The Fey Blog

Read Great Tips in our Insurance Blog

Welcome To The Fey Insurance Blog.  We try to provide our Fey Insurance Agency clients great information to protect what matters most - Your Family, Your Home, Your Property. We invite you to visit our blog frequently.

 

Gap InsuranceEvery time you step off the Tube in London's Underground you hear a women's voice in her perfect British accent reminding you to "Mind the gap". It is a good thing too. At some stops on the Underground there is a pretty big gap waiting for you as you exit and if you got caught in one of those monsters you could be in some trouble. The same is true for the gap that occurs in leases and loans on cars. Normally over time a vehicle's value depreciates faster than the loan or lease can be paid off. This is commonly referred to as being "upside down" on your loan or lease. If during this "upside down" period you total a vehicle in an accident there is going to be a gap between what the insurance company will pay you (actual cash value of the car) and what you still owe on your loan or lease. The good news though is there is insurance that covers this gap and it is appropriately named GAP insurance.

GAP insurance coverage helps pay for the difference between actual cash value of the car and what is owed on the loan or lease. One thing to keep in mind though, GAP insurance from personal auto insurance companies does not cover the cost of warranties or other add on charges that might have been included in the loan or lease.

So for an example, you totaled your vehicle and the insurance company is going to value your car at $5000 but your loan was still $7000. Let’s also say that of the $7000, $500 of it is because of the warranty that you had purchased. Therefore, the insurance company (if GAP insurance was on your policy) would give you $6500 ($7000 due on the loan minus the $500 warranty cost) instead of $5000.

Rental Property InsuranceOver the last few years many homeowners have turned into landlords. With the real estate market drop, those that decided to purchase a new house also decided to not sell their prior home for fear of a financial loss on the property. Instead, they have turned their prior house into a rental. The trend still continues today even after the real estate market has rebounded some because landlords are seeing great cash flows from renting.

Here at Fey Insurance Services we insure a number of these properties and on occasion we are asked by clients if we have any insurance tips in renting a property. When asked we always mention these five things:

1. Temperature Requirement in the Lease: It is a good idea to include a clause in your lease that requires the tenant to keep the heat no colder than 59 degrees. This is important because around the Holidays many tenants will travel and if they want to try and save a buck they may turn off the heat. Pipes do not enjoy this especially with a polar vortex threatening again this year. This way, if they do turn the heat off and pipes break you can pass that damage on to the tenant.

2. Renters Insurance for Tenants: Since you may have passed on the risk of pipe freezing damage to your tenant you then want to make sure they have insurance in place to pay for such damages. Requiring tenants to have renters insurance is a good idea. Not only does it protect their contents (which is excluded under your policy), it protects your property if they are negligent in causing damage to your property. I would recommend they have liability limits at least the value of your property.

3. Dogs: Know your states laws on dog attacks. For example, in Kentucky there was a law recently passed that could drag landlords into dog attack claims. This may make it difficult to get insurance for a property that has a dog. If you are going to allow dogs to live on your premises it is best to limit which kinds as some insurance policies exclude coverage for "vicious dogs".

4. Loss of Rents Coverage. Make sure your rental property insurance policy includes coverage for loss of rents. If you sign a year's lease with someone and then have a fire a month later, you are going to be out 11 months of rent or at least however many months it takes to rebuild the house. You can recoup this loss with loss of rent coverage. Also, make sure that you have enough loss of rent coverage. Many polices give you 10% of your dwelling limit or give you a flat $25,000. Add up your annual rents and make sure you have enough coverage.

5. Certificates of Insurance from Contractors: Unless you yourself are handy, you may be employing contractors to do fixes around your rental property. We strongly recommend you ask these contractors for proof that they have insurance. If they were ever to cause damage to your tenants contents or to your tenants person, you would want to make sure they have insurance to cover such things.

Water Back UpThis rain has caused one common phone call for our agency this spring, “I have water in the basement”. Whether it is a home, business or rental property, water has been finding its way into places it should not be; so what better topic to blog about today than water in your basement.

The first question we are asked is whether or not it is covered. This depends on a few factors. The two main factors are the source of where the water is coming from and the type of insurance policy you have. If water is coming into your basement through window wells or other opening in your basement (excluding drains), then that would be considered a flood loss which often is not covered by your normal insurance policy. In fact, even if you had a flood policy it normally doesn’t cover contents located in parts of a building that are underground, i.e. a basement. If the water is gathering in your basement because of a sump pump failure or a backed up drain or sewer than there could be coverage, as long as you meet the second factor which is having the type of policy that covers those things. Rental property policies have the most limiting coverage for water in the basement. The main coverage you need is called “Water Back up of Sewers and Drains” and many insurance companies don’t offer that on rental properties. Commercial building insurance policies have the “Water Back up of Sewers and Drains” endorsement as an optional coverage so it just depends if you purchased that option or not if you would have coverage. Homeowners polices more often than not have the “Water Back up of Sewers and Drains” included in their basic policy but if someone tried to skimp on the premium they may have taken that coverage out.

Umbrella InsuranceHow much liability protection do I need to carry to protect me and my family? Unfortunately there is no simple formula which you can use to calculate how much liability insurance you really need. With your home or a commercial property, there are computer programs which will help determine the construction replacement cost of the building, but there is no such program in the area of third party liability claims. Some insurance companies claim they make you “legal” for less, but in Ohio, for example, that means bodily injury limits of $25,500 per person/$50,000 per accident and property damage limits of $25,000. Any kind of serious accident will wipe out those limits in a heartbeat. As a bare minimum, we recommend no less than $500,000 in Personal Liability and $250,000/500,000/100,000 in Automobile Liability, but higher limits are available and recommended. This is where the Umbrella Liability Policy comes into play. These policies are written in increments of $1,000,000 with $1,000,000 being the lowest limit you can purchase. Limits of $1,000,000 to $5,000,000 are usually available, and higher limits are also available depending on the circumstances.

Please contact us, and we will prepare a quotation for your review on this very important catastrophe liability protection.

Auto Insurance ClaimWhen should I file a claim and when should I not? It is a common question we get in our agency and every time it is asks we always say, "it depends on each situation". Let's first tackle this question with how claims can affect your insurance.

It varies by insurance company but most companies look at a 6 year window for home insurance claims and a 3 to 5 year window for auto insurance claims. What this means is that if you file a home claim it can have an affect on your premium for up to 6 years and if you file a claim on your auto insurance it can affect your premium for 3 to 5 years. If you have more than one claim in this window of time it can really have an impact on your premium and may even cause some insurance companies to look at canceling your coverage. With this in mind, it is best to consult with your insurance agent to see what prior claims you have on your record before deciding whether or not to file a claim. If you already have a claim inside one of those windows of time then it may be worth contemplating whether to file a claim or not.

Let me break for one second to mention that liability claims are a must file. These would be auto accidents that involve a third party bodily injury or a homeowner claim that involves injury to another person. These need to be handled by the insurance company and their legal firms. Also, if you have a large claim such as a totaled vehicle or large size house damage, these too are claims you would want to file without hesitation. The claims that we are talking about that may or may not be worth filing are things such as backing your car into a light post, backing into an unoccupied car or driving off the road and causing damage to the front bumper when you hit a ditch. On the homeowner side, it would be small claims such as ice dams that cause a $1000 or $2000 worth of damage or a roof claim that the repair is only a $1000 or so. These are the types of claims it is worth contemplating prior to filing. When you factor in deductibles and the affect on your premium for a few years, those smaller claims may be best to pay out of pocket.

Other Structures InsuranceThere’s more to your homeowner policy than just coverage for the house you live in. It also provides coverage for other structures on your property.

These may include all structures and buildings not sharing a foundation with your house. Most insurance policies provide 10 percent coverage for other structures. For example, if you insure your home for $200,000 an additional limit of $20,000 applies to all other structures. Remember that if you have a total loss, you don’t receive $20,000 for each structure, but $20,000 total for damage to all other structures. A large detached garage by itself can exceed this amount in many cases.


So how do you know you have appropriate coverage?

Cyber LiabilityA risk that is not addressed by many businesses in this era of technology is protecting data. Whether that data is your own data or that of your clients, it constantly stands at risk of theft or corruption. We always recommend taking risk management action such as firewalls, strong passwords, management of mobile devices, etc. However, one other risk management action we recommend is the purchase of insurance that will cover your business for network data breaches, electronic copy write infringements and computer viruses. We strongly recommend this to businesses that deal with Personal Identifiable Information (PII) which are things like dates of birth, social security numbers, addresses, credit card information, financial information and health information.

Your typical liability and property insurance policies do not have the type of coverage that best protect your business if you were subject to a cyber-attack or stolen data. There are specialty policies built to help keep your business going after such claims.

Insurance Policy History

History of InsuranceToday when you receive your homeowner policy in the mail it comes as a thick packet usually about 40-50 pages in depth. Each year the policy renews, you get a similar package delivered to you. On and on this goes until you sell your current house and then get another. Once again, however, as you setup your homeowner policy on the new house you get yet another 40-50 page packet. I mention this because it was not always this way. Like every other industry, things used to be simpler.

The photo that is with this article is of a fire policy dating back to 1833 that hangs in our office. During the time of this policy there was only one page to the insurance packet. It held the logo of the insurance company on the top and then the rest of it was the contract language. When you sold your home you did not go out and purchase another policy. Instead you would go get the insurance policy from the prior homeowner and have it signed over to you. If you look closely at the photo you will see where there is writing all around the document which shows the different transfers of ownership. Ah, the simpler times.

One thing to note though, this policy only covered you for fire. Damage from wind, theft, water leaks, liability, etc. had not been invented yet. Though they were simpler times the coverage was not nearly as good as it is today.

Page 1 of 2

Consulting, Protecting and Servicing Since 1958

Logo smaller

Making a Payment

The fast and easy way to pay your insurance bills while online.

Logo smaller

Insurance Quote

Request an Insurance Quote by calling, emailing, or using our online form.

Logo smaller

Insurance Claim

Feel free to contact us directly, or the policy carrier with your Insurance Claim.

Logo smaller

Policy Change

Request Policy Changes online by using our easy Policy Change form.