Year: 2011

You pay for home insurance to avoid incurring large out-of-pocket expenses after a something damages your house and personal property. The last thing you need is an insurance company explaining “adequate limits of insurance” after the fact; especially if that explanation means more cost to you.

According to Marshall & Swift/Boeckh, an organization specializing in building cost research, 59% of homes were underinsured by an average of 22% in 2005. Some reasons for the high number of underinsured homes include inaccurate valuation methods, complacency with current home value and failure to report value-changing improvements and betterments.

The penalty for underinsurance is costly. Your home insurance company requires that you pay for enough insurance to cover the value of the home at the time it is damaged, not when the policy is issued. Most home insurance policies contain a provision requiring the limit of insurance to be equal to or greater than a specified amount for the insurance policy to pay for the full cost of the damage.

For example, say your house catches fire and one-fourth of it is damaged. While adjusting the claim, the insurance company determines that due to increased construction costs, your home’s current replacement value is $100,000. If just a portion of your home is damaged, most home insurance policies require that your limit be at least 80 percent of this amount, in this case $80,000. If your limit is less than $80,000, you will only receive a portion of the $25,000 and will have to pay the difference out-of-pocket…yuck!

Despite the above example, you should never carry a limit of insurance lower than 100 percent of your home’s current replacement value. Here’s why: Consider the previous example, only this time the fire damage is so severe that your entire home must be torn down and rebuilt. If your policy limit is anything lower than $100,000 you will have to pay the difference yourself.

To make matters more difficult is the constant flux of property values. According to the National Association of Home Builders, the cost of common construction materials such as cement, drywall, lumber and nails have soared over the past two years, two to five times faster than gasoline prices! According to Marshall & Swift/Boeckh, some homes that were built just two years ago for $125 a square foot may now cost over $200 per square foot to rebuild.

People also forget to count improvements. According to the Harvard University Joint Center for Housing Studies, homeowners spent $149 billion on owner-occupied home improvements in 2005. And this amount doesn’t include home repair costs or the amount spent by landlords on rental homes—two factors that would exponentially increase this dollar figure. Have you added a burglar alarm system, closed in the garage, put in new floors or redone the kitchen? Improvements like these are fair game in determining the current value of your home. In addition, many homeowners do not understand that factors like market price, property tax appraised value and mortgage amount are not the same as the cost to repair or rebuild your home after a loss.

Preventing underinsurance is tricky but not impossible. Most home insurance policies can be modified to increase insurance limits automatically. Regular communication (at least annually) with your insurance agent will help you understand limits and trends. And reporting improvements will help keep your limits up-to-date.

These steps will help ensure that your home insurance policy will do what you expect it to come claim time.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444

A cool swim on a hot day is an American tradition. As temperatures rise, most folks want to get into the water—whether at the ocean, lake or pool.

The combination of high fuel prices and an economic slowdown may keep Americans at or near home more than usual this summer. But water safety is a concern wherever you—and especially your children—venture this summer.

Pools present dangers, particularly for young kids. Each year, some 3,500 deaths—about 10 per day—are cause by drowning, according to The Centers for Disease Control and Prevention (CDC). And another 4,000 people are treated at hospital emergency visits total for injuries and trauma related to pool accidents.

The Consumer Product Safety Commission (CPSC) notes that drowning is the second-leading cause of injury death for children ages one to 14. Each year, 283 children under age five die in America’s pools and spas, a statistic that has worsened since the turn of the century. Most deaths and injuries related to pools occur on residential properties. Most involve children ages one to two, according to the commission.

Here are the problems that lead to children drowning in pools:

Unprotected pools. Pools must be treated as attractive nuisances, meaning children will want to get to them to play. One risk: Pools with a three-sided fence where the home forms the fourth side of the barrier. That simply means children can gain access to the water through a door rather than over a fence. Other problems include frost heaving that opens a gap in a fence gate, and wooden fences that rot and break.

“Little children are fiendishly clever and they can get away,” pointed out Dr. Jonathan Midgett of the CPSC. “For those brief moments when children elude us, we need layers of protection around our pools. The more obstacles between your child and the pool, the better! Fences need to isolate the pool from the house; have well-maintained self-closing, self-latching gates; and [have] back-up layers of protection, like sensors and alarms.”

Faulty equipment. Suction outlets in pools and whirlpools are a hazard to catch hair and fingers. Anti-entrapment drain covers must be secured in place.

No rules for the pool. Parents may rely on a neighbor, friend or caregiver/babysitter when children are in a pool this summer. Children must be made to understand that, whoever the authority figure is, they must respect that person’s directions. Make safety rules for the pool clear before anyone sets foot inside the pool area.

Poor supervision. Doctors put it bluntly. “Never leave your children alone in or near the pool, even for a moment,” advises the American Academy of Pediatrics.

The doctors’ group adds a rule of “touch supervision” with children younger than five years. This means that the supervising adult is within an arm’s length of the child at all times.

Children can drown in a pool full of people. This happens when no one adult is designated to supervise the pool or if the supervisor isn’t paying proper attention. The CPSC recommends at least one adult taking responsible for watching children around the water.

“This person should avoid distracting activities that can take their attention away,” explained Dr. Julie Gilchrist of the CDC. Distractions include: playing cards, reading, checking e-mail, and talking on the phone. In the time it takes to do these things, a child may quietly slip under water. “Drownings happen quickly and usually silently,” she added.

Anyone who owns or uses a pool should consider learning basic first aid and cardio-pulmonary resuscitation (CPR). “CPR can make a big difference by reducing the likelihood of brain damage in the few minutes it takes for 911 emergency responders to arrive,” Gilchrist, a medical epidemiologist, noted.

Swim lessons. Learning to swim is not just recreational, but a way to teach children how to save themselves, noted the CDC. Yet even strong swimmers must be supervised, no matter what age.

Any homeowner who has a pool – whether in-ground, above ground, or inflatable/temporary— should have liability insurance coverage, including umbrella liability coverage.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.

It’s summer, and thoughts of Americans everywhere turn to water. Whether it’s in the pool, on the lake, at the ocean or in the river, water draws people almost magnetically as the weather turns hot. In fact, swimming pool trade groups teamed up to make May “National Water Safety Month” in the United States to make consumers “water aware.”

Swimming pools are popular but also present a risk to a homeowner. While homeowners are welcoming friends and family with a clear, clean pool, they’re also assuming significant financial risks by doing so. What’s more, they are unwittingly facing liability from strangers since pools are an attractive nuisance that can pose a risk to uninvited guests, children in the neighborhood and intruders. Homeowners can be found liable for injuries to uninvited guests.

Drowning is the second-leading cause of unintentional injury-related death for children ages 1 to 14 years, reported the American Red Cross. Its survey of more than 1,000 adults showed that more than 90% of families with young children plan to be in the water this summer, and almost half (48%) plan to swim in a place with no lifeguard. If that’s on your property, be prepared.

Insurance plays a key role in protecting consumers who have pools on their property. Homeowners and liability insurance cover bodily injury and liability protection in the event of an injury or claim. Plus, insurance carriers, by virtue of inspecting or requiring compliance with building codes, can make a swimming pool safer.

If you have a swimming pool:

1) Let your insurance agent or insurance carrier know. Coverage is most likely to be provided if the structure and risks are known prior to a claim. Insurance carriers view pools as presenting a unique and heightened set of risks. Put simply, a swimming pool will increase the risk of property damage or a liability claim, as compared to a home without one.

Typically, a homeowners insurance policy covers property damage to a home and additional structures. An in-ground pool usually is considered an “additional structure” in insurance parlance, as are sheds and detached garages. An above-ground pool may be considered “personal property” and insured under that section of the homeowners policy.

Homeowners insurance also offers liability coverage in the event a homeowner is hit with a claim or lawsuit as a result of an incident in or near the swimming pool. Friends and family who are injured in a pool accident may not want to sue, but may need to sue in order to pay medical bills and replace lost income.

2) Check the amount of homeowners property coverage. A standard coverage amount for additional structures on a property is 10 percent of the amount written for the home itself. Thus, a $500,000 home might have $50,000 of property damage coverage for other structures. Ask your independent agent to help you determine the proper amount of property coverage.

3) Check the amount of homeowners liability coverage. One claim can pierce a standard homeowners liability insurance limit, so check with your insurance professional to discuss increasing the limit and/or adding an umbrella policy. An umbrella (or excess liability) policy pays up to a limit (usually $1 million) for claims.

4) Check the perils covered. Homeowners insurance comes in a variety of types, and some policies protect against additional “perils” in addition to fire, lightning and windstorm. Other perils may be excluded. Check which type of policy you have and whether it suits your needs. For pool owners in the north, note that damage by freezing/thawing is usually not covered by homeowners insurance.

5) Check that your pool is up to code, and whether any features are specifically not permitted or insured. Plumbing, fencing and deck requirements all can vary by state and locality. A homeowner increases the risk of loss if a pool is not up to code. Additionally, amenities such as diving boards and slides are particularly hazardous and may be excluded by building code or can be uninsured.

The U.S. Centers for Disease Control noted that drowning prevention requires appropriate adult supervision while children are in the water, as well as multiple layers of protection (such as four-sided isolation fencing, pool alarms, and locked gates) to keep children away from swimming pools.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.

Ever drive down the street and see a front yard with a trench that looks like someone is dredging a channel from the front door to the street? While a select few may be installing an expensive irrigation system, most are having the sewer line replaced. This line consists of a pipe that runs from the home to the mainline under the street. The lucky among them have undertaken this project on the advice of a proactive plumber who warned of the consequences of backup or leakage due to cracked or clogged pipes. The unfortunate majority have already experienced those consequences.

There are many substances that can clog a pipe. Most can be controlled, others cannot. Consider tree roots: a common reason for clogged and cracked pipes, which can cause most unpleasant damage to the inside of your house. Remedying this unfortunate situation can be costly, and depending on the nature of the project, is not covered by standard home insurance.

Consider the costs: (1) cleaning up damage to/in the house caused by the roots growing into the pipe, and (2) fixing pipes damaged by the roots.

In the case of the former, some home insurance policies will cover damage to your home if a clog causes your plumbing to overflow; others will not. Thus, if the root clog causes a toilet to send water the wrong way (which falls on people’s “biggest fear” list somewhere between death and clowns), resulting damage such as warped tiles, soaked carpet and furniture may not be paid by insurance.

Luckily, most standard home insurance policies can be modified to cover this significant exposure for additional premium. Cost of the modification varies but can be inexpensive; some providers will add the coverage for only a few dollars.

Consider the latter. In addition to paying for damages caused by the clogged or cracked pipe, homeowners will need to protect their property by having roots removed and installing piping that is not damaged. This could mean digging up several square feet of your yard, conducting repairs, and closing the hole as if nothing ever happened- not an easy or inexpensive task.

If this happens to you, don’t panic! While unmodified home insurance does not cover resulting damage, it may cover the cost to tear out and replace the damaged pipes. The kicker is “damage”—the home insurance policy will often cover the cost to fix the pipes if they are physically damaged by the roots, such as when the root penetrates a joint causing it to crack. It is possible for a root to clog a line without damaging the pipe- if this happens there would be no coverage to fix the pipe because it is not physically damaged.

There are many unexplainable phenomena in nature and the unpredictable root structure of trees and plants certainly qualifies. Talk to your independent agent about how to amend your home insurance to control the impact of this “growing” threat.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.

Millions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?

Homeowners’ Insurance

The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision-making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do

Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you.

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.

The entertainment value in a summertime get-together can be in the camaraderie and storytelling. But don’t let your next backyard barbecue turn into a tale of woe, to be retold years from now.

One party hostess recalled a disastrous event that involved hot oil, alcohol, a paper tablecloth and fireworks:

“The oil to fry the turkey was too hot and too full (yes, we fry our turkeys in Texas). Maybe it had to do with the over-served [read: one too many alcoholic beverages] cook. But once the turkey went in, the oil bubbled over, caught the paper tablecloth on fire, and lit the grass on fire.”

The grass fire then ignited a pile of fireworks, which were supposed to be on the porch. This in turn “led to one huge fireball, screaming crying children who will probably never recover from the panic that was set throughout, which then led to roof catching on fire.”

The damage tally was: one home partially destroyed, several cars damaged by smoke, a missing dog, $2,500 worth of poorly timed fireworks and three acres of burned grass. The lessons learned reported the wiser hostess: “We now monitor everyone’s booze intake, park cars far away, and only have one person know where the fireworks are. And I now cook the turkey with fire extinguishers nearby.”

Summer is truly party time in America. But homeowners should be aware of the risks associated with these get-togethers. Before reviewing safety tips, let’s look at three common risks for which a homeowner might need insurance coverage:

Liquor liability: Summer parties can be a breeding ground for drinking-and-driving accidents. Most homeowners know that they bear some responsibility if a guest becomes impaired after consumer alcoholic drinks at the homeowner’s house, and then causes a car accident. If the party-giver is sued, however, his/her homeowners and automobile insurance policies may not provide liability coverage. (Keep in mind that the legal defense against a claim is another significant expense for anyone who is sued in such a circumstance.)

Changes to homeowners insurance standard contracts in 2000 may limit the coverage available under a homeowners policy. Homeowners might be well served to check their homeowners and auto insurance policies (contacting their agent, if necessary) to determine what protection they may have.

Personal accidents on the homeowner’s property: A homeowners policy and an excess liability policy (dubbed an “umbrella” policy) provide broad protection for accidents on the party host’s property. For instance, if a guest tumbles down the steps of an outdoor deck or a child is burned by the outdoor grill, the homeowners policy would pay medical costs for the guest (and, should a lawsuit follow, likely would pay the costs of defending against the lawsuit and damages awarded in the case).

No one, of course, wants to see such events occur, but accidents do happen. Homeowners coverage is designed to “make whole” a homeowner who is facing a liability claim due to an accident on his or her property.

Property damage liability: When guests drive to your party and park their cars at your home, the homeowner assumes risk. The possibilities of property damage range from a simple dent from a stray baseball, to a young driver releasing the parking brake and rolling the car into a tree, to an impaired driver going for a joy ride and damaging the car. A different example of property damage is the theft of a guest’s purse/wallet or valuable articles from the party-giver’s property.

Homeowners coverage pays for damage to another person’s property, if the homeowner is held liable. A homeowner’s negligence and omissions (i.e., failing to take steps that might have prevented an incident) are reasons that he or she can be found liable for damage to another person’s property.

To prevent accidents, consider some sensible safety precautions:

Grilling

Some 5,000 people are injured by charcoal, wood-burning and propane grill fires each year, according to the U.S. Fire Administration of the Federal Emergency Management Administration. Good safety practices include:

• Before using a propane gas grill, check the connection between the tank and the fuel line. Make sure the Venturi tubes (where the air and gas mix) are not blocked, and check hoses for cracks or damage.
• Never use a propane barbecue grill on a balcony, terrace or roof. And never grill/barbecue in enclosed areas, as deadly carbon monoxide can be produced.
• Keep a fire extinguisher or a source of water (a garden hose or four-gallon pail of water) near an outdoor grill or barbecue.
• While barbecuing, don’t wear loose clothing. Use long-handled barbecue tools and/or mitts that are flame resistant.
• Don’t squirt flammable liquids onto an open flame.
• Don’t leave a grill unattended.
• Keep matches and lighters away from children. Supervise children around outdoor grills, which are objects of curiosity.
• If using a charcoal or wood fire, dispose of hot coals properly by soaking them with water, then stirring to ensure that fire is extinguished. Never place them in plastic, paper or wooden containers.
• Keep alcoholic beverages away from the grill since they are flammable.

Drinking

Liquids containing alcohol cause the human body to lose more fluid, say health educators. So summertime drinking in the sun or heat can present hazards to health, including impaired judgment, balance and coordination. Consider these safety tips if serving:

• Use designated drivers.
• Make non-alcoholic beverages as available as alcoholic drinks.
• Stop serving alcohol before the party ends.
• If children are attending the event, remember that alcohol may seem more available to them at a party.

Dining outdoors

Food-borne illnesses favor the hot conditions found at outdoor events where food is not refrigerated or may be undercooked. The U.S. Department of Agriculture offers food safety tips:

• Cook foods thoroughly to safe minimum internal temperatures.
• Keep hot foods hot and cold foods cold. Hot foods should be heated and maintained at 140 °F or warmer with chafing dishes, slow cookers, and warming trays. Cold foods should be held at 40 °F or colder. Maintain cold by placing food dishes in bowls of ice or in a cooler.
• Live by the “two-hour rule”: Foods should not sit at room temperature for more than two hours.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.