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Overlooked Insurance Coverage

August 30, 2012

The following are brief descriptions of insurance coverage not usually obtained or obtained in inadequate amounts.  Insufficient insurance can expose you to serious losses and could also jeopardize your future financial comfort and security.  Note that I am not covering all types of insurance and this guide’s purpose is to alert you to the importance of the right insurance protection.  Some of this coverage can be as riders to existing policies.


Umbrella insurance: Excess personal liability or umbrella policies typically cover losses over the amount of your regular insurance coverage, or over a deductible amount.  Note that you are not covered for gaps between the two.  For example, if you have liability insurance of $300,000 and the umbrella policy has a $500,000 liability deductible, you will not be covered for losses between $300,000 and $500,000.


Workers’ Compensation: This covers people that get hurt while working in your home.  This coverage extends to people even if they are not employed directly by you and possibly people working “off the books.”  An example is where you engage someone with a one-person business to install a new dishwasher for you and he brings along a college kid as a helper, who he pays “off the books.”  The dishwasher falls and crushes the student’s hand.  Without the workers’ comp insurance, you can be liable since the injury occurred in your home.  With the workers’ comp insurance, the injured person deals directly with the insurance carrier – you are out of the picture.


Unlicensed and Uninsured Contractors Insurance: This is insurance for damages caused by unlicensed or uninsured contractors.  This includes noncompliance with building codes, lack of obtaining permits, poor quality work that causes other damage and possible scams and broken contracts.


Uninsured motorists: Most people have coverage to provide payments if they are in an accident caused by an uninsured motorist but they could be for an inadequate amount, or a lower amount than your umbrella deductible.


Cyber liability: Crazy things can happen on the Internet.  You should check with your agent to see what protection might be needed based on how you use the Internet, email and the confidentiality of the information you handle.


Consult your insurance agent: Each policy has defined coverage and exclusions.  The policies must be carefully read and understood so that you are clear on the protection you have. You should make it a practice to meet at least once every two years with your insurance broker or agent to review your coverage, the cost, additional areas of coverage, available alternatives and ways to reduce premiums.

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