Remember Your Coverage!

By Fairport Wealth

Answers to Your Questions About Insurance

In the same way daylight savings time reminds us to change the batteries in our smoke detectors, Insurance Awareness Day, which is today, serves as a reminder to review our insurance coverage to remain in control of potential risks and exposures.

Michelle L. Hirsch

Senior Vice President, Brunswick Companies

Michelle L. Hirsch, a property and casualty insurance professional with Brunswick Companies in Cleveland (who we go to with insurance inquiries), shares answers to some commonly asked questions about insurance.

Q: How often should I update my appraisals?

A: It’s a good idea to obtain revised appraisals every five years to make sure that the values are correct. Some carriers offer automatic appreciation on all jewelry, which can be extremely beneficial. For example, a new client recently lost his Patek Philippe watch and wanted to submit a claim to replace it. His prior agent had listed the watch’s value at $15,000 on the jewelry schedule, but when he tried to replace the watch, he discovered the value had increased to over $75,000.

If you are looking to lower your premium, know that jewelry kept in a bank safety deposit box or a home safe could be eligible for significant premium discounts.

Q: Do I need flood coverage if I don’t live near a body of water?

A: Oftentimes, homeowners who do not live in a flood zone think they do not need to purchase flood insurance. However, what most clients do not realize is that any water that enters the home from outside the home is considered a flood claim.

We recently had a client whose basement flooded when the city’s storm drains overflowed after a major rainstorm. Only because the client had flood insurance was this claim covered. Flood coverage can be purchased for less than $500 a year.

Q: Does my homeowner’s policy cover my vacation property if I rent it out?

A: With more people choosing to rent a home for their vacations, many clients are purchasing cabins or lake homes for investment purposes. We have also seen clients turn their secondary homes into rentals when they are no longer able to go back and forth.

If you decide to rent out your property for a short period of time via an online service, coverage could be a problem. Most carriers frown upon short-term rentals and may exclude coverage. However, carriers are more inclined to offer coverage when you rent your property for the long term and also require the renter to carry renter’s insurance. Either way, insurance companies require clients to disclose plans to use their property as a rental.

Q: Does it ever make sense to avoid turning in a claim?

 A: Not every claim is considered equal. We recently had a client who backed out of the driveway and hit his wife’s car. Both bumpers had to be replaced. After calling our office to explain what had happened, we walked the client through the different scenarios to determine whether it was worth turning in the claim to his insurance company.

The frequency of claims submitted is often rated equal to the severity of a claim when it comes to pricing. To keep costs down, Brunswick believes that in certain situations small claims should be paid out of pocket. Analyzing the options is key to personal risk management.

You never know what life has in store. Contact your Luma Wealth advisor if you need help assessing your risks, and sign up for the next Financial Fitness event to help protect your future.