How Can I Identify Property Insurance Gaps?
Business owners and homeowners should have a firm understanding of their property insurance coverage. A robust insurance plan should cover various aspects of risk facing a property, and any gaps in property insurance can lead to potentially frustrating and expensive insurance issues. One of the best ways to identify any gaps in your property insurance is to have your insurance agent or broker conduct an annual review of your property insurance policy.
Factors That Influence Coverage
When you apply for property insurance coverage, several aspects of your property influence the type and amount of coverage you can receive. For example, if you apply for homeowner’s insurance, then your home’s location, building style, age, and various other factors will influence the cost of your insurance premiums and the scope of your coverage. Special considerations exist for commercial properties.
Your insurance provider may offer coverage for certain types of natural disasters like wildfires or severe wind damage. However, the specific clauses in your insurance policy that pertain to natural disasters may specifically exclude earthquakes or floods. It’s important to know which events fall under your coverage and which do not, so no unpleasant surprises occur in the aftermath of a disaster.
Some elements of your property may qualify as liabilities according to your insurer. For example, if you intend to install a swimming pool on your property or purchase a large trampoline for your kids, your insurance agent may warn you that these items can increase your policy obligations and lead to higher premiums.
Changes to Your Property
If your property experienced any changes within the past year, your insurance broker or agent will need to review those changes to determine if they affect your coverage. For example, a policyholder renovates his or her living room and installs new hardwood floors, a high-quality entertainment center, and a surround sound system. The policyholder would want to ensure that these changes fall under his or her insurance policy in the event of serious property damage. If the policyholder fails to upgrade or update his or her policy, it’s possible that these changes would not be eligible for coverage later.
Your insurance agent or broker can also help with a risk assessment of your property. This will uncover various elements of risk you may not have noticed, such as your property’s presence on a flood plain or a change on your property that leaves it more vulnerable to other types of damage. Most insurers will price their coverage based on risk, so properties with fewer risks and lower risk overall will be less expensive to cover. A property with multiple risks will likely require higher premium payments.
Review Your Bundling Options
Most insurance carriers offer policyholders the chance to bundle different types of coverage into single policies, or multiple policies into one insurance plan. If your insurance provider offers any bundles, you could save quite a bit of money on your monthly premiums by bundling. However, it’s important to take any disclaimers or coverage restrictions that may apply into account. For example, an insurer may only allow you to bundle one type of coverage into your policy if it is under a certain amount, and anything over that amount would require an individual policy. Other insurers may require you to purchase several types of insurance before you are eligible for bundled pricing.
Disasters and property damage can happen without warning, and policyholders shouldn’t need to pick up the pieces of what insurance won’t cover. Instead of running the risk of encountering gaps in your insurance coverage after an accident, have your insurance agent or attorney review your policy to find any gaps in your coverage that could be problems later.