6 Often Seen Property Insurance Mistakes Which You May Literally Lose You Everything
Wednesday, March 25th, 2009 Subscribe To Our Feed
Finding the correct property and casualty insurance coverage may not rank high on your list of priorities and, compared with things like investment and estate planning decisions, questions about the language in your homeowners insurance plan may seem hardly worthy of consideration. Even So, the more successful you become, the more detailed your asset-protection needs are going to be—and the more you have to lose. Suppose, for example, that in addition to your primary residence—a historic home—you also own a house at the beach and a condo in the city.
For illustration, let us assume that your properties are in three states, the value of your collection of Abstract Expressionist paintings has grown apace and you recently volunteered to serve on the board of directors of a charity. Virtually every aspect of this situation could cost you dearly.
The laws governing insurance vary widely from state to state, different sorts of property demand specialized coverage and art collections and other unique items may prove hard to protect fully. As if this were not enough, serving on the board of a charity could land you with additional personal liability.
Protecting yourself, your family and your property could mean purchasing extra coverage, but additional insurance is not always the best answer. Instead, it is important to review all of your needs, consider specialized policies and coordinate your insurance coverage with other facets of your financial situation.
Here are 6 shortcoming which could turn out to be extremely costly.
1. Having gaps in homeowner’s coverage.
Any homeowner needs to look at their cover on a regular basis so that they can keep up with rising replacement costs. But, insuring different kinds of property in different locations poses extra challenges. If you purchase insurance cover from more than one insurer then you may face several different rules, limitations, and plan renewal dates. For instance, the liability limit on the policy covering a second home could fall short of the minimum on an excess liability policy designed to complement the insurance on your primary home and you could well wind up being responsible for coming up with the difference.
2. Disregarding your property’s unique characteristics.
One of the advantages of of wealth is having the means to own exceptional homes but one of the drawbacks is that These might be hard to insure adequately. Standard homeowner’s coverage is not going to pay for the hard-to-find materials and craftsmanship that is needed to rebuild that 19th century showplace that you have lovingly restored. Houses built on the coast may be subjected to hurricane damage, while a house in the California mountains might be subject to wildfires or earthquakes.
3. Under insuring collectibles and art.
Normal homeowner’s policies place a limit on coverage for the loss of hings like antiques, furs, and other valuables. And while you could schedule additional cover, insuring for the real value of an art collection will generally mean purchasing a specialized policy which addresses several critical issues.
4. Forgetting to insure employees.
When an individual works for you as, for example, a nanny, landscaper or personal assistant you could have a liability for medical expenses and lost wages if that individual is hurt on the job. Several states require household employers to contribute to a workers compensation fund while in other states it’s optional. All The Same, providing such insurance cover might be obligatory for ensuring your financial health.
5. Disregarding your liability as a member of a board of directors.
Some form of excess liability coverage could help protect you if you’re sued as a director of a nonprofit’s board or, for more comprehensive protection, you may want to consider taking out special directors and officers liability insurance.
6. Failing to get frequent policy reviews and updates.
Your financial life isn’t static and neither are your needs for insurance. The value of a collection might rise, home renovations may mean an increase in the value of your home and the re-titling of assets as part of your estate plan or because of the death of a family member, divorce, or the birth of a child may require policy changes. Even without any major events, you will almost certainly need a comprehensive review of your insurance cover at least every two years.
Whatever the level of homeowner insurance you require equip yourself with the very best no obligation homeowners insurance quotes today.
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