My Insurance Never Told Me That!

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Many homeowners and property owners discover terrible truths about their insurance policies after they have been in effect. You might hear things like “Firearms not covered,” “Any jewelry exceeding $500 in value isn’t covered unless an endorsement was purchased,” “Water damage due to natural floods isn’t covered,” and “Yes your regular deductible for insurance is $500 but your hurricane deductible for insurance is $30,000.”

Do not become a victim to a disaster and your insurance company. It can be devastating financially and emotionally to find out that your insurance policy doesn’t cover you after a loss. The majority of the information you need is contained in your insurance policy. It’s not fun or easy to read insurance policies. There will be exclusions and legalese in your insurance policy. Your state might have its own requirements and restrictions depending on where you live.

How can you avoid the “My insurance never said that” syndrome? It’s important to read the policy carefully, look up the terms, take inventory of your belongings, visit the site of the state insurance commissioner, and ask questions about your insurance company. Although it’s not enjoyable, it can be very informative. It could also save you from a lot of pain if you are faced with a catastrophe.

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Read the Insurance Policy What exactly is covered? What is not covered? These should be written down on a piece of paper with columns marked “covered” or “not covered”. What are the policy’s limits for items that are covered? These should be written down.

You should pay special attention to jewelry, furs and firearms. These items often have very limited limits. Your policy might only cover $500 in jewelry and $100 in cash. You will need additional coverage if you have a $24,000 diamond engagement ring or if you collect coins.

Flooding and earth movement coverage are important. These coverages are unlikely to be included in your policy. You may consider buying flood, earthquake or supplemental insurance policies if you live in an area that has had a history of flooding.

Write down your deductibles and see if there is a different one for hurricanes, windstorms and other disasters. These should be written down so you are aware of the amounts. These deductibles can be or not be determined by your state.

Check that your policy limits cover the cost of rebuilding and replacing your home’s contents. Is your policy inclusive of an inflation adjustment to ensure that you are covered regardless of rising building costs? Is your policy able to replace damaged items based either on replacement cost or actual cash value? Your damaged goods will be appreciated if your policy replaces them based on actual cash values. Your television may have cost $3,000, but the insurance policy will not depreciate it. It may cost you only a few hundred dollars to repair it. You can get replacement cost coverage to ensure that you have enough money to replace the items.

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Take inventory of your belongings
If you don’t have the right insurance, it’s difficult to find the right amount. Do a complete inventory of all your belongings. Compare the cost of replacing those items with your current policy limits. Would you know what items to include in a loss if your house was to be torched today? Now is the best time to take the time to record everything and calculate its value. It may be that you have more coverage than you think. You may also find that your coverage is not sufficient. This will help you avoid the “My insurance didn’t tell me that” blues.

Insurance Resources
The websites of your state’s insurance agency and your insurer are great resources. Spend some time researching the regulations and insurance issues in your state. Ask your agent for clarifications. You can save heartache by taking a proactive approach today.