It’s almost time to hitch up the boat and head for the lake. Before you do, here are four questions to ask your insurance agent:
1. Am I covered if someone else is using my boat?
If they are paying you to borrow your boat, your boat policy will almost certainly not cover any losses or liability. So, don’t rent your boat out without first talking to your agent.
However, many policies cover use of your boat with your permission by friends or family members.
But not all of them do. So, you need to read your policy, especially the exclusions section. You may need to specify by name everyone who may use your boat this season.
One way that may extend coverage to others using your boat could be through an umbrella policy. Talk to your agent about additional coverage that may be provided through an umbrella policy.
2. If I’m in an accident on the way to the lake, who pays for damage to my boat?
This one’s a tricky question. So, let’s look at a few scenarios:
First, you are towing your boat to the lake.
You are in a car accident that’s your fault. Your boat and trailer cause damage to another vehicle. Who pays? Your auto insurance pays, not your boat insurance.
Second, you are towing your boat to the lake.
Your trailer detaches from your truck and the unattached boat and trailer hit the car behind you. Who pays? Your boat insurance pays this time.
Finally, you are towing your empty trailer to a designated parking place after launching your boat.
You make a mistake and damage your trailer. Who pays? Your boat insurance, if you have optional coverage for your trailer.
3. If my boat is wrecked, will I get a new boat to replace it?
Again, that depends.
Many people have an “actual cash value” policy, often called a “market value” policy, because these policies cost less.
But actual cash value policies pay only what the boat was worth at the time of loss.
This means that depreciation takes a huge bite out of the final payment by the insurance company. If your boat is totaled, you likely won’t get enough to purchase a new one to replace it.
However, if you have an agreed amount value policy, you are more likely to get enough money to replace your old boat with a new one at claim time.
4. Are there additional coverages I should consider?
Yes. There are optional coverages available under most boat policies. That’s why talking with your local insurance agent can make a huge difference at claim time. You may need additional coverage, like an umbrella policy, and not even know it.
Schedule a time right now to meet with an experienced local agent and discuss how you will be using your boat this season.
Your assets will be better protected, and you’ll boating with more peace of mind.
If your home is severely damaged due to a fire, you may not have enough insurance to rebuild your home... even if you have replacement coverage!
How can that be? Simple. Your homeowners policy covers rebuilding your home to the “same quality” and “similar materials” that existed before the fire.
Your policy specifically limits or excludes the cost to rebuild to new building codes. It will also not pay for demolition of undamaged parts of your home.
This is critical coverage in California because our building codes and local laws are constantly changing. So, I’ll do my best to explain what this coverage is, and why you should care.
A typical “ordinance or law coverage” endorsement covers three things:
Coverage A: Loss of the undamaged part of your home
Hapless Hank survived the fire. But his beautiful home was badly damaged. The county said that since 58 percent of his home was destroyed, the entire home had to be demolished before he could rebuild. He thought he was OK since he had replacement coverage.
But he wasn’t OK.
The insurance company would agree to pay for only the 58 percent that was damaged, not the 42 percent of his home that was undamaged. Insurance doesn’t pay to fix or replace perfectly fine things.
Ordinance or law coverage could have protected him against this terrible event.
Coverage B: Cost to demolish the undamaged part of your home
Frustrated Fred had a similar problem. Sixty percent of his home was destroyed. Instead of rebuilding, he took the insurance settlement and went shopping for a new home.
But the county required him to demolish his entire existing home, due to excessive damage.
Again, insurance was not going to pay to demolish the 40 percent that wasn’t damaged, just because local officials required it. Frustrated Fred had to pay $20,000 of demolition costs out of his own pocket.
Ordinance or law coverage could have covered this.
Coverage C: Increased costs to meet new building codes
Surprised Sally lost her entire home in the wildfire. She was glad that she had purchased replacement coverage a few years ago. She looked forward to her home being rebuilt.
So, imagine the surprise when she found out that her home, which was built in 1973, would need to be rebuilt to current building codes, and that it was going to cost far more than she had imagined!
She checked her policy, and she had ordinance or law coverage for this. Yay! But it was limited to just 10 percent of the total insured amount. So, she had just $30,000 in coverage to meet new building codes.
But new building codes required an additional $70,000 in construction costs.
Surprised Sally wasn’t going to be able to rebuild her beloved home.
Many of our neighbors in Napa and Sonoma counties experienced these surprises in coverage last fall when the tragic fires hit us hard. They thought they had enough coverage... and they didn’t.
Too many homeowners, business owners, and landlords have a limit of just 10 percent of the dwelling amount for this, when in fact they may need 25 or 50 percent coverage.
Please call your local agent to make sure you have enough ordinance or law coverage on your policy.