Written by, Davidson O. Calfee, President
1. Who needs insurance? There are different kinds of insurance that protect certain areas of someone’s life. There are insurance products built for replacement of an object or property/asset owned such as an auto, boat, home or business. Then there’s the liability area to help people recover from accidents such as wrongful deaths during auto/motorcycle collisions, trip & falls, kitchen fires that spread throughout the neighborhood, shuts down street access points to neighborhood businesses who lose income from business interruption, etc. Protecting your income is another valuable and sensible aspect to insurance. If you were in a skiing accident and broke both legs, could you work? Would the mortgage get paid? Would you face foreclosure or bankruptcy? Would you need income protected insurance? Lesson learned is to keep your family protected by term or whole life, short term disability, long-term care & health insurance. There are also many tax advantages to insurance when planning for the future.
2. What’s are the most commonly held misconceptions people have about their insurance? In basic terms, insurance is a piece of paper & a promise. Most people think nothing bad will ever happen to them so their insurance coverages would never come in to play. Some people complain about paying $500/year for their car insurance. But what if that same person was distracted and turned on to a main road later than expected and a motorcycle collided? What if that motorcylcle driver needed a new heart? What if their medical bills totalled $875,000? Could that same policy holder pay that bill or would they rather pay the $500/year insurance bill.
I thought the same thing until Hurricane Katrina took my home, belongings & business. In a snap, my world changed. Proper insurance coverages & policies make you whole again. They provide funding to help you get back on your feet. A big misconception is the vast amount of money that an insurance policy can pay you compared to the price. The yearly cost of a policy is minimal compared to the payout for monster disasters. And disasters do happen, everyday, everywhere and Yes, to good people too.
3. How can people educate themselves about being properly insured? As a resource, our website has over 100 pages for education through weekly blogging concerning real estate, local storm threats, survival skills, preparedness procedures, tips on saving money, policy forms, exclusions, definitions & more. www.CalfeeInsurance.com Also, if you want a 2nd opinion, have a tailored question or want the policy explained in a legal way, ask us. As a member of the MA Insurance Agents Association, we have paid attorney’s & advisors on staff to answer detailed questions within a turnaround time of 24 hours.
4. Do homeowners have an ethical obligation to discuss their insurance status with their renters? Landlords should discuss insurance with their tenants to explain & shift liability conception to avoid legal suits and arguments. After a disaster, everyone points their finger away from themselves. Ideally, the landlord covers what he owns (the house) and the tenants cover what they own (furniture, clothing, etc.) Flood insurance is another item to discuss with a renter and should be offered as an ethical obligation. Most renters don’t carry insurance for the same misconception that most people have; that nothing bad will ever happen.
5. Are there aspects of the insurance business that are unique to the Cape? As most people know, our coastal area is unique but at the same time common with the entire Atlantic coast from Cape Cod to Galveston, TX. When a storm hits anywhere in the USA, everyone feels the impact. They might not realize it, but large areas of our region are insured by reinsures who insure insurance companies and their policies. There are only a handful of reinsures in the world and they really control the pricing of Cape Cod insurance policies, not to mention the rest of the world. It doesn’t matter if you have a different theory or hurricane model pertaining to Cape Cod, the reinsurers have their own thoughts and will price their policies based on profit & loss.
6. Are there things that insurance – even the best plans – just do not cover? War. Sorry, no coverage so let’s support our Ottis Air Force base to protect us in time of need. And really any type of maintenance to your car, boat, home or business is not covered.
7. Does homeowners insurance cover food spoilage? Most of the time food spoilage is covered but may be after your AP (all peril) deductible. If you have a $1,000 deductible and the lights go out. You need to have a lot of food spoilage to go above and beyond $1,000. But… UPC Insurance, a FL based company who writes on Cape Cod has a special ‘Ultra Program’ that will cover food spoilage over a standard & separate $100 max deductible.
8. If you have a home office does that require additional/different insurance? For a home office, with no foot traffic, any business material/property is not covered without a special endorsement. Again, UPC Insurance, a Cape Cod favorite, offers the best options with higher limits to valuable home office coverages. Such insurance as special computer coverage, money, ID theft, property damage of others, and up to $10,000 of business property in your home and $1,000 away from your home.
9. What are the significant differences between auto, motorcycle, motorhome and boat insurance? The big difference is they are all written on different insurance forms so the amount of coverages vary in comparison. Each policy tailors specific coverages to the risks presented to the vehicle on the water or on the road.