Potholes in life come in various sizes and shapes, much like when you stumble across potholes in insurance. As you probably know, there are are times when an insurance policy doesn’t meet the expectations of the policy holder. We’re here to ensure it always does!
Continue reading below as Kingsgate Insurance goes on to explain some common roadblocks, or potholes, you may or may not have experienced and how you may be able to prevent them.
Cosmetic Damage Exclusions to Metal Roofs & Roof Claims in General
Cosmetic Damage to metal roofs is becoming a very common exclusion for carriers. When some insurance companies identify a metal roof, they will exclude “cosmetic damage”. A roof that is still serving its purpose by protecting the home from external elements that sustains minor cosmetic damage from hail stones would not be paid out in the event of a claim for replacement cost. This can be a pothole in a claim scenario and can really upset insureds. It is important to know how a carrier approaches metal roofs. Roof claims in general can be a point of disagreement between the carrier and the insured.
Every homeowners policy has exclusions in it for “Wear & Tear” and/or ”Neglect”. The carrier’s intent is to not be a warranty policy rather the expectation is that the insured is maintaining their property. If an insured has a 3-tab shingle roof with a life expectancy of 20 years that hasn’t been replaced, it’s going to be difficult to get an adjuster to pay that claim unless damage is very clear. This verbiage, however, is commonly used in claim denials on roofs. Additionally, one regularly sees carriers try to pay only “some” of the roof or a single side. This can provide a good leverage point to argue that the carrier needs to pay to replace the entire roof. Kingsgate Insurance wants to be the insured’s advocate in discussing how the policy should work and helping them navigate that discussion with an adjuster.
Business Ventures in the Home
There are some very specific limitations in a homeowner’s policy that can lead to claim denials if not properly addressed. The Homeowners policy defines business very broadly. If an insured is generating more than $2,000 of income in a 12-month period, a carrier can consider that a business venture. The policy can then limit contents coverage in various circumstances and can even deny property coverage to other structures. Perhaps even a bigger problem is Bodily Injury and Property Damage Liability for “Business” conducted from an “insured location”. Say you have parties to sell trinkets to your friends and generate more than $2K a year in income. Those parties you host at your home no longer have any liability coverage.
Liability for owned Recreational Vehicles (ATVs/UTVs/Golf Carts/Etc.)
Owning recreational vehicles can be tricky when it comes to liability coverage. Using a recreational vehicle exclusively on your premises, your standard homeowners liability coverage will apply to a loss that might occur. If you have them licensed for road use or intend to use them off premises, you will need to either endorse your homeowners policy or schedule them on a recreational vehicle policy to have any liability coverage.
Uninsured/Underinsured Motorists Coverage
Combined Single Limit/Split Limit auto liability coverage is legally required to protect OTHER drivers. What MOST insureds probably don’t know is that their own auto policy has coverage limits to protect them from other underinsured or uninsured drivers. It was estimated in 2021, about 11.3% of Iowa drivers carry no insurance while another portion of people who buy insurance only purchase state minimum limits. What if you are in an accident with one of those type of drivers and have serious bodily injury? Uninsured/Underinsured Motorists coverage is designed to provide insureds with coverage for themselves if they are in an accident with a driver carrying low liability limits or no insurance at all. This is some of the broadest coverage offered in an insurance policy. In many situations it can go beyond paying just bodily injury and pay for loss of wages. Uninsured/Underinsured Motorists coverage can also act in similar ways to a life or disability policy – it’s one of the most important coverage limits an insured can buy.
Extended Non-Owned Auto Coverage
Do you have regular access or use of a vehicle that you don’t own or insure? The personal auto policy automatically excludes liability coverage for any vehicle you own but do not insure. Your auto policy automatically extends the insured auto liability coverage for any vehicle you drive that you don’t own EXCEPT if the vehicle is “Furnished or available for your regular use”. An example of this gap would be if an insured has both a personal auto, but also drives a company vehicle for work. The insureds personal auto policy would exclude liability coverage to the insured when driving the company auto if they do not have the Extended Non-Owned Auto (ENO) endorsement on their policy. Another example might be where two people live together but aren’t married. Each individual should have their own vehicle and own insurance policy and if they are driving each other’s vehicles, they should carry the Extended Non-Owned Auto Coverage endorsement.
Vehicle Physical Damage Coverage & Loan/Lease Gap or Car Replacement Cost Coverage
Auto claims are regularly paid out based on what an auto is worth at the time of the loss. This can cause problems because one might expect a new vehicle of like kind and quality or maybe they have an outstanding debt on their loan or lease agreement. When applying Loan/Lease Gap coverage to an auto policy it is intended to settle the difference between the actual cash value of the vehicle and the amount still owned to a lien. Car Replacement Cost is another optional endorsement intended to replace your damaged vehicle with like kind and quality vehicle and/or parts.