New & Existing Coverage Options for Personal Insurance
Advances in insurance in-and-around the home
Over the past few years, personal insurance companies have started to come out with a few new coverage options. From the first meeting, they seem to be great assets, and I think they’ll continue to prove themselves to be. However, don’t let these fade out some of the old coverages.
Utility Line Coverage
This was first introduced a few years ago and has recently been picked up by several major companies. The intent of this is to provide coverage for your utility lines that run underground from your home to the street. These can include water lines, sewer lines, drain lines, gas lines, and electrical lines. The neat thing about this endorsement is that it provides coverage for one of the top exclusions in the history of insurance – wear and tear. So, if you have older pipes and they are damaged due to wear, this endorsement could provide coverage. Some of the other exposures covered includes freezing, tree roots, the weight of machines above ground, and animals. It also pays to excavate your yard, repair or replace the damaged piping, and then place the excavated material.
Personal Cyber Protection
While business cyber insurance has been around for a few years, individuals have been left somewhat stranded when it comes to protection for themselves. Everyone knows that cyber risks are on the rise, and your private information is not as private as it once was. Some companies are starting to offer endorsements on the homeowner policy that provides cyber protection. There is an endorsement for identity theft currently available, but it only pays to cover the cost of legal documents and time taken off work, not the cost of lost information. This is where the cyber endorsement really steps in. It is still lacking when compared to the commercial policy but does a good job offering basic coverages such as data recovery, system restoration, reimbursement for cyber extortion, and coverage for forgery or theft.
Ordinance and Law
In case you have a home loss, especially if your home is 10 or more years old, this is a critical coverage to have (and to have a lot of). When you have a loss, such as a fire, where someone from your local authority comes and inspects, if they find that your home is under code, they can require you to replace the damaged portion of your home with material that brings it up to code. However, a regular policy doesn’t provide much, if any coverage for this. Your home provides coverage to replace what was there, not add in different materials. They can even require you to demolish the part of your home that was not damaged and rebuild the entire home up to code. If either of these things happen, you need ordinance and law coverage to step in. Many basic policies provide 10% of your home replacement cost for this, but if you are required to demolish your entire home, you’ll be left with a large out of the pocky expense. I recommend carrying 50% of your home replacement cost to help with this exposure.
Water and Sump Pump Overflow
This is a great coverage, and everyone has some exposure to it, even if your home is on a slab foundation. This was created to provide coverage if water backs up through your drains or sump pump. Even if your sump pump fails, this coverage still applies. People who have basements have the most exposure for this and need to ensure they have this endorsement. Many contractors will say you need around $25,000 to $30,000 in coverage to replace a finished basement. If you’re on a slab, even though you most likely don’t have a sump pump, your drains could back up and cause damage. The only downside to this is that it does not cover damage to a sump pump, but only the resulting damage from it failing.
If you are not sure you have these coverages or would like to talk about adding or increasing them, don’t hesitate to contact me!