Purchase & Maintain Your Fire Extinguishers

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I was speaking with a customer earlier today about a remodel project that they have planned.  When I asked about fire extinguishers for the project, I was pleased with their rapid response that they would go out and purchase some immediately!
  According to a National Fire Protection Association study, there are approximately 400,000 house fires each year in the United States, which account for 75 percent of all structure fires. This study also indicated that residential fires result in over 3,700 deaths per year. Indeed, fires typically kill more Americans than all other natural disasters combined.
Having properly placed fire extinguishers in your home is an excellent loss control measure that targets the most common cause of property loss.  
Before purchasing fire extinguishers, learn about the different types of fire extinguishers. There are four basic types, as follows.

• Class A extinguishers put out fires in ordinary combustibles, such as wood and paper. 
• Class B extinguishers should be used on fires involving flammable liquids, such as grease, gasoline, and oil. 
• Class C extinguishers are suitable for electrically energized fires. 
• Class D extinguishers should be used on flammable metals and are typically specific for the type of metal in question. 

We all now that having fire extinguishers makes sense unfortunately, most of us buy them, hang them, and then neglect them.  It's like a Ron Popeil rotisserie commercial, "Set it and forget it!"  Unfortunately, our inaction may lead to an extinguisher's inaction as well when called upon.  So, what can we do to make sure our extinguishers are in good working order?The following are some tips concerning this important fire protection device.

• Most home fire safety experts recommend medium size, multipurpose fire extinguishers that are labeled as suitable for use on class A, class B, and class C fires. 
• A fire extinguisher should be kept in your garage, kitchen, and on each floor of your home. 
• You and other potential users in your household should thoroughly read the extinguisher's instructions on a periodic basis. 
• A professional fire equipment supplier should inspect each extinguisher annually. 

Note that prices on fire extinguishers start at around $20. Many insurers offer modest premium credits to encourage homeowners to purchase and maintain extinguishers.

ARE YOU SMARTER THAN AN IDAHOAN?

Idahoans and Wisconsonites may take some occasional ribbing from folks in other states, but they top the list when it comes to smart drivers.  And while people may talk with disdain about Utah drivers, the lowest test scores came from the Northeast.  Read more about the smartest drivers here: http://bit.ly/9poyto

So does this list coincide with where the safest drivers are?  Yes and no.  Many of the smarter states lead the safer states list, but not all.  The safest drivers come from the Midwest, this according to Allstate.  http://bit.ly/1D44QR   ...and yes, that is Boise Idaho, coming in at number 9.

NEED FLOOD INSURANCE TODAY? SENATE SAYS, NO WAY!

For the fourth time, the US Senate has let the funding for flood insurance lapse.  What does this mean for the economy?    Basically it puts a halt to any loans that are in process, where the loan collateral is in a flood zone requiring flood insurance.  You can read more about the lack of funding here: http://bit.ly/dAQhu5

Why is it so hard to fund the National Flood Insurance Program?  The answer is political and probably better left off this blog!

So what can you do if you need flood insurance now?  Unfortunately, not much!  You can wait until the Senate reconvenes and decides to fund flood insurance or you can try to convince your mortgage broker to accept one of the alternative flood insurance offerings available through Lloyds of London or other brokerage houses only available to those who live in some states.

Frustrated?  Call your Senators through the US Capitol Switchboard: (202) 224-3121 and let them know.
 

DON'T MIX ALCOHOL AND DRIVING, "WELL DUH!"

When I think of the risks of drinking and driving, the thought, "Well duh!" goes through my head.  Everyone knows how stupid it is to mix alcohol and car keys.  Unfortunately, some still haven't got the message, so if you are one of them, here is a "Well Duh!" message for you!

A National Highway Traffic Safety Administration study indicates that nearly 12,000 people died in automobile crashes involving alcohol consumption in the United States in 2008. This tragic statistic represents an average of one alcohol-related auto accident death every 45 minutes. Tougher DWI laws are one answer to reduce these losses. Educating drivers on alcohol awareness is another important step. The following educational tips about drinking and driving are important to remember and to pass on to young drivers.

• Never drink and drive. Be aware that neither coffee, exercise, nor a cold shower will sober up a drinker. Only the passage of time will do so. If a person does drink, a nondrinking driver should be designated.
• Apply a zero-tolerance policy to alcohol and young drivers. Young drivers are particularly at risk to be involved in alcohol-related crashes.
• Steer clear of impaired persons on the road and report these incidents to the police as soon as safely possible. Drivers under the influence of alcohol display certain driving characteristics, such as weaving or swerving, driving very slow or very fast, braking erratically, and driving after dark without headlights.
• Wear a seat belt and utilize defensive driving techniques, as these are the best defenses against an alcohol-impaired driver.
• Try to avoid driving in the early morning hours of the day, particularly on weekends due to a heightened exposure to impaired drivers. 

$$$ WHERE DO HEALTH CARE DOLLARS GO? $$$

I attended a luncheon last week with a fantastic guest speaker, Scott Kreiling, President of Regence Blue Shield of Idaho.  He shared some fantastic information regarding healthcare costs.  I will try to disseminate it here and share some links to their web site where additional information can be obtained.

...and here is another chart from their website:

Although this information is interesting, it gets even better.  The folks at Regence have established an education plan to help us realize where the real cost of insurance comes from, http://www.whatstherealcost.org/ and they share steps that we can take to personally reduce the overall cost of health insurance.  www.regence.com/industry/what-drives-up-health-care-costs.jsp#

Regence also provides a website for their customers to help them set healthy goals and accomplish them.  www.MyRegence.com

DECREASING HOME VALUES - I CAN INSURE MY HOME FOR LESS, RIGHT? -WRONG!

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Economies are always changing and home values fluctuate with them.  During the past couple of years, many homes have decreased in value.  Looking for the bright side, I am now asked by optimists if they can insure their homes for less.  After all, this makes sense, right?

No way!

Remember that most home insurance pays for your home to be rebuilt just as it was.  While home values have been decreasing, the cost of construction has continued to rise.  (Could this be due to continued low interest rates?)

The key thing to remember here is: Your limit of property insurance should be based on the cost to replace it, not the current resale value.

To read a great article on this topic, click  here.

BEST DOGS FOR HOME INSURANCE

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I received information from Travelers Insurance today about dogs.  They say that the top five dogs to own (for insurance purposes) are:

• Shih Tzu
• Poodle
• Dachshund
• Bulldog
• Boxer

Here are some additional dog facts:

An American has a one in fifty change of being bitten by a dog each year.
Approx. 800,000 dog bite victims (1 in every 6) require medical attention annually in the US.
Industry-wide, over 1/3 of homeowners's liability claims come from dog bites
The average cost of a dog bite claim was $24,461 in 2008

Your insurance agent should remember to ask about dogs or pets in the household and review your insurance company's list of ineligible breeds in their eligibility guidelines.

You can read more about risk management with dogs in a previous posting, TAKE STEPS TO PREVENT DOG BITES.

CONSIDER BUYING EARTHQUAKE INSURANCE

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Images of desperation and despair continue to pour out of Haiti in the wake of its devastating earthquake last month, killing over 200,000 people and directly impacting over 3 million of its people. This earthquake also serves to remind Americans of their exposure to this peril as well. Records dating back to 1900 reveal that earthquakes have occurred in all 50 states and caused damage in 39 of these states. The Federal Emergency Management Agency (FEMA) released a major study in 2000 indicating that U.S. earthquake losses over time could average $4.4 billion a year.

So the following question naturally arises: what is your exposure to an earthquake? Research indicates that residents in California, Oregon, and Washington are most at-risk. However, parts of Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee are also quite exposed to earthquakes. The New Madrid Seismic Zone runs under these states and, though it occurred long ago, gave rise to one of the largest magnitude earthquakes to ever hit the United States.

If you live in any of these states, you should ascertain your proximity to an earthquake fault zone. California residents can determine their exposure by visiting the State of California's Department of Conservation Web site, which provides a list of affected cities and counties. For other state-specific information, visit the U.S. Geological Survey Web site.

Most homeowners policies specifically exclude earthquake losses, just as they do flood losses. Therefore, if you live near an earthquake seismic zone, consider purchasing a separate earthquake policy or an earthquake endorsement attached to your homeowners policy. In addition, the following are some steps to take that will reduce your chances of injury or property damage resulting from an earthquake.

• Verify that operational fire extinguishers are strategically located on each floor of your home. 
• Anchor tall furniture, refrigerators, water heaters, and bookcases securely to the walls. 
• Utilize flexible connectors for gas supply to gas-fueled appliances. 
• Keep beds away from glass or any hanging object that might fall. 
• Verify that your home's roof and chimney are well-maintained, with proper support. 
• Apply safety film to windows and glass doors. 
• Add anchor bolts or steel plates between the home and its foundation. 
• For older homes, work with a civil engineer or city building department to verify that your home is up to code for the earthquake peril. 
• Communicate to family members an emergency meeting place should your family get separated during an earthquake. 

If you are in your home when an earthquake occurs, stay inside and move away from windows, skylights, doors, and objects that might fall. Crawl under a sturdy item such as a large table or desk.  Stay where you are until the shaking stops.

DO I REALLY NEED TO INSURE HIRED & NON-OWNED AUTOS?

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Hired and Non-Owned Auto coverage is a type of insurance often overlooked by businesses, especially companies that don't have insured vehicles.  However this coverage is cheap, and neglecting to add it to your policy before a car accident can be very costly.  Ask yourself the following questions:

1. Might any of your employees run errands or make deliveries for the business using their own autos?
2. Is there a chance that you might borrow an employee's vehicle for any reason?
3. If you are unavailable (or on vacation) will an employee use their vehicle to run errands , make bank deposits, or anything else?
4. Do you foresee a need to rent a vehicle for business purposes?  (I saw my local FedEx guy driving a rented Budget truck today)
5. Will you ever pay someone to drive their vehicle for your business?

If you answered yes to any of these questions, then you need Non-Owned and Hired Auto Insurance.

For a really great article on Lessons Learned from Non-Owned and Hired Auto Insurance, click Here.
For information on Driver Training and Motivation, click Here.
For information on Driver Eligibility Criteria, click Here.  (This links to driver criteria for Philadelphia Insurance)

AM I OVERPAYING? (From: Insurance: The One Question Everyone Asks)

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“Am I overpaying?”

That’s a question that every consumer asks from time to time. Everyone is curious and concerned as to whether he or she is getting a good value for the money, whether it’s for a candy bar, a car or an airline ticket.

It’s a good question to ask about insurance, too. After all, Americans spend a lot of money on insurance for homes, autos and businesses. In 2008, American drivers spent $161 billion for personal automobile insurance, reported the A.M. Best Co., an insurance research and ratings firm.

This large market for auto insurance is highly competitive. Consumers play a large part in keeping insurance rates competitive by virtue of shopping—whether online, by telephone or on the World Wide Web. More than one of four (about 28 percent) of auto insurance buyers shopped around for car insurance in 2009, reported J.D. Power & Associates in its 2009 national auto insurance study.

But consumers aren’t the only ones shopping around for auto insurance. So too do independent insurance agents, including Trusted Choice® insurance professionals.

On average, Trusted Choice® agents provide consumers with property/casualty insurance options from eight different insurance carriers, reported the 2008 agency universe study conducted by Future One, a collaboration of the Independent Insurance Agents and Brokers of America (the Big “I”) and leading independent agency companies. For automobile insurance, those agents may compare rates and coverages at even more insurance companies, through their use of software that allows them to compare multiple policies and multiple carriers.

For auto insurance buyers, research showed that independent agents rank most highly on the most important element of customer satisfaction. The J.D. Power study measures customer satisfaction with auto insurance companies across five factors (in order of importance): interaction, policy offerings, billing and payment, price and claims. Insurers who sell their auto insurance products through agents performed “stronger in the interaction factor than do direct insurers,” reported J.D. Power.

Overall, customer satisfaction with auto insurance companies reached a five-year high in 2009, reported the J.D. Power study. The biggest improvement in satisfaction among the five factors has been in price. Interestingly, 42 percent of customers in 2009 reported that their auto insurance premiums declined without switching insurers.

Are you overpaying for auto insurance? Thanks to a competitive market that includes Trusted Choice® independent insurance agents, the answer probably is no. If you’re not sure, ask a Trusted Choice® agency to review your options.

source: TrustedChoice.com, October 2009

IS YOUR HEALTH INSURANCE RIGHT FOR YOU?

Your health is way too important to leave to chance. That’s why it’s critical that you have health insurance and that it is the right fit for you and your family. Unfortunately, millions of Americans do not know if their health insurance plan will cover their needs—or how to secure better coverage.

A good health insurance plan—one that covers every potential need—goes a long way toward providing peace of mind and helping avoid a financial burden that otherwise would saddle you and your family with payment of major medical expenses. Ideally, you should have a more comprehensive plan that provides coverage for hospital, surgical or routine medical expenses. But, at minimum, your health insurance policy should cover major medical expenses resulting from catastrophic illness or injury.

Many Americans secure health insurance through their employer; others are not so lucky. But even if you have a primary policy, be aware that group benefit plans do not always provide all the coverage for your needs. You may want supplemental insurance or a health savings account (HSA) to help fill the gaps.

For those purchasing their own primary or secondary health insurance policy, the options can seem confusing and expensive. So, how do you know if your health plan is a good fit for you? Here are some tips:

1.    Evaluate your family’s needs. Consider your family’s lifestyle and medical history, and try to anticipate life-stage health events, such as braces for your pre-teen and glasses for your self. Wife turning 40? That means mammograms every year.
2.    Prioritize those needs. For example, vision care may be a good benefit for your family, but not as essential as a prescription-drug plan. List your must-haves as well as your nice-to-haves.
3.    Review plan options. For each plan you are considering, ask about key coverage provisions: Does the policy cover major medical expenses only? If your family needs preventive, dental and vision care, does the plan provide them? Does it include a prescription drug plan? Do any of these must-haves need to be purchased separately? Are your current doctors in the plan? Does a family member have a pre-existing condition and will the plan cover it?
4.    Determine your costs. Premiums are not the only costs you should consider when looking at a health insurance plan. Take into account the expenses you may have to assume beyond paying the premium, such as deductibles, coinsurance and co-payments. Are there added costs for using an out-of-plan doctor or hospital? Consider increasing your deductible for a lower monthly premium.
5.    Consider an HSA or FSA. An HSA provides two benefits: a tax write-off and a health coverage benefit. The health benefit provides coverage when you are sick or injured and the savings mechanism allows you to accumulate funds that you can use to pay for care for illnesses or injuries not covered by your insurance. An added benefit of an HSA is that both the cost of the health plan and your contributions are tax-deductible. Similarly, a Flexible Spending Account (FSA) allows you to set aside pre-tax dollars to cover medical expenses, which can help lower your taxes.
6.    Know the differences of PPOs & HMOs. Individuals in a health maintenance organization (HMO) must choose a primary-care physician from a provider network. This physician is responsible for routine medical care and must refer you to specialists. HMOs typically provide no coverage for services from physicians outside the network. Meanwhile, individuals in preferred provider organizations (PPO) do not choose a primary care doctor and do not need referrals. They can obtain coverage from physicians outside the network but the PPO likely will reimburse less for the services. PPOs require deductibles and co-payments; HMOs don’t have deductibles but participants must pay co-payments. Again, be sure your family’s doctors are in the plan you select.
7.    Get coverage today. Health insurance, much like life insurance, is usually less expensive for younger people. So, get your coverage now to secure a lower premium and be sure to maintain your coverage.
8.    Use it. Use your insurance for preventive care and wellness to decrease your risk of needing more serious medical treatment. Schedule routine doctor visits and get the regular tests that physicians advise for your age and condition. Take advantage of the discounts offered by some plans for gyms and weight-loss programs. Seek help for smoking or alcohol abuse.
9.    Don’t let it lapse. If you lose or leave your job, you may be eligible to take advantage of a COBRA plan. Even though you’ll be footing the whole bill for your health insurance, you’ll be getting the employer’s group rate and retaining coverage for 18 months. If you go without insurance for more than 60 days, it can be trickier and more expensive to purchase health insurance down the road.
10.    Stay current. Coverage can be affected by life’s changes—if you get married or divorced, for example. And keep in mind that your children will not be covered by your plan indefinitely; generally dependent children lose coverage at 19 (or 22 if a full-time student).

With so many options and pitfalls to consider, talk with your Trusted Choice® agent to ensure you are securing the most appropriate coverage for you and your family.

LIFE INSURANCE: DO YOU NEED IT?

The most frequently asked question about life insurance is: Do I need it? The answer depends greatly on your situation. So, let’s determine if you need it. Review these statements and check all that apply:

□    I am married.
□    I have children.
□    Our family recently welcomed a new baby.
□    I am single, but I have dependents (a child or an elderly relative) who I support.
□    I am the sole breadwinner in my household.
□    I recently changed jobs.
□    My income has changed.
□    I recently bought a house.
□    I will pay for my children’s college education.
□    I own a business.
□    I am in debt.
□    My family has a history of illness, such as diabetes or heart disease.
□    I have trouble saving/investing money.

If you checked any of these statements, you need life insurance to protect the loved ones who rely on you for their financial support.

Imagine if you died unexpectedly. What would happen to your spouse, your children and other dependents? Would their standard of living or care slip significantly? Who would pay your children’s college tuition? Who would pay your mortgage and other debts? Would your business survive?

With life insurance, these concerns go away. If for no other reason, get life insurance for those most important to you—your family.

Life insurance tips

Now that you’ve determined that you need life protection, here are 10 suggestions to help you look for the best life policy for your family’s needs:

1.    Get the right amount. Remember that the amount of life insurance you need is directly related to the dependency of your family. An eight-year-old child is more dependent than a 20-year-old already is in college. Plus, knowing how much coverage you need prevents you from paying for unnecessary insurance.
2.    Start young. Get your life insurance while you’re young. Generally, premiums are cheaper for younger people because they are healthier than the rest of the population. Also, buying young will enable a cash-value policy to grow in value.
3.    Live healthy. Don’t smoke. Tobacco users pay more than twice the premium as non-smokers. Also, don’t cheat because benefits can be denied if someone who claims to be a non-smoker dies of a smoking-related illness. Also, you can improve your insurability and get a better rate by routinely visiting your doctor and improving medical conditions, like high blood pressure.
4.    Know what life policy you need. Learn the difference between term life and whole life policies, as well as that of a cash-value policy versus an annuity. There are products that serve several purposes and those that serve a single purpose. Know what your needs are first. Then you’ll know which coverage you should purchase.
5.    Dual incomes? If you and your spouse are breadwinners, get life insurance for both of you. That way, if either of you passes away, the family’s standard of living will not suffer.
6.    Prepay the premium. Ask the insurance company if you can pay your premium in advance, instead of monthly. This approach will save money on administrative or handling fees. Not all companies do this, but it never hurts to check.
7.    Want to save money, too? Some life insurance products—known as “cash-value policies”—are both a savings tool and a death benefit. These polices are ideal if you cannot save money. The cash value accumulates and can be borrowed or used for other purposes.
8.    Buy ‘bulk.’ Some insurance companies charge less for buying more. For example, it may be cheaper to purchase a $250,000 policy rather than the $230,000 you need.
9.    Don’t rely on employer-provided coverage. Many group plans limit the amount of coverage offered, which may not be enough for your needs. Additionally, you likely cannot take the life insurance with you if leave your job.
10.    Keep your coverage current. Major life events will impact the amount of coverage you need. Many events—such as having a child, getting married or buying a big house—will increase the amount of coverage you need. Others—such as children leaving the roost—may decrease the coverage you need.

Losing you would be painful enough for your family. The right life insurance can at least alleviate concerns about the financial implications of your death.

Ryan Ketcheson is a local Trusted Choice® agent that represents multiple insurance companies, so he offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

DOES VOLUNTEERING YOUR TIME MEAN VOLUNTEERING YOUR INSURANCE?

Millions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?

Homeowners’ Insurance
The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do
Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you. 

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.   
Stonebraker McQuary Insurance 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 Stonebraker McQuary Insurance online at www.stonebrakermcquary.com or call us at (509) 758-5529.  Ask for Ryan Ketcheson.

SMALL BUSINESSES: DON'T LET BUSINESS RISK SHARE YOUR HOME!

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The diversification of the U.S. economy over the past generation has meant that millions of Americans have started their own businesses. Americans still chase the dream of being their own boss by starting their own business—and the trend may pick up during the economic slump of 2009 because of hiring slowdowns and spikes in corporate layoffs.

Small businesses are the biggest driver of job growth, generating 60 to 80 percent of net new jobs annually over the last decade, according to the U.S. Department of Commerce. Small firms employ half of U.S. workers.

And the sole proprietor is alive and well: In 2005, there were six million firms with employees but a whopping 20.4 million firms who had no employees other than the owner, according to the Small Business Administration.

Of all small businesses, 52 percent are home-based. That means millions of Americans are earning their business income where they live. But business owner beware: Don’t expect homeowners insurance to cover business risks.

Business insurance offers protection from liability and property risks. Often these coverages are combined into a package policy called a BOP or business owner’s policy. Millions of small and mid-sized business owners purchase or renew their BOP every year.

Typically, a BOP includes the following coverages:
Property insurance for buildings and contents of the business. Home-based business might not need coverage for their property, since it’s already insured against risks of fire, lightning and windstorm. But if there are additional risks to the structure because of the presence of business operations, those won’t necessarily be covered by homeowners insurance. Your Trusted Choice® insurance agent can help determine if a special endorsement or a separate policy are most appropriate.

Home-based businesses might not have adequate coverage through homeowners insurance because homeowners policies often have “sublimits” restricting coverage for business property. For instance, the homeowners policy may cover business property, but typically only up to $2,500 while it is “on premises” and up to $500 while the property is “off premises.”

One example of inadequate coverage was a home-based retail cosmetics/personal care business that kept $20,000 of inventory in a garage that caught fire. The inventory was covered only up to the sublimits of the homeowners policy. Another instance: Coverage would be limited to the “off premises” limit of $500 if a laptop computer valued at $1,500 that is stolen while the business owner has it away from home.

Property insurance for buildings and contents of the business. Home-based businesses might not need coverage for their property, since it’s already insured against risks of fire, lightning and windstorm.

If there are additional structures on a residential property where the homeowner operates a business, those won’t necessarily be covered by homeowners insurance. For example, a detached garage that serves as a small-engine repair shop would not be covered by homeowners insurance; that business owner would need a policy endorsement to gain coverage.

Business interruption insurance. This protects against loss of income resulting from a fire or other covered event that disrupts the business. This coverage can also include the extra costs a business shoulders while it works from a temporary location. A fire in a home can be double trouble for a home-based business.

Liability insurance. This protects the small business for legal responsibility for the damage it causes to other people or entities. Liability insurance is usually priced according to the risk of the industry in which the business operates. A business that manufactures toys, for example, faces different risks than a consulting firm. Liability insurance shields a business and its employees if they cause bodily injury or property damage.

Not included in a BOP are professional liability coverage, automobile insurance, workers compensation, medical insurance and disability insurance. All can be covered with separate policies.

Check with your Trusted Choice®  insurance agent about what type of insurance protection a small business—especially a home-based business—warrants.

WHEN YOU CAN'T COME HOME: WHAT DOES "LOSS OF USE" COVERAGE ACTUALLY COVER?

Your homeowner’s insurance policy will pay to repair damage to your home caused by a fire, windstorm or other covered cause of loss. But when you and your family incur expenses for moving out while repairs are made, who picks up the tab?

An often-overlooked but essential function of your homeowner’s policy is “additional living expenses” (also called “loss of use” or “Part D”) coverage. Additional living expenses coverage will pay the necessary increase in living expenses required to maintain your family’s current standard of living while the house is being repaired. Examples of expenses typically covered include the cost of hotel, food bills in excess of normal grocery/restaurant bills, cooking supplies and the cost of moving property into storage.

The good news is that payment for these expenses usually does not stop if the policy expires. Rather, they will continue to pay until the limit is used up, the home is repaired to a habitable state, or you permanently relocate.

The bad news is that many homeowners erroneously believe that the policy covers 100 percent of additional living expenses until the home is habitable. Realistically, very few policies do this. In most cases, home insurance companies place a limit or cap on loss-of use payments. For example, many homeowner policies will only offer loss-of-use coverage as a percentage of the limit of insurance carried on the dwelling; 20 percent is common. Others may specify a flat dollar amount.

Usually, a covered loss must occur for any insurance dollars to be paid for additional living expenses. The one exception is if your home is not accessible due to civil authority or government mandate triggered by nearby damage. For example, in 2009, wildfires in California triggered mandatory evacuations that prevented tens of thousands of homeowners from going home. If homes in close proximity to yours are burning, there’s a chance the government will close roads and/or prevent you from entering your property even though it has not yet suffered a direct loss. In this situation, additional living expense payments are often limited to two weeks.

Homeowners who receive additional income by renting a portion of their home should also pay close attention to the Part D limit. This limit also applies to replacing lost rental income while the damaged house is being repaired.

Here’s the important question: How do you know if your policy’s Part D limit is sufficient? The trouble is that important factors are variable. For example, how do you know how long you will be out of your house? Building codes and permits cause rebuilding efforts to proceed slowly in many parts of the country. Calling a local building contractor to gain some idea is a good start but there is no exact prediction.

Further, how do you know what expenses you will incur? According to Hotels.com’s 2009 hotel price index, the average hotel room in the U.S. costs $115 per night! Add this and other expenses to a lengthy, unpredictable repair schedule and the possibility of eclipsing your Part D policy limit before your home is habitable could become a serious problem.

The last thing you want to hear is that your loss-of-use coverage has run out before you can go home. Fortunately, your Trusted Choice® insurance agent understands this exposure and can help you weigh your options, including those that may increase your loss-of-use coverage limit. For a thorough review of your homeowner’s policy, call your Trusted Choice® agent today.

source: TrustedChoice.com, November 2009

WHY PURCHASING A PERSONAL UMBRELLA POLICY IS A WISE DECISION

One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. This policy provides high limits of liability to protect you against a catastrophic liability loss. It pays after your homeowners or personal auto policies’ limits have been exhausted. For example, a major car accident in which you severely injure sev-eral persons can result in damages easily exceeding your personal auto policy’s liability limits. Losses that result in injuries to numerous people, head injuries, and death are often covered by a personal umbrella policy. In addition to providing higher limits, this policy normally pays for some losses not covered by the underlying policy, such as legitimate allegations concerning libel or slander.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the personal umbrella policy is increasingly seen as an insurance necessity, rather than a luxury. It is especially attractive because of its relatively low cost.

In particular, you should consider purchasing a personal umbrella policy if you have certain
characteristics or engage in certain activities, including the following.

• Your total assets are greater than your underlying liability limits.
• You are financially responsible for the actions of a young, inexperienced driver.
• You live in an exclusive and affluent neighborhood.
• You have a high profile career or high income.
• You frequently host guests on your property.
• Your residence includes a swimming pool.
• You own waterfront property, a farm, or a ranch.
• You own watercraft or aircraft.
• You own numerous rental properties.
• You engage in extensive international travel for pleasure.

AVOID PHONE CONVERSATIONS AND TEXTING BEHIND THE WHEEL

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According to the National Highway Traffic Safety Administration, driver distractions are a contributing cause in approximately 25 percent of all motor vehicle crashes or about 1.2 million accidents. However, distractions can be hard to quantify, and the number of accidents due to driver distractions is difficult to define. What can further complicate matters is that there may be more than one distraction, such as texting while chastising a child in the backseat.

Cell phones are considered one of the leading driver distractions. As a result, more communities are placing restrictions on drivers' use of cell phones. And more states are now passing laws banning the practice of texting while driving. The U.S. Congress is even considering a federal law related to this ban. The following tips are offered to motorists in regards to cell phone use in vehicles.

• You should never text message while driving. One study indicates that when drivers engage in texting, their collision risk was 23 times greater than when not texting. Another study found that texting while driving is more dangerous than drunken driving.
• You should wait until the car trip is complete before placing a call. Your cell phone's voice mail feature should answer a call while you are driving.
• Absolutely essential calls should only be performed while stopped. However, it is not wise to pull over on the side of the road, where a rear-end collision is possible. Instead, you should pull into a parking lot to perform this task.
• The phone should be placed where it is easy to see and reach.
• You should take advantage of speed dialing capabilities.
• You should never drive and talk on the cell phone during stressful, emotional, or complex discussions since the risk of an accident is heightened.
• If you must occasionally use a cell phone while driving, you should consider using a hands-free cellular phone since some studies indicated that these are safer to use.

REDUCE YOUR EXPOSURE TO WILDFIRES

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The major wildfires in Southern California in August and September have burned over 150,000 acres, destroyed dozens of homes, and caused residents to flee from over 10,000 homes. Indeed, wildfires are one of the most destructive natural forces known to mankind. While sometimes caused by lightning, nine out of ten wildfires are human-caused. A wildfire can be defined as any unwanted and unplanned fire burning in forest, shrub, or grass. According to the National Interagency Fire Center, there were over 80,000 wildfires in the United States in 2008. These fires burned an estimated 5.2 million acres.

If you live in a wildfire-prone area, the following are some tips for you to mitigate the risks of suffering a wildfire loss.

• If you are building a house or planning to replace a roof, consider noncombustible or fire-resistant roofing materials, such as Class A asphalt shingles, metal, cement, and concrete products, or terra-cotta tiles. These types of roofs are less susceptible to burning embers from a wildfire.
• Remove any dead branches, leaves, and any other vegetation from your roof and gutters.
• Remove any dry brush from your yard and stack firewood at least 20 or 25 feet from your home.
• Create a "fuel-break" -- driveways, gravel walkways, or lawns.
• Prevent sparks from entering your home by covering vents with wire mesh no larger than 1/8-inch. Cover skylights and chimney outlets with nonflammable screening materials.
• Use tempered glass in your windows since this material withstands high temperatures from wildfires better than regular plate or double pane glass.
• Make trellises of nonflammable metal.
• Avoid certain exterior siding materials, such as vinyl, which soften and melt easily under high temperatures. Instead, siding materials such as stucco or masonry should be selected, since these resist heat better.

CHOOSE YOUR HOME CONTRACTORS WISELY

Homeowners regularly hire general contractors and subcontractors to work on their homes but are often unaware of the large exposures that could result in hiring an unlicensed or uninsured contractor, particularly for large projects. For example, an uninsured roofer working on your home may sue you for damages if he is injured on the job. The following key rules should thus be followed when selecting a contractor to work on your home.

• Be wary of contractors who solicit business door-to-door or via cold calls. In addition, avoid contractors who quote you a price that will automatically go up the next day or week if you don't accept it immediately.
• Obtain recommendations from friends, family members, and neighbors about experienced and reputable contractors who have performed excellent work for them.
• Ask for a written estimate from the contractor that includes any oral agreements the contractor makes in this process. The estimate should contain a line-by-line breakdown of costs, including materials and labor.
• Verify that the contractor is licensed, bonded, and properly insured. Ask for certificates of insurance for workers compensation and general liability policies. You should also receive these certificates for any subcontractor the general contractor may hire to work on your home.
• Contact the Better Business Bureau to see if complaints have been filed against the contractor. This can be performed via the bureau's Web site at http://www.bbb.org/.
• Get a copy of the proposed contract. Ideally, it should include a hold harmless clause in your favor, particularly for major work such as when heavy equipment will be used in constructing a swimming pool. A hold harmless clause specifies that the contractor will indemnify you with respect to your liability to members of the public who are injured or whose property is damaged during the course of the contractor's operations. The contract should also explicitly establish an independent contractor relationship.
• Ask a knowledgeable friend, relative, or attorney to review the home repair contract before you sign

AVOIDING CONSTRUCTION DEFECTS THAT CAN DESTROY YOUR HOME

I have a friend who lives in a five year old manufactured home. About a month ago, He called me during a rainstorm because he couldn’t get his breaker box to quit tripping and cutting the power to half of his home. I thought he might be overloading the circuit, so we unplugged everything; but the breaker still tripped. I walked outside and saw an outdoor outlet on the side of the home. Making sure that the breaker was switched to the off position; I opened up the outlet and discovered that it was full of water. The weather seal had failed and the outlet was shorting out because of the heavy rain collecting inside. We didn’t have a replacement outlet at the time, so I capped the end of each wire with wire nuts and wrapped them in electrical tape.

My friend called me yesterday evening to help him install the replacement outdoor outlet at his home. In the process I noticed that the work box that housed the electrical socket was stripped where the screws went in to hold the new outlet securely to the home. I removed the work box and found a scary problem. The original installer of the work box didn’t ensure that other wiring was out of the way and the metal wings that hold the work box secure against the home had nicked the insulated housing of another wire when it was installed. Over the past five years, that nick just sat there. However, during the rain storm, when water entered the housing, the water must have entered the housing of the wire, causing it to short out and much of the insulation on the housing melted and burned away. No doubt, this time bomb was just waiting to burn down their home.

Thank heavens the original work box had been stripped, otherwise this problem would probably not have been caught in time.

Since this was a manufactured home, my friend was very detatched from the construction process of his home and unable to do anything to prevent this type of occurrence. However, there are steps that can be taken to avoid poor workmanship in the future.

• If you don't know how to conduct a repair or a new additon, do not perform the work yourself. Hire a professional contractor.
• Conduct a background check on any contractor you hire. Ask them for names of clients they've done similar work for in the past and then call those clients to see how they feel about the work that was performed. You may also wish to ask your contractor for a resume.
• Ask contractors for their credentials. Having special training or certifications that qualify them for the work that is to be performed generally results in a better outcome.
• Watch the work that as it is being done and feel free to ask questions. While this may not make you their best friend, contractors are less likely to take shortcuts when they are being observed.
• Hire a qualified inspector after the project has been completed to certify that it was done correctly. It is preferable to have the inspection done before you pay the contractor.

Remember that contractors are human and no matter how careful they are, defects can still occur. Additional steps can be taken now to help you in case you later experience trouble due to a construction defect.

• Ask the contractor for their license and verify that they are the qualifier on the license. Ask if any complaints have ever been filed against them.
• Verify that they are bonded for at least the value of the work they will be performing. While a performance bond won't pay for faulty workmanship, it can pay if the contractor leaves before the work is completed or if they fail to pay their suppliers. It is also a token that they are a respectable contractor, since bond companies don't typically issue bonds to contractors they don't trust.
• Ask the contractor to name you as additional insured on their liability insurance policy while they work on your project and obtain a certificate of insurance from their insurance company. Verify that their liability limit per occurrence is no less than $1,000,000.00.
• Verify that the contractor obtains any necessary permits for the work they will be performing.

Another topic worth mentioning is workers' compensation. It is possible that if someone is hurt at your home while performing work for you, the ensuing lawsuit may name you as a defendant. Verify that your contractor has a current workers compensation insurance policy and make sure that everyone who will be performing work is included in the policy. This should even include the general contractor. Obtain verification of this in writing.