Are You Properly Covered?

Cold temperatures, snowstorms, ice, and wind. Wintertime brings a lot of hazards, and with these hazards come some real and important insurance concerns.

Here are some real-life scenarios that describe the impact of having the right - and the wrong - insurance coverage. Each example is based upon typical homeowners or renters coverage.

Rental Apartment is Robbed

A young couple leaves their apartment to dig out their car after a snow storm.  While busily bundling up for their journey into the snow, they forget to lock their front door. They return a few hours later, shocked to find that their television, stereo and some cash is missing.  The cost to replace the stolen property is $2,500. 

• With renters insurance, their out-of-pocket cost would be $250. (This is their deductible.)
• Out-of-pocket cost to couple without renters insurance: $2,500
• Annual premium for renters insurance:  $150

Learn more about renters insurance.

Jewelry Stolen from Hotel Room

Mr. & Mrs. Smith, who are staying at a charming ski resort, leave their hotel room to spend a day on the slopes.  When they return to their hotel room later that day, they discover that the diamond bracelet Mr.Smith had given his wife for their tenth anniversary is gone.  

Mr. Smith calls their insurance company to report the theft, andis relieved to learn that the loss is covered. However, the Smith's policy contains certain liability limits for jewelry. To cover the full replacement cost of the bracelet,Mr. Smith should have purchased a scheduled personal property endorsement to increase the liability limit on the jewelry before the theft.

The cost to replace the bracelet is $5,000.

• Recovery amount to theSmiths without the personal property endorsement:  $1,000.
• Recovery amount to the Smiths without the personal property endoresment: $5,000
• Annual premium for personal property endorsement (with homeowners policy): $25
• The scheduled personal property endorsement provides coverage for loss or theft and no deductible applies to claims under this coverage.

Learn more about personal property endorsement.

Winter Storm Destroys New Home

Shortly after Mr. & Mrs. Wilson purchased a home in the mountains, a freak winter storm rips through their new home, rendering it unlivable.  An insuance adjuster visits their home and determines that the house will cost $50,000 to rebuild. In additon, it is determined that $100,000 of personal property is lost.

The Wilsons ask when they can start rebuilding their home and replacing their personal property.  The adjuster advises them that their insurance policy valued the replacement cost of their home at $125,000 and their contents at $75,000. If the Wilsons had the proper valuation on their home and contents, the loss would have been covered in full.

• Coverage on the Wilson's home: $125,000
• Coverage on the Wilson's personal property:  $75,000
• Out-of-pocket expense to the Wilsons for the house: $25,000
• Out-of-pocket expense to the Wilsons for their personal property: $25,000
• Increase in homeowners insurance annual premium to increase coverage: Approximately $50

Learn more about increased coverage for personal property.

Ice Storm Damages Roof

Mr. Peterson is reading in his den when he notices that the freezing rain that has been falling has turned to ice. The next day he observes ice damage to his roof and calls his insurance company.  The insurance adjuster arrives and determines that the composition shingle roof must be completely replaced for a total cost of $8,000. The adjuster applies the depreciation for the roof's age (ten years), which reduces coverage by 25% to $6,000. If Mr. Peterson had purchased a "replacement cost endorsement" to his homeowners policy, the roof would have been completely covered.

• Out-of-pocket cost to Mr. Peterson: $2,000
• Increase in homeowners insurance annual premium for endorsement:  Less than $50

Learn more about replacement cost endoresements.

Boy Injured at Family Skating Party

The Decker family is hosting a large family skating party on the pond in their back yard.  Tragedy strikes when Thomas, their twelve-year-old nephew, falls and breaks his ankle.  Seriously injured, the young boy is taken to the hospital.  Quickly, the hospital bills hit $3,000, but Thomas' parents have no health insurance.

Fortunately, the Deckers realize that the medical payments portion of their homeowners policy covers medical bills of individuals injured on their property, regardless of fault.  Thomas recovers quickly, everyone breathes a huge sigh of relief, and Thomas' family is saved from a large medical bill. 

• Annual premium for the Decker family's homeowners insurance:  $300
• Medical payments paid by insurance company:  $3,000 

Learn more about medical coverage in homeowners policies.

Neighbor Sues Neighbor for Dog Bite

The Bodden children are having a snowball fight in their backyard when one of them accidentally runs into the Pagano's yard and unknowingly steps on Cosmo, the Pagano's dog.  The startled dog snaps and bites the child. 

Outraged, the Boddens file suit against the Paganos and win their case.  Fortunately, the Paganos have medical and liability insurance provided by their homeowners policy to protect them.

• Litigation cost to defend the suit:  $10,000
• Medical bills:  $2,500
• Pain and suffering damages:  $100,000
• Total cost paid by the agano's insurance company:  $112,500
• Total cost paid out-of-pocket by the Paganos:  $0

Learn more about medical and liability insurance.