Insurance can be a complicated thing to understand.  We’ve included some common questions and answers that many of our clients ask us on a consistent basis. If you have further questions or would like to speak with an experienced business, benefits or personal lines agent we are more than happy to assist you.

Auto Insurance

  • This response is brought to you courtesy of the Independent Insurance Agents and Brokers of America (IIABA).


    “Top 10 Reasons to Purchase the Rental Car Damage Waiver”

    by Bill Wilson, CPCU, ARM, AIM, AAM
    Director, Big “I” Virtual University

    Although most collision damage waiver (CDW) or loss damage waiver (LDW) fees are considered outrageous, most consumers should consider purchasing the CDW/LDW for short-term rentals. This is becoming increasingly the case as rental car companies charge ever-higher fees and penalties for losses and expenses not covered by most auto policies or credit cards. The following are ten reasons to purchase the rental car damage waiver:

    1.  Loss Valuation.
    The value of a rental car, according to virtually all rental agreements, is determined solely at the discretion of the rental company and may be significantly different from the market value “ACV” basis used by most auto policies. The “industry standard” (ISO) personal auto insurance policy covers the lesser of the “actual cash value” (market value) of the vehicle or the amount “necessary” to repair or replace the damaged property.
    The rental agreement may very well contractually obligate the consumer to reimburse the rental agency for the “full value” (whatever that is) of the vehicle. If the renter’s insurance policy has a “betterment” clause, the insurer might not pay the “full value” and the renter could be responsible for the difference.

    2.  Loss Settlement.
    As implied above, there may very well be disagreement over the value of the vehicle or the amount charged for labor and materials to repair the property—an Appraisal clause may be invoked by the insurer with its accompanying costs covered partially by the insured/renter.

    2.  Loss Settlement (continued).
    More importantly, the auto insurer has the right to “…inspect and appraise the damaged property before its repair or disposal”—the rental company may choose to make the repairs immediately, potentially resulting in a lack of auto insurance coverage because of failure to comply with the condition cited above.
    For example, in a claim involving farm equipment under a similar policy provision, the insurer denied coverage when the farmer had the property repaired immediately in order to minimize lost production and the insurer never had the opportunity to appraise the damage.

    3.  Loss Payment.
    The rental agreement may require immediate reimbursement for damages and it is not uncommon for the rental company to charge the consumer’s credit card for the full value of the vehicle and other expenses. This can create a significant debt, “max” out the card’s credit limit (perhaps shortening a vacation or business trip), result in litigation, etc.

    4.  Loss Damage Waivers (LDW).
    The rental agreement usually requires reimbursement for more than collision, making the consumer responsible for ANY “loss” in value beyond normal wear and tear regardless of fault. Most auto policies must include collision coverage on at least one insured owned vehicle for collision coverage to transfer to the rental car. Since many consumers buy only state-mandated liability insurance, they may have no physical damage coverage to transfer to the rental car.
    If the rental agreement includes a Loss (not just Collision) Damage Waiver (LDW), the policy must also include comprehensive coverage to protect the consumer for non-collision damage such as theft or vandalism. Even so, keep in mind that the renter’s contractual liability under the rental agreement may be almost absolute, so it’s possible the auto policy may not respond to all losses.
    (Note: Likewise, the auto policy might respond to losses not covered by the LDW such as use off paved roads, use while intoxicated, use by unlisted drivers such as valet parking (see below), etc. Therefore it is important to have BOTH auto insurance and LDW coverage.)

    5.  Indirect Losses.
    The consumer most likely will be responsible for the rental company’s loss of rental income on the damaged unit. Most auto policies have, at best, daily and maximum caps for this indirect loss and some may pay only for loss of income resulting from theft, not collision or other causes of loss.
    In addition, many rental companies will not divulge their fleet utilization logs for competitive reasons or their rental agreements may make the renter responsible for loss of use without regard to fleet utilization rates. If so, the renter may be charged even though unused rental vehicles are sitting on the lot. In one case, a renter was hit with a $2,000 loss of use charge. Insurers may not be willing to pay for charges they don’t feel represent a true loss of income by the rental company.
    Most alarmingly, rental car companies are increasingly inclined to charge for “diminution of value,” an indirect loss that is not covered by most auto policies’ physical damage section (nor most credit card coverages). We have seen documented examples of these charges for amounts in excess of $5,000 – $7,000 and heard of one that was allegedly $15,000 on an upscale SUV rental.

    6.  Administrative Expenses.
    The rental contract may make the consumer liable for various “administrative” or loss-related expenses such as towing (e.g., one renter was charged for a 230-mile tow), storage, appraisal, claims adjustment, etc. None of these expenses are typically covered by auto policies.

    7.  Other Insurance.
    Coverage under an auto policy is typically excess over: (1) any coverage provided by the owner of the auto, perhaps including self-insured plans, (2) any other applicable physical damage insurance, and (3) any other source of recovery applicable to the loss—CDW/LDW, travel policies, credit card coverages, etc. (what if the credit card coverage says it’s excess over the auto policy?). The potential controversy over who pays what is obvious and can result in litigation.
    In addition, keep in mind that many states have statutes, proprietary policy forms, and/or case law precedents that may govern this and other rental car exposures. For example, in determining which insurance is primary (pays first) and which is excess, states vary significantly. By purchasing the damage waiver, this distinction become unimportant to the renter.
    In one final example, a consumer was given a loaner vehicle from a Cadillac dealer while his car was being serviced. He proceeded to total the vehicle in an accident to the tune of $37,000. His personal auto insurer refused to pay on the basis that their auto policy provided excess coverage over the dealer’s garage insurance policy, offering only to pay a portion of the dealer’s deductible. The garage insurer paid the entire claim, then sued the customer for $37,000.
    When the consumer turned the suit in to his auto insurer, the claim was denied under the liability section of his policy, citing a “care, custody or control” exclusion. While this involved a dealer loaner auto, the same result could have been reached in this state if the auto was a rental.

    8.  Excluded Vehicles & Territories.
    Personal auto policies typically do not provide physical damage coverage for motorcycles, motorhomes, and other motor vehicles that are not private passenger cars, pickup trucks, or vans, and use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and Canada (the rental agreement may also exclude operation outside a specific geographical area, in which case the auto policy could provide coverage not provided for under an LDW).
    In addition, if a consumer is renting a trailer (U-Haul, camper trailer, etc.), auto coverage is typically limited to only $500 – $1,500. The consumer usually has no choice but to rely on the rental company’s damage waiver for coverage under these circumstances.

    9.  Excluded Uses & Drivers.
    The personal auto policy may have limitations on the use of vehicles that are not otherwise excluded by the rental agreement damage waiver—for example, some auto policies provide no physical damage coverage for the business use of nonowned pickup trucks or vans.
    Also, some auto policies may include an exclusionary endorsement for certain individuals or may apply only to designated individuals that can be covered by listing them on the rental agreement. In contrast, the damage waiver usually only applies to designated individuals (with certain omnibus “insureds” such as spouses), so having both an auto policy and the damage waiver can again be advantageous.

    9.  Excluded Uses & Drivers (continued).
    One often overlooked issue where a large coverage gap might exist is using valet parking at a hotel or restaurant during a personal or business trip. Most auto policies cover damage to nonowned autos if you have physical damage coverage on at least one declared auto. However, this coverage may extend only to a nonowned auto “while in the custody of or being operated by you or any ‘family member’….”
    If the rental car is being valet parked, it’s certainly not being operated by you. The question is whether it is still technically in your custody. Does custody mean possession or entrustment? Is the rental car in your custody from the moment you rent it or only when you have physical control? It’s a matter of law and contract interpretation. That’s why it is probably not a good idea to valet park a rental car.
    The Catch-22 is that, even if you purchase the rental car damage waiver, most rental agreements void the coverage if the vehicle is being driven by an unauthorized driver. As discussed above, the only authorized drivers are those identified by name on the rental agreement and perhaps a spouse or co-worker. Hotel or restaurant valets? Highly unlikely.

    10.  Additional and/or Future Costs.
    The personal auto policy will most certainly include a physical damage deductible in the range of $100-$500 or more, while the rental agency’s LDW may not. In addition, payment for damage to a rental car may result in a significant premium increase on the renter’s auto policy via surcharges or loss of credits.

    All auto insurance policies are not created equal, despite what you might be led to believe by some “low-cost” auto insurance advertising. In particular, coverage and claims practices for the use of nonowned auto like rental cars can vary dramatically from one insurer to another. Equally important, virtually all rental car companies draft their own rental agreements and can make charges and assessments that are not covered by any auto policy. Although damage waiver fees are generally considered outrageous, most consumers should consider purchasing the waiver for short-term rentals.

    The above information is based on the “ISO standard” Personal Auto Policy in force in most states at the time of publication and typical rental car agreements. Be aware that these contracts may vary from state to state and there may be statutory exceptions (e.g., the State of NY) that may govern. In addition, these provisions can change at any time, so it is important to review the laws and contracts in effect in your jurisdiction at any point in time. Due to the brevity of this article, we cannot analyze every possible loss exposure and exception to the general guidelines above.

    Copyright 1998-2008 by the Insurors of Tennessee and Independent Insurance Agents & Brokers of America. Reprinted with permission.

  • Personal automobile insurance is divided into several types of coverage:

    The “Liability” portion of your policy covers damage you cause to other people’s property as well as injuries they sustain as a result of your negligence.

    “Collision” covers damage to your vehicle caused by an accident.

    “Other Than Collision” (sometimes referred to as Comprehensive) coverage responds to damage to your vehicle caused by fire, theft, vandalism, break-in, and/or other non-collision losses such as a broken windshield or damage by flood waters, earthquake, hail, or hurricane. Note that if the vehicle overturns as a result of high wind, rushing water, and so forth, it is considered a Collision loss rather than an Other Than Collision loss.

    “First Party Benefits” coverage (in Pennsylvania) offers you choices for Medical, Wage Loss, Accidental Death, and Funeral Expenses. $5,000 in medical coverage is required. Higher limits are available for Medical coverage up to $100,000. Various coverage amounts may be elected for Wage Loss, Accidental Death and/or Funeral Expense.

    “Extraordinary Medical Expense” coverage is available for catastrophic medical expenses in excess of $100,000 up to $1 million.

    “Uninsured Motorist” coverage and “Underinsured Motorist” coverage protect you in the event someone with no insurance, or an inadequate amount of insurance, is responsible for your injuries.

  • Liability coverage and coverage for damage to your vehicle always follow your vehicle. So, if someone borrows your car and has an accident, your policy will respond to claims that your vehicle damaged someone else’s property or caused their injuries. As long as your policy includes coverage for Collision on the vehicle that was borrowed, damage to that vehicle would also be covered.

    In Pennsylvania, any injuries to the person who borrowed your car would be covered under their own personal automobile policy, as provided under the Pennsylvania Financial Responsibility Act (No-Fault).

  • Insurance companies often discount their rates for good drivers and those who take safety and security precautions. A driver with no accidents or violations will be offered lower insurance premiums than a driver with accidents and/or violations.

    Discounts are commonly offered for: anti-lock brakes, air bags, passive restraint systems, and anti-theft devices. Discounts are often available for having more than one car insured with the same insurance company, or having other insurance policies, in addition to your personal automobile insurance, written with the same insurance company.

    Completion of a defensive driving course will usually qualify you for a discount as well.

    You can also lower your insurance rates by requesting higher deductibles for your Collision and Other Than Collision (Comprehensive) coverages. Or, if you drive an older car, the value at which the vehicle will become a total loss may be so low that it no longer makes sense to carry Collision and/or Comprehensive coverage on that vehicle.

  • Insurance companies group vehicles into categories based on their likelihood of being damaged in an accident, vandalized, or stolen. The size and type of vehicle are taken into consideration. The cost of repairs to a given vehicle is also considered. (This can vary greatly even on vehicles in the same price range.) Some vehicles perform better than others. Insurance companies are able to determine this based on safety tests and on actual crash data gathered by insurance companies.

    It is important for you to research the safety and performance record of vehicles you are considering buying. You should also ask your agent for premium quotations on vehicles you are considering purchasing to avoid “sticker shock” on the premium cost once the vehicle is added to your insurance policy.

Business Insurance

  • Pennsylvania’s Construction Workplace Misclassification Act takes effect on February 10, 2011.  The provisions of this act define “Independent Contractor” for the purposes of the Commonwealth’s Worker’s Compensation and Unemployment Compensation laws.  If you are in the business of construction, you should make note of these requirements.

    An independent contractor:
    • Has a written contract to perform the services.
    • Is free from control or direction over performance of the services, both under contract and in fact.
    • Is customarily engaged in an independently established trade, occupation, profession, or business with respect to the services performed, meaning:
      Possesses the essential tools, equipment, and other assets necessary to perform the
    services independent of the person for whom the services are performed;
      Has an arrangement in which he or she realizes a profit or suffers a loss as a result
    of performing the services;
      Performs the services through a business in which he or she has a proprietary
      Maintains a business location that is separate from the location of the person for
    whom the services are performed;
      Has previously performed the same or similar services for another person;
      Maintains at least $50,000 in liability insurance during the term of the contract.
    For more information, please click on the link below.
    Pennsylvania Senate Appropriations Committee Fiscal Note to House Bill 400, Construction Workplace Misclassification Act.

  • Catastrophic property losses, such as a major fire, will seriously test your resolve.  Compounding the problem of having to rebuild is trying to figure out how you will replace the income your business is losing and continue to pay your expenses during the clean-up and reconstruction period.

    Business Income insurance can help you replace net income and meet expenses that continue during a time when your business operations are severely curtailed.

    What considerations enter into your decision to purchase Business Income coverage?  You will need to think about the following:
    • If the building from which you operate your business is damaged or destroyed, how long would it take for you to get
    back in business?
    • If you lease, does your lease have special terms that would hamper your ability to repair the leased space?
    • If you own the building, are there zoning or other municipal regulations that would hamper your ability to have the
    building reconstructed?
    • Do you use specialized equipment that would take an extended period of time to replace?
    • What kinds of expenses would continue while you are shut down?
    • Which employees would you want to continue to pay even while your business is shut down?
    • If the property damage occurred at your busiest time, how much income would the business lose?
    • If you were forced to lease space temporarily while your building was being reconstructed, where would you find that
    leased space?  What would the cost be?

    Plenty of things to consider, but what does Business Income insurance actually cover?  During the period of restoration of your owned or leased space, the coverage is designed to cover:
    • Net Income;
    • Continuing Expenses, including ordinary payroll; and
    • Extra Expenses.

    There are options, of course.  You may elect to exclude ordinary payroll from coverage.  You may decide that Extra Expense coverage is not needed.

    Among other options, you may wish to broaden the coverage by adding an Increased Period of Restoration because your building is not up to current code and reconstruction will take longer due to code compliance issues.

    Or, you may wish to broaden your coverage by adding an Extended Business Income option because it may take awhile after reopening to get back to the same production level you were at before the loss.

    So, what kinds of things go on during a period of restoration?  Before any kind of restoration can begin, you will have to deal with:
    • The time it takes for fire investigation, cause and origin determination and debris removal.
    • The time it takes to select contractors and develop restoration plans.
    • The time it takes to secure building permits and approvals from zoning and planning boards.
    • The time it takes to create bid proposals, await responses, and award contracts.

    Now that you are ready to start reconstruction, what constraints must be dealt with?
    • The time it takes to order and receive building materials and supplies.
    • The time it takes to complete the actual reconstruction based on climatic conditions, site access, material staging,
    and so forth.
    • The time it takes to order and receive new equipment – or have existing equipment refurbished.
    • The time it takes to customize new equipment, if necessary.
    • The time it takes to bring employees back and/or hire and train new employees.

    There are many things to consider, and may challenges to overcome, following a catastrophic property loss.  Hopefully what has become clear is that Business Income coverage will play a major role in helping you to stay in business at a time when your resources will be severely constrained.

  • Fiduciary Liability insurance is designed to protect you against claims alleging the breach of your fiduciary duties to an ERISA retirement or welfare plan, or claims alleging an error in the administration of the plan.  This is “third-party” coverage.  It does not provide coverage to restore the assets of an employee benefit plan.

    You may be familiar with Employee Benefits Liability coverage.  Employee Benefits coverage only applies to allegations of errors in the administration of a benefits plan, and so is a much narrower coverage than Fiduciary Liability.

    Directors and Officers Liability policies respond to allegations of mistakes or mismanagement by directors or officers of a corporation.  These policies exclude coverage for any claims based on or arising from an ERISA violation.

    Who is a fiduciary?  Under ERISA, a fiduciary is a person who exercises discretionary authority or control over plan management; who exercises any authority or control over plan assets; who has any discretionary authority over plan administration; or who gives investment advice for a fee.  A person can become a fiduciary by being formally designated as one or functioning as a fiduciary, de facto.  The test for fiduciary status is functional, which means that your plan may have unintended or unknowing fiduciaries.  Someone may become a fiduciary because of the role he or she plays even though they did not intend to become a fiduciary.

    Fiduciaries, when administering a plan, must act prudently.  Under ERISA, fiduciaries are personally liable for their breaches.

    What types of benefit plans fall under ERISA guidelines?  There are two types of plans.  Welfare benefit plans which include medical plans, disability benefit plans and vacation benefit plans are the first type.  Pension benefit plans which include any plan designated to provide retirement income to employees are the second type.

    Under welfare benefits plans, claims may be made for medical benefits, life insurance benefits, disability benefits, or severance benefits.  ERISA requires that every plan provide a benefits claim procedure to facilitate consideration of claims.  Fiduciaries are required to consider the claim in light of what the plan requires.  The plan administrator will function as a fiduciary when considering a benefits claim, and therefore owes a duty of loyalty to the plan participant and a parallel duty to enforce the plan as the plan sponsor meant it to be enforced.

    What types of claims might be handled under a Fiduciary Liability policy?
    • Claims involving the denial of benefits under medical and disability benefit plans.
    • Claims alleging that the employer miscalculated the employee’s retirement benefit.
    • Claims alleging that the employer improperly denied benefits to a surviving spouse.
    • Claims alleging that the plan administrator failed to follow specific investment instructions.
    • Claims alleging that the investment options offered contained excessive expense charges.

    Employee Stock Ownership Plan (ESOP) employers have additional legal vulnerabilities, among them, allegations that the company stock was improperly valued.

    Many costly and complex issues can arise when dealing with ERISA plans.  Well-designed, well-executed, and well-administered benefit plans will help limit your exposure to claims.  Fiduciary Liability coverage can be an additional tool in reducing the financial impact of ERISA claims and is well worth considering.

  • If you are in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages, you need to be aware of a limitation built into your Commercial General Liability (CGL) policy.  CGL policies do not apply to bodily injury or property damage caused to third parties arising out of:  your causing or contributing to the intoxication of any person; your furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

    There is a common misconception that this exclusion only applies to those licensed to distribute, sell or serve alcoholic beverages.  (In Pennsylvania, those licenses are issued by the Pennsylvania Liquor Control Board.)

    If none of these activities apply to you, your CGL policy provides coverage.  This coverage is typically referred to as “host liquor” liability coverage.  In other words, if your business occasionally provides alcoholic beverages in the course of business entertaining, you are not deemed to be in the business of serving alcoholic beverages.

    If any of these activities apply to you, you should give serious consideration to purchasing Liquor Liability coverage.  The exclusion may apply, for example, if your business involves serving alcoholic beverages for a charge, regardless of whether the activity requires a license.

    A common problem of interpretation of the CGL liquor liability exclusion is deciding what is, and what is not, being in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.

    An endorsement may be available from your insurance company to attach to your CGL coverage so that the liquor liability exclusion does not apply to specific scheduled activities.  This endorsement makes provision for excepting certain scheduled activities from the scope of the exclusion.

    We strongly recommend that you discuss the specifics of your operation with your insurance broker to better understand the gaps that may exist in your insurance program.

  • Managing your risk may help you to reduce your premiums. Here are some things to consider:

    • Keep electrical wiring and devices, stairways, carpeting, and flooring in good repair.
    • Install and maintain smoke detectors and fire extinguishers throughout your premises
    • Make frequent deposits to minimize the amount of cash on your premises
    • Keep a back-up copy of inventory records, accounts receivable, and computer data off premises
    • Make sure your employees have good driving records
    • Make sure your employees have been trained in proper lifting techniques
    • Make sure your employees use personal protective equipment such as goggles, ear plugs, etc.
    • Keep track of claims so that you can quickly identify and address adverse trends
  • You have no business liability insurance coverage under your homeowner’s policy. You have very limited business property coverage under your homeowner’s policy. In order to properly cover your business you need commercial property and commercial general liability coverage often written in the form of a package, sometimes referred to as a “Business Owner’s” policy.

  • Whether the lease is for equipment, for space within a building, or for space outside of a building, the terms of the lease agreement may have important insurance implications. Have you agreed to cover the structure itself, even though you don’t own it? Have you agreed to include the landlord as an insured on your insurance contracts? Have you agreed to waive your rights to subrogate against your landlord in the event the landlord was responsible for the damage to your property? Have you agreed to carry specific amounts (or types) of insurance as part of the lease agreement? Your agent will be able to identify changes that will need to be made to your insurance program to comply with the terms of your lease.

  • General Liability insurance coverage will protect your business in the event you become a defendant in a lawsuit alleging that your business did (or failed to do) something that caused injury to someone or damage to their property. General Liability coverage extends not only to paying damages but also to the attorney’s fees and other costs involved in defending against a lawsuit.

    Certain types of lawsuits are not covered by general liability insurance, such as allegations that you wrongfully terminated an employee, or that your product did not perform as promised. Other, more specialized, types of insurance are often available for allegations not covered under a commercial general liability policy.

  • This type of coverage is intended for buildings in the course of construction – usually new buildings and additions being constructed from the ground up.

  • Although your business may not include all of these categories of insurable property, this list should at least give you food for thought:

    • Buildings and other structures that you own or lease from others
    • Furniture, equipment, machinery, supplies, raw materials
    • Inventory
    • Money and Securities, both on your business premises and away from your premises
    • Accounts Receivable records that may have to be recreated if they were destroyed
    • Improvements that are permanently attached to the structure itself
    • Electrical switchgear, compressors, computerized telephone systems, heating boilers
    • Computer processing equipment such as servers, workstations, printers, scanners, etc.
    • Valuable papers such as engineering drawings, legal documents, client records, and so forth
    • Property that is often away from the premises, such as tools and construction equipment
    • Automobiles, trucks, trailers
    • Outdoor signs, satellite dishes
    • Intellectual property such as copyrights, trademarks and patents
    • Equipment you lease either on a short-term or long-term basis

Health / Life Insurance

  • Yes, that is part of our service to you. We will hold employee meetings to explain new programs or explain changes to existing programs.

  • On small groups, carriers generally do not make a charge to have a Broker handle your account. You are paying the same rate whether or not you have a broker. If you are not sure if there would be a charge to obtain a broker, please call our office. If you provide the name of your current carrier, we will be able to tell you if that carrier charges extra for you to have a broker.

  • Most carriers of medical coverage want the employer to pay at least 50% of the premium.

  • Yes, many of our employee benefits carriers have voluntary plans available for dental, vision, short term disability, long term disability and life insurance.

  • Medical insurance is available to a sole proprietorship; please call to see if you qualify.

  • Yes, most often we are able to obtain employee benefits for a group as small as two individuals

  • Most Long Term Care policies determine your need when you are no longer able to perform a certain number (such as 2 of 6) of a few simple Activities of Daily Living (ADLs) without assistance. An example of these activities are eating, bathing, dressing, maintaining continence, getting in and out of bed.

  • Again there are many but some of the most common are:

    Adding Inflation Protection Rider – Since you are purchasing LTC perhaps years before the benefits will be paid – this rider provides increases in the daily benefit limit which helps protect you against inflation.
    Adding a Nonforfeiture Benefit Rider – this option returns at least some of the premiums paid even if you cancel or lapse your policy.
    Choosing an Indemnity Rider – with this rider, if you qualify for benefits, the company will simply pay the daily amount regardless of the actual expenses incurred.
    Adding a Home and Community Based Services Rider – this rider changes the daily benefit to a monthly amount – giving you more versatility with the timing of your services.

  • There are too many options to discuss in a short questions and answers format. Some of the most common are:

    Daily Benefit amount – this is the maximum amount your policy will pay each day for Facility Services or Home Health Care. Maximum available benefit per day is usually $300.
    Elimination period – this is the amount of time you must pay for your care before receiving benefits from your insurance company.
    Benefit period – the length of time during which benefits will be paid. The benefit period may be as little as one year and as long as unlimited (a lifetime).

  • Besides the definition of disability, two important factors to compare are:

    • How long you will need to be out of work before you may start collecting a benefit? (Example would be 30, 60, 90, or 180 days.)
    • How long you will be able to collect the benefit under the policy? (Example would be 2 or 5 years, or to age 65)
  • Policies will vary greatly. Most of the variations have an impact on the premium. You will need to compare the policies and not only on price. You will find that some of the variations may be very important in your financial planning.

  • First you want to purchase the protection from an agent that will service your account and be there if you need to file a claim, an agent who will understand all the options available in a disability policy.

  • No they are not the same. It is important that you know the definition of disability for the policy you are considering. Two most commonly used terms are “the inability to reasonably perform the duties of your occupation” and “the inability to reasonably perform the duties of any occupation”. The definition in the policy will make a difference in the cost of the policy and when a claim would be paid. The policy with the definition of “your occupation” will cost more than the policy with “any occupation”.

  • A Disability Income policy is designed to provide you with an income for the time you are considered to be unable to work due to an illness or injury. Your income gives you the ability to plan for the future. What would happen if your income suddenly stopped due to an illness or injury? Would you be able to maintain your current lifestyle? Would your retirement plans stay on course? Even if you have group disability insurance through your employer, it may not be enough. Perhaps you should consider an individual disability plan.

  • Generally speaking group medical coverage will be more comprehensive and less expensive. Group coverage is not available to everyone, so you may want to look at an individual plan. We never know when we may be hospitalized or need medical attention.

    There are many things to consider when choosing a health plan such as deductibles, co-payments and coinsurance. You should speak to a professional insurance agent to discuss the many options.

  • Medical insurance provides benefits for sickness and injury. The types of sickness and injury covered are typically broad, but there are always limitations. Most medical policies will provide benefits only if the procedure is medically necessary. Elected and experimental procedures usually are not covered.

  • There are many variations of health insurance policies. The two most common are medical insurance and disability income insurance. A third health insurance product to consider is Long Term Care Insurance.

  • Generally speaking it is best not to wait. It is always possible that by waiting your health or occupation could disqualify you for coverage or for standard rates. It is best to purchase at least a small policy while you are young and you are in good health. You may even want to consider adding a rider for purchasing additional coverage in the future.

  • We need some basic information to obtain a quote. Premiums are based on factors such as age, tobacco use, height and weight, and your general health. Most companies have several rating levels based on you individual statistics.

  • We find that a combination of Term and Permanent life insurance is usually in the best interest of the client. Some Permanent Life Insurance is almost always a wise decision. Then add Term insurance to cover the added expenses for the “term” the expenses are anticipated.

    We also feel that if you can only afford term life insurance, it is better to have some term life insurance than to have no coverage. The beneficiary of your term life insurance will not care that it was term insurance. They will just care that you planned for their future and you purchased the protection.

    Most companies will allow you to convert Term Life to Permanent Life at some time in the future. The premium for the new policy will be based on your age at the time that you do the conversion; but most times you will not need to submit to a physical examination.

  • Both Term and Permanent Life insurance serve as an insurance need. It is important to determine the amount and length of the need.

    Permanent insurance will always be there, as long as the premiums are paid. Premiums will remain constant over the course of your life.

    Term insurance ends at the end of the term. Premiums are then adjusted if the coverage is still needed. The premiums for term insurance will go up at an increasing rate the older you become.

    Permanent insurance builds cash value – term insurance does not.

  • Although there are many types of life insurance policies, nearly all are variations of two basic types: Term Life Insurance and Permanent Life Insurance.

    Term Life Insurance is exclusively death coverage. These types of policies are written for a specific length of time (term): one year, five year, ten year, twenty year, or thirty years for example. If the insured dies during the term of the policy, assuming the premiums are paid, the death benefit is paid to the beneficiaries. If at the end of the policy’s term the insured is still alive, the coverage either ends and no benefit is paid. Coverage may be renewed or replaced. If renewed or replaced, the premium for the new term will be adjusted higher based on the current age of the individual. We usually think of term insurance as a tool to purchase less expensive protection for a specific amount of time, to cover temporary extra expenses. (Perhaps to cover a mortgage or college expense if you were not here to provide)

    Permanent Life Insurance (sometimes referred to as “Whole Life”) never terminates as long as the premiums are paid. Unlike term insurance, permanent insurance builds cash value which may be available to provide funds for financial needs while the insured is still alive: financial needs such as loans, college expense or premium payments. Basic permanent life insurance premiums remain constant and do not increase with age as do the term life insurance premiums.

  • Everyone’s needs and goals are unique. A needs assessment, performed by a qualified professional such as a Chartered Life Underwriter (CLU) or a Chartered Financial Consultant (ChFC), may be helpful in making these very important decisions.

    For simplicity, a rule of thumb often used is to maintain life insurance in an amount at least equal to five times your annual income. (This would be adjusted based on your financial obligations and your number of dependents)

  • Life Insurance provides a payment to your survivors at the time of your death.

    When a person dies, there are many expenses that need to be paid. These expenses may include such items as funeral costs, burial expense, current bills, and estate taxes.

    In the case of a premature death, the expenses could also include continuing financial needs of their survivors, such as family living expenses, mortgage payments, long-term debt, and educational expenses.

    A life insurance policy’s primary function is to provide for these costs and expenses. The goal, of course, should be to have a sufficient amount of life insurance to cover all of these costs and a reasonable amount left over to offset unforeseen future expenses.

Home / Apartment Insurance

  • Personal Umbrella policies provide high limits to protect you against catastrophic liability losses.  Examples of where an Umbrella policy may come into play include:
    • Injuries to guests, including a fatality, at your residence are allegedly caused by your failure to properly maintain your heating system.
    • A youthful driver in your household loses control of the vehicle on a wet road and strikes a pedestrian causing brain trauma and severe physical limitations.
    • The child of a tenant in your rental property starts a fire playing with a lighter.  The smoke detectors fail to operate and residents of the building are severely burned while escaping from the building.
    • You volunteer as a board member for a local non-profit organization.  A suit is filed as a result of a decision the board has made, naming all of the board members as defendants.  The organization does not carry Directors and Officers coverage.

    The Personal Umbrella policy is activated once the liability limits of your underlying (primary) policy are exhausted.  The underlying policies typically include a Homeowners policy and a personal automobile policy.  Underlying policies might also include liability coverage for rental properties, watercraft liability coverage depending on the horsepower and/or length of the boat you own, and recreational vehicle liability coverage depending on the type of recreational vehicle you own, to name a few.

    The Umbrella policy’s coverage provisions require that specified limits of liability be provided by the underlying policies.  These underlying limits may vary by insurance company, but a typical example would be:
    • Homeowners liability limits of at least $300,000;
    • Personal Automobile liability limits of at least $300,000/$300,000 for Bodily Injury and $100,000 for Property Damage;
    • Rental Property liability limits of at least $300,000.

    The intention is that the underlying policy limits required are in place and that the Umbrella policy would respond without any gaps.  For example, if a jury awards $450,000 to a plaintiff following a suit arising out of an incident at your residence, the Homeowners policy would pay $300,000 and the Umbrella policy would pay $150,000.

    In the event that you do not maintain the required underlying limits, the outcome would be different.  Let’s say you only have $100,000 in liability coverage on your Homeowners, rather than the required $300,000.  In the $450,000 jury award example, your Homeowners policy would pay $100,000.  You would pay $200,000.  And then, your Umbrella would pay $150,000.

    Personal Umbrella policies do not necessarily follow a standardized format.  Underlying coverage requirements may vary by insurance company.  Rates may vary significantly from one insurance company to another.  Some insurance companies will only offer Umbrella coverage if they write both the Homeowners and Personal Automobile coverages.  Some insurance companies will only require that the underlying Personal Automobile coverage is written. And still others will offer Umbrella coverage without writing either the Homeowners or Personal Automobile coverages.

    We live in a highly litigious society.  Juries have demonstrated a willingness to award sizeable sums to plaintiffs in negligence cases.  Personal Umbrella policies are relatively inexpensive.  All are good reasons for you to consider this valuable coverage.

  • The amount of coverage you have for damage to your property caused by mold may range from limited to none.  The amount of coverage offered is dependent upon your individual insurance company:  some policies contain total mold exclusions, some offer sub-limits, none offer full coverage for damage caused by mold or fungi.

    Given the fact that coverage for mold damage is so limited, we recommend that you become familiar with strategies to prevent or limit the growth of mold.  Therefore, this document will focus on mold prevention.  Remediation can be complex and costly.  This article will not address the issue of remediation.

    Molds can be found almost anywhere.  They can grow on virtually any organic substance, as long as moisture and oxygen are present.  Mold growth will occur where excess moisture accumulates.  It is impossible to eliminate all mold and mold spores in indoor environments; however, mold growth will often occur when moisture problems are undiscovered or unaddressed.  Since mold requires water to grow, it is important to prevent moisture problems in buildings.

    Moisture problems can have many causes:  uncontrolled humidity; tightly sealed buildings lacking adequate ventilation; building materials or floor and wall coverings that trap moisture; roof leaks; blocked rain gutters; landscaping that directs water toward the structure; unvented appliances such as clothes dryers, and so forth.

    So, the key to mold control is moisture control.  Solving moisture problems will help you to avoid mold problems.  Here are some mold prevention suggestions:
    • Fix leaky plumbing and leaks in the building envelope as soon as possible.
    • Watch for condensation and wet spots.  Fix sources of moisture problems as soon as possible.
    • Prevent moisture due to condensation by increasing surface temperatures or reducing the moisture level in the air.  To increase surface temperature, insulate or increase air circulation.  To reduce the moisture level in air, repair leaks, increase ventilation (if outside air is cold and dry), or dehumidify (if outside air is warm and humid).
    • Keep heating, ventilating, and air conditioning (HVAC) drip pans clean, flowing properly, and unobstructed.
    • Vent moisture-generating appliances, such as clothes dryers, to the outside where possible.
    • Maintain low indoor humidity, below 60% relative humidity, ideally 30 – 50%, if possible.
    • Perform regular building inspections and maintain HVAC equipment on a regularly scheduled basis.
    • Clean and dry wet or damp spots within 48 hours.
    • Don’t let foundations stay wet.  Provide drainage and slope ground away from the foundation.

    What actions should you take when faced with water damage (from clean water) to prevent mold growth?

    Time is of the essence.  If materials remain wet for more than 48 hours, mold growth will likely occur.  The time frame may be even shorter for the start of mold growth depending on weather and building conditions.

    Clean-up methods include:
    Wet Vacuum.
    Wet vacuums are designed to collect water.  They can be used to remove water from floors, carpets, and hard surfaces where water has accumulated.  They should not be used to vacuum porous materials such as gypsum board (drywall).  They should only be used when materials are still wet.  The tanks, hoses, and attachments of these vacuums should be thoroughly cleaned and dried after use since mold and mold spores may stick to the surfaces of these items.

    Damp Wipe.
    Mold can generally be removed from nonporous (hard) surfaces by wiping or scrubbing with water, or water and detergent.  It is important to dry these surfaces quickly and thoroughly to discourage further mold growth.  Instructions for cleaning surfaces, as listed on product labels, should always be read and followed.  Porous materials that are wet and have mold growing on them may have to be discarded.  Since molds will infiltrate porous substances and grow on or fill in empty spaces or crevices, the mold can be difficult or impossible to remove completely.

    HEPA Vacuum.
    High-efficiency particulate air (HEPA) vacuums are recommended for final clean-up after materials have been thoroughly dried and contaminated materials removed.

    Dehumidifiers are often used to reduce the ambient air moisture level and facilitate drying.  Sometimes, residential dehumidifiers are not up to the task of sufficiently reducing the humidity level when building materials have become saturated.

    Professional cleaning contractors are often called in when conditions include standing water, or saturated building materials.

    We can provide you with guidance when you are faced with mold prevention and mitigation decisions including advising you on the amount of coverage your policy provides for mold clean-up and directing you to contractors who are experienced in moisture removal from structures.

  • Considering the amount of money invested in weddings, the peace of mind afforded by Wedding Insurance makes the coverage well worth considering.

    What is Wedding Insurance?  A wedding insurance policy is considered a “special event” policy and affords coverage for additional expenses and lost deposits incurred resulting from:
    A.  Cancellation or postponement of the Event;
    B.  Expenses to avoid cancellation of the Event;
    C.  Expenses to take or retake Event photographs;
    D.  Expenses to shoot or reshoot the Event video;
    E.  Expenses resulting from the direct physical loss or damage to Event gifts;
    F.  Expenses resulting from loss or damage to special attire for the Event;
    G.  Expenses resulting from loss or damage to special jewelry on the Event day;
    H.  Expenses resulting from lost deposits when a vendor fails to provide the Event item, services, or location it was obligated to provide.

    Consider, for example, a fire at the venue prior to the wedding day.  The Cancellation and Postponement coverage would indemnify you for all deposits forfeited and other amounts paid or contracted to be paid for items such as:  hall rental, transportation, catering, accommodations, entertainment, flowers, travel arrangements and accommodations for the honeymoon.

    Or, if the caterer is unable to deliver, the Expenses to Avoid Cancellation coverage would afford coverage for the additional expense you would incur in excess of the original contract price to hire a replacement caterer.

    Or if the wedding gown is damaged or stolen prior to the wedding, the Special Attire coverage would indemnify you for the cost to replace the wedding gown with a gown of equal value; the cost to repair the gown up to an amount not exceeding the original cost of the gown; or the cost to rent a wedding gown if a repair or replacement were not possible in time for the Event.

    We’re sure you can think of many other examples of how things may go wrong.  Wedding Coverage can be put in place to reimburse you for these unexpected additional expenses or lost deposits.  We believe you will find the premium for this coverage to be surprisingly affordable, and would certainly recommend that you consider purchasing a Wedding Insurance policy.

  • Your Homeowners policy provides contents coverage for personal property of residents of your household.  If your student resides in your house, their personal belongings will be covered for an amount up to 10% of your personal property limit (Coverage C on your Homeowners Declarations Page).

    Please keep in mind that coverage is limited to “named perils” meaning coverage is only afforded for those causes of loss specifically listed.  Items such as laptop computers and peripherals may not be covered for Theft in all situations.  Nor will they be covered for breakage by dropping, liquids accidentally spilled on them, or power surges.  Coverage may be broadened by adding a “Special Computer Coverage” endorsement to your Homeowners policy.

    Coverage for legal defense in the event your student is sued for negligence leading to injuries to a third party or damage to their property is provided under your Homeowners policy as well.  Liability coverage extends to any part of a premises not owned by you where your student is temporarily residing.

    What if your student damages the dorm room, apartment, or rental house?  Your Homeowners policy will not respond in these situations (unless the damage resulted from fire, smoke, or explosion).

    An option worth considering is to have your student obtain a Renters policy for their dorm room, apartment, or rental house.  Broadened coverage for computers and peripheral equipment using a “Special Computer Coverage” endorsement is strongly recommended under a Renters policy as it is under your Homeowners policy.

  • Many factors go into how the premium for your homeowner’s coverage is determined.

    One of these factors is the availability of water to fight a fire. Rural homes without access to a continuous, public water supply are more likely to sustain severe damage than homes within a few hundred feet of a public fire hydrant. Similarly, homes protected by a volunteer fire company are more likely to sustain serious damage than homes protected by a paid fire department.

    Other factors affecting the premium are: the age of the dwelling, the types of materials used for the exterior walls and roof, and whether the plumbing, heating, electrical wiring and roof have been updated.

    The number of lawsuits filed in a given area and the dollar amounts of jury awards also influence homeowner’s insurance premium levels.

  • As a condominium unit-owner, your policy covers the additions and alterations made to your unit, your personal property, your additional living expenses and your personal liability.

    Usually the condominium association purchases the insurance to cover the buildings and other structures along with the liability coverage for the association. Typically, you are responsible for the “walls in” on your unit, as defined in the condominium by-laws. Damage to the interior of your unit, liability arising out of your unit, and additional living expenses you may incur living elsewhere temporarily while your unit is being repaired would all be covered under a condominium unit-owner’s policy.

    Sometimes your condominium association may find it necessary to assess the unit owners for losses that were not completely covered by the association’s insurance policy. Coverage for “Loss Assessment” is available under the condominium unit-owner’s form for these types of situations.

  • If the home you rent, or the apartment you occupy, were destroyed would you have the financial resources to replace everything you own? If someone were to sue you, would you be in a position pay the legal fees necessary to defend yourself?

    So called “Renters” insurance provides the same personal property, loss of use (additional living expenses) and liability protection as a homeowner’s policy.

    The landlord’s insurance does not cover you as a tenant.

  • Your Homeowner’s policy covers all your personal belongings no matter where they are. Where the personal property was located at the time of the loss does not affect the coverage (as long as the loss was caused by a peril covered under the policy).

  • Your personal property is covered by your homeowner’s insurance policy. Your personal property includes the contents of your home as well as the personal belongings of the members of your household.

    This coverage is typically written on an “Actual Cash Value” basis, which is the replacement cost of the personal property less depreciation.

    You can elect to have your personal property covered on a “Replacement Cost” basis which will cover the cost to replace the personal property without a deduction for depreciation.

    Valuable items such as jewelry or furs, collections such as stamps or coins, unique art objects, musical instruments, and so forth should be covered under a Special Personal Property form since the standard policy limits the amount of coverage for these types of personal property.

  • Most insurance companies will require that you insure your home to the amount it would cost to completely rebuild it with materials of like kind and quality. This is often referred to at the “replacement cost” of the dwelling.

    Replacement cost should not be confused with market value. The market value of your home is the amount someone would be willing to pay to buy your home.

  • Damage caused by floods or earthquakes is not included in a typical homeowner’s policy. Flood insurance is available under a separate Flood policy. The coverage forms and rates are established by the National Flood Insurance Program, which is overseen by the Federal Emergency Management Association (FEMA).

    Earth movement coverage may be available as an optional coverage for such things as damage to a structure caused by a sinkhole.

    Earthquake coverage is often available as an optional coverage, depending on where the home is located.

  • There are things you can do to lower your insurance premium. Insurance companies offer discounts for homes that have safetyfeatures such as: deadbolt locks, fire extinguishers, smoke alarms, burglar alarms, and fire alarms.

    Many insurance companies have begun applying surcharges to accounts with claims, and offering discounts to accounts that remain claim free for a specified period of time.

    Insuring both your home and your personal autos with the same insurance company often qualifies you for a “multi-policy” discount.

    Significant discounts are sometimes offered if you agree to a higher deductible (such as $500 or $1,000).