Auto Insurance Basics

States have laws requiring drivers to carry auto insurance, sometimes referred to as financial responsibility laws. There are a number of ways a driver can show his ability to pay for injuries and damages. By a wide margin, auto insurance is the most common form of financial responsibility compliances and is the most frequently purchased form of insurance.

The two basic components of auto insurance coverage are liability and physical damage coverages. Liability coverage will pay for your negligence resulting in bodily injury and or property damage. Claims for bodily injury could include claims for medical expenses, lost wages, consequential damages including pain and suffering. Property damage coverage pays for the damage you may do to the property of others. Liability coverage includes the cost of defending yourself against liability claims. A companion coverage that is of great value is uninsured motorist coverage. This coverage protects you if you are injured by an uninsured driver.

Physical damage coverage can provide collision and or comprehensive coverage. Collision coverage provides payment for damage to your automobile as the result of a collision with an object. Comprehensive coverage pays for the damage to your auto by causes other than collision. Collision and comprehensive coverages are optional and not required by law. If you have a lien on the automobile, the lender will require you carry these coverages.

Cyber Week

Monday this week was Cyber Monday. This was the Black Friday equivalent for online retailers. Many online retailers have extended the single day event and have been calling this Cyber Week. We at Fey Insurance bring this up because it is very important for both consumers and retailers to be cautious about identity theft during this time. Earlier this year we posted a blog article about Password Protection and we encourage you to revisit that article for tips on creating secure passwords. Also, below you will find a poem that was posted on cyberinquirer.com and was written by Amanda Lorenz. The poem has a few good tips for online holiday shoppers, so we wanted to share it with you:

Identity Theft: A Christmas Poem
by Amanda Lorenz

Twas the month before Christmas and all through the house,
All the children were networking with the click of a mouse.
Cyber thieves were nestled all snug in their chairs,
Waiting for shoppers to unknowingly share.
As I shopped for him and he shopped for me,
The thieves stole our money and our financial history.
We did not even realize that this information was taken,
And we thought the denial of our credit card was mistaken.
Using Phishing or SMiShing and hacking the links,
Our private information was retrieved in a blink.
Perhaps we should have shopped on a network that was secure,
Or at least checked our credit reports monthly to be sure,
That thieves were not using our names and our faces
To purchase plane tickets to tropical places.
So to all of the shoppers who like to avoid the crowd,
Protect your info this season and make CyberInquirer proud!

Damage to Rented Premises

Any time a business rents or leases a space to operate from they sign a contract. In that contract are insurance requirements stating that the tenant will carry certain liability limits. Normally they will ask the tenant to carry a commercial general liability policy, and more often than not they ask for at least $1,000,000 per occurrence limit. The reason they ask for this is that if the tenant is the cause of a fire or other type of damage to the rented building, the landlord wants to make sure that the tenant’s insurance will pay for the damages, and not their own insurance.

Commercial General Liability takes care of a lease contract with two different types of coverages. The first is the coverage I mentioned above of $1,000,000 per occurrence limit. This coverage, however, only gets the tenant half way there. The per occurrence limit doesn’t cover for actual areas of a building that the tenant rents or leases. It will pay for only the part of the building that is not rented by the tenant. An example might help explain this better.

Example:
Let’s say that business XYZ, Inc rents unit A of a four unit office building. If XYZ, Inc causes a fire that extends damages to both unit A and unit B, the per occurrence portion of their insurance policy will only cover damages to unit B. It will not pay for damages to unit A because it is leased or rented by them.

Damage to Rented Premises (sometimes called Fire Legal Liability) is the other coverage a tenant needs when they rent space. This coverage is often included in a general liability policy as well but many times is not specifically mentioned in lease contracts. In the example above, Damage to Rented Premises would be the coverage that would pay for unit A that XYZ, Inc. rented.

The reason I bring this up as a blog article topic is because the Damage to Rented Premises is often overlooked. Since it is left out of many lease contracts, businesses don’t think to check with their insurance carrier about the coverage. Your typical commercial general liability policy will only include $100,000 to $500,000. If company XYZ, Inc. in the above example rented a large space, this may not be enough coverage, and they could pay for some of the damages out of pocket.

So next time you rent a space for your business be sure to have Fey Insurance Services review the lease and double check your commercial general liability insurance limits to make sure you are covered in case of a large fire.

Online Backup Programs

In a recent article on PCMAG.com we read a few frightening statistics:

1) Of the 700 million computers in the world, about 10% will crash each day.

2) 50% of the business who did not have a back up of their files will never reopen in the event a main computer or server crashes.

3) Only 6% of internet users actually back up their data on a daily basis.

The best way to avoid becoming one of the tragedies is to invest in an Online Backup program. For home use there are a number to choose from such as Mozy, Carbonite, IDrive, MiMedia, Norton Online Backup, SOS Online Backup and others. Presently they are easy to setup and once in operation they will all automatically backup any changes you make to your computer's files without you having to do a thing.

Depending on the size of your computer's hard drive and the speed of your Internet access, the initial backup can take some time. It can range from a few hours, to days or even a full week. If you have a lot of digital photographs on your computer, you could be looking at a week or so for the initial backup. But once the initial backup is established, the Online Backup will do incremental backups only on files which have changed or new files added since the last backup. Those incremental backups will run fairly quickly. Before deciding if Online Backups for home or business are for you, consider what the ramifications would be if you lost all of your personal photos or all of your business records in a computer crash.

Winterize Your Outside Faucet

Disconnect your outdoor hoses from their outdoor faucets before it gets too cold. We have already had the first freeze warning for Fall 2010, so if you have not done so, now is a good time to disconnect your outdoor hoses from their outdoor faucets and store the hoses away. If you fail to do this, you run the risk of the water in the attached hoses freezing and cracking the water pipes going into your house. In the Spring when you turn on the hose you could have substantial water damage in your home from the cracked pipes.

Insurance Term: "Underwriter"

When discussing insurance, whether in the news or with your own insurance agent you hear the term “Underwriter”. I thought that with this blog post I would tell you a little bit about what an underwriter does in the property and casualty insurance world and tell you where there name comes from.

An underwriter is a person who works for a financial institution, and for this blog we will specifically talk about a property and casualty insurance company. The underwriter’s job is to assess risk and determine if an individual or business is eligible for the insurance company’s products and what pricing they will receive. They pour over the data give them by either you the customer, your insurance agent, other third party data sources and/or the historical data of your account to help them come up with their decisions.

So where does the term “Underwriter” come from? Back in the late 1600’s groups of merchants, investors and sea captains gathered at a little coffee shop in London owned by a man named Edward Lloyd. Between sips of Ed’s coffee the merchants who had a large cargo of goods to ship overseas would sit down with business investors and ask them to give some kind of financial backing if something happened to their cargo of goods while being shipped. Investors would agree to pay for the lost cargo if the ship didn’t make it to its destinations but required a fee or premium from the merchant for taking on this possible loss. Eventually the merchants started to post on the walls of Ed’s coffee shop the amount of backing they needed for their shipment. The investor would then come and writer their name under the request and there the contract was bound. The fact that the investor wrote “under” the request is key because there is where they came up with the term “Underwriter”.

One other item to note; does the named Lloyd sound familiar? Edward Lloyd’s coffee shop was the birth place of Lloyd’s of London.

Products and Completed Operations Hazard

If you manufacture, sell or distribute a product, there is a possibility that the use of the product could cause bodily injury. The example everyone thinks of is a stepladder. Next time you are at the home improvement store take a look at all the warnings that ladder manufactures put on their product. Who really needs to be told not to stand on the top rung of a ladder? But, it is because of the product liability hazard that manufacturers feel it is necessary to include so many warning with their products. Even if you are not the manufacturer, and simple sell someone else’s products, you could still be liable.

The second part of this coverage is completed operations coverage. If you install or repair products such as a heating system, you could be negligent should damage be caused by your work after you work is done. Let’s say that you installed a new furnace in a restaurant, and later that day a fire ensues. The fire marshal determines that product literature that was left inside the furnace caught fire further melting a plastic cover causing black smoke to spread throughout the premises. The business had to close until repairs and cleanup could be completed. A substantial amount of money was lost and the cleanup was in the thousands of dollars.

Both of the situations cited above would be covered if your policy includes products and completed operations coverage. Not sure if your package includes this coverage; give us a call to review.