How to Read Your Insurance Policy: What Did I Buy, How Does It Work
It’s only March, yet those who devote themselves to hurricane and disaster preparedness are readying themselves for storm season. This week, the National Hurricane Conference is underway in New Orleans. The Insurance Information Institute put together a number of programs for the conference, the first of which was a workshop to help emergency responders understand how their insurance works.
Professionals who are involved in the recovery process go into high gear after disaster strikes. Teaching them about insurance protection means they can focus on the important recovery role and not second guess the insurance decisions they made. That’s why it was gratifying to have so many of them in attendance. Our presentation was “How to Read Your Insurance Policy: What Did I Buy and How Does It Work.”
We started at the beginning, explaining the reason an insurance policy seems hard to read through is because it is a legal contract. But the most important sections are labeled and upfront. If something is labeled IMPORTANT MESSAGES as part of any contract, you darn well should read it. The Important Messages section of your policy has some big-type alerts that you should not overlook. For example, Florida property insurance policies have three (3!) 16-point bold type sentences considered “must read” information by insurance regulators because they mandate what the sentences say and the size of the font. One message is a reminder that a standard homeowners policy does not cover damage from flooding. Another explains that you may have a high hurricane deductible with a significant out-of-pocket cost. A third suggests you consider Building Ordinance or Law coverage so you have the funds needed to rebuild your home up to the latest building codes.
Look at your Declarations Page, too. It gives you the exact dollar amount of your coverage for the structure, your home’s contents – and it tells you the dollar amount of the hurricane deductible you selected.
We provided many other tips, and you can read all about it by looking through the presentation. If you have not had a conversation with your insurance company in the last year, pick up the phone and make sure your coverage is up to date. There is no time like the present to prepare for the future.