Q & A with Dallas Shipp, of the Shipp Agency

Q: I own a local business and my insurance policy is supposed to pay for my lost income if I’m unable to open up because of a fire or storm. However, I was without power for nearly a week after Hurricane Ike and my insurance company said that wasn’t covered. Why not? – Gene, College Station

Dallas Shipp: While your current insurance policy may not cover that, the commercial product available through The Shipp Agency does include lost revenue and payroll expenses due to electricity outages. It’s a coverage that is not always available with all companies though, so you may want to shop around. You may be surprised what other coverages are available that you don’t currently have.

Q: I’m looking into buying a new house, but was told that if there was a hurricane in the Gulf of Mexico, it could keep me from closing because I wouldn’t be able to purchase homeowners insurance, which is required by my mortgage company before I can close. What is this about? It’s not like we’re on the coast. – Jessi, College Station

Dallas Shipp: This is a very valid concern. While we are not located in a coastal county, once a storm enters a certain quadrant (basically, when it goes past Cuba/Florida and into the Gulf) the coastal counties get locked down because insurance companies have no way of knowing where it’s headed, and they’re not going to take the risk of writing a policy and paying a claim the next week. If a storm appears headed for Texas, insurance companies will stop binding coverage further and further from the coast.

Take Hurricane Rita as an example. There was massive damage along the coast, but there was also significant damage further inland because of tornados and hail, all the way up to Jasper, Nacogdoches and Shreveport. That’s why it is important to secure insurance as early as possible when purchasing a home.

Q: I had hail damage to my roof a couple of years ago when we had a bad hail storm, and my insurance company said that they would only pay for a portion of cost to replace my roof. Why do I purchase insurance if they aren’t going to pay to fix my house? Anonymous, College Station

Dallas Shipp: This is a huge difference from one insurance company to another and it’s called “replacement cost.” If you don’t have replacement cost on your home and your property, you’re wasting money on an insurance policy that might save you a couple of bucks a month, but in the long run, is just going to leave you angry. If you had replacement cost coverage on the dwelling—and read your contract carefully because some companies will say you have replacement cost on the home, but they’ll exclude coverage from your roof, which is probably the most likely part of your home to be damaged from hail or strong winds.

Q: I keep getting letters in the mail about an umbrella policy for ‘added liability protection,’ but what does that mean? Erin, College Station

Dallas Shipp: An umbrella policy is a very critical piece of your family’s protection plan. If you’re involved in a lawsuit, it will provide you with an extra million dollars in protection, before the plaintiff can touch your personal assets. However, the biggest reason to make sure you have this in place, is that if an insurance company has an extra million dollars on the line, they’re going to provide you with a very good lawyer at no cost to you. The key to remember here is that you don’t have to be guilty to be sued, and even if you did nothing wrong, it will still cost thousands of dollars to defend you in court. This protection is typically available for about $10/month, and is a no brainer.
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Have a question about your insurance? Email Dallas@theshippagency.com today. If your question is answered in next month’s edition of AYC Magazine, you’ll receive a free sandwich from Firehouse Subs!