Summertime Blues

"There ain't no cure for the summertime blues."  Blues?  It's the first day of summer and that means fun.  Why all this talk about summertime blues?  It is a very simple equation. Fun +  x = liability (where x = just about anything!)  Unfortunately, your "fun" residence abounds with chances for injuries and resulting liabilities to others. Let's demonstrate the truth of this hypothesis:   fun + x = liability.

Your backyard pool is loads of fun.  Add your neighbor kids to the mix and you have the potential of someone getting hurt.  Result?  Liability due to failure to take reasonable precautions to prevent children from swimming unsupervised..

You are hosting a fun summer soiree with a great selection of adult beverages.  On his way home from the party, one of your guests is involved in a serious automobile accident. Outcome?  You get sued under the doctrine of social host liquor liability.

Your kids' trampoline is the hit of the neighborhood.   Your backyard is the place for fun until a neighbor's child gets injured when he bounces off the trampoline platform onto the ground.  Consequence?  Suit papers alleging inadequate supervision on your part.

The backyard grill at your fun-filled Fourth of July party, goes haywire, badly burning a 12 year old.  The end result could be legal action against you for your failure to maintain the grill in good working order.

The list of potential summertime blues is an endless as the fun!  So what's a fun-loving homeowner to do?  Is there a cure for the summertime blues?

Prevention is the best cure.  Just as you put on sunscreen to protect your skin from the elements, make sure that all of your "fun" attractions are installed correctly, maintained in good working order and adequately supervised at all times.  Talk to your insurance professional about increasing your home insurance policy's liability limits or purchasing an umbrella policy.  Increasing your liability limit to $500,000 is normally less than $30/year. Additionally, an umbrella liability policy can cost as little as $150 a year for $1,000,000 worth of coverage.

Take a few moments out of your summer fun to protect your most valuable assets - your home, your income and your family.  Fun + (x + insurance) = reduced liability and peace of mind.

Insurance Folks are Nuts!

The other day, I stumbled upon a blog entitled "18 Disney Movies That Were Never Made." It is probably no surprise to you that a film chroniciling the adventures of a superhero named "Insurance Man" was not on the list.  You can't blame an insurance nerd like me for checking. Anyway, the blog made me think about the media's portrayal of the insurance industry in movies and tv shows.  Does art imitate life?  Has insurance been portrayed honestly?  What is fact and what is fiction?  You be the judge.

One episode of the beloved Andy Griffith television show highlights the value of homeowners insurance.  Aunt Bee loses her "valuable" antique broach given to her by her Aunt Martha.  Andy tells Bee they can put in a claim with the insurance company. A geek like me beams with pride as Andy explains the applicable homeowners coverage to Aunt Bee.  Fact - Insurance rocks!

There was actually a television series that centered on the insurance industry.  Can you name it?  The main character was an insurance investigator named Mike Longstreet.  Did I mention he was blind?  The short-lived show was appropriately named Longstreet and aired for one short season in 1971-72.  The blind protagonist was equipped with his seeing eye dog, a gun and was an expert at martial arts.  Quite a hero but I am leaning towards fiction.

The 2012 hit television show, Revolution, is a sci-fi drama that takes place when the world has been robbed of electricity.  Believe it or not, the show has a connection to insurance. One of the key characters and villains is Major Tom Neville.  Prior to the blackout, Tom was an insurance adjustor.  All adjustors are villains?  Fiction.

The big screen has had a few collisions with insurance as well.  Do you remember the Jack Nicholson movie, About Schmidt?   The main character, Warren Schmidt, is retiring from his career as an insurance actuary.  He reflects on his past and whether he ever made a difference in the world.  Sidenote, not all actuaries are without emotion!

In 2004, Ben Stiller played the role of Reuben Feffer, an actuary whose job analyzing risk for insurance  seems to have turned him into a dour, lifeless loser whose wife cheats on him during their honeymoon.  Remember Along Came Polly?  Fact - not all actuaries are as boring as Feffer!

I was pleasantly surprised to discover insurance in a Disney movie!  Did you take your kids to see the 2004 computer-animated movie, The Incredibles?  This action-comedy centers around a family of superheros.  The father, Bob Parr, is an insurance company adjuster by day and superhero possessing great strength and durability by night. Finally an insurance champion that everyone can relate to and that's a fact.

Without a doubt, Double Indemnity is the most famous insurance storyline.  Initially a novel, this critically acclaimed story has been made into a movie and a play.  The movie version stars Fred McMurray as Walter Neff, an insurance salesman turned murderer. Neff kills his lover's husband to collect on an accident insurance policy.  The payout?  A $50,000 double indemnity benefit; i.e. twice the benefit if death is caused by accidental means.

As an insurance geek, Double Indemnity is my all-time favorite since it is jam-packed with insurance terms and references.  One of my favorite lines from the book is from McMurrary's character, Walter Neff.  "You think I'm nuts?  All right, maybe I am.  But you spend fifteen years in the business I'm in, maybe you'll go nuts yourself".  Fact - not all insurance folks are nuts!

A Fool And His Money Will Soon Be Parted

As tornado cleanup continues for thousands of residents of Oklahoma, the nation finds hope as stories of rescued individuals, recovered pets and salvaged possessions come to light.  A brief account about the surprising recovery of cash, (you remember cash?  greenbacks?  paper money?) caught my attention.   

Moore, Oklahoma resident Tom Bridges had $2,000 cash from the sale of his boat. The cash was in an envelope with a rubber band, on a windowsill of all places, before the tornado hit. The day after the tornado, he found that envelope with the money intact in his destroyed home.  No small miracle that paper money in a paper envelope was found after 210 mph winds whipped through town!

An oft quoted proverb says "A fool and his money will soon be parted."  By no means am I saying that Mr. Bridges is a fool but what if he and his money had parted... permanently? What if he hadn't found that wad of cash?  Furthermore, what if one of his neighbors had hidden away thousands of dollars worth of gold coins and the tornado deposited the coins in lands unknown?

Of course, the insurance addict in me got to thinking....  Do the folks know how insurance responds to claims involving money?  Inquiring minds want to know.

A standard home, renters or condo insurance policy places a $200 combined limit on the following valuables:

Money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards.

'Nuff said.  If you routinely or just by happenstance have a combined total of more than $200 worth of these items in your home, please be aware that if someone burglarizes you or your home burns down or a tornado blows through, the most you will recover from your insurance company is a whopping $200!  Please don't be confused. There is not $200 for money and $200 for gold and $200 for smart cards.  The TOTAL is $200.

As always, please talk to your agent about your particular policy and your specific needs.  As a perk on select coverage forms, some insurance companies will automatically increase this $200 limit to a $500 or $1,000 amount. Others will allow you to increase this limit to a $1,500 maximum or higher, for an additional premium charge.

No need to be foolhardy.  Now that you understand the insurance consequences of damage to your cash and coins, you can decide when to part with your money.

Peace of Mind

In 1971, Memorial Day was declared a national holiday by an action of Congress.  Often called Decoration Day, the majority of Americans think of Memorial Day as the beginning of summer.  However, the intended purpose of Memorial Day is to honor the nation's war dead.  For those of us that do not have a war veteran in our family, we often associate Memorial Day as a day to remember any loved one that has passed.

Perhaps part of your Memorial Day is a visit to the cemetery. Be aware that across the country, there are increased instances of theft of grave markers. I can only image how violated I would feel if a visit to the cemetery revealed that the headstone of a loved one had been stolen, damaged or vandalized.  A recent theft of a $36,000 brass statue and grave marker occurred in Trumbull County, Ohio.  Police reports from around the country reveal that many markers are stolen and sold for scrap metal.

An obscure yet invaluable coverage of most home insurance policies is coverage for grave markers.  A typical policy might read:  "We will pay up to $5,000 for grave markers, including mausoleums, on or away from the "residence premises" for loss caused by a Peril Insured Against under Coverage C."  The "Peril Insured Against" would include tornado, vandalism, lightning and theft.

Today, many headstones are personalized with photos, detailed artwork, emblems and even QR codes, honoring the complexity of the individual's life.  Typical headstones can range from $750 to $2,000. The more customization the higher the cost.

The process of designing a permanent memorial is an extremely emotional experience.  It is the final word on someone's life journey.  Each and every visit to a grave marker stirs feelings of joy, sadness and perhaps, comfort.  It is reassuring to know that if something unforeseen harms your loved one's marker, you can look to your homeowners insurance policy for assistance.

Insurance is peace of mind.

Have a safe and blessed Memorial Day.

Sinkholes - Coming To A Home Near You

Imagine waking up to find the basement of your residence swallowed by a sinkhole.  That's just what happened to a couple renting a home in Cincinnati early this morning.   Luckily, no one was injured in the geological event.

You may remember the deadly sinkhole in Florida that claimed the life of 37 year-old Jeff Bush while he was sleeping in his bed. Since that event, neighboring homes in Seffner, Florida,  have been condemned and are being demolished.

Sinkholes are depressions in the surface of the land caused by the sudden settlement or collapse of the land.   According to a U.S. Geological Survey, sinkholes are found all over the world.   In the U.S., sinkholes are especially common in Florida, Missouri, Tennessee and Kentucky.

So, is the damage caused by a sinkhole covered on your homeowners policy?   In most states, NO.  In the states of Florida and Tennessee,  insurers are required by law to offer sinkhole coverage for an additional premium.  In other states, if the carrier offers the coverage, a homeowner can elect to purchase it for an additional premium.

Be aware that this optional sinkhole collapse endorsement covers only the  "actual physical damage arising out of, or caused by, sudden settlement or collapse of the earth ."  Emphasis on "actual physical damage".  So if your neighbor's home is damaged by a sinkhole and your home is condemned because of a potential sinkhole underneath, is there actual damage to your home?  The coverage you paid for may not apply.

Good news for Florida residents.  Because sinkholes are so common, the mandated coverage does pay for expenses when the home is "being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure."

As for businesses, most commercial insurance forms do provide sinkhole coverage.  As always, be sure to discuss this coverage and other potential coverage limitations with your agent on your specific policy.

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.

The Hammer Clause - Not What You Think

"Doctor, Lawyer, Indian Chief" - Besides being the name of a popular song from 1945, what do these occupations all have in common?  Each requires that the individual with the title possess a special skill holding them to a higher standard of conduct.  They are considered professionals.  Plumbers, programmers, carpenters...the category of professional has evolved.

If allegations arise that one of these individuals failed to render services of a professional nature, their business liability policy, sometimes referred to as a Commercial General Liability (CGL) policy, will not respond.  Professional liability is excluded under CGL policies.

The astute professional carries a professional liability policy in addition to his CGL.  Professional liability insurance, also referred to as malpractice insurance, will protect the professional when allegations of errors or omissions in professional services arise.  But you knew that.

What you may not know is that many professional liability policies contain an unusual clause, known as the "hammer clause".  The hammer clause requires the insurer to seek the insured's approval prior to settling a claim for a specific amount.  Some professionals believe that settling claims out of court is an admission of error that may harm their professional reputation.  So the hammer clause appears to be a great way for the professional to have the final say before settling a suit that they deem frivolous or unsubstantiated.

However, what many professionals fail to realize is that if they do not approve the recommended settlement, the hammer will fall.  You see, the hammer clause goes on to say that the insurer will not be liable for any additional monies required to settle the claim or for the defense costs that accrue from the point that the insurer makes the settlement recommendation.

An example will demonstrate the point.  Dr. Smith has a $5 million limit on his professional liability policy.  His insurance adjuster/lawyer recommends that a settlement be reached in a malpractice claim for $500,000.  Dr. Smith refuses and wants the case to proceed to trial.  Any defense costs from that point on, as well as any settlement over $500,000, will not be paid by the insurance company.  Talk about putting the hammer down!

The 1945 song goes on:  "Tell the doc to stick to his practice; Tell the lawyers to settle his case.".  My interpretation, always work with an insurance professional who can explain these important policy provisions to you.  That way, you won't get hammered.