Getting the right property and casualty insurance coverage may not rank high on your list of financial priorities. Compared with investment decisions and estate planning issues, questions about the language in your homeowners policy, say, may seem hardly worth considering. Yet the more successful you become, the more complicated your asset-protection needs are likely to be—and the more you have to lose. Suppose, for example, that in addition to your primary residence—a historic home—you also own a house at the beach and a condo in the city. The properties are in three different states. The value of your collection of Abstract Expressionist paintings has grown rapidly. And you just volunteered to serve on the board of directors of a charitable organization.
Almost every aspect of this situation could cost you dearly. Insurance laws may vary widely from state to state, different kinds of property require specialized coverage, and collections of art, antique cars, and other unique items may be difficult to protect fully. Meanwhile, serving on a nonprofit's board could subject you to additional personal liability.
Safeguarding yourself and your family may mean buying additional coverage, but more insurance isn’t necessarily the solution. Rather, it’s important to review all of your needs, consider specialized policies or policy options, and coordinate your coverage with other aspects of your financial situation. Here are 6 different shortcomings that could prove costly.
1. Leaving gaps in homeowners coverage. Any homeowner needs to review coverage regularly to keep up with rising replacement costs. But insuring different kinds of homes in different locales poses extra challenges. If you buy insurance from more than one carrier, you may face contrasting rules, limitations, and policy renewal dates. For example, the liability limit on the policy for a second home might fall below the minimum on an excess liability policy designed to complement the insurance on your primary home. You could wind up responsible for the difference.
2. Ignoring properties unique characteristics. One perk of affluence is the means to own exceptional homes; one drawback is that they may be difficult to insure adequately. Standard homeowners coverage won’t pay for the materials and craftsmanship needed to rebuild that 19th century showplace you’ve painstakingly restored. Coastal homes may face hurricane damage, while a place in the California (or, Colorado) mountains could be subject to earthquakes or wildfires. Meanwhile, city co-ops or condos may need policies tailored to their buildings or associations coverage.
3. Under insuring art and collectibles. Standard homeowners policies limit coverage for the losses of antiques, furs, and other valuables. And while you could schedule additional coverage, insuring the real value of a collection of contemporary art or vintage muscle cars likely will require a specialized policy addressing several critical issues. How is the value of the collection determined? (You’ll need a professional appraisal when the policy is designed, with frequent updates as items appreciate.) Will a damaged or destroyed item be paid for with cash, or will you be required to have it replaced or restored? Will additions to your collection automatically be covered?
4. Forgetting to insure household employees. When someone works for you or your family, as a nanny, landscaper, personal assistant, or in another role, you could be liable for medical expenses and lost wages if the worker is hurt on the job. Several states require household employers to pay into a workers compensation fund, while in other states it’s optional, but providing such insurance may be mandatory for ensuring your financial well being. If an employee drives your car, also make sure he or she is included on your policy.
5. Neglecting your liability as a board member. Excess liability coverage could help protect you if you’re sued as a director of a nonprofit's board. Or for more comprehensive protection, you may want to consider special directors and officers liability insurance.
6. Failing to get frequent policy reviews and updates. Your financial life isn’t static, and neither are your insurance needs. The value of a collection may increase; extensive home renovations could mean a sharp rise in the value of your property; and the re titling of assets as part of your estate plan—or because of divorce, a death in the family, or the birth of a child—could necessitate policy changes. Even lacking major events, you need a comprehensive review of all your insurance coverage every year.
It often doesn’t take much to realize a cluttered space can affect how we feel when we’re in and amongst it, but researchers at UCLA have confirmed a scientific link between clutter and depression.
In a study of 32 Californian households, UCLA’s Center on Everyday Lives and Families discovered a number of insights into the relationships between the objects around the home and the mental health of the families living in them. The results have been published in a book titled Life at Home in the Twenty-First Century, a fascinating look at how the space in middle-class American homes is used.
Amongst the most enlightening discoveries is the fact that cortisol, the hormone associated with stress and present in most animal species, is noticeably higher in women who have a large number of objects around the house. While it’s a useful hormone to have in certain situations (without it we would feel no natural caution when doing things such as crossing a busy road, standing next to a steep drop or during other life-or-death situations), a buildup of this hormone in non-dangerous situations causes us to feel anxious, fearful and unhappy when there is no reason to be.
Interestingly, the cortisol level in men stays relatively steady in a cluttered environment, so it’s easy to see why tension between partners could be more likely to boil over when there are differences of opinion on a household’s clutter.
If you feel your house could do with a declutter, one useful option is the sealed-box technique. This involves placing a number of items you don’t use or don’t feel particularly attached to into a box and storing it away for a while.
After a decent amount of time has passed, if you still haven’t opened the box or missed the items in it, simply leave it closed and donate them to charity. You’ll rest assured knowing you’ve made some space and pleased someone else!
Please comment below with some of your decluttering tips.
In a couple of minutes learn why turning in insurance claims is NOT always the best idea.
So, you're going on a trip.
You want to know if you need to purchase the rental car agency's insurance. You have comprehensive and collision coverage on your vehicle, so the coverage should extend over, right?
The answer is yes, BUT there is a catch!
Turns out, your car IS covered, but loss of use is NOT which means, you could possibly be stuck paying for the days that you cause the rental car to be out of commission.
Translation: YOU PAY FOR THE DAYS THE CAR HAS TO BE IN THE SHOP!
Don't believe us because the financial guy who writes a lot of books says you don't need to purchase rental car insurance? We polled a large group of insurance agents to find out what they've SEEN in rental car claims situations.
Here are a few of their comments:
"Charged almost 3k for a scratch. They charge for even the time vehicle "will be out of service""
"It happened to me. It was a mess and ruined my vacation. I was even an insurance agent while it happened 😬🤣"
"I worked for Enterprise before Insurance.. some credit cards will cover loss of use.. AMEX is a good bet (call customer service of card), it has to be deposit hold card and payment card.. I worked in escalations 😁"
"Over the years I have had several clients that the policy paid to get a replacement Rental but the Rental company charged for their Loss of Use while their damaged car was out of service no longer part of the operational fleet. I’d say on average the clients that have shared these stories, I’d say like above; I’ve seen approx. $2500-$3000. I would say I’ve seen some carriers that have by endorsement or otherwise, covered the Loss of Use. Carrier specific."
"Yes had a customer who had their credit card hit for over $3,500 after an accident in a rental car when they wrecked it for diminished value and admin fees and a few other charges. I always recommend buying it from the rental company."
"Oh yes. One example was the rental car got the window smashed out. $2800 bill for the client who had no loss of use and didn’t purchase coverage."
Bottom line, you need to know YOUR policy. Does it cover loss of use, diminished value, or administration fees? If so, are you willing to fight if the rental car company comes after you and tries to make you pay? Is there an easier option (that won't make your insurance premium go up should you have an accident) like backup coverage through your credit card? Be sure to use THAT card to rent your car. Knowing the answer to all of these questions should help you make the right decision for you. If you need a little guidance, feel free to reach out. We're happy to chat a little more about it.
I recently posted the caption above on the Colorado Parent Page because it's cute and silly. However, the need to have a current home inventory is serious as it helps make the road to recovery faster in the unfortunate event that disaster strikes.
Documenting items in your home may feel like an overwhelming task. Here’s what you need to know to guide you through the process.
Document. Take detailed pictures and video of every room in your home as well as a record of each individual item. Items such as antiques should be discussed with your insurance agent to itemize them on your policy. If you already have a home inventory list, make sure to keep your list updated with any new significant purchases along the way.
Proof of value. Keep receipts, contracts and appraisals to understand what level of coverage you’d need. Things to take note of: item description, make/model/serial number and estimated replacement costs.
Don’t forget the storage unit. Personal items that are kept in a self-storage facility are covered under homeowners insurance.
Keep it safe. Store your documentation in a fireproof box or safe deposit box or keep a file on hand with your insurance agent. You can also back up the files on an external hard drive or to the cloud (such as Google Drive or Apple’s iCloud) as an additional measure.
Kick-start. To kick-start your inventory task, CLICK HERE to check out a great list of home inventory apps to help you with the process.
After taking your home inventory, give us a call to check your current policy to ensure that you’ll be covered or set you up with a new policy today!
It’s not unusual to buy a house, get homeowner’s insurance and then never check up on the policy again. Then something terrible happens and you find out you’re not covered for that new deck you added, the increased cost of building materials, the solar panels you added last year, etc.
To avoid this happening to you, check up on your policy coverage at least once a year. Some people choose to update anything to do with insurance of all kinds during their birth month to make it easy to remember to do. When you do, here are a few questions to answer.
Has Your House Increased in Value?
If you’re not sure, ask for an assessment. Usually you’ll get a tax assessment sent to you once a year in order to pay your property taxes. If you notice a big increase in the assessment, first double check to make sure that it is accurate and not overpriced; second, call your insurance company so that you can update your policy.
How Much Have You Paid Down the Mortgage?
If you’ve paid down the mortgage and you have a healthy savings account, you should determine how much you’re willing to come out of pocket for your house if something should happen. Some people, for example, do not report a power outage caused by a storm that ruined their food. They really don’t need the 300 dollars to refill the fridge from the lost food, or 1000 dollars to fix the damage caused by the tree falling on the roof.
Have You Added onto the House?
If you’ve added a room, improved the windows, improved security and so forth, you should talk to your insurance company to determine if this affects the price of your insurance. Having safety devices like some alarms, carbon monoxide detectors, and security features such as automatic calls to the fire station when you’re out can lower the cost of your insurance. Likewise, some other additions like a new room will add to the cost.
What New Things Have You Brought into the House?
Most of the time, a couple of years after buying a new house people tend to buy new furniture, more electronics and other things that cost more money than their old appliances and entertainment systems. It’s important to assess at least once a year the cost of the items in your house such as new tools, furniture and fixtures.
Have You Installed a Security System?
Security systems can cut down on the cost of your insurance when it comes to theft risk. If you’ve installed an expensive system, though, it might add to the cost of your insurance to replace the system should it be damaged from something like a storm.
Do You Have a Pool You Did Not Have Before?
Have you built a pool, added a hot tub or even have a trampoline? If so, your insurance needs are going to be higher due to potential liability. Getting children’s parents to sign waivers doesn’t work, so make sure you are covered.
Has a Fire Station Moved Nearby?
Believe it or not, having a fire station nearby can lower your insurance costs, but having a fire extinguisher put into your yard can make them higher. If either of these things happens, you need to call your insurance company and let them know to see how it affects your insurance.
Did You Add a Storm Shelter?
Adding a storm shelter is one more thing that will need to be repaired should something terrible occur. While it will help save on loss of life and some companies give a discount for having one, in some cases it might actually increase your insurance costs.
As you take an assessment of your homeowner’s insurance needs, remember to also update other policies as needed. Please do not avoid updating your policy for fear of paying more. There is no point in paying anything if you’re not truly covered. Getting paid 1000 dollars when you need $10,000 is just like getting nothing at all.
To make sure your home is covered, give us a call!
A couple of years ago, I went hiking above Chautauqua Park in Boulder. Within 30 minutes of my hike, I received a call from American Express letting me know of fraudulent behavior on my credit card. I was shocked that within a matter of minutes from the time I had parked and left my car, someone had smashed the passenger side window, grabbed my wallet which I'd hidden, and rushed off to have a fantastic spending extravaganza at my expense.
Remembering this experience got me thinking. How can I make sure that doesn't happen again? Here are a few quick tips:
Lock it down. While it might be tempting to leave your windows cracked on a hot day, make sure that your windows are completely rolled up and the doors are locked. Don’t forget the sunroof, too.
Hide valuables. As a general rule, never leave your valuables in the car. Hide sunglasses, electronics and any other “shiny objects” in your glove box or center console. Purses and shopping bags should always be tucked away in the trunk. Always take your garage door remote inside with you. Do NOT leave spare change in plain sight, I know a teen who smashed a window just to get a few dollars worth of coins.
Park smart. Keep visibility in mind when selecting your parking spot. Parking on well-lit streets and under bright street lights is always ideal.
Anti-theft devices. Car alarms are the best deterrent. Consider the addition of a tracking device, such as LoJack® or OnStar®, which could also qualify you for an extra discount on your auto insurance.
Minimize appeal. Overall, the best way to keep your car safe and protected is to lower the appeal of what treasures could be inside and to make it more difficult, risky and noisy for a thief to gain access to your vehicle.
Give us a call to have a check-up to review other safety tips and see what discounts we can discover for your policy.
Many seasonal entrepreneurs feel their businesses are too small to necessitate coverage without realizing how critical it is that they are protected as businesses that operate year-round. Here are some factors to consider when it comes to making sure you’re covered.
The elements. The summer season calls us to the great outdoors, which means employees and customers become subject to the risks weather creates. Rain can cause slips and falls, wind can knock over heavy objects and injure people or damage property and heat and humidity can cause equipment to fail, resulting in repair costs and lost revenue.
Increased volume. The seasonal uptick in business often means busier days with hotter nights for employees, calling for changes or updates to your workers’ compensation policy. Additional equipment might also be purchased with expanded operations. It’s important to review your policy’s limits to make sure you’re protected.
More driving. Service-based industries especially experience increased driving and travel time to job sites. Ensuring that you have adequate coverage for both the number of vehicles and each driver is mission critical.
Vacation time. While your regular employees take time off to take much-deserved vacations, you might find the need to hire temporary staff to cover the workload. Ensure that your commercial policy includes the appropriate level of workers’ compensation.
We’d be happy to review your specific needs and discuss any risks or additional liabilities you could incur. Contact us today to get your recommended SPF for summer!
Meet the author: