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2024-07-31
By: Advocate Brokerage
Luxury Home and Auto Insurance: Facts vs. Falsehoods
Luxury home and auto insurance is a constantly evolving and complex set of coverages. No wonder many Americans have misconceptions about their policies. Today, Advocate Brokerage clarifies some facts and falsehoods about personal insurance products.
Fact: Standard homeowners’ insurance doesn’t cover flood damage. A standard policy won’t cover flooding, but most homes are eligible for flood insurance, even if they’re not in a flood zone.
Falsehood: Your homeowner policy doesn’t automatically cover renovations. You must notify your carrier beforehand and potentially get approval for significant renovations. You must also increase your dwelling limit accordingly. Most policy contracts dictate that you are required to disclose and will penalize in the form of a punishing deductible should you suffer a loss. In other words, don’t invest in upgrades until you ensure that you’ll be insured!
Fact: All homeowners should maintain an inventory of major household items, jewelry, collectibles, and other valuables, regardless of whether they’re covered under home insurance or a separate policy. While some insurance carriers require formal proof at the time of a loss, it is always useful to have a video of your contents stored in the cloud.
Falsehood: Your standard auto insurance policy covers business use of your personal vehicle. This is False. If you use your car for business and have an accident, you might be responsible for more than just the deductible.
Fact: Most standard auto insurance policies don’t cover personal property stolen from your vehicle. Your home or renters insurance policy is more likely to cover such losses.
Falsehood: A parking ticket won’t automatically raise your insurance premiums. A single ticket probably won’t affect your rates. However, losing your license due to multiple tickets could put your policy at risk.
Fact: You can’t necessarily choose your dwelling coverage limits. Your insurance carrier determines these limits based on the cost of construction replacement value of your home, often using a home estimator to value your residence.
Falsehood: Dwelling replacement coverage is the same as market value. This is False. A home’s market value can be much less or more than the cost to rebuild it entirely. Many high-end home insurers conduct independent inspections to ensure proper coverage.
Fact: An independent agent can help you secure the best coverage. Insurance can be complex. An expert insurance Advocate by your side can ensure you have the information needed to fully insure your home, autos, and other investments.
Falsehood: Your dwelling limit is the guaranteed amount you will get paid if you suffer a total loss. Unless your policy specifically contains a “cash option”, the insurance carrier is basing the payment on rebuilding “like for like”. Many insurance companies put the burden on the homeowner to insure their house to value. If the house is underinsured by more than 20% the insurance company might cover less than the value of the home.
Looking for more information? Contact Advocate Brokerage today. Let one of our knowledgeable agents guide you towards comprehensive coverage.
