‘Educated’ Guesswork

I may be going to Ireland in September and I am in the process of planning and organizing the trip. What changes/endorsements do you recommend, if anything, I make to my personal auto policy if I decide to rent a car while I am in Ireland? If my memory serves me correctly, liability coverage is worldwide and premium deductible is at the same limits as I carry on my vehicle. However, I also remember that you purchase the coverages through the rental car company as well.

You have to love a person who is unafraid to let senior moments or mere memory lapse disturb an otherwise comfortable ignorance. Never let "if my memory serves me correctly" replace "let me be sure I remember the form correctly." For many a moon the ISO PAP has specifically stated the policy territory to be:

1. The United States of America, its territories or possessions;

2. Puerto Rico; or

3. Canada.

I think we can all agree Ireland is clearly not included. This example demonstrates another common issue arising from such questions: Once you wander aimlessly into the swamps, odds are the mud is only going to get deeper. When a person sees no apparent problem with taking a wild guess at one issue, it's safe to assume that that will not be a unique aberration but a pattern. In this case, our questioner evidently had no warning alarms to stop him commingling a mistaken memory of worldwide liability with the issue of whether or not to purchase a collision damage waiver.

If the insured association has a flood loss and they assess every unit owner, will the HO-6 policy loss assessment pay out???

Perhaps it is dealing with the plethora of retiree residents that explains the agent brain lapses so common to condominium coverage. Three question marks is a definite clue. If one question mark means "I'm asking," three must mean "Help me, Obi Wan Kenobi—you're my only hope!"

Ah, Padawan, I have heard your plaintive cry. Herewith is the wording in the ISO HO 00 06 05 11 that has somehow eluded you:

7. Loss Assessment

• We will pay up to $1,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises," by a corporation or association of property owners. The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this policy if owned by you, caused by a Peril Insured Against under Coverage A, other than:

  1. Earthquake; or

  2. Land shock waves or tremors before, during or after a volcanic eruption.

Industry articles often cop an attitude of "can you believe how some insureds never learn" when quoting the latest statistics on how many insureds seem to think flood insurance is covered by a standard homeowners form. "Don't those dummies read their policies? And how did they miss that big gold sticker we put on the front that says 'Warning. No flood insurance is provided by this policy!'" A bit more humility may be in order, because it is clear from the multitude of questions similar to the above that "missing the obvious" applies to more than a few agents as well.

Our questioner has surely made one or more of three increasingly depressing errors: He never read the above provision that clearly states that for assessment coverage to apply the loss must be "caused by a Peril Insured Against under Coverage A;" he doesn't realize flood is not a "Peril Insured Against under Coverage A;" or he doesn't know what "Coverage A" is.

These and similar queries are far too common to cast aside as mere flukes. Yet they are the very type of errors that create misunderstandings, confusion and even anger among insureds when they find the person they trusted to lead them through the thickets of insurance actually is a prime example of the blind leading the blind. With all of the truly complex issues we face in this great industry, we simply cannot afford any more "educated" guesses.