Before You Buy: The Questions to Settle for Each Policy You Carry

Every policy is built on a set of decisions about what to cover and at what limit. The questions below are the ones worth settling before you buy, line by line.

What should a renter settle before buying?

• Determine how much personal property you want to insure
• Assess what liability limits of insurance you desire to meet your renters insurance needs.  Do you need to meet a minimum requirement for a landlord or a personal umbrella policy?
• How much loss of use coverage suits your needs?
• Do you have any specialty items to insure such as high value jewelry or fine art that are subject to sub-limits within the policy?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Is earthquake insurance something that you would like to have as well?

What should a homeowner settle before buying?

• Determine what it would cost to reconstruct your property after a total loss
• Assess what liability limits of insurance best suit your homeowners insurance needs.  Do you need to meet a minimum requirement for an umbrella policy?
• How much loss of use coverage suits your needs? Would that be sufficient should your home have a major loss and you can’t live there for an extended period of time while it is rebuilt?
• Are you planning on doing any major construction or renovations in the near future?
• Do you have any specialty items to insure such as high value jewelry or fine art that are subject to sub-limits within the policy?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Is earthquake insurance something that you would like to have as well?

What should a landlord settle before buying?

• Determine what it would cost to reconstruct your property after a total loss
• Assess what liability limits of insurance you desire to best suit your landlord insurance needs.  Do you need to meet a minimum requirement for a personal umbrella insurance policy?
• How much loss of income coverage suits your needs?
• Do you have any potential for a long term vacancy? Does the policy you are choosing provide coverage for a vacant property?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Is earthquake insurance something that you would like to have as well?

What should a condo owner settle before buying?

• Determine what it would cost to reconstruct your unit’s improvements should you have a total loss
• Determine how much personal property you want to insure
• Assess what liability limits of insurance you desire for your condo insurance policy. Do you need to meet a minimum requirement as part of the HOA’s CC&Rs or for a personal umbrella policy?
• Determine how much loss assessment coverage you need
• How much loss of use coverage suits your needs? Would that be sufficient should your home have a major loss and you can’t live there for an extended period of time while it is rebuilt?
• Are you planning on doing any major construction or renovations in the near future?
• Do you have any specialty items to insure such as high value jewelry or fine art that are subject to sub-limits within the policy?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Is earthquake insurance something that you would like to have as well?

What should a driver settle before buying?

• Determine what liability limits best suit your auto insurance needs. Do you need to meet a minimum requirement for your lease or an umbrella policy?
• How many miles do you plan to drive in the next 12 months?
• Will you be using your vehicle for work?
• Do you want coverage for towing and roadside assistance?
• Do you want reimbursement for a rental car if your auto is damaged due to an accident or comprehensive loss.
• Do you want comprehensive and collision coverage or just liability?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Do you need GAP coverage?
• Do you want only OEM parts used to repair your vehicle?
• Who else will be regularly driving your vehicle?
• Is your car financed or leased?

What should a boat owner settle before buying?

• Determine what liability limits best suit your boat insurance needs. Do you need to meet a minimum requirement for your lease or an umbrella policy?
• Do you use your boat in lakes or in the ocean?
• What do you do with your boat? Do you tow skiers? Do you participate in boat races?
• Do you want coverage for emergency towing?
• Do you want comprehensive and collision coverage or just liability?
• Determine what deductible options provide you with the coverage and pricing that meet your needs.
• Who will be operating your boat?
• What special equipment do you carry on your boat?
• Do you plan to take your boat outside of US waters?

What should a business owner settle before buying?

• Determine what liability limits best suit your business insurance needs. Do you need to meet a minimum requirement for your lease, under a contract or for an commercial umbrella insurance policy?
• Do you want to insure your business property? How much?
• Does your business property stay in one place or does it frequently move around?
• If your business was interrupted by a claim how much loss of income would you like to be insured for?
• Do you have employees?  How many and what is your annual payroll?

What to do with your answers

Work through the list for the policies you actually carry, then set your answers beside your declarations page. The gaps tend to show up in the same few places. A reconstruction figure nobody has revisited since the policy was written, a loss of use limit never tested against a long rebuild, and specialty items sitting inside a sublimit rather than scheduled.

Two of these questions carry more weight in California than they would elsewhere. Reconstruction cost is one, because guaranteed replacement cost is largely unavailable here and extended replacement cost adds a stated percentage rather than an open-ended promise. Earthquake is the other, because it sits outside the homeowners policy entirely and its deductible is generally a percentage of the coverage limit rather than a flat sum.

None of these questions have a standard answer. They depend on what you own, what you could absorb, and what a rebuild would cost where you live. We can walk through them with you and put real figures against each one. Call the agency at (818) 322-4744 or request a quote.

Coverage described here is general. The policy you are issued determines what is and is not covered.

Disclaimer

This article is provided by Schneiderman Insurance Agency for general informational purposes only. It is not legal, tax, financial, claims, or coverage advice. We are licensed insurance professionals, not attorneys, accountants, or financial advisors, and nothing here should be relied on as a substitute for advice from a qualified professional in those fields. This content is general in nature and is not a review of, or a recommendation for, any individual reader’s specific insurance needs, policies, or circumstances. Insurance coverage depends entirely on the specific terms, conditions, endorsements, exclusions, limits, underwriting eligibility, carrier, and facts of each situation, and the actual policy language always controls. We do not guarantee any coverage, pricing, eligibility, underwriting approval, or claim outcome. Reading this article does not create an agent-client relationship. To understand how these issues apply to your situation, please review your own policy and speak with a licensed insurance professional, and consult legal, tax, or financial advisors where appropriate.