Making certain that one's home and possessions are covered no matter what, is a business land mind, and that's frequently because the insurance carrier's agent has done a poor job of making sure he's done a thorough interview of his client.
I'm going to list some common areas where coverage ends up being insufficient or non-existent. Print this out and call your general insurance agent tomorrow, and have him tell you where there are holes in your coverage. Be sure you instruct him to solve them!
- Sewer Backups are not covered in standard homeowner's policies. Ask your agent to add a rider to your policy at least covering the damage to carpets and furniture that would occur from a line failure.
- Home Offices are not covered within the terms of your homeowner's policy. That goes for the business equipment in them as well as liability claims that occur as a result of someone being hurt in the office. You can add what's called a "business pursuits" endorsement to your policy. The additional cost is normally less than 8%.
- Your College Kid's possessions are not covered the moment he moves them to an apartment. Oddly, most policies do cover a 10% loss if he lives in a college dorm. The solution to this is renter's insurance. The stuff is next to free, and worth every dime.
- Guys Working on Your Property, Even the Maid and the Butler, are normally not covered by your liability coverage if they are hurt while working there. That can present a real problem if one of them is and files suit against you. It is important to either have an endorsement to your liability coverage for that purpose, or to make certain that those worker's companies have Workmen's Compensation Insurance covering their employees. Ask for a copy.
And finally, having only the liability coverage that comes with your homeowner's policy is becoming a real gamble. For a very small additional premium you can get what's known as an umbrella policy. One with a maximum loss of $5 million is usually less than $300 a year.
Hi Bill...
This is some great info...that I had no clue about!
I'm going to give my client with a home office a heads up!
I like the caricature....but miss your face!
Miss Joan,
The primary rule we should all remember about insurance is this. They have a bad day when we ask for them to settle a claim. So, they're going to do their best to follow the letter of the policy. And without special endorsements, the chances are a homeowner's policy's coverage is pretty minimal on issues other than total destruction of the building itself.
That caricature has been with me for almost my entire business life. I don't remember who drew it or where, but nevertheless, it has been on signs, business cards and as the introduction to my newspaper columns and TV pieces for at least 25 years -- probably longer. Of course, I'm the only one who thinks I still look like that.