Ordinarily at cocktail parties, conversation lags once I reveal that I work in insurance. But because our non-coastal Connecticut town was hit hard during the last few hurricane seasons, I'm now more popular than the bartender. Working with specialty insurers may be ideal for agents who serve towns like mine. Below are the most common questions I am asked:
Do I have enough coverage? Most people understand the need to select a coverage limit based on the cost to build (not buy), but few know their limits or if they're appropriate. Specialist insurers typically offer guaranteed replacement cost or at least extended replacement cost with coverage extensions in higher risk areas, to help ensure that a home can be rebuilt in like kind and quality when the cost to do so exceeds policy limits.
What if we don't want to rebuild at the same location? Specialists typically give their clients the choice to receive a cash settlement as high as the policy limit, rather than force them to rebuild in a place that is likely to sustain damage again.
Why not distribute funds up front to make it easier to begin repairs? Some carriers hold payment until a homeowner proves repairs are underway, creating a possible financial burden until reimbursement. Policyholders of specialists receive advances at the beginning of the settlement process.
Is my finished basement covered if my sump pump fails? Many standard insurers provide less coverage for sewer and drain backup than required to restore even a media room. Specialists typically provide up to the coverage A limit that applies in more situations, including sump pump failure. They also typically offer full policy limits for contents (coverage C).
Must I stay in a hotel room if my home is uninhabitable? Standard carriers generally cap loss-of-use coverage (coverage D) at 20% of the dwelling limit. Specialist carriers typically provide coverage for “reasonable expenses” so homeowners can maintain their normal standard of living.
Will my out-of-pocket costs change depending on event? Although special deductibles are common, triggers vary from named storms, wind speeds or hurricane definitions. Sometimes they are a dollar amount or a percentage of the dwelling limit, which can mean big out-of-pocket expenses. Specialists may allow policyholders to choose their deductibles if they're willing to retain more risk. If there's a large loss when the special deductible is not triggered, specialists typically waive the standard deductible.
Is there a difference in how insurers reimburse tree damage? Specialists provide more coverage for fallen trees and will remove a tree that has fallen on property other than the house. Some work with arborists on preventative services and preferred response to their policyholders.
Flood insurance is flood insurance, right? Most people believe that all flood insurance is the same. Specialists often sell excess flood coverage, which is important because NFIP limits might exhaust when a large home is flooded. Some provide enhanced flood coverage with replacement cost for contents in secondary homes, additional living expenses and basement improvements.
How much coverage do we have if our homeowners' association assesses us for damage? Standard insurers may reimburse $1,000 for assessments (and sometimes $0 when the assessment is triggered to cover the association's deductible), while specialists typically provide up to $50,000 and some meaningful fraction thereof to cover assessments issued for the association's deductible.
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