You might be wondering why I’m linking to this story in the Times.
Yes, it is about a lawsuit (or a bunch of lawsuits) against Horace Mann, the elite private school, which has been exposed (there was a long piece in the New Yorker) as allegedly doing nothing about some teachers’ sexual abuse of students. Now Horace Mann is suing their insurance companies for coverage of the costs of defending and settling these lawsuits.
Reason I’m telling you about it: take a careful, thorough look through your homeowner’s or renter’s insurance policy. You may be as surprised as I was when I reviewed mine. The personal liability section can offer coverage for more types of lawsuits than you would off-handedly think. Yes, if a friend falls in your kitchen, cracks her head open and has to be hospitalized the insurance company will probably cover her medical bills. And if she sues you, the insurance company will probably cover the legal costs of your defense.
But there are other things your policy covers, although the information in the personal liability section is terse, while the exclusions go on for pages and pages.
If you read your current policy, you’ll see those exclusions — losses the company will not cover. Current New York policies all probably have many flood exclusions, after Sandy and, I’ve heard, even before Sandy. I’d guess that insurance companies are smarter than we are in evaluating the probability of such disasters and reckoning with climate change way before our Congress deigns to. (My policy also stipulates that it has a loss limit on golf carts; my carrier need not concern itself about that one. As well as the one on guns.)
But read with special care the sections about your responsibility to inform your carrier immediately upon a loss because this is where you can get into trouble: insurance companies will deny coverage if you haven’t informed them immediately.
And this is what Horace Mann is suing about. Their insurance companies have denied coverage because they claim Horace Mann did not inform them in a timely fashion.
This will be a thorny lawsuit, I’ll bet, because what an insurance company considers as “timely,” may not be what you and I consider realistic. Are Horace Mann’s insurance companies counting from the date of the alleged incidents — some of which, if I remember correctly — occurred decades ago?
- Read through your complete policy so you know what it covers.
- If anyone sues or is hurt, or your golf cart is stomped on by an elephant or something, call your insurance agent immediately and do whatever he or she tells you to do.
- And if you don’t have a homeowner’s or renter’s policy, buy one. Now.