Category: Uncategorized
Condominium Owners Association Insurance
Condominium Owners Association insurance is under the general scope of Professional Liability. This insurance guards those entrusted with the maintenance fees associated with condominiums, wether it is for commercial or residential application from liability exposures.
Condominium Owners Association insurance is for the specific purpose of guarding those responsible with the direction of funds from maintenance fees and dues from liability wether true or false. However, if those responsible for the funds knowingly committed fraud most policies would be void.
For this very reason condominium owners associations will typically purchase this type of insurance policy to guard against this type of claim. In fact board members of a condominium owner association will typically confirm there is coverage in place before joining the board.
For this reason it is important to any responsible condominium owners association to ensure that there is an active policy in place with desired limits. Limits can vary therefore it is important to confirm with the insurance company as to those limits and how coverage is triggered.
Good Home Insurance Companies
Since the largest purchase for the majority of Americans will be their primary residence it only makes sense to protect the asset properly and adequately. For many the tool they use to protect their home is home insurance.
Therefore, finding a solid and reliable home insurance company is very important. To do so it is important to check out the home insurance company’s rating on a website such as AM Best. Typically a homeowner would not want to use any company that is not rated “A” or higher with a positive or stable outlook.
Of course it is also important to consider real world feedback by inquiring of family and friends as to which home insurance companies they use and their experience with that particular one. Questions asked should range from; length of time with the company, response to claims, frequency of premium increases, their experience on the phone with representatives.
After these basic inquiries it is always prudent to have three or more home insurance companies quote your particular home being sure the coverage you are requesting is the same of all three. From there you will find that different home insurance companies have different coverage and bells and whistles.
Simply consider which one best fits your needs and budget and move forward with that particular home insurance company. Remember, you typically can change any time if you don’t like the carrier once you sign up or you can just simply re-shop it every year to determine the best current value.
What is “Gap Insurance”?
Gap Insurance is normally purchased at the time of a new car purchase when financed through a lending institution. The reason this is offered is due to the instant depreciation of the new vehichle the moment it is driven off the new car lot.
For example, a new car purchased at the sales price of $35,000 is typically depreciated by at least 20% within’ the first three months of ownership depending on the make and model. Since most auto insurance policies only cover the Actual Cash Value of an auto, the outstanding difference between the new car price and the depreciated car price can be a significant “gap”.
For this reason “Gap Insurance” is purchased to cover this difference between the amount paid and the depreciated value. Is it worth it? For some it may be worth the additional cost and for others possibly not. This strictly depends on the numbers and an individual’s risk tolerance.
What is an Inland Marine Policy?
This is a great question that address the hard to insure stuff that many Americans have but don’t know how to cover. Examples of Inland Marine items that can be covered are those things that have significant value but isn’t part of a permanent structure or contents. Such items are expensive jewelry, instruments like guitars, golf clubs, camera equipment and any other items of value that can be moved off of the insured’s premises.
The way this policy works is that the specific items and values are itemized on the policy and the insurance covers that specific item for the stated value. It may or may not have a deductible and it may be written for Actual Cash Value or Replacement Cost.
Other examples of Inland Marine items can be tractors and accessories, a workman’s tools, portable generators and radios or even fine art. Really the concept is for those expensive items that are portable and are can move off the insured’s premises. By calling an insurance carrier it is relatively easy to obtain quotes although some high value items may need verification and/or appraisal.
The cost for Inland Marine policies are usually inexpensive and well worth the price in comparison to the amount that could be lost otherwise.
What is the Best Home Insurance for Tier 1?
Living by the ocean certainly has it’s advantages and disadvantages. The beauty of ocean living however can quickly turn to a nightmare in the face of an oncoming hurricane. For this reason alone purchasing home insurance in itself can be a bit of a bad dream on it’s own.
Because insurers typically don’t like the potential for multiple losses at the same time they usually shy away from those types of risks. However, this is usually regulated by each carrier on what and where they will write home insurance. This of course doesn’t mean that they will cover “all risks” as they can and do usually exclude wind and flood.
Thankfully however, FEMA and a few others do sell both wind and/or flood coverage that can be independent from the personal home insurance carrier. Of course the premiums for insurance on homes in tier 1 areas will cost more due to the greater risk of loss, however, for many the luxury of beach living is worth the premium paid.
It is always best to start your insurance shopping by talking with your existing home insurance agent or insurance carrier to see what they offer and then requesting quotes from FEMA and other local agents in that area. Local agents will be familiar with the risks but it is still best to talk to a few local agents.
So if you’re planning to purchase a home or vacation home in these wind challenged areas that are at risk for hurricanes and/or flood, you may want to check into the insurability before purchasing. By considering the insurance costs for homes in tier 1 areas the buyer will be better equipped to budget the expenses of their dream home.
Commercial Insurance Agents
Commercial Insurance is required in many regards by all businesses in one way or another. The needs may be for Worker’s Compensation which is mandatory in all but two states (Texas and New Jersey), General Liability, Commercial Auto, Umbrella or Professional Liability. These are but a few examples of commercial insurance. Of course there is usually Property coverage for commercial businesses which includes the buildings and contents.
One distinction between commercial and personal insurance for example when it comes to Property coverage is that many businesses will have Loss of Business Income with Extra Expense Coverage whereas personal lines will not. This coverage protects the company from financial loss or at the minimum reduces the financial loss should the source of revenue be interrupted by some loss.
Where many businesses make mistakes in insuring their risks is usually in under insuring. This is where they don’t properly analyze their potential for loss and in turn inadequately insure themselves. Either their property limits or projected revenues or both are too low so at the time of loss their is a sense of frustration.
Of course by having a commercial lines agent working alongside the business owner guards against many errors in covering and addressing risks. Today there are many commercial lines agents who work specific niches in the insurance industry. By choosing to have a professional relationship with a commercial lines insurance agent familiar with the specific business risks can greatly reduce the impact of inevitable losses as a business owner or corporation.
Without a doubt by having a local commercial lines insurance agent is a great strategy for managing risk control and minimizing loss which in turn positively affects the bottom line!
Basic Insurance Definitions
Glossary – Commercial Property
Additional Coverages: Coverage for indirect losses that would not otherwise be covered by the CP policy.
Agreed Value: Optional coverage that provides a predetermined amount in case of a total loss.
Bailee: One who is charged with the care of the property of another. For example, a garage is bailee of a customer’s (bailor’s) car (the bailment) and a jeweler is a bailee of
customer’s jewelry while in for repair or appraisal. There are various standards of care that a bailee must meet, depending upon whether the bailment is gratuitous or a bailment for hire (paid).
Building: The building or structure described. A building must have a roof and four walls.
Business Personal Property: Personal property owned and used in the business of the
named insured, including personal property of others in the care, custody or control of the named insured.
Collapse: “An abrupt falling down or caving in.” This falling down or caving in may be of a building or any part of a building.
Commercial Property Policy: The principal contract for insuring the building and business personal property exposures of commercial insureds. Generally referred to in this course as the “CP policy.”
Computer Virus: An unauthorized code into a computer.
Concurrent Causation: To avoid unintended insurance recovery in situations that involve an excluded peril and a non-excluded peril, current forms contain concurrent causation exclusions; concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is not excluded.
Concurrent Causation Doctrine: Holds that losses are covered if caused jointly by an
excluded peril, such as flooding or earth movement, and some other peril not excluded by the policy, such as negligent construction.
Concurrent
Causation Exclusions: Exclusions added to modern property policies in response to litigation activity involving the concurrent causation doctrine. They are designed to avoid intended insurance recovery in situations that involve damage that can be said to be caused by both an excluded peril and a nonexcluded peril. Concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is
not excluded.
Consequential Loss: Indirect loss arising out of direct damage to property, such as spoilage of food following lighting damage to a freezer unit.
Coverage Extensions: Additional insurance for things already covered under the CP policy.
Debris Removal: Coverage for the expense of removing debris of covered property that has been damaged by a covered cause of loss.
Delay, Loss Of Use, Loss Of Market: Indirect losses that are the result of a covered loss, such as a restaurant losing customers, with the attendant revenue, while rebuilding after a fire.
Direct Damage: Damage directly caused by a covered cause of loss.
Endorsement: An attachment to a basic policy that becomes part of the policy and modifies coverage. Endorsements can add, delete, or modify provisions in the basic policy.
Functional Valuation: An alternative valuation method that provides for the replacement of a scheduled building with similar property that performs the same function but is less costly.
Increased Cost Of Construction: Coverage for the additional costs of complying with
enforcement of an ordinance or law regulating the construction or repair of buildings after a loss.
Indirect Or Consequential Damage: Damage that arises as a result of a direct loss – such as loss of income when a business must shut down due to a fire. Inflation Guard A provision by which the limits of coverage are increased on a regular basis by a designated percentage in order to offset increasing building costs associated with inflation.
Intangible Property: Property that cannot be seen or felt – such as customer records, patents, and trademarks.
Liberalization: A broadening of coverage without an added charge to the insured.
Named Perils: A specific list of covered causes of loss, such as fire, lightning, or wind, contrasted to open perils, which provides coverage for any damage not otherwise excluded.
Open Perils: Property coverage that applies to risks of loss on a general basis, in contrast to policies that cover specifically identified (named) perils. Formerly known as “all risks”
coverage.
Permanently Installed: A piece of property that is set up for use and intended to
remain in the same place without fundamental change.
Personal Effects: Items usually worn or carried on a person.
Personal Property: All property other than real estate.
Physical Damage: What’s covered by property insurance policies.
Prosecution Or Abatement Policies: Insurance policy that pays for offensive litigation against a patent infringer.
Separation Of Coverage: The various categories of business personal property
(stock, machinery and equipment, furniture, fixtures, tenant’s improvements and betterments) may be assigned individual limits of insurance through the use of this
endorsement.
Sinkhole: A hole in the ground created when water wears upon limestone or dolomite.
Structure: A broader term than building. Anything that is constructed.
Subrogation: The insurer’s right to collect payment from the ultimate wrongdoer.
Valuation: The method used to place a value on damaged property.
Vandalism: The willful and malicious damage to or destruction of covered property.
What is an HSA plan?
An HSA plan stands for “Health Savings Account” and typically is associated with “high deductible” medical plans. HSA plans usually have lower premiums than standard “co-pay” types of plans as the insured normally pays the first dollar amounts up to the “high deductible”.
The high deductible is currently around $2500 to $5000 for individuals and can be around $10,000 for families. Either the plan will pay %100 after the deductible is met or an 80/20 split with the twenty percent being the insured’s responsibility.
HSA plans normally are good for younger and healthier people who don’t visit the doctor often as the money they put into their HSA is building interest and is tax free up to the annual limit. Thus it becomes a good savings plan for medical emergencies. Some HSA medical plans will include “well visits” which is an added benefit.
Like anything else it is best to shop around and compare different carriers if it is not part of your employment benefits.
Are Personal Umbrellas Necessary?
Personal line umbrellas are not necessary from the perspective of law, lenders or insurance carriers when it comes to covering your home and auto. However, from the perspective of protecting your assets and future it does make a lot of sense.
Personal line umbrellas can be purchased usually from the carrier that currently insures your home and auto. Most surprisingly is the inexpensive cost to have a million dollars over your home and auto policies. Typically a million dollar personal lines umbrella can be purchased for $200 to $300. To have this extra coverage is fairly inexpensive for what you get.
When considering an insurance umbrella consult your agent concerning requirements or any other state specific laws or requirements. And as always be sure to call and get a few quotes.
Why do I need auto insurance?
This is a common question often asked by many younger drivers just starting out on their journey down the road. Mostly the question is prompted by the expense of having to have auto insurance without truly understanding the immediate and future protection that it offers. Once a driver understands the reasons it is definitely easier to accept.
Reason number one is because as a member of the driving community you need to be responsible for any injuries or damage that you may cause to another’s property or being. This aspect of insurance is commonly referred to as liability coverage.
Reason number two is that if you’re driving an auto that is financed by a bank or some other financial institution they require that you protect their interest. This is called Comprehensive and Collision coverage. This insurance comes into play when you either have “bad luck” or you were just being a bad driver.
Reason number three is if someone else hits you and your car and they don’t have any insurance or may be under insured then you will probably want someone to pay you for your losses. Since the driver at fault has no insurance to pay you then you will want your insurance to pay. This concept is much more easier to grasp for many. This coverage is called “uninsured motorist” and “under insured motorist”.
These three reasons usually are the core of why people purchase car insurance in addition to the reality that having auto liability insurance is the law. Of course auto insurance laws vary from state to state but nonetheless the reasons set forth above are a good place to start.
