Pathway Insurance

As the survey by the National Association of Insurance Commissioners indicated some have a misunderstanding of what is covered and what isn’t.  Ask yourself this question:

Do I really know what my insurance policies cover, or more importantly what isn’t covered by insurance?

Note how one Cincinnati driver learned a harsh lesson about his car insurance policy.

“Joe” was driving in down Cincinnati making a delivery, when he takes his eyes off the road for just one moment to adjust the sound on his radio.  The car in front of him suddenly stops and Joe runs right into the back of a minivan!

Fortunately no one was injured, but Joe’s car was banged up pretty good plus the minivan needed a new bumper.  Joe calls his insurance company to report the accident and within a week he gets a letter from his company refusing to pay the claim for the damage to his car, and to the damage to the person whom he had hit.

Naturally Joe was upset about that, so he calls a local Cincinnati TV station to see if there is anything that they can do. The reporter smelling blood in the water for a sensational story quickly lost interest after finding out that the insurance company denied the claim because the policy holder used their vehicle in a way that was clearly prohibited by the policy.

Joe thought he was covered, but in reality he wasn’t.  Joe didn’t bother to read the exclusions in his car insurance policy.  He used his car in a way that was prohibited by his insurance policy and he had to pay the claim out of his own pocket.  That was tough lesson for Joe.

The absolute worst possible time to learn something isn’t covered is after the accident happens.

When a claim isn’t paid, sometimes we want to lay blame at the feet of the insurance companies,  when in reality it may have been our lack of understanding of what insurance really covers and what it doesn’t cover that caused the problem in the first place.

So it is vital that you understand completely what your insurance policies cover and what they do not cover.

Keep in mind: Insurance companies can legally deny your claim when you violate a policy term or condition, or if you forgot to add a coverage, or did not have coverage for a loss.

Insurance companies will only pay what they are contractually liable to pay and no more. That’s how it works.

If you want to know what is not covered you must take time to read your policy.  Specifically you must review the section titled:  EXCLUSIONS.  Be cautious and take time to read the details.  Not every insurance company uses the exact same limitations of coverage.  Click below to read typical EXCLUSIONS of coverage.

Typical Car Insurance Exclusions

Typical Home Insurance Exclusions

…but there are a few things you need to understand about your policy so you don’t get burned financially.

Did you know that your insurance policy doesn’t cover everything?

Many mistakenly believe that it does, and some receive a rude awakening after a claim occurs and the insurance company issues a denial of coverage.

The absolute worst possible time to find out something isn’t covered is after the claim happens.  Yet this happens on a regular basis to those who do not take time to investigate what is covered and what isn’t.

A survey was completed by the National Association of Insurance Commissioners and they found:

33 percent of U.S. heads of household, who own a home and have homeowners insurance, incorrectly believe flood damages would be covered by a standard homeowners or property and liability policy.

68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.

51 percent think damages from a break in the water line on their property supplying water to their home are covered.

35 percent think damages from earthquakes are covered.

Such misconceptions about insurance coverage often lead to anger on the part of the policyholder after experiencing a loss they thought was covered only to later have their claim rejected by the insurance company.

 Whose fault is that?  It’s my opinion there are two chief culprits.

It’s the insurance industry itself for not taking more time to educated their clients in easy to understand language.  But it’s also consumers who buy insurance policies throw them in the drawer and dust them off only when a claim happens without bothering to read beforehand what’s covered and what’s not .