Policy Exclusions Can Affect Your Wallet


Savvy insurance shoppers know that they must compare more than one number when assessing quotes from insurance companies. For example, if you’re looking for a homeowners policy, you’ll obviously want apples-to-apples quotes on the replacement cost for the primary structure.

A smart shopper will also make sure that the quoted limits are the same for other policy categories, such as medical liability. Because if someone is hurt at your home, a cheaper premium may turn out to be a terrible value if that policy only pays a maximum of $50,000 compared to another policy that would have paid up to $500,000.

Even if you make sure quoted coverage amounts are equal that may not mean you’d have equal coverage. This is because some companies bury exclusions or exceptions in the policy verbiage, knowing that even very educated consumers will not take the time to read every sentence of a policy before signing up.

These are examples of some real-life exclusions or exceptions that exist in some policies—situations when coverage either doesn’t exist or is altered from the standard policy limits:

AUTO

  • If you don’t own the vehicle you are driving, you may not be covered.
  • If you use a vehicle for any business purpose, you may not be covered.
  • If you use a borrowed vehicle or loaner for any business purpose, you may not be covered.
  • If you don’t specifically add a new or returning member to your household, such as an adult child who returns to live at your home, that person may not be covered.
  • If you deliver anything in your vehicle (products that you sell, business papers to be signed, pizza, newspapers, etc.), you may not be covered.
  • If you rent a vehicle over 10,000 pounds gross vehicle weight, that vehicle may not be covered even though a lighter-weight rental would be.
  • If you are involved in a criminal act, such as a DUI or even a speeding ticket, you may not be covered.
    • If there is a theft from your vehicle but no sign of forced entry, that event may not be covered.
  • Medical payments may only include licensed physician fees, so something like a lifesaving helicopter ride would not be covered.
  • Sales tax may not be covered if your vehicle is totaled and you need to replace it.

HOME

  • If you live in a high-risk hurricane area or tornado zone, you may have a separate and different deductible for claims caused by those weather events. So while your normal deductible may be $1,000, it could be $10,000 in the case of a hurricane or tornado.
  • If two events happen concurrently (i.e., a hurricane causes flooding, so you have wind damage and flood damage), one event may cancel out coverage that would have existed otherwise. So if you don’t have flood insurance to cover the flooding, your wind damage won’t be covered either.
  • Coverage limits may be much lower than you’d expect for anything from water damage from a leak to jewelry, coins or other collectibles.

To avoid finding out the hard way that your coverage isn’t what you thought it was, working with an insurance expert is a good idea. At Kelly Klee, we only do business with high-end insurers, and our agents have years of experience to help you make the best choices for your unique situation. We work hard to ensure that our customers always understand and are comfortable with the fine print on the policies we write.

To reach Kelly Klee, call 844-885-1600 or email us at support@kellyklee.com.

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