The Walters Agency Podcast

Understanding Your Insurance Contract: From Coverage Gaps to Complete Protection

• Timothy Walters • Episode 2

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Why Is Having The Right Coverage Important?

Protection isn't automatic when you purchase an insurance policy—it's defined by the specific terms, provisions, and exclusions within your contract. Timothy Walters draws back the curtain on this common misconception that leaves many policyholders vulnerable to unexpected out-of-pocket expenses after a claim.

The podcast explores how different life situations require tailored insurance solutions. Whether you're a homeowner, landlord, or renter, each scenario demands specific coverage considerations. Timothy explains why landlords should require tenants to maintain renter's insurance and how homeowners with rental rooms need special policy endorsements to avoid coverage denials. For life insurance, he breaks down how needs shift throughout life stages, from term policies that cover specific periods to permanent solutions offering lifelong protection.

Connect with an experienced agent who can guide you through these complex decisions and ensure you're genuinely protected when it matters most. Call or text The Walters Agency for a free consultation to assess your current coverage.

To learn more about The Walters Agency visit:
https://www.brightway.com/agencies/tn/knoxville/0237/team
The Walters Agency
7009 Asheville Hwy
Knoxville, TN 37924
423-417-2070

Speaker 1:

Welcome to the Walters Agency podcast, where insurance meets peace of mind. Hosted by licensed insurance agent and owner, timothy Walters, we're here to help families, homeowners and small business owners throughout East Tennessee protect what matters most Our mission creating win-win-win solutions for insurance. Let's dive in.

Speaker 2:

Insurance isn't just about checking a box. It's about protecting what matters most, whether it's your home, business or family. Having the right coverage can mean the difference between peace of mind and financial disaster. But what exactly does the right coverage look like and how do you know if you're protected against the unexpected? Welcome back everybody. Skip Monty here, co-host, slash producer, back in the studio with Timothy Walters. Timothy, how are you doing today?

Speaker 3:

All right, Skip. How are you doing, buddy?

Speaker 2:

Doing just fine. I've got a big question to ask, skip, how are you doing, buddy? Doing just fine. I've got a big question to ask, though.

Speaker 3:

So, in the insurance world, why is having the right coverage important? Well, that's a good question, skip, and it's one a lot of people don't ask themselves until they've had a claim. So the reason that you want to have the right coverage is, if you don't and something happens that falls outside of the coverage in your contract, then you don't have coverage. Unfortunately, a lot of people have it in their minds that, well, they got their homeowner's insurance or their auto insurance or their life insurance or their business insurance, they got this policy, so everything's covered, and that is not true. Insurance policies are contracts, so there's limitations. There's things that that is not true.

Speaker 3:

Insurance policies are contracts, so there's limitations. There's things that are specifically provided for, there's things that are specifically excluded and there's things that maybe fall in the cracks in between. And so kind of knowing what you're actually covered for, knowing what you have, is important. And that's where, like I said, having a good agent who's going to have a decent understanding about hey, what kind of insurance product do you have, can they kind of vouch for the quality and the coverage in that product or at least explain to you some of the limitations of what it does and what it doesn't do, is important.

Speaker 2:

So that sounds like a factor that I should consider when updating my coverage. Are there other things that we should consider?

Speaker 3:

Well, yeah, you should always consider what you're trying to accomplish with your insurance. That's going to depend on what kind of insurance are you taking out. Are you trying to protect a home that you live in that's your primary residence, that you need to protect not only the value of the structure from completely being destroyed and having to be rebuilt or maybe the roof gets taken off in a hurricane or it's in a tornado or something but your personal property in the house? Do you rent rooms out in your house, in which case some insurance contracts are going to completely exclude that and if they find out that you're doing it behind their back, they're going to cancel your policy. Some companies will let you do that with an endorsement and they're fine with it.

Speaker 3:

Do you own a property that you rent out to other people, like a long-term rental property? Well, there's a completely different type of insurance form for that from the regular homeowner's insurance. It protects your legal liability as a landlord. It protects the value of the home, but it's not going to have a lot of coverage for property that you own and your tenant. If they want to protect their property, they're going to have a renter's insurance policy and you're going to want them to have a renter's insurance policy to create some separation and a legal liability on that lot from them and you. I always recommend landlords require that their tenants maintain renter's insurance. It's not expensive or take to a completely different place life insurance.

Speaker 3:

A lot of people buy life insurance when they're young.

Speaker 3:

They're buying houses, they're having kids, maybe they don't have a lot of income month to month to devote to that, so maybe they get a term life insurance policy like a 20 or 30 year term to cover, like their major debt exposures, like their mortgage or something like that, like that.

Speaker 3:

But if they can afford it, I always recommend people look into a whole life solution which is permanent life insurance or maybe a term policy that they're called return a premium where if you survived to the end of the 20 or 30 years, all the money you paid into it comes back to you, that they can be invested in something else. But it really kind of depends on what stage of life you're at, what kind of risk you're trying to mitigate and again, that's why having an agent you can talk to about this, because this is what this is what we do, like we're we're nerds, we swim in this, most of us, uh, and because it's a little bit crazy, but most of us do know what we're talking about. If we've been doing it long enough and you know insurance is like anything else, unless you're in it all the time it can be kind of like Greek. It might be hard to understand. I'm not a super smart guy, but I've been doing it a long time so I can advise people on hey, what does this?

Speaker 2:

do? What does it not do? Would I recommend it to you? Wow, well, so it's obviously important to have the right coverage. What are the biggest risks if you don't have the right coverage?

Speaker 3:

Again, if you don't have the right coverage, you could be in a situation where, worst case scenario, you don't have coverage. Maybe a less worst case scenario, maybe the coverage isn't exactly what you expected it to be. So, real world example roofs on a house. Okay, there's two basic types of loss provisions in homeowners insurance. It's one's full replacement cost. Now, that's kind of a misnomer. People think, oh well, that's just going to replace everything like new. You know, yada, yada, yada. Well, yes, but with some provisions. You know you have your deductible, you have your policy deductible. So again, let's use the roof as an example. If a windstorm comes by and takes all the shingles off of your roof and to replace it costs $20,000 and you have a $1,000 deductible, well, the insurance company is not going to give you $19,000 to replace the roof if you have replacement value loss provision on your policy. The other common one is called typically actual cash value depreciation. Sometimes it's called a roof materials payment schedule. Same thing, basically. They look at the age of the roof and they're going to say, well, this roof was so-called 30-year shingle roofs and I'm not going to get into the quality of shingles these days but a 30-year shingle roof that's 15 years old. Well, it's halfway through its lifespan. So they're going to depreciate the value of that roof by half 50%, so that's $10,000, and then take your deductible, so you'll get $9,000 from the insurance company to help go towards replacing your roofing and the rest is out of pocket.

Speaker 3:

So unfortunately, a lot of people when they look at their insurance policies, all they're looking at is the price tag, right, the premium. They want the lowest, they want the cheapest insurance possible here every day, and if you try to explain some of this stuff to you sometimes people get impatient with it. But it is important for you to understand. At least you know. Hey, I went with a cheaper policy.

Speaker 3:

But the roof, if I do have a total loss on my roof, you know, depending on how old it is, I might be out of pocket a lot more money than I expected to be, whereas if I go with this other policy, maybe it's a little bit more per year. But if I do have a total loss on the roof, then the insurance company is going to pay the lion's share to replace my roof. And speaking from my own personal experience, even right now, I don't have $5,000 or $10,000 in my hip pocket to replace a roof right now. So paying a little bit extra for that extra protection on my homeowner's insurance is actually probably a smart financial decision for me personally. Other people maybe. They have cash to burn and they want to pay less per month on their insurance, and that's fine too. But not understanding it and then something happens is when people get upset and I see it happen.

Speaker 2:

Absolutely Well, you know that is something. Roof insurance is something that I would love to delve deeper into, perhaps in a future episode, Maybe we can. We can delve into that a little deeper, because it's a there's a lot to that, I know from personal experience.

Speaker 3:

Yeah, man, I'll set you up a policy. You know All right, All right, sounds good.

Speaker 2:

All right, love it, timothy. Appreciate what you're doing and we'll catch you in the next episode awesome, thank you that's a wrap on this episode of the walters agency podcast.

Speaker 1:

Ready to find the right coverage for your home, business or family, call or text 423-417-2070 for a free 20-minute consultation. Until Until next time, stay covered, stay protected and keep winning with the Walters Agency.