Keeping Insurance Values Up-To-Date

We’d like to take a few minutes to discuss the importance of protecting your business and employees by keeping your insurance coverage up-to-date.

A Quick Insurance Review
Let’s start with some basics about how insurance works.  Insurance protects people and companies against major financial losses that occur because of damage or loss of property.  Insurance companies determine premiums by taking into account the risks associated with the business, the amount of coverage they need to be fully protected, their past history and statistics that predict what percentage of businesses will suffer a loss or file a claim.  The amount of property insurance coverage is based on the cost to rebuild and restore your business, not market value.

The Rising Cost of Rebuilding
In recent years, we’ve experienced devastating weather events at home and worldwide.  In 2011 alone, the U.S. experienced $17.3 billion in insured losses from 100 significant events, many unprecedented and unexpected.  Some decimated entire communities.  And, experts predict that severe weather will likely continue.

Add to that, skyrocketing building costs.  As communities here and abroad rebuild, the demand for building materials and labor has intensified, driving up prices.  For example, in the fifteen months between the second quarter 2010 and third quarter 2011 the follow materials increased significantly:
 >Copper Pipe +26.5%  >Drywall +5.5%
 >Steel Rebar +15.8%  >Plywood +11.0%
 >Structural Steel +13.0% >Lumber +11.7%

Insurance-to-Value
Insurance-to-value is a critical element of any well-constructed property insurance program.  If you and your agent or broker keep values up-to-date, this can protect your business by providing you with the coverage you need should a major loss occur.

Travelers has easy to use tools that will help you and your agent or broker address this issue.  For more information about our Insurance-to-Value and Business Income worksheets talk to your agent or broker.

The Travelers Indemnity Company and its property casualty affiliates One Tower Square Hartford, CT 06183
This material does not amend, or otherwise affect, the provisions of coverage of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond.  Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law.  Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations.
© 2012 The Travelers Indemnity Company.  All rights reserved.  Travelers and the Travelers umbrella logo are registered trademarks of the Travelers Indemnity Company in the U.S. and other countries.
CX-2420 New 12-11

I had the pleasure of walking through the Methuen YMCA a few days ago and sitting with the Executive Director Anne Whalen to learn about the facility that I look at on a daily basis through my office window.  It is amazing to be so close to the Methuen YMCA but have no idea of the amazing programs they have available to Merrimack Valley Families.  Since I was so impressed with what Anne has done, I thought I would share with all of you all that the Methuen YMCA offers.

The Methuen branch of the Merrimack Valley YMCA opened in 2003 after renovating the former Stephen Barker Elementary School into the building we see today.  The center now has a toddler, preschool and school age child care center, a gymnasium, a teen center and a wellness center with a complete Nautilus strength training circuit, treadmills, elliptical trainers and life cycles. 

The Preschool Child Care center at the Methuen YMCA provides full day care enrichment programs for toddlers, preschoolers and kindergartners. The programs address the individual interests and abilities of the each child by focusing on emotional, physical and cognitive areas of development as well as arts & crafts, dramatic play, games, gym time, music, outdoor play and nutritional meals.  I was able to peak into the toddlers and preschoolers and was immediately taken by the children as they all worked together with the teacher in the classroom activities.  The preschool room was sectioned off into different areas of interest so that each child has an opportunity to learn as much as they can. 

The School Age Child Care programs at the Methuen YMCA are for ages 5-12 and offers a variety of activities to promote learning and fun through sports, games, arts & crafts, and homework assistance.  Transportation is provided from the Methuen School and full day programs are available during holidays and school vacations.  This program provides a safe environment for children and peace of mind for parents while they work.  The summer “School is Out” program is an all day youth development program during the summer months that include field trips, swimming, art, sports, tournaments and community service opportunities.

The Methuen YMCA has many youth programs including sports, art, cooking, science, dances and kids night out.  Special events that include the family are Family Nights, Healthy Kids Day, Touch A Truck (which is coming up on May 19th!), Trunk or Treat, Breakfast with Santa, Valentine’s Day Dance, Recycling Events and Blood Drives.

The Teen Center is a safe place where teens ages 13-18 can come after school with access to pool tables, ping pong games, video games, computers and homework assistance.  During the summer there are frequent trips to the Lawrence YMCA pool and Music Clubhouse plus trips to amusement parks, laser tag, mini gold and more!

I think the most important program that I learned about is the program Anne Whalen has brought to the Methuen YMCA that is for parents, friends, brothers, sisters, teachers, everyone!  It is called Darkness to Light, Stewards of Children and it is a Child Sexual Abuse Prevention training program for adults in the Merrimack Valley.  It is the only evidence based child sexual abuse prevention training proven effective in educating adults to prevent, recognize and react responsibly to child sexual abuse.  It is SO important to have everyone in the community come to this training and help protect the helpless children who are suffering or are at risk of becoming a victim.  We, the Merrimack Valley Adults, need to know how to prevent this and keep the children out of harm’s way. The next training at the Methuen YMCA is Tuesday, April 10, 2012 from 6-8:00 pm.  It is a free training, please RSVP to 978-683-5266 or at www.mvymca.org.

*for other training dates please refer to the www.mvymca.org website.

Have you ever wondered if there was service line coverage for your underground piping and wiring on the Homeowners Insurance Policy?  Well, on the basic policy there is not and I can tell you that there aren’t too many companies that I can think of who offer it as an endorsement.  That is why the Service Line Coverage Endorsement that Safety Insurance offers on the Supreme Plus endorsement or as a stand alone addition to the policy is a great coverage to be able to offer.

What is Service Line Coverage?  Well, it is defined by Safety Insurance as “underground piping and wiring, including permenant connections, valves or attached devises” but then go into deeper detail by saying that Service Line Coverage is for any of the following specifically listed:
 1. Water piping that connects from the dwelling to a public water supply system or private well system;
 2. Sewer piping that connects from the dwelling to a public sewer system or private septic system;
 3. Ground loop piping that connects to a heat pump; or
 4. Power line that provides electrical service to the dwelling or other structure.

The Service Line Coverage Endorsement will pay up to $10,000 for loss, damage or expense arising from any service line failure of any of the 4 covered Service Lines above.  Service Line failure caused by Earth Movement, Service Line Failure that causes another service line failure, leak, break, tear, rupture, collapse or arcing.

The Service Line Coverage endorsement will pay for the damages to the covered Service Line, Excavation Costs, Expediting Expense, Loss of Use and damaged Outdoor Property such as trees, shrubs, plants, lawns and walkways that are damaged during the excavation or due to the service line failure.

Many homeowners do not know that they are responsible for the service lines that run through their property which is why this Service Line endorsement is such an important coverage but also a great value.  Of course, exclusions do apply but to find out more contact our agency and we can go over the coverage in depth with you.

I can’t believe I haven’t blogged about Umbrella Liability Insurance yet!

An Umbrella Liability insurance policy is an inexpensive policy designed to provide additional liability coverage, starting with $1 Million in coverage, in excess of your current “underlying” policies such as your auto, home, boat, motorcycle etc.  The underlying policies are required to hold a certain amount of liability in order the have the umbrella but as long as those requirements are met the underlying policies will react to a covered claim first and once the limits on the policy are used up, the umbrella will take over for the remaining amount of coverage.  A true umbrella policy will also fill in some coverage gaps from the underlying policies. 

Umbrella Liability Policies are liability only. By liability we mean the following: “we agree to pay on behalf of the insured the ultimate net loss which the insured becomes legally obligated to pay because of personal injury or property damage”.  So lets define exactly what personal injury and property damage are.

Personal Injury – Bodily Injury: sickness, disease, mental anguish, etc.  Libel; slander; false arrest; invasion of privacy; wrongful eviction; assault or battery if committed to protect persons or property.

Property Damage – There are a few different definitions of this but basically all consisting of the direct              physical damage to tangible property as well as the loss of use of that property.

**Not all umbrella liability policies are the same and there are exclusions that will apply.

Who is covered on the Umbrella Liability policy?  Well, you the named insured!  A Family Member or relative meaning a person who lives in your household and is either related to you or a depended person under the age of 21 and in your care.  Any person using an auto, recreational vehicle or watercraft which is owned by you and covered under the policy.

The one thing that you need to remember is that an Umbrella Liability policy is not for just wealthy people.  In today’s economy everyone should be covered and an umbrella liability policy is the best way to do that.  While I might not have a house, I may have lots of savings.  I may not have savings or a house but I do get a paycheck every month and if I find myself being sued, I could see a finding attached to my weekly pay.  I will give you an example of how an umbrella liability policy works.

You strike a pedestrian or bicyclist and a settlement is made of $500,000.  Your auto policy holds the minimum liability requirments of $250,000 per person/$500,000 per accident and will respond first.  You have a $1 million umbrella liability policy.

   Auto Policy minimum requirement: $250/$500
   Auto Policy limits carried: $250/$500
   Umbrella policy limit: $1,000,000
   Amount owed on the Settlement $500,000

    Auto carrier pays $250,000
    Umrella policy pays $250,000
    YOU, the insured pays $0

I hope your find this information helpful and that you go and purchase an Umbrella Liability policy!

Due to the recent unfortunate weather activity, snow in October, I thought I would answers all the questions I have been asked the most about power outtage and loss of use. 

First Question…If my power is out and I need to rent a hotel room to stay, will my homeowners insurance policy Coverage D, Loss of Use, cover the bill?

The answer to that is no, power outtage without any damage done to your house is not a claim and Loss of Use is only activated with there is a COVERED LOSS to the home you occupy.  No power doesn’t damage anything, it just turns everything off.  Many people make a choice to stay at a hotel to have running water and stay warm but the reality is that they have done that by choice because while not pleasant, cold is still liveable and therefor not covered under loss of use.

The policy specifically states the following to power failure: “Power failure means the failure of power or other utility service if the failure takes place off the residence premises” So if the power lines go down in the town, that is off premises and excluded.  The policy goes on to say that “BUT if the failure results in a loss, from a PERIL INSURED AGAINST on the residence premises, we will pay for the loss caused by that peril.”  If the power outtage, for example, causes pipes to freeze then burst the policy will respond to the water damage done.  Only THEN will loss of use come in to play if the damage is so extensive you cannot live in the house anymore.

Second Question…Do I have coverage for my refridgerated items that have gone bad because I have no power to keep them cold? 

This is very common especially to homes that have multiple refridgerators or freezers.  There is not coverage for this on a regular homeowners insurance policy but can be added for an additional cost or sometimes comes included in an enhancement package that companies offer.  Check your policy to see if you have it or speak with your agent.

You might have heard an insurance person call some property insurance policies homeowners and some Dwelling Fires and not know the difference between the two.  There is actually a large difference and it is very important that you know what.

Homeowners policies are written for 1, 2, 3 and 4 family homes that are lived in by the owner, hence the word “Home”.  As long as one of the units is occupied by the property owner, this home is insured on a homeowners insurance policy.

A Dwelling Fire property insurance policy is the type of policy that a rental property would go on.  If you own a 1, 2, 3 or 4 family house that you have completely rented out to tenants, you need a Dwelling fire policy.

It is very important that each property is insured correctly because a rental property that is insured as a homeowner and vice versa will have coverage issues at the time of a loss or will be cancelled by the company.

There are differences in coverage for each type of property insurance policies.  I have gone over the homeowner policy in previous blogs so I will just focus on the Dwelling Fire in this one.

The dwelling fire property insurance policy consists of 5 different coverages:

 Coverage A – Dwelling:  This covers the materials and supplies used to construct, alter or repair the  dwelling.

 Coverage B – Other Structures:  Coverage for other structures on the premises that are not attached to the main house

 Coverage C – Personal Property: This is optional coverage for personal property that you may have in the dwelling as the landlord.

 Coverage D – Fair Rental Value: Optional coverage, coverage for loss of rent if your tenants are not able       to live in the apartment.

 Coverage E – Additional Living Expense: Optional Coverage, coverage for any additional expense due to coverage claim

Tenant Relocation is automatically added to each policy.  In the event of a covered loss each tenant has $750 of coverage to relocate if the apartment is not fit to live.  This is the ONLY coverage for tenants available on the Dwelling Fire property insurance policy.  We highly recommend that lardlords require each tenant purchase his/her own renters insurance policy.

Most companies do offer liability but that isnt always the case.  Be sure to check your policy to see if you have liability coverage and if not, make sure you have it added.

So now that you are well educated on the difference, go and make sure that all your homes are insured correctly!

Since getting into the  insurance industry I always think of how my homeowners insurance will cover me in certain situations and I thought I would share some information about the coverage you have on your Homeowners insurance (HO), Condominium and Renters policy that will cover you on any vacations you might take this summer.

Lets start with your Personal Property that you take with you.  Personal Property owned by an insured is covered anywhere in the world at the Coverage C amount listed on your Homeowners insurance, Condo or Renters policy or $1,000, whichever of the two is greater.  There are certain limits for specified property that are also listed out in your policy which I will not get into but can be reviewed on your policy.  This coverage is especially important because it can cover your baggage at the baggage claim.  If the fault is of the airline, your Homeowners insurance, Condo or Renters policy will apply in excess.  Some exclusions apply.

What about liability coverage on the homeowners insurance policy?  You all know how much we encourage you to have high liability and even to purchase Umbrella policies and this is a big reason why…  Lets say that while on my vacation at the beach, I borrowed the boat of a good friend of mine that rents the same time every year right down the street.  I have two of my close friends visiting from out of state and I want to make sure they have a great time at the beach.  While I am driving the boat, I go over a huge wave and fail to reduce the speed.  My two friends aren’t holding on and fly in the air so high, when they land the man breaks his leg and the woman suffers major back pain that takes her out of her job as a coach for 6 months.  Thank goodness, my liability coverage will apply even though I am away from home.  Some exclusions do apply so before you go away, sit down with us so we can go over any areas that you might not be covered so we can plan accordingly.

And the last big coverage that will follow you on vacation is other people’s property.  Whether you are renting the house on the beach, borrowing a friends house, or camping out most of the big things that can happen to real property are not within your control.  Lighting, windstorms and other natural events would occur no matter who is occupying the building and in most cases the homeowners insurance or commercial property policy of the building owner would cover that.  Your homeowners insurance policy has an exclusion for “property damage” done by an insured to a property rented to, occupied or used by, or in the care of an insured.  However, there is up to $500 replacement cost coverage for damage done to property of others (some exclusions apply).

Happy traveling this summer and be safe.  Be sure to contact us before you go with any coverage questions and so we can review your current homeowners insurance policy!

How Does Gap Insurance Work?

Many auto insurance clients of mine ask me “how does gap insurance work” whenever I ask them if they would like to add the Auto Loan/Lease Gap Coverage endorsement onto their Safety Insurance Atuo Policy.  Well Basically, gap insurance is coverage for the gap of money between the amount you are paid on a total loss and the amount you still have left on your loan.  For example:

• You have a Loan out for $20,000 left on your vehicle.
•  You have an accident and your car is found to be a total loss but the book value of your car is only worth   $18,000 now and that is what the insurance company is offering to pay you.
    20,000 – 18,000 = 2,000
•  That leaves a $2,000 difference between what you are getting and what you owe. 

Without Gap Insurance, you would be responsible to pay that $2,000 back to the bank.  Dealers offer this coverage when you purchase your new car but it is expensive ranging anywhere from $500-$800.  Safety Insurance Company offers it for $25/year on newly purchased vehicles that are 5 years old or less.

There are a few charges that will not be covered under your Gap Insurance that you should be aware of: 

• Any overdue payments, penalties, taxes, interest or charges resulting from overdue payments at the time of  the loss.  So you will want to keep making payments at the time of a loss until you are sure that you will  be reimbursed or that the car actually is a total loss.
•  Financial Penalties under a lease for any excessive use, abnormal wear and tear or high mileage.
• Security deposits not returned on a lease by the lessor
•  Costs for extended warranties, Credit life insurance, health, accident or disability insurance purchased  with the loan or lease
•  Carry over balances from previous loans or leases

Hopefully I have answered the question of “how does gap insurance work” well for you and that I have piqued your interest in Safety Insurance Company.

It has been our experience in the past few months that Third Party Insurance Claims are becoming so much more of a hassle than ever before when it comes to auto accidents.  If you were in a small fender bender or in a huge accident that may have clearly been the other person’s fault 100%, you may find yourself in Third Party Insurance Claims and being denied coverage or offered only a percentage of what you should be paid. 

When I say Third Party Insurance Claims, basically what I mean is that you do not carry collision coverage on your auto insurance policy but you have been hit by another person whose fault the accident was.  When this occurs, we report the claim to the other party’s carrier who should be paying for the damage done to your vehicle since the accident was not your fault.

I will give you two recent examples of Third Party Insurance Claims:

One of our clients, who recently had a third party insurance claim, was driving straight on a busy road, he had no signals or signs he had to abide by giving him the right of way.  Another vehicle ran a stop sign from a side street in front of our client which resulted in our client hitting the other vehicle.  The other vehicle was issued a citation and there was a police report done.  Our client only held basic liability coverage on his vehicle so we reported the claim to the other company.  The other company is refusing to pay our client 100% and would only offer our client 80%. 

A few months ago, our client was stopped at a light in the left hand lane of a two lane left turn light.  At the light, the car to our client’s right turned into her vehicle instead of staying him his/her lane.  Out client only carried basic liability coverage so we reported the third party insurance claim to the other company.  The other company refused to pay our client a dime because the other party denied everything. 

Both of these cases were with the same company but it has been the case with most third party insurance claims we have seen lately.  We know Collision is a pretty expensive coverage to carry but if you cant afford it or if your vehicle is older and you dont feel its worth it, there is another option for you to avoid having to go through third party insurance claims.  Limited Collision is a form of collision that could cover you in these cases.  Limited Collision will pay in some situations for “direct and accidental damage to your auto caused by a collision”.  As long as you are NO MORE THAN 50% at Fault and know who it was that that hit you, there will be coverage and you can let the two insurance companies fight instead of you fighting the other person’s company yourself.  And guess what, IT IS CHEAP COVERAGE! For more information refer to our blog specifically on Limited Collision.

We are here as your agent to help in any way possible but sometimes even we cant get a company to change it’s mind on paying out on third party insurance claims.  So, make your life easier by purchasing Limited Collision so you dont have to work with any company other than yours!

Many people ask me “What is Renters Insurance”?  Well, Renters Insurance, also known as a Tenant Insurance Policy, is a form of a homeowners policy specifically for people who rent where they live.  The coverage is set up as follows:

 Personal Property Coverage for the renter’s belongings in the apartment, condominium or house.  The main structure of the house or building is already insured by the owner so the renter does not need to worry about that, they need to worry about their stuff inside where they reside.  This is the main focus of the renter’s insurance policy. 

Loss of Use is the second part of the coverage on the Renters Insurance Policy.  It is coverage for the renter if they are not able to stay in their apartment, condominium or house if there is a loss that makes it inhabitable.  This part of the policy will pay for the renter to stay elsewhere until they can go back to the apartment or until the policy reaches its limits.  It will also cover any additional living expense that it is out of the ordinary so you can maintain the household’s normal standard of living. 

The Renters Insurance Policy does have Personal Liability for the renter which follows him/her worldwide and can be anywhere from 100,000 to 1,000,000 in coverage.  While we don’t suggest 1,000,000 on the renter’s policy, if that is the kind of coverage you are looking for, an umbrella policy would be better suited.

 Medical Payments to Others is the last coverage on the policy and that can go up to 5,000 in coverage.  It is paid to a person who is injured on the insured location with permission and to others off the insured location who has been injured by the activities of the insured, caused by a residence employee or cause by an animal owned by or in the care of the insured. 

That is the basic coverage of the Renters Insurance Policy, keep in mind that a Renters Insurance Policy is an inexpensive policy and if paired with an auto insurance policy can be eligible for a discounted rate.   When you prepare to purchase a Renters Insurance policy, you need to know what you are looking for in personal property coverage.  I suggest you go to http://www.knowyourstuff.org/ to take an inventory of all your personal belongings in the rented space.  This will help you get the right coverage and keep an itemized inventory if you were to have a loss.