Will Your Personal Insurance Cover You? How Do You Know?

How often do you talk to your personal insurance agent? If you’re like most people, including me, the answer is almost never. No wonder a Gecko has become one of the leading figures in personal insurance today!

You need to be concerned about this. I have a friend who last year decided to tear down his house and build a new home on the property. His agent didn’t do him any favors by slapping an insurance policy called a Builders Risk on it. You see, his homeowners insurance didn’t accept an endorsement called Course of Construction, which would have been broader in coverage and much cheaper. The agent took the easy way out and saddled him with an expensive 12-month policy that wouldn’t automatically renew like a homeowners policy. Its best purpose is to cover spec homes, not new residential homes by the client. The agent had personal lines companies that would have loved to take the account with a Course of Construction endorsement if given the chance.

The problem arose recently when the home was not quite finished and the Builders Risk policy expired. Nobody at the agency notified my friend until the bank wanted to know why there was no longer any insurance in place. My friend was now out of insurance and faced with the possibility of another expensive annual policy (the home will be finished in a month), or even worse, an uncovered fire that destroys over a year’s worth of work. Now, because the home is well into the process, no personal lines companies want to insure it with the endorsement. I haven’t ever figured that one out yet, but that’s the way it is.

Can this scenario or one like it, happen to you? It can, so I urge you to be diligent in making sure you’re meeting at least annually with your agent. It doesn’t take much time and your cost not to could be tragic. In an era where more and more personal agents are communicating less with their clients, you need to be responsible for your own financial protection. Make your agent earn their commission.

P.S. This is one of the reasons I started my consulting practice. If you need help with an insurance challenge, contact me at dan@toroic.com to inquire on how I can help you solve it. Or, visit my web site at www.toroic.com and see what services I offer.