Why should I Insure Recreational Vehicles?

Summer is in full swing. For Paducah, KY this means you will start seeing packed golf courses in the cities and kids whizzing around on 4-Wheelers in the county.

Many people do not see any value in insuring their recreational vehicles. They are not as expensive or powerful as vehicles and are typically used on or around the residence premises. Consumers believe that their homeowners policies will provide coverage; however, they do not realize the limitations of the homeowners policy in regard to recreational vehicles.

First, an unendorsed homeowners policy limits when coverage is provided. The homeowners policy is typically designed to provide coverage for things like lawn mowers, golf carts and 4-Wheelers, but only when they are used for servicing the residence premises, assisting the handicap, or on the golf course.

Secondly, an unendorsed homeowners policy limits where coverage is provided.  The homeowners policy does not extend property or liability coverage once you leave the residence premises listed on the homeowners declarations page, the one exception being a golf cart on the golf course. Use “on the course” refers to being on the course or paths and is not to be confused with public roads going to and from the golf course.

Finally, an unendorsed homeowners policy limits what coverage is provided. The homeowners policy provides coverage subject to the insured perils under a homeowners policy. A homeowners policy is insuring perils such as fire, wind/hail, or theft. Collision is not a covered peril under a homeowners policy.

We work with insurance carriers that write policies specifically built for Golf Carts and ATV’s. The premium is often minimal and the property deductible is lower than a homeowners deductible. If you would like to talk to an agent about your risk in this area then please give us a call!

 

Should I Let Others Drive or Borrow My Car?

You might have heard your insurance agent say, “Insurance follows the car not the driver”. If your vehicle is insured, then someone borrowing your car with your permission would also be covered under your insurance policy. With that information, you may want to pause before letting anyone drive your vehicle. When you are trying to decide on letting someone borrow your car you more than likely are considering their personal driving habits and how much you trust them. But do you consider the impact it could have on your insurance if the borrower were involved in an accident in your vehicle?

Because insurance follows the car, your policy would act first in the event of an accident even if the borrower has their own insurance. Their insurance would not kick in until your limits were completely exhausted. Your policy is also the one that would take the rate increase that often comes with claim activity.

We don’t want to discourage you from being a good neighbor or exercising common safety practices. We all have had a friend move and need to borrow a truck or have taken a long road trip where the driving needed to be broken up into shifts.  However, as insurance professionals we do need to make you aware that when you loan your car you are also loaning your insurance.

 

What Liability Limits Should I Carry on My Homeowners Policy?

When you begin reading your insurance declarations page you may come across the phrase “Limits of Liability” listed at the top of the page. While this is not incorrect to call all coverages on an insurance policy limits of liability, this post is referring specifically to the Personal Liability listed on a homeowner’s policy. If you are wanting more information on the property coverage provided by your homeowners then you can find that here: https://www.bradshawweil.com/blog/a-basic-guide-to-your-homeowners-insurance/.

By definition Coverage E- Personal Liability covers 2 areas:

Bodily Injury- bodily harm, sickness, or disease, including required care, loss of services, and death

Property Damage- Physical injury to or destruction of tangible property, including loss of use.

This coverage applies to bodily injury or property damage that arises out of the insured’s personal activities that occur anywhere. The same coverage also applies at the insured location. This coverage does not include liability for any business activities the insured is involved in, no matter the location.

In order for a claimant to collect a payment from an insured’s Coverage E- Personal Liability they must be able to prove the insured negligent. Was a handrail loose that the insured should have had fixed? Is the tree limb hanging over the driveway dead and should have been removed? In the event that the insured was doing everything a prudent person would have done to maintain their property then the injured party would not have a claim under Personal Liability.

The question then becomes, “Why carry such high limits for Personal Liability if I am maintaining my home as a prudent person would?” The answer has multiple parts. First and foremost, Personal Liability Coverage also states that the insurance company will provide a defense for the insured at the insurer’s expense even when the charges are groundless.  Legal costs are high. Enough Said. Secondly, you cannot limit or know what someone could sue you for. In the event that they do sue you and win, you will need protection from your insurance policy.

Personal Liability is usually sold in limits of $100,000, $300,000 or $500,000. Bradshaw & Weil, Inc. strongly recommends at least $300,000 for most cases. You should consider your assets and net worth when deciding on the limit you purchase. You should also consider if you have additional liability in place in the form of an umbrella policy.

What Liability Limits Should I Carry On My Vehicles?

**Reminder as you read: The liability coverages discussed below are only taking into account bodily harm or property damage you cause to others. Coverage for your own medical injuries or your own vehicle would be found elsewhere in your policy if you have purchased them.

Each state government has set a minimum limit of liability insurance that a vehicle owner must carry in order to be considered legal. For insured’s in Paducah, KY the minimum liability limits set by the state of Kentucky are:

$25,000 Bodily Injury Per Person | $50,000 Bodily Injury Per Accident | $10,000 Property Damage Per Accident

We believe that some insurance is better than none; however, we do not feel that the limits required by Kentucky are enough to actually protect you in the event of an accident. As agents that have helped our clients through auto claims situations time after time we are convinced that an insured should carry NO LESS than the following limits of liability:

$50,000 Bodily Injury Per Person | $100,000 Bodily Injury Per Accident | $50,000 Property Damage Per Accident

When working with our clients or prospective clients we actually recommend they purchase one of the following two options:

1.) $100,000 Bodily Injury Per Person |$300,000 Bodily Injury Per Accident | $100,000 Property Damage  Per Accident

2.) $250,000 Bodily Injury Per Person | $500,000 Bodily Injury Per Accident | $250,000 Property Damage Per Accident

We understand that being able to pay premium is obviously a large factor in purchasing insurance. We also understand that some do not have assets great enough that require them to purchase a large amount of protection. But we do challenge you to consider the value your policy brings. The premium payment is really quite small compared to the protection provided when an auto accident occurs. Given the increase in distracted driving and the amount of time spent in your vehicle each week the odds are not in your favor to avoid an auto accident forever.

We also encourage our insureds to be realistic. Minor fender benders may be the most common types of accidents we see around Paducah, KY. Minimum limits may be enough in that type of scenario to cover expenses you are legally obligated to pay. But what if you hit someone on a motorcycle? What if you are responsible for a 3 car pile up? Vehicles are becoming more and more expensive as safety features and capabilities are added. Medical expenses are also increasing today. You purchase an insurance policy to protect you from catastrophic loss like one of the scenarios mentioned above. A benefit of insurance is also having it available for the minor fender bender; however, that type of scenario is not necessarily how insurance was intended to be used.

 

 

 

What Is Loss of Use or Additional Expenses?

Your homeowner’s insurance policy includes Coverage D- Loss of Use. Some insurance carriers call this Additional Expenses but the same coverage rules apply.  If you suffer a covered property loss that makes your residence uninhabitable then your policy will provide reimbursement for the expenses you incurred relating to maintaining your normal standard of living. Some examples we have seen of this were expenses for apartment/hotel rental, laundromat and food. The key word is uninhabitable. If you have covered damage to your kitchen but all your appliances are still in working order and your kitchen is still accessible then you would not be eligible for reimbursement of food expenses under loss of use coverage.

Let’s look at a different scenario. If you own a home that you rent to others then you might see Fair Rental Value in the place of Loss Of Use on the insured properties declarations page. Damage that makes the rental home you own uninhabitable may not directly affect you. Your home is still livable. Your appliances are still working.  You are still able to take care of your daily needs; however, you have lost the rent income from your rental home when the tenants had to find another place to live during repairs.

Another place you will find coverage for loss of use is on your auto policy. On the auto policy loss of use falls under the coverage named Transportation Expense. You might also see this coverage labeled Rental Reimbursement. The reason it is considered loss of use is because this coverage only comes into play when your vehicle is “out of use” due to a covered claim. You cannot collect rental reimbursement for a vehicle you rented to take a trip in simply because you didn’t want to put mileage on your vehicle. You can collect rental reimbursement when you had to rent a car while your vehicle was in the shop for 2 weeks after you were involved in a collision.

Contact your agent if you have more questions about loss of use coverage and when it applies!

 

What Deductible Should I Carry On My Autos?

We are asked all the time, “What deductible should I carry on my auto policy?” The standard auto deductibles we see at Bradshaw & Weil, Inc. in Paducah, KY are $500 or $1000. When choosing your deductible you want to consider the value of your vehicle and the impact of claims on your premium. Insurance is designed to protect you from catastrophic loss not as a maintenance policy. Turning in small claims all the time will inevitably impact your premium and hurt you in the long run. Higher deductibles not only save you a little bit of premium but they also discourage you from turning in small claims.

You also need to remember that insurance settlements for vehicles are typically done at an Actual Cash Value basis (unless your policy specifies Agreed Value or Replacement Cost loss settlement. These types of settlements for auto policies are not standard.) It is a good idea to check a third party source to determine if the value of your car is worth paying premium for comprehensive and collision coverage. If your vehicle is only worth $1,000 and you carry a $500 deductible then the most you could receive from insurance at a time of total loss would be $500. Would that be worth paying $200 or more every 6 months to include that coverage on your policy?

Why Pay More for Replacement Cost Insurance?

One major myth about insurance is that replacement cost policies are much more expensive than a market value insurance policy. This is not always true. In many cases, we have found that replacement cost companies offer a very competitive premium for a much more valuable policy, especially when considering the companies we work with at Bradshaw & Weil, Inc. We have experience with both market value and replacement cost companies in Paducah, KY.

But why pay even $1 more if you don’t intend to rebuild your home? When insurance is advertised you are often hearing about “total losses.” What most people don’t consider is that a partial loss is really much more likely to happen. Insurance is not only designed to cover the materials used to repair your home but also to reimburse for expenses that were used to prevent further loss. Clean up from water damage or fire damage can get very expensive very quickly. Even when only a small portion of your home was damaged.  A contractor hired to do reconstructive work after a claim is working on a much tighter time frame. He doesn’t have months to negotiate prices. He also isn’t working with a fresh and clean building plan. A specialist may have to be brought in to figure out how to piece things back together. These are all expenses your insurance is designed to help with after a covered loss.

Even though you don’t intend to rebuild after a total loss, you very likely will need the extra thousands of dollars provided by a replacement cost policy in the event of a partial loss. Another issue you might get into with a market value policy is having a partial loss settled at market value. In this situation, being reimbursed on an actual cash value or market value basis might not be enough to cover the full replacement cost of the damage.  We are looking at the value your insurance policy provides not just the dollar signs listed on the declarations page.

Contact Bradshaw & Weil, Inc. of Paducah, KY if you have more questions about what type of policy best suits your needs.

Why Is My Home Insurance Value So High?

At Bradshaw & Weil, Inc. in Paducah, KY, we write insurance policies on a replacement cost basis. Meaning, they are designed to completely rebuild your home as it were if you had a total loss. We work with local homeowners reviewing construction materials and special features of their home to determine how much it would cost to rebuild their home completely.  When you are going through the home buying process you will be talking with Realtor’s and Mortgage Lenders who will refer to your home value at a much lower limit. This is the market value of your home or what you paid for your home. We have found that market value limits not only significantly reduce the coverage you have on your home but also that the premium with companies who write at market value is often the same as or only slightly less than a replacement cost policy with a preferred company.

 

Contact Bradshaw & Weil, Inc. to ensure you have the right type of policy for your needs.

What Qualifies as a “Home-Based Business”?

Your homeowner’s policy is designed to only provide coverage for personal exposures. That means it is not extended to offer coverage for any event that arises from a business exposure. Many individuals have home-based businesses and don’t even realize it. Are you part of a direct sales company like Mary-Kay? Do you have a hobby that you are particularly skilled in? So skilled that people will buy your product? Do you own a small business and work from a home office where your files are stored? If you can answer yes to any of those questions, then you are involved in a home-based business.

When you leave your home to hold a product party at a friend’s house, your homeowner’s liability will not follow you. If you store inventory in your basement it would not technically be considered personal property in the event of a home loss. The client files and office equipment you keep in your home office would also not be considered personal property in the event of a homeowners loss.

If you are concerned about whether or not your homeowner’s policy would provide coverage for a certain risk then you should contact your agent right away. Business owner policies are available for a very reasonable price when considering the alternative debt you could be in from liability or property losses.

Getting The Right Insurance For Your Home-Based Business

The Fiduciary Role of an Insurance Agent

At Bradshaw & Weil, we call ourselves Insurance Professionals because our service goes beyond just acquiring a license and selling policies. The process of obtaining an insurance policy is not necessarily a difficult one but it does require going through several steps. An Insurance Professional will guide you through each step of the process, letting you know what to expect, and helping you to understand how the process relates to your coverage.  As Insurance Professionals, we are held to a fiduciary standard and our companies’ Code of Ethics when dealing with our clients. This means more than just doing what is legal. It means doing what is right no matter the outcome.

A fiduciary is a person who stands in a special relationship of trust to another person. you hear this term a lot in the financial sector but did you know that Insurance Agents have fiduciary responsibility too? We have a fiduciary duty towards our clients, our insurer’s and the public.  Two of the ways in which we enact our fiduciary duty are:

  • selling coverage not price
  • educating on the process of inspection.

Some agents cut coverage in an attempt to price match or avoid disclosing possible inspection issues for fear it could lead to their client declining the policy and have a negative impact on the agencies bottom line. We understand that price is important to our clientele and that is exactly why we make the point to fully disclose coverage concerns or inspection red flags. If you can’t afford to pay your insurance premium, then you won’t be able to afford the payout of a large claim against you.  Education is of utmost importance when it comes to coverage. If you make an educated decision to cut your coverage or to self-insure then that is your right. But we feel that matching coverage to beat price is a disservice to you.

Inspection requirements work the same way. Insurance companies are inspecting your residence for things that increase hazards. Brush growing along the side of a home or trees hanging over the roof are going to increase the chance that your home has fire damage or damage from a tree falling etc. As with anything, the upkeep of these items can cost you money or your valuable time to fix. When your agent takes pictures or recommends you trim trees, it is not because the agent doesn’t like the way it look s or because the insurance carrier will not accept your home in the condition that it is but because your agent wants to be able to prepare you up front for any repairs or maintenance that might be required of you.

 

Disclaimer: We will not always be aware of every inspection requirement that could arise with your property. We will not force you to pay a premium for a coverage you do not want. It is your policy and your right. However, as an Insurance Professional it is our duty to make you aware of available coverage and educate you on how it can be a benefit to you. All licensed insurance agents regardless of employer are held to a fiduciary ethical standard. We cannot speak for practices of your agent or insurance company.