Things to Consider When Purchasing Home or Commercial Insurance

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Home Insurance

One of the major tests for home insurance agents is how they handle claims, according to Consumer Reports. Consider the satisfaction reports of the company before you purchase your policy, as low-rated insurers tend to have low-satisfaction reports, and claimants often feel like their claims' damage estimates and final settlements are too small or not handled in a timely manner.

Often, an insurer and a claimant don't see eye to eye on damage amounts or how a claim should be handled after a qualifying event. Do your homework before you buy, and make sure you're buying the right insurance for your situation. Jeanne Salvatore, vice president for consumer affairs at the Insurance Information Institute, recommends making sure you're covered for the structure of your house, your most valuable belongings, your liability to others, and your living expenses if you're forced to make your own home livable and/or living somewhere else while your house is being renovated or repaired (or, worst-case scenario, rebuilt.)

Most common levels of coverage:

  • HO-2: Broadly protects against 16 major perils

  • HO-3: A slightly broader policy that protects against all perils, except those specifically excluded

  • HO-5: This is the most common level for newer, better-maintained homes, and covers most things*

  • HO-6: Co-Ops and Condominiums have different insurance needs, and usually need to include different types of coverage

  • HO-7: Mobile Homes need specific insurance, and insurance for them usually protects against most perils*

  • HO-8: Older homes usually need to be insured differently than newer, differently-built homes. Read over what your policy covers – some only cover the cash value to replace the structure itself, while others also cover personal property (learn more at U.S. News)

*(except those specifically excluded)

Commercial Insurance

From the startup phase through to the major corporation phase, commercial business insurance should be included in your budget. Insurance provides you peace of mind and covers you in the event of an incident. Commercial insurance for your business can help cover your business and protect it – and your personal liability – from potential litigation.

How can you protect your personal wealth and assets from your company's liabilities? Here are a few tips:

  • Have sufficient liability insurance: Forbes suggests personal umbrella liability coverage and business umbrella coverage, depending on the circumstances

  • Keep your personal assets and business assets separate

  • Protect yourself personally from renters and liabilities surrounding rental properties

  • Review all jointly held accounts, and ensure your business name is on all business accounts, but not on your personal ones

  • Have it in writing: formalize informal partnerships, only hire contractors who are insured & bonded, and get everything under contract and in writing

  • Ensure you have filed for the correct business entity (i.e. LLC, S or C corporation, sole proprietorship, etc)

The idea behind asset protection is to shield your personal assets and finances from business claims or creditors. Asset protection plans put into place legal strategies before a lawsuit or claim happens, and can help to deter a potential claimant from suing you and/or your business and help prevent seizure of your personal assets after a judgment. Investopedia details two types of claims – internal and external – and how your assets need to be protected from both. In short, you should protect both your company from suit should a liability occur on company property, and your and your company's property should a liability occur outside company property. Knowing which kind of claims can be filed against you can help to protect your assets.

It is important to talk to an insurance agent to understand what kind of assets you have, what needs to be protected, what kind of claims can be made against you, and what you need to do to ensure your personal property and wages are protected against garnishment and seizure in the event of a suit.

Most commercial insurance companies offer a range of policy options, some of which may include:

  • Liability coverage

  • Insurance for products you sell

  • If you operate your business out of your home

  • Insurance for outstanding loans

  • Umbrella coverage, for that extra piece of mind

If you're unsure if you're covered completely, or just want to check up on your policy, contact your local commercial insurance provider today.

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