Property insurance faces big changes in 2023, says insurance broker

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“Fires and storms have made 2022 one of the toughest costly years for the insurance industryleading to the bankruptcy of several companies across the country,” says Karl Susan (opens in a new tab), a Los Angeles-based insurance broker. “Unlike ‘what happens in Vegas stays in Vegas,’ when it comes to property insurance, what happens anywhere in the country has the potential to impact the rates we pay. all for the cover.”

A longtime friend of this column, Susman has been an insurance broker for more than 30 years, holds a master’s degree in insurance administration from Columbia University, and serves as an expert witness in lawsuits involving coverage issues and agent malpractice.

Increase in rates and reduction of certain important coverages

“Dennis, for your readers who will be acquiring either a new property or a business policy in 2023, they have an important obligation to themselves: It’s about being aware and understanding the coverages they pay for. This is the time to not just read carefully, but study your insurance policy, as certain covers that used to be fairly automatic may no longer be included as standard in your policy.

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Susman listed several important coverages you need to consider:

1. Guest Medical Coverage

Your landlords’ policy and your company’s policy should absolutely have no-fault medical client blanket. It will pay regardless of why a guest in your home or business gets hurt and incurs medical expenses: no lawsuits, no questions asked, their bills are paid.

He points out, “Take the maximum amount of coverage you can get because the cost per year will be less than two drinks at Starbucks.”

2. Event insurance and wedding cancellation cover

What if I’m planning to host a big event at my home or business?

“Event insurance coverage is a smart, inexpensive investment – $200 to $300 – that protects you from liability for injury or damage to venue property. This may also include liability for alcohol if you serve it.

“Most insurers also offer cancellation cover for weddings, which reimburses lost non-refundable deposits if you have to cancel or postpone for reasons beyond your control – but not for ‘cold feet.’ gifts, photos, a wedding dress, tuxedos and other items are also available.

3. Adequate coverage for jewelry

“Unfortunately, most people don’t know that in most policies jewelry is covered up to $1,500 no matter where it is. However, it is possible to get a jewelry jumper which covers, for example, expensive items kept in a safe that you take out for special occasions. It is extremely important to contact your agent or broker to let them know that you are taking them out of the safe to wear them.

Also, from accounts of bewildered readers who have seen the contents of their safe disappear, know that the the contents of a safe are not FDIC-insured (opens in a new tab) or the financial institution. And your bank declines all responsibility.

Drugs, minors, illegal substances or acts

‘Keep in mind,’ notes Susman, ‘that generally illegal substances or intentional acts of wrongdoing are not covered by insurance. If someone in your family is out’breaking Bad‘, don’t expect your insurance company to step in and protect you.

“Marijuana is a drug, legal or not, and if you provide it to your guests, you bear the risk that your insurance company will deny coverage if they get high, damage your things, or leave and damage guest property. others or people are injured.

“If you are unsure about the legality of owning or using personal firearms, check with a local office of the ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) (opens in a new tab). Don’t look for insurance to get you out of something illegal.

Practical suggestions to avoid cancellation

“To save on premiums, insurance is something you should avoid using, and you don’t want to be canceled for something you didn’t do that resulted in a huge claim. So offer to pay Uber or Lyft if your guests have been drinking too much.

“You don’t want someone driving drunk, for their safety and the safety of others, because you could be held liable if they become drunk on your premises. It’s also a good idea and very considerate to have soft drinks and mocktails on hand so people can stay sober while avoiding the social stigma of not drinking with crowds.

Susman was quick to stress the importance of dietary restrictions. “If you are advised of peanut allergies and choose to ignore the warning, be aware that a single peanut could send a guest into anaphylactic shock, and a lawsuit is likely to result.”

Don’t miss a payment and do what’s recommended

Most of us have been a day late or even missed a premium payment, received a lapse opinion, quickly made it up and were reinstated. “Do NOT expect this to happen in 2023,” Susman warns, “regardless of why you missed that payment.”

It’s no secret that companies are trying to reduce their exposure to risk, given the huge losses in 2022. Fewer payment plans are available, which means you have to write a big check all at once rather than to make payments over time. So if you can’t pay in full, for a lot of people that means no insurance.

Also, as several of my readers have commented, letters with specific instructions on how to reduce the risk of loss are received from their insurance companies, often regarding trees and branches overhanging rooftops.

“This increases the risk of a fire reaching your home as well as damage to the roof itself from branches and foliage. your font.

Susman’s advice? “Do what they say. It’s common sense. Don’t be a stingy.

Increase your limits

Susman concluded our interview with some “peace of mind” advice.

“Given the rising costs of everything, it is important to have adequate limits. You can easily call your agent and say, “Increase my coverage because things cost more and take longer to fix.” It’s the safest decision you can make right now in a world of insurance uncertainty.

Dennis Beaver practices law in Bakersfield, California, and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or emailed to [email protected]. And don’t forget to visit dennisbeaver.com (opens in a new tab).

This article was written by and presents the views of our contributing advisor, not Kiplinger’s editorial staff. You can check advisor records with the SECOND (opens in a new tab) or with FINRA (opens in a new tab).

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Increase in rates and reduction of certain important coverages

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