Costly Property Insurance Mistakes
Getting the right property and casualty insurance coverage may not rank high on your list of financial priorities. Too busy with investment decisions and estate planning issues? Well, the more successful you become, the more you have to lose. Owning property in different countries and even different states of the same country requires you to know the various insurance laws applicable.
It’s important to review all of your needs, consider specialized policies or policy options, and coordinate your coverage with other aspects of your financial situation.
Shortfall in your coverage that could prove costly
Leaving gaps in the coverage. Review coverage regularly to keep up with rising replacement costs.
1. Ignoring the unique characteristics of various properties you own. A 19th century showplace you’ve restored, can’t have Standard Homeowners coverage. Coastal homes may face flood damage, while a place in the mountains could be subject to wildfires.
2. Under insuring art and collectibles. Standard Homeowners policies have limited coverage for the losses of certain valuables. Some of it may need a specialized policy. You’ll need a professional appraisal with frequent updates as items appreciate or additional items are added.
3. Omitting to insure household employees. You could be liable for medical expenses and lost wages if your employee is hurt on the job. As a household employer you might be required to contribute to a workers’ compensation fund. If an employee drives your car, include him/her on your policy.
4. Failing to have a policy reviewed and updated. Your insurance needs are not static. Increase in the value of a collection; home renovations increasing the value of your property; assets added to or removed from your estate as a result of divorce, or death in the family could require policy changes.
A complete review of all your insurance coverage should be executed every two years.