Back to Basics: Property and Casualty Insurance Review

Property and Casualty Insurance

Back to Basics: Property and Casualty Insurance Review

* This article was originally published on Nov. 20, 2019. It has been updated for 2021.

The New Year is like a fresh start. And while your property and casualty insurance might not have been at the top of your resolution list, the beginning of the year is a perfect time for a check-in.

That’s because a little risk-management maintenance now can help protect you throughout the year. So make the most of the “post-holiday slump” as you take some time for a property and casualty insurance review. Here’s what you need to know.

Property and Casualty Insurance: Explained

Property and casualty insurance, or P&C, is a hypernym used to describe several different types of insurance policies.

Property insurance covers your physical property, like your home, vehicle, and possessions. 

Casualty insurance, also known as liability insurance, covers you for losses in the case that you cause damage to another’s property or injury to another person.

It’s highly likely that you already have some form of P&C insurance coverage. In fact, you probably have several insurance policies that would be classified as P&C. Here’s where you can look.

Policies that can include property and casualty insurance

Homeowners insurance

A homeowners insurance policy helps protect your home and possessions against covered perils, including theft and fire. Most policies also include liability coverage that may help protect you if someone is injured at your home or you cause damage to someone else’s property.

Auto Insurance

If you’ve secured an auto insurance policy, you likely have casualty — known as liability or collision — coverage for your vehicle. Your policy may also include coverage for medical costs incurred during an accident for both you and your passengers. Adding property, or comprehensive, coverage to your vehicle can help reduce repair or replacement costs in the event of auto damage for reasons other than collision. 

Landlord insurance

If you own a rental property, landlord insurance protects the structure itself — but not the renters’ possessions — and can also provide liability coverage if litigation results from an incident on the property.

Policies that do not include property and casualty insurance

Health insurance

Your health insurance policy will cover your medical costs and those for any dependents listed on the policy, but it will not cover any lost property or the medical costs other involved parties accrue.

Life insurance

A life insurance policy can help provide financially for your beneficiaries after your death. But it will not cover any property damage or liabilities in the event of an accident or otherwise.

I Didn’t Know My Property and Casualty Insurance Covers That!

Speaking of coverage, let’s get down to some specifics. Here are three unique scenarios in which property and casualty insurance could help.

Unplanned post-holiday hand-outs

With mail delays continuing into this post-holiday season, some festive gifts are still arriving. And with folks placing online orders with gift cards they received, purchasing the things they didn’t receive during the holidays, and exchanging items, porch pirates are still a threat to packages outside doors. While homeowners insurance almost always covers break-ins, policies can vary when it comes to package theft. So instead of investing in a glitter bomb, speak with your insurance provider if you’re unsure about the details of your coverage.

Em-BEAR-assing visitors

I don’t see much wildlife near me — but, then again, Fort Collins proper isn’t a long way from the mountains! If you do, you could end up with some unwanted visitors. For example, if a bear finds its way into your garage and breaks a few windows on the way out, your homeowners policy should cover the damage. It’s important to note that damages caused by pets or preventable incidents — like mice rummaging through the walls — likely aren’t covered.

Celestial Surprises

Did you see the “Christmas Star” last month? While Saturn and Jupiter are light-years away, other threats lurk a bit closer to Earth. You might be surprised to learn that your homeowners insurance may protect you against falling objects — including asteroids and “space junk” — damaging your home. 

Property and Casualty Insurance Best Practices

Start the year strong by making time to examine and confirm your property and casualty insurance coverage details. To get started, you can look for the following.

Make sure your coverage is adequate

Property and casualty insurance carries limits. Find out what yours is and run some numbers. Is your coverage enough to properly protect your property and belongings and provide peace of mind? If not, you may look into increasing your limits or adding umbrella insurance to your policy for an additional layer of security.

Consider coverage riders and endorsements

Riders are insurance policy provisions that add additional coverage to basic insurance policies or otherwise change policy terms. For example, you can add a replacement cost rider to your homeowner’s insurance. This protects you in several ways, but the most common is this: If you insure your home and it’s destroyed in a fire, your insurance may not be enough to replace it if your policy only covers the actual cash value. 

Here’s why: Actual cash value would cover only what your home was worth at the time of the fire — not the costs to rebuild it. If your home is several years old, depreciation can account for tens or even hundreds of thousands of dollars in costs for which your insurance company will not reimburse you. A replacement cost rider ensures you can rebuild your home exactly as it was without paying out of pocket — except for your deductible, of course.

You may also want to consider a law or ordinance endorsement. Let’s say that a fire only damages a portion of your home. But when a contractor comes out to begin repairs, she discovers that your entire electrical system needs to be replaced because it doesn’t meet current building code standards. A basic homeowners policy wouldn’t cover that. But if those updates are required by building code enforcement, you won’t have to pay out of pocket with a law or ordinance endorsement.

Check for new prices

Follow the “two-to-three” rule. Every two to three years, get two to three competitive quotes from highly rated insurers. Shop around — just like you did for holiday gifts! In both circumstances, you want to make sure you’re getting the best deal without compromising value. This is important because different insurers experience different localized losses and their policy costs will differ accordingly.

Adjust your deductible as necessary.

If you’ve been focused on planning your financial future and have built up your emergency reserve, consider increasing your policy deductibles. For example, increasing your auto insurance deductible from $250 to $1,000 could mean serious savings on annual premium costs.

Bundle your policies

Bundling your insurance policies with the same insurer often means discounts and access to more affordable riders and endorsements. Bundling options vary by insurer and can change from year to year. So even if you’re sticking with the same insurer, you may have different savings options you can take advantage of in the New Year.

Is your property and casualty insurance 2021-ready? If you’d like to discuss your insurance coverage, don’t hesitate to reach out. We’ll help you navigate your way through your policies and conduct an insurance-related risk review. This way, we can make sure you’re covered adequately, identify any coverage gaps, and recommend the best ways to fill them. You can also feel comfortable asking for coverage advice and avoid having to worry about getting an insurance sales pitch. 

The worst time to find out you don’t have the right property and casualty insurance coverage is after you need it. So look into your current policies and coverage options today.

Ready to schedule your next meeting?

Simply head to the Meeting page where you can find and schedule a convenient time to discuss whatever is on your mind.

Jason Speciner
jason@fpfoco.com

Jason Speciner is a CERTIFIED FINANCIAL PLANNER™ professional, an Enrolled Agent, and the founder of Financial Planning Fort Collins, a 100% employee-owned and fee-only firm. He is also a member of the National Association of Personal Financial Advisors (NAPFA) and XY Planning Network (XYPN). Since 2004, he has served clients of all ages and backgrounds with unique experience working with members of generations X and Y. To learn more, check out Jason's blogs and see the media he's been featured in.



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Assets Under ManagementFee as a % of AUM
$100,000 - $249,9991.00%
$250,000 - $499,9990.90%
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$1,000,000 - $1,999,9990.65%
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inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
MINIMUM ACCOUNT SIZE
There is a minimum initial investment of $100,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities.

Minimums do not apply to inStream proactive financial planning as a stand-alone service.
ANNUAL FEE
Assets Under ManagementFee as a % of AUM
$100,000 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 or more0.50%

inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
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The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds. Invest:FOCO is currently available for Individual, Joint, Traditional IRA, and Roth IRA registrations.
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MINIMUM ACCOUNT SIZE
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ANNUAL FEE
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Assets Under ManagementFee as a % of AUM
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$2,000,000 or more0.50%
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For investment management services there is a minimum initial investment of $125,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. Investment management fees are generally debited from the accounts to which they apply. Financial planning services are included for Strategy:FOCO investment management clients at no additional charge.
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FINANCIAL PLANNING
Financial planning services are ongoing, and include unlimited phone, email, web and in-person meeting and consultation time. Pricing is based on the unique circumstances of each client situation. Generally, there is a one-time plan development fee ranging from $500 - $2,000 and a monthly fee of $150 - $500; cancel anytime. Clients utilizing investment management services with portfolios of $500,000 or more will typically receive financial planning services for no additional fee.
INVESTMENT MANAGEMENT
Assets Under Management (AUM)Annual fee as % of AUM or flat-dollar
$0 - $249,9991.00%
$250,000 - $499,9990.90%
$500,000 - $999,9990.80%
$1,000,000 - $1,999,9990.65%
$2,000,000 - $2,999,9990.50%
$3,000,000 - $3,999,999$15,000
$4,000,000 - $4,999,999$20,000
$5,000,000 or more$25,000 + $2,000 per additional $1mm
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ESTIMATE YOUR FEE
Your fee is determined by the complexity of your needs and situation. The primary proxy we use for complexity is your investable net worth, which is generally your total net worth, excluding your primary residence. Your investable net worth includes the value of cash, bonds, stocks, mutual funds, rental real estate, and other business or financial interests. Our transparent pricing aligns with the holistic nature and value of our comprehensive services. You can use the chart below to estimate your fee based on your investable net worth. In some circumstances, your fee may be more than the minimums in the chart below.
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$8,000 - $12,000$1,000,000 - $3,000,000
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