Common Insurance Coverage Gaps Faced By Policyholders

Most policyholders believe they are well insured and only become aware of coverage gaps when they file a claim. This is unfortunate as the gaps can lead to policyholders not recovering financially from the losses they suffer. While there are many different types of gaps that policyholders can experience, some are more commonly encountered by the Miami insurance law attorneys at VPM.

Commercial Insurance Policy Gaps

Inaccurate Listing of Insureds

The declaration page of the insurance policy contains essential information regarding the coverage it provides. It is that this page which contains the complete and accurate names of all insureds covered by the policy. When it does not, our Miami insurance law attorneys have seen issues in coverage arise. 

Lack of Professional Liability Coverage

Professionals cannot depend on general liability coverage for issues involving professional errors and omissions. These claims arise when a professional is accused of acting in a way that fails to meet the standard of care for a client/patient. For example, a doctor that fails to diagnose a patient with a disease may have a professional liability claim filed against them.

Lack of Coverage For Loss of Electronic Data

The destruction or physical injury of property that results in a loss of electronic data may not be covered under most insurance policies. This type of coverage can be added to a general liability insurance policy, and our Miami insurance law attorneys recommend obtaining it for your business.    

Policy Vacancy Provisions

Many insurance policies contain provisions that a vacant property is excluded from coverage. Businesses should be mindful of this and also what the insurer considers to be “vacant.” Is it when the building is completely empty? At 50% capacity? Clarification is needed to avoid having a claim denied due to a building being considered vacant. 

Improper Property Value Listed In Policy

Especially in today’s volatile market, property values can rise and fall quickly. When a property value changes, it is important to ensure that the building still has enough coverage in case the unexpected occurs and a claim must be filed. A good rule of thumb is to review property value and coverage amounts annually or whenever renovations are done to the property. 

Lack of Coverage for Tools and Materials

The tools and materials used by some businesses, such as contractors, are typically of high monetary value. However, they may not be covered by standard general business insurance policies. Our Miami insurance law attorneys recommend reviewing your policy to ensure proper coverage. 

Residential Insurance Policy Gaps

Lack of Coverage on High-Value or Collectible Items

Many homeowners do not realize that their standard homeowner’s insurance policy does not provide coverage for some high-value and collectible items, including jewelry and fine art. There are policies available to provide this coverage, but homeowners must be proactive in having them added. Lack of coverage in these cases is a leading cause of residential insurance policy gaps seen by our Miami insurance law attorneys. 

Lack of Coverage for Floods

In most situations, a homeowner must purchase a separate flood insurance policy for coverage in case of flooding. A standard homeowner’s insurance policy does not provide this coverage. Without the additional coverage, homeowners can be left holding the bag when their property is flooded. 

Lack of Coverage/High Deductible for Hurricanes

Policyholders near the coast need to pay special attention to the provisions of their insurance policy that pertains to hurricanes. Even if the policy provides coverage, it will likely have a higher deductible. Instead of a flat rate fee, the deductible will likely be a percentage (somewhere between 1 and 5 percent) of the insured value of the home. 

Lack of Coverage for Home Renovations

Home renovations can trigger the need to review current insurance coverage as renovations can cause property value to increase. Other renovations, such as the addition of a pool, may trigger the need for additional types of coverage. Our Miami insurance law attorneys advise that failure to notify the insurance company could cause a policy to be considered void. 

Policy Exclusions for Certain Types of Pets

Certain types of pets, particularly certain dogs, may be excluded from a homeowner’s policy. If a homeowner owns this type of animal and does not notify the insurance company, the policy may be considered void. It is a good idea to always inform the insurer when a new pet is added to an insured home. 

Lack of Coverage for Additional Structure

When a homeowner has additional structures on the property, such as a barn or a detached garage, it cannot be assumed that the structure is covered by the homeowner’s standard insurance policy. 

How To Identify Insurance Policy Gaps

If you are not sure if you have gaps in coverage that could result in a significant financial loss when the unexpected occurs, you need to have a risk assessment performed by our Miami insurance law attorneys. An assessment can ensure your residence or business has the coverage needed, and if it does not, it can provide you with the information necessary to obtain the proper amount and type of insurance coverage. Our Miami insurance law attorneys further assist by:

• Customizing the language that should be contained in your insurance policy to meet your specific needs
• Reviewing insurance binders to scrutinize coverage products
• Creating a system that organizes past and current insurance policies 
• Reviewing current policies to ensure they are still relevant and provide the coverage needed in light of new laws or industry developments
• Drafting endorsements when needed to create changes in existing insurance policies

Connect With The Miami Insurance Law Attorneys at VPM 

To learn more about any possible gaps you may have in your commercial or residential insurance policy, contact the Miami insurance law attorneys at VPM. We may be reached via our contact page, and we focus our practice on representing policyholders that have been denied coverage, as well as providing risk management advisory services.

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