Guest blogger: Simon Hermant
We are pleased to welcome Simon Hermant to our blog. Simon is an Account Executive with HUB Intnerational, who are a leading global insurance brokerage that provide a broad array of property and casualty, life and health, investment and risk management products and services.
All of a sudden ‘Risk’ is a dirty word
The economic downturn of 2007 has left many, once open to accepting reasonable levels of risk, now adjusting their risk aversion metre and tipping the scales towards the zero mark. And this is not limited to investments.
Basic homeowners insurance may cover some damage to your property and liability if someone is injured, but without a thorough analysis of your needs and assets, there is a likelihood you are vulnerable and at risk.
No two homeowners are ever the same; neither should their insurance policies.
Here are the Top Ten things that are typically overlooked when it comes to Homeowner’s Insurance
1. Fine Arts, Collectables & Specialty items. Basic homeowners insurance has limitations in regards to custom furniture, oriental rugs, antiques, light fixtures, glassware and more. While fire damage and theft may be covered under your regular policy, certain circumstances such as accidental breakage or damage are not. Further, you are likely to receive replacement cost under most standard policies, which typically only cover items at a single location, not second or vacation homes.
2. Watercraft, ATVs, Golf carts, etc… Watercraft of up to 25 feet and under 25hp is included under most homeowner’s policies. Additional coverage has to be purchased to cover anything over these limits. Additional liability, coverage for crewmembers, and pollution liability for craft after a certain size are often overlooked. As well recreational vehicles such as ATV’s and golf carts need to be addressed for usage and physical damage coverage.
3. Directors & Officers. Did your insurance broker ever ask you if you are a member of a private board or a public one? Or whether or not you are compensated for your service? If compensated, the normal umbrella policy will NOT cover a financial loss. A personal D&O (Directors and Officers) Policy is available that sits over and above the Board’s Policy, protecting you from any excess personal liability.
4. Wine Collection. Certain collectibles, including your wine collection, silver or memorabilia is not covered by regular homeowner’s policies or if so, have small limits. An additional rider, even without a deductible, is not expensive and can be written to offer percentile increases in value each year. Insurers will even help you to have these items valued.
*I recommend that homeowners re-evaluate items every 3-5 years to ensure adequate coverage. Blanket coverage is also available for those who want a buffer but prefer to not have specific contents revealed (possibly for estate purposes).
5. Farm, Ranch, Equine. Race or show animals? Particular breeds of horses are excluded under basic homeowner’s policies and require additional coverage. Further, homesteads with high volumes of acreage and “land exposure” are considered higher risk. Adequate coverage must also be obtained for ranch hands, horse trainers and farm workers and animal mortality.
6. Legal defense costs. Though you hope tragedy never strikes, if forced to retain an attorney, chances are legal costs would far exceed the limits for most homeowner’s insurance policies.
7. Household Staff. Homeowners are generally aware that it is mandatory for full-time household staff to be insured under liability, worker’s compensation and disability coverage. However, Employment Practices Liability Insurance Coverage (EPLI) protects you against wrongful termination, discrimination and sexual harassment claims if an employee claims he or she is being harassed by the owner or by a co-worker.
8. Other Structures on Your Property. Pool houses, guest cottages, rental properties, staff quarters, unattached decks, docks, fencing, in-ground pools, barns and other structures may not be insured under regular policies. Even if they are, coverage limits are typically very low, usually 15 or 20% of the main dwelling limit. Extra coverage needs to be considered.
9. Uninsured and Underinsured Motorists. In the event of an automobile accident (where you are not at fault) and there is bodily injury to you and / or your passengers, it would be critical to be adequately insured. Given the stats today, close to 20% of drivers are either underinsured or uninsured. If the other driver carries is in this position or hit and run situation occurs, your auto policy limits could be insufficient..
10. Excess Liability (Personal Umbrella Liability). Personal Liability limits under a standard homeowners and auto policies are usually maxed at $500,000 to $1,000,000 in coverage. In today’s litigious society, this is an area where these limits could be insufficient and result in potential loss of your net worth. Extending your limit is essential in today’s environment.
Simon Hermant
Account Executive
Hub International
