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Home Home and Family Family 6 Often Seen Property Insurance Mistakes Which You May Lose You Everything
6 Often Seen Property Insurance Mistakes Which You May Lose You Everything PDF Print E-mail
Written by Donald Saunders   
Taking out the correct property and casualty insurance cover may not be particularly high on your list of financial priorities and, compared with things like investment decisions and estate planning issues, questions about the language in your homeowners plan could seem hardly worthy of consideration. However, the more successful you are, the more involved your asset-protection requirements 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.
by DonaldSaunders


Taking out the correct property and casualty insurance cover may not be particularly high on your list of financial priorities and, compared with things like investment decisions and estate planning issues, questions about the language in your homeowners plan could seem hardly worthy of consideration. However, the more successful you are, the more involved your asset-protection requirements 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's assume that your properties are in three states, the value of your collection of Abstract Expressionist paintings has risen quickly and you just volunteered to serve as a director of of a charitable organization. Virtually every aspect of your present situation could cost you dearly.

Insurance laws vary widely from one state to the next, different sorts of property require specialized coverage and art collections and other unique items may prove difficult to fully protect. Meanwhile, serving on the board of a non-profit organization might subject you to additional personal liability.

Safeguarding yourself and your family could mean purchasing extra coverage, but more insurance is not always the best solution. Rather, it's important to review your needs, consider specialized policies and coordinate your cover with other facets of your financial situation.

Here are 6 problems which could turn out to be extremely costly.

1. Leaving gaps in your homeowner's cover.

Homeowners need to look at their cover on a regular basis so as to keep up with growing replacement costs. But, insuring different kinds of home in different locations poses additional challenges. If you take insurance cover from more than one carrier then you might be faced with contrary limitations, rules, and policy renewal dates. For instance, the liability limit on the policy for a second home could fall short of the minimum on an excess liability policy intended to complement the insurance on your primary home and you may well wind up being responsible for coming up with the difference.

2. Brushing Aside the unique characteristics of your property.

One advantage of affluence is having the means to own great homes but one problem is that These could be difficult to insure adequately. Normal homeowner's coverage is not going to pay for the materials and craftsmanship that is needed to rebuild that late 19th century showplace that you have painstakingly restored. Coastal properties could face hurricane damage, while a home in the California mountains could be subject to wildfires or earthquakes.

3. Under insuring art and collectibles.

Ordinary homeowner's policies limit cover for the loss of hings like antiques, furs, and other valuables. And while you could arrange additional coverage, insuring for the true value of an art collection will usually mean purchasing a specialized plan which addresses several critical issues.

4. Omitting to insure employees.

When somebody works for you as, for example, a nanny, landscaper or personal assistant you may be liable for lost wages and medical expenses if the person is hurt on the job. Several states require household employers to pay into a workers compensation fund while in other states this is optional. However, providing such insurance cover may be obligatory for ensuring your financial health.

5. Neglecting your liability as a member of a board of directors.

Some form of excess liability coverage might help protect you if you are sued as a director of a nonprofit's board or, for more comprehensive protection, you may want to consider taking out special directors liability insurance.

6. Failing to get regular plan reviews and updates.

Your finances aren't static and neither are your requirements for insurance. The value of your art collection may rise, extensive home renovations may mean a sharp rise in the value of your property and the re-titling of assets as part of your estate plan or as a result of divorce, a death in the family, or the birth of a child might necessitate plan changes. Even lacking any major events, you will almost certainly need to carry out a comprehensive review of all your insurance coverage at least every two years.

About the Author:

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