Taking out the right property insurance coverage might not be particularly high on your list of financial priorities and, compared with things like investment and estate planning decisions, questions about the language in your homeowners plan might seem barely worth considering. Even So, the more successful you are, the more detailed your asset-protection needs are going 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.
For instance, let's assume that your properties are in three states, the value of your collection of Abstract Expressionist paintings has risen quickly and you just volunteered to serve as a director of of a charitable organization. Virtually every aspect of your present situation could cost you dearly.
Insurance laws vary widely from one state to the next, different sorts of property require specialized coverage and art collections and other unique items may prove difficult to fully protect. Meanwhile, serving on the board of a non-profit organization might subject you to additional personal liability.
Safeguarding yourself and your family could mean purchasing extra coverage, but more insurance is not always the best solution. Rather, it's important to review your needs, consider specialized policies and coordinate your cover with other facets of your financial situation.
Here are 6 problems which could turn out to be extremely costly.
1. Having gaps in your homeowner's cover.
Any homeowner needs to look at their coverage on a regular basis so that they can keep up with rising replacement costs. But, insuring different kinds of property in different locations poses special challenges. If you buy insurance cover from more than one carrier then you may face contrasting limitations, rules, and plan renewal dates. For instance, the liability limit on the plan for a second home could fall below the minimum on an excess liability plan designed to complement the insurance cover on your primary home and you could wind up being responsible for coming up with the difference.
2. Brushing Aside the unique characteristics of your property.
One advantage of affluence is having the means to own great homes but one problem is that These could be difficult to insure adequately. Normal homeowner's coverage is not going to pay for the materials and craftsmanship that is needed to rebuild that late 19th century showplace that you have painstakingly restored. Coastal properties could face hurricane damage, while a home in the California mountains could be subject to wildfires or earthquakes.
3. Under insuring art and collectibles.
Normal homeowner's plans limit coverage for the loss of such things as antiques, furs, and other valuables. And while you could schedule additional coverage, insuring the real value of a collection of contemporary art will generally mean purchasing a specialized policy which addresses a number of critical issues.
4. Omitting to insure employees.
When somebody works for you as, for example, a nanny, landscaper or personal assistant you may be liable for lost wages and medical expenses if the person is hurt on the job. Several states require household employers to pay into a workers compensation fund while in other states this is optional. However, providing such insurance cover may be obligatory for ensuring your financial health.
5. Neglecting your liability as a member of a board of directors.
Excess liability coverage might help protect you if you're sued as a director of a charity or, if you prefer to have more comprehensive protection, you may want to think about arranging special directors liability insurance.
6. Not getting regular plan reviews and updates.
Your finances are not static and neither are your insurance needs. The value of a collection might increase, home renovations may mean an increase in the value of your home and the re-titling of assets as part of your estate plan or as a result of divorce, a death in the family, or the birth of a child may require changes to your plan. Even lacking any significant events, you will undoubtedly need a comprehensive review of your insurance cover at least every two years.
For instance, let's assume that your properties are in three states, the value of your collection of Abstract Expressionist paintings has risen quickly and you just volunteered to serve as a director of of a charitable organization. Virtually every aspect of your present situation could cost you dearly.
Insurance laws vary widely from one state to the next, different sorts of property require specialized coverage and art collections and other unique items may prove difficult to fully protect. Meanwhile, serving on the board of a non-profit organization might subject you to additional personal liability.
Safeguarding yourself and your family could mean purchasing extra coverage, but more insurance is not always the best solution. Rather, it's important to review your needs, consider specialized policies and coordinate your cover with other facets of your financial situation.
Here are 6 problems which could turn out to be extremely costly.
1. Having gaps in your homeowner's cover.
Any homeowner needs to look at their coverage on a regular basis so that they can keep up with rising replacement costs. But, insuring different kinds of property in different locations poses special challenges. If you buy insurance cover from more than one carrier then you may face contrasting limitations, rules, and plan renewal dates. For instance, the liability limit on the plan for a second home could fall below the minimum on an excess liability plan designed to complement the insurance cover on your primary home and you could wind up being responsible for coming up with the difference.
2. Brushing Aside the unique characteristics of your property.
One advantage of affluence is having the means to own great homes but one problem is that These could be difficult to insure adequately. Normal homeowner's coverage is not going to pay for the materials and craftsmanship that is needed to rebuild that late 19th century showplace that you have painstakingly restored. Coastal properties could face hurricane damage, while a home in the California mountains could be subject to wildfires or earthquakes.
3. Under insuring art and collectibles.
Normal homeowner's plans limit coverage for the loss of such things as antiques, furs, and other valuables. And while you could schedule additional coverage, insuring the real value of a collection of contemporary art will generally mean purchasing a specialized policy which addresses a number of critical issues.
4. Omitting to insure employees.
When somebody works for you as, for example, a nanny, landscaper or personal assistant you may be liable for lost wages and medical expenses if the person is hurt on the job. Several states require household employers to pay into a workers compensation fund while in other states this is optional. However, providing such insurance cover may be obligatory for ensuring your financial health.
5. Neglecting your liability as a member of a board of directors.
Excess liability coverage might help protect you if you're sued as a director of a charity or, if you prefer to have more comprehensive protection, you may want to think about arranging special directors liability insurance.
6. Not getting regular plan reviews and updates.
Your finances are not static and neither are your insurance needs. The value of a collection might increase, home renovations may mean an increase in the value of your home and the re-titling of assets as part of your estate plan or as a result of divorce, a death in the family, or the birth of a child may require changes to your plan. Even lacking any significant events, you will undoubtedly need a comprehensive review of your insurance cover at least every two years.
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