How to Make the Most of an Underinsured Loss

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...and endorsements that make up the policy, and they are also printed on the corresponding form or endorsement. Make sure to match up all the endorsements listed on the declarations page with all of the actual forms and endorsements. That way you can be sure you have the entire policy and can conduct a comprehensive analysis.

This is also the time to look for other insurance. For example, personal property may also be covered under employees’ homeowners policies, or a landlord may have insurance on the building and the tenant on business personal property. In the latter example, if one policy is underinsured, the insureds can look to the other policy for coverage or move certain items from“building” to“business personal property,” since, as will be discussed shortly, some items are coverable under both categories.

One example of where another policy may offer some relief in a residential loss is if the insured owns a vacation property. Most homeowner polices include coverage for personal property anywhere in the world. However, the amount available for personal property not at the residence premises is usually limited to 10 percent of the policy limit. Thus, if the primary residence is destroyed and the personal property loss exceeds limits, the insured may be able to make a claim under the policy issued on the vacation home. While the amount available may be limited to 10 percent of the personal property limits of coverage, it will help minimize the underinsured loss.

Examples under commercial polices typically involve leased equipment that also may be insured by the lessor. As such, a claim can be made by the lessor under their own policy. This will free up the insured’s money for their own property. Additionally, with most commercial policies, the extension of coverage section will provide coverage for newly acquired property.


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