Auto Insurance Coverage

Recently, one of our clients called to report that her teen-aged daughter had been in an auto accident.  While stopped at a light, her car had been rear-ended by another car, which resulted in some whiplash for the daughter.  The car was a total loss.

I advise all my clients who are involved in accidents, either at-fault (ie, when their own insurance is called upon) or not-at-fault (the other person’s insurance comes into play) to prepare for some inconvenience and, perhaps, annoyance. Even with that in mind, this should have been a routine claim, in which the insurance carrier for the other driver would have paid the entirety of the medical charges as well as the book-value of the car.*  But, as is far too often the case, what seems routine can often become complicated.  In this case, the daughter, now in her late teens, had a seizure disorder when she was very young.  After the accident, her doctor recommended a series of tests to determine if the jossling her brain took could result in re-triggering the disorder.  The tests could be expensive.

So what’s the problem?  The other driver’s insurance carrier (under the liability coverage) incurs the responsibility for all of the expenses related to bodily injury. True, but only to the policy limits and, in this case, the limits were for only the state-mandated minimum: $25,000 per person/$50,000 per occurrence.** The insurance carrier?  One of those whose TV ads are as ubiquitous as they are intellectually grating (lizards, cave men, ditzy-yet-endearing waitress types; you get the idea) and who predict they can save you money (let’s say, oh, about 15%) over your current coverage.

How? Often via lower limits, ie less coverage.  The so-called 15% savings can quickly be realized from reducing the bodily injury and property damage, as well as the uninsured motorist (ie coverage for you in case whomever hits you doesn’t have enough coverage) and medical payment limits, down to the state-mandated minimum.  After all, you’re not required to carry more coverage than that.  And to many people, in their zeal to save money, this is attractive.  I see this regularly, though, I must note, not always, when reviewing the policies from these carriers for potential new customers.  We, like virtually every independent agent, will not not write auto policies for less-than-adequate limits, usually at least $300,000, and preferably $500,000. To do otherwise would abrogate our responsibility to our clients.

Can the “call 1-800/Endless TV ad insurance companies” save you some money and provide adequate coverage?  In some cases, of course they can; auto insurance is a competitive product.  Can they provide the advice and attention an independent agent like Finn and Stone will provide for you for the same premium?  Probably not.  And when you have a claim, (whether it’s your fault) you won’t consider how cheap your car insurance is; you’ll want to be sure you’re adequately covered, and that there’s an agent like us who will take the time to help you through the claim.

*Arriving at fair compensation for your totalled vehicle can require some preparation and negotiation.  We suggest researching the book value via one of the on-line services.
**Because the cost of our customer’s tests and any follow up treatment could easily

Scheduled Jewelry Insurance

My father, who was an insurance broker for 30 years, kept a slim little book near his desk called “So You Think You’re Covered?” Obviously, with all the many coverage changes over the years the book became dated to the point of near-obsolesence, but the concept remains true even to this day: Misconceptions about insurance coverage are common.

Here’s a recent example: A few weeks ago I received a call from one of our homeowners clients. She was upset because she had lost a pair of very old diamond earrings. Her grandmother had given them to her many years ago, so, as you can imagine, the sentimental value was very high. She wondered if her homeowners policy would cover the cost of replacing them. I checked her policy to determine if the earrings were “scheduled,” which means that the insurance company had been provided with an appraisal from a qualified jeweler describing the earrings and attesting to their value (if they’d been newer, the bill of sale would have sufficed). The earrings would thus have been “scheduled,” that is, insured separately and for their appraised value, on her policy under a personal articles floater for a small additional premium. Unfortunately, the earrings were not scheduled and the claim was denied under the “mysterious disappearance” (yes, it’s really called that) exclusion* on a homeowners policy. If the earrings had been scheduled, they would have been covered for their replacement cost.

Jewelry, and many other items, have coverage limitations under even the broadest homeowners policy. This is why every year we send our clients a letter asking them to consider and review if they own items, such as jewelry, silver, artwork, or antiques that may need to be scheduled. So, please don’t “think you’re covered” for a certain loss; call us and ask before it occurs.

*So, you’re probably asking, is my jewelry covered at all? Unscheduled jewelry is indeed covered under a homeowners policy, typically to a limit of about $2500, but is subject to the same conditions and exclusions, as well as the deductible, as other personal property. You’re covered for such perils as fire and theft, but if you lose an item of unscheduled jewelry, there’s no coverage. A scheduled item, however, would be covered if it were lost.