What's included in the policy and what add ons should you have?
Only a good agent will ask good questions to understand your specific needs and make sure they are providing good well-rounded coverage for you and not leaving gaps in coverage. The worst thing is to find after you have a claim that there is limited coverage or NO coverage. What's even worse is when they didn't tell you and "You should have read the policy"! I got that once from my agent and then I fired them!
- Find an agent with experience – Some things only come with experience and thinking you're saving money doesn't always add up
- Select an Insurance carrier with a good rating. You of course want a carrier that has a financially stable rating like AM Best rating, but you also want to know when there is a claim they aren't just worried about the $$ they are spending! Look at their claims reviews, don't take their word for it. They tend to phrase questions in a way that makes them look good. What you want to know is they care.
- Does your agent (potential Agent) get involved in the claims process or are they more hands-off? Most agents these days would rather send it to the 800 number and go sell another policy. But agents know how GSD (Get Stuff Done) and sometimes if your claim is at a standstill you want an agent that is willing to make the call and get involved!
- Is there an appraisal clause in the policy and does that include an "Umpire clause"? TN State law requires that an insurer have a system in place so a policyholder doesn't have to use the court system when a claim seems to be off. I've seen some major Tennessee Insurers that DO NOT have an umpire clause in their policy. I'm not sure how this meets minimum law standards but it must. The issue here is that for the sake of this, let's call them Xfarm insurance carrier tells you they are paying $1,054 on this claim but you got a quote that was at $5,549 for the repairs to your home. Xfarm says that's crazy and you need to hire someone else. So they recommend chuck in a truck with no overhead and has been in business only 1 year. He has a license and insurance and was recommended by Xfarm so you think ok, and he's willing to do the work for $1054 but you're not quite comfortable so you get another reputable company to quote the work and discover their price is $5,189. You submit it to your insurance carrier and Xfarm says nope we're only paying $1,054 use chuck in the truck. An appraisal clause allows you to hire an appraiser (kind of like a lawyer) and forces Xfarm to hire an appraiser, in most cases, both appraisers meet and the first thing they do is select an umpire (kind of like a judge if they can't come to reasonable terms). Then appraiser A and Appraiser B talk and don't agree on the value of the claim then it goes to umpire Donald, and Donald looks over the facts, talks with both appraisers, and then makes a decision, and Xfarm and the policyholder are legally bound to that settlement for the claim. But when there isn't an umpire clause then when Appraiser A and Appraiser B don't agree then you have spent money to hire the appraiser and you have no resolution and Xfarm had no reason from the beginning to try to come to an agreement. Now you are stuck hiring an attorney and filing a suit against Xfarm in a court system, Your home isn't fixed and you have the next 2 years in litigation, attorneys fees all so you hope to recover an additional $4,000! The issue here is you wouldn't spend that time or money on $4,000 and they know it so they get away with it! SO MAKE SURE THERE IS A TRUE Appraisal clause with an umpire!
- Matching: does your carrier match? If the carpet in the hallway is ruined and connects to the living room, dining room and bedrooms, are they going to pay to replace all the carpet or just the hallway? The same can be said for exterior finishes like siding and roofing. Colors fade and you don't want just the front side of your home siding replaced if a hail storm destroys it. Make sure they will match.
- Cosmetic replacement: A few years ago many carriers took out coverage for cosmetic damage like hail hitting a metal roof. You wouldn't drive your car with hail damage and they are required to fix that, but they may not be required to replace your metal roof if the roof isn't leaking due to the hail damage.
- Standard coverage vs. I can increase it at my cost. Sewer backup and drain endorsements are coverages that are commonly overlooked. A lot of carriers have a whopping $5,000 or $10,000 in coverage for this damage. But if you have a sewer back up you're likely going to have $20,000+ in damage by the time it's properly cleaned, disinfected, repaired and you're living in that space again! Can you increase the coverage? Do you have a basement? This coverage is sometimes on a cap and you cannot increase it and other times the company welcomes you buying more coverage. A friend once called her agent after we talked and they more than doubled the coverage and her cost went down $10/year! It didn't cost her anything and she got $25,000 in coverage vs. the $5,000 the agent put on there as standard coverage.
- Umbrella policies are great for homes, they provide coverage that you may not have or excess that you may need, but often the savings for then having multiple policies is enough to pay for or almost pay for the cost of the umbrella itself. For example, my $1m umbrella policy costs about $198/yr but the discount on my home and auto is about $150 costing me only $49/yr for a $1m umbrella! Well worth the peace of mind.
I hope these give you some things to talk about with your agent and I hope it's not too late!
If you need help on a claim we're here to answer a quick question or help with small and major damage to property. Call us at (931) 520-7700!