Your Vacation Checklist

by Mark Goldwich

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Summer break is nearly over, but vacations happen year round, so it is never too late (or too early) to learn a thing or two that could really come in handy should disaster strike while you are away, from the perspective of an insurance claims professional.

First, be sure you have insurance to begin with, and that it is the right insurance for you and your property, with the right coverages, endorsements, and deductible. Whether you are going on vacation or not, you should meet with your insurance agent yearly, or you should review your policy carefully if you don’t have an agent. Why? As you might imagine, insurance policies differ from company to company, and each insurance company may also have policies that differ. Some policies are actual cash value only, meaning they will deduct for depreciation in the event of a loss, while other policies are replacement cost value, meaning they will not deduct for depreciation, but fully pay whatever it costs to replace what you had that was damaged, lost,  or destroyed. Even this is not consistent, in that some policies say they are replacement cost, but will only pay the full replacement value if you replace the item, and they will not pay actual cash value until or unless you actually replace the property first.

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Another consideration that needs to be made when researching insurance options is what I call “internal limits”. Most people understand their policies have overall policy limits for which their property is covered, like a limit for all items related to the structure, and another limit for all of their personal belongings.  However, some don’t realize there are usually internal or sub-limits for items, usually for personal property. For example, all your personal property may be insured for $50,000, but your policy may have multiple sub-limits for items like jewelry, cash, antiques, camera equipment, business property, stamps, firearms, silverware and goldware, watercraft, trailers, expensive rugs or tapestries, and even computers. Sometimes these limits apply only if the property is damaged under certain circumstances (like theft), and sometimes these limits apply regardless of what caused the damage.

In short, it’s important to have an idea of what these limits and circumstances are, and whether or not you can buy additional insurance to cover your property. Oftentimes you can, but unless you know what the limits are, how can you know whether you need to buy more insurance or a better policy? Early in my career as an insurance company adjuster, an associate and I inspected a claim for a theft loss that highlights this well. As we interviewed the homeowner, he explained that while he was out of town, thieves broke into his home and stole a number of items, including jewelry, cash, and designer clothing from his wife’s boutique. Other items were stolen and damaged as well, but the items listed above were all subject to relatively low internal limits.

The cash limit was $200, the jewelry limit was $2,500, and the limit for clothing used in his wife’s

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business was $1,000. Normally, this wouldn’t be so dramatic, but in this case, the amounts he was claiming were extraordinarily high. You see, he was claiming the amount of cash stolen exceeded $200,000, the amount of jewelry exceeded $100,000, and the clothing exceeded $50,000 in value. We were shocked, he could probably sense in our questions that we doubted his story, but he assured us he could document and prove all the items and quantities being claimed. He even noted the money was still in the U.S. Marshall’s bags from when the money was recently returned to him. A strange claim, indeed! And to say he was upset about the shortcomings of his policy sub-limits would be an understatement – I was glad to make it back to the office alive! No doubt most people will never experience a loss of this magnitude, but it well illustrates the point of internal policy sub-limits, and the importance of being familiar with those in your policies.

And for similar reasons, it is crucial to have at least a basic understanding of all other aspects of the policy. Without this basic knowledge, it is impossible to know whether or not you have the right policy and endorsements for your needs. Once you are confident of your policy, you can be a bit more at ease when you leave for vacation.

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But just having the right policy is not enough. You need to have a plan as well. This can include how to prepare your home to make it less attractive to thieves, to be less susceptible to electrical and plumbing losses, and general life and home protection ideas, including a contact list to use in the event of some disaster, and a step by step strategy for beginning to deal with the claim remotely. I actually found some very good ideas and tips on insurance websites for www.Nationwide.com and www.Travelers.com (hey, just because I don’t trust those guys to help you after a loss doesn’t mean I won’t recognize any of their good works).

With a comfortable knowledge of your policy, a plan in place, and your home prepared, it’s time to pack your bags and enjoy your trip!

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.