With a very tough 2008 drawing to a close, there are a number of important goals for everyone in the insurance technology industry, including getting up to speed on social media, and improving competitiveness.
By Katherine Burger More from this author
December 11, 2008
If there was ever a time to make New Year's resolutions, it's now, at the end of a year that for most people in the financial services industry can't conclude quickly enough. Looking back at the events of 2008 in order to understand and learn from mistakes is important, but that exercise should provide a foundation for new thinking and improved operations going forward.
Accordingly, the 2009 Insurance Technology Outlook special report in this issue of Insurance & Technology features insights from carrier CIOs and other industry experts about what's going to be on insurance company IT agendas in the coming year. At the same time, I'd like to suggest a few goals for all of us -- resolutions that, even if we only partly achieve them, will help us be smarter and more successful businesspeople.
Related ResourcesContent Management vs. Knowledge Management: What Insurers Need to Know about the Key Differences The Human Side of Knowledge Management: How Insurers Can Unlock People Potential in the Knowledge Economy The Optimized Insurer: Using Analytics to Optimize Business Performance Master social media. It's more than selling insurance via Second Life or featuring a carrier's TV commercials on YouTube. Fluency in Web 2.0 technology and social networking sites such as Facebook and Twitter is now a core business capability for any decision maker. It's critical to collaboration and communication in any business. I'm committing myself to becoming much more active and adept at using social media -- so expect to become my friend and follower in 2009. And look for enhanced online features, tools and content offerings from Insurance & Technology on www.insurancetech.com.
Understand the unfamiliar. How well do you really grasp the habits and expectations of the Millennial generation -- your new employees and customers? How much do you know about underbanked individuals, whether they are immigrants in the U.S. or residents of underdeveloped countries? Are you up to speed on cloud computing, mobile payments and telepresence? The events of the past year have made it clear that the world is shockingly interconnected, which makes it imperative for all of us to strive to simultaneously become technologists, economists, demographers, sociologists and futurists. You can't get away with saying, "It's not part of my job description."
Be competitive. It's not devious to conclude that tough times present opportunities for strong and well-managed organizations. Companies that are able to make smart technology investments that improve distribution, compliance and financial management capabilities not only grow profits and market share, they create jobs, pay taxes and give back to communities. It's all good.
Stay healthy. Do I really have to explain this one?
Happy New Year!
Insurance Search Engine
Saturday, January 31, 2009
Fiserv Insurance Faces Rebranding Challenges, Opportunities
On March 2, 2009, Brookfield, Wis.-based Fiserv Insurance Solutions will rebrand as StoneRiver, as a condition of the acquisition of a majority share of the company by Trident IV, a private equity fund managed by Stone Point Capital, for approximately $540 million, a deal that was announced in July 2008.
Fiserv Insurance Solutions was obligated by the terms of the acquisition to re-brand within 12 months but has accelerated the process, according to Eddie Jones, the vendor's SVP for marketing and communications. "We felt it was important to go ahead and create an independent identity as soon as possible," he comments. "We have a great deal of transitional activity to do, and the sooner we build the new identity, the better -- for our customers, for our presence in the market and for our employees to begin identifying and building the values that will be StoneRiver."
Related ResourcesContent Management vs. Knowledge Management: What Insurers Need to Know about the Key Differences The Human Side of Knowledge Management: How Insurers Can Unlock People Potential in the Knowledge Economy The Optimized Insurer: Using Analytics to Optimize Business Performance In addition to concerns customers may have about the changes brought by new ownership, rebranding from a well-established name carries the risk that potential customers will fail to associate the new name with the old reputation, notes Karen Pauli, research director, insurance practice, TowerGroup. "However, if done correctly, with a great deal of communication, it is a chance to define the organization," Pauli remarks. "Going out under the StoneRiver name gives the insurance organization the chance to create an identity of its own, apart from Fiserv, where they could, from time to time, get lost in the greater organization."
Fiserv Insurance Solutions/StoneRiver's Jones affirms that the new name will reinforce the vendor's exclusive focus on insurance technology as 'the' business of the company but refers to further benefits related to its new status. "The independence of being a privately held company in a publicly financed space is that we don't suffer from the same kind of market volatility and we have the luxury of investing for the long term in strategic solutions and growth opportunities," he says.
Fortuitous Timing
Among the vendor's longer-term, growth-oriented investments is its Project Ignition, a multi-year effort to establish a common architecture for its core insurance software solutions. The project was launched approximately two years ago and has been in active development for about a year. The vendor plans to complete the common architectural foundation for its products this summer, according to sources.
"While causally unrelated to the company spin-off, the timing of Project Ignition is fortuitous, as it jibes with the notion of a fresh corporate identity," says Donald Light, senior analyst, Celent (Boston). "A common platform also makes sales easier."
Ideally StoneRiver will be able to combine that positive impression with the ability to carry over the positive associations attached to the Fiserv name, according to Light. "That's the challenge they face over the next year or two," he says.
Fiserv Insurance Solutions was obligated by the terms of the acquisition to re-brand within 12 months but has accelerated the process, according to Eddie Jones, the vendor's SVP for marketing and communications. "We felt it was important to go ahead and create an independent identity as soon as possible," he comments. "We have a great deal of transitional activity to do, and the sooner we build the new identity, the better -- for our customers, for our presence in the market and for our employees to begin identifying and building the values that will be StoneRiver."
Related ResourcesContent Management vs. Knowledge Management: What Insurers Need to Know about the Key Differences The Human Side of Knowledge Management: How Insurers Can Unlock People Potential in the Knowledge Economy The Optimized Insurer: Using Analytics to Optimize Business Performance In addition to concerns customers may have about the changes brought by new ownership, rebranding from a well-established name carries the risk that potential customers will fail to associate the new name with the old reputation, notes Karen Pauli, research director, insurance practice, TowerGroup. "However, if done correctly, with a great deal of communication, it is a chance to define the organization," Pauli remarks. "Going out under the StoneRiver name gives the insurance organization the chance to create an identity of its own, apart from Fiserv, where they could, from time to time, get lost in the greater organization."
Fiserv Insurance Solutions/StoneRiver's Jones affirms that the new name will reinforce the vendor's exclusive focus on insurance technology as 'the' business of the company but refers to further benefits related to its new status. "The independence of being a privately held company in a publicly financed space is that we don't suffer from the same kind of market volatility and we have the luxury of investing for the long term in strategic solutions and growth opportunities," he says.
Fortuitous Timing
Among the vendor's longer-term, growth-oriented investments is its Project Ignition, a multi-year effort to establish a common architecture for its core insurance software solutions. The project was launched approximately two years ago and has been in active development for about a year. The vendor plans to complete the common architectural foundation for its products this summer, according to sources.
"While causally unrelated to the company spin-off, the timing of Project Ignition is fortuitous, as it jibes with the notion of a fresh corporate identity," says Donald Light, senior analyst, Celent (Boston). "A common platform also makes sales easier."
Ideally StoneRiver will be able to combine that positive impression with the ability to carry over the positive associations attached to the Fiserv name, according to Light. "That's the challenge they face over the next year or two," he says.
MetLife Boosts CSR and IVR Capabilities
Competing for external recognition has helped MetLife’s call center operations leadership identify the capabilities it needs in order to deliver best-in-class service.
By Anthony O'Donnell More from this author
January 28, 2009
As supposedly solid financial institutions evaporate into thin air, the steady, changeless qualities of an insurance brand are doubtless reassuring. When it comes to service, however, meeting customers' expectations and sustaining a customer-friendly brand means trying to score as the goalposts constantly move. Bearing that challenge in mind, MetLife ($521.3 billion in total assets) has driven relentless improvements in its call center capabilities, aimed at continually improving service even as it seeks to reduce costs.
The New York-based carrier recently relaunched its customer service representative (CSR) Knowledge Assistant application on a KANA (Menlo Park, Calif.) knowledge management platform, reports Todd Fusco, VP of MetLife's business solutions planning unit. The revamped application puts more relevant information at CSRs' fingertips, reducing the time that they need to search for it and that customers have to wait, he says. MetLife also has deployed Nuance (Burlington, Mass.) interactive voice recognition (IVR) software to boost self-service capabilities, making it easier for customers to complete inquiries with fewer steps, Fusco adds.
Related ResourcesContent Management vs. Knowledge Management: What Insurers Need to Know about the Key Differences The Human Side of Knowledge Management: How Insurers Can Unlock People Potential in the Knowledge Economy The Optimized Insurer: Using Analytics to Optimize Business Performance Among the improvements in MetLife's customer service performance -- owing to a combination of the KANA and Nuance applications as well as existing routing and forecasting capabilities -- is a CSR availability rate increase from 67 percent to 85 percent, according to Fusco, who points out that Nuance IVR capabilities have contributed to an increase in self-service efficiency, freeing up CSRs for more-demanding inquiries. He notes that 74 percent of the carrier's customers report being "very satisfied," compared to an industry average of 53 percent.
Karen Hemenway, VP of MetLife's customer sales and service group, relates the latest call center capability improvements to the carrier's quest for continuing recognition as a "Certified Center of Excellence" by Purdue University's Center for Customer Driven Quality. Call centers compete for the distinction on their ability to exceed their industry peers as measured by 28 performance categories. According to Hemenway, in October 2008 MetLife's call center received the designation for the fourth year running, outperforming the industry in 18 categories and demonstrating improvement over its own 2007 performance in 12 categories.
"We have earned internal accolades for high quality and productivity, but we see value in seeking external validation," says Hemenway. "We have learned through the Center of Excellence certifications that there are areas of opportunity for further improving our effectiveness and efficiency."
Optimization Phase
The addition of the KANA-based Knowledge Assistant represents the call center's transition from a building and consolidation phase to one of optimization, according to Fusco. "We're taking steps beyond the core capabilities that any call center should have," he says. "We are focused on both implementing new capabilities and getting the most out of things we've invested in in the past."
For example, KANA has boosted the capabilities of MetLife's MetCare unified service delivery desktop for CSRs, Fusco suggests. Built on Chordiant (Cupertino, Calif.) software implemented in 2000, MetCare connects to disparate systems to draw vital data needed by CSRs. Prior to the deployment of KANA, the Knowledge Assistant application transmitted unstructured data on MetCare through IBM's (Armonk, N.Y.) Lotus Notes.
"While we had the ability to do keyword searches and other queries, there was an onus on the CSRs to look for what they needed in the context of the call they were taking," Fusco recalls. "KANA offers you the ability to create unique knowledge bases and compartmentalize information to maximize and automate search capabilities -- it's the ability to deliver knowledge when and where you need it."
MetLife purchased the KANA software in early 2007 and began analysis and content redesign over the following four months. Building and testing followed through much of the year, and group-by-group deployment began in the fourth quarter. "The larger part of the initiative was rethinking our store of knowledge -- how do we rewrite and rebuild it in context of a customer phone call?" says Fusco. "It was rationalized to the questions customers ask and need, as opposed to being broadly available in volumes of reference materials."
MetLife licensed the Nuance IVR software at about the same time it added KANA and spent most of 2007 analyzing processes and building menus designed to get answers to customers' questions with a minimum of steps, Fusco adds. "The build of development happened throughout 2008, with our first group going to pilot over the summer," he says. "The balance of groups will be rolled out over the next few months, with 100 percent deployment by the end of the third quarter of 2009."
By Anthony O'Donnell More from this author
January 28, 2009
As supposedly solid financial institutions evaporate into thin air, the steady, changeless qualities of an insurance brand are doubtless reassuring. When it comes to service, however, meeting customers' expectations and sustaining a customer-friendly brand means trying to score as the goalposts constantly move. Bearing that challenge in mind, MetLife ($521.3 billion in total assets) has driven relentless improvements in its call center capabilities, aimed at continually improving service even as it seeks to reduce costs.
The New York-based carrier recently relaunched its customer service representative (CSR) Knowledge Assistant application on a KANA (Menlo Park, Calif.) knowledge management platform, reports Todd Fusco, VP of MetLife's business solutions planning unit. The revamped application puts more relevant information at CSRs' fingertips, reducing the time that they need to search for it and that customers have to wait, he says. MetLife also has deployed Nuance (Burlington, Mass.) interactive voice recognition (IVR) software to boost self-service capabilities, making it easier for customers to complete inquiries with fewer steps, Fusco adds.
Related ResourcesContent Management vs. Knowledge Management: What Insurers Need to Know about the Key Differences The Human Side of Knowledge Management: How Insurers Can Unlock People Potential in the Knowledge Economy The Optimized Insurer: Using Analytics to Optimize Business Performance Among the improvements in MetLife's customer service performance -- owing to a combination of the KANA and Nuance applications as well as existing routing and forecasting capabilities -- is a CSR availability rate increase from 67 percent to 85 percent, according to Fusco, who points out that Nuance IVR capabilities have contributed to an increase in self-service efficiency, freeing up CSRs for more-demanding inquiries. He notes that 74 percent of the carrier's customers report being "very satisfied," compared to an industry average of 53 percent.
Karen Hemenway, VP of MetLife's customer sales and service group, relates the latest call center capability improvements to the carrier's quest for continuing recognition as a "Certified Center of Excellence" by Purdue University's Center for Customer Driven Quality. Call centers compete for the distinction on their ability to exceed their industry peers as measured by 28 performance categories. According to Hemenway, in October 2008 MetLife's call center received the designation for the fourth year running, outperforming the industry in 18 categories and demonstrating improvement over its own 2007 performance in 12 categories.
"We have earned internal accolades for high quality and productivity, but we see value in seeking external validation," says Hemenway. "We have learned through the Center of Excellence certifications that there are areas of opportunity for further improving our effectiveness and efficiency."
Optimization Phase
The addition of the KANA-based Knowledge Assistant represents the call center's transition from a building and consolidation phase to one of optimization, according to Fusco. "We're taking steps beyond the core capabilities that any call center should have," he says. "We are focused on both implementing new capabilities and getting the most out of things we've invested in in the past."
For example, KANA has boosted the capabilities of MetLife's MetCare unified service delivery desktop for CSRs, Fusco suggests. Built on Chordiant (Cupertino, Calif.) software implemented in 2000, MetCare connects to disparate systems to draw vital data needed by CSRs. Prior to the deployment of KANA, the Knowledge Assistant application transmitted unstructured data on MetCare through IBM's (Armonk, N.Y.) Lotus Notes.
"While we had the ability to do keyword searches and other queries, there was an onus on the CSRs to look for what they needed in the context of the call they were taking," Fusco recalls. "KANA offers you the ability to create unique knowledge bases and compartmentalize information to maximize and automate search capabilities -- it's the ability to deliver knowledge when and where you need it."
MetLife purchased the KANA software in early 2007 and began analysis and content redesign over the following four months. Building and testing followed through much of the year, and group-by-group deployment began in the fourth quarter. "The larger part of the initiative was rethinking our store of knowledge -- how do we rewrite and rebuild it in context of a customer phone call?" says Fusco. "It was rationalized to the questions customers ask and need, as opposed to being broadly available in volumes of reference materials."
MetLife licensed the Nuance IVR software at about the same time it added KANA and spent most of 2007 analyzing processes and building menus designed to get answers to customers' questions with a minimum of steps, Fusco adds. "The build of development happened throughout 2008, with our first group going to pilot over the summer," he says. "The balance of groups will be rolled out over the next few months, with 100 percent deployment by the end of the third quarter of 2009."
WellPoint Hits the Trifecta
WellPoint (NYSE: WLP) hit the trifecta yesterday, but it wasn't the one that makes you leave the track happy. This triple combination -- investment losses, lower enrollment, and higher medical costs -- caused earnings per share to sink 57%.
Fortunately, investors saw it coming. The stock actually ended up 4% on the day.
The $350.5 million after-tax investment loss hurt, but the damage is done, and the company is still above its required level of capitalization. Aetna (NYSE: AET) and Humana (NYSE: HUM) also reported impairments last year, but none of them are close to needing a bailout like AIG (NYSE: AIG).
WellPoint's membership dropped 1% in the quarter as people lost jobs and couldn't pay for COBRA. Completing the trifecta, medical care ratio -- medical costs divided by premiums -- was up to 83.4% from 82.9% a year earlier. Those higher costs are cutting directly into the bottom line.
Fortunately, premiums reset eventually, and the company should be able to get the cost issue under control this year. Investors will have to wait until the end of next month at the company's investor day to get the full details, but management did say they expect to see earnings in the "low single digits." Not great, but at least it's headed in the right direction.
WellPoint and the rest of the health insurance industry -- UnitedHealth Group (NYSE: UNH), Cigna (NYSE: CI), and the like -- will have two opposing forces working on their stocks this year. On one hand, they should be at the front edge of the recovery -- increased employment means increased revenue -- but the unknowns that surround Washington's plans for universal health care (or some derivation thereof) will continue to drag on their stocks.
The only thing WellPoint can do is hope that the economy recovers, hope Washington doesn't dilly-daddle, and keep costs under control while it rides this out.
Fortunately, investors saw it coming. The stock actually ended up 4% on the day.
The $350.5 million after-tax investment loss hurt, but the damage is done, and the company is still above its required level of capitalization. Aetna (NYSE: AET) and Humana (NYSE: HUM) also reported impairments last year, but none of them are close to needing a bailout like AIG (NYSE: AIG).
WellPoint's membership dropped 1% in the quarter as people lost jobs and couldn't pay for COBRA. Completing the trifecta, medical care ratio -- medical costs divided by premiums -- was up to 83.4% from 82.9% a year earlier. Those higher costs are cutting directly into the bottom line.
Fortunately, premiums reset eventually, and the company should be able to get the cost issue under control this year. Investors will have to wait until the end of next month at the company's investor day to get the full details, but management did say they expect to see earnings in the "low single digits." Not great, but at least it's headed in the right direction.
WellPoint and the rest of the health insurance industry -- UnitedHealth Group (NYSE: UNH), Cigna (NYSE: CI), and the like -- will have two opposing forces working on their stocks this year. On one hand, they should be at the front edge of the recovery -- increased employment means increased revenue -- but the unknowns that surround Washington's plans for universal health care (or some derivation thereof) will continue to drag on their stocks.
The only thing WellPoint can do is hope that the economy recovers, hope Washington doesn't dilly-daddle, and keep costs under control while it rides this out.
Big pension plans lose $469B in 2008: Study
Hammered by the crash in the equities markets, pension plans sponsored by large companies suffered a dramatic reversal of fortune in 2008, with the average funding level sinking to 75% at year-end, down from 104% a year earlier, according to an analysis released Wednesday.
That unprecedented drop was the result of a huge decline in the value of assets held in pension plans sponsored by the 772 companies in the S&P 1500 that offer defined benefit plans.
New York-based Mercer L.L.C. estimates that the pension plans lost $469 billion in 2008, converting a $60 billion surplus at the end of 2007 to a $409 billion shortfall at the end of last year.
"This is a very difficult time for pension funds," said Adrian Hartshorn, a Mercer principal in New York.
The fall in funding levels "will reduce balance sheet strength, which leads to consequences for several areas of the business, including capital-expenditure decisions, loan covenants and credit rating decisions," Mr. Hartshorn said.
To meet funding requirements set by federal law, employers will have to pump in tens of billions of dollars in new contributions to shore up their plans, while some companies may decide to freeze their plans.
More employers will take a step back and ask if their plans still are viable, Mr. Hartshorn said.
The release of the Mercer analysis comes as business groups are expected to renew their push to convince federal legislators to temporarily ease funding rules. Last month, Congress approved legislation that provides a modest relaxation of funding requirements.
That unprecedented drop was the result of a huge decline in the value of assets held in pension plans sponsored by the 772 companies in the S&P 1500 that offer defined benefit plans.
New York-based Mercer L.L.C. estimates that the pension plans lost $469 billion in 2008, converting a $60 billion surplus at the end of 2007 to a $409 billion shortfall at the end of last year.
"This is a very difficult time for pension funds," said Adrian Hartshorn, a Mercer principal in New York.
The fall in funding levels "will reduce balance sheet strength, which leads to consequences for several areas of the business, including capital-expenditure decisions, loan covenants and credit rating decisions," Mr. Hartshorn said.
To meet funding requirements set by federal law, employers will have to pump in tens of billions of dollars in new contributions to shore up their plans, while some companies may decide to freeze their plans.
More employers will take a step back and ask if their plans still are viable, Mr. Hartshorn said.
The release of the Mercer analysis comes as business groups are expected to renew their push to convince federal legislators to temporarily ease funding rules. Last month, Congress approved legislation that provides a modest relaxation of funding requirements.
Wednesday, September 17, 2008
Different types of auto insurance
Nowadays auto insurance is the ideal way to ensure a good life for yourself and your expensive vehicle. Auto insurance keeps safe your huge amount of money spent on your automobile. But on the same hand, auto insurance is also quite expensive. However there are different types of auto insurance policies available today. It is at an individual’s discretion which policy he can afford to adopt.
1. Fully Comprehensive Auto Insurance Policy Types- though this policy is the most expensive one yet it is the most widely adopted type of auto insurance. This is so because the insurance provides compensation or covers all sorts of cases such as theft, accident, wear and tear etc. If unfortunately an accident occurs where you were not at fault while the other driver who did the accident does not disclose his and his insurance details; you ought not to worry. For being a policyholder of the fully comprehensive program, you can register an insurance claim against your insurance company. But while taking this policy one essential thing should be borne in mind. There are a few auto insurance companies that do not insure your vehicle 100% of its value but of 80% or so. Even though many companies defend their policy as a measure to prevent themselves from fraud cases etc. yet try your bets to find the agency that insures your vehicle 100%.
2. Third Party, Fire and Theft- this type of insurance is basically meant for those car owners who have had finished their car loans but still admire, cherish their car and have great sentiments attached to it. This policy is somewhat akin to the fully comprehensive one but not identical to it. For like the latter the former covers cases of theft, accident, fire etc. but in case of an accident you can receive compensation only when you were at fault and had hit another car. So if any other car hits yours or you by mistake bang t in the garage, the insurance company will not come to your financial aid.
3. Third Party Insurance- it is the insurance that is the cheapest of all and covers only cases of accident where you were at fault and hit a third party. The insurance company is not to be contacted in case of any other mishappening with your vehicle. This insurance policy is generally preferred by those who own an old and less pricey car or any other vehicle.
4. Specialized Car Insurance- is basically for cars categorized as classic, those that are 25 years old. These cars are insured as classic and so accordingly they have their requirements and services. The classic car insurane policy can be said to be as good as the comprehensive one but the only drawback associated with it is that it limits the policy taker to a limited number of road miles he can drive in any given year.
Ultimately it is at the discretion of every individual which policy he desires to take. It is advisable to sort out one’s requirements and budget and also make a survey of the auto insurance policies in the market before actually grabbing a policy.
1. Fully Comprehensive Auto Insurance Policy Types- though this policy is the most expensive one yet it is the most widely adopted type of auto insurance. This is so because the insurance provides compensation or covers all sorts of cases such as theft, accident, wear and tear etc. If unfortunately an accident occurs where you were not at fault while the other driver who did the accident does not disclose his and his insurance details; you ought not to worry. For being a policyholder of the fully comprehensive program, you can register an insurance claim against your insurance company. But while taking this policy one essential thing should be borne in mind. There are a few auto insurance companies that do not insure your vehicle 100% of its value but of 80% or so. Even though many companies defend their policy as a measure to prevent themselves from fraud cases etc. yet try your bets to find the agency that insures your vehicle 100%.
2. Third Party, Fire and Theft- this type of insurance is basically meant for those car owners who have had finished their car loans but still admire, cherish their car and have great sentiments attached to it. This policy is somewhat akin to the fully comprehensive one but not identical to it. For like the latter the former covers cases of theft, accident, fire etc. but in case of an accident you can receive compensation only when you were at fault and had hit another car. So if any other car hits yours or you by mistake bang t in the garage, the insurance company will not come to your financial aid.
3. Third Party Insurance- it is the insurance that is the cheapest of all and covers only cases of accident where you were at fault and hit a third party. The insurance company is not to be contacted in case of any other mishappening with your vehicle. This insurance policy is generally preferred by those who own an old and less pricey car or any other vehicle.
4. Specialized Car Insurance- is basically for cars categorized as classic, those that are 25 years old. These cars are insured as classic and so accordingly they have their requirements and services. The classic car insurane policy can be said to be as good as the comprehensive one but the only drawback associated with it is that it limits the policy taker to a limited number of road miles he can drive in any given year.
Ultimately it is at the discretion of every individual which policy he desires to take. It is advisable to sort out one’s requirements and budget and also make a survey of the auto insurance policies in the market before actually grabbing a policy.
Homeowners — just what are you buying?
The idea is so simple. You pay a premium and the insurance company protects you. Yeh, right! When you go out shopping, you read the labels before you buy, don’t you. Well, the same should be your habit when you’re buying a homeowners insurance policy. Never just use a site like this to get online quotes and then buy a policy because it’s low cost or affordable. You should read it before you buy.
So what are you looking for? Well, let’s get technical. The insurance company protects you against “perils” except where there are “exclusions” telling you that there may be limitations on that cover. Often, those exclusions are the smaller print coming near the end of the policy when the insurer hopes you’re attention is wandering. Check out exactly what is covered. If it’s not clear, ask someone before you buy. The first part of the home insurance policy usually deals with “property protection”. So that covers the structure of the place you call home together with everything permanently attached like the plumbing, the electrical wiring and all the other “stuff” (sorry another technical term including your air-conditioning, heating system, and so on). All the other buildings and structures on the land will be included so long as they’re all used for domestic purposes. That covers the garage, shed, patio and fences/walls. Pay special attention to any “loss of use” provisions — that should cover your out-of-pocket expenses if you cannot live in your home while it’s being repaired.
Then we get into the everyday personal property (usually called the “contents”) owned by you and the family who live with you on a permanent basis. Depending on the wording, you may be covered for the cash value or replacement cost. But watch out. If you have anything unusual that’s more expensive or difficult to replace, that’s got to be specially endorsed on the policy. Some things may be excluded like a firearm, the car covered under your auto insurance policy, and so on. Other things may be included like the charges the local fire department may claim if it is called out, the cost of removing fallen trees or other debris after a storm, and so on. Everything else will have to be separately negotiated and added on to the policy as an endorsement
So what are you looking for? Well, let’s get technical. The insurance company protects you against “perils” except where there are “exclusions” telling you that there may be limitations on that cover. Often, those exclusions are the smaller print coming near the end of the policy when the insurer hopes you’re attention is wandering. Check out exactly what is covered. If it’s not clear, ask someone before you buy. The first part of the home insurance policy usually deals with “property protection”. So that covers the structure of the place you call home together with everything permanently attached like the plumbing, the electrical wiring and all the other “stuff” (sorry another technical term including your air-conditioning, heating system, and so on). All the other buildings and structures on the land will be included so long as they’re all used for domestic purposes. That covers the garage, shed, patio and fences/walls. Pay special attention to any “loss of use” provisions — that should cover your out-of-pocket expenses if you cannot live in your home while it’s being repaired.
Then we get into the everyday personal property (usually called the “contents”) owned by you and the family who live with you on a permanent basis. Depending on the wording, you may be covered for the cash value or replacement cost. But watch out. If you have anything unusual that’s more expensive or difficult to replace, that’s got to be specially endorsed on the policy. Some things may be excluded like a firearm, the car covered under your auto insurance policy, and so on. Other things may be included like the charges the local fire department may claim if it is called out, the cost of removing fallen trees or other debris after a storm, and so on. Everything else will have to be separately negotiated and added on to the policy as an endorsement
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