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When NOT to Buy Insurance

When NOT to Buy Insurance

There are many good reasons to purchase insurance. Hayes Brokers can tell you every single one of them. But when should you NOT buy insurance? When (After) You Have A Claim Many businesses try to control costs by not purchasing certain types of insurance when they are suggested or offered by a broker. The most common types of insurance that are declined are: comprehensive and collision coverage for vehicles, directors & officers liability insurance, property insurance, flood insurance, and cyber liability. Unfortunately, insurance cannot be purchased after-the-fact to cover a claim. If a tree falls on your car and you call your insurance agent to add comprehensive coverage that day, you’ll get comprehensive coverage, but it will exclude prior damage. The next time a tree falls, you’ll have coverage. This time, no coverage. In the case of coverage like Directors & Officers Liability insurance, a claim for damages may not come to light for months, or even years. D&O cannot be backdated to cover prior claims. The best time to purchase coverage is before a claim happens Since you don’t know when a claim might occur, the time to purchase coverage is now. When It Isn’t Yours You can purchase insurance on anything or anyone at just about any time. However, the insurance policy will not pay you unless you have an insurable interest in the person or object. For instance, you can purchase insurance on your next-door neighbor’s house. However, if his house burns down, you won’t receive a check, since you have no insurable interest in the home. What is insurable interest? It is a concept that...