How well do you understand the ins and outs of homeowner's insurance fire damage coverage? There are some nuances and keys that could be valuable in both finding the right coverage for your clients and showing in-depth knowledge of the policy in making the sale.
Understanding homeowner's and commerical insurance fire-related policy exclusions or limitations of coverage can make the difference in sale and in policy renewal.
Issue 1- Smoke, Water, or Fire?
Often times insurance policy language defines "fire" very narrowly. Some insurers do this to avoid liability when damage is not a direct result of the flames of the fire itself. If, for example, a client incurs a fire at their homw or business and some items receive damage by smoke and are ruined, some insurers will not pay for the replacement of those items. In that case it depends what the insurance policy says specifically about smoke damage. The same can also be said of damage caused by lightning and water used in fighting the fire.
According to Financial Web in recent years many insurance companies have escaped liability when people die in home or business fires. This is because they died of smoke inhalation and were not burned alive by the flames.
Another common exclusion or loophole in some home insurance policies is damage caused by water. For example, if your home is on fire, and the firefighters come to put out the fire, your home insurance policy may exclude, or not pay for damage that was caused by the firefighters putting out the fire with water cannons. Now, obvously those same items might have been destroyed by fire if not for the intervention of firefighters on our behalf so this seems questionable at best.
So comprehensive coverage to insure all losses related to a fire is best to protect your clients homes, businesses, and personal valuables. This is an essential component of quality customer care.
Issue 2- Common Fire Insurance Policy Limitations
Besides policy exclusions that may restrict a client's coverage, many insurance policies have restrictions on what will and what will not be covered during the fire. For example if a client lives in a historic home or otherwise older home that has very old or antique types of architecture and hand crafted items in on the house, many insurance companies will not pay to have expensive moldings, trim and other custom crafted items replaced. Finding an appropriate policy for such clients may be a challenge.
those circumstances above, insurers will pay to have simple prefabricated or commonly made ornaments, fixtures or moldings installed. So, a little research in these circumstances may help tremendously. An important policy language tool is to make sure that the coverage will cover the insured's home as it was before the fire damage.
There are many potential exclusions that agents and brokers need to be aware of in advising clients on policies they are selling. At times there may be special accomodations made by the insurer and a good agent always asks what can be done in making every attempt to make a sale.
