Thursday, March 28, 2013

So how many of you have read your insurance policy?

There is an ongoing debate on who's job it is to make sure that you, the insured, understand your coverage and your coverage options. The carriers like to say it's the insured's and their agents, the agents say the carriers have some responsibility in educating insureds, and most insured's say my agent and the carrier should make sure I'm covered, I don't have to read the policy.

Needless to say, what it boils down to is that you, the insured, our client, need to understand what you have. Only then can you ask questions of your agent and carrier about what gaps there are in coverage and what you need.

For example, do you have children that have had to move back home due to school and the economy? Their personal property (clothes, stereo, cd's, books, computer, etc.) may not be covered  under your homeowners policy. Your child may need to get a renters insurance policy to cover their stuff.

Another one to look out for is who is insured. When you look at your declarations page (the page that lists what coverage's you have and in what amounts) is everyone that should be on the policy listed? Is there a section (like in auto policies) for excluded persons? Are they correct? When your child gets a learners permit you need to make sure that they are added on to your policy.

Are the coverage amounts correct? Are they too little? Way, way too high? Be careful here. In California there are certain rules that carriers have to follow when calculating rebuild costs on property. This may seem high to you, but when you get into the costs of reconstructing and removing debris it adds up quick. A little more is better, but if you have insurance on a 1,500 sq.ft. house for $500,000 you had better have gold plated everything and imported marble.

How does your carrier define words? Look at the definitions page. Just because a word means something to you does not mean your carrier has the same meaning. This can get real confusing.

Included vs. excluded. Read the sections of what is covered and then what's not covered or excluded. Look for sub limits on jewelry, electronics, business property, etc. You may need to talk to your agent about adding coverage. Also look at the endorsements that are on your policy. This is another spot where coverage can be added, limited or excluded.

Yes, it can be confusing. but it's worth it to read it now and address any issues before you have a claim and find out you're not covered or that coverage is limited. Talk to your agent, ask questions, ask them to point out where in the policy your question is addressed.

Now go have a drink!

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