Identifying Coverage Gap Issues
The term “coverage gaps” probably does not resonate if the consumer does not understand an insurance policy. The average consumer usually cannot remember the name of their homeowner’s insurance carrier, but almost always can remember the name of their auto insurance carrier. Why is that? Both policies are important to safeguarding assets and making sure that coverage on those contracts adequately protects the possessions that clients have worked so hard to purchase.
Personal Lines Coverage Gaps
Let us first discuss the homeowner’s policy. It is important for consumers to be aware that homeowner’s policies do not cover flood damage or damage caused by water backup. In the marketplace, there are some carriers that include water backup coverage; however, most policies require an endorsement to cover that type of loss. Consumers usually find out that coverage is restricted to personal property coverage at the time of loss, which causes frustration and confusion.
Earthquake coverage, while not widely requested in Florida, can be purchased and varies in range of premiums. If a homeowner is located in an earthquake zone area, then coverage should be considered. This, of course, works the same in Florida with hurricane coverage. While there may be cases where a homeowner will choose not to purchase this coverage, at a minimum clients should consider windstorm coverage on a homeowner’s policy.
Deductibles are an important component of an insurance contract. While higher deductibles can save consumers money, sometimes the savings can be minimal and might not make sense. However, the client who has an appetite for risk might wish to have a higher deductible regardless of premium savings. Conversations with clients and understanding what is important to them are invaluable.
Lastly, equipment breakdown has emerged as coverage that can be added to a homeowner’s policy. Review the policy form and make sure that the endorsement makes sense before purchasing this additional coverage.
Commercial Lines Coverage Gaps
Business interruption is an important coverage consideration for a business owner. If the business is interrupted due to a loss, it can be a financial strain on the company to make the business operational again. Business interruption can help with any additional costs that the client may incur to get the doors quickly open again.
Cyber liability coverage has become more relevant to businesses in recent years. Data breaches occur more often and business owners’ traditional insurance policies do not provide coverage for this loss. Protecting customers’ personal and private information is important for a business owner. Today, clients’ personal and financial information is frequently exposed via the internet and business owners need to protect that information.
Independent insurance agencies assist clients, both personal and commercial, review policies and meet with customers to make sure that there is adequate protection. Meeting an agent face-to-face is a valuable stop in understanding what is important to clients and how to best protect that which is important. To schedule an appointment to review your coverage today, call RMC Group at 888.599.5553.