It doesn’t have to be Halloween to hear horror stories, or at least not in the insurance world. If you’re lacking the proper coverage when disaster strikes, the situation can quickly and easily turn into a much bigger nightmare. That’s why it’s so important to be prepared for the worst, even when things seem eerily peaceful. Fortunately, an independent insurance agent can help you find the exact coverage you need to help you rest easy.
Sadly, these folks didn’t have a happy ending to their stories. Check out a few recaps of some insurance horror stories that turned dramatically worse without adequate coverage, and how having the right insurance could have easily helped save the day for all of them.
A Truly Horrific Crash
When Joe first signed up for car insurance, he wasn’t anticipating that he’d ever have to actually use it one day. To avoid the legal penalties, he purchased just the bare minimum amount of coverage required in his state. With protection from a liability standpoint, he figured he was ready to hit the road and never look back. As long as Joe kept paying his monthly premiums on time, it never occurred to him that anything could go wrong.
It never occurred to him until one day when Joe had to go pick up groceries during a heavy rainstorm. As thunder cracked and lightning flashed overhead, he greatly misjudged the amount of time it would take to bring his car to a stop on the wet pavement, and wound up slamming into the back of a brand new BMW that was waiting for the light to turn.
The woman in the BMW got severe whiplash, and the trunk and rear bumper of her brand new luxury car were completely crushed. Joe’s ten-year-old Honda Accord was totaled, and even though his airbag deployed, he still suffered a broken collarbone and a broken wrist from his hand slamming against the dash.
To make matters worse, since Joe was automatically at fault for the rear-end collision, his measly minimum auto insurance didn’t fully cover the incident. He ended up having to pay a large chunk of the expenses out of his own pocket, further adding insult to the injuries. If only Joe had been more prepared…
How Better Car Insurance Could Have Helped
Though all car accidents are tragic to some extent, the one Joe was involved in didn’t have to turn into the absolute nightmare it did. If he’d been covered to a fuller extent, his bank account wouldn’t have had to take a massive hit. For starters, with collision coverage, Joe would’ve been covered for the damage to his own vehicle. Collision coverage protects drivers from the following:
- Collisions with other vehicles
- Collisions with objects like trees, signposts, fences, and buildings
- Single-car accidents like skidding and running off the road
Without collision coverage, Joe was stuck paying out of pocket for the replacement of his own vehicle. If he’d worked with his independent insurance agent to purchase adequate collision coverage ahead of time, he could’ve saved himself a lot of money, and a throbbing headache.
Also, if Joe would have increased the limits under the bodily injury liability section of his policy, the injuries to the woman in the BMW would have been fully covered. Bodily injury liability coverage reimburses for expenses arising from injuries you cause to a third party while operating your vehicle. Since injuries are often expensive, it’s critical to have adequate coverage. Coverage includes medical payments, ambulances, and more.
A Terrifying Workplace Incident
Once upon a time there was a small retail business that didn’t bother to purchase workers’ compensation insurance. Despite coverage being mandatory in most states, the owner of the business was infamous for performing sketchy operations all around. So when it came to protecting his team, he figured the safety video shown when they were first hired was good enough.
But one day that theory was put to the test. As workers were busy gathering customer orders in the warehouse at the back of the store, the forklift suddenly malfunctioned when it was extended to its fullest height. The two workers operating the forklift fell several feet down to the concrete floor, crushing the two other employees who’d been trying to help them from below.
All the workers had to be rushed to the hospital and treated for serious injuries including broken bones, deep cuts, and a couple of concussions. That’s when the business’s owner ended up with a real nightmare on his hands. Without workers’ comp coverage, not only did the hospital bills have to come directly out of his own pocket, but the families of the injured employees also sued. He finally learned his lesson, though it was already much too late.
How Workers’ Compensation Could Have Helped
If the retail store’s owner would have purchased workers’ comp like he should have before ever hiring employees, he could’ve saved himself a great deal of trouble. Workers’ comp is designed to protect employees from illness, injury, or death while performing job-related activities, but it also protects business owners from a legal standpoint if an incident happens.
Workers’ compensation covers the following:
- Medical care: Workers’ comp reimburses employers for medical care of their employees, including doctors’ office and hospital visits, rehabilitation treatment, medications, diagnosis fees, long-term treatments, and more.
- Employee wages: Workers’ comp provides reimbursement of hourly or salary wages that an employee loses while out of work due to workplace injury, illness, or disability.
- Legal protection: If an injured or deceased employee’s family sues the business, workers’ comp offers protection by covering attorney and court fees, as well as settlements the business may be ordered to pay.
- Benefits: In the event of a disability or death of an employee, workers’ comp may pay out a lump sum benefit. If the employee was killed, the benefit would be paid to their dependents.
- Funeral costs: If an employee dies on the job, workers’ comp may provide reimbursement for final arrangements and ceremonies.
Additionally, workers’ comp protects employees against injury, etc. due to other covered disasters, such as workplace violence, terrorist attacks, and natural disasters. Without this coverage, business owners have to pay for not only medical expenses for their employees, but also lawsuits in the event they get sued.
The Great Neighborhood Fire
Susie didn’t think she’d ever need homeowners insurance for anything catastrophic. That’s why she only purchased the bare minimum coverage limits in every category when she first moved into her brand new home. Things were fine for the most part until the day she decided to host a backyard bonfire with some of her closest friends…
When a stray spark ignited a pile of dead leaves she’d raked earlier that day, the fun gathering quickly turned tragic. Due to the dry conditions of the season, the fire grew and spread rapidly, reaching her neighbors on either side of her house. All three homeowners’ yards were badly burned, and each house suffered quite a bit of property damage as well.
To make matters even worse, since she lacked adequate coverage, Susie had to pay for a temporary residence out of her own pocket while her home was being repaired. Worse yet, she had to pay for her neighbors’ hotel stays too. Clearly, Susie had to learn the hard way about the importance of having adequate homeowners insurance from the start.
How Better Homeowners Insurance Could Have Helped
If Susie had increased her homeowners coverage limits enough to actually assist her in times of tragedy, she could have saved herself and her neighbors a lot of grief. With enough coverage, homeowners insurance can protect against property damage, legal expenses, and more.
The main coverages provided by homeowners insurance include:
- Structural damage: This covers the “dwelling,” or structure of the home. Damage to/destruction of the dwelling is covered against listed perils, including fire.
- Personal property damage: This covers personal belongings like furniture, collectibles, clothing, and more from incidents like fires. Property stored off-premises is often covered too, though with a much lower limit.
- Additional living expenses: This covers extra costs if your home gets badly damaged or destroyed and forces you to live elsewhere temporarily. Reimbursement for things like hotel rooms, eating out, extra gas mileage, and more is covered.
- Liability: This covers legal expenses like attorney/court fees if you’re sued for bodily injury or property damage to a third party. Settlements you’re ordered to pay if you lose the case are also covered.
Appropriate homeowners insurance would have covered Susie from the property damage to her home her neighbors’ homes, and also protected her from a legal standpoint if they decided to sue her. Further, her homeowners insurance would have reimbursed her for the costs of a temporary residence while awaiting repairs on her own home.
Impoverished Life After Death
Daniel was only 43 years old and seemed remarkably healthy, so he didn’t think having life insurance was important for at least another decade, or even two. His salary covered not only his family’s normal living expenses, but also afforded them several luxuries. Daniel’s family lived quite comfortably in their lavish home and looked forward to putting all of their children through college in the future.
That is, until Daniel tragically passed away from a sudden heart attack with no diagnosable cause. His widow, a stay-at-home mom, was now left with three young children to care and provide for on just the wages from her part-time online side business. She also had to take over the particularly hefty mortgage on their estate all by herself.
Sadly, Daniel’s widow just wasn’t able to support her family to live the way they did before his passing. She and the kids had to move into an apartment in a sketchy neighborhood in order to afford the bills. The mother also had no idea how she would be able to pay for each kid’s college tuition without help from her deceased husband. With Daniel out of the picture, his widow was left to suffer not only his loss, but the aftermath of him not having been prepared.
How Life Insurance Could Have Helped
If Daniel had been set up with the right life insurance before his tragic and untimely death, he could have left his family in good hands, at least financially. There are many reasons that considering life insurance, even from a young age, is so important, including the following:
- To pay off outstanding debts: Many people purchase life insurance to pay off remaining debts, such as mortgage loans, after they pass away. This benefit allows the deceased’s family to be freed from covering huge outstanding balances.
- To secure a spouse’s financial future: A death benefit payout made to a spouse can provide financial security for their future, including allowing them to take many years off from working in certain cases. This type of benefit comes in handy especially if the remaining spouse would be left alone to take over parenting young children.
- To pay for children’s education: Life insurance death benefits are often allocated into a savings account intended to pay for a child’s college or graduate school education. However, death benefits can also be used to help a grown child who has already completed school pay off any remaining student loan balances.
- To help a family maintain a standard of living: When a working parent dies, it can create a huge difference in the amount of money brought into the family. Life insurance death benefits can make up for this gap and allow the family to maintain the same standard of living as before the policyholder passed away.
With payouts from life insurance, Daniel’s family could have kept their home and typical style of living. Their children’s futures also could have been secured, and the mother might have even been able to stop working for a while in order to comfort them in their father’s absence.
Here’s How an Independent Insurance Agent Can Help Prevent Horror Stories
When it comes to helping you prepare for unforeseen tragedies such as car accidents, house fires, workplace incidents, premature deaths, and more, no one’s better equipped for the job than an independent insurance agent. They’ll get you set up with the proper coverage from the start, and also be there for any future catastrophes. Checking with your independent insurance agent about your protection periodically can turn potential horror stories into lullabies.