January 01ST, 2025

As 2024 closes out, my first thought of the incoming new year was about getting our collective ducks in a row for 2025. I can't say enough how many times I have come across potential clients that pay insurance premiums, but failed to review their insurance coverage annually to ensure it is up to date.

Recent Example number one: The potential client presented the following facts to my office: They had a homeowner's policy insuring their home, then, one day, they moved out due to a marriage, and decided to rent out the old house. They didn't know they were supposed to update their policy to a landlord type policy, so the homeowner policy stayed in place until the date of the fire. Five years later, October 2024, the tenant left an unattended candle burning while they are out shopping. $300,000 worth of structural damage later, the insurance company denies their claim because the potential client should have insured this rental with a policy specifically designed to insure landlords. The denial was based upon a technicality within the details of the policy. This denial occurred in December of 2024. My office has been requested to review and fight this denial..... I'm on it!!!

Moral of this story? Whenever there is an important change, such as change of ownership, or there is a move, you need to update your policy with your insurance agent to ensure you are still properly covered. 

Recent Example number two: My office was presented with the following facts: Restaurant owner insures his property in February of 2024, but something went wrong with his premium check. The policy was subsequently canceled due to non-payment of premium, but the cancellation notice was sent to the wrong address. The policyholder did not notice because he is busy managing multiple restaurants. The fire occurred in November of 2024, causing $600,000 worth of structural and business property damage. My office fought this situation throughout December of 2024 and won. The client is now in a position to rebuild his restaurant and business personal belongings. 

Moral of the story? Regardless of how busy you are, making sure your insurance policies are very important. As it turned out in this case, I was able to get him out of this mess based upon a mistake the insurance carrier made by sending out the cancellation notice to the wrong address.

Example Number Three: The potential client gave his home to his business partner because he owed his business partner a large sum of money. He told the business partner that he just paid the insurance premiums, so he had insurance for the following eleven months. The deed to the property was transferred to the business partner. Two months later, a devastating fire took place at the property and the business partner submitted an insurance claim. His claim was denied because he was not the insured. The named insured then presented the fire claim but he too was denied because he no longer had an insurable interest in the property. The new owner needed to be the person listed on the deed AND the person named on the insurance policy declaration page.

Upon review of the facts, we actually agreed with the carrier, so we did not take on this client. It was ultimately the new owner's responsibility to secure his own insurance policy when he acquired the new home.

Final Example: Most people are actually "under insured". As part of my duties working for a large carrier, I traveled to and handled MANY of the well known California wildfires throughout the years, along with my prior co-worker adjuster colleagues. I might have been assigned a dozen of the total losses and in every case, 100% of the available policy limits were paid because, in fact, these homes were actually under insured.  There are reasons for this, for which I will not go into here, but, as a homeowner myself, I would encourage you to ensure your home and personal belongings have sufficient limits in the event of a total loss. Also, detached structures, by default is usually insured for 10% of the primary dwelling, usually could stand to have its' limits increased especially if there is a detached garage, pool, barn, etc.

Moral of the story? Take time at least once per year to talk to your insurance agent and to update them on any changes to the home, the situation, etc. Once the claim has been submitted, it's the adjuster, not the agent, that is looking at the fine print of your policy and WILL NOT go easy on you if there is an opportunity to deny or limit your claim. Unfortunately, a lot of agents are not that well versed on the policy details, so it's worth your time to read the policy yourself and question anything within the policy that concerns you.