Promises, Promises
Take a better look at your protection warranty.
If you have a burglar alarm, fire sprinklers or other
risk-reducing feature that falls under the category of a
"protection warranty" (meaning you guarantee your
property has a protective system), you may qualify for a rate
reduction on your insurance premiums.
But don't just take the money and run. If your coverage is
based on one or more protection warranties, you're responsible
for keeping that protection operational. If you don't, the
insurer can deny a claim, says David Ezra, attorney and partner
with law firm Berger Kahn APLC in Irvine, California. For example,
if you're remodeling and your sprinklers are disconnected, you
may not be covered for a fire during that time.
If your protective system is not working for a period of time,
notify your agent in advance, says Ezra, and make sure you're
covered during that time. He also suggests weighing the costs and
benefits of protection warranty discounts. "Think about how
much you're saving [in premiums] and what it's going to
cost to keep that system in place all the time," he says. Ezra
also warns a warranty may be a problem. If you fail to keep your
end of the deal on a warranty discount, your claim may not be
paid.
Content Continues Below
As always, read the policy and be sure you understand what
you're promising to do for the premium reduction, as well as
what the consequences are if you fail to meet the terms of the
coverage.
Jacquelyn Lynn is a freelance business writer in Orlando,
Florida.