True Insurance stories by Byron Taylor of AIS Insurance in Oakland (names were altered to protect clients identities, you can contact Byron at btaylor@aisinsurance.com for superior service.)
John K.* was resting comfortably in the bedroom of his Lakeshore Avenue apartment when the methodic sound of dripping water caused him to stir. Thinking he had left the faucet on in his master bathroom, John rolled out of bed and trekked through familiar darkness toward the intermittent plopping sound. He was only able to make it half way across the room before it hit him; a drop of water on his head, and then another. At first he thought it was something else until his bare foot sloshed into a puddle where dry shag carpet used to be. John quickly flipped on the light and soon discovered the water was dripping from the fire sprinkler nozzle on the ceiling. Amused, John chuckled to himself and casually hopped on his dry foot toward the bedroom door en route to the kitchen for a bucket and a paper towel. John opened the door and uttered a string of expletives not fit for print after seeing the threshold to his bedroom was now a make shift shore to the easily one inch deep water that had accumulated over the course of 4 hours in his living room, hallway and kitchen. John had officially suffered his first insurance loss.
Let’s be honest, it's no secret that most people hate insurance. Over the years the concept of personal coverage has been co-opted by the image of greedy businessmen working in a windowless back room of Evil Incorporated. More often than not, the average American seems to think insurance is a scam, a scheme or any other euphemism associated with separating you from your money and getting nothing but a big fat bill in return. And while it may be true that most of us will go through life without ever experiencing property damage or loss, isn’t it good, not to mention smart, to have coverage in place just in case you do? Let's go back to the example of John K. who is still standing at his bedroom doorway, mouth agape like one of those Scream Halloween masks. The following day John would learn the unit upstairs had sprung a leak in the wee hours of the morning and it would be an indefinite length of time before an at-fault party could be determined and the resulting losses addressed. In the meantime John was stuck with thousands of dollars in personal property damage and no one was stepping up to help. It was then John remembered he had bought renters insurance months earlier as a way to help reduce his auto insurance premium. John made one call and his insurance company sent a team of adjusters that very same day. John was even further relieved he had coverage once it was discovered that his hip 1970's era apartment was an asbestos playground and it would now have to be gutted to the studs. John dodged a very expensive bullet because his insurance carrier packed his family up, paid for his temporary living expenses and he was soon able to move into a new place and carry on with his life. That's the happy ending we all want. Now let's look at the flipside. Dick M.* purchased a new house and went to see his insurance agent hoping to keep a few bucks in his pocket. More concerned with money instead of his client’s best interest, his agent offered George a landlord policy which only covers the house itself and pretty much nothing else. Thinking the chances of a total loss were slim to none, Dick agreed and signed on the dotted line. Over the years to follow, Dick would pat himself on the back over the thought of saving so much money and beating the system, that is until the day an electrical short in the garage caused his beloved home to burn to the ground with everything in it. Dick filed a claim and was able to get his home rebuilt, but when he inquired about the over $150,000.00 in personal property lost in the fire, his agent broke the terrible news that there was no replacement coverage because he didn’t have the right kind of policy. Dick was left with only a house and not enough money to fill it with the things that make it a home. The expensive lesson to be learned here: don’t be a Dick.
The most important rule of thumb for any form of property insurance should always be coverage over price. Saving a few hundred dollars every year will mean nothing if you don't have enough to repair or replace your home in the event of a covered loss. If you absolutely have to save more money, consider a slightly higher deductible that will not cause a financial hardship should you suddenly need to pay it. You will also want to avoid filing excessive property claims as this could potentially limit your options if you ever wanted to switch insurance companies in pursuit of a better rate. Once you are ready to purchase property insurance, you should always shop around for the best coverage to premium combination. You can also ask your family, friends, or even your realtor to refer you to a trustworthy insurance provider.
And for those of you who still think insurance is some kind of unholy rip off, think about that secure feeling you have every time you leave your home, or that deep relaxing breath you take right before drifting off to sleep at night. That dear reader is called peace of mind. And that is what property insurance buys you. I suppose it would make you feel better if you could touch insurance or watch television while it curls up on your lap. But insurance is not warm and fuzzy, and you shouldn't want it to be either. Insurance should be formidable and serious and be able to protect you when you need it the most. You should leave the cuddling to your cute puppy dog that is peeing on the power strip behind your new flat screen LCD TV which is now going up in flames as you read this. But not to worry, your insurance will cover that too.
