'Administrative' insurance coverage

When an insurance company writes in a letter that certain claims are not covered in its policies, but such claims have always been paid ''on an administrative basis,'' what does it mean? Is this dependable? Is it actually insuring against such claims the same as if they were included in the policy contract? - C. H.

As much as any other business, insurance companies like to keep old and valued customers. To do this, they will sometimes pay certain claims, even though those claims are not covered in the policy, or even if the policy specifically excludes those items. For instance, a policy may say that a nonfactory-installed tape deck in an automobile is not covered unless you pay for extra coverage. But if the tape deck is stolen and you are a longtime, valued customer, the person handling the claim might ask a superior, perhaps an officer of the company, if he wants to cover your loss. Or the company might pay for an expensive piece of jewelry stolen from a home even if the jewelry was supposed to have special coverage.

You should not depend on this, however. Some companies never make exceptions, while others do so on a case-by-case basis. They don't publicize this and they probably won't talk about it in advance. You should review your policy and find out which of your possessions are not covered. If these items need special insurance, get it.

If you would like a question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.

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