When the coronavirus pandemic hit in 2020, Carolyn Richmond, a longtime New Yorker, packed several bags and drove to her weekend home in Sag Harbor, N.Y., with the intention of staying a week or two. She never left.
“I knew the pandemic was going to be really bad. Ultimately deciding not to return was very emotional,” said Ms. Richmond, 53. “I’d lived at the Claridge House on East 87th Street for 29 years. My lease was up that November. I eventually packed up everything I owned, put what I needed into storage and decided to stay on Long Island permanently.”
Like countless others, she renovated. A master bathroom with a wet room was created, as were walk-in closets and an office, complete with new furnishings and better technology. Black tar replaced a pebbled driveway. Appliances were upgraded. Everything was accounted for — except a call to her insurance broker to see if her living transformation matched her existing policy.
“I knew I had good insurance, but I didn’t think to call and ask if I needed more or a different kind,” said Ms. Richmond, chairwoman of the hospitality practice group at the law firm Fox Rothschild. “In hindsight, I got a bit sloppy.”
She’s not alone. Amid lockdowns, quarantines, and working and learning from home, many Americans have faced changes in how they live, where they live, and even what they’ve bought or inherited. Through it all, insurance has not been top of mind.
“The world was trying to survive. The concern for upgrading their policies for all of these experiences fell by the wayside,” explained Kurt George, a vice president at Property Damage Appraisers, an independent appraisal firm based in Fort Worth. “Very quickly, people were no longer properly covered.”
So that your insurance plan better reflects your post-pandemic life, here are a few questions and suggestions worth considering. There is no one policy that fits all, so don’t be afraid to get quotes from different sources and specialists.
Is Your Primary Home Still Your Primary Home?
“For those that moved or bought new homes, their primary apartments in New York became secondary homes, while secondary dwellings like their Hamptons or Westport home became primary residences. That comes with specific differences for insurance companies,” said Adam Wolfson, the owner of Wolfson Global Insurance Brokerage, an independent insurance agency based in Manhattan.
While flipping their living situations, Mr. Wolfson said, people forgot to discuss the following changes with their brokers: What home or apartment will they call their primary residency, and what amendments, including geographical conditions and considerations, will need to be accounted for so their policy reflects their change in lifestyle?
“In a secondary home, you generally don’t need as much coverage for your belongings. You don’t tend to keep as many clothes there. Furnishings are typically not as high end. And your liability protection, if someone got hurt and sued you, tends to stay with the primary policy,” he explained.
Full vs. Partial Payment
If you’re one of the many people who made renovations, added extensions or made big purchases, you want to make sure you’re covered for replacement cash value, or R.C.V., as opposed to actual cash value, or A.C.V., Mr. George said. “That means if something needs to be replaced, you receive the amount it would cost to replace it today rather than the depreciation cost to replace your 20-year-old stove, which is important if you’ve just renovated your kitchen,” he explained.
Mr. George stressed this difference since “renovations and home improvement costs escalated up to 50 percent during the pandemic,” he said.
“Materials have increased, and there’s been a shortage of employees,” he added. “If something were to happen, you want to be reimbursed for 100 percent for the work you have just done.”
Inherited Items
The unexpected passing of loved ones has been one of the greatest tragedies of the pandemic, leaving friends and family suddenly inheriting expensive heirlooms, jewelry, artwork and antiques. “These items fall under a valuable articles policy, which offers additional and extensive protection for higher-end assets that might not be covered under one’s existing policy,” said Jim Hickey, head of personal lines for World Insurance Associates, an independent brokerage firmbased in Edison, N.J.
“Since standard policies are extremely limited when it comes to covering expensive assets like these, it’s important to find out what kind of additional coverage is right for what you now own,” he added.
Cyberstalking
As people continue to work out of their basements, attics and closets, their internet use has increased exponentially, leaving them overexposed and underprotected.
“Most people’s home internet devices were basic and rudimentary. Unlike their offices, their homes didn’t have cutting edge virus software or high-tech internet security systems they needed, which created more risk for online theft, stolen identity, hacking, data breach and piracy violations,” said Mr. Wolfson, who suggested inquiring about cyber liability coverage.
“Most higher-end residential insurance companies offer this as an add-on to a home insurance policy,” he said. “There’s even cyberbullying and breach-of-privacy protection.”
Aside from covering and reimbursing expenses such as credit monitoring and legal fees, this kind of coverage can also help you get in touch with credit agencies and your banks, and reissue important documents. However, if you are with a company that doesn’t offer cyber liability protection you will most likely need to move your homeowner’s insurance to a new carrier, Mr. Wolfson added.
Who’s Responsible?
Some people have used whatever space is available inside, while others have turned to the outdoors, converting garages, yards and even newly constructed sheds into unexpected offices. And yes, there’s a policy for that. “Working from home isn’t going away so quickly,” said Sean Burgess,the chief claims officer for Lemonade, a global digital insurance company based in Manhattan. “The question to ask is, How does your existing policy apply to the new belongings you have in your home now that you’re utilizing them for business?”
“Some people brought their old office into their homes — that meant monitors, computers, product inventory, among other items,” Mr. Burgess added. He recommended asking the company who would be responsible for these items if they were stolen or damaged, and for lost wages. “This is a gray area because it’s your company’s property, but ultimately these items are on your property,” he said.
Traditionally, Mr. Burgess explained, policies cover up to $2,500 of business- or work-related items on the premises. If you’re traveling with the item, that coverage is reduced to $1,500. He suggested inquiring about small-commercial- or small-business policies, which are usually tacked on to your homeowner’s plan. “Whatever type of building you’ve created to work in, you want to make sure you’re covered for that stand-alone work space,” he explained. “Small-business insurance plans also add additional personal liability for damages and injuries than homeowner’s do.”
Pandemic Pups
Let’s not forget your other addition — pets need insurance, too. “It pays to ask about bundling,” Mr. Burgess said. “Because it’s typically combined with an existing policy, insurance companies often offer a 10 to 15 percent discount for owning more than one plan with the same provider. There’s also the convenience of having multiple policies with one provider and the additional convenience for the consumer to work with just one company.”
Auto Correct
With rising inflation and most expenses increasing, some people have saved by letting go of unnecessary costs, like monthly garage spaces. “For those that moved out of the city, insurance premiums dropped pretty significantly,” Mr. Wolfson said. “Upstate New York is far cheaper for auto insurance. You could save hundreds of dollars annually just by moving your car to your weekend house.”
Car bundling is another money-saving consideration. If you don’t have a car but have become a frequent renter for getaways, Mr. Wolfson said, you can find additional savings through higher-end companies like Chubb, whose $1 million personal liability coverage includes renters and borrowed car insurance — an extra fee you would have to pay if renting from, say, Hertz or Avis.
Document Everything
Since the pandemic has prevented inspectors or appraisers from making personal house calls, insurance carriers have pivoted and guided clients via Zoom or Facebook on the coverage evaluation process. “Clients made lists of everything they did or purchased, including materials used and costs for their renovations, and uploaded them directly to their insurance carrier, to properly insure replacement cost coverage,” Mr. Hickey said.
Others have stored their materials on iCloud. “iCloud is far more efficient. A fireproof safe is great, but when your building or house is evacuated, you’re never going back inside to retrieve it,” Mr. George said. A safe, he joked, is “also very 1985.”
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