Use a separate flood insurance policy from the NFIP or a private carrier, not just your homeowner’s policy.
The Water Came Up, and My Homeowner’s Policy Let Me Down
When a nearby river overflowed its banks after days of torrential rain, my neighborhood was hit with a flash flood. A foot of water rushed into my home, destroying my floors, my furniture, and my life. I called my homeowner’s insurance company, thinking I was covered. They delivered the devastating news: damage from rising surface water—a flood—is specifically and absolutely excluded from every standard homeowner’s policy. To be covered, I would have needed a separate flood insurance policy. I had insured my house against fire from the sky, but not water from the ground.
Stop assuming your homeowner’s policy covers your boat. Get a dedicated boat insurance policy instead.
The Sinking Feeling of Being Uninsured on the Lake
I bought my first small fishing boat. My homeowner’s policy provided a tiny sliver of property coverage for it, around $1,500, and only while it was on my property. The first day I took it out, I was in a minor accident that caused damage to another boat and a fuel spill. I discovered my homeowner’s policy provided zero liability coverage on the water. For that, I needed a separate, dedicated boat insurance policy. That policy would have covered the damage, the fuel spill cleanup, and the liability. My “home” insurance didn’t leave the shore.
Stop thinking your wedding venue’s insurance covers your cancellation. Get your own wedding cancellation insurance instead.
The Venue’s Policy Protected Them, Not Us
We booked our dream wedding venue. They had their own insurance, so we didn’t think we needed our own. A week before the wedding, the venue had a major fire and had to cancel our event. Their insurance covered their loss of business, but it did nothing for us. We were left scrambling to find a new venue and lost all the non-refundable deposits we had paid to our florist, photographer, and caterer. Our own wedding cancellation insurance would have reimbursed us for all those lost deposits and the cost of rescheduling.
The #1 secret for getting a flood claim paid is taking pictures of your property before the water rises.
The “Before” Photos That Proved My “After” Claim
A flood warning was issued for my area. Before the water started to rise, I took 15 minutes and walked through my house with my smartphone, taking pictures of every room, my furniture, and my appliances. After the flood, when the adjuster came, I had undeniable, time-stamped “before” pictures. It prevented any argument over the quality of the carpet I had or the condition of the furniture that was now a muddy wreck. Those simple photos were the most powerful piece of evidence I had to prove the full extent of my loss.
I’m just going to say it: Your standard homeowner’s policy is practically useless in a major flood or earthquake.
The Two Disasters That Standard Insurance Ignores
I live in California, where the risks are fire and earthquakes. My standard homeowner’s policy was great for fire. But for the other major, catastrophic risk I face, it is completely useless. The policy has an absolute exclusion for any damage caused by “earth movement.” The same is true for floods. The two natural disasters that can completely level a home and destroy a lifetime of savings are the two perils that are specifically and completely excluded from the very policy that is supposed to protect your home. It’s a shocking and dangerous gap.
The reason your event cancellation claim was denied is because it was due to a circumstance (like low ticket sales) that wasn’t a covered peril.
The Canceled Gala and the Uncovered Disappointment
Our non-profit was hosting a large fundraising gala. A week before the event, ticket sales were disastrously low, and we had to make the painful decision to cancel. We had purchased event cancellation insurance and thought we could recoup our lost deposits. The claim was denied. The policy is designed to cover cancellations due to specific, unforeseen “perils” like a hurricane, a fire at the venue, or a vendor going bankrupt. It does not cover a lack of interest or poor ticket sales. Our business decision was not an insurable event.
If you’re still not carrying liability insurance for your drone, you’re one crash away from a massive lawsuit.
The Fun Hobby That Became a Serious Liability
My son loved flying his high-end drone. We never thought about insurance. One day, he lost control, and the drone crashed into a neighbor’s car, causing damage, and then hit a person, causing a minor injury. We were shocked to find our homeowner’s policy had an “aircraft” exclusion and provided no coverage. We were on the hook for the property damage and the injury lawsuit. A separate, and very affordable, drone liability policy would have protected us. That fun, high-tech toy had become a serious, uninsured financial risk.
The biggest lie you’ve been told is that you’re not in a flood zone. Everyone is in a flood zone; the risk level just varies.
The “No-Risk” House That Was Underwater
When I bought my house, the mortgage company told me I was not in a “Special Flood Hazard Area” and that I didn’t need flood insurance. I felt relieved. Two years later, a bizarre, once-in-a-century storm system caused a flash flood that sent two feet of water into my home. I learned a critical lesson from FEMA: everyone lives in a flood zone. It’s just a question of whether it’s a low, moderate, or high-risk zone. Over 20% of all flood claims happen in those “low-risk” areas where insurance isn’t required.
I wish I knew my boat policy had a “lay-up” period and wouldn’t cover me during the winter months.
The Winter Sail and the Uninsured Sinking
I live in a northern state, but on a beautiful, unseasonably warm day in February, I decided to take my sailboat out. A sudden squall caused the boat to sink. My claim was denied. My boat insurance policy had a “lay-up” period. It specified that the boat would only be covered while in use between May and October. From November to April, it was only covered while it was in storage. By taking it out during that winter lay-up period, I had completely voided my coverage. My one beautiful day on the water cost me my entire boat.
99% of people make this one mistake: buying flood insurance less than 30 days before a flood. (There’s a 30-day waiting period).
The Policy I Bought on Monday for the Hurricane on Friday
A major hurricane was churning in the Atlantic and heading our way. In a panic, I went online and bought a flood insurance policy from the National Flood Insurance Program (NFIP). The storm hit, my house flooded, and I filed a claim. It was denied. The NFIP has a mandatory, 30-day waiting period from the time you purchase the policy until it goes into effect. My last-minute purchase was useless. You can’t buy insurance for a hurricane when the storm has already been named. It’s a protection you must buy in the calm, not the crisis.
This one small action of understanding your flood zone designation will determine the cost and necessity of your policy.
The Alphabet Soup That Defined My Risk and My Rate
I was looking at a house and my realtor told me it was in “Flood Zone X.” I had no idea what that meant. I went to the FEMA website and learned. Zone X is a low-to-moderate risk area where flood insurance is optional, but recommended. A house in Zone AE is in a high-risk area where insurance is mandatory for a mortgage. Knowing the specific flood zone designation for my property told me my statistical risk, whether my lender would require me to have a policy, and what my premium would be. It’s the key to the whole system.
Use an agreed value policy for your classic boat, not an actual cash value policy.
The Sunken Treasure and the Check That Made Us Whole
My father restored a beautiful, classic wooden boat. He had it professionally appraised for $50,000 and insured it with an “agreed value” policy. He and the insurer agreed, in writing, that the boat was worth $50,000. When the boat was tragically destroyed in a marina fire, the claims process was simple. There was no argument over depreciation or its “book value.” The company sent a check for the full, agreed-upon $50,000. For a classic or custom vessel, it’s the only way to ensure you’ll be paid what it’s truly worth.
Stop assuming your wedding insurance covers a change of heart. It doesn’t.
The Runaway Bride and the Uncovered Deposits
My daughter called off her wedding two weeks before the big day. It was emotionally devastating. It was also financially devastating. We had paid thousands in non-refundable deposits to the venue, the caterer, and the band. We had purchased wedding insurance, so we thought we were protected. We were wrong. The policy clearly excluded a cancellation due to a “change of heart” by the bride or groom. The insurance is for unforeseen events like a hurricane or a sick parent, not for a personal decision to call off the wedding.
Stop thinking your homeowner’s policy covers your expensive E-bike. You may need a separate rider for it.
The Stolen E-Bike and the Surprising Exclusion
My new, $4,000 E-bike was stolen from my garage. I thought my homeowner’s insurance would cover it. They only paid me $500. The policy had a sub-limit for standard bicycles, but it also had an exclusion for “motorized vehicles.” Because my E-bike had a motor, they argued it fell under that exclusion. I had to fight to even get the small bicycle limit. To properly cover it, I would have needed to add a specific endorsement for a motorized bicycle. It’s a new technology that most old insurance policies don’t know how to handle.
The #1 tip for earthquake insurance is to understand the massive deductible, which is a percentage of your home’s value.
The $50,000 Deductible I Had to Pay First
An earthquake caused $80,000 in damage to our home. We had earthquake insurance and thought we were safe. Then we got the bill for our share. The deductible wasn’t a flat dollar amount; it was 15% of our home’s total insured value. Our house was insured for $500,000, so our deductible was a staggering $75,000. The policy only paid the last $5,000 of the damage. The deductible is so high that the insurance is really only for a catastrophic, total loss, not for the more common, partial damage.
I’m just going to say it: Most people who should have earthquake insurance don’t, because of the cost.
The Gamble We’re All Taking in California
I live in a high-risk earthquake zone. My house is my biggest asset. But I do not have earthquake insurance. The premium is thousands of dollars a year, and the deductible is 15% of my home’s value. It’s a policy that is so expensive, and has such a high deductible, that it feels almost useless. I, like most of my neighbors, am engaged in a collective, high-stakes gamble. We are betting that “the big one” won’t happen to us, because the cost of insuring against it feels financially crippling. It’s a rational, but terrifying, choice.
The reason your claim for a stolen outboard motor was denied is because it wasn’t specifically scheduled on your boat policy.
The Motor That Walked Away
My boat was in storage for the winter. Someone broke in and stole the expensive outboard motor right off the transom. My boat insurance policy covered the damage to the boat, but not the motor. The policy stated that the boat “hull” was covered, but that detachable motors, trailers, and electronics had to be specifically listed, or “scheduled,” on the policy to be covered for theft. My failure to itemize the most valuable part of my rig left me with a huge, uncovered loss.
If you’re still hosting a large party without special event insurance, you’re risking your homeowner’s liability limits.
The Wedding Reception and the Million-Dollar Lawsuit
We hosted a large wedding reception for our daughter in our backyard. A guest had too much to drink and caused a serious car accident on the way home. We were sued under “social host liability” laws. The lawsuit was for over $1 million. Our homeowner’s policy only had a $300,000 liability limit. For a few hundred dollars, we could have purchased a “special event” policy for the wedding. It would have provided a separate, dedicated $1 million in liability coverage, protecting our homeowner’s policy and our personal assets from that one-day event.
The biggest lie is that your event insurance covers everything. It has exclusions for things like communicable diseases or lack of interest.
The Canceled Conference and the List of Exclusions
We bought event cancellation insurance for our large industry conference. A few weeks before the event, a new COVID-19 variant caused a wave of fear, and our attendance numbers plummeted, forcing us to cancel. The claim was denied. Our policy had a specific exclusion for communicable diseases. It also excluded a cancellation due to a lack of interest. The policy was designed to protect us if the venue burned down, not from the business risks of a pandemic or a poorly-marketed event.
I wish I knew that my flood policy only covered the building and not my basement improvements or belongings in the basement.
The Finished Basement That Was Considered a Hole in the Ground
A flood inundated our basement. We had just spent $30,000 finishing it with drywall, nice flooring, and a beautiful entertainment center. Our flood insurance policy paid to replace the furnace and the hot water heater. It paid nothing for the finished walls, the flooring, or any of our furniture that was destroyed. A standard NFIP flood policy has severe limitations on basement coverage. It covers the foundation and essential equipment, but it does not cover finished surfaces or personal belongings below ground level. Our beautiful basement was an uninsured loss.
99% of boat owners don’t know their policy has a navigational territory limit.
The Trip to the Bahamas My Insurance Didn’t Take
I have a great boat insurance policy that I use for cruising up and down the coast of Florida. I decided to take a trip to the Bahamas. While there, I was in a minor accident. My claim was denied. My policy had a “navigational territory” clause. It clearly stated that coverage was limited to the coastal waters of the United States. To be covered in the Bahamas, I would have needed to add a special endorsement for a specific period of time. The moment I left US waters, my insurance had stayed behind at the dock.
This one habit of checking for a “named storm” deductible on your boat policy will prevent a surprise after a hurricane.
The Hurricane and the 10% Deductible
A hurricane damaged my boat while it was in the marina. The total damage was $20,000. My policy had a standard $1,000 deductible. But when I filed the claim, I was told my deductible for this loss was actually $5,000. My policy had a separate, much higher “named storm” deductible. It was 10% of the boat’s insured value. Because the damage was from a hurricane, not a regular storm, that higher deductible applied. It was a brutal and unexpected out-of-pocket expense that I had never noticed in the fine print.
Use a “jewelry floater” policy to get worldwide, “all-risk” coverage for your valuable pieces.
The Lost Earring and the Policy That Paid
My wife lost one of her diamond earrings while on vacation in Italy. We have no idea how it happened; it was just gone. Our homeowner’s policy would not have covered it; that requires a specific peril like theft. But we had a separate “jewelry floater” policy. It provided “all-risk” coverage, which includes simply losing something (“mysterious disappearance”). It also provided coverage worldwide. We filed the claim, and the policy paid to replace the entire pair of earrings, no questions asked. It’s the only real way to insure valuable jewelry.
Stop assuming your homeowner’s policy covers your collection of firearms or art. You need a valuable articles policy.
The Stolen Guns and the Low Sub-Limit
My father has a valuable collection of antique firearms. When his house was burglarized, the entire collection was stolen. The total value was over $25,000. His excellent homeowner’s policy paid him a check for only $2,500. Buried in the policy was a specific sub-limit for the theft of firearms. The same is true for art, stamps, and other collectibles. To cover their full, appraised value, he would have needed a separate “valuable articles” or “personal articles floater” policy. His standard policy saw a gun, not a valuable antique.
Stop thinking your travel insurance covers your destination wedding. You need a dedicated wedding policy.
The Two Events That Needed Two Policies
We were having a destination wedding in Mexico. We bought a great travel insurance policy that covered our flights and hotel if we had to cancel. We didn’t buy wedding insurance. A week before the wedding, our photographer’s studio had a fire, and he had to cancel on us. Our travel insurance did nothing. It covered our ability to travel, not the wedding itself. A dedicated wedding insurance policy would have covered the lost deposit for the photographer and the cost of hiring a new one. The trip and the event are two separate risks.
The #1 secret for a classic car policy is that it has strict mileage and usage limitations.
The Joyride to Work That Could Have Voided My Coverage
I have a beautiful classic Mustang insured on a specialty “classic car” policy. The premium is incredibly low. One sunny day, I decided to drive it to work. My friend, who is an agent, saw me and freaked out. He reminded me that my policy has a strict “pleasure use only” clause. It’s for car shows and weekend drives. Using it for a regular commute is a violation of the policy terms and could give the insurer a reason to deny a claim. The low premium is a direct trade-off for those strict limitations on how you can use the car.
I’m just going to say it: The National Flood Insurance Program’s coverage limits are often too low for many homes.
The Flood and the $250,000 Cap
My home’s replacement value is about $500,000. I have a flood insurance policy through the government-backed National Flood Insurance Program (NFIP). When a major flood destroyed my home, I learned the hard truth about the program’s limits. The NFIP has a maximum coverage limit of only $250,000 for the building’s structure. That’s it. It doesn’t matter if your home is worth more; that’s the most they will pay. My house was a total loss, but I was only reimbursed for half of its value. For higher limits, you need to look at private flood insurance.
The reason your boat liability claim was denied is because you were using it for a purpose not on the policy, like parasailing.
The Water-Skiing and the Uncovered Lawsuit
I had a great liability policy for my boat. My kids’ friends were over, and we were towing them on a tube. One of the kids was injured, and their parents sued me. My claim was denied. The policy covered the boat for “pleasure use,” but it had a specific exclusion for any liability arising while the boat was being used to tow a water-skier, tuber, or parasailer. For that, I would have needed a separate water sports liability endorsement. My fun afternoon had turned into a massive, uninsured lawsuit.
If you’re still not insuring your collectibles, you’re treating your passion like it has no financial value.
The Baseball Cards My Dad Thought Were “Just a Hobby”
My dad spent his life collecting vintage baseball cards. It was his passion. He kept the collection, which was worth over $100,000, in our basement. He never insured it. When a burst pipe destroyed the entire collection, he was heartbroken. His homeowner’s policy only paid him about $1,000 for the “damaged cardboard.” A separate, “valuable articles” policy would have insured the collection for its full, appraised value. He treated his passion like a hobby, and in the end, that’s all the insurance company saw it as, too.
The biggest lie is that private flood insurance is always better. You need to compare it carefully with the NFIP.
The Private Policy That Couldn’t Compete With the Government
I live in a high-risk flood zone and needed flood insurance. I assumed a private policy would be better and cheaper than the government’s NFIP. I was wrong. Because my house was older and built before the first flood maps, it qualified for a subsidized rate from the NFIP. The private insurance market, with its modern risk modeling, quoted me a premium that was three times higher. The NFIP isn’t always the best, but you absolutely must compare it to the private market. Sometimes, the government program is the better deal.
I wish I knew that my wedding insurance wouldn’t cover a cancellation due to a pre-existing medical condition.
The Known Illness That Canceled Our Wedding
My father was in remission from cancer but was stable. We booked a big wedding. Two weeks before the date, his health took a turn for the worse, and we had to cancel the event to be with him. Our wedding insurance claim was denied. The policy had an exclusion for any cancellation resulting from a “pre-existing medical condition” that was known at the time the policy was purchased. While his decline was unexpected, his underlying condition was not. It was a heartbreaking and very expensive detail in the fine print.
99% of people with a valuable articles policy don’t get their items reappraised regularly.
The Ring I Insured for $10,000 That Was Now Worth $20,000
I bought a “valuable articles” policy for my wife’s engagement ring 15 years ago. We insured it for its original appraised value of $10,000. We never thought about it again. When the ring was stolen last year, I discovered that due to inflation and the rising price of diamonds, its current replacement value was nearly $20,000. But because we had never gotten it reappraised and updated the policy, the insurer only paid the $10,000 it was insured for. We lost a fortune because of our own neglect.
This one small action of reading the “wear and tear” exclusion on your musical instrument policy will clarify what’s not covered.
The Worn-Out Guitar and the Denied Claim
I’m a professional musician, and I have a specialty insurance policy for my vintage guitar. After years of playing, the frets were completely worn out and needed to be replaced. I filed a claim. It was denied. The policy had a clear exclusion for damage caused by “wear and tear, gradual deterioration, or inherent vice.” The policy was there to protect my guitar from a sudden, accidental event, like being dropped or stolen. It was not a maintenance plan to pay for the predictable and gradual wearing out of its parts.
Use a dedicated RV policy, not just an endorsement on your auto policy, for better liability and contents coverage.
The Campsite Accident My Auto Policy Wouldn’t Cover
I added my new RV to my auto insurance policy. It seemed easy and cheap. While we were at a campsite, a guest tripped on our fold-out steps and was injured. I was shocked to learn my auto policy provided no liability coverage for incidents that happened while the RV was parked and being used as a residence. A dedicated RV policy would have included “campsite liability” and much higher limits for our personal belongings inside. An RV is a car and a house, and it needs a specialized policy that understands both.
Stop assuming your RV policy covers you when the vehicle is being used as a permanent residence.
The “Full-Timer” Status That Voided Our Coverage
My husband and I sold our house and became “full-timers” in our RV. We kept our standard RV insurance policy. When we had a major liability claim at a campsite, it was denied. The insurer said that because we were using the RV as our permanent, full-time residence, we had violated the terms of our “recreational use” policy. For our new lifestyle, we needed a specific “full-timer’s” policy, which provides broader, homeowner’s-like liability coverage. Our change in lifestyle had created a massive, uninsured gap.
Stop thinking your homeowner’s policy covers your ATV when you ride it off your property.
The ATV and the Accident Down the Street
My homeowner’s policy provided some liability coverage for my ATV, so I thought I was covered. I was wrong. That coverage only applied while I was using the ATV on my own property. The moment I drove it down the street to a neighbor’s house, the coverage vanished. When I had an accident in their yard, I was completely uninsured. For off-premises use, I needed a separate, dedicated ATV insurance policy. My homeowner’s policy had a very small, and very specific, property line that it would not cross.
The #1 tip for event insurance is to get liability coverage that protects you from guest injuries.
The Canceled Cake vs. the Million-Dollar Lawsuit
When we bought insurance for our daughter’s wedding, we were focused on the “cancellation” part—what if the venue goes out of business or the caterer doesn’t show up? Those are real risks. But the most important part of the policy was the “event liability” coverage. If a guest had gotten drunk and caused a car accident on the way home, or if someone had slipped on the dance floor, we could have been sued for millions. The lost deposit on the cake is a problem; a catastrophic liability lawsuit is a life-altering disaster.
I’m just going to say it: Most people cancel their flood insurance after a few dry years, right before the next big storm.
The “Wasted” Money That Became a Brilliant Investment
My neighbors and I all bought flood insurance after a big storm. For the next five years, it didn’t flood. My neighbors started canceling their policies, complaining that they were “wasting” money on the premiums. I kept mine. In year six, the “100-year flood” hit. My house was rebuilt with the insurance money. My neighbors, who had tried to save a few hundred dollars, lost everything. Flood insurance feels like a waste, right up until the moment it’s the most brilliant investment you’ve ever made.
The reason your boat salvage claim was so expensive is that your policy didn’t have separate coverage for wreck removal.
The Sunken Boat and the Second Bill
My boat sank after hitting a submerged object. My insurance policy paid for the “actual cash value” of the boat, and I thought the ordeal was over. It was not. The Coast Guard then mandated that I had to have the wreck removed from the bottom of the lake, as it was a navigational hazard. The salvage operation was incredibly expensive. My boat policy did not have separate coverage for “wreck removal.” It paid for the boat, but not for the cost of cleaning up the mess it left behind.
If you’re still relying on your credit card’s cell phone protection, you’re ignoring the high deductible and low limits.
The “Free” Phone Insurance That Was a Bad Deal
My premium credit card offered “free” cell phone protection if I paid my bill with the card. I thought I was covered. When I broke my new, $1,200 phone, I tried to use the benefit. I discovered the coverage had a $100 deductible and a maximum payout of only $600. It was better than nothing, but it was far from the “full protection” I thought I had. It’s a nice perk, but it’s not a substitute for a real insurance policy with a reasonable deductible and adequate limits.
The biggest lie is that you don’t need identity theft insurance. The recovery process can be a nightmare.
The Stolen Identity and the Full-Time Job of Getting It Back
My identity was stolen. My credit card company and bank eventually reversed the fraudulent charges. But the real damage was the time and effort it took to get my life back. I spent over 100 hours on the phone with credit bureaus, filing police reports, and disputing accounts. It was a stressful, full-time job for months. Identity theft insurance doesn’t just reimburse for stolen money; it provides “restoration services.” It gives you a dedicated case manager who does all that legwork for you. That service is what you are truly paying for.
I wish I knew my wedding policy had an exclusion for vendor bankruptcy if I didn’t buy the specific rider.
The Bankrupt Photographer and Our Missing Photos
We paid our wedding photographer in full before the big day. A week after the wedding, before he had delivered our photos, his company declared bankruptcy. He was gone, and so were our pictures and our money. We filed a claim with our wedding insurance. It was denied. Our basic policy covered a vendor being a “no-show.” It did not cover a vendor going out of business. For that, we would have needed to buy a specific, and separate, rider for “vendor bankruptcy.” It was a devastating and very specific gap in our coverage.
99% of people don’t know the difference between flood insurance (rising water) and homeowner’s insurance (water from above).
The Two Types of Water and the Two Different Policies
A hurricane hit our town. The wind damaged our roof, and rain poured in, destroying our ceiling. That was “water damage” covered by our homeowner’s policy. A few hours later, the storm surge brought the ocean into our first floor. That was a “flood,” and it was completely excluded from our homeowner’s policy. It was covered by our separate flood insurance policy. Water that comes from the sky is a homeowner’s claim. Water that rises up from the ground is a flood claim. It’s a simple distinction that determines everything.
This one habit of taking your scheduled jewelry in for an annual inspection will keep your coverage in force.
The Loose Prong and the Denied Claim
My wife had her engagement ring insured on a valuable articles policy. One day, she looked down and the main diamond was gone. It had fallen out of its setting. The insurance claim was denied. The policy had a requirement that we have the ring professionally inspected once a year to check for loose prongs or wear and tear. Because we had neglected to do this, we had violated the terms of the policy. That simple, free, annual inspection at the jeweler would have kept our coverage in force and saved us from a five-figure loss.
Use a “hole-in-one” prize indemnity policy for your charity golf tournament, don’t just risk paying it out of pocket.
The Lucky Shot That Almost Bankrupted Our Charity
Our small charity was hosting a golf tournament. To attract players, we offered a $20,000 prize for a hole-in-one on the 17th hole. We never thought anyone would actually make it. On the day of the tournament, someone did. We were on the hook for a $20,000 prize that our small non-profit couldn’t afford. For a few hundred dollars, we could have purchased “prize indemnity” insurance. The insurer would have paid the prize for us. We were gambling with our charity’s future, and we lost.
Stop assuming your boat policy covers you while it’s being transported on a trailer.
The Highway Accident and the Uninsured Boat
I was towing my boat to the lake when I was in a highway accident. The boat was badly damaged. I thought my boat insurance would cover it. It did not. My policy only covered the boat while it was “in the water or on a trailer at my residence.” It did not cover a collision that happened on the highway. My auto insurance didn’t cover it either, as it only covers the trailer, not the cargo on it. I had discovered a bizarre and expensive uninsured gap that exists between the two policies.
Stop thinking your policy covers an earthquake and the resulting tsunami. You may need two different coverages.
The Two Disasters That Required Two Policies
I lived in a coastal area in the Pacific Northwest. I had an earthquake insurance policy. I thought I was fully covered for our region’s biggest risk. After a major earthquake, a tsunami inundated my home. I was shocked to learn that my earthquake policy only covered the damage from the shaking. The subsequent damage from the tsunami was considered a “flood,” and it was excluded. To be fully protected, I would have needed two separate policies: one for the earthquake and another for the flood that it caused.
The #1 secret of valuable articles policies is that they often have no deductible.
The Stolen Ring and the Check for the Full Amount
My wife’s engagement ring, which was insured on a “valuable articles” policy, was stolen. We were bracing ourselves to have to pay a deductible, just like with our homeowner’s insurance. We were thrilled when the insurance company sent a check for the full, appraised value of the ring. Most valuable articles or “floater” policies have no deductible. It’s a premium feature of a premium policy. You are paying a little extra to have that first-dollar coverage and the peace of mind of not having to pay anything out-of-pocket after a loss.
I’m just going to say it: If you live anywhere near the coast, you need to have a serious conversation about flood and windstorm insurance.
The Two-Headed Monster That Is a Hurricane
Living on the coast means facing a two-headed monster: wind and water. A standard homeowner’s policy covers wind, but it will have a separate, and much higher, “named storm” or “hurricane” deductible. And it absolutely excludes flooding from the storm surge. To be properly insured, you need a complex and expensive combination of policies. It’s a difficult and costly reality, but ignoring the dual threat of wind and water is a gamble that coastal homeowners simply cannot afford to take. You have to be prepared for both heads of the monster.
The reason your wedding ring claim was denied is that you couldn’t prove it was lost (“mysterious disappearance” may be excluded).
The Ring That Vanished into Thin Air
I lost my wedding ring. It was on my finger, and then it was gone. I have no idea where or how it happened. I filed a claim with my valuable articles insurer. The claim was denied. While the policy was “all-risk,” it had an exclusion for “mysterious disappearance” unless I could provide some evidence of a probable theft. Because I couldn’t prove it was stolen and had simply lost it, the claim was not covered. It’s a frustrating exclusion that requires more than just the fact that your item is gone.
If you’re still not insuring your child’s expensive musical instrument, you’re one accident away from a big bill.
The Cello, The School Bus, and the Uninsured Accident
My daughter plays the cello in her school orchestra. Her instrument was a beautiful, and very expensive, one. We never thought to insure it. One day, another student accidentally knocked it over on the school bus, cracking the neck. The repair was thousands of dollars. Our homeowner’s policy only provided a small amount of coverage for it “off-premises.” A separate, and very affordable, “musical instrument” insurance policy would have covered the repair, no questions asked. We were risking a valuable asset every single day and didn’t even know it.
The biggest lie is that your homeowner’s policy covers your snowmobile.
The Snowmobile and the Property Line
My homeowner’s policy provided a sliver of coverage for my snowmobile. I thought I was all set. Then I read the fine print. That coverage was only valid while the snowmobile was on my own property. The moment I drove it off my property and onto a public trail, the coverage vanished completely. For that, I needed a separate, dedicated snowmobile insurance policy, just like for a car or a motorcycle. My homeowner’s policy was not designed to follow my high-speed recreational vehicle out into the world.
I wish I knew that my flood insurance had a separate, higher deductible for contents vs. the structure.
The Two Floods and the Two Deductibles
Our house was flooded. We had a flood insurance policy and thought we had one deductible. We did not. The policy had a $5,000 deductible for the damage to the building’s structure. It had a second, separate $5,000 deductible for the damage to our personal belongings or contents. To get our house and our stuff replaced, we had to pay two separate deductibles for the same single event. It’s a detail that can double your out-of-pocket costs in a disaster, and most people don’t know about it until it’s too late.
99% of people don’t read the exclusions on their special event policy.
The Bouncy Castle That Wasn’t a Covered Event
We bought a special event liability policy for our son’s big birthday party in the park. We rented a bouncy castle. A child was injured, and the parents sued us. Our claim was denied. The policy we had bought, in its list of exclusions, specifically mentioned that it would not cover any liability arising from “inflatable amusement devices.” We had purchased insurance for a party but failed to read that it excluded the riskiest and most important part of that party. The one thing we really needed insurance for was the one thing we didn’t have.
This one small action of understanding the “consequential loss” exclusion on a boat policy will tell you what’s not covered after a breakdown.
The Engine Died, and the Vacation Died With It
The engine on our boat failed due to a mechanical breakdown while we were on a week-long cruising vacation. The engine repair itself was not covered, as it was a “wear and tear” issue. But we also had to cancel the rest of our trip, losing thousands in non-refundable marina reservations and other costs. We tried to file a claim for those losses. It was denied under the “consequential loss” exclusion. The policy covers direct damage to the boat, not the indirect, consequential financial losses that happen because of a breakdown.
Use kidnap and ransom (K&R) insurance if you travel or work in high-risk areas.
The Business Trip and the Unthinkable Event
My company sent me to work on a project in a high-risk region of the world. Before I left, our corporate security team made sure we had a “Kidnap and Ransom” (K&R) insurance policy in place. The policy did more than just provide money. It gave us access to a 24/7 crisis response team of experts who would manage the entire process—from negotiation to extraction—if the unthinkable happened. It was a sobering but essential piece of protection for anyone who works or travels in unstable parts of the world.
Stop assuming your homeowner’s policy covers your golf cart, especially if you drive it off your property.
The Golf Cart and the Trip to the Mailbox
I use my golf cart to get around my large property and to drive down the street to the community mailbox. I thought my homeowner’s policy covered it. It did, but only while I was on my own “insured location.” The moment I drove it onto the public street, my coverage disappeared. When I had a minor accident at the mailbox, I was completely uninsured. For that, I would have needed to add the golf cart as a specific vehicle to my auto insurance policy. It’s a motorized vehicle, and it needs a vehicle policy.
Stop thinking you need to be a rockstar to get musical instrument insurance. It’s for anyone with a valuable instrument.
The $3,000 Flute My Daughter Played in the School Band
My daughter played the flute in her high school’s marching band. Her instrument wasn’t a Stradivarius, but it was a high-quality instrument that cost us over $3,000. We never thought to insure it. When it was accidentally damaged during a football game, we had to pay for the expensive repairs ourselves. A simple, and very affordable, “musical instrument” policy would have covered it completely. This specialty insurance isn’t just for famous musicians; it’s for any student, teacher, or hobbyist with an instrument that would be expensive to repair or replace.
The #1 tip for a boat claim is to understand that wear and tear on sails, covers, and engines is not covered.
The Ripped Sail and the Lesson in Maintenance
During a sailing trip, my old, sun-worn sail ripped in a heavy gust of wind. I filed a claim with my boat insurance. It was denied. The surveyor determined that the sail failed not because of the wind, but because of its age and deteriorated condition. The policy covers sudden, accidental damage. It does not act as a maintenance plan for the predictable, gradual wearing out of parts like sails, canvas covers, or engine components. The rip was an accident, but the cause was wear and tear, which was my responsibility.
I’m just going to say it: The maps that determine flood zones are often outdated.
The “Safe” Zone That Was a Foot Underwater
My house was in “Flood Zone X,” which the official FEMA map said was a low-risk area. But that map was based on data from 20 years ago. Since then, massive new housing developments had been built all around me, paving over acres of land that used to absorb rainwater. When a major storm hit, the runoff was catastrophic, and my “safe” zone was flooded. The official maps often lag far behind the reality of new construction and changing weather patterns. Your true risk might be much higher than the old map says it is.
The reason your wedding cancellation claim was denied is that the reason (a change in military deployment) was specifically excluded.
The Deployment and the Denied Claim
My fiancé is in the military. We had our wedding all planned and had bought wedding insurance. A month before the wedding, he received unexpected orders and was deployed overseas. We had to cancel everything. We were devastated to learn our wedding insurance claim was denied. The policy had a specific exclusion for cancellations due to a change in military orders. It’s a known risk of the profession, and the standard policy would not cover it. We would have needed to find a specialty policy that specifically covered that military risk.
If you’re still not getting an appraisal for your fine art, you can’t prove its value in a claim.
The Painting I Loved and the Value I Couldn’t Prove
I inherited a beautiful painting from my grandmother. I always loved it, but I never had it formally appraised. When a fire destroyed my home, the painting was lost. I told my insurance company it was worth at least $10,000. They asked for proof. I had none. It was just my opinion. They ended up giving me a few hundred dollars for the value of a “decorative wall hanging.” A professional appraisal is the only way to document the true value of art or collectibles and is the key to getting a fair settlement.
The biggest lie is that you’re covered for a boat fuel spill. You need specific pollution liability coverage.
The Spill That Cost More Than the Boat
I was refueling my boat when the nozzle slipped, spilling a large amount of gasoline into the marina. The cleanup was a huge and very expensive environmental issue. I thought my boat liability policy would cover it. It did not. My policy had a clear “pollution exclusion.” To be covered for the cost of a fuel spill cleanup, I would have needed to add a specific, and separate, “fuel spill and pollution liability” endorsement to my policy. The environmental damage was a catastrophic risk I never knew I was running.
I wish I knew that my classic car insurance prohibited me from driving it to work.
The Commute That Was a Contract Violation
I have a beautiful ’67 Corvette insured on a classic car policy. The premium is incredibly low. One day, I decided to drive it to the office. My agent happened to see it in the parking lot and called me immediately. He reminded me that my policy is for “pleasure and exhibition use only” and has a strict annual mileage limit. Driving it to work was a violation of the policy. If I had been in an accident, my claim could have been denied. The low price of that specialty policy comes with very strict rules.
99% of people with an RV don’t have adequate coverage for their personal belongings inside.
The RV Fire and the Uninsured Camping Gear
We had our RV insured on our auto policy. A fire at our campsite destroyed the RV and everything inside it—our camping gear, our clothes, our cooking equipment. The auto policy paid for the value of the vehicle. It paid almost nothing for the thousands of dollars of personal belongings we had inside. A dedicated RV policy would have included a separate, much higher limit for our personal effects, just like a homeowner’s policy. We had insured the vehicle, but we had forgotten to insure everything that made it a home.
This one small action of asking if your boat policy covers waterskiing or tubing liability will protect you from a lawsuit.
The Tube, The Turn, and the Lawsuit
The most fun part of owning our boat was towing the kids on an inflatable tube. We never thought about the insurance risk. A friend, who is an agent, was reviewing our boat policy and pointed out that it had an exclusion for liability while engaging in “towed water sports.” If one of the kids on that tube had been injured, we would have been completely uninsured for the resulting lawsuit. For a small extra premium, we added the endorsement. It was a simple question that uncovered a massive and very common liability gap.
Use private flood insurance to get higher limits for your property and loss of use coverage.
The Government Policy That Wasn’t Enough
My home was worth $600,000. The National Flood Insurance Program (NFIP) policy I had only provided a maximum of $250,000 in coverage for the structure. It was a huge gap. My agent found me a policy from a private flood insurance company. The private policy was able to offer me the full $600,000 in dwelling coverage I needed. It also offered coverage for “loss of use,” which paid for me to live somewhere else during the rebuild—a benefit the NFIP policy does not have at all. The private market was the only way to get truly comprehensive protection.
Stop assuming your wedding insurance covers the honeymoon. That’s travel insurance.
The Wedding Was Insured. The Trip Was Not.
We bought a great wedding insurance policy. It covered lost deposits, a sick parent, and even the photographer going out of business. After the wedding, we went on our honeymoon to a tropical island. A hurricane hit, and we had to cancel the rest of the trip. Our wedding insurance did nothing. It is designed to protect the event itself. For the trip that comes after, you need a completely separate travel insurance policy. We had protected the party, but we had failed to protect the trip.
Stop thinking your identity theft policy prevents theft. It only helps with the recovery costs.
The Insurance That Didn’t Stop the Crime
I bought an identity theft insurance policy, thinking it was a shield that would prevent criminals from stealing my information. It is not. A few months later, my identity was stolen anyway. The policy didn’t stop the crime, but what it did was amazing. It assigned me a dedicated, professional case manager who spent the next 100 hours on the phone with credit bureaus and banks, doing all the nightmarish work to restore my good name. It doesn’t prevent the theft; it pays for the cleanup.
The #1 secret for a jewelry claim is to have a recent appraisal or detailed receipt.
The Appraisal That Was My Only Proof
My grandmother’s antique diamond brooch was stolen. I knew it was valuable, but I had no way to prove it. It was just my word against the insurance company’s. My wife, on the other hand, had her engagement ring appraised every two years. When her ring was stolen, she had a detailed, official appraisal document that described the ring’s quality and its current replacement value down to the dollar. Her claim was settled for the full appraised amount, no questions asked. The appraisal was her power.
I’m just going to say it: People who live near a fault line and don’t have earthquake insurance are gambling with their biggest asset.
The Shaking Ground and the Crumbling Foundation
I live in an active earthquake zone. The cost of earthquake insurance is high, and the deductible is massive. For years, I went without it. I was gambling. I was betting my entire home equity, my biggest financial asset, that the “big one” wouldn’t happen. One day, I finally faced the reality of that risk. I decided that paying the high premium was better than the sleepless nights. It’s an expensive and imperfect product, but it’s the only tool available to protect against a disaster that could wipe out a lifetime of savings in 30 seconds.
The reason your claim for a damaged sail was denied is that it was considered normal wear and tear from racing.
The Race, The Rip, and the Exclusion
I’m an amateur sailboat racer. During a race, a strong gust of wind shredded my main sail. I filed a claim with my boat insurance. It was denied. The policy had an exclusion for any damage to sails or rigging that occurred during organized racing. They see racing as a high-risk activity that puts an abnormal amount of stress on the equipment. The policy was for “pleasure cruising,” not for competitive racing. To get that covered, I would have needed a special, and much more expensive, racing endorsement.
If you’re still planning a destination wedding without event insurance, you’re taking a massive financial risk.
The Destination and the Disaster
We planned a beautiful destination wedding in the Caribbean. A week before the event, a hurricane hit the island. The resort was damaged, the airport was closed, and our wedding was canceled. We had over $30,000 in non-refundable deposits with the venue and all our vendors. We had no wedding insurance. We lost everything. For a few hundred dollars, a good policy would have given us a full refund. A destination wedding has so many more moving parts and external risks; going without insurance is a massive, and foolish, gamble.
The biggest lie is that you don’t need flood insurance because you’re not near the ocean. River and flash floods are common.
The Desert Town That Was Underwater
I live in a desert town, hundreds of miles from the ocean. I laughed when someone mentioned flood insurance. Then, a rare, massive thunderstorm caused a flash flood that sent a wall of water rushing through my neighborhood. My home was inundated. I learned that floods are not just a coastal problem. They happen in every single state, from overflowing rivers, to snowmelt, to simple, catastrophic rain. I was living with a risk I didn’t even know I had because I misunderstood what a “flood” really is.
I wish I knew that my RV policy didn’t cover damage from pests or rodents.
The Mice Who Moved In and the Damage They Did
We stored our RV for the winter. When we opened it up in the spring, we discovered a nightmare. A family of mice had moved in and had chewed through the wiring, the upholstery, and the plumbing. The damage was thousands of dollars. We were shocked to learn our comprehensive RV policy had a specific exclusion for damage caused by insects, rodents, or vermin. It was considered a maintenance issue that we were expected to prevent. Our unwelcome winter guests had left us with a very large, and very uninsured, repair bill.
99% of people don’t know that their boat policy premium is based on where they plan to use the boat.
The Great Lakes and the Higher Premium
I was buying a boat and got an insurance quote based on using it on a small, inland lake. The premium was low. I then told the agent I was planning to take it out on the Great Lakes. He re-ran the quote, and the premium nearly doubled. He explained that a large, open body of water like the Great Lakes is a much higher risk than a small, calm lake. The “navigational territory” is one of the biggest factors in determining your premium. Where you boat is just as important as what you boat.
This one small action of reading the “vermin” exclusion in your policy will make you want to protect your stored assets better.
The Word That Cost Me My Classic Car’s Interior
I stored my classic car in a barn for the winter. When I pulled it out in the spring, I found that rats had nested in it and destroyed the entire interior. I filed a claim with my classic car insurance. It was denied. I read the policy and found the one word that killed my claim: “vermin.” The policy had a clear exclusion for any damage caused by insects, rodents, or vermin. It was a standard exclusion I had never noticed, and it cost me thousands of dollars in restoration work.
Use a policy with “uninsured boater” coverage, because many boaters don’t have liability insurance.
The Hit-and-Run on the Water
I was out on my boat when another, faster boat hit me and then sped off. They caused thousands in damage to my boat and gave me a minor injury. I was horrified to learn that, unlike with cars, boaters are often not required to carry liability insurance. There was a good chance the person who hit me had no coverage, even if I could find them. Thankfully, my policy included “uninsured boater” coverage. It stepped in and paid for my repairs and medical bills, just as the other boater’s insurance should have.
Stop assuming your valuable articles policy covers breakage of a fragile item, like a porcelain doll.
The Shattered Doll and the Fine Print
My mother had a collection of valuable porcelain dolls insured on a “valuable articles” policy. A houseguest accidentally knocked one off a shelf, and it shattered. The claim was denied. We were shocked. The “all-risk” policy was not truly “all-risk.” It had a specific exclusion for “breakage of fragile items” unless the breakage was caused by a named peril like a fire or theft. The simple, accidental drop was not covered. For that, she would have needed a special, and very expensive, “breakage” coverage endorsement.
Stop thinking your collectibles insurance covers items while they are being shipped.
The Lost Package and the Uninsured Baseball Card
I have a collectibles insurance policy for my valuable baseball card collection. I sold one of the cards and shipped it to the buyer via a major carrier. The package was lost in transit. I filed a claim with my collectibles insurer. It was denied. The policy only covered the collection while it was in my home or in a bank vault. It did not cover the items while they were in transit or being shipped. For that, I would have needed to purchase separate shipping insurance directly from the carrier.
The #1 tip for an earthquake claim is to document all cracks in your foundation and walls immediately.
The Photo Diary of a Damaged House
An earthquake hit our town. The initial damage seemed minor. But in the days and weeks that followed, small cracks in our drywall started to get bigger, and doors started to stick. I took a photo of every single crack, every single day, with a ruler next to it to show the progression. This photo diary became a crucial piece of evidence for my earthquake claim. It showed the adjuster how the initial, unseen structural damage was manifesting over time. It turned a debatable claim into a documented fact.
I’m just going to say it: Buying a house in a high-risk flood or earthquake zone without understanding the insurance costs is a rookie mistake.
The Dream Home and the Nightmare Premium
We fell in love with a beautiful home in a coastal community. We made an offer and it was accepted. We were in escrow when we finally got the quote for the required flood insurance. It was over $5,000 a year. The high, ongoing cost of the insurance made our dream home completely unaffordable. We had to back out of the deal. The cost of insuring a home against its primary, catastrophic risk is a huge part of the total cost of ownership. It’s a number you must know before you ever make an offer.
The reason your event liability claim was denied is because it involved liquor, and you didn’t have liquor liability coverage.
The Open Bar and the Uninsured Lawsuit
We hosted a large corporate event with an open bar. An attendee got drunk and, after leaving the event, was in a serious car accident. The injured party sued not only the drunk driver but also our company for serving him. We submitted the claim to our “special event” liability policy. It was denied. The policy had a clear “liquor liability” exclusion. To be covered, we would have needed to purchase a separate, specific liquor liability policy. Our fun, open bar had created a massive, uninsured legal nightmare.
If you’re still using your classic car for errands, you’re violating the terms of your specialty policy.
The Trip to the Grocery Store That Was a Policy Violation
I have a classic car policy for my vintage Porsche. The premium is incredibly low. One day, I just needed to run to the grocery store, so I took the Porsche for fun. I got into a minor fender bender in the parking lot. My claim was almost denied. My policy has a strict “limited use” clause. It is for exhibitions and club functions, not for use as a regular passenger car. The adjuster gave me a warning. My everyday errand was a violation of my specialty policy’s terms.
The biggest lie is that you’re automatically covered for a hurricane. You need to check your windstorm deductible and exclusions.
The Hurricane, The Wind, and The Flood
A hurricane hit my house. I thought I was covered. I learned that a hurricane is not a single “peril”; it’s a combination of two: wind and flood. My homeowner’s policy covered the wind damage but had a huge, 5% “hurricane deductible.” And it completely excluded the damage from the flood waters of the storm surge. To be fully covered, I needed two separate policies, with two separate, high deductibles. Being covered for a hurricane is a complex and expensive puzzle, and my standard policy was only one small piece.
I wish I knew that my valuable articles policy required me to keep the items in a bank vault to be covered.
The Jewelry Heist and the Warranty I Had Breached
I have a valuable articles policy for my wife’s inherited jewelry. To get the best possible rate, I had agreed to a “vault warranty” endorsement. It stated that the jewelry was only covered if it was stored in a bank vault when not being worn. I got lazy and kept it in a safe at home. When our house was burglarized, the entire collection was stolen. The claim was denied. I had breached the warranty in my policy. My failure to keep my promise to the insurer had voided their promise to me.
99% of people don’t know that some flood policies have a 30-day waiting period, making them useless for an approaching storm.
The Approaching Storm and the Useless Policy I Just Bought
The news was tracking a massive hurricane that was predicted to make landfall in my area in a week. In a panic, I called and bought a flood insurance policy. I felt relieved. The storm hit, my house flooded, and I filed a claim. It was denied. The National Flood Insurance Program has a strict, 30-day waiting period before a new policy takes effect. I had tried to buy insurance for a house that was already in the path of a disaster. It was too late. Flood insurance is a plan you have to make in the sunshine, not the rain.
This one small action of taking a picture of your wedding dress with the receipt will be invaluable if the airline loses it.
The Lost Gown and the Photo That Proved Its Value
The airline lost the luggage that contained my daughter’s wedding dress. It was a nightmare. We had wedding insurance, but we had to prove the value of the dress. Thankfully, my daughter had taken a picture of the dress and the original, itemized receipt with her phone. We were able to email that photo to the insurance adjuster. It was undeniable proof of the dress’s existence and its cost. We got a check that week and were able to buy a new dress just in time. That one photo saved the day.
Use a trip-transit policy to cover your goods during a move, not just relying on the mover’s minimal liability coverage.
The Mover’s “Insurance” That Was a Joke
We were moving across the country. The moving company said our goods were “insured.” When the truck arrived, many of our valuable items were broken, and a whole box was missing. We filed a claim and were horrified. The mover’s “insurance” was actually just “released value protection,” and it only paid 60 cents per pound. Our 10-pound, $2,000 laptop was “worth” only $6. For a few hundred dollars, we could have bought a separate “trip-transit” insurance policy that would have covered our belongings for their full, replacement value.
Stop assuming your policy covers ice and freezing damage to your boat’s engine.
The Cold Snap and the Cracked Engine Block
I stored my boat for the winter but didn’t properly “winterize” the engine. A sudden, deep freeze caused the water inside the engine block to freeze and crack it. The damage was catastrophic. My claim was denied. My boat policy had a specific exclusion for damage caused by ice and freezing unless I had taken reasonable steps to winterize the vessel according to the manufacturer’s recommendations. My failure to perform that critical, seasonal maintenance had resulted in a massive, and completely uninsured, engine replacement.
Stop thinking that a government disaster declaration will make you whole. The grants are small and the loans have to be repaid.
The “Disaster Relief” That Was a Low-Interest Loan
A flood destroyed my home. I didn’t have flood insurance. I was counting on a presidential “disaster declaration” to help me. The help I got was not what I expected. The FEMA grants were only for a few thousand dollars, enough for temporary housing. The main form of assistance was a low-interest loan from the Small Business Administration to rebuild. It wasn’t a gift; it was a new, 30-year mortgage on top of my old one. Disaster relief is not insurance; it’s debt.
The #1 secret is that specialty insurance is often cheaper than trying to add coverage onto a standard policy.
The Rider That Cost More Than the Standalone Policy
I needed to insure my wife’s expensive engagement ring. My homeowner’s insurance company offered to add it as a “rider” to my existing policy. The price seemed high. I then got a quote from a specialty company that only insures jewelry. Their standalone policy was not only 30% cheaper, but it also offered broader, “all-risk” coverage that the rider did not. The specialty insurer understood the specific risk better, and they were able to price it more accurately and more affordably.
I’m just going to say it: If you can’t afford the insurance for a luxury toy (boat, RV, classic car), you can’t afford the toy.
The True Cost of Ownership
My friend bought his dream boat. He got a great deal on the boat itself, but then he was shocked by the cost of the insurance, the slip fees, and the maintenance. The total cost of owning the boat was much more than just the purchase price. Insurance isn’t an optional extra for a luxury item; it’s a mandatory and significant part of the total cost of ownership. If the monthly premium for a comprehensive policy with adequate liability limits makes your budget too tight, then you truly can’t afford the toy.
The reason your claim was denied is that you failed to properly “winterize” your RV or boat according to the policy’s requirements.
The Frozen Pipes and the Denied Claim
We put our RV in storage for the winter. We thought we had drained all the water, but we missed a step. A hard freeze caused the residual water in the pipes to freeze and burst, causing thousands in damage. Our RV policy denied the claim. The policy had a “winterization” clause that required us to follow the manufacturer’s specific instructions for winter storage, including adding antifreeze to the plumbing system. Our failure to follow that specific maintenance procedure was a breach of the policy conditions.
If you’re still hosting events with bounce houses without proper insurance, you’re taking on an enormous risk.
The Birthday Party and the Million-Dollar Liability
We rented a bounce house for our son’s birthday party. We never thought about the insurance. A child was injured, and the parents sued us for negligence. Our homeowner’s policy only had a $300,000 liability limit, and the bounce house company’s insurance was questionable. We learned that these “attractive nuisances” are a huge source of liability claims. A simple, one-day “special event” policy with a high liability limit would have been an easy and affordable way to protect our family’s assets from the risk of that one, fun afternoon.
The biggest lie is that a 100-year flood only happens once every 100 years. It’s a 1% chance every single year.
The Statistical Trick That Confuses Everyone
My house was in a “100-year floodplain,” so I didn’t think I needed to worry. The term is the most misunderstood in all of risk management. It does not mean a flood will happen only once every century. It means there is a 1-in-100, or 1%, chance of a flood of that magnitude happening in any given year. Over the course of a 30-year mortgage, that means you have a 26% chance of experiencing that “100-year flood.” It’s a statistical game of roulette, and the odds are not as long as you think.
I wish I knew that my jewelry floater wouldn’t cover damage from “inherent vice,” like a faulty clasp.
The Pearl Necklace and the Broken Clasp
My wife was wearing her insured pearl necklace when the clasp broke, and the necklace fell to the ground and scattered. We filed a claim, thinking our “all-risk” jewelry floater would cover it. The claim was denied. The policy had an exclusion for loss or damage caused by “inherent vice”—a flaw or defect in the item itself. Because the loss was caused by the faulty clasp, and not by an external force, the policy would not pay. It was a frustrating and very subtle exclusion.
99% of people don’t review the exclusions in their RV’s full-timer liability policy.
The “Full-Timer” Policy With Part-Time Coverage Gaps
My husband and I are full-time RVers. We have a special “full-timer’s” liability policy that is supposed to act like a homeowner’s policy. I decided to read the exclusions. I was shocked. It excluded liability for any business activities I conducted from the RV. It also had limitations for any injuries that occurred while the RV was in motion. It was a hybrid policy with a unique and complex set of exclusions that were very different from a standard homeowner’s or auto policy. Reading them was an eye-opening and critical exercise.
This one small action of getting an elevation certificate for your home will determine your true flood risk and premium.
The Certificate That Saved Me a Thousand Dollars a Year
My home was mapped in a high-risk flood zone, and my lender was requiring me to pay a very high flood insurance premium. The map, however, was based on broad, neighborhood-level data. I paid a surveyor a few hundred dollars to do an “elevation certificate.” It provided the specific, precise elevation of my home’s lowest floor. The certificate proved that my house was actually built higher than the base flood elevation for my area. I submitted it to my insurer, and my flood premium was reduced by over a thousand dollars a year.
Use specialty policies to fill the specific, high-value gaps left by your standard home and auto insurance.
The Portfolio of Protection
I realized my standard home and auto policies were like a basic, generic safety net. But my life had specific, high-value risks that were falling through the holes. My wife’s engagement ring, my classic car, my son’s expensive tuba, and my liability as a board member were all either excluded or had very low limits. I started to think of specialty policies—a jewelry floater, a classic car policy, a musical instrument policy, a D&O policy—as the custom patches I needed to sew over the holes in my generic coverage, creating a truly comprehensive portfolio of protection.