TROUT INSURANCE SERVICES
  • Insurance
    • Home & Auto Insurance
    • Medicare
    • Income Protection >
      • Disability Insurance
      • Long-Term Care
      • Critical Illness
      • Annuities
    • AARP - Hartford
    • Life Insurance
    • Health Insurance
    • Dental and Vision
    • Employee Benefits
    • Business Owners >
      • Group Health Insurance
      • Commercial Property & Liability
      • Business Overhead Expense Disability
      • Disability for Business Owners
      • Critical Illness
    • Short Term Health
  • Trout Team
    • Our Story
    • Dave Trout
    • Jessica Cody >
      • Home & Auto Insurance
    • Jeremy Sheridan
    • Robert Pugh
    • David Hanson
    • Jennifer Trout
    • Idelle Davids
    • Jan Trout
    • Steve Dillingham
  • Resources
    • Employee Success
    • Fixing the ACA "Family Glitch"
    • Aetna/CVS Health NC
    • Client Center
    • Reviews
    • Blog
    • Articles >
      • Health Insurance 2022
      • Friday Health
      • Comparing 2022 Plans
      • Insurance Partners
      • Best Value Insurance Plans
      • ARP Facts CMS
      • ARP Unemployment
      • ARP 2020 Excess Premium Subsidy
      • No Income Cap
      • Unemployment Glitch
      • Asheville Homesharing
      • 2019 Verification-a
      • BCBS Online Setup
      • APTC Income 2023 & Tax Form 1040
      • Lost Subsidy
      • Privacy Policy
  • Community
    • Alignment's 5-Star Switch
    • Employer Networking w/ Just Economics
    • FALLing with Families
    • Medicare New Era Event October 13th
    • Blue Ridge Pride Festival
    • Health & Wellness Fair
    • Goombay & YMI
    • Alignment Health Plans
    • YMI Winter Coat Drive
    • Medicare Seminar
    • Art in Autumn + MANNA
    • Music on Main
    • Western Women's Business Center Conference
    • Mural on Main Street
    • Expanded Team- Next Generation
    • Back to School
    • Weaverology
    • Mother Earth Food
  • Contact Us

Bedbugs, Lava And Bowling Balls: Inside My Homeowners Insurance Policy

9/26/2014

0 Comments

 
Picture

LISTEN TO THE STORY

Picture
My homeowners insurance policy reads as though somebody took all of the bad things that can happen in the world and divided them into two buckets: stuff that is covered and stuff that is not covered.

I'm covered for damage from fire, lightning and malicious mischief. I'm covered if a volcano spews lava onto my house. It's right here under "Additional Coverages." Paragraph 10. "Volcanic Action."

But there's this other section, "Losses Not Insured," that tells you how insurance really works. For example, Paragraph 2, Subparagraph e:

"War, including any undeclared war, civil war, insurrection, rebellion, revolution, warlike act by a military force or military personnel ... "


War is what insurers call a correlated risk: If my house gets blown up in a war, it's much more likely that lots of other houses across a wide area are also going to get blown up around the same time. Correlated risks are really hard to insure against. Insurers could go decades without paying anything, then suddenly face more claims than they could ever pay.

A lot of the stuff insurers don't cover falls into this category. Earthquakes and floods are both correlated risk.

But there's this other category of stuff that insurance companies won't pay for that's not explained by correlated risk.

My insurance policy doesn't cover bedbugs — or any kind of bugs, for that matter. Bedbugs, despite what you may have heard on the local news, are not a disaster on the scale of an earthquake.

Insurance companies won't cover things like bugs because they don't want to give you an excuse to do ridiculous things. If I had bedbug insurance, I'd furnish my entire apartment from stuff I found on the street. What's the worst that could happen?

The fancy term for this is moral hazard.

"Moral hazard essentially involves being less careful because you have insurance," says Dan Schwarcz, an insurance expert at the University of Minnesota. "And so, if you have insurance you have less reason to be careful because the insurer will pay for it."

Moral hazard turns out to explain one of the most mysterious details in my policy: falling objects. I'm covered for damage from falling objects — trees, satellites, whatever — but only if they first damage the roof or an exterior wall of my building. I kept thinking: What other damage could I have from a falling object? Schwarcz explained it to me:

"This coverage excludes scenarios in which there's some falling object in your home, right, that's not caused by an external force. So, let's say that you put your favorite bowling ball right on your shelf and the bowling falls and smashes into your television."

Bowling ball breaking the TV: not covered by my insurance policy.

0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Picture
    CONTACT ME

    Dave Trout
    828.658.1472

    Trout Insurance

    Archives

    April 2016
    March 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    March 2014
    January 2014
    October 2013
    January 2010
    August 2009
    July 2009

    Categories

    All

    RSS Feed

Trout Insurance Services

Monday-Friday
9:00am-5:00pm & by Appointment


​Visit: 29 N Main St
Weaverville, NC 28787
     
Mail: PO Box 1414     
Weaverville, NC 28787  
Ph: 828.279.4681
​
Fax: 1.888.221.4842
​

contact@troutinsurance.com
Trout Insurance is an Independent Insurance Agency Based in WNC. 
Privacy Notice Statement  | Privacy Policy
“We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or call 1.800.Medicare to get information on all of your options.”
Trout Insurance is an independent authorized agency licensed to sell and promote products from Blue Cross and Blue Shield of North Carolina (Blue Cross NC). The content contained in this site is maintained by Trout Insurance. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. ®, SM Registered marks of the Blue Cross and Blue Shield Association.”
Picture
  • Insurance
    • Home & Auto Insurance
    • Medicare
    • Income Protection >
      • Disability Insurance
      • Long-Term Care
      • Critical Illness
      • Annuities
    • AARP - Hartford
    • Life Insurance
    • Health Insurance
    • Dental and Vision
    • Employee Benefits
    • Business Owners >
      • Group Health Insurance
      • Commercial Property & Liability
      • Business Overhead Expense Disability
      • Disability for Business Owners
      • Critical Illness
    • Short Term Health
  • Trout Team
    • Our Story
    • Dave Trout
    • Jessica Cody >
      • Home & Auto Insurance
    • Jeremy Sheridan
    • Robert Pugh
    • David Hanson
    • Jennifer Trout
    • Idelle Davids
    • Jan Trout
    • Steve Dillingham
  • Resources
    • Employee Success
    • Fixing the ACA "Family Glitch"
    • Aetna/CVS Health NC
    • Client Center
    • Reviews
    • Blog
    • Articles >
      • Health Insurance 2022
      • Friday Health
      • Comparing 2022 Plans
      • Insurance Partners
      • Best Value Insurance Plans
      • ARP Facts CMS
      • ARP Unemployment
      • ARP 2020 Excess Premium Subsidy
      • No Income Cap
      • Unemployment Glitch
      • Asheville Homesharing
      • 2019 Verification-a
      • BCBS Online Setup
      • APTC Income 2023 & Tax Form 1040
      • Lost Subsidy
      • Privacy Policy
  • Community
    • Alignment's 5-Star Switch
    • Employer Networking w/ Just Economics
    • FALLing with Families
    • Medicare New Era Event October 13th
    • Blue Ridge Pride Festival
    • Health & Wellness Fair
    • Goombay & YMI
    • Alignment Health Plans
    • YMI Winter Coat Drive
    • Medicare Seminar
    • Art in Autumn + MANNA
    • Music on Main
    • Western Women's Business Center Conference
    • Mural on Main Street
    • Expanded Team- Next Generation
    • Back to School
    • Weaverology
    • Mother Earth Food
  • Contact Us