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6 Frequently Seen Home Insurance Mistakes That You Could Literally Lose You
Everything
Taking out the right property and casualty insurance coverage might not rank
high on your list of priorities and, alongside such things as investment and
estate planning decisions, questions about the language in your homeowners
policy might seem barely worthy of consideration. Yet, the more successful you
become, the more involved your asset-protection needs are likely 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 instance, let us assume that your properties are in 3 different states, the
value of your collection of Old Master paintings has risen rapidly and you just
volunteered to serve on the board of directors of a charitable organization.
Almost every aspect of your situation could cost you dearly.
The laws governing insurance vary widely from one state to the next, different
kinds of property need specialized coverage and art collections and other unique
items might be difficult to fully protect. Meanwhile, serving on the board of a
non-profit organization might land you with additional personal liability.
Safeguarding yourself, your family and your property could mean buying extra
coverage, but more insurance is not always the best solution. Rather, it’s
vital to review your needs, give some thought to specialized policies or policy
options and coordinate your insurance cover with other aspects of your financial
situation.
Here are 6 problems which could turn out to be very costly.
1. Leaving gaps in homeowner’s cover.
Any homeowner needs to review their cover regularly so that they can keep up
with increasing replacement costs. But, insuring different kinds of home in
different locales poses extra challenges. If you purchase insurance from more
than one carrier then you coulf be faced with several different rules,
limitations, and plan renewal dates. For example, the liability limit on the
policy covering a second home could fall below the minimum on an excess
liability plan designed to complement the insurance on your primary home and you
might wind up being responsible for the difference.
2. Neglecting your property’s unique characteristics.
One of the perks of wealth is having the means to own great homes but one of the
problems is that they might be difficult to insure adequately. Normal
homeowner’s coverage will not pay for the hard-to-find materials and
craftsmanship needed to rebuild that 19th century showplace which you have
painstakingly restored. Coastal properties may face hurricane damage, while a
home in the mountains of California might be at risk from wildfires or
earthquakes.
3. Under insuring art and collectibles.
Normal homeowner’s plans place a limit on cover for the loss of such things as
antiques, furs, and other valuables. And although you could arrange additional
coverage, insuring the true value of a collection of contemporary art will
usually mean taking out a specialized plan addressing several critical issues.
4. Omitting to organize insurance for employees.
When an individual works for you as, for instance, a nanny, landscaper or
personal assistant you could have a liability for medical expenses and lost
wages if the person is hurt on the job. Various states require household
employers to pay into a workers compensation fund while in other states it’s
optional. All The Same, providing such insurance might be required for ensuring
your financial health.
5. Neglecting your liability as a member of a board of directors.
Some form of excess liability coverage may help to protect you if you’re sued
as a director of a charity or, if you prefer to have more comprehensive
protection, you might want to think about special directors liability insurance.
6. Not getting regular plan reviews and updates.
Your financial life isn’t static and neither are your insurance requirements.
The value of a collection may rise, home renovations might mean a sharp rise in
the value of your home and the re-titling of assets as part of your estate plan
or as a result of the death of a family member, divorce, or the birth of a child
may necessitate policy changes. Even without any major events, you will almost
certainly need to undertake a detailed review of all your insurance cover at
least every two years.
Whatever the level of homeowner insurance you need equip yourself with the very
best free and no obligation homeowners insurance quotes today.
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