Entries Tagged 'Personal Insurance' ↓

Social media has certainly changed the way we communicate. Did you know it also may have changed our insurance needs? Blog and Facebook posts can generate liability that may not be covered under homeowner’s insurance policies.

Personal injury claims for defamation or slander and invasion of privacy are a growing concern. Under most standard homeowner’s policies, personal injury is not covered but you can add an endorsement.

That said, personal injury coverage has limitations. When these posts are intended to harm, as can be the case when young people take part in cyberbullying or “electronic aggression,” coverage may not apply.

The Centers for Disease Control and Prevention define electronic aggression as “any type of harassment or bullying that occurs through email, a chat room, instant messaging, a website (including blogs) or text messaging.”

Acts of electronic aggression are considered intentional acts. Even if your child forwards an offending post, your family may be drawn into litigation or a police investigation.

Clearly, monitoring your child’s online behavior is critically important, but you also may want to think twice about your own posts. In one case a man posted damaging remarks about an eBay vendor, who retaliated with a $15,000 lawsuit. In today’s world, no one is safe from electronic litigation.

Remember, once you post something, you usually can’t take it back.

If this concerns you – and what parent wouldn’t be concerned – talk to my office about adding a personal injury endorsement to your homeowner’s policy.

If you’re like the rest of us, you frequently receive solicitations and ads from cut-rate insurance companies promising to save you money on your auto or homeowners insurance. And, like most of us, you are being very careful with your money and looking at all your expenses in the hopes of cutting costs. However, buying cut-rate insurance may cost you much more in the long run.

Insurance is your first line of defense against life’s calamities. After a loss, you want to be able to count on a good insurance company to help you through all the problems that arise. For example, a full-service insurance company with a good reputation can:

• Provide prompt and courteous service year-round after a loss.
• Provide knowledgeable adjusters who can assist you in making important post-loss decisions.
• Locate a top-rated repair shop near your job or home to repair your damaged car.
• Promptly and conveniently provide a replacement vehicle while your car is in the shop if you purchased rental coverage.
• Pay for an alternative living space that is as similar as possible to your home if you are unable to occupy it after a loss.
• Provide a strong defense with excellent legal counsel if you are sued after a loss.
• Ensure prompt board-up services after a loss.
• Help you locate a trustworthy contractor if your home or roof is damaged.

Cut-rate insurance carriers cost less because they generally provide fewer services.

The decision to purchase insurance should go beyond price. Protection for your home and family after a loss is priceless.

Do your research and talk to people who have purchased low-cost insurance to find out if they are pleased with the claims service they have received. Chances are, they’re finding the cost of their “low-cost” insurance is far too high.

According to one large insurance carrier, water damage is a much more likely cause of homeowner claims than fires. Excluding claims for catastrophes, such as hurricanes, American homes are 10 times more likely to suffer from water damage than from fires.

Note that property maintenance is important in the event of a claim. In fact, you may not be covered for water damage that occurs over time due to inadequate maintenance. However, with good preventive maintenance you can easily eliminate such claims; below are several tips to help you reduce the risk of water damage:

• Keep your roof in excellent repair. Regularly clean gutters and replace any cracked or missing shingles. Watch for ceiling stains and make immediate repairs if you notice water seepage or a damp ceiling.
• Check washing machine hoses annually and replace them every five years.
• Check hot water heater connections and perform regular maintenance on your hot water heater. It should be drained annually, but if you do it yourself, be careful because the water could scald you. If you do not know how to drain the heater correctly, hire a professional.
• Run your washing machine and dishwasher only when you can stay home for the entire wash cycle. This simple tip can prevent you from returning home to a flood.
• Check icemaker connections annually. Moving the refrigerator for cleaning may crimp the hose. Each time you move your refrigerator, check to make sure your icemaker line is intact.
• Inspect your air conditioner drain lines annually for clogs or cracking.
• Remove and replace deteriorating caulking around your tub and sinks.

Although water damage is one of the most frequent causes of claims, by taking time each year to maintain your home and appliances, you can dramatically reduce your chances of a being a water-damage statistic.

The statistics are startling: Teen drivers are three times more likely to die in an auto accident than are those aged 25 to 64.

So it should come as no surprise when insurance companies raise your rates by 50% to 200% when your teen starts to drive. Fortunately there are ways to lower your rates, despite your teen driver.

Statistically, the longer your teen waits to drive, the less chance he or she will crash. Sixteen-year-old drivers crash three times more frequently than do 19 year olds. If your teen is not sufficiently mature, make him wait until he is.

A driver’s education course offers a lot of pluses for your teen and can reduce your rates by as much as 15%. Some insurance companies also offer good-student discounts.

Limit nighttime driving, as more than 40% of teen-involved fatalities occur between 9 pm and 6 am. Also note that distracted driving is now an epidemic in the U.S.; don’t allow calling or texting while driving. No passengers either; research indicates that the risk of driving fatalities increases with the number of passengers.

Once your teen turns 18, consider a separate insurance policy. If you decide to purchase a used car for your teen, be aware that older-model cars, while cheaper to insure, may have fewer safety features such as side-impact air bags.

Don’t forget, for your teen this is a rite of passage on the way to adulthood. Of course it’s important to keep your premiums low, but it’s more important to produce a good, safe driver.

Your tenant or homeowner policy is useful when there’s a theft or other loss. But remember, it does limit losses for certain personal property items.

Generally your personal property limit under your homeowner’s policy, known as Coverage C for contents, covers movable property such as televisions, clothing, furniture and other household items.

Coverage C should represent 50% of the insured value of your home: If your home is insured for $250,000, your contents coverage should be $125,000, which is known as a coverage “limit”. You can add extra coverage, or “endorsements”, which vary according to the insurance company.

There are also restrictions to coverage known as “sublimits” that limit the amount your insurance company will pay on specific personal property. Here are some typical sublimits under a homeowner policy:

• $200 for cash, gold, silver, platinum and coins
• $1,500 for securities, deeds, evidences of debt
• $1,500 for theft of jewelry, watches, furs and semiprecious stones
• $2,500 for theft of flatware in silver, gold, platinum and pewter
• $2,500 for theft of firearms
• $2,500 for business property on premises
• $500 for business property off premises
• $1,500 for portable electronic devices in a vehicle
• $1,500 for watercraft and related trailers and equipment
• $1,500 for trailers not used with watercraft

These coverage limits may still be inadequate; with the price of gold increasing, the theft of just one piece of jewelry can seriously erode those limits.

Items or lists of items can be covered by “scheduling” them, or you can purchase a separate policy if, for example, you have a boat that is worth far more than the sublimit.

The cost to schedule items or purchase a stand-alone policy is reasonable. You may find it well worth the extra to protect the items most valuable to you.

Many people who formerly owned or rented are moving in with relatives to save costs in this troubled economy. This means many rental properties and single-family homes are sitting vacant and awaiting sale or foreclosure.

If you own a property that is vacant, is your insurance coverage adequate? Vacant houses have higher risks of vandalism, arson and other losses; if a property is unoccupied for a certain length of time, usually 30 to 60 days, your insurance coverage may cease or offer only limited coverage in the event of a loss.

To determine if you should update your insurance information with my office, ask yourself these questions:

• Do you own a rental property that you can’t keep occupied?
• Have you moved out of your home while you try to sell it or await foreclosure?
• Do you travel extensively or perhaps live part of the year in another residence?

If you answered “yes” to any of these questions and haven’t updated your status recently, it may be time to do so. Should you suffer a loss, the status of your property when you completed your insurance application greatly affects your coverage. For example, if your home was occupied when you purchased your coverage, your insurance carrier will assume that it is still occupied. If, after a loss, an adjuster determines the house was unoccupied, your claim may be denied or significant portions of coverage may be declined.

Why run the risk? Contact my office and correct outdated information.

Many people start home-based businesses to earn extra income, and these businesses can come in all types, ranging from beauty salons to bookkeepers and everything in between.

During the start-up phase, there are many factors to consider: Will you provide a product or service? If you’re providing a product, will you make it at home? How will you market yourself? Where will you look for funding, and what financing programs are available?

Carving out your own niche is the fun part of starting a business, but several other areas need decisions as well: Will you operate as a sole proprietor or form a corporation? What accounting rules will you need to know? What relevant government agencies should you be aware of? And what kind of insurance will you need to protect your new venture?

Whatever your business, if you operate out of your home, you will need liability insurance for the products you make as well as for the customers you do business with.

Be aware that your homeowners’ insurance policy does not provide this coverage. Insurance companies want you to insure a business on a business policy.

In addition to liability concerns, you may have bought materials and equipment that are specific to your business rather than part of your household belongings. These also need to be covered by a business insurance policy.

If you use your own car to make deliveries or go to appointments, your personal auto policy will not cover this and you will need business auto coverage.

Fortunately, there is an inexpensive type of policy that can give you an adequate liability limit and coverage for your business property and auto. It’s called a business owners policy, and it’s offered by nearly every major insurance carrier.

Costs can run between $500 and $1,000 per year, depending on what you need to insure.

Did you know your credit score can be used for more than just getting a bank loan?

These days many types of organizations use your credit score to determine how much they will charge you to do business with them.

If you live in a state other than California, Hawaii, Massachusetts or Michigan, your insurance carrier has the right to use your credit score as one of the factors that determine your auto insurance premium.

Why are insurance carriers using your credit score? Insurance is all about assessing risk or exposure to loss.

In the past, auto insurance has always been rated on the vehicle itself. These days, given the many technological improvements to vehicles, insurance companies have decided to assess the risk of the vehicle and the driver.

Research shows people’s financial traits cross over into other parts of their lives.

People with higher credit scores pay their bills on time and use good judgment with credit card limits.

They also carry over their good judgment to driving and tend to get into fewer accidents.

People with lower credit scores don’t pay bills on time, have a high debt-to-credit ratio, and are more likely to have accidents and file claims.

Therefore, insurance companies base your premium on your credit score. And those with lower scores should start working on improving them.

Here’s how: pay bills on time and reduce credit card debt. Thirty-five percent of your credit score is weighted on paying your bills on time, and credit card debt represents 30%. You also can boost your score an additional 15% by keeping longtime accounts open.

Best of all, be in control of your financial picture. The better your credit score, the better you are handling your finances. Banks, insurance companies and others will take notice and you will reap the benefits.

A little-known but very useful insurance coverage for small- to midsize-business owners is Ordinance and Law coverage.

Basically, this is Property coverage available to building owners and landlords of either residential or commercial units.

Ordinance and Law coverage fills the gap in your property coverage if you own a building that is 25 years old or older.  

If you have a partial or total loss of your building, property insurance will cover only the repair or rebuild of the structure. It will not cover any upgrades that need to be done to comply with today’s building codes.

The most classic example would be a requirement to install wheelchair ramps on the rebuilt portion of the building. If the ramp wasn’t there at the time of a loss, then property coverage will not pay for it.

Ordinance and Law closes that gap in coverage. If adding a ramp is required by law, the Ordinance and Law coverage will pick up the cost of doing the work.

Building codes could require any number of changes: installing sprinkler systems; updating fire walls in apartments; accommodating fire codes for safe evacuation in the new structure; and making a building strong enough to sustain heavy weather like hurricanes, high winds or floods, and the list goes on as building commissioners change and evolve codes.

Ordinance and Law coverage is broken down into three sections:

Coverage A – Loss to the Undamaged Portion of the Building:

If there is a partial loss of 50% of the building, many cities and towns want you to demolish the entire building and rebuild according to today’s codes.

The coverage will pick up the cost to replace that undamaged portion of the building.

Accordingly, the limit of coverage is usually the same as the building limit listed in the Property coverage.

Coverage B – Coverage for the Cost of Demolition:

Now that you have to demolish an entire building that was only partially damaged, your expenses just skyrocketed, right? No. Coverage B will pay for bulldozing the undamaged portion of a building. This limit of coverage is usually a percentage of the building limit coverage.

Coverage C – Coverage for the Increased Costs of Construction:

This is the portion of coverage that pays for making all the changes that bring the building up to code. This limit would be determined by the amount you would need to make any changes.

This might take a bit of research of your town’s laws to see what changes you would need for your building. But it is time well spent should a loss occur.

Once changes have been made, you can adjust your building limit to include the new total value of your “up to code” building.

However, it is still wise to keep Ordinance and Law coverage, since laws are moving targets.

You don’t want to be caught short at the time of a loss if you need to comply with new building codes.

If you own a business and have auto loans or lease your vehicles, you may want to think about auto loan/lease gap coverage.

If one of the vehicles is totaled in an accident, you might think that you would no longer have to pay off the balance of any loan or lease attached to that car.

However, that is not the case, and it could present your business with a real financial strain.

Your insurance carrier will give you the depreciated value to replace the totaled vehicle. However, that depreciated amount may not be enough to cover the remaining outstanding amount of the loan or lease.

If, for example, a $25,000 car is totaled in the first year of ownership and the loan has not been paid off, you could be in trouble, because the insurance company would give you only the depreciated value of the car. If that figure were $20,000, you’d be responsible for the remaining $5,000 on the loan or lease. Therein lies the problem.

If you are a business owner with many vehicles, you can multiply this scenario to see how it could add up quickly.

Take a few minutes to take an inventory of the vehicles used in your business. If a vehicle is newer, there may be a larger loan or lease than on an older vehicle. Gap coverage could come in handy here. You may not want to replace older vehicles if they are totaled. In that case, gap coverage wouldn’t be needed.

Most insurance carriers offer gap coverage for a very reasonable premium. It could save you a lot of headaches.