The Bottom Line: 3 Areas to check on your Insurance Coverage


Having insurance coverage gives peace of mind, but many people lack necessary coverage. Often, coverage is assumed when in fact an existing policy provides zero protection for specific loss events. Other situations become convoluted as to what policy covers specific losses, such as a homeowner’s policy possibly covering some losses associated with motor vehicles. Here are three common areas where you should really check your insurance coverage to make sure you are protected.
Flood Insurance

A CNBC article on flood insurance indicates homeowners who have insurance policies on their real estate incorrectly assume that flooding is covered. Most homeowners are surprised to discover that flooding is not covered at all under their existing home insurance policies. Flood insurance is separate and provided by the National Flood Insurance Program. Also, many homeowners wrongly assume that if they do not live close to a body of water that flooding cannot occur. Broken water mains, rain runoff, swimming pool failures and other events can cause flooding miles away from creeks, river, lakes or the ocean.

Renter’s Insurance

Landlords are very likely to have an insurance policy on the structures and property of the homes and apartments they own. This provides fire loss protection, liability protection for slips and falls, and other catastrophic loss or liability loss coverage associated with the buildings and property. However, without renter’s insurance, you have zero protection as a tenant for the contents of your rented property. A separate renter’s policy must be purchased to cover your furniture, clothing, electronics and other things contained in your rented home or apartment. The good news is that renter’s insurance is usually very inexpensive to have complete coverage on what you own.

Coverage for Personal Items Left Inside Vehicles

You have full coverage on your vehicle that is under a loan or lease, so you assume it also covers things you might have left in your car that can get stolen. Who hasn’t left their cell phone, laptop or expensive sunglasses in their car at least for a few minutes. Commuting to work or school usually involves a backpack or briefcase with a computer, cell phone, tablet or other pricey items briefly left unattended during a stop for gas and morning caffeine. If a thief absconds with your electronics or other items left in your car, your automobile policy is not likely going to cover a nickel of the loss. However, some homeowners policies may cover a portion. It depends on things such as if the items were briefly placed in the car and the actual wording of the policy. Separate riders can be purchased to get broader protection.

This is just an example of where insurance policies you have may not actually live up to your expectations for any given loss. It is wise to consider your own personal risks for loss and then speak with an insurance agent about obtaining adequate coverage. Nearly anything can be insured, but the risk of loss and the cost of the coverage needs to be considered. Everyone should read the fine print of their insurance policies to check for lack of coverage. Too much coverage with high premiums should be avoided as well.