Water damage coverage in the homeowner insurance policy is a confusing subject. Usually, the damage caused by water will be covered, but the item causing the loss, such as a leaky pipe or broken appliance hose, will not be covered. While your insurance company will pay for the damaged flooring from a ruptured appliance hose, it will be the policyholder’s responsibility to replace the bad hose. Parts and appliances wear out and it is not the intent of an insurance policy to cover wear and tear.
Flood, which occurs when a nearby tributary or body of water breaches its banks and flows into your home, is not covered under homeowner insurance. You must purchase flood insurance for that. You can purchase flood insurance as long as your community participates in the National Flood Insurance Program.
As absolute dependence on computers and computer stored information grows there are new ways companies can be sued by third parties for damages. When private information such as dates of birth, social security numbers, credit card numbers, etc are stolen off of your business’ computer systems, it is called a data breach, and they are very costly to manage. The insurance industry has calculated this cost to be about $200 per individual whose information was taken. Also, if a malicious virus is distributed from your computer to a customer’s computer system and causes damage, you could be held responsible for cost to repair their system. Your basic general liability policies are not designed to pay for such claims so many times when businesses look to their business policies the coverage is not there to help with these expenses. Because of that, insurance companies have developed a new product called cyber liability. It is designed to step up and pay for the third party damages caused by your data breaches and damage by viruses to other’s computer system.
So what kinds of business should be looking into this new cyber liability products? Any business with a computer, especially one that stores or interacts with any private information or distribute emails to others should look into this product. Restaurants and retail stores that take credit cards, professional business that store dates of birth, driver’s license numbers and social security numbers, even doctors’ offices are at risk for the types of claims mentioned above. Unfortunately, even if a business has the best firewalls and antivirus software, they still are at risk of data breaches and malicious viruses. Cyber liability is something designed to help protect your business assets if an unpreventable claim strikes.
The institute for Highway Safety has provided a method to take much of the guesswork out of selecting the proper booster seat for your child. Seat belts are designed with adults in mind- so a child booster seat is an absolute necessity, and extra care needs to be taken when securing young children.
Children usually resist wearing a seatbelt because it is uncomfortable. Boosters elevate children so that the safety belts installed in the vehicles by manufacturers will fit the child better. The booster seat allows the lap belt to fit properly over the child’s thighs and not their abdomen. The shoulder belt should fit across the middle of the child’s shoulder. Not only will the belt be more comfortable, it will provide maximum protection in a crash.
The institute’s researchers used a specially designed test dummy configured as a 6 year old child. The researchers determined the effectiveness of how a 3-point lap and shoulder belt fit the dummy under a range of configurations representing many different automobile models. Based on a range of scores, a booster seat rating was assigned to each seat.
Market Value vs. Replacement Cost is something that we in the insurance business discuss a lot with property owners. Depending on the economic conditions there can be a variation between Market Value and Replacement cost. Since the current economic conditions have caused such a discrepancy we at Fey Insurance thought it might be a good time to explain the difference between the two terms.
Market Value is the amount that a house is worth on the real estate market. It is what you can buy or sell the house for. As we sit in the middle of a depressed real estate market, the value of homes is down from years past. When you hear a mortgage company or title company talk about getting an appraisal they are always talking about Market Value because the lending institution is mainly concerned with what they could sell the asset (building) for.
Replacement Cost is concerned with a different valuation of a building. Replacement cost deals with the amount of money it would take to rebuild a structure using the same materials at the same location with the same style of construction. Because this is based on building materials and cost of labor it doesn’t have the large swings that Market Value has. For example, in today’s poor economic conditions, material costs have stayed pretty level meaning the Replacement Cost of a building has stayed relatively flat.
So how do these two forms of valuations play out in numbers? Let’s take an example home that is a brick structure, has four bedrooms/ two baths and is about 2000 square feet. A house like this in our area may be listed on the real estate market for about $250,000 (depending on the school district, location to town, etc) and will probably sell for about $235,000 (which would then be the Market Value). This same structure would have a different value if we used Replacement Cost. In our area the same structure just mentioned would cost about $135.00 per square foot to rebuild if a fire or tornado totally destroyed it. Take the $135.00 per square foot and multiply that by the 2000 square feet and you come up with a value of $270,000 (which would then be the Replacement Cost).
When it comes to banks and lenders they care about Market Value ($235,000 in our example) where the insurance companies, since they will have to pay to have the home rebuilt after a fire or tornado, cares about the Replacement Costs ($270,000 in our example).
So next time you see your homeowner policy or commercial building policy and look at what they are insuring your structure for don’t say to yourself, “I couldn’t sell my building for that” because the amount you are thinking of is the Market Value. Insurance companies are only interested in the Replacement Cost because they want to make sure they are able to rebuild your property and make you just as you were prior to the fire or tornado.
PIAA wrote the following article on 6/27/14 with news on the resent Ohio Workers Compensation program. The article is as follows:
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.
Now that the bill has been signed into law, BWC will begin the competitive bid process to identify an insurance carrier(s) to provide limited other states’ coverage for Ohio employers who need it.
It is good risk management for customers to check and make sure their vendors have insurance. Because of this small business owners are often asked to prove to their customers they do indeed have insurance. When customers ask for proof of insurance what they are often asking for is a form called a certificate of insurance. A certificate of insurance gives the basic information of a business insurance policy. It tells things such as the insurance company’s name, dates the policy covers, name of the insurance agency who handles the policy and highlights the different types of liability coverages the policy has and the limits or amount of insurance in each of those coverages.
Any type of business can be asked to provide a certificate of insurance. Three areas where you see certificates of insurance most commonly asked for are construction and maintenance contractors, businesses that lease space and consultants. The reason that construction and maintenance contractors are often asked to show certificates of insurance are because their customers want to be sure if they cause injury around their premises or damage around their premises that they are covered. Also, many contractors are acting as subcontractors to other construction and maintenance companies. If their subs cause damage or injury they want to be sure they have insurance because if they do not they will then be the responsible ones.
People that lease space are asked for certificates because the owner of the building wants to make sure that if they cause damage to the building they have insurance to put the building back as it was prior to incident that caused damage. They also want to make sure if the person leasing space is responsible for someones injuries while they are visiting the building that they have insurance in place to cover those injuries.
Consultants are asked to provide certificates of insurance in order to meet contract requirements. Often, consultants sign a contract with their customers and in the contract there is always an insurance section that outlines the required coverages they must have. The best way for that customer to make sure the consultant is meeting the requirements is to ask for a certificate of insurance.
So the next time you are asked by a customer to show proof of insurance you will understand that you are being asked for a certificate of insurance. Contact your agent and let them know you need a certificate of insurance. Make sure to provide them with the name and address of the company or individual that is asking you for the certificate.