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Most Highly Specific Specialty Insurance Policies are Not Worth the Money

The purpose of any insurance policy is to cover the cost of unexpected events in our lives. Most policies anticipate problems in broad areas — health, home, auto, and life. Specialty or “genre” policies wander into a different realm of “what if,” and often play to unrealistic fears, with little promise of actually delivering benefits. Thus, these “genre” coverage options really are just a “cover” to increase insurer profits. For instance, a company called HomeServe, offers water line coverage up to $6,000 for about $5 a month.

The policies address the potential for water meter breakage on personal property, with repairs running from $200 to $2,000. The problem is quite real, because the meter is the responsibility of the property owner. The proposed coverage, however, is not. The policy language stipulates that acts of God, wear and tear over the life of the meter, and emergency repair work without prior authorization are all excluded.

The stipulation for advance approval of an emergency repair is a glaring example of how such policies often contradict themselves. By its very nature, an “emergency” belies having prior authorization. The policies also do not include benefits for broken faucets or freezing.

Highly specialized stand-alone policies that cover what are likely “once in a lifetime” risks are rarely worth the money no matter how economical they may seem on the face of things. Such coverage caters to and increases homeowner anxieties and are best left alone in favor of more comprehensive and affordable policies with well-conceived riders.

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