Insurance Coverage

Limitations of Coverage on your Home Policy.

Monday, August 24th, 2009

As was mentioned in the previous article: What’s not covered on my Home Insurance Policy?

A home insurance policy does not provide unlimited coverage, so you should take time to understand where any potential gaps in coverage may be apparent. Now we will discuss further limitations of coverage on the home, condo, or renters policy.

As will be discussed in more detail in another article the home policy (Condo and Renters policy have different coverage parts) and what is covered is broken down into something called ”Sections”. Section 1 for the home policy has 4 distinct coverage parts:

Coverage A – Dwelling

Coverage B – Other Structures

Coverage C – Personal Property

Coverage D – Loss of Use

We will focus specifically on Coverage C-Personal property limitations of coverage.

Certain types of personal property are either not covered, or they have limitations on the maximum amount of money that will be paid for those items in the event of a loss for instance:

Computers, especially lap top computers or business equipment that you keep in your home.

Antique furniture and Fine Arts.

Theft of jewelry, watches, precious and semi-precious stones and furs, including any article containing fur which represents its principal value.

Theft of silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware.

Theft of guns.

Theft of sports cards or other collectible cards.

Theft of hand tools (not including lawn and garden tools and equipment).

Money, bank notes, bullion, coins and medals and other numismatic property and precious metals including platinum, gold and silver, but not goldware or silverware.

Securities, accounts, deeds, evidence of debt, letters of credit, notes other than bank notes, passports, manuscripts, tickets, stamps and other philatelic property. This dollar limit applies to these categories regardless of the medium (such aspaper or computer software) on which the material exists. The limit includes the cost to research, replace or restore the information from the lost or damaged material.

This is a brief list of common personal property items that have limited or no coverage. Certain companies may have endorsement riders that can be attached to the policy that will provide a limited amount of coverage, but your deductible would apply. Or you can schedule a individual item on something called an inland marine property schedule.

Always read your individual policy for complete detail. If you are a client of Pathway Insurance, please contact us directly to discuss your individual circumstances. Or if you would like a free analysis you may contact me directly at jack@pathwayinsurance.net

Remember the worst possible time to learn you do not have the correct amount of coverage is after a claim occurs.

Posted in Home Insurance Exclusions | No Comments »

Typical Car Insurance Policy Exclusions

Sunday, August 23rd, 2009

If you Violate a Car Insurance Exclusion…

You just might be Floating up the Creek without a Paddle.

(That means the insurance company probably isn’t going to pay the claim)

Keep in mind that car insurance EXCLUSIONS can vary by insurance company and the state in which you reside plus one other factor: Court decisions. Court’s in different states can come to different conclusions in their interpretation of EXCLUSIONS. It’s always a good idea to make sure that you read your policy for the specific exclusions applicable to your individual policy.

Let’s review a few common EXCLUSIONS that sometimes are violated by policyholders intentionally or because they simply did not know. (Not all Exclusions are listed)

EXCLUSIONS – READ THE FOLLOWING EXCLUSIONS CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE WILL NOT BE AFFORDED UNDER THIS PART.

To any vehicle while being used to carry persons or property for compensation or a fee, including, but not limited to, pickup or delivery of magazines, newspapers, food, or any other products. This exclusion does not apply to shared expense car pools.

This particular exclusion was the reason why the man named “Joe” in our previous post had his claim denied. Joe was using his vehicle to deliver pizzas, he caused an accident and his insurance company refused to pay for the damage to his vehicle or the other party’s vehicle.

This exclusion could mean that coverage may not be available in the event you use your vehicle for any business activity where you are compensated for that activity. So if you deliver newspapers, pizza, food of any type, medical supplies, package delivery you may have no coverage under your personal auto policy for accidents or injuries under this exclusion.

How about if you transport people in your personal automobile as part of your job duties? Let’s assume you are a social worker, child care worker, or work at a group home transporting your clients to various destinations in your personal automobile? Again the same situation may apply.

Another car insurance EXCLUSION:

Bodily injury or property damage resulting from, or sustained during practice or preparation for: Any pre-arranged or organized racing, stunting, speed, or demolition contest or activity; or any driving activity conducted on a permanent or temporary racetrack or racecourse;

What no coverage for drag racing at the local track? Nope.

Another car insurance EXCLUSION:

Bodily injury or property damage arising out of the use of a covered auto while leased or rented to others or given in exchange for any compensation.

What you mean I can’t open up my own buy here pay here lot and insure the vehicles I sell on my personal auto policy? Nope.

Another car insurance EXCLUSION:

Bodily injury or property damage caused by, or reasonably expected to result from a criminal act or omission of that insured person. This exclusion applies regardless of whether that insured person is actually charged with, or convicted of, a crime.

Road rage anyone?

As I mentioned previously exclusions may vary from company to company, and the interpretation of those exclusions by court action have been affirmed in one state, but rejected in another. We have briefly considered only a few typical exclusions contained within the personal auto policy. Take time to read all of the exclusions in your policy.

Posted in Car Insurance Exclusions, Insurance Coverage | 3 Comments »

What’s not covered on my Home Insurance Policy?

Sunday, August 23rd, 2009

A Home, Condo, or Renters insurance policy does not provide coverage for all possible events.

As is true with car insurance EXCLUSIONS , what is covered on your Home insurance policy can vary by insurance company. Take time to read what is covered and what is not.

Limitations of coverage will once again be listed in the EXCLUSIONS section of your home policy.

Let’s review a few common EXCLUSIONS on a typical home, condo, or renters policy. (Not all Exclusions are listed)

Earthquake or other earth movement including loss caused by, contributed to or aggravated by landslide; mine subsidence; mudflow, earth sinking, rising or shifting. We do cover direct loss that follows caused by fire, explosion or breakage of glass.

Earthquake coverage can be added with most companies for an additional premium.

Water damage, meaning: (a) flood, surface water, waves, tidal water or overflow of a body of water. We do not cover spray from any of these, whether or not driven by wind; (b) Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or (c) Water or water-borne material below the surface of the ground. This includes water which exerts pressure on or flows, seeps or leaks through any part of a building or other structure, sidewalk, driveway, foundation or swimming pool; caused by or resulting from human or animal forces or any act of nature. We do cover direct loss that follows, caused by theft, fire or explosion.

It may be possible to add a water back up endorsement to your home, condo, or renters policy for an additional premium. A separate flood policy can be purchased to cover what your home policy excludes.

Vandalism or malicious mischief, including intentionally set fires, if the dwelling has been vacant for more than 30 consecutive days immediately preceding the loss. A building under construction is not considered vacant.

If your home is vacant more than 30 days you can purchase a vacant home policy, click here.

Neglect of an insured person to use all reasonable means to protect covered property at and after the time of loss.

Example: If a lightning bolt puts a big hole in your roof and you take no reasonable actions to prevent rain from entering your home which in turn causes additional damage to your home, the insurance company can refuse to pay for the damages.

(a) wear and tear, marring, or scratching, deterioration; (b) inherent vice, latent defect, mechanical breakdown; (c) smog, rust or other corrosion, mold, mildew or fungus, wet or dry rot; (d)smoke from agricultural smudging or industrial operations; (e) discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril We Insure Against under Personal Property Coverage of this policy. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed; (f) settling, shrinkage, bulging or expansion, including resultant cracking, of pavements, patios, foundations, walls, floors, roofs or ceilings; (g) birds, vermin, rodents or insects; or (h)animals owned or kept by an insured person. If, because of any of these, water escapes from a plumbing, heating, automatic fire protection sprinkler or air conditioning system domestic appliance, we cover loss caused by the water. We also cover the cost of tearing out and replacing any part of the covered building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which the water escapes.

Your home insurance policy does not cover maintenance issues, wear and tear, mechanical breakdown. For instance, if your foundation cracks because of a lack of moisture that is not something that your homeowners insurance policy would extend coverage for. (If your foundation cracks due to an earthquake and you have earthquake coverage, coverage may apply)

Collapse, other than as provided in Additional Coverages 8. - We cover risk of direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following: (a) Perils Insured Against in Coverage C-Personal Property. These perils apply to covered building and personal property for loss insured by this Additional Coverage; (b) hidden decay; (c) hidden insect or vermin damage; (d)weight of contents, equipment, animals or people; (e) weight of rain which collects on a roof; (f) use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation.

The limitations of coverage is quite extensive for home insurance, you must read your policy carefully to determine if there are any possible gaps in coverage. Insurance companies will not allow you to backdate or purchase coverage after the claim happens. You must do that before the claim happens.

There are a number of common items that homeowners may have in their possession that also have limitations of coverage. We will discuss that in our next post.

Posted in Home Insurance Exclusions, Insurance Coverage | 2 Comments »

Cincinnati Insurance Buyers: Isn’t it my agent’s responsibility to tell me what I need?

Saturday, August 22nd, 2009

In theory that’s how it should work; in reality it is your responsibility as the insurance buyer to determine the amount and level of coverage that you should maintain.

Some professional agents will take time to explain what is covered, and what is not.

Other agents will provide no explanation but to merely match your current coverage and hope for the best.

As you can imagine the worst possible agent to purchase a policy from is one who simply takes the later approach verse the former. (There are tons of agents like this selling insurance today they are what I term Gecko-ized agents)

Insurance when you have the correct amount can literally save you from complete financially disaster. To illustrate this, a gentleman by the name of Tom who lives in the Cincinnati area was referred to our agency for an insurance review on his home insurance.

We immediately discovered that he has a gap of about $90,000 in coverage on his home, I explained that based on this gap in coverage he would not be able to rebuild his home in the event of a complete loss, such as a fire.

His previous agent only insured his home for the purchase price, not the replacement cost which left him significantly underinsured. (There is a big difference in most case between what your home’s value is and what it would take to rebuild the home called the replacement cost, we’ll discuss that in detail in a future post)

Fortunately he listened to our advice and purchased a new policy with the appropriate limits. Only a few months later, his home was completely destroyed by a fire. Without the correct coverage limits he would not have been able to rebuild his home.

Do not assume that your current policies and coverage levels are adequate. It is your responsibility to do that, not your agent’s.

Knowledge is power; make it your objective to at least understand the basic provisions of personal insurance so as to better protect your financial circumstances. The articles posted here may help you to understand the basics of insurance. Please contact our office for specific questions or you may write to jack@pathwayinsurance.net

Posted in Insurance Coverage | No Comments »

Is State Minimum Insurance Coverage Adequate for Greater Cincinnati Residents?

Monday, March 16th, 2009

A popular television commercial airs frequently in the Cincinnati area advertising state minimum car insurance quotes for limited budgets.

While it’s true that state minimum car insurance coverage may cost you less money than higher insurance limits, it could inadvertently cost you more money in out-of-pocket expenses in the event you are responsible for an accident in excess of state minimum limits.

For instance in the state of Ohio, state minimum limits as required by law amounts to $7,500 for property damage, and $12,500 individually for injuries that you may be legally responsible to pay.

In the state of Kentucky the state minimum limits are $10,000 for property damage, and $25,000 for injuries.

Let’s discuss a scenario to show you exactly how the property damage coverage works:

Let’s assume that you’re driving north out of downtown Cincinnati on the way to work and you rear end the vehicle in front of you. After all repair estimates are complete it appears the damage total is $4,700 for the other party’s vehicle.

If you carry Ohio state minimum insurance limits for property damage you have $7,500 to cover the property damage you are responsible for. In this scenario you have enough coverage to cover all property damage expenses.

Let’s play devil advocate for just a moment and assume that when you rear-ended the first vehicle that vehicle in turn was pushed into the vehicle in front of him because of the impact of your car. It’s possible that you could be held liable for the damage to both vehicles.

So the first vehicle’s damage amounts to only $4,700, however the damage to the other vehicle was $5,200 leaving total property damage total of $9,900. Subtracting the $7,500 property damage limit your insurance company pays leaves you with a balance of $2,400 that you owe.

Is state minimum limits enough for Cincinnati drivers? In the first scenario yes, in the second it ends up costing you $2,400 out of pocket. State minimum coverage limits may keep you legal, but may end up costing you more in the long run.

Please note that in multi-car accidents it may not be 100% certain that in every case the driver causing the multiple car accident is solely responsible other mitigating circumstances could apply.

If you have state minimum insurance limits click here to upgrade your coverage.

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