Identity Theft Coverage

Identity Theft is one of the fasted growing crimes in the U.S.  In the time it takes you to brew a cup of coffee in the morning… a thief can steal your identity!

If you’re a victim of identity theft… restoring your name and good credit will be confusing and time-consuming.  It can take weeks, months, or even a year to resolve the issue.  And it can often require significant out-of-pocket expenses.

Did you know that you can add Identity Theft Coverage to your homeowners insurance policy?  It’s valuable protection for your entire family and the cost is typically very affordable  – on average about $25 per year.

Coverage can differ from company to company… but typcially the coverage will provide you with a hotline where you’ll have access to an experienced identity theft specialist who will walk you through the entire recovery process.  In addition, the coverage will pay for expenses related to restoring your identity such as:

• Lost Wages
• Re-Filing Applications For Loans, Grants or Other Credit Instruments
• Certain Legal Fees
• Notarizing Affidavits or Other Similar Documents
• Ordering Credit Reports
• Postage, Phone, and Shipping Fees
• Child Care Costs

With Identity Theft Coverage you can have peace of mind knowing that if someone steals your identity… help is just a phone call away!

Important Coverage For Homeowner or Condo Association Members

If you live in a homeowner or condo association, Loss Assessment Coverage is probably one of the most important parts of your home or condo insurance policy… yet it is probably the most misunderstood and overlooked parts.

Every association has Common Areas.  This can include things like hallways, elevators, stairwells, parking lots, community buildings, swimming pools, tennis courts, basketball courts, etc.  Who owns these Common Areas?  You do… along with the other members of the association.  You each share equal parts ownership.  But what most people don’t think about is that you also share equal parts responsibility for any liabilities associated with these Common Areas.

For example, what if a child drowned in the community swimming pool and the distraught parents sue the association for wrongful death?   If the jury awards the parents $5,000,000 and the association only carries $2,000,000 insurance coverage… where will the other $3,000,000 come from?  You… along with the other members of the association!  You would each be assessed an equal part.  So if you live in a 100 unit complex you could expect an assessment of approximately $30,000 ($3,000,000 divided by 100 owners = $30,000).

The Loss Assessment Coverage in your home or condo insurance policy is there to provide protection for this type of special assessment.  But most home or condo insurance policies include a only very limited amount of Loss Assessment Coverage… typically $1,000 – $5,000.  But you have the option to purchase additional Loss Assessment Coverage.  Most insurance companies offer limits up to $50,000… although there are companies that will offer more.

The cost to purchase additional Loss Assessment Coverage is typically very minimal.   So if you live in a homeowner or condo association I always recommend purchasing the highest amount of Loss Assessment Coverage your insurance company offers.

7 Reasons You Need A Renters Insurance Policy

1-  Your Landlord’s Insurance Does Not Protect You

A common mistake renters make is believing that their landlord’s insurance policy will cover their personal belongings.  This is not the case.  A landlord’s insurance policy protects damage to their buildings and their liability if someone gets hurt on their property.   Without a renters insurance policy, your personal belongings are not protected unless the loss is due to negligence on the part of your landlord.

2-  It’s Affordable

Renters insurance can be inexpensive.  Your price is determined by the amount of coverage you need and the deductible you choose.  A higher deductible will lower the overall cost of your policy.  Many insurance companies offer discounts for things that help prevent losses like smoke detectors, fire extinguishers, deadbolts, and sprinkler systems.  And always package your renters insurance with your auto insurance to take advantage of multi-policy discounts.  In many cases, the savings you get on your auto insurance will pay for the cost of the renters insurance!

3-  Suffering A Total Loss Would Be Financially Devastating Without It 

Suffering a total loss of all your personal belongings would be financially devastating for most people.  Renters insurance policies will protect all of your personal belongings such as furniture, electronics, clothes, appliances you own, dishes,  and other valuables.  Some limitations will apply to things like valuable jewelry, firearms, silverware, antiques, fine art, collectibles, and other items of rare or unique value.  So if you have these types of items, you will need to purchase special coverage to make sure they are protected too.  And when you purchase your renters insurance policy… make sure your policy protects your personal belongings for Replacement Cost Value.  Some policies provide protection for Actual Cash Value… meaning they would depreciate your personal belongings for age and wear & tear, much like auto insurance policies work.

4-  You Are Responsible For Your Visitors

If someone gets hurt in your apartment, you can be held responsible.  Renters insurance not only protects your personal belongings, but also includes coverage for liability and medical payments to others.  So without renters insurance, you would be responsible for the legal fees and medical expenses out of your own pocket.

5-  Students May Need Their Own Coverage

If your child is a student living away from home, your homeowners policy may not cover his or her belongings.  Whether the student lives in the dorms or in an apartment, check your policy and discuss your options with your insurance agent.  He/she may need to purchase a renters insurance policy.

6-  Coverage For Loss Of Use

Similar to an auto insurance policy that pays for a rental car after an accident, your renters insurance policy will pay for living expenses such as a hotel and meals if you are unable to live in your home for a period of time after a loss occurs.

7-  You Are Living With Someone Not Related To You

Just because you are not “renting” doesn’t mean you can’t purchase a renters insurance policy.  If you are living with someone who is not a relative… their homeowner’s insurance does not provide protection for you.  The most common situation is the boyfriend and girlfriend living together.  The boyfriend owns the home and has a homeowners insurance policy that protects his (and household relatives) personal belongings, liability, and loss of use.  His homeowner’s policy does not provide protection for his girlfriend that is living with him.  The girlfriend needs to purchase a renters insurance policy to protect her personal belongings, liability, and loss of use.

Insurance Scores – 8 FAQ’s

1- What Is An Insurance Score?

An insurance score is a snapshot of your insurance risk picture at a particular point in time based on information in your credit report.  Statistics have proven that people with a higher insurance score tend to file less claims.  Insurance companies use your insurance score as one of the many factors to determine your insurance premiums.

2- How Is My Insurance Score Determined?

Every insurance company is different and has their own way of determining your insurance score.  But basically they enter your credit information into a computer model which analyzes your information and generates your insurance score.  Your insurance scores change as new information is added to your credit report, so insurance companies will typically re-run your score when you apply for a new insurance policy or your current policy is being renewed.

3- Are Insurance Scores The Same As Credit Scores?

No.  Your financial credit score is used to indicate your ability to repay borrowed money.  Your insurance score is used to predict the likelihood you will have future insurance claims.

4- How Do Insurance Companies Use My Insurance Score?

Insurance companies use your insurance scores along with many other variables to determine your premium.  Insurance scores serve as tool to better estimate the likelihood your will have future claims. B y doing this, insurance companies can better control risk, enabling them to offer insurance coverage to more people at a fairer price.

5- What Information Affects My Insurance Score?

An insurance score is generally based on your payment history, bankruptcy, foreclosures and collection activity, length of credit history, the amount of outstanding debt in relation to credit limits, types of credit in use, and new applications for credit.  An insurance score does not take into account your income, race, gender, marital status, religion, age, geographic location, nationality, ethnicity, or handicap.  It only considers your credit history.

6- I Have An Excellent Credit Rating, Does This Mean I Qualify For The Best Insurance Premiums?

Since your insurance score measures items related to insurance losses and credit scores measure creditworthiness… these scores may be very different.  Additionally, insurance companies use many other factors when determining your premiums.  For your auto insurance they also use factors such as driving record, prior loss history, and vehicle type.  For your homeowners insurance they also use factors such as loss history, construction type, distance to fire stations and fire hydrants, and presence of protective devices such as smoke detectors and alarm systems.  State laws and regulations can also vary… so the factors that insurance companies use to calculate your premiums may differ by state.

7- Does The Use Of My Insurance Score Affect My Credit Rating?

No.  There is no affect on your credit rating when an insurance company makes an inquiry into your credit history.  However, the inquiry may be present on your credit report, should you choose to obtain one.

8- What If Information On My Credit Report Is Wrong?

If you find errors on your credit report, you should report the errors to the credit reporting agency.  By law, the credit reporting agency must investigate and respond to your request.  Once these errors have been corrected, please notify the insurance company as you may qualify for a more favorable rate.  But please be aware that some errors may have little or no affect on your insurance score and/or insurance premium.

Full Tort vs. Limited Tort

Tort is the area of law that covers the majority of all civil lawsuits.  Essentially, every claim that arises in civil court, with the exception of contractual disputes, falls under tort law. The concept of tort law is to redress a wrong done to a person, usually by awarding them monetary damages as compensation.

Tort law can be split into three main categories: Negligent Torts, Intentional Torts, and Strict Liability. Negligent Torts encompass harm done to people generally through the failure of another to exercise a certain level of care. Auto accidents would be considered negligent torts.

In Pennsylvania, our personal auto insurance policy gives us 2 options:  Limited Tort or Full Tort.

Regardless of the tort option you choose, if you are injured in an auto accident you always have the right to seek compensation for actual out of pocket expenses such as medical bills, income loss, and vehicle damages.

Full Tort

With Full Tort, you also have the right to seek compensation for non-monetary damages such as pain and suffering, loss of enjoyment of life, permanent injuries, scarring, and spousal loss of consortium.  Choosing Full Tort on your policy will cost a little more but it could mean you receive thousands of dollars more if you’re ever injured in an auto accident.

Limited Tort

With Limited Tort, you only have the right to seek compensation for these non-monetary damages under strict and limiting circumstances such as:

You suffered a serious injury.  This will be determined by the courts and is typically defined as a personal injury resulting in death, serious impairment or body function, or permanent serious disfigurement.

• The other driver is convicted of driving under the influence of alcohol or a controlled substance or accepts an ARD program.
• The other driver committed an intentional act which caused your injuries.
• The other driver was operating a vehicle registered in another state.
• The other driver has no insurance.

If you have never been injured in an auto accident, you may not realize the pain and suffering that a person goes through.  Auto accidents can lead to injuries and long-term disabilities that last for months or even years.  People tend to choose Limited Tort because they believe it saves them money and they’ll never be injured in a car accident.  But did you know that by choosing Limited Tort, you are not just sacrificing your protection, but also the protection of your family members who are covered under your auto insurance policy?  Limited Tort not only puts you and your family at risk in your own car, but it even applies when you or your children are injured as passengers in someone else’s car, or even as a pedestrian.

I recommend my clients always consider choosing the Full Tort option.  In my opinion, having additional money to help you through a very difficult time in your life is well worth the investment today.

Term vs Permanent Life Insurance

No one is ever truly prepared to lose a loved one. The experience is emotionally exhausting… but it doesn’t have to be financially exhausting too. One smart way to put your family’s financial worries at ease is to purchase a life insurance policy.

Life insurance comes in many shapes and sizes, but the different types of life insurance policies generally fall into one of two categories: Term and Permanent.

Term Life Insurance

Term life insurance is typically the most affordable type of life insurance available. It is designed to meet temporary needs, providing coverage for a pre-defined period of time (the term). For example, you can purchase a term of 10, 20, or 30 years. The premiums are typically fixed and remain unchanged for the duration of the term. Term life insurance has no cash value. At the end of the policy term, you have the option to continue the policy, but the premium will increase significantly. And most term policies include an option to convert to a permanent policy without showing proof of good health.

Advantages	Disadvantages
Lower costs in early years	Higher costs in later years
Coverage customized to last for a specific number of years	No cash value
Option to convert to permanent coverage later without proof of good health	Premium paid every year for coverage to remain in force

Permanent Life Insurance

Permanent life insurance is designed to provide lifelong protection, as long as the premiums are paid. Most policies will provide coverage until age 100 or later. The policy will build cash value that is tax deferred and will continually increase over time. During your lifetime you can borrow against the cash value for things like business or investment opportunities, education expenses, retirement income, and emergency medical expenses.

Advantages	Disadvantages
Lower costs in later years	Higher costs in early years
Fixed premium	Future dividends and current interest rates are not guaranteed
Coverage is permanent for life
Guaranteed policy cash value
Tax deferred growth on cash value
Cash value accessible through surrender or policy loan
Coverage may be continued without further premium being paid

You should consider the advantages and disadvantages of each to determine the best fit for your individual needs. For some people a combination of term and permanent coverage may be appropriate. For example, you can use permanent coverage as a foundation for final expenses and use term coverage for larger, more immediate needs.

Please contact me with any questions or for more information.

May Is National Youth Traffic Safety Month

This month is National Youth Traffic Safety Month and it’s one of the most important issues facing teens and parents today.

Chances are you’ve heard the stories, seen the statistics, or maybe firsthand witnessed a teen driving accident.  That’s because car crashes are the leading cause of death for teens in America.  Teens are involved in 3 times as many fatal crashes as all other drivers.  It’s reported that each year more than 5,000 teens are killed in car crashes.  During 2006, a teen died in a traffic crash an average of every hour on weekends and every 2 hours during the week.

The statistics are frightening… but don’t let them keep your teen in the house forever.  Instead, make sure you talk to your teen about the importance of responsible driving.  Here are 10 safe driving tips you can share with your teens:

1.  Buckle up!  The car shouldn’t even start before everyone in it has their seat belt fastened.

2.  No alcohol or drugs.  Explain the consequences of being caught with alcohol or drugs in their vehicle and that they are responsible for what is in the car, even if it is not theirs (this one might help your teen say no to their peers).

3.  No texting or talking on the cell phone while driving.

4.  Keep emotions out of the car.  The teen years can often be very emotional. Driving upset or angry can put your teen in a dangerous situation as it leads to speeding and impaired judgment. It’s best to go out for a walk or a run if they need to cool off.

5.  Curfew:  Think about heading home when it starts getting dusk out.

6.  Passengers:  No more than one at a time.

7.  No speeding.

8.  Don’t drive while sleepy.  Driving sleepy slows reaction time, impairs judgment, and is similar to driving drunk.

9.  Drive defensively.

10.  Pay attention.

With prom night, graduation, and summer vacation quickly approaching… keep your teens safe by sharing these facts with them.

For more information, please visit National Organizations For Youth Safety (NOYS).

2 Basic Types of Home Policies – HO3 & HO5

Home is where your heart is.  And for most of us it’s the most important investment we will ever make.  That’s why it’s important to make sure it’s protected with a homeowners insurance policy.

There are basically two main types of policies – HO3 and HO5.

What is the difference?  The primary difference lies in the protection you get for your personal property.  Simply defined, personal property is everything that would fall out if you turned your home upside down.

Under an HO3 policy, you get what’s called Named Perils Coverage (a.k.a. Broad Coverage) for your personal property.  Peril is “insurance speak” for a specific danger that could cause damage to your property.  With named perils coverage, the insurance company gives you a specific list of perils (dangers) that are covered.  Anything not on the list is not covered.  The burden of proof when submitting a claim is on the claimant, who must show that the loss was caused by a listed peril.  Policies can vary by company, but a standard HO3 policy typically includes the following 16 named perils:

1. Fire or Lightning
2. Windstorm or Hail
3. Explosion
4. Riot or Civil Commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism or Malicious Mischief
9. Theft
10. Volcanic Eruption
11. Falling Objects
12. Weight of Ice, Snow, or Sleet
13. Accidental Discharge or Overflow of Water or Stream
14. Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
15. Freezing
16. Sudden & Accidental Damage from Artificially Generated Electric Current

Under an HO5 policy, you get what’s called Open Perils Coverage (a.k.a. Special Coverage) for your personal property.  Open Perils coverage means that the insurance company gives you a specific list of perils that are excluded.  Anything not on the exclusion list is covered.  The burden of proof to deny a claim is on the insurance company, who must show that the loss was caused by a listed exclusion.  Policies can vary by company, but a standard HO5 policy typically includes the following exclusions:

1. Earth Movement (most companies offer this by endorsement)
2. Ordinance or Law (most companies will give you a limited amount of coverage)
3. Water Damage – Flood, Water Backup Through Sewers & Drains, Sump Pump Failure (most companies offer water backup & sump pump failure coverage by endorsement;  a flood insurance policy can be purchased separately)
4. Power Failure
5. Neglect
6. War
7. Nuclear Hazard
8. Intentional Loss
9. Governmental Action
10. Theft In or To Dwelling Under Construction
11. Vandalism or Malicious Mischief (when home has been vacant for a certain # of days)
12. Mold, Fungus, or Wet Rot (some companies will give you a limited amount of coverage)
13. Wear & Tear, Deterioration
14. Mechanical Breakdown (some companies are offer this by endorsement)
15. Smog, Rust & Corrosion
16. Smoke From Agricultural Smudging & Industrial Operations
17. Discharge, Dispersal, Seepage of Pollutants
18. Settling, Shrinking, Bulging, or Expanding
19. Birds, Vermin, Rodents, Insects
20. Animals Owned By Insured

Which policy should I choose?

If your home qualifies for an HO5 policy, then I highly recommend you purchase it.  The price difference between an HO3 and HO5 policy is relatively small and in my opinion well worth the better protection.  Your insurance agent should help you to clearly understand the differences and choose the policy that is right for you and your family.  The decision is ultimately up to you.

Please feel free to contact me if you have any questions.

Motorcycle Insurance Discounts – Are You Paying Too Much?

It’s that time of year again for many of you to break out the leather and chrome!  Before hitting the open road, you should take a few minutes to review your insurance policy.  Are you getting the best price available?

There are many discounts available that you may not be aware of such as (note: discounts will vary by company):

• Homeowners Discount – Save money if you own a home or condo.
• Paid In Full Discount – Save money by paying the full year’s premium up front.
• Prior Coverage Discount – Save money for having continuous motorcycle insurance.  And the higher your liability coverage, the larger the discount.
• Multi-Vehicle Discount – If you own multiple motorcycles, save money by insuring them all on the same policy.
• Motorcycle License Discount – Save money for having a valid motorcycle license.
• Multi-Policy Discount – Save money for having another in-force policy with the same company such as auto, boat, RV, snowmobile, etc.
• LoJack Device Discount – If you have comprehensive coverage on your motorcycle (which covers theft), you will save money for having a LoJack device.
• Anti-Lock Brake Discount – Save money when your motorcycle has anti-lock brakes.  This one is frequently overlooked!
• Safety Course Discount – Save money when you’ve taken an approved safety course within the past 3 years.
• Motorcycle Association Discount – Save money when you belong to a motorcycle association.

When you’re out on the road, the last thing you want to worry about is whether you have the right insurance policy.  Feel free to contact me for a free discount review and quote.

Equipment Breakdown Coverage For Homeowners

Every homeowner has expensive equipment in their homes that make life convenient, functional, and enjoyable.  Most likely your home contains many of these items:

• Air Conditioning Systems
• Central Vacuum Systems
• Clothes Washers & Dryers
• Computers & Peripherals
• Dishwashers
• Freezers & Refrigerators
• Furnaces & High Efficiency Heating Systems
• Garage Door Openers
• Garbage Disposals
• Heat Pumps
• Home Security Systems
• Ovens
• Sump Pumps
• Swimming Pool Equipment
• Televisions
• Water Heaters
• And Much More…

What happens when a costly piece of equipment breaks down?  Who pays to repair or replace the piece of equipment?  Most of us don’t budget for these types of expenses and many of us believe our homeowners insurance would pay for this.  But the truth is… most homeowner’s policies do not cover the breakdown of equipment.

Some insurance companies are now offering Equipment Breakdown Coverage.  This coverage will protect you against unexpected repair or replacement costs due to a mechanical, electrical, or pressurized system breakdown.

Equipment Breakdown Coverage can be added to your homeowner’s policy on average as low as $25 a year!  It’s an affordable alternative to costly product and home warranty plans.