Sorry, you’re not covered…

| August 4, 2014

These are the four words no one wants to hear when they call their insurance company to file a claim. Unfortunately, this phrase is spoken all too often in the following situations:

Under-insuring a home. If you base your coverage on what you originally paid for your home, or if you called your insurance company to lower your coverage when your market value dropped, you may be seriously under-insured. The key to adequate homeowners insurance is making sure you have enough coverage to rebuild your home (in today’s dollars) should you experience a catastrophic loss.

Assuming flood insurance is standard. Unfortunately, many homeowners believe their homeowners insurance includes flood coverage. The reality is most carriers do not cover claims due to flooding. Flood insurance is typically a separate policy sold through the National Flood Insurance Program.

Understanding deductibles. Another area where homeowners may get an unexpected surprise is with their deductibles. Many believe they have one flat-rate deductible, a common feature of auto and renters insurance. However, when it comes to homeowners insurance, this is not always the case. More and more insurance carriers are increasing their deductibles for wind and hail damage to 2%–3% (sometimes even as much as 5%) of the total policy coverage. This means if the client makes a claim on a $300,000 policy, they’ll be paying $6,000 out-of-pocket before insurance covers the rest.

So, if you haven’t reviewed your insurance policies in a while, make sure you do so this summer – before you suffer a loss.



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