Sticks and Bricks

The horrific tornado that devastated parts of Oklahoma this week has been deemed an EF5. The National Weather Service classifies an EF5 as the strongest category of tornadoes, generating winds of up to 210 miles per hour.  Thankfully, the number of lives lost remains low but initial property damage estimates are at $3 billion.

The stories are heart-wrenching   The destruction is nuclear.  The remains are nothing more than sticks and bricks.

After a 25 minute reign of terror, the monster tornado left.  First responders began the search and rescue mission.  Now the cleanup and rebuilding begins.  Enter Red Cross, FEMA and insurance.

The good news is that, unlike Superstorm Sandy, this tornado has no complications of flood insurance.  A tornado is a tornado is a tornado.  Windstorm.  Covered by the vast majority of insurance policies.

The bad news is, just like Superstorm Sandy, many of the victims are renters. Renters without insurance.

According to a recent study, nearly 70% of renters don't have renters insurance!  WHY? Surely it is not the cost.  The National Association of Insurance Commissioners reports the average renters policy costs under $200 a year.  Less than $200 per year.  Let's break that down.

$200 a year

$16.67 a month

That minimal premium policy would likely provide:

$15,000 contents

$4.500 loss of use

$500,000 liability

Consider this:

The average single American's monthly cell phone bill is $71.

The average American's cable bill is $86 per month.

Personally, I think the number of uninsured renters is because renters erroneously think that their landlord is responsible for their property.  They think that the landlord insures their property.  Nothing could be further from the truth.

Unlike a smart phone or cable, insurance is not a "fun" product to spend money on.  The actual policy document, be it paper or electronic, won't give you a warm and fuzzy feeling.

What insurance can do is give you peace of mind.  Peace of mind, Renter, that when a tornado or fire leaves you with nothing but sticks and bricks, you will be able to replace your belongings, find temporary housing and begin the process of recovery.

A Snowman and His Umbrella

Oh! There's no place like home for the holidays....Truer words were never spoken.  At this special time of year, we open our homes to friends and family to celebrate the joy of the season.  Parties, cookie exchanges, neighborhood caroling- the possibilities are endless.   Enter the Insurance Grinch!

Every time we open our door to "friends, family and others", we open the door to a potential lawsuit. Consider these possibilities:

• On his way home from your Holiday Open House, one of your guests is involved in an auto accident with another party.  After your guest fails the sobriety test, it is revealed that you were the host that served him alcohol.  Several weeks later, the injured party serves you with a lawsuit alleging "social host liability".
• The neighbors are caroling door-to-door.  After they serenade you with "Silver and Gold", one of the carolers slips and falls on your steps, resulting in a knee replacement surgery and lost time from work. Weeks later, your neighbor serenades you with a "negligence lawsuit".
• Being the home with the best sled riding hill in the cul-de-sac, the nearby kids love to bring their assortment of sleds and toboggans to your backyard.  Uh-oh!  You guessed it.  One of the kids loses control of his homemade sled and incurs a serious injury.  Ding dong.  Special delivery of a "failure to provide a safe sledding area" lawsuit.
• Finally, it's the night before Christmas and a burglar breaks into your home. You catch the burglar in the act and shoot him with your legally registered firearm.  Now, the burglar sues YOU for shooting him "negligently".  (Folks, I'm not making this stuff up!  Here is the real life story of such a case.)

The good news is that many of these types of lawsuits will be covered by your home or renter's policy. (You do have such a policy, right?)  However, why not supplement your coverage with a personal umbrella liability policy?  For as little as $150 a year, you can purchase a $1,000,000 umbrella policy. That's an added layer of protection for your assets in the event of a catastrophic lawsuit.

Crooner Perry Como sings another line in the song,  "If you wanna be happy in a million ways", - a hint from Perry about securing a personal $1,000,000 umbrella policy? Perhaps.  Sam the Snowman in Rudolph has carried a green umbrella for years.  Another suggestion?  Maybe.  Contact your Trusted Choice agent and discuss an umbrella liability policy today.

Three's Company, Too!

When the tv show "Three's Company" aired in 1977, no one but an insurance nerd like me worried about the insurance implications of unrelated people living together.  "I wonder if Jack, Janet and Chrissy each had their own renters policy to cover their belongings?"  

Today, about 1/3 of married people in the US have cohabitated.  A recent study reveals that people who cohabit with just one person and then marry that person go on to accumulate wealth at double the rate of people who marry without cohabiting.  No wonder cohabitation is on the rise!

Seriously, there are many types of living arrangements these days:

• Cohabitation couples (AKA significant other)
• Boomerang "kids" moving home with parents
• Aging parents moving in with adult children
• Grandkids being raised by grandparents

Does your insurance agent know about these living arrangements?  There are significant coverage implications that need to be addressed, before an uninsured claim arises.  

Let's talk about your home insurance which covers your property and provides liability insurance in case someone sues you.  Everyone that lives in your household is covered, right?  WRONG.

Most homeowner policies cover "you" (person named in the policy), your resident spouse, any resident relatives and any persons under the age of 21 that are in your care.

So, on a basic home policy, your live-in (no matter the gender) is not covered.  Likewise, if your spouse moves out, he/she is not covered.  

The other scenarios listed above will have coverage under the homeowners policy as long as the individual's legal address is the same as yours and they are a relative.  (Note - relative is NOT defined in the home policy.)

Bottom line, talk to your TrustedAdvisor about the individuals living at your home and what type of coverage they have and what they may need.  Affordable solutions are available.

Next time, we'll talk about your auto policy and how living arrangements and policy language determine who has what type of coverage.