What’s the biggest exposure for homeowners?

Posted on July 17, 2018May 20, 2019 by Brad Smith

Protecting your home in Kentucky means being prepared for Spring wind and hails storms. Start by finding a good insurance agent. — Good insurance means no worries

If you’re like most, replacing your home and personal property are the primary reasons for purchasing a homeowners insurance policy. While that is important, insuring your property may not be the most important coverage offered by your homeowners’ insurance policy.

Insurance claims in Kentucky and many other areas increase during the spring. Severe weather is the primary culprit of Spring insurance claims. What would happen if a tree fell on your house during a windstorm and damaged your home? After you meet your policy deductible, your homeowner’s insurance policy would cover the cost of repairs.

What if the wind had been blowing in the other direction and instead of crashing through your rough, your neighbor’s home is the one damaged. In most cases, your neighbor’s insurance would cover the damages to his house.

However, there are cases where you are liable. If the tree was dead, dying, diseased or unstable you could be on the hook. If you are cutting the tree down, you are liable.

What’s your liability exposure? What should your liability limit be? It depends! But one thing is for sure. You need to have input. If you’re being left out of this process, your likely be left out of many other decisions.

child injured on trampoline

No one will deny the importance of communication. How will things go if you decide not to communicate with your boss? Even better, your spouse? Not even an occasional Uh-huh.

Your homeowner’s policy protects you from many But there are always people that you would rather not talk toMost of us could quickly compile a list of the top ten people that we didn’t want to talk to. If we compiled a list of the people that we least wanted to communicate withYour boss communicates with you, so does your spouse. While at times most of us would The job of the insurance agent would be fairly simple if you were only getting property coverage. How much is your house worth, how much personal property coverage would you like, and what causes of loss do we need to protect against.

Liability exposures are much more difficult to define. How much will it cost to repair/replace your neighbor’s home in the example provided above? Do you have adequate personal liability protection?

While the claim to repair the neighbor’s home could be very significant, relative to other potential liability exposures, this would be small. Kids open the door to much larger exposures when their invited and even uninvited friends have access to your pool, trampoline, treehouse, fireworks, go-carts, and more. How much coverage would you need if an injury or death occurred on your property due to your negligence?

Take some time to review your homeowner’s policy. The limits on your home will most likely exceed the value of your home and personal property. Can you say the same about your liability limits? Finally, speak to a qualified insurance broker that can provide you guidance. The last thing you need is for someone that can sell you insurance, what you truly need is an individual that can work with you in developing a compressive risk management plan.

You Can Climb, But You Can’t Hide

Posted on July 11, 2018July 16, 2018 by Brad Smith

Treehouse Tree houses are prime elements of childhood fun. They are clubhouses, hideaways, castles, war rooms, forts, spaceships, control centers, submarines; the list of what they can perform is limited only by imagination.

Now let’s look at a tree house with an insurance company’s eyes….oh boy! Now we have a structure with a separate value that, just like a home, garage, shed, or pool; needs specific coverage. Worse, that coverage has to be for damage to the tree house as well as for protection against losses caused by owning a tree house.

The fact that tree houses are so fun is what makes them a big problem, insurance-wise! They are attractive nuisances, which is to say, Child Magnets! Tree houses are guaranteed to make a home popular, very popular! And the word of one will spread far and wide!

The fun provided by tree houses has to be tempered by the following:

they exist off the ground and have to be accessed by climbing to them, often via ropes or ladders
treehouses that are poorly maintained become even more dangerous
they are used by children who are playing….not thinking about how careful they should be
they are sometimes used by too many children….how much weight can the tree house safely handle
children are usually unsupervised during such play
access to the tree house may occur 24/7/365….including nights, weekends and other times when the homeowner is at work, or on vacation

Treehous

Besides the above, consider when the household’s kids have outgrown the tree house and the owners pay even less attention to it. Depending on the location, it could even attract illegal activity!

If you have a tree house, make sure that it’s maintained and activities are supervised. Also, make sure you get an insurance professional’s help in getting protection….or else all of the fun disappears!

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Fireworks Accidents – Part 2

Posted on June 29, 2018July 16, 2018 by Brad Smith

Fireworks are dandy, but at what point will your homeowners insurance pay

In part one we discussed that a homeowners policy may be available to handle losses involving fireworks. However, this is not

always the case as there are instances where your homeowner policy does not offer coverage.

Legal Issue

If it’s illegal for you to set off fireworks, this legal hurdle could result in any loss being excluded by the policy.

Be prepared to be uninsured if you don't know your do's and don'ts about fireworks

Business Issue

A homeowners policy is meant to handle losses related to owning and living in a home, there’s no coverage for a person who uses their home for making, selling, storing or distributing fireworks. Any business activity involving fireworks is going to cause a big problem if a loss occurs.

Who Is Injured Issue

Injuries to yourself or others in your household are not covered because Medical Payments and Liability coverage is designed to handle loss suffered by persons outside of your household.

Intentional Loss Issue

If an injury or damage to property is not an accident, there’s no coverage. Tossing a firecracker or aiming a bottle rocket at another person could be considered deliberate, even when no injury was intended. Deliberate acts and their consequences are commonly excluded by homeowners policies.

So when dealing with fireworks, make sure they’re legal, that they’re used carefully and only for entertainment. Then your chances are good that any loss may also be covered.

Return to Section 1

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Fireworks Accidents – Part 1

Posted on June 28, 2018July 19, 2018 by Brad Smith

Fireworks Accidents – Part 1 of 2

A longtime, extremely popular summer rite is to enjoy setting off fireworks. However, it’s important to think, truly think, before striking a match or using a lighter on your first firecracker, sparkler, smoke-bomb, bottle rocket or other forms of incendiary entertainment. For all their fun, fireworks are capable of causing serious injuries to persons and substantial damage fourth of july fireworks to property. Such losses can have substantial financial consequences, so it’s important to know whether you are insured in the event you cause a fireworks accident.

Examples:

Imagine you are setting off some fireworks in your driveway for your children and their friends. Suddenly, a sparkler you gave to a neighbor’s child violently flares up, burning her hand and face.

While setting off some bottle rockets, one smashes through a window of a house across the street. The rocket sets the home’s living room curtains on fire. It then spreads to the carpeting and the room’s furnishings. The local fire department responds, putting out the fire. There are thousands of dollars in damage caused by fire and water.

In the first example, your Homeowners Policy could cover her injuries a couple of ways. If the injuries are minor, her medical kids and fireworks go together like peanut butter and gasoline treatment could be handled under the Medical Payments portion. However, if the child’s injuries are more serious and her parents sue, your policy’s liability portion should handle your legal defense as well as a legal judgment.

In the latter example, one could be found negligent for causing the fire and subsequent damage. A homeowners policy usually handles claims such as these. However, you should also be aware of the limitations which will be covered in part two of this topic.

Continue to section 2

COPYRIGHT: Insurance Publishing Plus, Inc. 2016 All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Golf Carts: Cute, Handy…..Dangerous

Posted on June 27, 2018July 16, 2018 by Brad Smith

Golf cart on course At one time golf carts were seen exclusively on golf courses. Then, since golfing is part of the sports world, other sports saw their usefulness, so carts popped up along the sidelines of football fields and near baseball dugouts, shuttling players about. Today, many more people are aware of the non-sports usefulness of golf carts…..and that is becoming a problem.

Increasingly, more exceptions are being made regarding golf cart use. At first they could be used on areas close to golf courses, then retirement communities made exceptions, then gated and other, larger property-owner communities allowed their use. Now, exceptions are being made for their limited, public street use in small towns, college communities and in other situations.

The increased use of golf carts means the increased number of golf cart accidents. Such incidents are a particular concern since they may involve elderly drivers who may have impairments or slower reaction times. Further, golf carts are popular with very young, frequently unlicensed drivers who may lack care and experience in operating golf carts safely.

Pairing up golf carts with higher risk operators creates a high-risk situation. Consider several features of golf carts:

Lightweight
Open vehicles without roll bars
Low clearance
Rigid frame construction
Capable of deceptive speed (some models can reach 25 mph)
Do not include seat belts

While carts are ideal for traveling along fairly level, soft-surface areas; their features and design make them quite hazardous on other surfaces. Some golf carts can move at higher speeds, but their low clearance and rigid structure make them prone to rollovers. While carts are relatively light, they still are easily heavy enough to cause serious, even fatal injury to persons trapped beneath them. It also makes a Golf Cart used in competitive driving tremendous difference being in an accident on a grass surface as opposed to an asphalt, gravel, packed-dirt or cement road. Some accident statistics reveal that golf cart accidents often involve children who are hurt when flung from carts during turns.

Another issue with golf carts is that there is no consistent regulation regarding their use and safe operation. The real issue is awareness! Persons who own and use golf carts away from courses should be careful about how they operate such vehicles, who are allowed to drive and ride in them and what safety procedures must be used to minimize accidents. No matter how cute, easy-to-operate and economical they are, golf carts are motorized vehicles that can cause serious loss and injury. Use them with care!

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Homesharing – Part 2

Posted on June 6, 2018July 16, 2018 by Brad Smith

Homesharing has been a “thing” for years and its use is growing along with internet applications that facilitate transactions involving making a residence available for short-term rentals. Standard homeowner policies have long been issued under the assumption that a covered residence is usually occupied by the named insured and that person’s family on a full-time basis.

While insurance policies issued for homes, condos, and apartments do contemplate some situations involving other persons staying in a residence, those situations are allowable when they don’t involve financial transactions. Renting for income alters a residential situation into a business. Business activity creates a coverage problem which could result in policies being canceled or claims being denied. Renting all our part of a residence also results in types of losses that are uncovered because they haven’t been contemplated as insurable, residential activities.

Policy wording may exclude coverage for losses when they are directly related to a business. So, protection may be lost for the residence, residential property as well as for liability for damage or injury to others and their property.

Basic HO policies, if they don’t outright exclude losses involve compensated rentals, severely restrict other coverage. However, due to the rising popularity of homesharing, the insurance market is responding with options to provide more protection. A basic policy may be amended to extend protection which does the following:

Extend eligibility of a rented residence to continue to qualify for all policy protection
Add protection for household contents that might be damaged or destroyed during rentals
Extend medical payments coverage to insureds who may be injured by renters
Loss of income specific to homesharing activity
Add liability coverage for injury to third parties that occur during rentals

However, this additional protection may still fall short of what is needed. The insurance market is now making broader coverage available that handles less common exposures such as ID theft resulting from homesharing, pest infestation caused by renters, liquor liability coverage arising from alcohol served during rentals, extra cost caused by excessive use of utilities, or personal and advertising liability.

Even with special coverage for homesharing, property owners should also be aware of consequences and cost of resolving issues such as breaking local zoning laws, violating residential association bylaws or legal costs of dealing with squatting situations. Homesharing is a popular component of the sharing economy, but participants need to be careful to get proper protection.

Return to Part 1

COPYRIGHT: Insurance Publishing Plus, Inc. 2018

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Homesharing – Part 1

Posted on May 30, 2018July 16, 2018 by Brad Smith

For a variety of reasons, changing attitudes, objectives and financial situations have created interest in collaborative consumption and the growth in the sharing economy. Homesharing and ridesharing have become major components in this evolving economy. The term can be confusing and have more than one meaning.

Regarding this article, we are discussing commercial arrangements represented by services such as AirBnB. Its premise is to match supply and demand for housing related to traveling. It allows a resident of a home, condo or apartment in one location to provide short-term housing to persons traveling through or vacationing in their locale. The arrangement is facilitated through an online platform that provides the obligations of both parties to the transaction. Therefore, this discussion does not involve situations involving short-term trading or swapping of property in exchange for either similar residential space or in exchange for providing skills or services.

A wide variety of rental situations fall under homesharing, such as the following:

Rental of seasonally used property
Rental of entire premises for vacationers
Rental or part or entire premises for persons attending a local, large event such as racing, festivals, concerts, tournaments, sports championships, etc.
Providing space for a special event, such as graduations, weddings, or parties (birthday, retirement, etc.)
Renting a portion of a residence while the property owner or regular renter still occupies other parts of the residence

The online aspect is critical as it acts as a portal for providing information on available residences, locations of property, property features, rental costs, available amenities, contractual obligations related to property use and payment of fees, deposits, and, if necessary, damages or penalties due to misuse.

A major motivation for such homesharing arrangements is the opportunity of significant, additional income for underutilized property. However, that creates a problem. What coverage issues exist under residential insurance policies?

Continue to Part 2

COPYRIGHT: Insurance Publishing Plus, Inc. 2018

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Think you don’t need renter’s insurance. Maybe you should reconsider.

Posted on April 26, 2018July 16, 2018 by Brad Smith

Insurance agent’s sell renters insurance based on cost. It’s easier that way, as the cost for renter’s coverage is insignificant when packaged with an existing auto policy.

But cost is not the real story. Property coverages are great, but the exposure that concerns me the most is liability.

Let’s say you have $25,000 worth of personal property. If you get a renters policy and it’s covered, great. If you have fire and all the property is lost your renters policy will pay. If you don’t then you lose $25,000. With or without a renter’s policy you know what your exposure is.

But what will happen you invite your neighbor over for coffee….. We all know the McDonald’s coffee story. If you don’t have a renter’s policy, you will be the one on the hook. With a renter’s policy, your exposure should be covered or at least significantly mitigated.

Will attorney’s fees be covered in the event of a frivolous lawsuit? Most likely!

The bottom-line is simple. When we know the cost of a potential loss, we can better evaluate the risk-reward. Liability exposures are much more difficult to evaluate and there is no reasonable way to discern the value of an insurance policy. We live in one of the most litigious countries in the world. Don’t underestimate the value of the renter’s liability coverage. More importantly, don’t pass on a renter’s policy based on the fact that you are willing to underwrite your own property risk. By doing that you are underwriting your liability exposure too.

TruePoint Insurance offers many great options that allow renters to protective themselves from both property and liability exposures. Call us today at (502) 410-5089, or visit our website and try out our Instant Online Rater where you can access real insurance quotes in real-time whenever or where you like.

Renter’s Insurance, another reason why we are insuringky.com

Insuring Unmanned Aircraft (Drones) Part 2 of 3

Posted on April 16, 2018July 16, 2018 by Brad Smith

In part 1, we began our discussion of the challenges represented by UAVs. Compared to radio-controlled, model aircraft, UAVs are, often, larger, more expensive craft and may be equipped with extensive photographic and computer components. They are used in ways that substantially increase the chance of loss because they are used in different settings. Originally UAVs were used in the following, non-military ways:

storm chasing
mapping
documenting land use changes
agriculture
search and rescue

However, eyes continue to be opened about the, nearly, endless versatility with these devices. Today, interest in the commercial uses of drones is viral. Companies are developing or actively using drones for the following:

realty inspections
pipeline inspections
fast food delivery
monitoring crops
filmmaking
insurance claims inspections
surveillance
wildlife monitoring
news reporting on hazardous incidents and traffic reporting
package delivery

The increase in the number of UAVs and their use around people will generate way more incidents involving injuries and collisions (with persons and property), dropped packages, flight malfunctions, accidents with other aircraft, etc.

Insurance companies are in the forefront, determining how current or new products have to be changed or developed in order to handle additional loss exposures that will be created by growing personal and commercial UAV use.

Besides exposures involving injuries, damage or destruction to UAVs and to other property; UAV risks will also involve personal injury such as invasion of privacy, trespass, etc. They may also expand cyber liability risks as UAVs will face hacking threats. They may also create broader threats of terrorism.

UAVs are a part of a changing risk landscape and, again, insurance professionals will take the lead in responding to the challenges they pose.

Access the third and final post for this series on Unmanned Aircraft at:

https://www.insuringky.com/blog/insuring-unmanne…ones-part-3-of-3/

Insuring Unmanned Aircraft (Drones) Part 1 of 3

Posted on April 16, 2018July 16, 2018 by Brad Smith

Unmanned Aerial Vehicles – Part 1

For most of us, our relationship with aviation is passive. We, except for rare instances, are involved in flight as passengers, not as flight crew. We board aircraft, take our seats and allow pilots to transport us, handling all of the complexities of air travel.

Whether air transport involves moving people, goods or both, its efficiency in reducing the time it takes to travel over long distances from weeks and days to hours is rivaled only by its potential severity of losses.

Protection against loss involving cargo or passengers is handled by aviation insurance which is designed to respond to low frequency but high severity accidents. Currently such policies are now being asked to handling an emerging, different exposure; unmanned aerial vehicles (UAVs).

UAVs, aka drones, were developed initially for research, exploration and military use. In recent years, they have been increasingly exploited for personal and commercial use. Initially the potential for loss was low, similar to use of hobby, radio-controlled (RC) planes, copters, etc. But the situation with UAVs is transformative. RC aircraft are used recreationally. They are operated chiefly in wide open, isolated areas with little chance of interaction with persons or property. Losses usually involve damage to the aircraft. Injuries to persons typically are restricted to first aid for cuts, bruises and similar, fairly minor harm. Protection is adequately handled by homeowner policies or by specialty coverage provided by recreational RC flying clubs. That is NOT the case for UAVs.
For more information, please see Unmanned Aerial Vehicles – Part 2

https://www.insuringky.com/blog/insuring-unmanne…ones-part-2-of-3/

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