Years ago, this brilliant advertisement for Fram Oil Filters featured an auto mechanic reminding car owners that investing a small sum to replace their oil filters regularly will reduce the need for expensive engine repairs later. It concludes with this pithy yet often ignored life lesson: “You can pay me now, or you can pay me more later.”
With the rising cost of many forms of insurance, this important life lesson should remind consumers that just like preventive auto maintenance, prioritizing short-term savings over securing quality insurance protection from large and costly losses is an ill-advised strategy. There is a better way.
Rather than reducing insurance costs by encouraging our clients to forego important insurance protection that exposes their assets to uncovered losses, we recommend several strategies to help make quality insurance solutions more cost-efficient. Following is a short list of just a few of the questions we use to help those we serve to examine solutions for the wide range of uncovered losses that can arise when prioritizing cost reduction over long-term protection.
- Am I covered if my nanny/housekeeper/other domestic employee is injured while working?
- What other risks can expose my assets or threaten my family’s safety when employing domestic help?
- What coverage do I have to protect me from third-party lawsuits that may arise due to my volunteer activities or for a seat I hold on a board of directors?
- What risks am I covered for when I travel abroad? What am I NOT covered for?
- Am I covered for the additional rebuilding costs required to comply with current building/zoning laws after a covered loss?
- Given my lifestyle, how much liability insurance protection should I secure?
- What types of risks occur when my children are away at school?
- If a hurricane or other natural disaster were to cause widespread damage, causing rebuilding costs to rise, will there be enough coverage to rebuild my home?
- If my vehicle is badly damaged in an accident, can I select the repair facility and insist on replacement parts from the original manufacturer?
- What loss prevention or safety measures are available to help me control the cost of my coverage?
- If I have a fire and I don’t want to rebuild my house, can I elect to take the insurance settlement in cash?
- What coverage is in place to protect me / my family members when working from home?
- Am I covered if I rent a car? If I rent a car while on a business trip?
- What protection do I have if my identity is stolen? What steps can I take to better protect myself am my family from cybercriminals?
- How can I protect my collectibles at a cost that makes sense?
- What are the risks that arise during a home renovation or remodeling project, and how can I manage them?
There are two ways to identify the uncovered losses waiting to be discovered in your personal property and liability insurance program.
- Wait until a loss occurs to learn whether it is or is not covered.
- Participate in a comprehensive review that evaluates your current insurance program to identify the property and liability losses you are and are not covered for.
Too often, consumers who have prioritized savings over protection discover after a loss that the insurance coverage they purchased does not provide the level of protection they expected to receive. I remind those I speak with who focus on reducing insurance costs of the equal importance of securing high-quality insurance coverage that protects their hard-earned assets from uncovered losses. Let me know if you would like to discuss available strategies to improve the cost-efficiency of quality insurance coverage that properly protects your assets.
Sources: Assurex Global