Which do you have ?
Which should you have ?
What are you waiting for ?
I was sitting here thinking which out of the 3 endorsements that I explain to my insured is THE MOST IMPORTANT ?
However for the life of me, I could not come up with either being more important than the other. Truly a policyholder would be better off having something and NOT needing it, rather than NEEDING something and not having it. In consideration of the cost of the endorsements, I say just spend the money and adequately insure yourself.
So quickly I will touch on the 3 endorsements that I give details on when providing a Policy review.
Sewer Backup & Sump Pump – this endorsement is needed if the policyholder wants to be “made whole” after experiencing damage from the sewer line backing up into their lower level bathroom, laundry room, and or shower. This water is very nasty water, ( Category 3 ) and needs to be professionally cleaned and addressed. All structural materials need to be removed from the property and replaced with new material. Needless to say this can be a very costly loss to go through. Another area where this endorsement plays key is with the Sump Pump area of the property. If the Sump Pump fails to perform ( no matter what the failure ) then this endorsement kicks in to ensure that the policyholder is “made whole”. Without the endorsement as a part of their coverages, the cost of the damages fall into the policyholder’s lap. In Maryland this endorsement is so important, that it is mandatory that Insurers offer it.
Personal Property Replacement – this endorsement is needed if the policyholder has damage to personal items when experiencing a covered loss. Personal items, and or personal contents pretty much means a policyholder’s STUFF. With out this endorsement a policyholder will be paid to go out and replace their items based off how much they originally spent to purchase them, MINUS how long they had them/used them. ( depreciation ) This payment is called Actual Cash Value. If a policyholder wants to have the correct amount of money needed to replace the loss/damaged items then the Personal Property Replacement endorsement is a must. The same depreciation formula will be applied, yet the insurance company would owe to make up the difference once you provide them with the receipt proving that you replaced the items. If a policyholder wants similar like, kind, and quality of their items this endorsement is key.
Law & Ordinance – this endorsement is needed if the policyholder has damages so extensive that there is a rebuild required. In the rebuild, whatever is required to bring the property up to code will be an additional expense to the policyholder. This expense is not taken care of in the original coverages. All that is taken care of in the original coverages is the cost to replace the property with what was already there. No additional code requirements, and or upgrades will be included. Therefore, this endorsement provides a cushion of funds just in case those “snags” present themselves during the rebuild process.
As stated in the beginning of this post, I can not decide which ( if any ) is more IMPORTANT than the other. Depending on the loss suffered a policyholder could find themselves in a really tight situation without one of these. Which brings me back to the old saying ” What You Don’t Know Won’t Hurt You ” …… this saying is so false it hurts !!!