What An Umbrella Policy Is, and Why You Need It

Most Americans view auto insurance as necessary to protect against the costs of a car accident. Likewise, it’s common knowledge that homeowners insurance helps families rebuild their lives and homes. An “umbrella” policy is not as well known, but anyone who owns a home or any assets should consider buying it.

Umbrella liability insurance covers you in many situations if you are held responsible for bodily injury, property damage, or personal injury. The product got its name because it adds a higher level of protection above auto, homeowners and boat policies, which are “primary” policies. Umbrella coverage kicks in after primary insurance is exhausted. What’s more, an umbrella policy offers primary coverage for losses not covered by other insurance.

Typically, insurance agents sell an umbrella policy in conjunction with auto and homeowners coverage. You can usually add $1 million-plus of liability insurance for a few hundred dollars per year, and a multiple-policy discounts often can be had. One tactic insurance pros suggest: raise deductibles on auto and homeowners policies, and use the premium savings to pay for umbrella coverage.

What does primary insurance pay for? Liability insurance under auto and homeowners policies pays expenses (for example, an injured person’s medical care, rehabilitation and lost wages) because the policyholder was at fault through negligent actions. Liability coverage also pays for costs of defending against a claim or lawsuit.

It’s common for a driver, vehicle owner, homeowner, or boat operator/owner to be held responsible for someone else’s injuries, property damage, lost wage and/or expenses. An at-fault driver also can be held liable for personal injury (which is distinct from bodily injury), including psychological injury such as “pain and suffering.”

What does umbrella coverage do? The umbrella is a shield to protect an individual from having to tap into savings or sell assets to pay a judgment or claim. The umbrella policy keeps the hands of the claimant from the personal, family and business assets of the negligent person.

Intoxicated drivers leaving a party at your home, dog bites, and the neighbor kid falling off the trampoline– these incidents can cause financial losses. Even lending a friend a ski house or lake house for the weekend can create a claim. A tree in your yard that blows over in a storm and crushes the neighbor’s car is another example. A home-based business that requires visitors to come to your house may create a loss that’s excluded from homeowners coverage.

But all these incidents may cause bodily injury, personal injury and loss of wages. These losses might exceed (or be excluded from) primary insurance limits and coverages.

Who should consider an umbrella policy? Most homeowners should consider an umbrella, but especially those active in community affairs. Serving in civic, charitable, and religious organizations can lead to conflicts, claims, and even lawsuits. Even if a lawsuit is thrown out of court, you still must defend yourself. Umbrella liability coverage picks up these costs, whether or

not a person is actually found to be liable. Defense costs generally are covered in addition to the liability limits of the umbrella policy.

Conversely, a person might face a damaging situation such as a false arrest or imprisonment, defamation, invasion of privacy, wrongful entry, eviction or malicious prosecution. Most will want to defend themselves, but will face legal and other costs to do so. Homeowners coverage won’t cover it; umbrella coverage can.

A Trusted Choice® agent can review your family’s coverage to ensure you are protected. Click here to find a Trusted Choice® agency in your community.

Rebuilding To Code After Superstorm Sandy

This is an interesting article on rebuilding property damaged by Superstorm Sandy.  Cappy Stults was interviewed in the article with advise we give our clients in this unique claim situation after this disaster. 

http://www.propertycasualty360.com/2013/01/28/nj-order-on-rebuilding-to-code-post-sandy-lauded-b

Hurricane Sandy has turned many families lives upside-down.  NJ.com posted an interesting article on how independent agents help guide our clients during these unpresidented times. 

http://www.nj.com/business/index.ssf/2012/11/guiding_clients_after_the_stor.html

Hurricane Sandy Damage Insurance Treatment In Brief

Safety

Use of generators can be very dangerous. Never bring generators inside and point the exhaust away from windows and doors. Wood stoves, kerosene heaters and electric heaters can cause fires and excessive carbon monoxide. Be very careful in their use and we suggest not using them when you are sleeping. Do not take action in emergency repairs that are beyond your physical ability and knowledge. Life safety is more important than lost property.

The following information is general in nature. Your own company may treat claims in a different manner.

Emergency repairs to prevent further damage is generally covered. Removing trees from structures and the cost to cover holes with tarps or plywood should be covered. Removal of trees that block driveways and ramps may also be covered subject to $500 or $1,000 limit. Removal of trees that are not on buildings or blocking drives is generally not covered by insurance.

The responsibility to remove a downed tree is that of the property owner of where the tree has fallen: not where the tree came from. A neighbor’s tree on your property generally is your responsibility, not the neighbor’s unless they feel responsible. Their insurance, however, will not pay for the removal from your property. Trees on cars are covered under the vehicle’s comprehensive coverage on the auto policy, subject to the deductible. The cost to remove the tree off of the car is not insured unless the tree is also on a structure and again, the covered amount may be limited.

Insurance coverage for loss of food in a refrigerator or freezer due to power outage has limited coverage under most insurance policies. It is subject to the policy deductible although some companies have a lower deductible for food spoilage.

Although Sandy was a wind event, whereas Irene was a rain event, many companies offer specified limits for damage caused due to failure of a sump pump. Flood damage is not covered on a homeowners policy but would be under a federal flood insurance policy offered through many insurance companies.

Claim reporting and handling

Companies bring in teams of adjusters from around the country. Sandy affected millions of households and businesses. Many company and agency offices were also affected by both direct damage and power outage. These outages have also affected phone and data services. If you cannot get to your agent, call your insurance company’s claim reporting office. These numbers are many times on your policy or bill. Be specific about your damage. Insurance companies will be triaging claims, responding first to those that have the most severe damage. If your damage is not affecting the livability of your home or business, it may take a few days for the company to respond to your report. This does not mean they are ignoring you or have lost the report. If you do not hear back from them in 5 business days, follow up. Calling them after just 2 or 3 days will only slow them up.

Keep track of your expenses and take many pictures before doing any repairs. Be careful who you hire and pay to do work. Unfortunately during these times there are unscrupulous people who will take advantage of homeowners. Be cautious in advancing money.

Charles S. Stults, Allen & Stults Co., Hightstown, NJ

ALLEN & STULTS INSURANCE – LOCAL AGENCY INCLUDED IN IIABA’S BEST PRACTICES STUDY

HIGHTSTOWN, NJ – Allen & Stults has retained its status as part of an elite group of independent insurance agencies around the United States participating in the Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) “Best Practices” Study Group.

Each year since 1993, IIABA and Reagan Consulting, an Atlanta-based management consulting firm, join forces to study the country’s leading agencies in six revenue categories. The agencies comprising the study groups are selected every third year through a comprehensive nomination and qualifying process and awarded a “Best Practices Agency” designation. The selected “Best Practices” agencies retain their status during the three-year cycle by submitting extensive financial and operational data for review each year.

“This is an honor to again be recognized as a Best Practices Agency, and a reflection of the hard work of our employees and loyalty of all of our customers” says Cappy Stults, Allen & Stults President and CEO.

This year concludes the current three-year study cycle in which more than 1,200 independent agencies throughout the U.S. were nominated to participate. Only 224 agencies qualified for the honor. To be chosen, the agency had to be among the 35-40 top-performing agencies in one of six revenue categories. The agency was nominated by either an IIABA affiliated state association or an insurance company and qualified based on its operational excellence.

The Best Practices Study was initiated by IIABA in 1993 as the foundation for efforts to improve agency performance. The annual survey and study of leading independent insurance agencies documents the business practices of the “best” agencies and urges others to adopt similar practices.

Allen & Stults Insurance was founded in 1881 and can offer insurance products from a number of different companies including Travelers, MetLife, The Harford, Encompass and Progressive. Website: www.allenstults.com

For further information, please contact Jerry Ford of Allen & Stults at 609-448-0110.

Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance – property, casualty, life and health – as well as employee benefit plans and retirement products. Web address: www.independentagents.com.

Are Your "Other Structures" Properly Covered?

Verify Your "Other Structures" Are Properly Covered

Your homeowners policy covers "other structures" that are either (a) separated by a clear and distinct space from your dwelling or (b) connected to the dwelling by a fence, wall, wire, or similar type of connection. The limit of insurance for other structures is typically 10 percent of your dwelling limit. Sometimes, however, this limit may be quite inadequate, creating unwanted coverage gaps. For example, residences with detached guest houses, storage units, swimming pools, expensive fences, and gazebos may be vastly underinsured for these other structures. Thus, consider the following tips if you find yourself in that situation.

An other structures on the residence premises (HO 04 48) or similar endorsement can be selected to increase the limits for these structures.

A replacement cost loss settlement for certain non-building structures on the resident premises (HO 04 43) or similar endorsement can provide replacement cost protection for items such as reinforced-masonry walls, metal or fiberglass fences, patios and walks, and driveways. The attachment of this endorsement can often add 30 percent or more to your settlement for your damaged property.

If you own, rent, or lease "other structures" located away from your main premises, consider an endorsement adding property coverage to these off-site structures such as the coverage B—other structures away from the residence premises (HO 04 91) endorsement or the specific structures away from the residence premises (HO 04 92) endorsement.

Sometimes it is not readily apparent whether certain "other structures" are on or off premises. For example, if your "other structure" is a boat dock on a lake, be aware that it may actually be "off premises" since most lakeshores are technically owned by the Army Corp of Engineers.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2012
International Risk Management Institute, Inc.

Mobile Devices

"No it's cool, I can stay on a little longer, my cell phone plan bills me by the minute!"

Mobile Devices: Does Insurance Tag Along? 

Mobile information devices like PDAs and MP3 players occupy the bags and pockets of tens of millions of Americans. These devices can be pricey, often costing hundreds of dollars. The cost to obtain the information programmed on these gizmos can be exponentially more. If your portable device is damaged or stolen, will these costs be covered by your insurance?

Personal Insurance
Consider the iPod. Their owners span every demographic. For some, the iPod is as important to getting through the day as morning coffee or sunshine.

This pervasive product ranges in cost—usually a few hundred bucks or less depending on bells and whistles and that’s just for the hardware. Downloading music can cost a dollar a song, videos and “podcasts” even more. Add in time spent collecting this information and you’ve got thousands of dollars invested in this thing. The same is true for other portable devices.

The good news is that most homeowners policies cover personal property while it is anywhere in the world a positive considering the nature of these devices. The bad news is that coverage is limited—meaning the check you receive after the loss may not be what you expect.

While many believe their iPod is “worth” thousands of dollars, a homeowners insurance policy is designed to cover “direct physical loss” to property. Therefore, a typical policy will cover the cost of the device itself but not the cost of the information stored on the device. Some homeowner policies include coverage for loss to “personal records,” which may include information stored on a portable device. However, not all will do so and those that do likely limit coverage to a relatively small amount. If you have questions, consult your Trusted Choice® insurance agent.

Business Insurance
More and more people are using PDAs, such as BlackBerrys, Treos and iPhones, to conduct business on the fly. These devices keep them wirelessly connected to their work through email, Internet and phone.

If you own the device personally and use it for business, coverage under your homeowners insurance policy is less generous. Personal property used for business may not be covered worldwide and is subject to an amount of insurance that is lower than other personal property. A further restriction is that any limited coverage available for “personal records” does not apply to business records.

If the device is owned by your employer, it’s likely covered under a business insurance policy. Such policies contain similar limitations for loss of information. Business owners should call their Trusted Choice® independent insurance agent for information about electronic data coverage.


Back it Up
Whether used for business, personal, or both, cost to replace the device itself is likely the extent your insurance will pay if it is damaged or stolen. The best way to protect the information contained in the device is to back-up data periodically. Then, even if you have to replace the device, you won’t have to start from scratch.
 
Allen & Stults Co. is a local Trusted Choice® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Allen & Stults Co. online at allenstults.com or call it at 800-792-8660.