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Life is full of unexpected events that may benefit from an additional insurance policy. Tail end insurance is one instance where supplemental coverage may be helpful since it extends coverage for claims filed after a policy expires. Here are three essential things to know about tail end coverage or the Extended Reporting Period (ERP) before you cancel your policy.
Why Tail Coverage is Important
Because daily life is often unpredictable, this endorsement gives policyholders peace of mind because it allows you to file a claim against your policy even after it expires or is canceled. Adding this supplemental claims-made insurance policy requires additional payment to your insurer, but is often worth the added cost. Keep in mind that while this policy does grant you more time to file a claim, it does not extend your current policy period.
How Long Coverage is Needed
Many insurers recommend purchasing the most time possible because you cannot add additional time after your endorsement ends. It’s also important to note that since an ERP is a fixed time, it’s also not renewable.
Generally, most insurers look at your professional liability policy and charge an additional fixed percentage. Usually, this cost is between 100 to 300% of your final premium.
Tail end coverage can be a practical endorsement option for anyone with professional and management liability policies. Just make sure you add the endorsement before canceling your policy to ensure you don’t miss any narrow window.
Things happen in a hurry when you buy a new home and sifting through the details of your homeowners’ insurance policy may not be a priority. Nonetheless, it is important that you understand your coverage limits and deductible amounts before filing a claim. Consider the following features of a homeowners’ policy when deciding on what is best for you.
What Is Covered?
Most policies provide protection for four main areas. Each of these will have some type of maximum limit that will be paid out for any given claim.
- Property – covers the cost to repair your home if it is damaged or destroyed. It is important to know that flood and earthquake disasters are not covered and require special insurance.
- Belongings – provides reimbursement costs of personal items that are destroyed or stolen.
- Liability – protects against claims by others against you for bodily injury or property damage.
- Expenses – covers additional costs such as hotel rooms or other expenses that are incurred while your home is being repaired.
How Much Deductible?
Choosing the right deductible depends on several factors and won’t be the same for everyone. The deductible is what you pay out of pocket before the insurance company starts picking up the tab. Keep in mind this applies to each claim. If you live in an area of high risk then you may want a lower deductible. If you want lower payments and are willing to pay more out of pocket if something happens, then a higher deductible could be right for you.