Say My Name: Named Insured Status

What's in a name? As it relates to an insurance policy, a lot.

If you're actually to pull out your insurance contract and read the definitions, you'll find a definition for "named insured". This is basically the person named on the policy as the owner. It can be multiple people (usually a husband and wife), a single person or a company (in the case of a commercial policy). 

So, why is it important to make sure the named insured is correct on the policy? A lot of policies limit or even eliminate coverage for non residents. So think about this, a family lives in Texas. The husband has a job transfer that temporarily relocates him to Florida for a year. He moves and his wife and kids continue to live in Texas until he returns. While he is not living in the house, if he is not listed as a named insured on the insurance policy, he could be excluded from liability coverage. This is also true in divorces or separations. If a spouse moves out, there could be a gap in coverage as it relates to liability and property coverage. 

The other place to closely review named insured status is as it relates to vehicles. Who owns the car? What entity owns the car? That is who the named insured should be. So, if you use a company that bundles all the autos in the household into one policy, make sure that the named insured matches the owner on the title of the car and if it doesn't, then you'll probably need to have your agent or broker write a separate policy each of the vehicles owned by separate owners or entitles. 

And finally, what about umbrella or excess liability coverage? The umbrella policy should match the underlying policies. This will insure that coverage will be seamless in the event of a large liability loss. 

In some cases, you will put homes or cars in the name of a trust, LLC or LP. Some carriers will cover this under a personal lines policy, but will list an individual or married couple as the named insureds and the trust, LLC or LP as an additional insured. There is a difference between additional insured and named insured, but that is for another time. What's important in this post is being sure both spouses are listed as the named insured regardless of the additional insureds. 

So, moral of the story? Review your insurance policy. Make sure the owners match up with the named insureds and both spouses are listed. There are special cases where only one spouse will be listed, and your insurance agent or broker can speak to you more about this. 

Ignorance is Not Bliss: Homeowners Special Limits of Liability

What is your most valuable real asset? I'm not talking about your family, your personality, your job, etc. Some people might answer that question by saying their home or their auto, but what about items that are smaller or easier to be lost, stolen or destroyed? For example jewelry, fine arts, oriental rugs, antique furniture, silverware...?

These items typically have limited coverages on a homeowners or renters policy. While you see a limit for contents or personal property, within the contract you will find special, lower limits for these categories. I'm going to have a lot of insurance agents or brokers upset with me because I might be creating more work for them, but I challenge you to pull out a copy of your contact and look for a section called "special limits of liability." This will provide you with exactly the limits that your policy is subject to; if you can't find it reach out to you agent or broker, if they can't find it or you don't know who they are, it might be time to find a new agent or broker.

Now let's talk about a solution. Obviously you want to keep your valuable items out of harms way (jewelry in a safe or vault, fine art and furniture out of direct sunlight, maintain an active centrally monitored fire and burglar alarm), but is there an insurance solution? Are you surprised to hear there is? Probably not. 

It's called a collections/valuable articles/personal article/inland marine policy/rider/floater. Whatever the insurance company decides to call it, they all serve the same purpose, to protect those items (and more) mentioned above. These policies are typically inexpensive depending on the category of the item you're looking to cover and a lot of times you'll find that they are available without a deductible. 

There are two ways to provide coverage for these items, blanket or scheduled. 

Scheduled coverage is where each item is specifically listed on the policy with a description and a value (usually determined by an appraisal or bill of sale). So, if you were to encounter a covered loss, the company will pay up to the limit that is shown to replace it (some companies offer a cash out option where you are not required to replace the item, and some companies offer an extended replacement cost option if the value of the item appreciates). It is especially important to remember that scheduled items should have updated appraisals every couple of years as the value of art, gold, silver, etc. is increasing dramatically year over year at this point in time. 

Blanket coverage, while not offered by every company, lists a limit for each of the chosen categories. You are not required to advise anything to the insurance company about the items that are being covered under this type of collections policy, but there may be a per item limit. What this means is if you have a per item limit of $10,000 and you have a covered loss of an item worth $12,000, the company will only pay the first $10,000 for any single item (not a single occurrence). Some companies have a higher rate for blanket coverage, so typically if you're looking to pay less premium you'll want to look toward scheduled coverage. 

My guess is following this information, you've got some work to do! Good luck! Please feel free to post any questions, comments or concerns. 

Photo curtesy of

http://www.123rf.com/photo_5855575_closeup-of-wooden-treasure-chest-with-valuables.html