Claims That Are Not Covered

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by plong

Category: Education

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The worst feeling an insurance agent can experience is when a client calls in with a claim – and there is no coverage or only partial coverage. An insurance policy is a legal contract between you, the insured, and the insurance company. You sign the application and pay the premium, and the insurance company sends you a policy. All policies define who the insured is, and they tell what the company is willing to cover. Each company can carry a different contract, so what may be covered on one will not be covered on another. Each circumstance needs to be examined individually.

Here are some common sinking stomach claims:

  • If a hit and run driver damages your vehicle and you do not know who did it – you must rely on your Collision coverage on your policy to repair your vehicle and the deductible will be your responsibility.
  • If you are in an accident, whether you are at fault or not, and do not carry Substitute Transportation coverage, you have no coverage for a replacement vehicle while yours is being repaired. If the other driver is at fault, you need to chase that other company and see if they will allow this coverage.
  • A very common claim is loss of a piece of jewelry – the most common reason is it has fallen off. This is termed mysterious disappearance which is not a peril covered under a policy’s Personal Property – so no coverage. If the item was stolen, you need to make a police report. You will receive coverage up to the “Special Limit of Liability” which can vary policy to policy, usually $1500; this is also subject to your deductible.
  • You are on vacation or this is a secondary home. You keep the temperature at 50 degrees – or forget to pay the bill and the heat is turned off. We have an extreme cold snap, so the pipes freeze and burst. The insured contractually was required to “Use reasonable care to maintain heat in the building”. Forgetting to pay the bills makes sense for denial of coverage, but what about the 50 degrees? If it is an extreme cold, should you know 50 degrees is not enough to stop the pipes from bursting?
  • Septic systems – you back your vehicle into your yard to remove some debris, and you accidentally collapse a portion of your septic system. There is no coverage for this collapse.
  • Retaining walls holding back tidal water – the wall erodes from a storm. There is no coverage on the homeowner policy and there is no coverage on a flood policy as well.
  • Power surges and your television and computer. During the summer months especially, the Cape requires a lot more electricity which means we have a lot more brown outs and power surges. When this occurs circuitry in appliances, your computers and home entertainment units are not covered. PLEASE USE SURGE PROTECTORS. If the surge is caused by a lightning strike or there was a hurricane, you would be covered subject to your deductibles.
  • You walk into your basement and find water seeping in through the walls – fairly common on Cape during rainy seasons. There is no coverage for this on the Homeowner policy. You may find some coverage in a flood policy.

Ask your insurance agent how best to cover what is important to you. Taking a proactive approach to insurance may avoid the discomfort of the “you’re not covered” discussion.

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