Insurance News and Information

Owning an All Terrain Vehicle

Tue, 29 Nov 2011 20:15:00 GMT

“Risk Managing All-Terrain Vehicles”

from Big “I” Virtual University

A property owner who owns a 70-acre farm was asked to allow friends with ATV's to access the property for off-road riding. He was concerned about the liability associated with this permission should he consent. Does his insurance protect him? Is there anything else he can do?

In the field of risk management, there are several methods of handling risk. One of those is called "avoidance." It's like the old joke where the patient tells his doctor, "Doc, it hurts when I do this." The doctor replies, "Well, don't do that." In the scenario described above, the best risk decision is to not give permission for the use of ATV's on property you own. Jim Mahurin, CPCU, ARM is a Nashville, Tennessee based risk management and insurance consultant who has seen "friendly" situations such as this escalate into extraordinary liability claims once a serious injury transpires.

"Let me suggest caution in regard to the ATV question. I have dealt with situations involving ATV's and property owners for almost twenty years. Almost all of them were bad. Really bad.

"One project was to perform a risk assessment for a private community following a catastrophic ATV mishap. They owned several thousand mountainous acres surrounding a lake and housing area. ATV use had been very popular in the community. The tragedy was quite an education for everyone, the seriousness of the situation accentuated somewhat by the payment of several hundred thousand dollars not covered by insurance.

"ATV operation is dangerous. A sizeable number of mostly young people are killed on these machines every year. A far larger number suffer catastrophic injury. The injury profile arising from ATV use includes a high incidence of debilitating intracranial and cervical trauma. If the riders wears helmets, the injury patterns are more upper and lower cervical, with a reduced incidence of intracranial trauma. The secondary traumatic pattern tends toward legs and pelvis areas. A not uncommon problem is brain embolism. Both primary and secondary traumatic injury patterns frequently result in permanent disability or death.

"ATV operators are usually young, and the costs associated with fatalities often pale in comparison to the expense of caring for a permanently and totally disabled youth. As you pose the question about reducing or transferring liability, let me suggest you assume the situation from which you have to defend yourself is a quadriplegic or catastrophic brain injured youth facing fifty years of nursing home confinement. This is more common than you think and juries are quite sympathetic.

"The ATV industry reached an agreement with the U.S. Department of Justice several years ago. The industry agreed to take the three-wheeled ATV's off the market and develop safety standards for the use of the four-wheeled models. The industry has also worked to develop some procedures for the operation of ATV's on private land and address the issue of liability. The industry materials are usually available from ATV dealers. I found them to be excellent.

"The issues of liability are complicated. Since each state has differing laws with regard to negligence, the involvement of an attorney is very important. A separate problem with ATV operation is the uninvited user. If an area is used by one party, other ATV riders may show up uninvited and use the site as if it were public property. This creates a different set of problems.

"With regard to insurance, if the owner makes the unfortunate decision to allow ATV riders to use his property, it is important to make sure they have insurance coverage and to provide evidence. You want to trigger contractual coverage of the party using the property, even though that is likely to be of little comfort to you when you are sued for an injury or death described above.

"One final comment...ATV's often cause severe erosion and soil compaction problems. The farmer in question needs to watch the impact of the ATV's on his land very closely. He may find portions of his land compacted and suitable for paving in a remarkably short period of time."

If the insured insists that he wants to do this, then he should be very aware that the situation could ("probably" might be a better word) come back to "haunt" him (no pun intended...this really could get serious). If so, he would certainly want a hold harmless agreement signed by the ATV owners, though that wouldn't protect him from possible third-party actions that have been recognized in some legal jurisdictions. These can arise from non-riders who are injured or unknown persons who the ATV owners allow to ride their vehicles. In addition, it's unlikely that such a waiver of liability would be enforceable if the signer is a minor.

In addition, the landowner would want evidence that the ATV owners/riders have insurance. In general, if they have homeowners coverage, it will not protect them or persons they injure while using an owned ATV off their own premises. Special recreational vehicle policies are usually necessary and they should be written with VERY high limits of liability, and most likely in conjunction with a personal umbrella policy with at least $2 million limits.

This scenario is a great illustration of Risk Management 101. IF the landowner is insistent upon allowing this activity to take place on his property, he'd certainly want to make sure that proper coverage and high limits are in place...is he willing to pay for this to maintain these friendships? Perhaps his excuse for not allowing this would be to just show these folks how much this is going to cost him in increased insurance premiums. And, if they offer to reimburse him, let him know that, with such remuneration, he may now have a "business" exposure not covered by his policy.

A Note from Our Clients

Tue, 08 Nov 2011 21:08:00 GMT

Dear Mr. Perry,

David and I wanted to thank you for taking care of switching our workers' compensation policy over and also for sending out all of the the new certificates of insurance to our contractors. We couldn't be more pleased with the service from Dyeco and from you in particular and wanted you to know how much we appreciate your hard work on our behalf. It is rare to find such extraordinarily outstanding customer service in these times!

Just the fact that we really feel like you are looking out for our interest and taking the initiative to look into our policies is amazing--something that we all mean to do but the day to day activities of running a small business can cause one to overlook .

You have really helped our business save some much needed money in these depressed economic times that we can put towards other needs in keeping the business afloat. Thank you again and I will be sure to recommend your agency to all that I know who may be looking for insurance coverage.

B. Coburn

Shaken or Stirred?

Tue, 08 Nov 2011 21:08:00 GMT

Martini. Mojito. Cosmo. What’s your restaurant’s signature drink? Alcohol is a major source of revenue (and fun!) for many restaurants, but it also raises serious liability issues. What happens if a customer overindulges, gets into his car and has a serious accident? Not only can impaired driving accidents lead to property damage, injuries or even death, they can also seriously impact your business. In many states, if your restaurant is found to have “over served” a patron, you may be held liable for that crash.

Reduce your chances of getting into this unpleasant situation by taking the time to train your staff on how to tell if a patron has had too much. Explain the warning signs of intoxication, and when it’s time to cut someone off and call them a cab. Support your staff in their decisions, and make sure that someone is always on hand to help in case a situation gets out of hand.

Also be sure that your restaurant has enough liquor liability insurance in case of the worst. Not sure if you have the coverage? Give us a call, and we’ll help you sort everything out.

Work Related Injuries Excluded on Health Insurance?

Tue, 08 Nov 2011 21:07:00 GMT

Its true. Any work related injury a business owner or their employees sustain while on the job is excluded from health insurance benefits. Cover yourself and employees on a Workers' Compensation policy to collect from the following benefits, in the event an injury occurs.

Injuries or loss of limbs
Diseases like emphysema or repetitive motion
Injury inflicted at work
Medical treatment
Rehabilitation
Lost wages (up to two-thirds of the salary)
Death
Liability insurance for the company for lawsuits filed by injured employees

Excuses, Excuses: Five reasons people make buying life insurance anything but top priority

Tue, 08 Nov 2011 21:06:00 GMT

Buying life insurance rarely makes the top 10 on our to-do lists—and we have plenty of excuses as to why. Here are top reasons people push it off, and why that might not be the best idea:

1) “I’m covered through work.”

Employer-sponsored life insurance is a great benefit to have. But work benefits are usually limited. What’s more, they don’t automatically go with you if you change—or lose—a job.

2) “I’m healthy.”

The fact is, the best time to buy life insurance is when you’re in good health. The younger you are and the healthier you are, the better your rates will be.

3) “I’m not insurable.”

Most of us are never as healthy as we want to be. But you might be surprised to find out that you are, in fact, insurable, regardless of age or health. It’s worth it just to ask.

4) “It’s too expensive.”

There are many types of life insurance available, and there’s usually something that will fit in everyone’s budget. Once you break it down, life insurance is basically a dollars-a-day expense.

5) “I’m single and don’t have children.”

Not being married or having little ones around now doesn’t mean there aren’t other plans in store for you in the future. Plus, if you are in your 20s or 30s and have debts such as a car and a home, it’s good to get insured now while the cost is the most reasonable.

Is today the day?

The truth is, we don’t usually think about items such as life insurance until someone asks about it, or worse, someone we know experiences a life crisis that puts things in a new light. But why wait? Let us be the one to ask you about it, rather than you experiencing a loss that jolts the issue to the top of your list.

We can help you find an Erie Family Life insurance policy that fits into your budget and covers your needs for your stage of life. Plus, if you’re an ERIE auto and homeowners policyholder, you can save on your premiums when you add a life policy from Erie Family Life*.

Clipping Coupons

Tue, 08 Nov 2011 21:06:00 GMT

Everyone loves saving money. We take the time to clip coupons, comparison shop and wait for sales when it comes to groceries, clothes and electronics. Why not apply your super saving skills to your insurance, too?

If you have ERIE’s homeowners insurance, see if you qualify for some sweet, sweet savings:
Multi-Policy Discount: Buy more, save more. When you bundle your ERIE auto, home, life insurance, or other insurance, you can see substantial savings on your insurance bills.
Smoke Alarm Discount: Installing smoke alarms can save your life in case of a fire, but they can also save you cash if you’re an ERIE homeowner.

Burglar Alarm Discount: Protecting your possessions and your family with a burglar alarm can give you peace of mind…and a chunk of change.

Do you qualify for a discount? Want more information on how you can save on your insurance? Give us a call today, and let us walk you through every step of the process. Beats clipping coupons any day.

Disaster Tips

Tue, 08 Nov 2011 21:06:00 GMT

Special Thanks to Travelers Insurance, we are happy to share this very important information. You can find the original article at http://www.travelers.com/claim/catastrophe-resources/disaster-tips.aspx.

Your home is one of your most important investments. By keeping it properly maintained in every season, you can help reduce the risk of a loss and ensure the safety and well-being of your friends and family.

Please review the following information and familiarize yourself with these important inspection and safety tips.

Survival Kit

When preparing for a disaster, be sure to make a survival kit that includes:

Canned or other non-perishable food
Non-electric can opener
First aid kit and manual
Portable radio and/or television
Flashlights
Extra batteries
Water in non-breakable containers
Prescription medicines as needed
Extra clothing and blankets
Emergency cash and credit cards
A copy of your Travelers insurance policy

Top

Earthquake

Before

Hang heavy items such as pictures and mirrors away from beds, couches and anywhere people sit.
Fasten shelves securely to walls and place large or heavy objects on lower shelves.
Be sure that water heaters and other gas appliances are properly bolted down or supported on the floor or wall.
Make sure that your house is properly bolted to the foundation.
Review how to shut off utilities in an emergency with all family members.
Prepare a survival kit.
Identify safe places with your family in each room, such as under sturdy desks or doorways where you can seek cover.

During

If you are indoors, seek cover under one of the safe places identified. Stay inside and avoid all places where glass could shatter, such as windows and mirrors, or where heavy furniture could fall over.
If you are outdoors, move away from buildings, overhead wires and streetlights. Stay put until the earthquake passes.
If you are in an automobile, pull over and stop your car in a clear area away from bridges, buildings, overpasses and trees. Stay in the car and after the earthquake has stopped, proceed with caution avoiding ramps and bridges that may have been damaged. Be sure to turn on the radio for current earthquake information.

After

Be prepared for aftershocks that may cause additional damage.
Listen to a battery-operated radio or television if possible.
Clean up any flammable liquids and leave immediately if you smell gas fumes.
Stay out of damaged buildings. Seek temporary housing if you are not able to return to your home just yet.
Promptly report the loss to Travelers using the toll-free claim reporting number.

Top

Hurricane

Before

Understand the difference between a hurricane watch and a hurricane warning. A hurricane watch means that a hurricane may occur within the next 24 to 36 hours. A hurricane warning means that a hurricane will probably strike your area within the next 24 hours.
Prepare a survival kit.
Plan your evacuation route in advance of the storm.
Close storm shutters and board up all windows.
Stock up on drinking water and non-perishable goods.
Have a supply of batteries and be sure you have flashlights and a portable radio in good working condition.
Review how to shut off utilities in an emergency with all family members.
Secure all outdoor objects or move them inside.
Secure your boat or move it to a safer place.
Fuel your car in case you must leave immediately.

During

Listen to the radio for important storm information and instructions.
If at home, stay inside and away from all windows, skylights and glass doors. Do not go outside, even if the weather appears to have calmed. The "eye" of the storm can pass quickly, leaving you outside when strong winds resume.
If you must evacuate, leave as soon as possible and be sure to tell someone outside of the storm area where you will be.

After

Stay tuned to the radio or television. If you have had to evacuate, return home only after authorities advise it is safe to do so.
Avoid downed power lines.
Beware and check for gas leaks or electrical system damage.
Make temporary repairs as necessary.
Promptly report the loss to Travelers using the toll-free claim reporting number.

Top

Flood

Before

Learn the flood warning signs and alert signals of your community.
Collect emergency building materials if you live in a frequently flooded area: plywood, plastic sheeting, lumber, nails, shovels and sandbags.
Prepare a survival kit.
Plan and practice an evacuation route. Establish a meeting place should your family get separated.
Review how to shut off utilities in an emergency with all family members.
Check your insurance policy. Ask your Travelers agent or call a claim representative about flood insurance. Homeowners policies do not usually cover flood damage.

During

Listen to a battery operated radio or television for the latest storm information. If advised to evacuate, do so immediately.
Move to high ground, avoid rising waters and do not walk or drive through any floodwaters.
Stay away from downed power lines and electrical wires.

After

Listen to the radio and do not return home until authorities indicate it is safe to do so.
Be watchful of snakes that may have found their way into your home.
Throw away all food that has come in contact with floodwaters.
If your basement has flooded, pump out the water gradually. Remove about 1/3 per day to avoid structural damage.
Promptly report the loss to Travelers using the toll-free claim reporting number.

Top

Tornado

Before

Learn the warning signs and alert signals of your community.
Understand the difference between a tornado watch and a tornado warning. A watch means that tornadoes may develop, while a warning means that a tornado has been sighted and you should seek shelter immediately.
Prepare a survival kit.
Conduct drills with your family. Designate an area of your home as a shelter and practice what the plan would be should a tornado occur.
Move cars and other outside objects inside the garage.

During

At home:

Seek shelter away from windows in the center of the room. Basements and storm cellars are the best havens, but if there is no basement, take cover in a bathroom, closet, or under a sturdy piece of furniture.

At work or School:

Go to the basement or an inside hallway at the lowest level. Keep away from large, open areas such as auditoriums, cafeterias and gymnasiums. Lie low and use your arms to protect the head and neck.

In a car:

Do not try to outrun the tornado. Stop the car, get out, and if there is no facility nearby to take shelter in, lie in a low area such as a ditch.

After

Keep calm. Stay in your shelter until after the storm is over.
Listen to the radio or television for the latest storm information.
Check for gas leaks or electrical system damage.
Watch for downed power lines when going outside.
Promptly report the loss to Travelers using the toll-free claim reporting number.

Top

Wildfires

Before

Give your yard a good annual clean-up and maintenance. Prune tree limbs within 10 feet of your home, clear away dead plants or branches, and remove pine needles, leaves, and other debris from the yard, roof, and gutters.
Prepare a family evacuation plan. Have more than one escape route and designate a meeting place if family members are in different locations when an evacuation order is given.
Make sure adult family members know how to shut off utilities and how to use fire extinguishers.
Prepare a survival kit.
Keep an updated inventory of your personal property and important documents. (Click here for information on how to conduct a Personal Property Inventory.)

During

Listen to the radio for important reports and evacuation information.
Remove lightweight and non fire-resistant curtains from around windows.
Place combustible patio furniture in the house or garage. Move all flammable furniture away from windows to the center of the house.
Close windows and interior doors.
Connect a garden hose to the outside tap and place lawn sprinklers on the roof. Wet the roof and any shrubs within 15 feet of the house.

If you must evacuate:

Shut off propane at the tank, or natural gas at the meter, and turn off all pilot lights.
Turn on a light in each room of the house to increase the visibility of your home in heavy smoke.
Wear protective clothing including sturdy shoes, long pants, and long-sleeved shirts, gloves, and a bandana or handkerchief.
Advise a friend or family member outside the wildfire area that you are leaving and where you will be.

After

Stay tuned to the radio or television for updated information. If you had to evacuate, return home only after authorities advise it is safe to do so.
Check for hazards such as electrical shorts or gas or water leaks. Turn off any damaged utilities, and arrange for the electric or gas company to test, repair, and turn utilities back on.
Check the roof and attic for smoke, sparks, and embers.
Throw away any items such as food or medicines that have been contaminated by smoke or fire.
Promptly report any loss to Travelers using the toll-free claim reporting number.

Be a Boy Scout

Tue, 08 Nov 2011 21:05:00 GMT

If you were ever a Boy Scout as a kid, you know how important it is to be prepared. Prepared for what? For anything that life throws at you. It’s true when you’re camping in the woods, and even more true when you’re running a business.

We really hope that your business is never affected by an earthquake , tornado, freak meteor from the sky or other natural disaster. But these things do happen, and an ounce of preparation before the unexpected can make picking up the pieces much easier.

·Back up your data early and often at an offsite location. An external hard drive won’t help you if it is damaged or destroyed in a storm. Consider offsite data storage or storage in the cloud.
·Make a comprehensive list of all of your equipment, furniture, and fixtures. It’s much easier to file your claim with a full list of your property. Pictures are even better!
·Have a disaster preparedness plan. Do your employees know what to do and where to go in case of an emergency? What if you have customers in house when disaster strikes? Click here for more information on creating a plan, and make sure to store it both on and offsite.

It’s estimated that 40 percent of businesses never reopen after a natural disaster. With a little planning and some help from an Erie property insurance policy, you’ll be back on your feet before you know it. Call us to talk about how you can protect your business.

Power Struggle: The Cost of Electrical Surge

Tue, 08 Nov 2011 21:05:00 GMT

Your family is forced to stay home due to the big storm hovering over the house. The comforting sounds and bright screen of your 52” LCD television eclipses the noise from outside. Then it happens: Just as you’re about to discover who gets voted off the island, your family is startled by sudden darkness.

After the outage forces your family to live in darkness for a few hours, the local power authority flips the switch and all is well…for a moment. The sudden surge of power is too much for your electronics to digest, and they’ve returned to oblivion.

American households spend billions on electronics annually. The average household contains thousands of dollars of electrical goodies like appliances and electronics, including televisions and computers. Limitations found in most standard forms of home insurance could leave you in the dark; such limitations say your insurance policy will not pay for damage to electronics that is caused by a power surge.

Renters and condominium unit-owners will not find comfort in their standard insurance policies, either; the same limitations usually apply.

A sudden surge in electrical current is not uncommon. There are a number of surge-protection devices designed to prevent this from compromising the life span of your most precious toys. But this hardware is not full-proof, and can still leave you and your family in the dark.

Losing your electronics due to power surge can be a financial disaster. Imagine having to replace that $2,000 television that is hooked up to the $1,000 home theater system you spent two weeks wiring, both of which are now left sizzling after a sudden jolt?

In many home insurance policies, this limitation only applies to personal property, not to “building property.” This means items that are considered part of your house, such as a built-in range, burglar alarm system or central heating/AC system are covered by your home insurance if bereft of life due to power surge. However, this is not true for all home policies.

There is hope. Most standard home insurance policies can be modified to cover losses to property caused by electrical surge. If your current policy cannot be modified, consider asking your agent to shop for a policy that includes the coverage or can be modified to do so.

Others may have a second option. Some power companies offer insurance for surge protection. They add a premium to your power bill, and in return offer insurance which can provide valuable coverage and allow you to collect damages without making a claim against your home insurance company or paying a deductible.

The cost of insurance provided through a power company varies; one major provider charges between $5 and $13 monthly for coverage ranging from $2,000 to $5,000.

However you chose to do so, purchasing this insurance coverage can be a tremendous relief for you and your family if the sudden voltage puts your prized possessions out to pasture.

Article provided by Trusted Choice (TrustedChoice.com)

Think your home, condo or business insurance policy covers flood? Think again!

Tue, 08 Nov 2011 21:04:00 GMT

Two Types of “Water Damage”

A standard home insurance policy will cover losses caused by water that accumulates in the home resulting from the accidental discharge of a system of appliance, such as a broken hose or valve. That same policy will not cover losses caused by water that accumulates as a result of the overflow of a body of water or runoff of surface water.

Common Causes of Flood

Floods often result from torrential rainstorms and hurricanes. Floods also commonly result from snow melt. Floods also result as a side effect of development- such as road construction or a new housing community- that alter storm water drainage patterns.

Who is at Risk?

Flood insurance is not just for people living or working on the coast. According to the National Flood Insurance Program (NFIP), 31 percent of the properties damaged by floods are located outside of a special flood hazard area as designated by FEMA. The NFIP reports that floods happen in all 50 states and that floods are the second most common cause of property damage behind fire.

Property owners are often mislead into believing that flood insurance is only available for properties that are located in a special flood hazard area or “flood zone.” Unfortunately, this myth has caused many property owners to suffer from uninsured flood losses that could have been easily covered. The only requirement is that the property is located in a “participating community.” This could be a township, municipality, city or county that has agreed to participate in the NFIP.

Preferred Risk Policy (PRP)

The NFIP offers the PRP for homes and businesses that are not located in a special flood hazard area and do not have a history of flood claims. The PRP allows eligible buyers the opportunity to purchase flood insurance at a pre-determined rate. PRP rates are intended to remind property owners that regardless of where the property is located the aforementioned data is proof that it’s still a good idea to purchase flood insurance.

A Few Unique Features of Flood Insurance

It is important to remember that a flood insurance policy is a separate policy from your home, condo, or business insurance. This means that flood insurance is subject to its own terms and conditions.

Following are a few of the unique features:

Waiting Period

There is a 30-day waiting period from the date you first purchase flood insurance to the date that policy takes effect. This is designed to prevent the purchase of coverage for losses in progress. The 30-day waiting period also applies to changes made to an in-force flood policy. For example, if you currently carry $200,000 in coverage for your home and decide to raise that amount to $250,000, you must wait 30 days before the change will take effect.

The waiting period does not apply to a renewal policy. There are two exceptions to the 30-day waiting period: the first is if the policy is required in conjunction with the closing of a loan. The second is for property owners that previously were not required to purchase flood insurance but are now being told they must as a result of a new map from FEMA indicating that property is now located in a special flood hazard area.

Two Deductibles?

Let’s say a flood causes $50,000 in damage to your home and $10,000 to contents. Your policy includes a $1,000 deductible. That deductible will apply once towards the recovery of your home and once towards the recovery of your contents. This means it’s possible you will pay the deductible twice for the same loss: once for the dwelling and once again for contents.

Note that lenders who require owners to purchase flood insurance typically only require insurance on the dwelling or building and do not require flood insurance on contents. Owners should carefully consider the cost to repair or replace contents before choosing to forgo insuring them.

Other Structures

An important feature of your home insurance is the inclusion of coverage for certain types of other structures such as a detached garage or pool house. The only other structure that the flood insurance policy will extend coverage to is a detached garage. Other structures may be eligible for coverage under a separate flood policy.

No Additional Living Expenses

An important feature of your home insurance is the ability to collect money from the insurance company to pay living expenses while your home undergoes repair. These expenses may include hotel, food and other expenses. Unfortunately, the flood insurance policy offers no coverage for additional living expenses- such costs must be paid out-of-pocket.

These examples are intended to illustrate some of the important differences in flood insurance and your typical home, condo or business policy. There are several other factors that differentiate a flood insurance policy from the type of insurance you may already have. This is why a conversation with your Trusted Choice^® insurance professional is the important first step in learning how to protect your biggest asset from flood damage. Call today!

Source: National Flood Insurance Program, www.floodsmart.gov

What is Employee Benefit Liability?

Tue, 08 Nov 2011 21:04:00 GMT

Provides employer coverage for liability arising out of errors or omissions in the administration of an employee benefit program, i.e., failure to advise employees of benefit programs. This does not cover Fiduciary Liability as a result of ERISA compliance.

What is Employment Practices Liability Insurance (EPLI)?

EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated. The number of lawsuits filed by employees against their employers has been rising. While most suits are filed against large corporations, no company is immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP). An endorsement changes the terms and conditions of the policy. Other companies offer EPLI as a stand-alone coverage.

EPL provides protection against many kinds of employee lawsuits, including claims of:

Sexual Harassment
Discrimination
Wrongful Termination
Breach of Employment Contract
Negligent Evaluation
Failure to Employ or Promote
Wrongful Discipline
Deprivation of Career Opportunity
Wrongful Infliction of Emotional Distress
Mismanagement of Employee Benefits

Flood Insurance: What It’s All About

Tue, 08 Nov 2011 21:04:00 GMT

Not so long ago, Hurricane Katrina pounded the Gulf coast of the United States, wiping out more than 250,000 homes.

That massive storm painfully brought to public awareness the fact that flood damage is not covered by homeowners insurance.

Many consumers were unaware that, even though their homes were ruined in the hurricane, they were not insured since they lacked flood insurance. Insurance against flooding (rising water) is different from insurance against driven rain or leakage, which often are covered. Since that time, tens of thousands of Americans have purchased flood insurance for the first time.

Three perils—fire, lightning and windstorm—are traditionally covered by homeowners property insurance. Flooding is excluded from homeowners coverage, as floods tend to be catastrophic in nature causing widespread damage in a geographic area. Private insurers are not able to absorb all that risk.

Hurricanes get a lot of attention, but big storms are not the only cause of floods, nor are floods limited to coastlines. In fact, flooding is the nation’s most common and frequent natural disaster, according to federal officials.

Flood insurance first came about after the federal government was called upon to bail out communities. As the nation grew after World War II, flood-damaged communities turned to the federal government for disaster relief and rebuilding assistance. In the 1960s, Congress sought a more proactive system, and in 1968 created the National Flood Insurance Program (NFIP).

This community-based insurance mechanism requires municipalities to adopt and enforce flood-abatement measures. In order to join the NFIP, it must adopt a program of corrective and preventive measures for reducing future flood damage (including zoning and building requirements). Flood insurance is available only to consumers in communities that have joined the NFIP.

The National Flood Insurance Program (NFIP) is part of the Federal Emergency Management Agency (FEMA). It provides flood coverage to homeowners and renters as well as commercial building owners. Coverage is provided through Trusted Choice^® insurance professionals as well as through other insurance agents.

Flood insurance may not just be desirable for homeowners, it may be required. For example, mortgage lenders are legally bound to require consumers buying a house in a high-risk flood zone to have flood insurance.

Consumers owning or renting property in low- or moderate-risk flood areas can buy flood insurance, and may be eligible for a lower-cost preferred risk flood policy.

Flood insurance protects against losses to buildings and contents (not the property on which they sit). Coverage is in effect whether flooding results from heavy rains, storm surge on the coast, melting of snow, blocked storm drainage systems, levee or dam failure, or other causes. Waters must cover at least two acres or affect at least two properties to be considered a flood for insurance purposes.

Residential flood insurance provides as much as $250,000 of coverage for dwellings for 1-4 families, and as much as $100,000 for contents. Commercial property owners can get up to $500,000 of insurance for the building and the same amount for contents. Condominiums also can be insured.

Unlike homeowners insurance, flood insurance has a waiting period. The NFIP sets a standard 30-day waiting period before flood coverage goes into effect (except for lender-required flood insurance, if more insurance is required because of a flood map revision, or if existing coverage is being increased upon renewal).

Teen Drivers

Tue, 08 Nov 2011 21:03:00 GMT

“Teenage Drivers”
from Big “I” Virtual University
Inexperience and immaturity make it much more likely that a teenage driver will have an
accident than an adult driver. A driver in the age group of 16-19 is FOUR times more likely to
have an accident than an older adult and TWICE as likely to die in an auto accident (in some
states, a 16-year-old is TWENTY times more likely to have an accident than an older adult). A
16-year-old is THREE times more likely to have an accident than someone 18-19 years old.
OVER ONE-THIRD of all deaths in the 16-19 year old range are due to auto accidents.
From an insurance standpoint, it is more expensive if your child has a vehicle driven primarily
by them. Consider not getting your child his/her own auto and letting him/her drive a family car.
If you insist on providing him/her with an auto, consider buying an inexpensive, but reliable,
used car. Anticipate at least one or more fender benders. In general, you are better off not
buying collision insurance and reporting these minor claims...an increased claims frequency
can result in higher premiums or non-renewal.
Unless it is impossible, do not insure your child's auto under a separate policy. It is almost
always advantageous, from a pricing and coverage standpoint, to have your child's auto on
your policy. In addition, since statistics show conclusively that teenagers have a higher claims
frequency and severity, make sure you have a personal umbrella policy with at least a $1
million limit. The cost can be as low as $150, but could be as high as $300 or more. Still, it's a
bargain to protect yourself and your assets from catastrophic loss.
Have your child complete a driver's education program. That can reduce your premium by 10%
or more.
If applicable, ask for a "good student" discount. If your child's grade point average is a "B" or
better, you could get a discount of 10-20% or more.
MOST IMPORTANT, practice sound loss control. When dealing with teenage drivers,
preventing accidents is more important than relying on insurance to fix things. Insurance can
replace your vehicles and pay for broken bones, but it can't replace the most important thing in
life...your child. So, consider the following:
Talk seriously to your child about the dangers of driving, including driving under the influence,
horseplay, etc. Use statistics from web sites such as www.iii.org to impress upon them how
dangerous driving can be.
Consider prohibiting your teen from transporting more than one passenger...some state
graduated licensing laws may require this too. Reckless behavior is directly proportional to the
number of teens in a vehicle. By limiting the number of passengers, you reduce the chance
that peer pressure and dares might result in your child taking foolhardy chances.
Consider having your child sign a "contract" similar to the one at
http://www.parentingteendrivers.com ― if anything, it will get his/her attention. Driving is a privilege, not a right. If your child violates your rules or the rules of the road, take
that privilege away from them until they can demonstrate that they understand the seriousness
of this responsibility and the possible consequences of their actions.
Copyright 2002 by William C. Wilson, Jr. Reprinted with permission.
NOTE: Policy coverages and circumstances can change at any time, so the information above may not be
accurate at the time of reprinting or subsequently to that time. IIABA does not assume and has no responsibility
for liability or damage which may result from the use of any of this information. The most current, up to date
version of this article can be found at IIABA’s Virtual University at http://vu.iiaa.net.

Personal Auto Policies and Company Cars

Tue, 29 Nov 2011 20:15:00 GMT

“The Personal Auto Policy & Company Cars”

from Big “I” Virtual University

Question: "I am supplied a car by my employer and am permitted to use it for both work and pleasure. My employer told me I need my own insurance to cover me when I use the car off duty. How can I do this under my personal auto policy?"

Under the personal auto policy (PAP), an exclusion states that there is no coverage for the use of an auto furnished or available for your regular use. It sounds like this person fits this exact situation; thus, when he drives the employer-owned auto (for business or personal use) his PAP does not protect him. The same can be said for his spouse or other family members if they drive the auto. Normally the policy written in the name of the business would protect the employee but, in this case, the employer told the employee he was not protected off duty.

This being the case, the employee faces a huge gap in coverage. The solution is easy though: simply add an endorsement commonly referred to as the Extended Non-Owned Coverage for Named Individuals to the policy for about $20 per six months and the exclusion disappears with regard to liability and medical payment claims. Make sure to add each person in the family by name to the endorsement if there is a chance they will ever drive the employer-owned auto.

However, a coverage problem does arise with regard to damage TO the company car. The same "furnished or available for your regular use" exclusion pops up under physical damage and the bad news is there is NO endorsement to fix the gap. So, if you take the car to the store at night to pick up milk and wreck the car, your auto policy does not pay for the damage...coverage lies solely with the business auto policy, which opens up a can of worms if the business auto insurance carrier seeks a subrogation claim against the employee. Subrogation is where an insurance company assumes their insured's legal rights to pursue recovery from a negligent party. In this case, if the employer has a legal right to require the employee to pay for the damage, the business' insurance company can pay for the damage to the auto, then pursue recovery against the employee.

So, there you go. This situation is very common today. Whenever an employee is furnished an auto for his regular use (or even has one available for his regular use), the endorsement fixes the problem...except for physical damage to the auto.

BUT...what if your PAP carrier won't add the Extended Non-Owned endorsement to your personal auto policy? If your company won’t (or can’t) add the endorsement (or a similar one if they are a non-ISO company), you have a huge coverage gap. If this is the case, the best option (and maybe only option) is to buy a "Named Non-Owner policy" to fill the gap. In general, that policy provides options to include liability, medical payments, and uninsured motorist coverage, but not no-fault or physical damage coverage. It, in effect, accomplishes about the same thing as the Extended Non-Owned endorsement does, but a price that’s much more expensive.

Whereas the "Extended Non-Owned" is going to cost perhaps $50 in most cases, the "Named Non-Owner" is going to run into the hundreds of dollars most likely...typically about 50% of the "owned" premium. With the Named Non-Owner policy, you must be careful in that every person to be insured must be named. That means, for example, that you'll have to name dad, mom, and each kid to be covered. It’s not enough to name just one parent. For such a Named Non-Owner policy you may be looking at a specialty auto insurance market or the residual market in many cases.

So there you have it. First try the Extended Non-Owned route and, if you hit a brick wall, fall back to the Named Non-Owner route. Either way, fix that gap in coverage!

P.S. Confused? NOW you know why the advice of a good, professional insurance agent can be invaluable!

Closed January 2nd

Tue, 29 Nov 2011 20:14:00 GMT

Our offices will be closed on January 2nd. An agent will be on call for emergency situations. All other queries will be responded to at a later date.