Interpreting the policy’s terms allows the insurance company to determine if a claim is covered or not. When multiple exclusions exist in a home insurance policy, it complicates property coverage interpretation when trying to make a claim. Coverage can vary, with some policies covering certain natural disasters while excluding others. For example, certain policies may not provide coverage for water damage, which is a common type of claim. If a policy specifically excludes coverage for certain natural disasters or water-related events, the insurer can deny the claim. These clauses help clarify the circumstances in which the insurance company must provide coverage for natural disaster claims or other types of claims. In case of a natural disaster, it is important to consider that any previous insurance claim, whether unreported, improperly investigated, not adequately paid, or where the necessary restoration work was not carried out, may have a negative impact on the evaluation and payment of the claim resulting from the natural disaster. Other factors that could affect the evaluation and payment of the claim include a lack of property maintenance, destruction of evidence, poorly worded coverage provisions in the policy, and policy exclusions. The consequences of the disaster can make the process of adjusting and settling the claim more complicated and time-consuming. Moreover, postevent crimes like theft or vandalism can further complicate the assessment of the claim, especially if the property is vacant due to a previous loss. Reframing Insurance: Transforming Liability into Valuable Assets Homeowners often underestimate the true purpose of insurance and neglect the opportunity to protect their valuable assets. Dismissing the likelihood of accidents, damage or natural disasters, they adopt a mindset of ‘It won’t happen to me’. However, it is vital to recognise that it is not a matter of if these incidents will occur but rather when they will happen. Your home holds paramount importance as your most valuable asset. Opting to save a few hundred dollars on an insurance policy exposes your most crucial investment to significant vulnerabilities. Many homeowners lack sufficient insurance coverage. Studies indicate that approximately 60% of homes in the US, which equates to two out of every three homes, are underinsured by a minimum of 18%. Outdated policies and failure to consider property changes and rising costs in labour and materials can lead to underinsured homes. Inadequate coverage in home insurance areas like dwelling, structures, personal property, 14 LAWYER MONTHLY NOVEMBER 2023 Studies indicate that approximately 60% of homes in the US, which equates to two out of every three homes, are underinsured by a minimum of 18%.
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