Your Home Is NOT Covered For Theft (probably)!
You have been searching for your dream home for months now and you have finally found the one! It has stainless steel appliances, granite counter tops and hardwood floors throughout - it's absolutely stunning! It even has a beautiful fireplace with room to put up a 60 inch flat screen TV above it!
You notify your mortgage broker that you have made your decision to purchase this property and they tell you that you must get homeowners insurance ASAP so they can budget it into the mortgage. You decide to go online and search "homeowners insurance" and you're immediately bombarded with all kinds of options. Since you have auto insurance with XYZ Insurance Company you decide to purchase a policy from them. XYZ Insurance Company asks some questions and in a few minutes you have a homeowners quote that's ready to go! XYZ Insurance Company even goes out of their way to send your mortgage broker a copy of the homeowners policy along with an invoice so it can be paid in full at closing! Man, that was SO easy and painless......
Six months later (after you're all settled into your dream home) you come home from work and you immediately notice a broken window on the side of your house. You slowly enter your home to find the place is completely trashed! As you walk through your home you notice your brand new flat screen TV hanging above the fireplace - GONE! When you venture upstairs to your bedroom you see that all of your clothes and shoes are missing as well as your fine China plates you received on your wedding night - everything is GONE!
As you think to yourself after you have a few minutes to clam down, "Everything is going to be 'OK' as you have XYZ Insurance and they have all of those amazing commercials on TV"
You frantically call XYZ Insurance to file a claim
"I'm sorry for your loss however you have no coverage for theft for your personal belongings on your homeowners policy" the claims rep says.
"What do you mean no coverage for theft? We pay over $700 a year for homeowners insurance and we have no theft coverage?!?"
This type of situation happens all too frequently and it seems to be due to two common denominators - 1) price and 2) knowledge.
1) People instinctively shop based on price which is great when you know what you want and can find the least expensive distribution channel for said product. That's why companies like Amazon and Hotels.com are so successful - as a consumer you want to find a specific product at the absolute lowest price. Insurance on the other hand should be shopped based on coverage first and price second or third. When you focus on coverage first you will be surprised to find out that for a few extra dollars per month you can get the proper coverage without worrying about having a "gap" in coverage.
2) When you called XYZ Insurance - who did you talk to? Was it an insurance "veteran" with 30+ years experience in homeowners insurance or someone that just passed their insurance exam last week? Do they know the product that they are selling or is it something they are still learning? Did they tell you what is excluded on the policy such as earthquake, flood, theft etc or did they just tell you the replacement cost value and the price? If the person you spoke to had the proper training (knowledge) then this situation could have been easily avoided.
Unfortunately homeowners insurance (similar to other insurance products) is now becoming more 'a la carte' than in the past due to people becoming extremely price sensitive. What I mean by this is you can buy a simplified policy for say $700 a year or a more robust "full coverage" policy for around $1,000 a year. $25 more a month would have covered that theft claim that's now going to cost you over $10,000 out-of-pocket............that $25 more a month now sounds pretty reasonable.....I thought so too!
3 out of 5 homeowners policies I review have no coverage for theft. Simply asking for "Special Perils" will add back this coverage to your homeowners insurance policy. Check your policy and give us a call to help guide you in the right direction to ensure you're properly protected!