This is my 100th blog post since I officially launched this year. So, to commemorate this pontification landmark, I decided to post 100 insurance do’s, don’ts, myths, caveats, warnings, suggestions, etc., etc., etc. Hope you find a nugget or two.

P.S.  Special thanks to David Thompson, CPCU and Mike Edwards, CPCU who contributed several of these maxims.


Note:  The following “maxims” are, to some extent” generalizations. As Alexandre Dumas observed: “All generalizations are dangerous, including this one.” For example, Maxim #4 may not be necessary in some states or with some policies. This is why Maxim #84 is so important.

  1. There is no such thing as “full coverage.”
  2. If you let someone drive your car and they injure someone or damage their property, your insurance almost always pays first.
  3. The rental car loss damage waiver covers things not covered by most PAPs and vice versa.
  4. The loss damage waiver on a rental car is not a “rip-off.” Buy it as if it’s any other necessary cost of your trip.
  5. Don’t listen when “Flo” says, “You get the SAME COVERAGE, often for less”…insurance policies are different.
  6. Insure all resident family members on one auto policy if at all possible…if not, make sure coverages and limits are as identical as possible.
  7. Everyone today needs auto insurance, even if it’s a named nonowner policy.
  8. Never use coverage suspension endorsements on personal autos.
  9. Compared to many auto policies in the marketplace today, the ISO PAP is the “Cadillac” of PAPs…ask the carrier if their form is as good or better than the ISO PAP.
  10. If a family has a student in college without an auto, make sure they do not have regular access to someone else’s vehicle.
  11. It is often a mistake to drop physical damage coverage on an auto, regardless of its age or value.
  12. Some policies cover things like pizza delivery, but others don’t…make sure you know which is which and ask your customers about this type of exposure.
  13. Some policies cover street racing and some don’t…do you know the differences between the policies you sell for exposures like this or other exposures?
  14. A policy with a “stated amount” limit on an auto (usually an antique or specialty vehicle) is often a reduction in coverage, not “agreed value” coverage.
  15. Anyone with access to a company car should have extended nonowned coverage on their PAP.
  16. Most auto policies do not require that “auto equipment” be attached to the vehicle at the time of loss in order to have PAP coverage.
  17. Far too many non-ISO auto policies are crap. Don’t sell them.
  18. The balance on your mortgage has nothing to do with how much Coverage A you need and lenders who insist on this are violating the law in many states.
  19. An HO-5 is often only 10-15% more costly than an HO-3…sell it.
  20. Always offer personal injury coverage if not included in the HO policy.
  21. Renters need high liability coverage and often have a greater need for an umbrella policy than home owners.
  22. Always ask customers if the named insured(s) reside in the home and expect to continue to do so.
  23. Water backup coverage endorsements usually exclude backup caused by flooding.
  24. Far too few HO policies include optional coverage endorsements other than scheduled property floaters…use an exposure checklist and offer them.
  25. HO policies usually extend liability coverage to vacant land, but the majority of such land is likely not vacant.
  26. The ISO HO-3 and HO-5 do not exclude leaking roofs…there is no requirement that the building be damaged by windstorm before interior building damage is covered.
  27. Increasingly, homeowners policies do not cover the use of drones and personal injury coverage usually does not cover drone invasion of privacy claims.
  28. Most homes are undervalued for Coverage A.
  29. Many, if not most, insureds have business property on their premises today…inquire and offer additional coverage beyond this and other policy sublimits.
  30. Always offer open perils and replacement cost coverage on personal property.
  31. Unlike many HO policies in the marketplace, the ISO HO-3 and HO-5 do not exclude repeated seepage or leakage of water over time if damage is promptly reported…this can be a very valuable coverage.
  32. Possibly the majority of homeowners now have an “in-home business” exposure, either from their own business or while working from home part-time or as a telecommuter.
  33. HO policies often provide little, if any, coverage for the use of riding mowers and other service vehicles off the residence premises…talk to your underwriters about options.
  34. Encourage condo owners and HOA residents to buy maximum limits of loss assessment coverage.
  35. Many homeowners have uninsured off-premises Coverage B exposures (e.g., boat docks) that should be revealed using exposure checklists.
  36. Renters insurance offered through apartment management companies is often pure overpriced crap…sell quality HO-4s and umbrellas to renters whenever possible.
  37. If a home is owned by a trust, be very careful how it is insured…talk to the underwriter and document the conversation.
  38. Determine in advance which of your carriers cover, exclude or limit “matching losses” for roofs, siding, etc. and give this strong consideration when placing customers with these exposures.
  39. Everybody is in a “flood zone.”
  40. Never recommend someone not buy a particular insurance coverage.
  41. If you buy a home in flood zone X and the lender is not requiring flood insurance, there is no 30-day wait if you buy the policy the day the loan closes.
  42. Never base a coverage decision on “I’ve always heard that….” Or “We’ve always….”
  43. Always offer optional utility service coverage on both a direct damage and time element basis…failure to do so is one of the top E&O claims following natural disasters.
  44. Strongly encourage customers to reduce the 72-hour business income waiting period to 24 or zero hours.
  45. Always offer building ordinance or law coverage.
  46. Always offer additional limits of debris removal coverage on commercial buildings.
  47. Business income coverage for dependent properties is far too often overlooked.
  48. The most overlooked advantageous business income endorsement is possibly the CP 15 20.
  49. Always offer coverage for catastrophic exposures like flood and earthquake…consider a DIC policy if there is a landslide exposure.
  50. Be wary of margin clauses, either those provided by endorsement (like the CP 12 32) or those buried in non-ISO policy forms.
  51. Always attempt to have protective safeguards endorsements (like the CP 04 11 and CP 12 11) removed.
  52. If there is any doubt if property is part of the building vs. contents, declare it as building property using the CP 14 15.
  53. A commercial property policy (e.g., CP 00 10) should include a description of any building that houses contents, even if no coverage is desired on the building.
  54. “Fire damage legal liability” coverage is not enough if you lease premises…read the lease and you’ll find out why.
  55. Avoid “Special Condition,” “Contractor Warranty,” or similar onerous policy forms.
  56. There is no such thing as a “comprehensive general liability” policy…it’s been called “commercial general liability” for over 30 years.
  57. Policy forms do not always do what you think they do…two good examples are the CG 22 93 and CG 22 64.
  58. Always quote higher liability and medical payment limits on liability policies.
  59. Fight to remove endorsements that limit coverage to designated premises or operations, such as the CG 21 44, CG 21 54, and CG 21 34.
  60. Never add any unnecessary comments on a certificate of insurance that are broad, vague or could be interpreted as misrepresentative of policy terms.
  61. Avoid endorsements that tie coverage to classification codes or types of operations.
  62. If you want an E&O claim, allow the CG 21 49, CG 21 55, or CG 21 65 endorsements to be attached to a policy.
  63. Make sure additional insured endorsements do not limit coverage to vicarious liability only or apply on an excess basis.
  64. Do everything you can to avoid the attachment of CG 21 39, CG 24 26, and CG 22 94 (or CG 22 95) endorsements.
  65. If there is any doubt about whether an event is coverage as host liquor liability, recommend liquor liability coverage be purchased.
  66. Most EIFS exclusion are onerous…avoid them if at all possible.
  67. Ask the underwriter if a policy package includes a cross liability exclusion…if so, have it removed.
  68. The ISO CGL says it covers “BYOB” liquor establishments, but that might not be true.
  69. Almost every defunct business needs discontinued operations coverage.
  70. Every business needs hired and nonowned liability coverage using Symbols 8 and 9.
  71. BOP hired and nonowned auto coverage is usually not as broad or flexible as BAP Symbols 8 and 9 coverage.
  72. There is no coverage under most business auto policies for temporary substitute vehicles unless you have Symbol 8 physical damage coverage.
  73. ISO has no business auto additional insured endorsement.
  74. Be wary of driver exclusion endorsement, especially those that apply to coverage for ANY insured if the claim involves an excluded driver.
  75. Every business auto policy should include the CA 99 33 and CA 20 54 endorsements.
  76. Do not use suspension or lay-up endorsements for commercial autos or mobile equipment.
  77. Over 35% of all NFIP policies are at maximum limits…always quote excess flood insurance if available.
  78. There is no such thing as a “following form” umbrella or excess policy.
  79. Tenant “build-outs” are not the same as tenant improvements and betterments.
  80. Coverage for damage to rented premises should always be provided by a first-party direct damage CP form (not CGL FDLL or the CP 00 40).
  81. Not every account can or should be written on a BOP.
  82. Always make sure you know who owns what property being insured, especially autos.
  83. Personally-owned autos usually should be insured on a PAP and business-owned autos on a BAP…it is almost always a mistake to insure a personally-owned auto on a BAP.
  84. Education is an investment, not an expense…if you think the cost of quality education is expensive, try the cost of ignorance.
  85. Do not bid on accounts beyond your expertise.
  86. Almost 40% of NFIP policies have building coverage only, no contents coverage…always quote and encourage contents coverage.
  87. Always compare what coverage a customer needs to what was bound and/or ordered from the carrier to what the carrier actually provided…pay particular attention to exclusionary endorsements the carrier added.
  88. Address coverage questions to a carrier’s claims department, not underwriting.
  89. Most attorneys, CPAs, financial planners, roofers, plumbers, and others know nothing about insurance…make sure your customers understand this when they get insurance advice from them.
  90. Most policies do not have “flood” exclusions…they’re “water” exclusions.
  91. Damage from toilet overflows is usually coverage by homeowners policies but not by commercial property or BOP policies.
  92. Establish “minimum limits” and “minimum coverage” standards for your agency…e.g., never sell minimum limits auto coverage nor UM/UIM limits less than liability limits.
  93. Be very, very wary about providing noninsurance advice…your E&O policy may not cover a resulting claim or lawsuit.
  94. Use self-documenting means of communication (e.g., email) when discussing coverage with customers, underwriters, and adjusters.
  95. Do not communicate with your customers only at renewal.
  96. Be very careful about modifying an insurance program during or following a divorce, especially when there are requests to remove or reduce coverage.
  97. Physically inspect every property you insure.
  98. Never accept an oral declination of a claim by an adjuster…always require it in writing and demand that policy language be cited for the basis of the denial.
  99. Do not take over an account via AOR before doing due diligence and never renew “as is.”
  100. Always practice the “RTFP!” Doctrine.

Do you have questions about any of the above? Do you have any insurance maxims of your own you’d like to share? If so, feel free to post your questions or suggestions below in the Comments section.

P.S.  I will be speaking next week in Oklahoma City on “The Reports of My Death Have Been Greatly Exaggerated: Commoditization, Disruption, and the Imminent Death of the Insurance Agent” and also doing a webinar on the NEW (finally) ISO Personal Auto Policy that will be effective next year. As a result, there’s a good chance I won’t be blogging next week.

In fact, my blogging might be a little spotty for the next month. If you are in North Carolina, I will be doing CE seminars in Raleigh, Greensboro, and Asheville November 14-16. The morning session is “Finding and Fixing Personal Lines Coverage Gaps” and the afternoon session is “Finding and Fixing Commercial Lines Coverage Gaps.” You can get more information and register here. I hope you’ll consider attending and, if so, please introduce yourself as one of my blog subscribers.

If you are a CPCU, I will be doing a free webinar for the CPCU Society called “Raiders of the Lost Coverage: Insurance Jones and the Temple of Exclusions.” Visit the CPCU web site for more details and to register. Or email me and I’ll send you a copy of the course outline.

Photo by g4ll4is

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Bill Wilson

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information