Cold temperatures, snowstorms, ice, and wind. Wintertime can bring its fair share of hazards, and with these hazards come some real and important insurance concerns.
Here are some real-life scenarios that describe the impacts of having the right — and the wrong — kind of insurance coverage. Each example is based upon typical homeowners or renters coverage.
Please choose the right insurance coverage for each scenario. There should be one answer for each scenario.
A young couple leaves their apartment to dig out their car after a snow storm. While busily bundling up for their journey into the snow, they forget to lock their front door. They return a few hours later, shocked to find their television, stereo, and some cash missing. The cost to replace the stolen property is $2,500.
Mr. & Mrs. Smith, who are staying at a charming ski resort, leave their hotel room to spend a day on the slopes. When they return to their hotel room later that day, they discover that the diamond anniversary bracelet Mr. Smith had given to his wife is gone.
Mr. Smith calls their insurance company to report the theft. He is relieved to learn that the loss is covered. However, the Smith's policy contains certain liability limits for jewelry. To cover the full replacement cost of the bracelet ($5000) Mr. Smith should have purchased a scheduled Personal Property Endorsement to increase the liability limit on jewelry before the theft.
The cost to replace the bracelet is $5,000.
Shortly after Mr. & Mrs. Wilson purchase a new home in the mountains, a freak winter renders it unlivable. An insurance adjuster visits their home and determines that the house will cost $150,000 to rebuild. In addition, it is determined that $100,000 of personal property is lost.
The Wilsons ask when they can start rebuilding their home and replacing their personal property. The adjuster informs them that their insurance policy valued the replacement cost of their home at $125,000, and their contents at $75,000. If the Wilsons had received a proper valuation on their home and contents, the losses would have been covered in full.
Mr. Peterson is reading in his den when he notices that the freezing rain has turned to ice. The next day he finds ice damage to his roof and calls his insurance company. The insurance adjuster arrives and determines that the composition shingle roof must be completely replaced for a total cost of $8,000. The adjuster applies the depreciation for the roof's age (ten years), which reduces coverage by 25% to $6,000. If Mr. Peterson had purchased a replacement cost endorsement to his homeowners policy, the roof would have been completely covered.
The Decker family is hosting a large family skating party on the pond in their back yard. Tragedy strikes when Thomas, their twelve-year-old nephew, falls and breaks his ankle. Seriously injured, the young boy is taken to the hospital. The hospital bills total $3,000, but Thomas' parents have no health insurance.
Fortunately, the Deckers realize that the medical payments portion of their homeowners policy covers medical bills of individuals injured on their property, regardless of fault. Thomas recovers quickly, everyone breathes a huge sigh of relief, and Thomas' family is saved from a large medical bill.
The Bodden children are having a snowball fight in their backyard when one of them accidentally runs into the Pagano's yard and unknowingly steps on Cosmo, the Pagano's dog. The startled dog snaps and bites the child.
Outraged, the Boddens file suit against the Paganos and win their case. Fortunately, the Paganos have medical and liability insurance provided by their homeowners policy to protect them.
Insurance can be a complex product to buy — but it doesn't have to be. Knowing your risks and understanding your coverage is the key to purchasing the right homeowners policy for you. Coverages between policies often vary, so buying on price alone may not provide you with all the insurance you need. Make sure that you understand exactly how protected you are before you buy. Talk to one of our Insurance Specialists and find out more about homeowner, apartment and condominium insurance rates form Homesite.