Month: April 2014

Golf Season is here! Does my insurance provide coverage if I hit someone!?

Chris

golfSpring is upon us (finally) and that means golf season is here!  I’ve been asked by a fellow golfing companion and a club pro the following question twice in the past few weeks, so I thought it may be worthy of a short blog post.

If I hit someone or hit (and damage) their car – does my personal insurance apply or is the golf course responsible?

Fore!!  Yes, if you hit the drive – you are liable for any subsequent damage.  The golf course may get named in the lawsuit – if it reaches court – but they are not going to be liable for any resulting damage from a golf ball that you hit.  You can try and run or hide; however, you are responsible for subsequent damages.

Coverage is afforded under the personal liability portion of your homeowners policy.  Generally, no deductible applies for this coverage.  If coverage is exhausted on the homeowners insurance policy, a personal umbrella policy may apply if needed.  There is no coverage under your personal auto policy (another common misconception)!

As always, it’s best to consult with your insurance professional to discuss any potential claim or coverage scenarios.  Furthermore, a golf lesson and some practice on the driving range may be the best way to avoid this claim scenario.

Does it matter what insurance company you do business with?

Chris

As an independent agency, we have many options and companies to work with.  Ultimately, this provides a great benefit to our customers – one advisor/professional to work with who has dozens of companies to choose from to find the best coverage and rates for you.  First, the customer needs to decide what is most important to them when choosing an insurance company.  Some factors to consider are as follows:

  1. Claims Service – Yes, different companies have different levels of claim service.  Some companies make the process very easy and provide great support during the process; however, other companies pay claims begrudgingly and can make the process painful.  This is one of our highest priorities when choosing a market for you because a successful claim settlement equals a happy customer.

  2. Price – Price is a dominant force in our industry and is usually a consumer’s top concern.  Price does matter but it is important to verify that other factors are not being omitted to create a lower price – specifically coverage (amongst others).

  3. Coverage Options – Do you have a unique risk exposure? Does the company you have your insurance with offer all the coverage you need?  These are important questions to consider when electing to place business with a company.

  4. Deductible Options – Many companies are increasing home deductibles and limiting deductible options.  If the company you’re with doesn’t have a suitable deductible for you, it may be worthwhile to ask your insurance advisor to explore other options.

  5. Size & Financial Stability – As an independent agency, we represent small, local mutual companies to Fortune 100 companies.  Size does matter – to a point.  It’s important that the company you’re with has enough capital surplus to cover any catastrophic events that may occur.  Furthermore, it’s important that the company allocates enough resources to critical functions of the company (i.e. customer service/support, claims, underwriting, etc.).  With that said, bigger does not always mean better.  We represent some regional companies that are AM Best A+ rated (financially stable) and provide good service, claims service, and pricing (if not better).

As always, it’s important to discuss these factors and any other factors that may apply to you with your insurance advisor to provide the best fit for you.  Every individual and family is different and subsequently, has different needs.  As an independent insurance agency, we feel that our flexibility and options provides a massive competitive advantage and most importantly, the best options for you.

The 3 Biggest Factors that Influence your Homeowners Insurance

Chris 2 Comments

There are many factors that influence your homeowners insurance rate;  however, some influence your rate much more than others.  From credit/insurance scores, to claim history, to your age – we’ll dissect which factors you should pay most attention to if you want to lower your homeowner insurance rate.

  1. Location  – Yes, where your home is located affects your homeowners insurance rates.  And yes, it may play one of the largest roles in determining your rate. In determining how your location affects your rates – several factors come into play:

    1. How far away is your home from a fire department and fire hydrant?  Obviously, the closer you are to a water source and fire department, the quicker the response time will be in the event of a fire, and the lower the chance of a total loss occurring.

    2. Does your neighborhood have a history of frequent claims?  These factors may include how frequent break-ins are in your neighborhood to how likely a catastrophic weather event is.  Most insurance companies use zip codes when utilizing these factors.

    3. Is the surrounding area hazardous?  Homes surrounded by woods, brush, and other items may increase the likelihood of a loss and subsequently, may increase your rate.

Yes – location, location, location matters.

  1. Home Characteristics – First and foremost, the characteristics of your home determine how much insurance you need to carry to replace/rebuild your home in the event of a total loss.  Unless written on a different form, most standard insurance companies require that homes insured on a homeowners insurance form (HO3 & HO5) be insured at 100% of replacement cost.  However, other factors may contribute to other your premium, such as:

    1. Age of home – typically, older homes will cost more to insure (especially those with older roofs) as they generally cost more to replace.  For individuals who own homes built before 1940, you may want to ask  your insurance agent about a functional replacement cost coverage.  This coverage rebuilds your homes with newer materials that are functionally the same as the older materials.

    2. Structure type – whether your home is brick or wooden-frame plays a role in the rating factor of your premium.  In the midwest, brick homes are usually less susceptible to normal losses (wind/hail) and subsequently, cost less to insure.

    3. Size of your home – Size does matter.  Larger homes obviously will cost more to replace and consequently, cost more to insure.  Additionally, larger garages are more likely to be broken into and usually hold a higher value of contents.  Higher risk = higher premiums.

  1. Insurance/Loss History – As many homeowners find out the hard way, the more claims you file, the higher your insurance premiums become.  This may be true even if the loss was due to weather related activity.  Insurance companies usually use prior history to Insurance companies generally look at two factors when determining an insured’s loss history – loss frequency and loss severity.  If you frequently file small claims, your rates will be higher for two reasons:  1) Insurance companies deem you likely to file claims in the future (which costs them more money), and 2) smaller claims are usually preventable.

If you’ve had a severe loss in the last 3-5 years, many insurance companies will either choose not to insure your property or charge a higher premium as they deem you to be a higher risk client.

These are three of the main factors that actuaries use to determine your homeowners insurance premium.  There are several other actions you can take to lower your premium (like replacing a shingle roof with a metal  or hail resistant alternative).  As always, it’s best to discuss your risk and exposure with your insurance agent to determine the best way to customize your risk management program and potentially lower your premiums.