FAQ – Homeowners Insurance

Nonpowder Guns (BB, Pellet, Air Rifle)

Each year in the U.S., several million air rifles and guns that shoot ball bearings (BBs), paintballs and pellets are sold. Their projectiles are released by using compressed air instead of gun powder, so they are, collectively, classified as nonpowder guns. These weapons are accompanied by a popular belief that these items are not dangerous weapons. That belief is mistaken. Although they do not fire bullets, many persons, particularly children, are seriously injured by these weapons and even fatalities are associated with these “toys.”

If your household includes such property, it’s extremely important that their use and storage be carefully supervised. The use of compressed air results in guns with enough fire power to launch smaller projectiles that can penetrate a person’s skin. Naturally, eyes are even more vulnerable to damage. Nationwide statistics show that more than 20,000 emergency room visits are directly related to injuries from nonpowder guns. As a consequence, more lawsuits are being filed to secure reimbursement for treatment expenses and, more importantly, compensatory damages.

Since so many children use nonpowder guns and, typically, cause injuries to other children, homeowners are becoming more vulnerable to lawsuits. Their insurance companies then must provide a legal defense against such claims and handle any settlements, so their costs are increased. Therefore, homeowners should develop a more realistic attitude toward nonpowder guns. Specifically homeowners should:

  • carefully consider whether a powerful nonpowder gun should be in the household
  • (if applicable) determine if their children are mature enough to have one
  • be sure to provide meaningful supervision when such guns are being used
  • consider how and where such guns are stored when not used
  • put together and follow a set of rules about how nonpowder guns are to be handled
  • (if applicable) seek immediate, competent medical attention to properly treat nonpowder gun injuries

Nonpowder guns are not toys. Homeowners should take steps to make sure their ownership and use are taken seriously.

Hurricane Tips

It is an unfortunate fact that many homeowners have to deal with the horrendous loss created by hurricanes. Hopefully, any affected person will own a homeowner insurance policy to help deal with the crisis. Persons who have suffered hurricane damage need to be aware of their responsibilities under the insurance policy in order to take full advantage of any available coverage.

A homeowner should discuss their coverage needs with an insurance expert. One priority should be to make sure that the amount of coverage is adequate in the event that the home has to be totally replaced. Also, the homeowner should keep their deductible in mind, seeking options to make sure that it is affordable. Insurers who operate in areas that experience hurricanes typically require deductibles at a high, flat amount (such as $2,000) or at a percentage of the policy’s insurance limit (anywhere from 2 to 5%).

Naturally, a homeowner should consider ways to minimize their possible loss and maximize their personal safety by:

  • Making advance evacuation plans (including determining evacuation route, fueling car, preparing supplies, etc.)
  • Being aware of the nearest, safe shelter
  • Bring outdoor property inside the home (lawn equipment, toys, tools, etc.)
  • Installing or building a proper “safe room”
  • Cover/Secure all windows and doors
  • Have a portable radio and stay turned to accurate source of weather broadcasts.
  • Turn off (unplug) small appliances and turn refrigerators/freezers to their highest settings.
  • If applicable, turn off fuel/oil tanks.
  • Fill sinks and bathtubs with water.

Returning to a damaged/destroyed site is not when a hurricane victim will be at his or her best, but that is the time that certain obligations have to be met in order to make the most out of any insurance recovery. It is important to do the following:

  • At the earliest possible chance, contact your insurer with details about your loss
  • If possible, be sure you have a way to visually record the loss details (camera, digital camera, video recorder, etc.)
  • Take reasonable action to keep intact property protected from additional damage or loss
  • Keep an accurate record of all expenses that are related to protecting your property as well as items related to temporary housing and meals

Though post-catastrophe times are chaotic and spirit-sapping, it is important to keep in contact with your agent and/or insurer. Take the time to be meticulous about filling out reports, documenting the value of your loss and cooperating with claims personnel.

A Construction Coverage Gap

2003 was a particularly bad year for massive fires in California. One conflagration resulted in a number of deaths and the destruction of hundreds of homes. One aftermath of the tragedy was the discovery that even those homes that were insured were not properly covered. The source of the inadequate coverage was man-made. In fact, it was legislated.

The world of contractors and construction is filled with rules meant to establish standards for building materials, site preparation, construction methods, etc. Most such rules are created on the level of local government and are typically called ordinances. Each area’s ordinances reflect specific concerns, particularly natural hazards that regularly endanger property such as windstorms, earthquakes, floods and…..fire.

Many of the homes damaged or destroyed in California were built near forested areas in the midst of droughts. Naturally, the likelihood of fires is much higher and, being in remote areas, fire protection is non-existent. In order to compensate for this extreme exposure to loss, local laws often require special construction features such as on-site water supply, pumping equipment, fire-retardant roofing, and fire-resistive construction materials.

Many homeowners enjoy the benefit of “grandfathering.” That refers to any exemption given to a person from having to comply with a new law. However, such exemptions disappear under certain circumstances such as significant remodeling or when a certain percentage of a building is damaged. Therefore, property owners who face the prospect of re-building their homes also face full compliance with current building laws. Without special endorsements, it’s unlikely that their insurance policies will provide significant Ordinance or Law Coverage. These property owners could be responsible for thousands, perhaps even tens of thousands in uncovered costs.

If you have an older home or live in an area that has special laws for rebuilding, it would be worth your time to consider adding protection against any extra costs caused by local ordinances. Your insurance professional is the person to know.

Fortified Home

Whether terrorizing coastal areas as a hurricane, devastating inland areas as tornadoes or pummeling a local area as a hailstorm, the wind creates many problems. Homeowners aren’t fans of heavy wind activity since it is capable of inflicting major damage. Most homeowners believe that when it comes to facing windy onslaughts, they’re helpless. The truth is that something substantial can be done to make a home less vulnerable to wind damage.

A fortified home refers to a residence with several special construction features that make them much more likely to survive violent storms and winds. There is nothing exotic or complicated about the features that include the following:

  • Installing window shutters that are impact-resistant
  • Avoid using smooth nails. Nails with rough or ringed shafts have much more holding power
  • Use roofing materials that are fire and wind-resistive
  • Before installing roof shingles, seal the seams of the plywood roof deck with asphalt tape
  • Attach the home’s frame directly to its foundation with metal strapping
  • Use a risk management, anti-fire tactic of keeping a home a minimum of 30 feet away from underbrush
  • Be more generous with nails. The more nails used to secure joints, the sturdier the home. Using more nails to secure a roof’s decking is particularly helpful.

A private institute devoted to the construction of safer homes performed a survey and found that building a home that uses all of the construction modifications adds a 5% (maximum) increase in total costs. While it is easiest and more cost-efficient to use the building tips during new construction, some elements can be added to existing homes (called retro-fitting).

Homes And Underground Storage Tanks

Insurance policies continue to be written conservatively. In some instances, they still reflect situations that were prominent

While most homes, especially those built in the ’80s or later, depend upon heating energy from utility companies, that is not the case for many homeowners. There are plenty of residential properties that include underground storage tanks. Most are for storing oil used for heating. Other residences may, for various reasons, have tanks for storing gas. In other instances, properties have tanks that were left buried after a home was converted to utility service.

Regardless how or why an underground tank may be present, homeowners must recognize that they have a L.U.S.T. (Leaky Underground Storage Tank) exposure. Though a tank’s existence as a leak-proof structure varies, oil tanks are typically viable for a mere 10-15 years while petroleum tanks may last 30 or more years. Unfortunately, the following circumstances can lead to a significant leakage problem more quickly:

  • A tank that was not properly lowered into its hole upon installation
  • Unsuitable materials were used to surround the tank, such as ashes or cinders, which break down with moisture and cause exterior tank corrosion
  • Water builds up inside the tank (leaking in from poor tank pipe seals or due to condensation). The water can combine with other chemicals that rust tanks from the inside
  • The tank and delivery pipes don’t have guards for preventing overspills.

It’s important to be aware of the danger presented by underground tanks. Only a small volume of escaping oil or gas can endanger large amounts of drinking water. Aggravating this danger is the fact that such damage is considered to be pollution which isn’t likely to be covered by a homeowners policy. This is true particularly if the homeowner knew of the tank’s problem. Besides the danger of being sued by persons who have been harmed by any leakage, government authorities may also require that the property be restored to a non-toxic state (referred to as remediation) and then be subject to future testing and monitoring.

If you have an underground tank, contact your insurance professional. While there may be some insurance options, an agent is a good starting point for finding help for inspecting, maintaining and managing this tricky risk of loss.

Are Fireworks Covered?

One rite of summer is to enjoy fireworks. However, it’s important to think before setting off your first firecracker, sparkler, smoke-bomb or bottle rocket.

For all their fun, fireworks are capable of seriously injuring persons and property. If you do cause damage, are you insured? In most instances, if you carry a homeowners policy, you are protected. For instance, imagine you are setting off some fireworks in your driveway for your children and their friends. Suddenly, a sparkler you gave to a neighbor’s child violently flares up, burning her hand and face. Your policy could cover her injuries a couple of ways. If the injuries are minor, her medical treatment could be handled under the Medical Payments portion. However, if the child’s injuries are more serious and her parents sue, your policy’s liability portion should handle your legal defense as well as a legal judgment.

Here’s another example of a loss that could be covered. While setting off some bottle rockets, one takes off and smashes through a window of a house across the street. The rocket sets the home’s living room curtains on fire. The neighbor is able to put out the fire with a garden hose, but the result is thousands of dollars in damage caused by fire and water. Your policy should handle this damage.

Coverage Shortfalls

There are instances where your homeowner policy does not offer coverage. If it’s illegal for you to set off fireworks, this legal hurdle could result in any loss being excluded by the policy. Since a homeowner is meant to handle losses related to owning and living in a home, there’s no coverage for a person who uses their home for making, selling, storing or distributing fireworks. Any business activity involving fireworks is going to cause a big problem if a loss occurs.

Injuries to yourself or others in your household are not covered because Medical Payments and Liability coverage is designed to handle loss suffered by persons outside of your household. Also, if the injury was not an accident, there’s no coverage. Playfully tossing a firecracker or aiming a bottle rocket at another person could be considered intentional, even when no injury was intended.

So when dealing with fireworks, make sure they’re legal, that they’re used carefully and only for entertainment. Then your chances are good that any loss may also be covered.

Insuring A Trust

Homeowner and other policies that protect private residences have, for most of their history, been written assuming that the property owner is an individual or married couple. Such policies define an “insured” or covered person as an individual, married couple or spouse of the individual listed on the policy. Recently, this assumption regarding “insured” is changing as it has become common for homes to be owned by trusts.

The change is prompted by another reality concerning homes. Besides use as a residence, a home is also often a primary financial asset. As property owners become more sensitive and savvy in handling their finances, the use of trusts to pass on property has expanded. A trust refers to any asset that is controlled or owned by an artificial entity, the trust agreement. Typically, the property owner becomes the trustee, having rights to use the home as a residence, but the legal ownership resides in the trust. The trust allows for tangible property to be passed along to heirs with much more for favorable tax treatment. However, there are consequences that affect insurance coverage and which should not be ignored.

If your home or personal property (furniture, furnishings, etc.) have been transferred into a trust, it is important to share this information with your insurance agent. Then you both may take steps to make sure that the insurance needs of both the trust and the property-users are covered. It is particularly important that liability protection remains intact.

Depending upon the insurer, your homeowner, auto and umbrella policies may have to be modified so that the trust arrangement is recognized and is protected by the policies. It may be that the policy wording already handles things by including trusts or trustees within the meaning of “insured.” In other instances, endorsements may have to be added to include the proper additional insurable interest so that property and liability coverage expands to protect the property held in trust and the trustees.

The existence of a trust means you need to get an insurance professional involved to make sure you can still trust the protection of your various insurance policies.

Be A Common Sense Host

Holidays often include celebrations that bring together families and friends in private homes across the country. Food, fun, talk and spirits flow generously and, to add a sobering thought, so do injuries and accidents. It’s not news to hear that increased drinking leads to increases in personal tragedies, but it’s important to get reminders that individuals must be responsible for their actions. One major area of responsibility is as a party host. Hosts are given the credit for the enjoyment that their guests experience at a party. On the dark side, party-givers are also asked to bear partial or full responsibility for guests who cause damage or injury on the way home from a gathering. In other words, they may be sued for contributing to losses caused by alcohol-impaired guests.

Applying Risk Management (Common Sense) to Hosting

The good news is that the brunt of responsibility, even via lawsuits, has to be faced by the individuals who directly caused the loss. There would have to be strong evidence to support a host being held financially responsible, since any involvement is indirect. For example, Jane provides drinks to Barrie, who then plows into the side of Chris’ car and garage.

While a homeowners policy may offer coverage if a host has substantially contributed to a loss, an insurer may be able to deny a claim for a number of reasons, including:

  • A gathering involves the host making an income
  • The involvement of paid bartenders
  • The party is thrown as a fundraising event
  • A host’s knowledge that the guest was impaired and continued to serve liquor
  • The host failed to make arrangements for impaired guests (designated drivers, taxis, lodging, etc.)
  • Local or state law(s) related to providing alcohol

Of course, the best course of action is to make sure that parties are thrown responsibly, are done as a social (rather than business or commercial) event, and that the chances of sending drunk guests on the road are minimized. A good host will make sure that food is available, that a liquor supply under his or her control is cut-off and that impaired friends or relatives are prevented from endangering themselves or others. No holiday celebration should end up with a lawsuit.

Toxic Mold

Most homeowners recognize the importance having snug, dry home. Now there’s a reason to put more emphasis on keeping it dry..toxic mold. A certain form of mold, called Stachybotrys (pronounced stakki-botris), is appearing in more headlines. Unfortunately, the mold, which is capable of causing illness in humans, is also becoming a familiar topic in courtrooms.

Toxic mold, like other more common molds (such as penicillin), is found indoors and can grow on nearly any type of damp or wet surface including wood floors, carpeting, tiles, drywall, paneling, insulation, etc. The only conditions necessary for its formation is moisture, food (organic material) and time. Besides mold’s ability to physically damage a home (staining, warping, deterioration), the spores from this type of mold can become airborne, making people susceptible to developing allergic or respiratory symptoms. Research is ongoing to determine whether mold exposure may also cause more serious health problems.

Damage to a home or its occupants that is caused by toxic mold is typically excluded. Insurance policies are designed to handle accidental causes of loss and items such as mold infestation, rusting and rotting are seen as home maintenance issues. However, in one notorious court case, a family in Texas was awarded several million dollars because its insurer allegedly mishandled a loss, creating a condition that allowed the growth and spread of toxic mold.

Rather than be concerned over the possibility of insurance coverage, prevention is the best course of action. Inspect in and around your home, looking for indications of moisture. Correct any conditions that could cause moisture build-up such as leaky roofs or plumbing, condensation, leaking appliances, etc. Keep your home snug and dry and avoid a moldy problem.

Who Cares About Attractive Nuisances?

What Is An Attractive Nuisance?

This is a term originated by a judge to describe property that attracts youngsters and, because of their dangerous nature, creates a special obligation to property owners. Examples are:

  • swimming pools
  • trampolines
  • empty buildings
  • appliances kept outside
  • excavations
  • construction materials

All of these can lure children onto property and they all have the potential to cause serious injury. Why Do Attractive Nuisances Create A Special Obligation?

A special obligation exists because of such property’s child endangering nature. Children do not have the reasoning ability of adults. When an opportunity to have fun pops up, it’s a rare child who thinks about the chance of being injured. A property owner with an attractive nuisance on his property cannot escape liability because of a trespassing child. When an attractive nuisance is involved, adults have to make a special effort to protect children from their blind sense of adventure or face the consequences. How Do You Handle Attractive Nuisances?

The answer is…do whatever it takes to prevent a child’s access to the nuisance. Therefore, in order of their effectiveness:

1. Eliminate the nuisance:


  • have old appliances hauled to a junk yard
  • tow old, non-running vehicles away
  • get rid of construction materials immediately after a building project is complete

2. Secure the nuisance


  • take off doors or covers from large appliances awaiting garbage pickup
  • keep sharp tools, especially power tools and equipment, locked away
  • store construction materials in a garage or shed

3. Reduce the chance for injury from a nuisance


  • install a pool cover and have a locked fence to prevent access to pool
  • do not allow younger children to use equipment such as trampolines
  • make sure there’s adult supervision of children using play equipment

If you’re not certain about whether you have an attractive nuisance situation, discuss the situation with an insurance professional.


What If My Home Is Vacant Or Unoccupied?

Vacant vs Unoccupied. There IS a difference. Webster’s Encyclopedic Unabridged Dictionary of the English Language has the following to say:

Vacant: having no tenant or contents; empty, void.
Unoccupied: without occupants, but not devoid of furniture or other furnishings.

The difference between the two is a matter of time and intent. While not being occupied is a temporary condition and an exception to a residence normally having occupants, vacancy generally represents abandonment of property. So what’s the point? Well, either condition may affect your coverage under a typical homeowner policy. It is quite important to understand the consequences of either condition in order to keep your coverage intact. Peeking At A Homeowner Policy

Generally, a homeowner policy has a couple of areas that may be affected by a home’s occupancy status: damage caused by freezing, or certain property and loss due to vandalism. Let’s talk about them in detail.

A homeowner policy usually protects a home from any loss that is caused by a frozen:

  • plumbing system
  • heating system
  • air conditioning system or
  • appliance

Example 1: Fern Guddyson and her family leave their home in Minnesota in January. They’ll spend the next 10 weeks in Miami because Fern is teaching a graduate course in Zen awareness at Palm Leaf University. During a bitter cold spell at their home at the end of March, the water line to their refrigerator (for its ice-maker) freezes and breaks. Later, when the line thaws, it overflows and, eventually, soaks all of the home’s oak flooring and carpets. Fern makes a claim to her insurer when the family returns home from Miami. The insurance company’s claims department rejects the claim when they find out the home was unoccupied for more than 30 days before the loss.

Unfortunately for the Guddysons, most homeowner policies will not cover freeze-related losses that occur during an extended period in which the home is either vacant OR unoccupied. But this loss of coverage can be avoided if the homeowner takes precautions to help avoid such losses. Precautions usually involve either draining any systems or appliances of water and shutting off the home’s water supply, or by keeping the home heated during the absence. Freezing

A homeowner policy typically offers protection to a home that is damaged by acts of vandals. with an important exception. Let’s visit the Guddysons again.

Example 2: Fern Guddyson and her family leave their home in Minnesota in January. Again, they’ll be in Miami for the next 10 weeks while Fern gets her doctorate in surfing from Palm Leaf University. A week before the Guddysons return (in late March), a group of kids break out most of the windows in the home. They then take a variety of tools found in Mr. Guddyson’s toolbox and smash doors, floors and walls. Fern makes a claim to her insurer when the family returns home from Miami. The insurance company’s claims department estimates the damage and gives Fern a check to cover her loss.

Typically, vandalism losses are covered even during periods of extended unoccupancy. However, if the Guddysons had emptied their home of all furnishings and turned off the power for the time they were gone, the vandalism loss would not have been covered. Why Are Such Exclusions Necessary?

Homeowner policies contain such exclusions in order to avoid special loss situations. A vacated home becomes an attractive nuisance, often attracting acts of vandalism. If a home is to be vacated, it may be necessary to purchase dwelling fire coverage to protect the home. In regards to loss caused by freezing, insurers want to encourage homeowners to do a little planning in order to reduce or eliminate the chance that a system or appliance causes a loss. If an insured refuses to act responsibly toward their property, they risk the chance of an uninsured loss.

If you’re facing a situation in which your home will be unoccupied or vacant for an extended period, talk to your agent and make sure you do whatever is necessary to preserve your full insurance protection.

Are These Tragedies Insurable?

Headlines Hit Home

Many Americans have been horrified and confused over the shootings which have occurred in schools nationwide the past several years, and the Columbine High School tragedy has been of particular concern. After having these events splashed over the airwaves and newspapers; the consequences of these actions have to be dealt with by the survivors. While citizens, authorities, social and psychological experts, gun opponents/proponents are all wondering why such things happen, the focus is beginning to shift to pointing fingers. Who’s Responsible?

The shootings have created both human and financial consequences and armies of lawyers are being formed to hold someone financially accountable. Let’s not oversimplify these events; there are elements that make them different from each other. The individuals involved and the particular circumstances that triggered each event are not similar enough to treat them in the same manner. However, the acts do have an important element in common. Since all of these acts have been performed by children, it may appear understandable that their parents are the first to be held responsible.

The first source that other parties look to for financial relief are insurance policies. In such instances, would the parents’ homeowner policies respond to lawsuits over the actions of minors who injure or kill their schoolmates? The answer is…..it depends. What Do Homeowner Policies Intend To Cover?

Homeowner polices are called package polices because they offer coverage in two major sections. Section I protects the property that belongs to the policyholder such as his home, garage, storage sheds, household furnishings and even the increased living expenses created by the loss of use of such property. Section II provides coverage against the policyholder’s legal responsibility for injuring other persons or damaging their property. While the shootings certainly involve substantial injuries and property damage, homeowner policies may not provide coverage.

Homeowner insurance policies intend to respond to events that are accidents. While the language differs among policies, generally, the premiums you are charged for this liability protection is based upon having to defend and make payments to injured parties because of losses that are neither intended nor foreseen by the policyholder. Of course, the particular loss details have a great deal to say about whether the event can be considered an accident or not. How the loss was caused, the age of the person causing it and other circumstances affect coverage. Are Shootings Covered?

The question of the hour is: will a homeowner policy pay for the financial consequences of a person shooting someone else? Surprisingly, nothing is clear cut. For instance, it could pay if the shooting involved a person who was defending himself or protecting another person. It may pay if a person was practicing on a gun range and a shot ricochets and injures another. It may even provide coverage if one person aims directly at another and fires a weapon, but the person holding the weapon is, say, a toddler.

Many homeowner policies define whom are considered to be mature individuals and, generally speaking, the age is 13 years or older. Acts involving both guns and persons who are this age or older are excluded from coverage under a homeowner policy. Why? Because such persons should be old enough to understand the extreme danger represented by guns. The choice in deploying a gun or similar weapons against other persons can rarely be considered accidental and, in most instances, are the full responsibility of the weapon-wielder.

But again, there can still be instances where a homeowner policy may be required to defend or pay for such losses, including instances:

  • where a parent may be held to be indirectly responsible for the actions of a child
  • where the shooter is found to be mentally impaired or is otherwise considered unable to have understood the nature of his or her actions
  • where a court may interpret a policy as being applicable to a shooting.

The fact is, the question of insurance coverage for such horrible events is as confusing and complicated as why such events ever occur. Only the passage of time and legal findings have the chance to make this subject any clearer.

Claims By Candlelight?

There’s something happening with candles?

If things haven’t got complicated enough for persons concerned with protecting their homestead, it appears that the soft, soothing glow of a candle’s flame may disguise some problems. Specifically, the use of candles may result in:

  • reducing the internal air quality of your home
  • increasing the chance of fire losses
  • damages by particulate deposits on interior and exterior walls, carpets, furniture, appliances, window treatments, floors and other surfaces.

Further, their use may also contribute to health problems from inhaling particulate matter or ingesting harmful chemicals. What’s the problem?

Actually, there are a number of problems and they have been accentuated by a change in the market for candles. The last few years have seen an explosive growth in the popularity of candles. They are increasingly used for their traditional, decorative purpose and they are now marketed as scented candles for deodorizing and for a health-related purpose called aromatherapy.

Of course, to boost sales, candle-makers find that they have to offer products with an intense scent. This is accomplished by adding scented oils into their wax mixture. This often causes the candle to burn improperly and increase the production of soot. A Sooty Situation

It looks like soot, which is a carbon residue produced by burning, can create a large, expensive problem. Since soot is particulate matter that can be carried through the air, it can seriously stain walls, carpets, and personal property. Studies show that electronic and plastic components are also vulnerable to soot damage. Unfortunately, soot produced by improperly burning candles bonds very strongly, making it difficult to impossible to clean. Further, soot may contaminate a home’s heating system, including ductwork. The soot can then be spread throughout a home, creating widespread damage that is difficult to repair. Property stained by soot may have to be cleaned by professionals and, often, the property has to be replaced. What’s in those things anyway?

You may have assumed that the only materials found in candles were the wick and some type of wax. Surprise! Here’s a list of ingredients which may either be found in a candle or may be created during combustion:

Acetone Benzene Trichlorofluoromethane
Carbon disulfide 2 Butanone 1 1- Trichloroethane
Trichloroethene Carbon tetrachloride Tetrachloroethene
Toluene Chlorobenzene Ethylbenzene
Styrene Xylene Phenol
Cresol Cyclopentene Lead

Another surprise is that the candle-making industry is not required to tell consumers about the ingredients used in their products, including when a wick is used which contains a lead core. Poor candle design or practices

Besides the use of oils and chemicals, candle-makers sometimes create problems because they make other mistakes. Candles may also burn improperly (causing soot) because a candle’s wick may be off-center or there may not be a proper amount of air in the candle mixture. A candle may have a higher likelihood of causing a fire loss due to:

  • an improper candle mixture which results in intense heat or high flames
  • improper holders (glass that shatters or spills flammable liquid)
  • wood holders that catch fire
  • flammable items imbedded in the candle mixture such as potpourri

Coverage under a Homeowner policy?

Damage to a home or personal property due to soot can create serious problems for both an insurer and a homeowner. Losses involving soot can create thousands of dollars in damages. Depending upon the details surrounding a loss and the wording of the particular homeowner policy, coverage for the damage may not be available. Why? Because the source of loss might be considered the result of pollution, which may be excluded. Another reason for rejecting a claim may be an assumption that the damage was gradual instead of sudden, so it wouldn’t be considered accidental and sudden damage. A claim could even be affected by the knowledge of the insured. For instance, even if the policy covers soot-related losses, a claim could be denied if a homeowner knew that the type of candle they used could cause damages.

Since the damage is caused by matter that is invisible to the naked eye, it could be difficult to prove that the loss was sudden. Tests can be used to determine the cause of stained or discolored property, but the testing can be expensive and the cost may have to handled by the homeowner. What To Do?

It’s all up to you. You might wish to ask more questions about the type of candles you use or curtail your use. You can also discuss whether coverage is available under your homeowner policy with an insurance professional. If you do use candles frequently, you may also want to check your home thoroughly for any stains or discoloration, including any contamination of your heating system. Candle, candle, burning bright? Not if you cause a claim tonight.

How Much Is That Doggie In The Lawsuit?

America loves its pets, especially dogs, whose population in U.S. households is estimated at 60 million. While dogs make great companions, playmates, and protectors, they also continue to be a problem for insurers. Nearly two million people are bitten by dogs each year with around 800,000 persons getting professional medical treatment for their wounds. Each of these incidents is a potential lawsuit.

Have Teeth, Will Bite

Our country’s level of dog ownership continues to grow. Therefore, biting incidents have also climbed. Another factor that contributes to these incidents is that owners often fail to supervise and train their pets. A third big contributor to the problem is that many persons, especially children, do not know how to behave around dogs. Bites may occur when:

  • a person stares at a dog, which the animal perceives as a threat or challenge
  • people attempt to handle dogs during sensitive moments (while a dog is trying to eat or while nursing puppies)
  • trespassers or house guests invade a dog’s territory
  • “rough-housing” with a dog escalates beyond playing.

An Issue Of Control

Insurance is still designed to handle accidents, and companies are at a severe disadvantage when policies are asked to respond to losses that are easily avoided. Dog bite claims involve the insured having control over areas such as:

  • choosing to own a dog
  • choosing the particular breed of dog
  • raising the dog in a certain manner
  • housing the dog in a certain manner
  • exposing the animal to various social situations
  • being knowledgeable about a dog’s temperament and inclination to bite or attack.

All of the above elements can contribute to lawsuits and to action from an insurer.

The “Policy” On Dogs

If you have homeowners insurance and you own a pet, the liability portion of your policy provides protection for losses arising from pet ownership. Not only are you and your household protected, but coverage even extends to persons who have custody of your pet. However, your policy won’t cover businesses that may have custody of your pet, such as kennels, obedience schools, groomers and professional sitters or walking services (they should carry their own coverage).

Minimizing The Problem

Owners have a responsibility to raise and handle their dogs in a manner that reduces the chance for a loss. Steps to take include becoming knowledgeable about their breed of dog and about general principles of ownership and care. They should make certain that family members, social visitors, neighbors and strangers are protected from the owner’s pets. Owners should also take advantage of resources to help them, such as tips from animal shelters, dog ownership clubs, the AKC and a plethora of Internet sources.

It may not be the fairest set of circumstances, but more insurers are choosing not to give dogs the benefit of the doubt. It is becoming more common for companies to refuse to write coverage for persons who own certain breeds of dogs. Therefore, owners must fight this trend by not taking their pet ownership lightly….because insurers aren’t.


Special Form vs. Named Peril

You should check your homeowners policy to make sure that your building and personal property is covered on a special form rather than a named peril basis. Named peril means that the policy insures against the sources of loss (perils) that are listed in the policy such as fire, earthquake or hail. Special form coverage protects property against any source of loss that is not specifically excluded. Under named peril coverage, the policyholder may have to prove to the insurer that a loss was caused by a listed peril. With special form coverage, the insurer can only deny a claim if it can prove that the source of loss is excluded.

Generally, a special form policy is preferable since it offers more coverage than a named peril policy. Here are a few examples of losses where special form coverage made the difference and a claim was paid:

  • A battery was left on a hardwood floor. When the battery acid leaked out, it spread to the point that it was necessary to replace a large section of the floor.
  • An insured tipped over a bucket containing ammonia for soaking diapers. The solution ruined a room’s wall-to-wall carpet.
  • A deer jumped through a picture window. It went wild in the house, denting walls and furnishings and bleeding as it ran. It eventually jumped through another window.
  • A washing machine was running when its load of clothes became unbalanced. As the washer’s spin’s cycle began, it shook and “walked” from its position into a brand new water heater, poking a hole in the heater’s casing and breaking its glass liner.
  • An insured was walking on the floor joists of his unfinished attic. The insured slipped off of the joists and fell through the living room ceiling, causing extensive damage.
  • A two-year-old boy found a hammer and went on a spree through his parent’s house, seriously damaging several plaster walls, a toilet bowl, wash basin, dressing table and other items.
  • A bucket of paint was spilled on an insured’s hardwood floors, getting into floor cracks and pores. It was necessary to replace much of the wood.
  • Finally, an insured converted his oil furnace to gas without removing the home’s oil-input pipe. On its regularly scheduled day, an oil company tanker arrived and pumped 500 gallons of oil into the insured’s basement.

How Much Are Your Possessions Worth?

Properly valuing your personal possessions is very important but can often be both tedious and difficult. However, the task is nearly impossible if you don’t have good documentation of what you own.

The following list could be very helpful in identifying what you own and, more importantly, used as proof of loss in case disaster strikes such as a serious storm, theft, or fire. If you print and complete this list, make a couple of copies, keeping one or two at a location away from your home. If you also want to keep a copy at your home, use an insulated safe (small ones are sold for in-home storage of important papers). Another good location is to put a copy in a plastic bag and keep it in your freezer (which can offer extra protection for non-food items).

Besides listing what you own, it’s also good to do the following:

  • take pictures of and/or videotape your possessions
  • keep your sales receipts
  • keep your warranty information
  • get appraisals and keep them current (appropriate for expensive property)

For items which you don’t have receipts or product information, include information on when and where you bought the property.

It may seem like a lot of work, but you’ll be happy to have this gold mine of information to assist your insurer in giving you protection against loss of your possessions.

General Personal Property Inventory

Completed by______________________ Date completed____________________________

$__________Sofa, couches, etc.
$__________Tables, end tables, etc.
$__________Desks, secretaries
$__________Chests, cabinets
$__________Cupboards, buffet, etc.
$__________Pictures, wall hangings
$__________Draperies, curtains, blinds
$__________CD players, DVD players and accessories
$__________VCRs, Camcorders
$__________Home entertainment accessories (speakers, digital equipment)
$__________Computers, scanners, copiers, monitors, printers, speakers
$__________Other computer accessories
$__________Table linens
$__________China, chinaware
$__________Crystal, glassware
$__________Kitchen appliances
$__________Small appliances
$__________Cutlery, utensils, etc.
$__________Beds, mattresses
$__________Dressers, vanities
$__________Bedding, blankets, linens
$__________Bath towels, linens
$__________Suits (men’s, women’s)
$__________Coats (men’s, women’s)
$__________Jackets, sweaters
$__________Skirts, slacks
$__________Shirts, blouses
$__________Hats, gloves
$__________Purses, billfolds
$__________Costume jewelry
$__________Robes, lounging wear
$__________Shoes, boots, slippers
$__________Sports equipment
$__________Miscellaneous effects
$__________TOTAL Valuables and Treasures
$__________Fine jewelry (list items separately at the bottom of the page)
$__________Valuable furs (list items separately at the bottom of the page)
$__________Art treasures
$__________Silver, silverware
$__________Camera equipment
$__________Guns and accessories
$__________Musical instruments
$__________Stamp collection
$__________Coin collection

List specific items and value below:

$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________
$__________ item__________


Exchange Students – Homeowners Coverage

Check with your exchange student program coordinator to see what kinds of coverage are automatically provided for the child. But don’t take anyone’s word, get copies of documents that prove the coverage situation. This article briefly discusses how a personal auto policy responds to exchange students. Please be sure to read the companion article, “Exchange Students – Automobile Coverage.”

An exchange student in your care who is younger than 21 years is automatically insured under a homeowners policy, treated as if the child were a relative. An exchange student’s property is covered while located at or away from your home. Off-premises coverage is normally limited to 10% of your policy’s Personal Property limit, subject to a minimum of $1,000. On-premises, the policy’s full content limit is available. If your homeowners policy had a $70,000 limit for Personal Property, up to $7,000 would be available to handle damage or loss to an exchange student’s property while it’s away from your home, say while at a summer camp. Liability coverage that applies to your family also applies for damage and bodily injury caused by an exchange student who is younger than 21 years of age.

If the exchange student is older than age 21, then the policy treats he or she as a guest. A policyowner can volunteer to extend his insurance coverage to include a guest’s property while at your residence premises or even while you and the guest are at some other location. However, it is sometimes difficult to determine whether an older exchange student is a guest or a tenant – someone who is paying you a reasonable rent for staying in your home.

Hosting an exchange student creates questions you should discuss with an insurance professional who can help make sure your coverage needs are met.

Insuring Roommates and Domestic Partners

Insurance policies continue to be written conservatively. In some instances, they still reflect situations that were prominent decades ago. One example is the way that policies define the persons it insures. Most policies are designed to cover:

  • single individuals
  • traditional married couples
  • traditional family – husband, wife, children
  • relatives sharing the same household

However, when two or more unrelated individuals live in the same residence and/or share the use of the same vehicle(s), the coverage situation becomes confused. It’s still common for either policy wording or company underwriting rules to limit or bar convenient coverage for an unrelated person. Why one or more unrelated persons are together is their business; the relevant consideration is how are their insurance needs met?

Homeowners Insurance

If you share an apartment or rent a home and each of you retains separate ownership of your property, each of you should carry your own tenant’s policy. If you own the home jointly, but maintain separate ownership of your personal property, you might consider the following strategy:

1. Name one individual as the “named insured” on the policy. The named insured is covered for his interest in the dwelling and personal property (such as clothes, appliances, furniture, etc.). Further, the named insured is also protected against losses involving his legal liability to others including payments for medical services.

2. Add the other owners as additional insureds – residence premises. The other owners then will have coverage for their interest in the dwelling, premises liability and medical payments to others.

3. Finally, each additional insured should buy their own tenant’s policy to cover their personal property.

Auto Insurance

If each person has his or her own vehicle, the insurance question couldn’t be simpler. Each vehicle should be insured by the individual owner. However, if two unrelated people share ownership of a vehicle, the policy covering the car should have a joint coverage endorsement added to it. A joint coverage endorsement (which may have various names) should result in giving the co-owners the same coverage as if they were related. (This endorsement is not available in all states.) The same strategy may be used when only one person owns the household’s vehicle. The other person (who does not have his/her own car) may be added via a joint coverage endorsement. However, other options may exist such as (depending upon the insurer): the non-owner resident may be added to the owner’s policy as a part-time driver or the other person might purchase a “non-owned” auto policy to get automobile coverage.

The insurance industry is making halting steps to acknowledge a broader range of ownership arrangements, including policy forms that allow policies to reflect domestic partnerships. How can you be sure about whether your interests are properly covered? Easy.speak to an insurance professional; discuss your situation in detail and then determine the best way to structure your policies.

Any Advice On Domestic And Personal Service Workers?

There’s Just No Time

Oh the demands on you…a job, family, your hobbies, volunteer work, your children’s school and recreational obligations, the lawn and garden, house cleaning, repairs and on and on. Like many of your peers, you might find that you just don’t have the time to get all of it done. Also, like many of your friends and neighbors, you may be “outsourcing” some of your responsibilities. Everything Old Is New Again

In days of old, a mark of the wealthy was to have most of your work done by servants. While this is still true of the very wealthy; a newer development is that this is now becoming a mark of the middle-class. Increasingly, more people are hiring folks to either assist or takeover duties such as:

  • child-rearing
  • gardening
  • decorating
  • housecleaning
  • laundry
  • grocery shopping
  • personal errands
  • child-transport
  • minor home repairs
  • lawn maintenance
  • meal preparation
  • exercise

While such help used to fall under the auspices of butlers, maids and nannies, today, individual specialists are providing similar services on either a part-time or full-time basis. Personal Services and Personal Liability

When personal services are provided by a commercial business, such as a limousine or laundry service or a lawn care company, there’s generally no need to worry about being held liable for injury to another person or their property.

Example: The Burlies never had time to take care of their lawn. As their grass grew thinner and the weeds spread, Mr. Burlie decided to sign-up for the “Green Thumb” package from Lucky’s Lawn Services. One afternoon, a Lucky Lawn specialist arrived at the Burlie’s home, unraveled a hose and began to spray a weedkiller. A few minutes later, Stevie, who lived several homes away from the Burlies, came rushing by on his skates. Stevie didn’t see the hose until it tangled his wheels and sent him headlong onto the cement curb. In this instance, Lucky’s Lawn Services would be responsible for the injuries.

However, as individuals are hired by Joe and Jane America to perform personal services, the responsibility for injuring other people or damaging the property of others may begin to fall upon Joe and Jane. In these cases, will Joe and Jane have any help in paying for damages or injuries?. Homeowners Insurance To The Rescue

A person who employs the services of another may be held legally liable should the “employee” cause an accident. Can the average person who is guilty of nothing more than trying to make their lives a little less hectic depend upon their homeowners insurance for protection? Well, coverage depends upon the details surrounding an event. Generally a homeowners policy will exclude coverage for losses that are related to the covered person’s (insured’s) business or when other coverage, such as workers compensation or disability insurance, should apply to the loss.

Example: Molly Kelp really likes her neighbors’ son, Peter, who is home from college. Molly knows that Peter is struggling for money to keep attending school, so she occasionally hires him to do jobs around her home. One day, she asks him to trim the branches of a tree that is in the front of her home. The branches are low enough to disturb traffic in the street. Peter jumps down from the ladder he’s using for the job at the same time that a car is passing by. The ladder tips over onto the car’s hood and the surprised driver swerves off the street and into the front of another neighbor’s home. In this case, Molly’s homeowner policy may apply to the damages caused by Peter. Why? Because the work was strictly related to Molly’s use of her residence. If Peter caused an accident while carrying a ladder to paint Molly’s law office which is next door to her home; coverage would be excluded. Do Your “Homework” On Personal Services

If you’re not sure about what happens when a person you hire causes a loss, you need to do your homework. Discuss the details with an insurance professional and bring a copy of your insurance policy. Between the two of you, you should be able to make sure that your needs are covered.

Insuring A Timeshare Residence

Face the Coverage Facts

The majority of your coverage concerns are found in our consumer article titled “Which Homeowners Policy is Right for Me?” As a lucky owner of a timeshare arrangement, you may have a special coverage need. The insurance world has a tendency to focus on providing coverage for the most common needs. Naturally, unusual situations result in coverage gaps and owning a timeshare is such a gap. While insurance is readily available to handle individually owned seasonal or secondary residences, buildings, vacant land, or personal property; the common timeshare arrangement may not be handled by basic and/or optional homeowner coverage forms. Why Do Timeshare Arrangements Cause Coverage Problems?

Coverage gaps may exist because typical timeshare arrangements involve:

  • real property with multiple owners
  • living units that are often furnished with personal property that may be jointly or severally owned
  • living units which are occupied by several individuals or families who have control of all of the property during their time of occupancy
  • special agreements or stipulations that govern the property.

All of the above circumstances make it difficult to find coverage since standard policy forms are not constructed or priced to handle unusual or complex situations. All the Right (Coverage) Moves

Taking care of your coverage needs calls upon the quick involvement of an insurance professional. Here are some steps you should consider when you discuss your situation:

1. Bring a copy of all the residence related paperwork. The paperwork should include a valid contract that describes your ownership interest and obligations in the timeshare property.

2. Be open to the possibility that you may need to buy more than one policy to cover the jointly owned property, any personal property that’s located at the residence, the joint liability exposure and any special assessments or liability assumptions agreed to under any contract.

3. Discuss the coordination needed to make sure that the coverage needs of all of the owners fit together so that no gaps exist when initially purchasing coverage. Further coordination will be necessary to make sure that, as circumstances change, the coverage is reviewed to make sure that it remains adequate.

4. Be flexible. Proper coverage may have to be provided by a specially modified personal insurance contract or even some form of commercial coverage may be necessary.

5. Take the time to ask that any coverage mentioned during a meeting with a qualified insurance professional be fully explained to you.

It’s best not to generalize because coverage needs can vary substantially from one arrangement to the next. Your best bet is to discuss your current coverage and your coverage needs with a qualified agent in order to make sure that you’re protected adequately and affordably.

I Own or Rent A Mobile or Manufactured Home

Your Choices

There are a number of choices available for protecting your type of home. A few years ago, you might have been limited to getting very basic coverage or hunting down a company that specialized in coverage for mobile or manufactured homes. Today, many companies, including specialists, provide these policies. Regardless of the type of home you own or live in, it is important that you learn about the coverage options that are available. You may find that different policies vary considerably in coverage and price.

A fairly recent development in covering mobile/manufactured homes is to insure them by modifying a conventional homeowner policy with mobile home provisions called endorsements. The endorsements change key definitions and provisions of a conventional policy to fit a mobile or manufactured home situation. Such modified homeowner policies are packages that protect the home, outbuildings (unattached garages, sheds, etc.) and personal property. They also provide insurance for personal liability.

Like any homeowner, you probably want a policy offering the broadest protection available. Coverage is generally offered using two approaches. Some policies include a laundry list of items (or perils) that may cause a loss. Other policies state that they will protect your home against everything EXCEPT for a host of specified perils. Either approach includes liability coverage which protects you for injuries or losses to others which you accidentally cause.

If you are a renter, your coverage options are unaffected by the type of home construction. Your primary coverage need is to protect your personal property. A common form called a HO 04 Tenants policy (or similar forms) provides both property and liability coverage. Your Particular Property Insurance Needs

Any coverage option you choose is likely to reflect the fact that mobile homes are,well, mobile. Mobile home coverage is affected by the fact that mobile homes:

  • are able to move under their own power;
  • are more susceptible to wind damage,
  • tend to lose value with age.

The mobility of such homes creates a special need to protect the financial interest of the business which lent the money to purchase the home. For example, a mobile home owner decides to drive his home to Arkansas. The soon-to-be Arkansas resident “forgets” to mention his plan (and his new address) to Ohio Mortgage Company. The Ohio lender would be out of luck if the policy didn’t include protection for this whimsical act. Another way in which a mobile or manufactured homeowner policy differs from conventional homeowner coverage involves coverage for unattached buildings. This coverage is usually minimal for, say, $2,000. Such a provision helps keep the premiums for policies lower by avoiding paying claims on very low value structures. The coverage is likely to be offered on an actual cash value basis. Unfortunately, mobile and manufactured homes tend to lose value over time.

The policy is likely to include a provision which requires you to get permission to move your home. Once granted, you’re likely to get thirty days of special transportation coverages for collision, sinking, upset or stranding ( a special, higher deductible may apply during the move). Another common coverage feature is coverage for your attempt to move the home in order to prevent damage from an insured cause of loss. For example, you move your mobile home fifty feet to get away from a neighboring trailer that is on fire. IMPORTANT: coverage for moving endangered property usually has a modest limit (several hundred dollars is typical) because of owners who may be too heroic or clumsy for anyone’s good. Your Particular Liability Insurance Needs

The liability protection connected with mobile or manufactured homes is, for all practical purposes, identical to the liability provided to conventional home owners. Why? The likelihood of guests to be hurt at your home, or your probability of being sued, tends to be the same. The important thing to remember is that your agent is a tremendous source for getting the information you need to be sure that your home and property are adequately protected at a reasonable price.

Which Homeowners Policy is Right For Me?

Now that you own a home, you should consider the best way to insure it. One strategy you may consider is to match your needs to the right company. Some companies like new, high-valued homes while some companies do well with older or historic preservation homes. Others are comfortable with country homes or old farm homes. It pays to shop around, both for the best coverage and for a company that likes your type of home.

There are two common levels of coverage that you may consider:

Named causes of loss coverage – The policy only covers for certain kinds of causes of loss to your property. You must prove to the company that one of the covered causes damaged your property.

Risks of physical loss – This covers all causes of loss except those that are excluded. The company must prove that one of the excluded causes of loss damaged your building.

Many companies offer risks of physical loss coverage for your buildings and named causes of loss coverage for your personal belongings. Risks of physical loss coverage cost more, but here are some claims that would not be covered under named causes of loss policies:

If, for various reasons, you don’t need a lot of bells and whistles on your coverage, ask around for a stripped down policy, sometimes called an HO-8 form. It MAY be appropriate for very low value, older homes. Coverage features include:

  • Protection against a list of specified causes of loss (if the damage isn’t created by one of the listed items, such as fire or wind, it isn’t covered)
  • Designed for older homes. Older homes generally were built with more expensive and/or exotic materials. You could not build early 20th century homes today for any price.
  • Contains no coinsurance penalty. You and the company agree on a maximum coverage limit that applies if the building is totally destroyed.

You may want to discuss other types of homeowners coverage if you own a different type of residence such as a modular home, mobilehome, apartment, townhome, condominium or you have personal living space in a commercial building.

Basic Homeowners coverages common to all homeowners form that insure both the home and personal property usually takes care of:

  • Coverage for your building (ask about coinsurance and replacement cost issues).
  • Coverage for your outbuildings – garages, sheds, barns, cabanas
  • Coverage for personal property is usually 50-75% of your building limit Limitations – many policies have special limits on certain types of property, such as theft loss to Jewelry and gems ($1,000), Furs ($1,000), Gold, silverware, pewterware ($2,500), Guns ($2,000), Building supplies – no coverage for theft. Further, very little coverage may be available of other types of property, regardless of the cause of loss, such as, money, stamps, fine arts, antiques, electronics, boating equipment, etc.
  • Additional living expense – pays the extra cost of temporary housing, food and other increased costs of living when you are forced from your home by a covered cause of loss.
  • Liability coverages – should you accidentally injure other people or damage their property
  • Defense costs – includes hiring and paying for a lawyer (if necessary) and paying most court costs.
  • Medical payments coverage is for minor injuries to people other than residents of the household. You don’t have to be sued or be negligent.

If this short article has raised more questions about your coverage.good. Find an insurance professional to get the answers (and the coverages) you need.

Homeowners Coverage – Part 2

Part 1 talked about how a typical homeowner policy covers buildings and structures. Now let’s look at Coverage Parts D, which is also a property coverage; as well as Coverage Parts E and F which involve injuries to people.

Coverage D–Loss of Use: This coverage handles the cost of additional living expenses while your home is being repaired. The coverage also applies if the home is unusable. However, the loss or loss of access has to be the result of an event that is covered by the policy. For instance, if your home were damaged during a war and you had to abandon it, Coverage D would not be available because war is excluded. Additional expenses normally include food, housing, and transportation. However, the expenses must exceed what your family normally incurs.

Coverage E–Personal Liability: This Coverage Part responds if you are legally responsible for causing property damage or physical injury. Protection includes paying for your defense costs and any financial judgment for covered incidents. Naturally the coverage would not apply for excluded situations, such as intentional injuries. Example: Joe is sued by a guy he injured during a brawl at a basketball game.

Coverage F–Medical Payments: This Part provides rapid reimbursement for minor injuries, such as a guest who trips and falls while visiting your home. This coverage does not apply to a family member. For example, if your child and your neighbor’s child are both slightly injured while playing and need to go to the emergency room, this coverage will pay for your neighbor’s expenses but not for your own child.

This is a brief overview of homeowners insurance. All of the coverage provided by the homeowners policy is subject to limitations such as exclusions, policy limits, and deductibles. It’s important that you discuss the details of coverage and any other insurance questions with your insurance agent.

Homeowners Coverage – Part 1

Employees routinely use their own vehicles in their jobs or just to run errands for their employer. Does your company have protection in case of an accident and both your worker and your company are sued?

Generally, a homeowners insurance policy includes at least six different coverage parts. The names of the parts may vary by insurance company, but they typically are referred to as Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability and Medical Payments coverages. They are usually presented as policy sections and are often labeled Coverages A through F. This article discusses Coverage Parts A, B, and C, which protect property.

Coverage A-Dwelling: The homeowner policy’s first coverage section protects your house and any attached structures, such as garages, decks or fences. The typical policy covers your home when it is damaged by many hazards (also known as perils or causes of loss) including fires or storms. However, the following causes of loss are usually excluded from coverage under the homeowners policy:

  • Earthquake
  • Flood
  • Faulty maintenance
  • Damage from insects or vermin
  • Wear and tear, gradual damage or deterioration

Coverage B–Other Structures: This coverage section protects structures that are not attached to the home, such as a detached garage, storage or utility shed, playground equipment and swimming pools.

Coverage C–Personal Property: This covers your possessions, whether they are at your home or away with you on vacation. Personal property is often covered on a named peril basis. This means that only the causes of loss listed in the policy section are covered. The coverage is also subject to limitations and exclusions. Types of property having significant value, such as jewelry, fine arts, collectibles, etc., may require special protection. Talk to your agent about scheduling (adding) coverage on a floater which broadens and extends coverage for high-valued possessions.

Actual Cash Value vs. Replacement Cost: Commonly, protection under sections A and B is provided on either an actual cash value or a replacement cost basis. Actual cash value is defined as replacement cost minus depreciation. Replacement cost is the actual cost to replace the structure, regardless of depreciation. Check your policy to see which type of coverage you have. Coverage under section C is usually provided on an actual cash basis. However, your agent may be able to add replacement cost to your possessions just like that found in Coverage A.

Insuring a Condo or Co-op?

Making sure that your condo or co-op is properly covered begins with a thorough reading of your condo or co-op documents (i.e., by-laws, provisions, regulations, etc.) It may help to have your agent review the papers, paying close attention to items such as:

What property is your responsibility to insure – the internal walls, appliances, your detached garage? What is the potential for loss assessments? Does the association or corporation insure common property at its replacement value? What is the association’s deductible? Are you obligated to add any extra coverages or limits?

Next, be aware that your coverage typically comes in two forms. “Named causes of loss coverage” only covers the causes of loss specified. You must prove to the company that a covered cause damaged your property. “Risks of physical loss” covers all causes of loss except those that are excluded. The company must prove an ineligible cause of loss damaged your property. Risks of physical loss coverage usually applies to real property and named causes of loss coverage protects personal property. The former type costs more due to such policies typically covering a wider range of losses.

Regardless of the coverage type, condo/co-op policies generally cover the following:

Real property: coverage for the structural part of the condominium or co-op you individually own such as interior walls, appliances, fixtures, plumbing, ductwork, wiring, carpeting, flooring, possibly private garages, and permanent improvements you make to the property.

Personal property: possessions that are portable such as clothing, furniture, toys, books, objects of art, home electronics, computers, etc.

Loss assessment: required contributions that members make for the repair or replacement of property that’s owned in common.

Additional living expense: covers the additional cost of temporary housing, food and other increased costs of living when you are forced from your condominium or co-op by a fire or other covered cause of loss.

Liability coverages: covers you for your negligence in injuring other people or property on your premises (those accidents for which the condo association is not responsible) or through actions related to many of your hobbies. The policy also provides defense coverage, including hiring and paying for a lawyer (if necessary) and paying most court costs.

Medical payments: coverage is for minor injuries to people other than residents of the household and the payment does not require a lawsuit.

Keep in touch with an insurance professional during such trying times. They’re already committed to providing genuine help.

Renters Insurance Needs

Most companies protect renters by using a homeowner policy that is designed especially for tenants. Typical policies cover your possessions for common causes of loss, additional living expenses related to making other living arrangements, medical expenses for treating people injured on your premises and, of course, lawsuits.

Property Coverage

Protection under the standard tenants policy is on an actual cash value basis (item’s replacement cost less depreciation). Example: Stewart’s kitchen catches fire and his five year old refrigerator is destroyed. A new model of the refrigerator costs $750. His insurance company pays him $95, the difference being five years of deteriorating value. Most companies offer coverage on a replacement cost basis if you purchase a separate endorsement.

Additional Living Expenses

A typical tenant policy provides a limit equal to 20% of your contents insurance limit. If your contents limit is $15,000, then your additional living expenses limit will be $3,000.

Theft Limitations

Certain types of property are quite vulnerable to being stolen, therefore very limited coverage is available for items such as jewelry, furs, gems, gold, silverware, pewterware, money, securities, guns and accessories. Protection can be increased by adding additional coverage to the tenant policy or by purchasing a personal article floater policy.

Liability Coverages

Liability insurance covers you for damage you cause to others or their property. The policy also provides for the cost of a lawyer (if necessary) and most court costs. Examples of liability claims include: slips and falls; beaning a neighbor’s child with a baseball; hitting a golfer with your errant hook shot; or a friend breaking her hip when she trips on a skateboard your child left on the stairs.

Insuring Apartment Business Activity

Is Your Home Winter Ready? – pt 3

In this part we discuss a different hazard of the winter season.

Firing Up A Hearty Loss

Do you own a fireplace, wood-burning stove or portable heater? What about a gas or an electric furnace? If so, you need to take steps to make sure that they are safe and used properly.

Have your furnace inspected to make sure that it will operate properly in cold weather. Clean filters and vents will go a long way to keep your furnace a source or warmth rather than a cause of a fire loss. An inspection should also make certain that your furnace is not a source for dangerous carbon monoxide buildup.

Fireplaces and wood-burning stoves should also be inspected and, if necessary, thoroughly cleaned. A byproduct of burning wood, creosote, builds up in chimney and stove flues very quickly. Even a single wood-burning season could produce enough buildup to create a fire or severe smoke hazard. Don’t do the inspection yourself. It’s worth the cost to have a professional inspect and clean your fireplace or stove. Also, make sure that you don’t burn softwood or paper. Using anything other than hard woods exposes your fireplace or stove to quicker creosote buildup (softwood) or more intense heat (paper) which could clog or contribute to cracking a flue or liner.

Be very careful with the use of portable heaters. Depending upon the type, they can be prone to malfunction or could be a hazardous source of burns, especially for children. Further, many types can be easily tipped with the combination of heat source and fuels, creating a serious fire hazard.

Finally, make sure you have fire/smoke and carbon monoxide detectors properly installed and in good working order. Test them and put in new batteries. Small expense, big payoff.

As always, insurance professional is a valuable source of safety and insurance information. Don’t hesitate to contact an agent to discuss your questions. If you haven’t had the chance, please be sure to read parts 1and 2 of “Is Your Home Winter Ready” which discusses other winter concerns.

Is Your Home Winter Ready? – pt 2

In this part we discuss an important legal responsibility created by the winter season.

Creating A Clear Liability

Snow doesn’t show favoritism. Instead of conveniently falling onto unused areas, it covers homes, sidewalks and driveways. As a responsible homeowner you need to arrange to make the travel ways on your property safe. This calls for clearing your walkways of snow and ice. It is also important to clear your property of items such as rakes, shovels, tools, toys and similar items. Remember that it takes only a small amount of snow to hide items that, during clear conditions, are easily seen and avoided. So take time to move such property and make repairs to uneven or cracked pavement.

Keep in mind that clearing walkways (including stairs) is an invitation for pedestrians to use the path. So, once you clear an area, it has to be kept clear and safe, especially from ice. Also, avoid creating piles of snow that can block either a driver’s or a pedestrian’s view. Finally, be sure that your property is safe for children who are enjoying winter. Don’t allow children to slide around without being aware of pedestrians or motorized traffic and don’t let anyone throw snow or iceballs at cars (you could be sued for any accident caused by careless play).

Don’t forget the inside of your home. Visitors should be kept safe from harm by making sure you keep inside stairs and floors clear of the watery remains of melted snow. Keep things dry and consider providing mats that provide good traction and an area where folks can clear snow and ice from their shoes or boots.

As always, an insurance professional is a valuable source of safety and insurance information. Don’t hesitate to contact an agent to discuss your questions. If you haven’t had the chance, please be sure to read parts 1 and 3 of “Is Your Home Winter Ready” which discusses other winter concerns.

Is Your Home Winter Ready? – pt 1

If you live in a climate that includes cold winters, you know the season creates special challenges for homeowners. In this article, we discuss an icy situation.

Ice Dams 

An ice dam is a formation of ice along a roof’s edge. The dam of ice blocks additional water and the pooling water backs up and finds pathways into a home’s interior. This water may cause deterioration and decay to interior wood and plaster. Once an ice dam has forced water to find ways to escape inside a home, the roof becomes more susceptible to future ice dams and water damage.

Too much heat warming the roof most frequently causes ice dams. The process occurs unevenly with the warmer area at the higher part of the roof melting the snow and then the cooler, lower area, particularly the roof edge, permitting the water to refreeze and then accumulate. Poor insulation or improper ventilation usually causes the heated roof. Inadequate insulation lets too much heat escape into the attic and this creates a warmer roof. Improper ventilation creates moisture and heat buildup due to the lack of air movement.

How to detect a problem

Compare the way the snow is melting from the living area of your home with how snow appears on the roof over an unheated area such as a garage or shed. How does your snow covered roof compare with your neighbors’ homes? Check for icicles. They can be pretty, but heavy icicle buildup means that interior heat is melting a lot of snow and may contribute to ice dams.

How to prevent ice dams

There are a number of ways to help prevent ice dams:

  • Clear excess snow from the roof. However, in order to minimize damage to the roof and roofing, hire a professional to remove the snow.
  • Add rubberized or special roofing adhesives to help prevent pooled water on the roof from finding entry into the home’s interior.
  • Inspect the attic and roof for cracks, holes, or joints that permit warm air to escape to the roof, and seal or repair these areas.
  • Add the recommended amount of insulation to the attic and exterior walls of your home to minimize escaping heat (this also reduces your heating costs).
  • Reduce your home’s thermostat and throw on warmer clothing during extended cold spells.
  • Clear your gutters and downspouts so that water is properly shed off your roof.

As always, an insurance professional is a valuable source of safety and insurance information. Don’t hesitate to contact an agent to discuss your questions. If you haven’t had the chance, please be sure to read parts 2 and 3 of “Is Your Home Winter Ready” which discusses other winter concerns.

In-Home Businesses

Homeowner (HO) policies aren’t meant to insure in-home businesses. HO premiums assume that coverage is for a residence and related structures. Therefore no liability coverage is available for business activities such as customers who slip and fall on your premises, damage to business property (owned or in your control), injury caused by things you make (products liability), or damage due to services that you promote or provide. It is also unlikely that an insurer would provide a legal defense against business related claims.

Generally, an HO policy does not provide workers compensation coverage for any employee. Medical expense and liability coverage may be available for workers who are ineligible for workers compensation, such as maids, butlers, or nannies, but such coverage only applies if an injury occurs while performing residential tasks.

Example: You send your nanny to make copies of your business proposal and, on the way to the copy center, she is seriously injured in a fall. Your policy won’t provide any medical expense coverage for your nanny because she was performing a business-related chore.

There is no coverage for detached garages, barns, or similar structures on your residence premises if they are used in whole or part for business.

Example: You store $3,000 worth of equipment and supplies that you use in your job in your garage and the garage burns down. The fire loss to the garage becomes ineligible because of its partial business use.

A basic HO policy may protect certain property. However, the coverage may be limited to as little as a few hundred dollars. Items qualifying for limited coverage include business personal property kept in or around your home, business personal property kept at a location other than in or around your home or landlord’s furnishings. One way to improve your coverage is to add policy options that do the following:

  • increase the coverage limits for business personal property
  • cover garages and other buildings that are rented to others
  • protect electronic business equipment which is usually used in a vehicle while such equipment is located outside of a vehicle
  • provide theft coverage for landlord’s property
  • acquire limited business personal property and liability coverage for a in-home daycare
  • cover a condo unit owners’ liability for damage caused by renters
  • provide premises liability coverage (i.e. a customer slips and falls)

Sales Office

Usually an HO policy does not offer much protection for business property. In fact, available coverage may be up to only $2,500 for personal property used for business and kept on the residence premises. Further, no coverage applies to business property such as inventory, product samples, or items being held for delivery. Finally, even optional coverage excludes property related to a business conducted on the premises. For example, you are a cosmetic sales rep who also holds make-up parties in your home. For customer convenience, you keep an inventory of cosmetics at home. The HO policy will not cover this property.

If you are a sales person operating out of your home and have limited inventory, some companies will cover you with the Businessowners policy. The Businessowners policy provides broad coverages for buildings, personal property, loss of business income and extra expense incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods off premises in transit, you will need to add additional coverage. Goods stored at other locations must be added to the policy.

If you cannot qualify for a Businessowners policy and a home business endorsement or separate policy fails to meet your need, your agent will probably have to build a special commercial package policy to handle your business. Commercial lines agents have both the expertise to design the appropriate coverage and access to the markets that offer policies for your sales business.

You will need workers compensation coverage for any employee, even part timers, and, if you deliver anything or if your vehicle is larger than a car, van or small pickup, you may need commercial automobile insurance. Another reason for buying a commercial auto policy is if any auto is corporately owned.

Professional Offices

Regarding doctors, attorneys, architects or similar occupations, whether your home office is your only office or simply a satellite office, you will need to work with an insurance agent who is familiar with the coverages that are appropriate for professionals.

Businessowners policies are suitable for most professional offices and can cover buildings, personal property, loss of business income, extra expenses incurred to operate the business (after a fire or other covered cause of loss), premises liability and medical payments.

Consult with your agent or your professional association(s) for professional liability and errors and omissions coverage. /p>


The homeowners policy is designed to cover landlord occupied residential buildings, landlord owned personal property, loss of rents (after a fire or other covered cause of loss), premises liability and medical payments. Note that the maximum occupancies that may be covered under an HO policy is a four-family dwelling. A dwelling policy may be used for 1-4 family structures that are not also occupied by the landlord.

For landlords with residential property containing from five to sixty units, the Businessowners policy is usually appropriate. It insures buildings, landlord personal property, loss of rents (after a fire or other covered cause of loss), premises liability and medical payments.

Most Bed and Breakfasts do not qualify for coverage either in the homeowners or dwelling insurance program. Bed and Breakfasts will require a combination of tenants coverage for the resident owner/manager, and a Businessowners policy to cover buildings, landlord owned personal property in boarders’ rooms, loss of business income (rents and fees) and the extra expense to operate (after a fire or other covered cause of loss), premises liability and medical payments.

For landlords who have office or retail tenants, the Businessowners policy provides broad coverages for buildings, landlord personal property, loss of rents (after a fire or other covered cause of loss), premises liability and medical payments.

Workers compensation is necessary for any employee. Talk with your agent. Most states require workers compensation for resident managers even if you provide only free lodging as payment. Make sure you have certificates of insurance for any subcontractors (painters, plumbers etc.) you hire to do work for you. If the subcontractor has no insurance, you may be responsible for the subcontractor’s work-related injuries.

Most personal automobile insurance will insure cars, vans, and pickups used in business – business use, artisan use. Larger trucks, backhoes and other contractors’ equipment will need separate coverage. Some contractor equipment can be covered by the Businessowners policy, some by an auto policy. Ask your agent how best to insure your equipment. /p>

Daycare or In-Home Schools

Coverage for abuse or sexual assault for small schools is often difficult to obtain at a reasonable price. Limited corporal punishment coverage for teachers who are employed by a school system may be available from your homeowners carrier. If you are an independent tutor or run your own school, most homeowners policies cannot be modified to include corporal punishment. Abuse and corporal punishment may be available through the association(s) that specialize in your type of school.

While the company that writes your HO policy may be willing to add an endorsement to cover piano lessons, most will not want to cover a three-to-five child daycare operation. Liability coverage may be purchased separately. Coverage for property and liability can be provided through a Businessowners policy, but none of these forms includes professional liability or abuse or corporal punishment.

Specialty schools, such as ballet, sports, personal training, animal training, or horseback riding will require specialty coverage. Again, your trade organization, or independent agent can often find you coverage at a reasonable price.

Workers compensation is essential for any person you employ.

Driving students in private vehicles or bus-like vehicles poses special problems. You must hold a Commercial Driver’s license if you haul more than 16 people including the driver. Your school is probably too small to qualify for standard business auto insurance. If standard coverage is unavailable, many states have assigned risk pools and other mechanisms to provide you coverage-sometimes at reasonable prices. A good independent agent will understand these markets.

Your state will also have laws regulating the transportation of students and these laws may require a special license when transporting fewer than 16 people. Subcontracting the driving does not lessen your responsibility for a whole raft of laws from vehicle accidents, workers compensation, ADA, and whether the driver has met the new substance abuse requirements./p>


Persons with in-home retail operations must look beyond an HO policy for coverage.

The Businessowners policy provides broad coverages for buildings, personal property, loss of business income and extra expenses incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods in transit, you will need to add additional coverage. Goods stored at other locations must be added to the policy, normally as an additional location.

You will need workers compensation coverage for any employee – even part timers.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation. /p>


As a wholesaler, here are some coverage options for your consideration:

Businessowners Policy – If you are a manufacturer’s representative with limited inventory, some insurance companies will cover your business with the Businessowners policy, commonly called a BOP. The BOP provides broad coverage for the following:

  • buildings
  • personal property
  • loss of business income
  • extra expense incurred to remain in business (after a fire or other covered cause of loss)
  • premises liability
  • medical payments.

If you have more than $1,000 of goods off-premises in transit, you will need to add additional coverage. Coverage for goods stored at other locations must be added to the policy.

Commercial Package Policy – If you cannot qualify for a Businessowners policy, your agent will probably have to build a special commercial package policy to meet your needs. You will need a competent commercial lines agent to help you. Commercial lines agents have both the expertise to design the appropriate coverage and the markets for your wholesale business.

Workers Compensation– You will need workers compensation coverage for any employee – even part timers.

Commercial Auto Policy – You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup, or if the vehicle is owned by a corporation. /p>


The following are the most commonly insured service classes of business by a Businessowners policy. The Businessowners policy provides broad coverages for buildings, personal property, loss of business income and extra expense incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods off premises in transit, you will need to add additional coverage. Goods stored at other locations must be added to the policy.

The following are the most commonly insured service classes of business by a Businessowners policy. If your service business is not on this list, it probably will need to be insured by the individually designed commercial package policy or similar specialty policy.

  • Appliance and Accessories – installation, servicing or repair – Commercial or Household
  • Bakeries (with baking on premises)
  • Barber Shops and Beauty Parlors and Hair Styling Salons
  • Dental Laboratories
  • Engraving
  • Funeral Homes or Chapels
  • Laundries and Dry Cleaning or Dyeing Receiving Stations
  • Lithographing
  • Mailing or Addressing Companies
  • Photocopy Services
  • Photo-engraving
  • Photographers
  • Printing
  • Shoe Repair Shops
  • Tailoring or Dressmaking Establishments-Custom
  • Taxidermists
  • Television or Radio Receiving Set Installation or Repair
  • Watch, Clock and Jewelry Repair

If you cannot qualify for a Businessowners policy, your agent will probably have to build a special commercial package policy to meet your needs. You will need a competent commercial lines agent to help you. Commercial lines agents have both the expertise to design the appropriate coverage and the markets for your service business.

You will need workers compensation coverage for any employee- even part timers.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation. /p>


Manufacturing businesses cannot normally be insured by a Businessowners policy.

Find an agent and company that specializes in the kind of product you manufacture. Look for a company that will write your size business. Make sure you consider the impact of products liability claims, coverage for your products while they are in transit or at other processors, and products belonging to others that you are working on, whether at your business or at their location.

You will need workers compensation coverage for any employee – even part timers.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation. /p>


Many companies have excellent “artisan” insurance packages for the small to medium subcontractor. Ask your agent to show you different artisan packages so that you can choose a program that fits your needs. Coverages may be similar among artisan packages, but rating plans vary. Some companies charge rates based upon payroll, sales or number of employees. As your business grows, you will want to ask your agent to shop your coverage to see whether it is to your advantage to change from one rating formula to another.

If you are a general contractor, you will need to work with an agent who specializes in general contractors. Contact your local builders association. Many builders associations will sponsor programs or know of agents who specialize in general contractors.

You will need workers compensation coverage for any employee – even part timers. If you hire any subcontractors, understand that you may be responsible for any injuries to subcontractors or their employees while they work for you. Make sure that you have certificates of insurance from each of your subcontractors for workers compensation, general liability and automobile insurance. It is to your advantage if your subcontractors have liability limits of insurance at least equal to your own.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation. 

Repair: Auto, Bicycle, Boat, Tractors, Furniture, etc.

Don’t expect your homeowners policy to give you coverage. Repair businesses work on personal property belonging to others. Your business probably will need to be insured by the individually designed commercial package policy or similar specialty form. Coverage for inventory, repair machinery, property of others, business income coverage after a fire or other covered cause of loss, and premises and products liability coverage can be built into your policy.

Look for a company that will write your size business. Make sure you consider the impact of products liability claims, coverage for goods that you are working on that belong to others whether at your business, in transit, at another processor or at your customer’s location.

You will need workers compensation coverage for any employee – even part timers.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup, or if the vehicle is owned by a corporation.

Work on autos will require an Auto Garage liability policy for the on-premises bodily injury, and Garagekeepers liability coverage to protect you against claims for damage to customer vehicles. 

Farms and Ranches

The homeowners program can be endorsed to cover some aspects of hobby or “gentlemen” farms, including farm liability and livestock collision.

Farming for profit will require a Farm or Ranchowners policy. Farm and Ranchowners forms can cover your dwelling, barns, sheds, silos, cribs and other buildings, machinery and equipment, supplies, liability coverage, additional living expenses after a fire or other covered cause of loss; some policies can be endorsed for livestock mortality. Crop insurance is a federal program, but local farm insurance specialists can provide crop hail and crop damage coverage. Your agent should help you design an insurance program that meets your specific needs.

You may own property that previously was used as a farm. Farm insurers understand rural homesteads. You may find better protection from an agent and company who specializes in rural and farm property. If you have large barns or other outbuildings, you may need to increase other structures coverage under your homeowners insurance or convert coverage to a Farm or Ranchowners policy. If you lease land to others for grazing or crops or hunting, you will need to add separate liability coverage to your Home or Farmowners policy.

Workers compensation laws for agricultural employees vary in each state. Each state has special rules for hired hands and migrant workers. Even if you are not required to carry workers compensation coverage for a specific employee, you may still be responsible for any-work related injury to that employee.

Farm vehicles normally can be covered through a personal automobile policy. Incorporated farms may require a commercial automobile policy. 

Racing: Car, Boat, Motorcycle, RV, Truck, etc.

If you are involved in racing vehicles or craft and, especially if you operate a business in building, servicing or repairing vehicles or craft from your home, you can not rely on your homeowners policy for either liability or property coverage.

Coverage for damage to actual equipment that is raced is seldom covered. You will want to check with your agent or your racing association for coverage for shop equipment, portable tools, travel trailers and other equipment related to your racing hobby or business. You will also need liability coverage or, at a minimum, be sure that the racetrack has spectator liability coverage that applies to your race participation, including practices.

Racing Repair Business

Your business may need to be insured by an custom designed commercial package policy that may need to include coverage for the following:

  • inventory
  • repair machinery
  • property of others
  • business interruption
  • workers compensation (even for part-time employees) and
  • premises and products liability

It’s critical to identify if you need coverage against products liability claims that can arise from customer property you have worked on at your business, which may be transit, located at another processor or at your customer’s location. An Auto Garage liability policy may be necessary to handle any on-premises bodily injuries and a garagekeepers liability form can protect you against claims for damage to customer vehicles.

You may need commercial automobile insurance if you make deliveries, have a commercial-size vehicle, or if the vehicle is owned by a corporation.