It might sound strange to say the majority of home and business owners don’t check whether their policy insures their interest. In the everyday hustle and bustle of things, I think most people are prone to trusting those we delegate our duties to. In fact, most people who purchase insurance rely upon an agent, broker, lender, or the insurer itself to dictate how much insurance they should actually obtain.

Unfortunately, most people don’t realize it falls on the insured in most states to obtain the proper coverage in general. To start, any insured should review their policy and make sure that any policy purchased actually described the interest to be insured.

Sounds strange, but I have seen instances where an insured cannot recover after a loss because according to their policy the property wasn’t covered in the first place. A good example is when an insured purchases a property with individual separate units situated on the same policy where the addresses are numerically in succession and one unit is left unaccounted for (and therefore uninsured) when a new policy is issued. This can be devastating to the policyholder in the event of a disaster.

Another example would be if a property owner purchases a property that has two separate and distinct dwellings on one parcel. If the owner lives in one unit and rents out another, the property owner better make sure that his or her policy allows renters in the second dwelling.

California Insurance Code §§280 and 287 say that an insurance policy is void unless the insured has an insurable interest in the subject of the insurance. Although the property owner may have an insurable interest, checking the policy to verify the property is properly described (address and dwelling specifics) and that the contingencies which may occur, such as renters or liability for guests, falls on the insured to purchase and make sure its outlined in the policy. Taking a glance and understanding what is covered under an insurance policy can prevent headache down the line and head off any problems if a loss were to occur.