Property Insurance

Almost every aspect of this situation could cost you dearly. Insurance laws may vary widely from state to state, different kinds of property require specialized coverage, and collections of art, antique cars, and other unique items may be difficult to protect fully. Meanwhile, serving on a nonprofit’s board could subject you to additional personal liability.

Getting the right property and casualty insurance coverage may not rank high on your list of financial priorities. Compared with investment decisions and estate planning issues, questions about the language in your home owner policy, say, may seem hardly worth considering.

The value of your collection of Abstract Expressionist paintings has grown rapidly. And you just volunteered to serve on the board of directors of a charitable organization.

Rather, it’s important to review all of your needs, consider specialized policies or policy options, and coordinate your coverage with other aspects of your financial situation.

1.  Leaving gaps in home owner coverage. Any homeowner needs to review coverage regularly to keep up with rising replacement costs. But insuring different kinds of homes in different locales poses extra challenges. If you buy insurance from more than one carrier, you may face contrasting rules, limitations, and policy renewal dates. For example, the liability limit on the policy for a second home might fall below the minimum on an excess liability policy designed to complement the insurance on your primary home.

2.  Ignoring properties unique characteristics. Standard homeowners coverage won’t pay for the materials and craftsmanship needed to rebuild that 19th century showplace you’ve painstakingly restored. Coastal homes may face hurricane damage, while a place in the California mountains could be subject to earthquakes or wildfires. Meanwhile, city co-ops or condos may need policies tailored to their buildings or associations coverage.

3.  Under insuring art and collectibles. Standard home owner policies limit coverage for the losses of antiques, furs, and other valuables. And while you could schedule additional coverage, insuring the real value of a collection of contemporary art or vintage muscle cars likely will require a specialized policy addressing several critical issues. (You’ll need a professional appraisal when the policy is designed, with frequent updates as items appreciate.) Will additions to your collection automatically be covered?

4.  Forgetting to insure household employees. When someone works for you or your family, as a nanny, landscaper, personal assistant, or in another role, you could be liable for medical expenses and lost wages if the worker is hurt on the job. Several states require household employers to pay into a workers compensation fund, while in other states it’s optional, but providing such insurance may be mandatory for ensuring your financial well being.

5.  Neglecting your liability as a board member. Excess liability coverage could help protect you if you’re sued as a director of a nonprofit’s board. Or for more comprehensive protection, you may want to consider special directors and officer liability insurance.

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