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When It Comes to Insurance, Be Careful About Your Coverage

iStock_000000616707_SmallIt’s an unfortunate mistake we see all the time in the insurance industry: People often make tragic assumptions about their coverage. Only after a loss do they discover that their insurance policy doesn’t do exactly what they imagined.

For example, you would think that a car destroyed in a garage fire would be covered by the homeowner’s insurance, right? Therefore, you might imagine that you don’t need auto insurance, or that you could get by with liability only.

Unfortunately, no. It doesn’t work that way. In that case you would file a claim on your auto insurance policy, not your homeowner’s insurance, and you would be subject to whatever deductible you selected under your auto insurance policy.

Speaking of homeowner’s insurance, what about the contents of your home? They’re covered in the event of a fire or total loss, right?

Nope, not necessarily. Under most homeowner’s insurance policies, your possessions are subject to strict coverage limits. If you own a collection of rare coins, expensive jewelry, pricey designer clothing or expensive works of art, you will most likely exceed your coverage limits for personal possessions. In that case, you won’t be reimbursed for the full value of the items if they are lost. When the value of your possessions exceeds your coverage limits, it’s important to add extra coverage to your policy to ensure those items are protected.

The lesson here is to read your insurance policies carefully, and its limits, before you can decide whether it offers adequate coverage.

If you’re concerned that your insurance policy won’t adequately protect you, give us a call. We can help you review your policy, understand make the necessary adjustments that you need.