Insurance Coverage Overlap

How Does Your Insurance Coverage Overlap?

Hello everyone!

I hope that you are enjoying your summer. I wanted to discuss how homeowners and auto insurance policies may overlap in the event of a loss and give some practical reasons why bundling coverage makes sense in these scenarios. Here are a few common examples where both coverages come into play:

Vehicle Break-In

A thief break into and either steals your vehicle or whatever is inside. In our example, let’s say they break the driver’s side window and steal the purse and the iPad that are sitting in the vehicle. Technically speaking, you have an auto claim for the window and a homeowners claim for the valuables that were stolen out of the vehicle. Some carriers do provide auto coverage for the contents of the vehicle up to a certain dollar amount to make it strictly an auto claim, but other companies tend to keep it as two separate losses.

Hail Storm

A hail storm is probably one of the most common cases of policies overlapping, especially when the damage is significant. If you have vehicles parked outside the home when a significant hail storm rolls through you will most likely have damage to your vehicles, as well as your home’s roof, siding, gutter damage, etc.

Fire

Less common and more severe, a fire loss could potentially involve vehicles as well as your home. The thing to remember here is that almost everything with a motor that is not used strictly for the maintenance of the your property is usually excluded from your homeowners coverage. The collector car that you were working on in the garage, ATV’s, boats, motorcycles, and of course, your vehicles, would all need their own coverage in order to be picked up in the fire loss.

In these cases, the way that your insurance coverage is constructed can impact what is covered and how the deductibles will be applied. First, if you have coverage with one carrier for your home and another for auto, multiple deductibles will come into play. In the vehicle break-in example, if your coverage is bundled together, especially with a carrier where they have everything on one policy, they would only apply one deductible (typically the highest) and then take care of all of the losses. In the case of hail storms, we have had situations where three cars and the home end up with significant damage. All the vehicles had a $1,000 deductible and so did the home. Even though four separate things were damaged in the loss, the carrier only took $1,000 as the deductible. As you can see, it can make a significant difference as some others would have taken $4,000 (one deductible for each car and the home) and the insured would have had to pay more out of pocket. As always, if you have questions or concerns, contact your agent for a review.

Finally, I wanted to address one last thing – flooding. In the event of a severe flood, damage to vehicles and home can happen. This one is a little different in the sense that most carriers exclude flood coverage on the homeowners policy. Typically, flood coverage is purchased on a stand-alone basis. However, flood is covered on the auto side of things. In the event of a severe flood, you may have coverage on vehicles but not your home and contents.

As always, thank you again for your support. We appreciate the opportunity to protect your families.

All the best,
Jon Oaks