Ready for spring? Time to whip open the windows to the house, shut down the $4-a-gallon oil burning beast in the basement and start thinking about BBQ, gardening and the beach. Spring is a time of regeneration and reorganization, like a good spring cleaning of your house.
But I know something that you haven’t dusted off in years – your insurance policies! We see and hear stories all the time of the family that “assumed” they had coverage but didn’t. This is my golden rule in insurance: “If it was all just covered, why are there so many pages in the policy?” The answer to this question is obvious.
Your insurance policy should come with an insurance agent that understands the coverage. Press your agent for explanations. Most importantly, your agent needs to know about you – your hobbies, your goals, and how you live your life. Unfortunately, insurance agents are not mind-readers. Not taking the time to completely reveal all the risks unique to you is a recipe for disaster. Just because you’re paying premiums does not mean you get coverage for anything and everything.
So here are some simplified basic home and auto insurance guidelines:
- If it’s in the air, underground, or on water (or relates to water) we’ve got some limitations.
- If it is business related, coverage on a home or auto policy is tricky. Generally a business needs a business policy.
- If you’re renting to tenants, we need to know.
- If it’s vacant, we’ve got big problems. If your home is burglarized, that’s no longer covered. But far worse, if the burglars then cause a fire that burns down your house – you have no coverage at all!
- If you haul people or cargo for a fee on a personal auto policy you have completely voided all coverage under the policy. You have nothing, nada, zero – no liability, no comp, no collision and no benefits.
- If you fail to care about any of the above you can always hope and depend on the generosity of the insurance companies to simply ignore the exclusions in their policies and pay your claim – good luck!
Here are a couple things to talk about with your agent:
- Do you have personal injury coverage added to your homeowner’s policy? When your teenage son posts inappropriate pictures of his girlfriend on Facebook – you’re going to need it.
- Do you have replacement cost on your home and contents? Do you have “open perils” coverage on your home? Would you want “open perils” on your personal belongings too?
- Collectables, valuables and unique items – have you scheduled these to ensure you have enough coverage?
- Should you have a personal umbrella policy? (Yes.) This policy adds additional liability coverage to protect you and the assets you’ve worked so hard to create. It can cost as little as $200 a year! $200 or your $200,000 house – how would you prefer to settle the liability claim?
- Kids in College. Is their stuff covered? What about liability for the dumb things they may do? How about the vehicle they take to school? The general answer is yes, but there are important restrictions.
It’s time for a spring cleaning, but make sure that includes a complete review of your insurance. If you have no idea who your agent is or if your agent has no idea how to answer these questions, it’s time to get a new agent.
Finding out because of a bad claim that you aren’t properly protected will ruin your sunny day.
Nathan Troutman, AIA, is an agent with the Keystone Insurers Group
