Take Cover

Photograph: © thodonalstock.adobe.com

Ah, summertime. The perfect time of year for frolicking in the neighbor’s pool, zipping around Long Island Sound in your boat, traveling with the family near and far—and all the mishaps, accidents and lawsuits that follow. This year, when you uncover the patio furniture or spiff up the grill, it might be time to dig out and examine your insurance policy as well.

Don’t expect a beach read. “They’re not fun,” says insurance expert Barbara Stevens. “First off, there’s the policy. Then there’s exclusions, and there’s exclusions to the exclusions.”
That fine print, though, can hold the key to your financial peace of mind.

Stevens, who is the president of Rand Insurance in Greenwich and a self-described “belt and suspenders” kind of gal, preaches the power of protection from experience. Her clients’ claims have included everything from a $10 million home lost to a fire, to a flooded and frozen pool house complete with “stalactites and stalagmites,” to a horse that ate a precious stone out of the ring on someone’s finger. (Crisis—and claim—averted: The stone was digested and, er, expelled.)

Homeowners with a pool have the largest exposure in summertime, Stevens says. A close second: dog bites. “The exposure of having a dog, any dog, is enormous.” Nipping at a toddler’s pacifier, for example, can spell l-a-w-s-u-i-t. One bite, Stevens says, “can be a $400,000 problem. Everyone assumes that because they have an umbrella policy, they’re covered for everything. They’re not.”

Whether you go jet-skiing in the Caribbean or Junior heads to Ecuador for a service trip, chances are you’ll have to sign a form that says you won’t sue if there’s a problem. It doesn’t say somebody won’t sue you, though. And what if you need to be airlifted out after an accident? Who will pay?

Even summer activities that seem laudable deserve a second or third look, insurance-wise: To earn spending money, Junior delivers pizzas with the family’s station car or drives your Lexus for Uber. Who pays if there’s an accident? Junior serves as the designated driver and an underinsured or uninsured driver hits the car and people need long-term care. Who’s responsible? You loan your kayak to the neighbor’s kid, and there’s an accident with a motor boat; or you go on vacation, rent out your house on Airbnb and someone trips on Junior’s skateboard. Where does the liability lay? A trampoline, a tree house, a Rottweiler, a Jet Ski, a nanny falls, a son or daughter gets in a brawl at school, a weekend bike ride, a drone crashes into a child on the playground, the carpool to camp, even your service on the board of directors…can all leave you vulnerable.

“The biggest exposure a person has is a lawsuit. This can be the most financially damaging,” Stevens says. You know your exposure if you total your car or lose a piece of jewelry, but your assets can evaporate with one suit. “Anyone has the right to sue whomever they choose. They can sue the board, the venue, the person who was involved or not involved. I can be sitting home and my name shows up in a suit,” Stevens says. “You have no control over whether an organization or a neighbor pays their insurance, and you have no control over their limits. It’s really important for us to tell people what they are covered for, but, more important, what they’re not covered for.”

COVERING YOUR ASSETS
Rained-out weekend? Here’s a worthwhile activity for bright days ahead.

1  Take your smartphone and walk around your house with the video camera running.

2  Note everything of value, including items in the attic, basement and garage. Include items like the china you bought in Italy, the treadmill, your TiVo box and tools.

3  After you finish, play back the video and write down a list and add estimated values or replacement costs.

4  Share it with your insurance agent to make sure that what you care about is covered. Be sure to tell your agent about home additions, renovations and landscaping.


SPEAK UP! Have a question for a local financial expert to address in this column? Send an email to dianes@mofflymedia.com.