Don’t Get Stuck with an Insurance Turkey

By Catherine Powell

Image courtesy of flickr

With Thanksgiving only being a little over a week away, I thought I’d touch on a topic we all know and dread: Turkeys.  I’m not talking about the plump, succulent fowls that grace many a Thanksgiving table, I’m referring to the bonehead moves that make many of us red in the face after the fact.  While many people have had to deal with their share of turkeys when it comes to buying major appliances and/or vehicles that look great in the showroom then fail to pull their weight when we get them home, today I thought I’d take the time to reveal several insurance turkeys that have caused many a policyholder to lose sleep.

Who gets the goodies?

When it comes to deciding who gets the goodies when we part this mortal coil, you’d think that would be a no-brainer.  However, one of the most frequent insurance turkeys occurs when policyholders fail to update their beneficiaries.  This comes as a shock to some and a windfall to others when instead of a spouse of many years receiving a payout, an ex-wife, sibling or the IRS winds up getting their mitts on someone’s estate because they failed to update their beneficiary.  If you’ve had a life insurance policy for more than a decade, you owe it to yourself to ask your agent who is designated as your current beneficiary.

Image courtesy of Pixabay

In one notable case, the New York Post posted a headline that read, “Pension Pickle – Broke Widower Loses $1M to In-Law.”  61-year-old Bruce Friedman, who’d been married to Anne Friedman for more than 20-years, was railroaded out of his wife’s pension by his sister-in-law when it was discovered that his wife had designated her sister as the beneficiary 4-years before the couple met.  Since she never updated the form, when she died in September 2001, the sister-in-law wound up with an unexpected windfall which she has refused to turn over to the widower.

“Virginia won’t sit down with me or my attorney. I’m just baffled.”

When Bruce took the matter to the NY Supreme Court, the court ruled that the deceased’s intention to name the widower as the beneficiary could not be assumed and the paperwork on file clearly designated a beneficiary.

Friedman’s lawyer, Sanford Young, described last month’s decision as “sobering,” and added had some advice for all couples: “Make sure you update your pension beneficiary forms. If you don’t, your spouse and family may wind up with nothing.” 

1.      Make sure you name an individual and not your estate as the beneficiary on your life insurance policy if you don’t want it to be subjected to probate.

2.      Make sure you spell the beneficiaries names correctly and fully.

3.      If you do update the beneficiaries on your police\y, make sure the changes are going to hold up in court.  This means you need to contact your agent so the proper forms can be completed and filed with the insurance company that issued the policy.  Scribbling out one name only to substitute another on a policy won’t do.

Into every life a little rain must fall.

Image courtesy of flickr

Or, so the saying goes.   But what happens when a LOT of rain falls, to the point where water backs up and floods your home?  Even worse, what if the flood causes your toilets to overflow, inundating your home with raw sewage?  If you think your homeowner’s policy is going to cover the damage, think again.  If you read the fine print on your homeowner’s policy, you’ll discover that flooding is noted as an exclusion and some policies also contain exclusions for water backing up into your home through sewers and drains.   In either case, to avoid having either of these turkeys come home to roost, you need to read your policy fully and consider adding flood insurance to your coverage.  You also need to have a plumber check out your pipes from time to time, since even a burst pipe could cause your claim to be denied if it’s determined your plumbing was not properly maintained.

These chestnuts you don’t want cracking on an open fire.

When it comes to the holidays, people love to cook, trim their Christmas tree and perhaps even light a fire in the fireplace.  While this is a cherished, time-honored right of the season, so too are fires caused by all three of these, any of which could cause a claim to be denied if negligence is to blame.  To keep you from losing your holiday cheer, let me give you a few tips to having a safe holiday season.

1.      Do you have a fire extinguisher at the ready?  Does everyone in the house know how to use it? The difference between a little smoke damage and a major conflagration can be measured in seconds.  That’s why everyone needs to have a fire extinguisher handy.  I keep mine in the kitchen pantry.

2.      Never leave your tree lit when nobody is in the room.  If the lights short circuit, or the family pet causes the tree to take a tumble, you could quickly find it alight.

3.      Never turn your back on the stove when you have food cooking.  If something does catch fire on the stove or in the oven, don’t panic.  Simply put a cover over whatever is burning and turn off the burner.  The worst thing you can do is to try to carry a burning pot, pan or casserole out of the kitchen.  You’ll most likely burn yourself and/or drop it, causing your home to go up in flames.

4.      Make sure all the fire alarms in your home are tested and their batteries are fresh.  Should something start to smolder, a screeching fire alarm beats a wailing fire truck any day.

Thanksgiving is meant to be a time to share your blessings with family and friends.  Heed my advice if the only turkey you’re looking to deal with this month is the one that graces your dining table.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about cyber-insurance, check out her website at http://aplusallfloridainsuranceinc.com/