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.

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.

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.