Member Q&A: My home has been insured by the same company for years. Why would I need to review my home insurance?

Perhaps the biggest investment an individual will ever make is their home. It only makes sense to insure what you’ve worked so hard to obtain. Too often in my 20 years of experience I see homes that are underinsured, don’t have the adequate liability coverage or are missing certain endorsements. Other times the policy is in the wrong name, the mortgage company has changed, or the coverages are under the wrong policy which can result in DENIED CLAIMS. Each of these gaps or deficiencies have consequences and should be reviewed and corrected proactively.

Let me provide a few examples of situations that may help save you money, time, potential lawsuit, or denied claim. Several years ago, I was reviewing the home insurance of a general contractor. I discovered that he kept some of his business equipment in his home garage. I advised that these items should be endorsed. However, the contractor did not take my advice. Two months later someone broke into his home stealing most of his equipment and tools and since he opted against insuring them, the items weren’t covered. Ultimately, it cost him a lot of time, out of pocket expenses, and unnecessary headaches to become operational again.

Many people do not realize the risks of inadequate liability coverage. Make no mistake about it, people can and will sue over your negligent acts that cause bodily injury or property damage to them.

Here are some big offenders:

PETS
Secure any/all pets while your guests are on your property to eliminate bites/injuries or property damage.

POOL
Post legible signage of risks, have a fence surrounding the premise, and ensure any walkway, lighting, loose objects in the yard/pool area, holes needing repair, etc. have been addressed to prevent any injury to you/your family, and your guests.

TREES
One of the most common threats of preventable damage are dead/diseased trees. They can fall on your property, with tremendous potential to damage your home, contents, or even worse, cause injury or death. When these dead, diseased trees fall on your neighbors property, you may be held liable. This is also true if any tree poses any liability threat or if the homeowner is attempting to remove the tree without any professional help. In essence, be proactive and address these issues ahead of time to protect your family and avoid a potential lawsuit. It would be in your best interest to review how much liability protection you have. As an example, if you are sued over a dog bite, and your limit of liability is $300,000, imagine what happens if the injured person has bodily injuries/medical expenses exceeding that amount? You may be responsible for the remaining bills/medical expenses out of your pocket. This same example is applicable to other acts of negligence that the insurance company or court may deem within your responsibility or control.

Have you refinanced or changed your mortgage company recently? Perhaps your lender sold your loan to another company. In either case, it is worthwhile to examine your policy proactively for accuracy. Over the years, I came across several situations where an individual had changed their lender, and neither party provided notification to the insurance company. When this happens, your home insurance premium may go unpaid resulting in a lapse and cancellation of coverage.

Have you recently made, or plan to make any home improvements or additions to your home/property? Perhaps you’ve added a storage building, pool, deck, bonus room, finished the basement, etc. If so, please notify your agent asap so he/she can ensure they are covered properly. Entirely too often, folks don’t realize the urgency to insure before a loss happens. (Fire, lightning, wind/hail, water damage can happen at any time.) Even if you have not made any updates/improvements, it is still in your best interest to review your home policy every year. Verify you are not under-insured, confirm any personal items needing itemized or endorsed separately, verify your home premium has been paid and coverage is active, know when your policy renews, and ensure the policy name and mortgagee clause are both listed correctly.

You also need to confirm your coverages are listed under the correct type of policy. What do I mean by that? One of the more common mistakes are policies that are either written under the wrong policy type, or the insured has changed their original occupancy status. There are several variations of homeowner policies depending on age of the home, type of construction, updates, condition, credit, claims, and other factors. For example, a condo will need to be written on a different type of policy than a mobile home. Additionally, if you’ve moved out or are now renting your home to someone else, the policy will need to be reviewed and rewritten asap to prevent policy cancellation or claim denial. If you move out without selling it, allowing the home to become vacant for an extended period of time, it is vital you notify your agent asap, as insurance companies will need to modify the existing policy, perhaps listing the coverages with another company under a different type of policy. Vacant homes are considered extremely high risk due to increased chance of theft, liability, fire, and vandalism. Since the home isn’t being maintained or properly secured, it carries greater risks of claim situations.

Premium members login to access the checklist to identify gaps and deficiencies that can result in DENIED CLAIMS and eliminate areas of risk that cause claims.

Looking for an in-depth personalized review?  Members and non-members alike can schedule a personal consultation by emailing info@onpointinsconsulting.com