True Insurance Coverage: Beyond Deductibles
Does your insurance really cover you when disaster strikes? Or are you more self-insured than you realize? Many people buy insurance based on price alone, only to discover too late that their policies are riddled with exclusions and limitations. On this episode of the “I Hate Insurance” podcast, host Rick J. Lindsey reveals why true insurance coverage matters and how to avoid common pitfalls.
The Problem with Traditional Deductibles
One of the main issues with standard insurance policies is the use of deductibles. As Lindsey explains at the 1:45 mark:
“Deductibles throw a wedge into the partnership because your interests aren’t aligned…you find out you didn’t have what you though you had. That’s not a partnership…most people are more self-insured than they are insured.”
He goes on to describe how deductibles have increased over time, often leaving policyholders unable to pay their portion when a claim occurs. This misalignment of interests between insurers and customers can lead to disputes and disappointment.
Understanding Common Insurance Exclusions
Insurance policies often come with hidden vulnerabilities that can leave you exposed when you need coverage most. At XINSURANCE, we believe in transparency and want to help you understand these common exclusions across various industries.
Industry-Specific Exclusions
Contractors
Common exclusions in contractor policies include:
- Intentional damage
- Defective design
- Errors and omissions
- Pollution liability
- Inland marine coverage
XINSURANCE Solution: Our customized contractor policies incorporate these critical areas, ensuring comprehensive protection against industry-specific risks.
Mobile Home Park Owners
Property insurance policies often exclude:
- Natural disasters (earthquake, flood, wind)
- Wildfires and weather-related damage
- Animal liability
- Amenity coverage (playgrounds, hot tubs)
- Golf cart liability
- Business income interruption
XINSURANCE Solution: We offer tailored coverage that includes these typically excluded perils, providing mobile home park owners with complete protection.
Security Services
Security professionals face exclusions in:
- Defense coverage limitations
- Medical services
- Vehicle-related incidents
- Communicable disease
- Cyber liability
- Property custody
XINSURANCE Solution: Our comprehensive security service coverage bridges these gaps, ensuring protection across all aspects of security operations.
General Liability Policy Gaps
Standard policies often exclude critical areas such as:
- Liquor liability
- Sexual abuse and molestation
- Assault and battery
- Professional liability
- Active shooter incidents
- Communicable disease
Risk Share Insurance: A Better Approach
Instead of deductibles, Lindsey advocates for a risk share model where both the insurer and policyholder pay a percentage of every claim. This aligns interests and creates a true partnership. As he states at 3:38:
“Our approach is to custom fit coverage and play out the claim, do a mock claim…If you own a million dollar house and you have $100,000 roof deductible, you don’t have $100,000 laying around. When you have a claim, the roofers are going to up the bid to try and help the insured cover the deductible.”
With risk share, the insurer might pay 90% of a claim while the customer pays 10%. This shared responsibility incentivizes both parties to mitigate risks and handle claims fairly.
The Importance of Comprehensive Coverage
Another key issue is the prevalence of exclusions and limitations in many policies. Lindsey emphasizes the need for truly comprehensive coverage at 10:45:
“If you cover wind and not flood, you think those two policies are going to work well together? No, they’re going to point at the other policy and it’s going to be a bad divorce…it’s an argument.”
He argues that proper insurance should cover all perils without arbitrary exclusions. This avoids coverage gaps and disputes when claims occur.
Challenges in the Current Insurance Industry
The podcast highlights several issues plaguing the insurance industry today:
- Rising rates and increasing exclusions
- Insurance companies exiting high-risk markets
- Growing litigation driving up costs
- Misalignment between insurers and policyholders
These factors are making it increasingly difficult for consumers and businesses to obtain adequate coverage at reasonable rates.
True Insurance Coverage: A New Approach
Lindsey advocates for a fundamentally different approach to insurance – one focused on true partnerships and comprehensive protection. Key elements include:
- Eliminating deductibles in favor of risk sharing
- Removing exclusions and providing all-peril coverage
- Customizing policies to each client’s unique needs
- Conducting mock claims to ensure proper coverage
- Aligning interests between insurers and policyholders
This approach aims to provide peace of mind and avoid unpleasant surprises when claims occur.
The Importance of Insurance Policy Customization
Off-the-shelf insurance policies often fall short. Lindsey emphasizes the need for customization at 15:43:
“It should be custom fit, it should be adjusted and massaged…in today’s world, work and play and personal all overlap.”
Properly tailored coverage accounts for each policyholder’s unique risks and circumstances. This may include:
- Assessing the true value of assets
- Identifying industry-specific exposures
- Accounting for personal liability risks
- Consolidating multiple coverages under one policy
XINSURANCE: Providing True Insurance Solutions
For those seeking a better insurance experience, XINSURANCE offers custom insurance solutions designed to fill gaps in traditional coverage. As an insurance partner, XINSURANCE takes a hands-on approach to assessing risks and crafting comprehensive policy solutions.
Unlike traditional insurers that may deny, cancel, or non-renew high-risk clients, XINSURANCE specializes in providing options when others won’t. Our all-in-one approach allows for multiple coverages under a single policy, with limits up to $20 million and beyond.
We can provide solutions for a wide range of risks, including:
- General and professional liability
- Property coverage
- Active shooter liability
- Communicable disease liability
- Alleged assault and battery
- And much more
With over 40 years of industry experience, XINSURANCE stands as a committed partner ready to fight when challenges arise.
FAQs
What is risk share insurance?
Risk share insurance is an approach where both the insurer and policyholder pay a percentage of every claim, rather than using traditional deductibles. This aligns interests and creates a true partnership in managing risks.
How does custom fit insurance work?
Custom fit insurance involves tailoring coverage to each client’s unique needs and circumstances. This may include assessing asset values, identifying industry-specific risks, and consolidating multiple coverages under one comprehensive policy.
What are some common homeowners insurance exclusions?
Common exclusions in homeowners policies may include flood damage, earthquake damage, mold, acts of war, and certain types of water damage. It’s crucial to review your policy carefully and consider additional coverage for excluded perils.
How can I simplify the insurance claim process?
To simplify claims, work with an insurer that prioritizes transparency and customer service. Keep detailed records of your assets, document any damage thoroughly, and communicate openly with your insurance provider throughout the process.
What should I look for in an insurance partnership?
Look for an insurer that aligns interests with policyholders, provides comprehensive coverage without arbitrary exclusions, and offers customized solutions. A true insurance partner should be willing to fight for you when claims occur. The insurance industry faces significant challenges, but solutions exist for those willing to embrace a new approach. By prioritizing true partnerships, comprehensive coverage, and customized solutions, both insurers and policyholders can benefit.
To learn more about custom liability insurance solutions, visit XINSURANCE. You can also learn more about us and our commitment to providing true insurance coverage. Ready to explore your options? Request a quote today and discover how XINSURANCE can provide the protection you need.
For more insights on insurance industry challenges and solutions, subscribe to the “I Hate Insurance” podcast on YouTube.