It is my experience that most licensed insurance agents are usually able to answer their client’s coverage questions correctly. Meanwhile, many problems arise simply because consumers simply do not know the right questions to ask to get the information they really need. Should it be the consumer’s job to know the right questions to ask?
In reality, learning how to help their clients ask the right question is a skill that few insurance professionals ever master. As Hurricane Irene was chewing up the coast in NC this summer and heading north, our staff received numerous calls from clients asking “Am I covered for a hurricane?”. The question our clients really wanted answered: “How will my coverage protect me for losses I may sustain from a hurricane?” Knowing this was what our clients really wanted to know, we were able to re-frame the question and provide a much more complete answer.
Of course, more complete answers can sometimes be disconcerting, especially when they are only being provided as a hurricane approaches. Few consumers take comfort in being reminded, for example, that while a homeowner policy does provide quite a bit of coverage for damages caused by a hurricane, NO policy provides the mythical “full coverage” we’d all like to have. The “Fine Print” of any policy explains in detail the damages that are and are not covered, and coverage varies widely among carriers. Consider the following:
- Unless you have specifically requested to purchase flood insurance, you will not be covered for losses that are caused by water that rises from the surface and enters your home by your homeowner policy.
- Conversely, rain water that enters your home through a damaged roof or window is not a “flood”, and is covered by almost all homeowner policies.
- Almost every homeowner policy in the NY Metropolitan area has two deductibles: one that applies to losses caused by a hurricane, and one that is applied to all other covered losses. All consumers should know well in advance of a hurricane what their deductible will be for losses caused by a hurricane.
- Because Hurricane Irene had been reduced to Tropical Storm status was when she reached NY, covered losses were adjusted using the (lower) deductible that applies to all other losses. Next time we may not be so lucky….
- Homeowner policies do not provide coverage to replace trees damaged by wind, hurricane force or not. There is, however, limited coverage to remove downed trees, though policies vary widely on the circumstances under which this coverage is available, and how much coverage is provided.
- For the many who lost power, can I suggest the purchase of (at the least) a portable generator before next hurricane season? Homeowner policies do provide limited coverage for food spoilage caused by a power outage, but by the time the deductible is subtracted from the claim, the cost of a portable generator would have been paid for and no spoilage would have occurred.
Two primary takeaways from all of this:
1. To make well informed decisions, insurance consumers need skillful guidance to ensure they are not only getting the right answers…. but also to the right questions.
2. It is just as important to examine the right questions BEFORE a risk arises.
This story about State Farm’s claims practice will shed great light on the issue. 
Private Risk Advisor 