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Insurance Tips

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Do I Need a Personal Umbrella Policy?

No one can tell you whether or not to purchase an umbrella policy; it is a matter of personal preference. We would recommend that you purchase an umbrella, as the cost is very reasonable, generally as low as $120 for $1,000,000 for a typical homeowner with two cars. The umbrella provides coverage in increments of $1,000,000 over and above your home and auto coverages and can even extend coverage for you as a director or officer of a non-profit organization.

Here are some quick examples that an umbrella policy actually paid a claim:

  1. Eye Injury: $379,000
  2. Pellet Gun: $600,000
  3. Dog Bite: $679,000
  4. Boat Accident: $1,500,000
  5. Slander: $312,000
  6. Water Skiing: $1,800,000
  7. Drowing in a pool: $479,000
  8. Uninsured Motorists: $500,000
  9. Hunting Accident: $529,000.

The choice is yours.

Does My Homeowners policy provide "Landslide Coverage"?

Most Homeowners policies will not cover Landslide coverage. Some companies may provide coverage for Landslide under their definition of "earthquake," so you will have to be very specific when requesting the coverage. There are only a handful of companies that provide Landslide in the basic policy.

Does My Commercial Insurance Policy cover Mold?

The newest litigation target involves a black fungus commonly referred to as mold. Many policies being written today or being renewed today will contain a mold exclusion. Many policies do not contain a mold exclusion, however the court is still out to see if the standard "pollution" exclusion will in fact exclude coverage for the airborne pollutant.

There are also issues with certain exclusions in the policy that pertain to "poor workmanship," so the best way to avoid the litigation is to research the entire subject and be sure you're sealing your work! Most companies are looking at the claims case by case.

Uninsured Motorist Coverage on a Commercial Policy, What Happened?

In a Supreme Court ruling of Scott-Pontzer V. Liberty Mutual Fire Insurance Company, a person sustaining injuries in an uninsured motorists accident may be entitled to examine the automobile policy of the company he/she works for, even if the incident was not related to work, their employment, or operating a company vehicle.

Am I Covered by my Homeowners Policy if I have a Business in the Home?

If you're an Avon salesperson, a bookkeeper, or you're selling MaryKay or Longerberger Baskets out of your home, more than likely your homeowners policy specifically excludes any liability arising out of a business venture. This is for property and liability coverage. Some homeowners policies do provide a limited amount of property coverage. Be sure to tell your agent about your "Home" business, so they can be sure you're properly protected.

How Much Life Insurance Do I Need?

The Age Old Question! Most experts say you need between 7 to 10 times your combined annual income, less any liquid assets.

Basically it boils down like this:

  • For Funeral Expenses, Medical and Hospitals, and Estate Administration, count on between $12,000 and $15,000.
  • Add to it debt repayment - car loans, home improvement loans, credit card balances, and miscellaneous loans.
  • Add to that mortgage balance, college costs times your number of children (figure $20,000 in state-$40,000 private annually).
  • Then add 50-75% of your annual income times the number of years needed and total that all together.
  • Now subtract savings, stocks, employer provided insurance and any other life insurance you may have, and there you have it!

If your house burned down today...

Other than contacting your insurance agent right away, you would begin to think about all the things that you could never replace.

The first thing that comes to mind is your photographs. Give all your negatives to a neighbor, relative, or anyone who could safekeep your precious memories. Buy a fireproof safe to store your home videos, wedding pictures, deeds, tax returns, etc. Next would be the family heirlooms, artifacts, pictures and crafts. You should videotape all these collectibles to have a permanent record. You already have smoke detectors in the house, but what about the garage?

Place a heat/smoke detector in the garage. Many fires start in this area and are undetected until it's too late. Ask Collaborative Insurance Services for other things to think about before you have a claim.

How high of a deductible should I carry? What makes sense?

We are asked many times, "What makes sense on carrying my deductible?" Generally, the savings on a deductible will be equal to the premium paid over a 2 1/2 to 3 year period. Most people won't have claims that often and should take the savings.

Another point to consider is that most people have a threshold that they would not turn in a claim under a certain amount to not have it on their record. You might as well carry that amount of deductible and take the premium savings if you wouldn't turn in any claim below that amount anyway. Our recommendation would be to carry the highest deductible you can afford, and take the savings and apply it to purchase an Umbrella policy, or increase your limits where you are vulnerable to a high claim settlement.

Does Your Credit History Affect Your Insurance Premium?

It is very likely that your credit history can and will affect your personal insurance premiums. Many companies are reviewing past credit history using Transunion, Equifax, or other popular credit reporting companies. Your credit history can be influenced by late payments on credit cards, mortgages, car payments, etc.

Other effects can be the number of credit cards which have balances on them, as well as the number of "hits" on your account to check your credit history. Insurance companies have researched credit history and found those insureds with good credit history generally have better loss experience.

Ask your agent if your company used your credit history to rate your policy. Find out which company supplied the credit background, and contact the company to receive a copy our credit report. Bottom line - Keep your credit clean!

The New World of Equipment Maintenance Insurance

Most insureds are protected from such expensive surprises as fire and other liabilities. But for many companies, one erratic expense remains out of control: equipment maintenance. Many organizations still rely on traditional service contracts and a patchwork of vendors to meet their equipment maintenance needs. Problems included coverage gaps, the need to keep track of different contract dates, lack of control and a maintenance budget too difficult to forecast.

The equipment maintenance management service we can offer, assumes responsibility for equipment inventorying and repair histories, each step of the work order process, including purchase orders and documentation, the vendor pay process, and accurate evaluation through management reports. Bottom line- customers cut costs while continuing to work with current vendor services and a more reliable way for organizations everywhere to maintain all their technical and office automation equipment.

Energy Systems Policy formerly known as Boiler Policy

An energy systems policy is designed to cover three basic perils not covered by your standard contents policy. The policy provides coverage for electrical arcing, mechanical breakdown, and power surge coverage. It is designed to not only cover boiler and machinery, but can also cover office equipment, phone systems, fax machines, and most importantly, production machinery.

Without this important coverage, you may not be insured for the above stated perils, but business income coverage will apply as well.

Loan-Lease Gap Insurance-How it can help.

Loan-Lease Gap Insurance is provided by insurance companies to offset the difference in the actual value of a car involved in a total loss and the amount of the loan or lease payments remaining. By adding Loan-Lease Gap Insurance to your policy, the insurance carrier will make up the difference to the bank to pay off your existing loan.

Be careful; many banks have already included this coverage in your loan or lease, so be sure to ask to avoid paying for the coverage a second time. Most companies require that the car be within 2 model years of the current year. The Loan-Lease Gap coverage will exclude late payments, upside down purchases from the previous car, or any other negative impact directly related to your loan or lease.

What exactly is a performance bond?

A performance bond is a guarantee to perform a task based on a supplied contract. In layman's terms, if you agree to perform a job based on your bid, then the bond reflects those terms in writing, and the bonding company guarantees that your work will be done per the contract.

If you default on the job, the bonding company will step in and proceed to handle the job. Because of the unique nature of bonds, they are not insurance, and are treated like a loan. The bonding company will then try to recoup their loss by subrogating against the contract bidder. Generally, all public work is bonded to protect the municipality.

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