If you're reading this, it's highly likely
that you are familiar with the upcoming event that's commonly
referred to as Y2k or the Year 2000 Problem. Just in case you
aren't, here's a very brief summary.
In the early days of computers, the cost of computer memory was
extremely high. A major use of memory, especially for numerous
business applications, was (and still is) related to the many
functions, calculations and transactions involving calendar dates.
In order to save time and money, computer programmers decided
that it made sense to use a shortcut. Instead of using four digits
to indicate years, they dropped any reference to the century and
just used the last two digits. Since we now face the new century,
many computer programs do not know what to do with "00"
as a shortcut for the year 2000. Some programs may "freeze
up," while others may try to proceed, using the assumption
that "00" stands for 1900.
How is your insurance affected? If you use insurance to protect
your assets as well as to protect you against the cost of damage
or injury you may do to other people or property, you may be curious
about how your policies are affected by the Year 2000 Problem.
The answer is….no one will know for sure until the event
occurs.
It is possible that you may lose the use of some of your property because of the problem. Particularly, some of your electronics could possibly fail because of the computer technology used in their construction. Whether your insurance policy provides protection for this is a different question. In most cases, no coverage will be available because the source of loss is not one similar to fire or theft. In other words, the cause of such losses is not one which is covered under most insurance policies. Of course, some coverage may be available if, due to oversight, your policy language doesn't specifically EXCLUDE such losses.
A more likely problem faced by insureds is an interruption in coverage. Part of the premium you pay covers the cost of administering your policies, including premium payments, policy changes, policy issuance of new and renewal policies, and handling claims. Many insurance companies are busy with making sure that their computer systems are able to handle the millennium. Your insurers should be contacting their agents and their customers to advise them of how they're addressing the problem.
While there are many things that are out of
your control, you can contact your agent or company and ask for
written information about how they either have or will handle
the Year 2000 event. You need to be assured that your company
will be able to handle and account for any of your premium payments,
show that you have coverage in effect, be current concerning the
exact coverages you carry, and be able to tell you what property
and persons are covered. If your companies are unable to do these
basic items, you may face the danger of being unprotected in the
event of a loss. It makes sense for you to:
Again, the actual "problems" created by the Year 2000
may be minimal or they could be far more serious than imagined.
You need to take reasonable precautions concerning your insurance
protection. Oh, and along with a party hat and glass of champagne…maybe
you should include a flashlight with the next New Year's celebration.
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