Insurance Policies
Before I get started, I want to talk about Blogs. My marketing Guru has been trying to get me to share my insurance adjusting knowledge from my experiences by writing monthly informational topic articles “Blogs”.
So, I researched blogs, and the following is the first result I found. How long should a Blog be? Answer: 1500-2,500 words.
Now for those who know me keeping a conversation with me under 2,500 words is likely not going to happen.
In fact, most of the results under my Blog search do not apply to me, but I promise to provide some homeowners insurance information based on my experiences that will be interesting and hopefully help you understand your HO policy better and what to expect if you ever need to file a claim.
Note: We separated this blog into 3 parts.
Part #1
Know Your Homeowner Insurance Policy
With Hurricane season approaching combined with normal home issues it is important for you to understand your Homeowners Insurance Policy. How is the expense of your policy calculated? What property is covered? What are the limitations of coverage? What property is excluded from coverage? What are your options for coverage? What’s up with my deductible? How is the deductible applied? How will the new insurance legislation going to affect me?
Most homeowners, including myself, (prior to becoming an insurance adjuster) really do not understand their Homeowners Insurance policy, we just want to protect our home “like a rock” and if we have a mortgage, we are required to also shield the mortgage companies’ investment.
When we make that payment and receive the policy it feels like we are “protected from mayhem”. Most of us feel like “we are in good hands” we store that policy envelope in the important paperwork drawer until there is a problem and we need the security of having someone “on our side”.
Then we easily become confused and overwhelmed with the claim process, not sure who to contact, should I call my agent? the insurance company? When we locate the correct phone number and start to navigate through their automated system, we are informed we can file online or wait for the next available agent.
The “like a good neighbor” feeling is becoming watered down. To our surprise we eventually discover our homeowner’s coverage is not as expected, some of our property we assumed was protected is excluded from coverage or has limited coverage.
Seems like “you only pay for what you need” is a bit backwards, they do not “stand with you” at all. I know firsthand how infuriating and disappointing this can become when you learn the insurance company is not helping “life go right”.
So, it’s important for us to understand what is covered, our property coverage limitations, our options, always good to have options.
Unfortunately, we have no choice but to accept our Florida Insurance cost increases. Some of us feel like we hit the lottery to even find an insurance company to provide coverage, but our money is going in the opposite direction, does that feel right?
What I find disappointing: Not only are we all paying a lot more for insurance coverage, but our protection is being reduced with many more policy limitations and coverage restrictions.
To add insult to our property injury: Thanks to the recent December 2022 Insurance Senate Bill 2A: The Removal of One-Way Attorney’s Fees, this senate bill condition is not helpful for homeowners. This condition creates a David and Goliath scenario with respect to claim settlement disputes.
Consider: The lower the disputed amount the less consumers can afford to stand up for their policy rights, does this condition make us a paper tiger? What happened to the integrity of our insurance contract, unfortunately those principles are more flexible based on the dollar amount?
Now, in all fairness and with respect for our legislators, this new bill does have some good intent enacting many sweeping changes to the state’s property insurance laws.
I get asked this question all the time: What is the best insurance company to go with? My answer: Some Insurance Companies have staff that really care about their customers, they are experienced, understanding, sometimes forgiving, always professional, they know the policy coverages and are consistent in providing coverage within the policy.
We can talk about some of those companies based on my experiences but, at the end of the day it always comes down to the policy expense and coverages.
The policy is a contract, and I will always represent your interest to ensure their representatives honor the insurance companies’ policy contractual coverage obligations, just like they make sure we pay the policy premium, would they accept anything less?
But with that said: This goes both ways, and you are at a disadvantage. Most homeowners are inexperienced with the claim process, your obligations per the policy in reporting a claim and understanding the insurance policy coverages and process.
I can assure you; Your Insurance Company of choice has a big advantage in this area. Insurance Companies are very good at managing their risk, unfortunately at our expense.
Let’s talk about Risk, what is the insurance term risk?
Answer: Calculating our risk is the process that helps insurance companies determine the insurance premium amount and coverage after evaluating the probability of a loss.
Example: You are at a higher insurable risk if you have an older home, an older roof, live near the coast, live in a higher crime area, etc. Insurance companies have an underwriting department that is very good at evaluating our risk for coverage.
The Insurance company underwriting departments have a top-secret protocol that in my experience (coming from the insurance side) even their claims department within the same company does not fully understand.
Their risk evaluation includes things like our credit rating, income level, age, marital status, prior claims in other homes, vehicles, work, medical, prior claims to our home address reported by previous owners, location of the home, public record information, social media, etc. The list goes on and sometimes the risk evaluation makes no sense, underwriting could be a blog within itself.
This is why your agent will ask you a bunch of questions and have you sign the information form. Please understand, this information needs to be accurate, review all the information before signing this form.
Most insurance policies have a condition within the policy that stipulates that if any information provided is incorrect, whether intentional, or unintentional, can eliminate all coverage and void the policy.
I can tell you from experience, if you ever need to retain an attorney to enforce the policy conditions this information is the first thing your insurance companies’ legal team will review.
The policy could be terminated and your premium refunded if they confirm any inaccurate information not available in public records regardless of whether it is accidental or not. Even if your agent mistakenly listed some wrong information, does not matter, your signature stated the information was correct and your claim could be denied.
Review the additional interest listed on your policy dec page, usually under all those listed forms and endorsements. This policy information can be revised by underwriting through your agent if needed.
Note: The claims department will include the mortgage company information listed on the dec page or any other additional interest as an additional payee on the claim insurance settlement check. If the mortgagee information is incorrect, this will delay the replacement check by at least a few weeks or months in a catastrophe situation.
Example: I have a client that lives in a golf course community, the association required a certificate of insurance for golf cart liability for obvious reasons. Rather than the agent providing a certificate of insurance to the association they listed the association as an additional interest on the policy dec page. The claims department issued a multi-party large claim settlement check with the association listed as a payee. Not something you are going to want to deal with in an already stressful situation.
Another example: Do you really want to deal with your Ex-husband or wife to get their signature on the insurance check.
You probably have already renewed your policy, and that’s okay, just know you can revise the information provided if needed. You can also change your coverage options, deductible amounts, etc.
No big deal, just call your agent, request a policy review, you are their customer, and you need to understand your policy. Have your insurance agent explain every form and endorsement listed on your declaration page, you may be surprised by their lack of knowledge. I can assure you; the insurance adjuster will provide an explanation after a claim, and you will probably not like their answer.
The agent may say: You can review your policy coverage check list but that will not list all the endorsement coverages limitations, form coverage exclusions, and applicable changed conditions.
Please be on the lookout for part 2- Know Your Policy Forms & Endorsements.
What is an endorsement? What’s a form? Answer: Part 2 is pending
Your personal Insurance Adjuster Rick Klein, always looking out for your interest.