May 2012 Newsletter

Storage Units

Mini-warehouses seem to have become as ubiquitous as fast
food on the suburban landscape. And while many of the facilities may be filled with commercial customers, anyone visiting one of these properties can see that a large percentage is taken up by homeowners and renters who are storing personal effects.

Users of these facilities should be aware that there are limits of coverage on movable property and some specialty items, such as sporting vehicles, that are frequently stored in warehouses. Some insurers won’t cover property stored away from the insured home without a separate policy addendum, called an endorsement.

The warehouse itself may
provide (or sell) some coverage for these items, but it may be limited in scope or applicable only if the damage is due to the warehouse owner’s negligence. For all other causes of loss, the owner of the personal property will need to look to their personal insurance.

Renting a Boat This Summer?

If your plans this summer include large bodies of water and a boat to sail thereon,
be forewarned, matey: Your homeowners coverage is probably going to leave your
nautical insurance protection grounded on a reef of coverage limitations and exclusions.

For example, a person might choose to rent a 21-foot boat for a week of drifting and fishing on a beautiful lake. Liability coverage for injuries or damage done by the boat may or may not exist, depending upon the engines and horsepower and the language
in the homeowners insurance policy. As for damage to the boat, if the peril causing
the loss is covered, payment is limited to a total of $1,500—hardly sufficient for a craft of this type.

Under that standard homeowners policy, the same rule applies for any rented watercraft, be it jet ski or sailboat: Liability will be based upon length and propulsion, and physical damage to the craft will be limited to $1,500.

Before setting sail on your well-deserved voyage of leisure, be certain to determine just what protection your homeowners insurance will supply and what the options are
to expand the protection, including whether you can obtain the needed coverage from the renting firm.

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If you’re pleased with us,
spread the word! We’ll be happy to give the same great service to all of your friends and business associates.
What Empty Nest?

Do you have “boomerang kids”? The term is used to refer to children over the age of 18 who, after living on their own, move back into their parents’ home. What impact does the fact that they are now legally adults, often having their own cars and a significant number of personal possessions, and even their own kids in tow, have on your current personal homeowners and auto coverages?

Your homeowners policy will most likely cover the possessions your adult children bring back with them, as long as the value doesn’t exceed the contents limits established by your policy. If they bring titled possessions, such as cars, they will likely keep their own auto insurance, but they could consider signing up with your auto insurer and checking if a multi-car discount is available. Special possessions, such as off-road vehicles or expensive jewelry, may need to be listed
on a separate form,
so inform us of any such changes.

If they work from your home, that enterprise should be covered by some kind
of business insurance
in case their computer,
DJ equipment or any retail inventory is damaged or stolen. And if they bring a pet, make sure it’s not a breed listed under any restrictions or exclusions in your homeowners policy. Some breeds of dog are not covered by some insurers.

Company Cars and Your Auto Policy

Is one of the benefits or perks of your job a company car? Great! But if you were to cause injury or damage to another with that car, what protection do you have for any resulting claims or lawsuits? What protection do you have for your own injuries? What about passengers? And if your company allows personal use of the vehicle, does that mean you can treat it the same as you would a car you owned? Specifically, does that include letting your spouse or other family members drive the car?

All of these questions require a thorough comparison of the usage permitted by your employer and the current coverage provided by your personal auto insurance. Since the car is owned by the company, there will be some coverage under its business auto policy, but it may well exclude several of the scenarios already mentioned. In such cases, your personal auto policy provisions will be key to any claims coverage. And keep in mind that proper coverage may require endorsements to either or both the business and personal policies. Be sure to review both to best coordinate your desired protection.

Flooded Basements

Flooded basements are one of the most common problems American homeowners encounter. Water in the basement can occur from rain seeping through a basement window or under a door; because of a failed sump pump or a drain backup; or due to a broken pipe or appliance. Whatever the cause, you are likely to have damaged furniture, flooring, walls and even electronics.

The standard homeowners policy doesn’t cover much if it’s not adapted to the special risks presented by water. Sump pump riders and sewage and backup coverage are common ways to insure against some of the hazards, but seepage due to groundwater—including water that comes from rain—is probably not covered outside of a flood policy.

Even if you don’t live in a flood zone, you usually can acquire flood insurance. In fact, it will probably cost you less if you don’t live in a high-risk area. Flood insurance does cover seepage but only if it is related to a declared flood event. A heavy rain that comes in under your door because the ground can’t absorb it is also covered under the flood policy. Keep in mind that flood insurance is really intended to help homeowners rebuild the structure. It doesn’t cover the contents of a basement or subgrade levels, and that includes carpet, paint and paneling.

A flood policy can definitely complement your homeowners policy, but there are details that you need to consider. To explore flood insurance, give our office a call.

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