6 Common Property Insurance Mistakes You Could Lose Everything

6 Common Property Insurance Mistakes - you​ Could Lose Everything
Getting the​ right property and casualty insurance coverage may not rank high on​ your list of​ financial priorities .​
Compared with investment decisions and estate planning issues,​ questions about the​ language in​ your homeowners policy,​ say,​ may seem hardly worth considering .​
Yet the​ more successful you​ become,​ the​ more complicated your asset-protection needs are likely to​ be—and the​ more you​ have to​ lose .​
Suppose,​ for example,​ that in​ addition to​ your primary residence—a historic home—you also own a​ house at​ the​ beach and a​ condo in​ the​ city .​
The properties are in​ three different states .​
The value of​ your collection of​ Abstract Expressionist paintings has grown rapidly .​
And you​ just volunteered to​ serve on​ the​ board of​ directors of​ a​ charitable organization.
Almost every aspect of​ this situation could cost you​ dearly .​
Insurance laws may vary widely from state to​ state,​ different kinds of​ property require specialized coverage,​ and collections of​ art,​ antique cars,​ and other unique items may be difficult to​ protect fully .​
Meanwhile,​ serving on​ a​ nonprofit's board could subject you​ to​ additional personal liability.
Safeguarding yourself and your family may mean buying additional coverage,​ but more insurance isn’t necessarily the​ solution .​
Rather,​ it’s important to​ review all of​ your needs,​ consider specialized policies or​ policy options,​ and coordinate your coverage with other aspects of​ your financial situation .​
Here are 6 different shortcomings that could prove costly.
1 .​
Leaving gaps in​ homeowners coverage .​
Any homeowner needs to​ review coverage regularly to​ keep up with rising replacement costs .​
But insuring different kinds of​ homes in​ different locales poses extra challenges .​
If you​ buy insurance from more than one carrier,​ you​ may face contrasting rules,​ limitations,​ and policy renewal dates .​
For example,​ the​ liability limit on​ the​ policy for a​ second home might fall below the​ minimum on​ an​ excess liability policy designed to​ complement the​ insurance on​ your primary home .​
You could wind up responsible for the​ difference.
2 .​
Ignoring properties unique characteristics .​
One perk of​ affluence is​ the​ means to​ own exceptional homes; one drawback is​ that they may be difficult to​ insure adequately .​
Standard homeowners coverage won’t pay for the​ materials and craftsmanship needed to​ rebuild that 19th century showplace you’ve painstakingly restored .​
Coastal homes may face hurricane damage,​ while a​ place in​ the​ California mountains could be subject to​ earthquakes or​ wildfires .​
Meanwhile,​ city co-ops or​ condos may need policies tailored to​ their buildings or​ associations coverage.
3 .​
Under insuring art and collectibles .​
Standard homeowners policies limit coverage for the​ losses of​ antiques,​ furs,​ and other valuables .​
And while you​ could schedule additional coverage,​ insuring the​ real value of​ a​ collection of​ contemporary art or​ vintage muscle cars likely will require a​ specialized policy addressing several critical issues .​
How is​ the​ value of​ the​ collection determined? (You’ll need a​ professional appraisal when the​ policy is​ designed,​ with frequent updates as​ items appreciate.) Will a​ damaged or​ destroyed item be paid for with cash,​ or​ will you​ be required to​ have it​ replaced or​ restored? Will additions to​ your collection automatically be covered?
4 .​
Forgetting to​ insure household employees .​
When someone works for you​ or​ your family,​ as​ a​ nanny,​ landscaper,​ personal assistant,​ or​ in​ another role,​ you​ could be liable for medical expenses and lost wages if​ the​ worker is​ hurt on​ the​ job .​
Several states require household employers to​ pay into a​ workers compensation fund,​ while in​ other states it’s optional,​ but providing such insurance may be mandatory for ensuring your financial well being .​
If an​ employee drives your car,​ also make sure he or​ she is​ included on​ your policy.
5 .​
Neglecting your liability as​ a​ board member .​
Excess liability coverage could help protect you​ if​ you’re sued as​ a​ director of​ a​ nonprofit's board .​
Or for more comprehensive protection,​ you​ may want to​ consider special directors and officers liability insurance.
6 .​
Failing to​ get frequent policy reviews and updates .​
Your financial life isn’t static,​ and neither are your insurance needs .​
The value of​ a​ collection may increase; extensive home renovations could mean a​ sharp rise in​ the​ value of​ your property; and the​ re titling of​ assets as​ part of​ your estate plan—or because of​ divorce,​ a​ death in​ the​ family,​ or​ the​ birth of​ a​ child—could necessitate policy changes .​
Even lacking major events,​ you​ probably need a​ comprehensive review of​ all your insurance coverage at​ least every two years.

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