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Webinar Recap: What Is Actually Covered? (Words Matter Part 3)

By February 12, 2024No Comments

On January 5, 2024, Wheeler, DiUlio & Barnabei hosted a lunch & learn webinar titled, What is Actually Covered? The Items You’re Missing. This was the third part of the Words Matter series. In this webinar, Partner Anthony DiUlio details how coverage policy works, where to find coverages within policies and common disputes about coverage policies.

Policy Review Order of Checks for Coverage

When discussing insurance coverages, the first thing you should do is read your entire policy. All policies are different, so be sure to gain a comprehensive understanding of your own carrier’s policy. In doing so, it is advisable to establish a consistent policy review process to increase efficiency and decrease cost.

While each policy is different, there are three main steps to follow when reading policies. First, review the declaration pages. The declaration pages provide the insured with crucial information regarding what is covered under the policy. Specifically, take note of:

  • The name insured
  • Mailed address
  • Insured locations
  • Policy period
  • Coverage list

Next, read the base coverage form. Here, the insured can find lists and details of coverages as well as important definitions. Coverages and definitions may reside in different areas of the policy. Be sure to always go back to the definitions when reading each section of the policy.

Lastly, review the policy endorsements. The endorsements will inform the insured if there are any changes or addendums to the base coverage form.

Policy Coverage Section Examples

While each policy is different, themes within the property coverage section may be similar. In this webinar, Partner DiUlio shared State Farm’s policy as an example.

A high-level overview of State Farm’s Coverages A and B is also provided below. Be sure to read your specific carrier’s policy in-depth for precise information on your coverages.

Coverage A under the Property Coverage section typically provides details for coverages associated with the main building or structure of the insured property. For example, State Farm lists “dwelling” as the covered structure under Coverage A. But, what constitutes as a dwelling for this carrier? The insured should seek the definition of dwelling mentioned later in the policy to understand if the damaged structure is a “dwelling” and then return to read the rest of the coverages.

In State Farm’s policy, Coverage A also outlines “Other Structures” that are covered under the policy aside from the dwelling. This may include attached property items such as walkways.

Lastly, Coverage A lists property that is not covered in the policy. Typically, land is not covered under most policies. Some other examples of items that may not be covered include:

  • Aircraft
  • Animals
  • Motor vehicles
  • Property owned by other residents not related
  • Property rented or held for rental to others unless owned by an insured

Coverage B details what is covered under Personal Property. This section refers to items that are not structural to the property, home, or dwelling. Items may include tables and chairs inside the damaged home.

It is important to note that some items, such as appliances, may fall under Coverage A or Coverage B. As mentioned, reading the whole policy in-depth is crucial to the success of the insured when filing claims.

Other Policy Considerations

In addition to the main coverages, pay attention to other key sections such as the special limit items and additional coverages.

Special limit items include damages that would generally fall under dwellings, other structures, or personal property, but they may need additional considerations when recognizing loss. Primarily, there may be a coverage requirement only applying when there is a specific cause of loss. For example, the coverage limit may vary depending on whether the property was stolen versus if the damage was a result of a house burning down.

Some special limit items may include the following:

  • Money
  • Coins
  • Metals
  • Trailers
  • Securities
  • Watercraft
  • Stolen firearms
  • Business property
  • Stamps and other collectibles
  • Checks, money orders, or gift cards
  • Stolen jewelry, watches, furs, or precious stones
  • Electronic data processing equipment for business
  • Silverware/goldware, stolen rugs, tapestry, or similar items

Finally, analyze the additional coverages section to see if there is anything further that could be added to your claim. Some additional coverages may include debris removal, temporary repairs, trees, shrubs, and landscaping, property removal, credit card and similar fraud, refrigerated products, and locks to rekey property when part of a theft.

Common Coverage Disputes

Policy language can ultimately be vague and difficult to fully grasp. Disputes over what is and what is not covered happen frequently, even if you read the entire policy. The following are types of claims that are commonly disputed:

  • Homes rented in part or entirely to others
  • Non-relative living situations
  • Repairs extending outdoors to lawns, driveways, sidewalks, etc.
  • Vacation homes and Airbnbs
  • Purchased property before or during move-in
  • Homes being worked on
  • Retired business owner inventories
  • Hobbyists

Interested in learning more? Contact our team at Wheeler, DiUlio, & Barnabei today for more information.