On March 16th, a major fire that caused the deaths of four people in Flushing has deeply shocked the community and served as a profound lesson for Chinese homeowners. Two senior insurance brokers shared their advice on home insurance based on their decades of experience. Honesty with the insurance company, choosing the right type of insurance, and ensuring sufficient liability coverage were emphasized as crucial aspects.
In the insurance industry, “better safe than sorry” is a common saying. Experts in insurance stress the importance of selecting the correct type of insurance, specifically being transparent about whether the property is for personal use or rental.
Yang Zaili, the owner of Zaili Insurance Agency with forty years of experience, emphasized the necessity for homeowners to protect their properties by purchasing insurance. He highlighted the significance of clearly stating to the insurance company whether the property is for personal use or rental, as the responsibilities and prices differ based on this information.
Another insurance broker, Yelinda, with twenty years of experience, reiterated the importance of having the right insurance coverage. She emphasized that for rental properties, the type of insurance significantly varies depending on whether it is for short-term or long-term rental.
Both professionals underscored the critical nature of liability coverage in home insurance. Yang Zaili mentioned scenarios like accidents on the property where liability insurance becomes crucial for landlords to ensure protection.
Yelinda emphasized that for a property valued at one million dollars, liability coverage should be at least one million dollars as the difference in premiums between coverage levels such as $30,000 and $50,000 is minimal. She highlighted that in the U.S., there is no such thing as cheap and good insurance, with the principle being “you get what you paid for.”
In the event of a fire like the one in Flushing, the experts believed that the deceased’s relatives might file claims against the landlords. In such situations, landlords are advised to promptly involve their insurance company and have their lawyers handle the legal matters.
Regarding specific home insurance aspects like fire insurance, Yang Zaili stressed the importance of having sufficient coverage for rebuilding costs. He explained the necessity to account for various expenses such as rebuilding the structure, replacing contents, and additional costs like loss of use.
Additionally, Yang Zaili suggested landlords require tenants to have their own insurance, known as “HO-4,” which covers personal belongings and liability for tenants living in the property.
There were reports suggesting that the property affected by the fire in Flushing was being used for commercial and multi-purpose rentals, potentially involving unauthorized modifications. The experts clarified that insurance claims might not be automatically denied in cases of illegal modifications, especially if the landlord was unaware of them.
Yelinda also pointed out that regulatory issues regarding property structure were the responsibility of building authorities, not insurance companies. She explained that even in cases of unauthorized structures, there could still be a possibility of compensation based on individual policy terms and the claim’s circumstances.