Sometimes a question gets one thinking

I received a question regarding "Who does your Personal, Commercial, Remodel" Cost segregation for you?"

Cost Segregation covers so many aspects, from Tax, Hard & Soft Costs, Legal, Liability, employees, Auto and sometimes even death of a Spouse, business partner or Key Personnel can leave exposures with great monetary damage. Being an Insurance Agent comes with a tremendous amount of responsibility. Being an Insurance Nerd, this question really got me thinking and perhaps someone has something to add to this blog that can help our fellow Rainers understand and rethink their coverages.

If you don't read past here, I have been re writing a lot of business for Mortgage Brokers and Realtors, tightening their belts on some coverages on their policies. I highly recommend that you think seriously how an exposure could cause a tremendous amount of damage if you don't have the funds to "Self Insure" Self Insurance works great in some instances. Large Developers can self insure on their projects, if they meet the guidelines. Auto Insurance can be another area where "Agreed Value" or putting up the Bond requirements required by your State. There are other things you can do to lower your premiums. I have seen just by raising a deductible from $1,000 to $2,500 can resolve the problem w/o having to change critical coverages on a policy.

If you can risk lowering personal Property coverage or accept Actual Cash value on a roof or Personal Property or raising your deductible. These are examples where you can lower your premium without discarding the most important value's of your Policy. You can't remove all of your personal limits. The Companies we work with do have minimum requirements, but there is room for negotiation. With the housing crisis, I have seen people let their policy's lapse. Another recent experience, I was notified by one of my clients that one of their rental properties went into foreclosure and remove their Insurance. I checked the Recorded owner and the bank hadn't taken title yet. I recommend my insureds to keep coverage until title is changed.

Your General Liability coverage on your Home Policy, does not cover Libel/Slander- It does not cover a worker on your property if they do not have Workers Comp and gets hurt on your property or your rental. It does not cover Building Ordinance if half your house burns down and the City requires you to tear the whole property down and re-build. That becomes your responsibility and the Insurance Company will not pay for it. The policy will not pay for your 20K ring or Rolex or your Wine/Art Collection unless you have scheduled property. It does not cover Identity theft. These are endorsements.

Liability is the greatest exposure we have. Realtor's, do you drive that potential customer in your Auto? Is it a 200 million dollar a year CEO? Don't do it. Brokers are requiring their Realtors to add them as additionally named insured's on the autos with min. limit requirements. Can you pay for a potential 3million dollar law-suit? The larger the exposure, the higher your Liability limits should be on your Auto and Home. An Umbrella Policy is worth it's weight in gold.

Additional purchases beyond the Umbrella available for your policy can be Workers Comp exposure for anyone working in your home- Identity Fraud- Libel/Slander-Cost replacement-Building Ordinance and collections. On an Auto, Having Permissive use, Loan Coverage and high limits for Property damage. In the Coastal area where I live, cars can be 100K or more, yet I often see $25K on auto property damage limits. That means the insured would have 75K or more to pay out of pocket if even 1- but if 2 cars or a light pole were involved in paying out, it could be a lot more.

The above coverages offer protection at a great value and I highly recommend everyone to have.The overall costs for the protection you need is nothing compared to the devastation a law-suit in an auto accident or your house catching fire, could have on you or your family.

There are so many times I see extremely important coverages missing on a Home/Auto Policy. Don't lower your Liability or other important coverages on your Policy's.

I have much more to say on the effects of Cost segregation, but from the size of this BLOG- I will save it for another day.