Brought to you by Famous & Spang Insurance
Reading your insurance policy might feel a bit like reading a foreign language — dense terms, technical jargon, and lots of fine print. But buried in that paperwork are powerful clauses that could make a huge difference when life throws a curveball.
At Famous & Spang, we believe in making insurance simple, transparent, and tailored to your life — and that starts with understanding what you’re signing up for.
Here are 5 commonly overlooked clauses that could impact your claim, your coverage, and your peace of mind:
1. The “Named Perils” vs. “All-Risk” Clause
Why it matters: This defines what your insurance will cover.
- A Named Perils policy only covers losses specifically listed in the policy — like fire, theft, or hail.
- An All-Risk policy (also known as “Open Perils”) covers everything except what’s specifically excluded.
What to look for:
If your policy lists what’s covered, it’s likely “named perils.” If it lists what’s not covered, it’s “all-risk.” That subtle difference could mean the difference between a paid claim and a costly surprise.
2. The “Replacement Cost” vs. “Actual Cash Value” Clause
Why it matters: This determines how much money you’ll actually receive if something is damaged or destroyed.
- Replacement Cost means the insurance company will pay to replace the item at today’s market value.
- Actual Cash Value (ACV) subtracts depreciation — so your 10-year-old couch or roof might only be worth a fraction of its original cost.
What to look for:
Check how your home, belongings, or car are covered. If you have ACV where you expected Replacement Cost, it might be time to reassess your coverage.
3. The “Loss of Use” or “Additional Living Expenses” Clause
Why it matters: If your home becomes unlivable, this clause can cover temporary housing, meals, and other essentials.
Too many people don’t realize their policy includes (or doesn’t include) this critical benefit — until they’re stuck with unexpected out-of-pocket expenses.
What to look for:
See how long this benefit lasts and what expenses it covers. Some policies have time or dollar limits — others offer generous terms.
4. The “Subrogation” Clause
Why it matters: It affects how legal responsibility is handled after a claim.
Subrogation allows your insurance company to seek reimbursement from the party that caused the damage. It’s helpful to your insurer — but if you sign away your rights (for example, when settling with a third party), you could unknowingly void your coverage.
What to look for:
This clause is often buried in the legal section. If you’re involved in an accident or multi-party claim situation, always consult your agent before signing anything.
5. The “Exclusions” Clause
Why it matters: This is where most people get caught off guard.
Even with full coverage, most policies have specific exclusions — like flood damage, earthquakes, mold, or wear and tear. These are not covered unless you add a specific endorsement.
What to look for:
Don’t assume your homeowners, renters, or auto policy covers everything. Review your exclusions and ask about add-ons that can fill those gaps — often at a very reasonable cost.
Take Control of Your Coverage
Understanding your insurance doesn’t have to be overwhelming — and you don’t have to do it alone.
At Famous & Spang Insurance, we walk through your policies with you in plain English. Whether you’re reviewing your current plan, filing a claim, or just wondering what you’re really paying for, we’re here to make sure you’re protected — and confident in your coverage.
Let’s have a simple, pressure-free conversation about what peace of mind looks like for you.
