Property and Casualty Insurances

December 30, 2021
As a continuation of our Insurance Issue, read on for more about homeowner, auto, and umbrella policies.
Homeowner’s insurance policies vary in what they cover and the premiums you pay, so it is important for you to know whether your policy does what you need it to do (and that you are not paying for coverage you don’t need or want). For example, your basic homeowner’s policy may have limits on what specific expensive items are covered, such as your baby grand piano, your great-grandmother’s jewelry, or your large coin collection. There are many categories of items (collectibles, jewelry, guns, trees, and furs) that need their own separate policy called a “rider”. Make sure your insurance agent is aware of these items so that if fire or water damages occur or you are robbed, your policy will pay for their replacement. Another key thing to note on your homeowner’s policy is whether your personal property is covered by “actual cash value” or “replacement cost”. If you had a fire in your living room and your policy included replacement cost, the insurance company would give you what it costs to go out and buy a new living room set, whereas actual cash value may only cover enough to buy an equivalent value couch from a garage sale. As you might expect, replacement cost can be the more expensive coverage but it would quickly become invaluable if something happened to your things.  
Check out both Consumer Reports as well as Kiplinger’s online for additional information that you can use when discussing insurance coverage with your insurance agent.
Automobile insurance is a bit more standardized than homeowner’s insurance because everyone is required by law to have it and many states, including Maryland, have minimum coverage requirements. Maryland requires drivers to carry 30/60/15, which is short for $30,000 of coverage per person up to a total of $60,000 per accident for injury, and $15,000 of coverage per accident for property damage. Our team recommends our clients have at least 300/300/50 in basic coverage and then add an umbrella (additional personal liability coverage) policy depending on your personal situation. This is in part because better insurance will also protect you in the event you are injured by a driver who does not have their own insurance (uninsured) or carries less than you do (underinsured). The more risk exposure you have (such as having a teenage driver on your policy) and the more assets you have, the more insurance you might need or want. 
Reviewing your policy at each renewal can help you look for things that have changed (such as a covered driver moving out of state with the car for college, or an aging car that it no longer makes sense to have a low deductible for comprehensive coverage (think hail storm). Perhaps you don’t need rental car coverage because you have another car available to you in your household or coverage through AAA. These savings can add up over time.
Read more about auto insurance and umbrella liability insurance, and the kinds of conversations we can prepare you to have.
We also highly recommend you review the following checklist for things to consider as you're reviewing your property and casualty insurances. This resource includes questions that you might not know to ask, or things you might not think to let us or your insurance broker know: Issues to Consider When Updating Property and Casualty Insurance
Gallant Financial Planning is available work with you and your family to help provide you with the knowledge and tools you need to find the right level of insurance for your situation. Schedule an appointment today.
-NOTE: Gallant Financial Planning is not a licensed insurance agent, nor are we an insurance broker. We are not licensed to sell insurance, and as fiduciaries, our only goal is for you to have the best outcome. We provide education so that you can have the right conversation with your licensed insurance agent to get you the appropriate insurance coverage for your individual situation.