Where’s the Necklace?

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No insurance professional ever wants a call from a client who has just lost an expensive piece of jewelry or some other expensive item that was not properly insured. The homeowner policy provides very little coverage for items such as jewelry, watches, furs, money, silver, guns, precious gems, and stamp and coin collections. One can, however, increase the sub limits in the policy or specifically insure the items with a special policy called a “Scheduled Floater” or “Valuable Items Floater”. The floaters are useful because they are “all risk” and there is no deductible to contend with. Most people think that the primary reason to insure a valuable item is for theft. There are many other things that can happen. A stone could fall out of a setting or a ring could slip off a finger or be accidentally flushed down the drain. Someone could spill a glass of wine while admiring your stamp collection or a child could decide to change the color of your mink. Some people schedule items that are not restricted on the homeowner policy such as cameras, musical instruments, and fine arts. Again, the appeal is that there is no deductible and the coverage is broad. Also, by placing a value on the item, you establish its worth up front so there is no dispute if there is a claim. We often advise our clients to consider not insuring valuable items that are inherited. The sentimental value can’t be replaced and since there is no monetary investment, paying a premium to protect them may not be worth it. Since many are using higher deductibles on their homeowner policies to save premium, the use of floaters for singular items of value makes even more sense. By having a scheduled floater, you can relax a little- knowing that if that Rolex you got for Christmas is missing, you will get another one without despair, tears, and regret.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

Beware of the Fine Print!

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I have written in previous articles about the need to become familiar with one’s insurance policy. I don’t expect everyone  to read the document cover to cover but it is important to at least review the exclusions and limitations as well as the limits provided. A good insurance professional will alert you to many of the important restrictions but as the old saying goes “two heads are better than one”in any review.. In the homeowner policy be aware of the listing of sub-limits for jewelry, furs, silver, guns. coins, and other similar items. Note that there is no liability protection for businesses even if they are conducted in the home. Flood and earthquake are excluded but can be purchased independently.Your auto policy won’t do you any good if you rent a car in Europe and take particular note of the importance of uninsured/under-insured motorist protection in the auto policy. Yacht polices are particularly diverse in coverage-especially in the definition of what is determined to be a “latent defect”. Insurance documents are tricky and hard to read. Don’t be shy in directing questions to your insurance representative who hopefully is knowledgeable-and available.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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It Takes Two to Tango!

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In one of the cases I worked on as a consultant/expert witness, the expert for the other side stated that insureds don’t usually read their policies and therefore the agent/broker is responsible for explaining and ultimately any misunderstandings regarding the insurance coverage. This is nonsense in my opinion. The insurance mechanism is a collaborative effort. The insurance professional provides the product and the expertise that goes with it. The client, in turn, is responsible for providing information and insights into exposure as well as familiarizing themselves with the coverage and limits of the policy. The insured cannot just acquiesce and expect the insurance broker to take care the whole matter. The insurance purchaser is the one that has the understanding of his or her business or personal insurance needs- and has to take the process seriously and have a dialogue with their insurance representative. Failure to do this may result in gaps or inadequate coverage and more times than not it is not the fault of the broker but rather the disinterest of the client. Both parties have to go to the dance floor in designing and implementing a logical need based insurance program.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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“A Matter of Trust”

trust

The recent episodes of corporate dishonesty and negligence is disturbing and no one wants to be on the short end of a business deception. When one places their insurance with a Firm there is an assumption that there will be an honest and competent approach from those persons protecting your assets. There are several methods to test the credibility and competence of those handling your insurance affairs. The following are some recommendations:

1. Ask someone you already trust and respect to recommend an insurance broker. The recommended party presumably has demonstrated their capabilities through a long term relationship with your friend.

2. Your insurance representative should be financially sound and the minimum recommended ratio of current assets to liabilities is 2:1. Their accountant should verify this.

3. It is suggested that you contact the State Insurance Department to see if there are an complaints about the insurance Firm you are researching.

4. Request that the Firm provide testimonial letters and references for you to call.

5. As a test for competency, research the education of the Firm’s personnel and how many employees are licensed or have advanced degrees in insurance. The Firm should profile their employees and comment on how long they have worked for the Firm.

Insurance is a complex business and it is crucial that you deal with honest and technically proficient individuals that will give you the right counsel. If an insurance Firm is unwilling to provide evidence of their capability, don’t deal with them.

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The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660 .

Insurance Ads: promises, promises

Promises

Lately there seems to be a frenetic blitz of advertising by several insurance companies where they imply a promise to provide substantial savings in home and auto insurance. It reminds me of the book, “How to Lie with Statistics.”

Unfortunately, there is very little accountability on the data behind their grandiose statements. Equally unfortunate is the fact that those insurance companies who spend a disproportionate amount of their budget wooing customers through advertising have reduced the placing of insurance to a commodity-as if you were buying a bag of potatoes. There seems to be no end to their insatiable appetite for more business. I personally admire the quiet companies that would rather spend their money and resources on claims and not on advertising and self-promotion.

The discerning consumer recognizes value in products and services purchased, and, although price is a consideration, the quality or value provided is more important. Would you pick a lawyer, dentist, doctor, accountant, boat, car or vacuum cleaner because it was the cheapest? Of course not, and one should treat the purchase of an insurance product the same way. There is a quality behind that insurance policy and the person selling it that will be manifested in the event of a claim.

For instance, if you have a disastrous fire in your kitchen, is your insurance company going to work with your contractor or insist that you use one of theirs? If you have a major collision loss on your car, are you going to be directed to a body shop chosen by the claim adjuster or will you have a say? The answers to questions like these depend on the insurance carrier you choose.

Insurance is a tricky business and not all insurance contracts or insurance companies are the same. Pick a quality company that has a fair price. With all the competition in the insurance field, there are very few companies that have an unfair price. I recommend a trusted advisor, whether it be an agent or consultant, to help you with the process. As the old saying goes, you get what you pay for and that includes your insurance coverage.

If you have questions about your insurance coverage, please contact us.

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