Checking Your Insurance Policy

Checking and understanding the limitations to your policy can be the difference between being covered for a major loss or losing potentially tens of thousands of dollars.  This point is again being brought up by us because we recently handled a claim where a family had a major water loss on a secondary property.  A water line burst on the second floor of the home and caused extensive first floor and basement damage.  Floors, walls, ceilings and contents were completely destroyed by the loss.  Their policy had a $10,000 total cap for a water loss.  If the home had caught fire, they would have been covered for the loss and also $40,000 would have went toward contents that were destroyed.  But overlooking an option in their policy capped the loss at $10,000 including the contents.  The total cost of the claim was between $40,000 and $50,000 and this does not include the loss to their personal items.  Many people never read their policy and trust the underwriter to explain it to them.  This is a major mistake because the underwriter will give most people the cheapest coverage to insure they write your policy and not have you go somewhere else.  In these cases, families who can not afford the difference for the loss tend to take loans, leave the house in its current condition or sell the property because they can not afford the reconstruction fees.  By taking the time to read through your policy and ask as many questions as possible you will not only understand in full detail what is and what isn’t covered, but you will potentially save yourself a major amount of heartache and an enormous amount of money.

About the author: Joe Fiorilli