Every now and then I have conversation with a client regarding the experience they had with a claim. Sometime after a loss in their home, they are not happy with the way the claim was decided because an item that was damaged or lost was not covered by the policy and I hear “why have insurance? Nothing is EVER covered.”
I am a consumer of insurance and understand their reaction. That could be my first, emotional reaction as well. My problem is that I know too much. After my initial rant and I’ve calmed down, my rational side takes over and I remember the following:
1. The insurance policy is a contract. In the document it spells out those things that are the responsibility of the insurance company (usually at time of claim) and the responsibility of the policyholder. Among other things, one of the responsibilities of the policyholder is to maintain the outside and inside of the insured home so that poor maintenance doesn’t cause a claim. Ongoing damage caused by a drippy pipe in the wall, or damaged caused by moss left on the roof would be considered “maintenance issues” and possibly not covered by the policy. The insured didn’t keep up with their end of the agreement.
2. After a claim on your homeowners’ policy, the company will restore you to the fullest extent allowed under the policy. All that “insurance speak” means is that the wording in the policy spells out what’s covered and what’s not. It also lists HOW MUCH will be paid out for certain items you own (called underlying limits). For instance, if you have $20,000. In cash in your house and it burns down, the underlying limit in your policy to restore cash might be $200. Guns, securities, theft of jewelry, theft of rugs, all have internal limits and would only be paid out to the underlying limit (I have included an example of a company list of underlying limits at the end of this blog). There is a separate policy to plug this hole in coverage. Give us a call and we can go over that.
The worst time for surprises regarding your insurance is at time of claim. Find an agent you like and trust, set up a time to get together and talk until all of your questions are answered. Leave the surprises for Christmas and birthdays!
Internal Limits
Internal Limits ESSENTIAL
Refrigerated Products N/A
Kidnap/Ransom N/A
Locks N/A
Golf Cart N/A
Volunteer America Included
Monies $250
Tapes, Records, CDs $500
Credit Card, Forgery $500
Fire Department Service Charge $500
Grave Markers $500
Motorized Land Vehicles $500
Rare Coins $500
Securities $500
Theft of Jewelry $500
Theft of Silver $500
Business Property on/off Premises $3,000
Trailer $3,000
Watercraft $3,000
Reasonable Repairs $5,000
Theft of Rugs $5,000
Arson Reward $25,000
These coverage levels are not available in all states. Refer to the state product guide and contract