The ads for homeowner and auto insurance are becoming increasingly entertaining. With celebrity endorsements, full action explosions and clever tag lines, many people buy insurance off the ads alone. Who wouldn’t want to save 15 percent? But what is the real cost?
Too often, people spend their time and energy growing their assets and accumulating wealth while failing to adequately protect their assets and preserve their wealth. Items such as collectibles, artwork and jewelry are one of the most overlooked and underinsured items on a policy. Initially, people engage agents and insurance companies that are ill equipped to meet their needs and do not conduct a comprehensive review. These reviews should be done annually and can take less than 15 minutes. Here are some examples that people often overlook that can or do have a significant impact:
Hired help, whether part time of full time, have been submitting claims for “wrongful termination, harassment and discrimination.” As long as employment can be proven, regardless of merit, the homeowner must defend him or herself, and the cost to defend as well as any potential settlement, can quickly escalate. The standard liability coverage on a homeowner or umbrella policy excludes coverage for domestic employees and must specifically be requested at a minimal cost. In addition, many people do not have a Workers Compensation endorsement added to their policy in the event their employee is injured but it can be added for a whopping $60!
Not-for-profits are often an overlooked area as they relate to a homeowner policy but they are directly correlated. To their credit, affluent consumers contribute a significant amount of their money and time to not-for-profit organizations. What these volunteers may not know is that their good deeds expose them and their hard-earned assets to the threat of liability lawsuits.
Volunteer board members of schools, shuls and other wonderful organizations can be held liable for the actions or inactions of the not-for-profit they try so hard to assist. While the organization may carry insurance to protect itself, a limited budget typically prevents the purchase of a gold-plated insurance program, leaving inadequate coverage to their deepest pockets—its board members assets.
Cyber liability is a coverage affecting businesses of all sizes but now pertains to homeowner policies as “cyber bullying” becomes an increasing exposure. Parents often don’t know what their children are posting on social media, and top tier homeowner companies are now offering coverage for unintentional liability. A wide array of coverages are available including psychiatric care, wrongful discipline, mental anguish, defense and forensic analysis to determine and prosecute the culprit.
No one likes to pay for insurance and we are all wired to save money, but not at the cost of bearing the full risk. Why not make sure you have the right coverage?
By David Feuerstein
David Feuerstein is a Senior Vice President with Brown & Brown (NYSE: BRO), the largest insurance broker in New Jersey. David’s consultative approach toward Employee Benefits, Property & Casualty Insurance and Personal coverage, has fostered strong ties with his clients. David can be reached at [email protected] or 973-549-1947.
