Recently we received a phone call from a former client.
A few years ago he took home insurance with a different agent and company because he got a much better “deal.” In hindsight it wasn’t a “deal” just a lower premium but now he has a problem. He asked us if a homeowner insurance policy in Texas will cover for plumbing losses that happen within the foundation of the home.
Our answer…it is really hard to say. The Texas homeowner insurance market was deregulated several years ago. Insurance companies offer different types of policies that offer different benefits and options.
We asked if he had a claim and yes he did. He had a pipe break within his foundation and his current policy does not cover this type of loss. So the cost of tearing into the foundation, any damage done by the water and putting back any portion torn out was all at his own expense.
He asked… and yes the policy he had purchased through our agency had coverage for this type of loss. I am sure his heart sank. I don’t know how much he saved by moving his coverage and if he had added the option for such a loss probably wouldn’t have saved much of anything.
We really felt for him. He made a change because he thought he got a better deal. He trusted the agent and company at face value and wasn’t aware of how different policies can be with regard to what is or isn’t a covered loss. Deregulation has made a situation in Texas where consumers have to be aware and knowledgeable.
This happens all too often today. And it is so frustrating to us as independent insurance professionals to see consumers being lured into buying insurance policies without being told what they are buying or better yet what they are NOT buying.
In this situation, the new insurance company does offer coverage for plumbing leaks within the foundation, however, it is a higher priced option (because of what it covers) and including it possibly didn’t make their quote less than what he was paying with our company.
There are many coverage options that are not included in quotes/policies offered by agents and/or companies. I don’t know if it is a lack of knowledge on the agent’s part or a fear that if they include the premium for the coverage they will not make the sale. Most likely a combination of both.
Either way the insured is left holding the bag and paying for a claim themselves.
Don’t let this happen to you. Insurance is so important! Yes I know you expect me to say that but it is true!! You cannot retroactively change it, you cannot return it for a refund and you do get what you pay for.
Wherever you decide to purchase your insurance coverage our advice is
- Don’t look for cheap or you will get cheap. Rather opt for great coverage at a competitive premium.
- Ask questions. Don’t just ask what is covered, ask what is not, what is limited and what options are available.
- Ask about discounts and ways to lower your premium without giving up valuable coverage for big losses.
- Work with an insurance professional who is knowledgeable and you can trust to be thorough
Be smart and be safe. Call on us anytime. We’re here to help!
Bill Haddox Insurance & Financial Services, Inc.