Archive for July, 2011
From The Personal Lines Team
Sixty years ago, when the 1950 census data was released, it showed that 8 in 10 households were occupied by married couples. Fifty years later, the 2000 census data showed that number had declined to just over 50%, signifying a change in the typical American household. Almost half of households were occupied by a single individual, roommates or unmarried couples (the 2010 census data is still in the process of being made public).
If you are in the “living together but not married” category, you should pay close attention to the language in your home and auto insurance policies that specifies which individuals are covered—in insurance terms, the “insureds.”
Most standard home insurance policies restrict coverage to a “named insured”—the individual person(s) named on the policy and his or her resident spouse. The policy then extends coverage to “resident relatives,” a term referring to individuals related to the named insured by blood, marriage or adoption (or someone under 21 in your care, such as a foster child) who are residents of the named insured’s household.
This means that a home insurance company has no obligation to cover a non-insured’s liability or to defend that person in a lawsuit alleging liability.
Consider this scenario: A girlfriend and her teenage son move in with the woman’s boyfriend. The son seriously injures another child in a tackle football game at the park down the street. That child’s parents file a suit against the mother/girlfriend.
Unless she has her own separate insurance policy (such as a “renters” insurance policy) or has been added as a named insured on the home insurance policy (which most insurance companies won’t do if she isn’t a relative), she has no coverage.
The problem doesn’t stop with liability. Chances are the girlfriend and her son will also move some of their personal property in with them, but clothes, electronics, school supplies and whatever else belongs to them may not be covered by the homeowner’s insurance policy either. Most policies exclude coverage for personal property that is owned by roomers, boarders or tenants. This personal property exclusion is another reason why a renter’s insurance policy is essential for non-insured roommates.
The auto policy also has a “named insured” which includes the individual listed on the policy and his or her spouse. The insured on an auto policy varies depending on the coverage. For example, liability, medical payments, and uninsured motorist coverage each have their own definitions of “insured.”
Say an adult boyfriend and girlfriend each have a car and their own personal auto insurance policies. One has high limits of liability on their policy, maybe $100,000, and the other has lower limits, like $25,000.
Let’s look at liability coverage in this scenario. This section of the policy covers the “named insured” and “family members” for liability arising out of the use of any auto. It also considers any other person an “insured” while that person is occupying a car (with permission) that is insured under your policy.
Dig deeper, however, and you’ll see that the policy excludes coverage while the “named insured” or “family member” is operating a vehicle that is furnished or available for regular use.
If the girlfriend is driving the boyfriend’s car and gets into an accident causing injuries, his auto insurer would pay up to the policy limits—in this case, $25,000. Unfortunately this may not be enough money to cover the full liability if the injuries are severe, and the liability policy with $100,000 limit might not be available as a fallback, even though it covers the driver for the use of any auto. That’s because the driver’s insurer can argue that this car is available for the driver’s regular use since the car owner and driver live together and that, under that circumstance, coverage is excluded by the policy language.
The good news is that these scenarios have solutions that we are ready to discuss with you. Call us today!
by Lynn Hudson
Summer travelers may be carrying some expensive, excess baggage during their summer vacation-uneeded insurance.
Consumers who buy travel services—such as vacation packages or rental cars—are likely to encounter a plethora of insurance-related products intended for protection against vacation disaster. But are these products necessary? In many cases, they aren’t.
For the typical family, buying extra travel-specific insurance can be an unnecessary waste of vacation money. If you have standard levels of homeowners, renters, auto and life insurance, as many people do, you are already protected for a large number of travel-related incidents that may occur while vacationing in the United States.
In the case of theft, consumers with the proper insurance generally are protected, even while traveling in a foreign country. Travelers who are not protected by standard insurance may want to consider purchasing certain specialized products to guard against theft, illness or liability.
The best way for all vacationers to save money and aggravation is to leave valuables at home. Why risk an expensive loss by packing items you don’t need? Ask yourself whether you really need to take your diamond ring, Rolex watch or most expensive clothing to the beach.
If you must take your valuables with you on vacation, avoid the risk of theft by packing them in your carry-on bag instead of checking them at the airline gate. If you leave your luggage in the car, always put it in the trunk.
Some travel-related insurance you may want to avoid:
Supplemental medical coverage. Most major medical insurance policies will cover consumers for standard medical care while traveling in the U.S. Typically, supplemental health insurance is not needed, unless you plan to travel abroad.
Flight insurance. Flight insurance is a type of limited life insurance that covers you only while you’re on a plane. More comprehensive life insurance, which is intended to protect your dependents if you die, is usually a better value because it protects your family at all times. In many cases, people without dependants do not need life insurance at all.
Rental car insurance. Most rental car companies offer collision damage waivers —often directly written into your contract for an extra fee to protect you from liability for damage to the rented vehicle. Nearly 80% of car owners already have coverage—either through their personal auto policy or a credit card—that applies to rented cars, as long as the vehicle isn’t used for business.
Some travel-related insurance you should consider:
Trip cancellation insurance. For travelers who purchase costly, non-refundable travel packages—especially those with small children or elderly parents—should think about trip cancellation insurance (TCI). TCI reimburses consumers for non-refundable expenses in the event they must skip their trip due to illness, death, family or weather emergency.
At a cost of about $80 to $150 per person, TCI can be costly, but some policies will provide extras such as lost baggage and medical evacuation insurance. Consumers can buy this coverage from an independent insurance agent, rather than the tour company, which guards against excessive coverage exclusions and ensures that they are protected, even if the travel company goes out of business.
To avoid problems, some travel experts recommend booking vacations with respected travel providers. However, even well-known travel companies do not guarantee problem-free vacations.
The Turner Agency recommends that you call us before you leave home to ensure that you are protected in the event of travel-related losses. We also suggest that you review all travel insurance contracts for exclusions—such as pre-existing medical conditions or injuries received while participating in “extreme sports”—before signing on the dotted line.
by Ross Turner
If you live in a home in a developed area or subdivision, there’s a reasonable chance that you are a member of a homeowner’s association. The same is true if your pad is a condominium.
Association membership has its benefits. In return, members of the association are sometimes asked to contribute funds to help maintain the integrity/value of the common elements. Those common elements—a garage or clubhouse, for example—are those items of property commonly owned by all members. “Asked” may be too soft a word—such contributions usually are collected through mandatory assessments.
What are some things for which you as an association member can receive an assessment? Good question. The answer is typically found in association bylaws. In some states, laws will have something to say about the extent an assessment can be charged and for what it can be charged. However, such statutes do not exist everywhere.
Here’s another question: If you receive an assessment from your home or condo association, will your home or condo insurance policy help you pay for it?
The answer, well, depends.
Most home and condo insurance policies have very similar language in how they address coverage for loss assessment. There are a few things you will need to know before coverage can be determined.
What Caused the Assessment?
The home or condo policy only will kick in to pay an assessment that is charged to you for a reason that would be covered by your insurance. For example, if the assessment were charged to help cover the cost of damage to the clubhouse caused by a fire, your policy would pay due to the fact that fire is a covered loss under your policy. However, if earth movement damaged the same building, your policy would not pay if earth movement is not a covered loss under your policy.
If an assessment is charged to cover the cost of painting the exterior of the clubhouse simply because the association decided it was time to paint, your coverage would not kick in due to the fact that there has been no covered loss.
Assessments are not only charged to cover claims of damage to common elements. Members also may be assessed for claims of bodily injury or property damage against the association’s master policy. For example:
A guest suffers a permanent head injury after slipping on a damaged walkway. The bodily injury claim against the association is $1.5 million. The association’s policy will cover the injury up to its policy limit of $1 million. The association assesses its members to cover the remaining $500,000.
In this example, your insurance policy would kick in to help pay the assessment. Why? Bodily injury is covered by your policy.
Which Policy Covers the Assessment?
Your home/condo policy says that it will only pay the cost of assessments that are charged during the policy period. This is important to note because it’s possible that the actual assessment may not be charged until months after the loss causing the damage occurred. For example, say the hurricane happens in August, when Company X insures you. In September, you switch your coverage to Company Y. The assessment for the portion of the hurricane damage that isn’t covered by the association’s master policy arrives in October. Company Y’s policy would kick in as it was in effect when the assessment was charged.
How Much Will My Home or Condo Policy Pay?
Most policies are issued with a limit of $1,000 to cover loss assessments. This limit is the most your policy will pay for a single loss, regardless of how many assessments are charged for it. For example, if the clubhouse is damaged by a hurricane, it’s possible that members may be assessed first to cover the cost of the association master policy’s deductible—and again to cover the cost of the repair that exceeds that policy’s limit of insurance. Since both assessments are charged due to the same hurricane, the total paid by your insurance would not exceed $1,000.
That $1,000 Seems Too Low. Can I Increase My Assessment Coverage?
Yes. Most home and condo insurance companies offer you the opportunity to add more coverage for loss assessments. It’s important to know that while the dollar amount may be increased, the terms of the policy still apply (i.e. you will still need the assessment to be charged due to a covered loss).
If you choose to purchase additional assessment coverage, proceed with caution. Most loss assessment endorsements will still only allow you a maximum limit of $1,000 if the purpose of the assessment is to cover the master policy’s deductible.
Loss assessments can be expensive. Having the right home or condo insurance policy to help cover some of the cost could save you big bucks. For more information, call The Turner Agency today at 288-9513.
I have noticed that the number of golf carts in my neighborhood has increased dramatically over the past couple of years. Families are using them as an alternative to driving their cars to the pool, to swim meets, or to visit a neighbor. With the price of gas, I can understand why.
However, the safety issues involved with a golf cart concern me, particularly when I see so many children behind the wheel**. Almost every serious golf cart accident I have heard or read about involved someone falling out of a golf cart and hitting their head on the ground or curb. I know Travelers, one of our companies, had two large umbrella losses in the community of Savannah, Georgia, that involved people falling out of a golf cart and dying from hitting their head.
Neither of these accidents were caused by people playing around. Rather, the accidents resulted from the drivers making an unexpected turn.
Recently Insurance Journal ran an article regarding the deaths that have occurred as a result of golf cart accidents in South Carolina. Click here to read the entire article. While I don’t think we need to require helmets to drive a golf cart, I do think seat belts in golf carts are a great idea – but they only work if you use them.
**South Carolina law states that those who wish to operate a golf cart must be at least 16 years old and possess a valid South Carolina driver’s license. The driver of the golf cart must have the registration card of the golf cart and his or her driver’s license while operating the golf cart on highways.
(We learned this the hard way a few years ago when we allowed our son to drive a rented golf cart down the street and back at the beach. When he returned to the house, he was not alone. He was being escorted by a policeman because he was under age.)
Did You Know?
The state of South Carolina requires a permit for a licensed driver to operate a golf cart during daylight hours on a secondary highway or street within two miles of his residence or place of business. For more information on how to obtain a permit from any DMV office, click here.