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 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!

 

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.

6 Items to Include In Your Home Maintenance Checklist

The time for spring cleaning is at hand. Warm weather and sunny days make way for your outdoor to do list. Most homeowners probably already have an idea of some aesthetic updates that need your attention but often they neglect some important maintenance items. Believe it or not home maintenance can affect your insurance positively and negatively. Insurance is designed to protect you from catastrophic losses like earthquake or tornadoes. It is not designed to cover losses resulting from maintenance/wear and tear. A claim resulting from wear and tear could be denied by your insurance carrier.

But, in order to provide you with protection from catastrophic losses, insurance carriers periodically inspect homes and make recommendation on items that need maintenance to prevent loss. The carrier recommendations can be pretty extensive or they can be relatively minor. Also, just because they inspect does not mean they will necessarily make recommendations. The recommendations are based off of your specific residence and risks that you might be susceptible to. Not complying to a carriers recommendations could force you into a sub-standard market that will cost you more premium for the same coverage.

We have compiled a list of 6 things we see fairly often on inspection results from homes in Paducah, Kentucky. The items on this list are things that homeowners are definitely aware need to be maintained but may get overlooked since they are not in your direct line of sight and damage from poor maintenance does not surface immediately.

 

HOME MAINTENANCE SUGGESTIONS 

1.) Inspect roof for damages and leaks

2.) Clean Gutters

3.) Repair or replace windows and window screens

4. )Redo areas with peeling or damaged paint

5.) Trim trees and shrubbery away from the house removing dead plants and shrubs as well

6.) Add handrails to any indoor/outdoor stairway with 2 or more steps

 

WHY? A good roof, clean gutters and a good coat of paint act as sealants to prevent water damage.

Clearing out dead landscaping can reduce risk of fire and prevent trees from falling on your home.

Adding a handrail to stairs can prevent falls and save you from liability claims.

 

If you are not an expert in the areas above then look at hiring a contractor to do a routine, yearly inspection. You can also follow the Bradshaw & Weil, Inc. Pinterest page for links to information from experts on signs of roof damage, ideas to prevent gutters from getting blocked and cost effective ways to add handrails.

Is Flood Damage Covered by My Homeowners Insurance?

Paducah, Kentucky has already had to install the flood gates this spring and the rainy season is not even over. While the water did eventually reside; one cannot help but be left with the worry of what might have happened if the waters had continued to rise? Many in low lying areas did not have to wonder. They experienced some flood damage even if it were minor. What is more concerning than the rising flood waters is that most homeowner’s do not realize that flood (meaning outside water coming in) is not a covered peril under a home insurance policy. In few instances an insurance carrier can offer flood as part of their policy but they are definitely in the minority. Flood is typically covered on its own independent policy.

Check with your agent if you are unsure whether or not you have flood coverage.

If you think you might be interested in flood coverage but don’t want to dedicate a lot of time to obtaining a quote then try the Bradshaw & Weil, Inc. quick quote option! Answering 7 questions will help you to determine whether or not you are in a flood zone and what your premium to obtain a policy would be.

Ger Your Quick Quote Now

 

A Basic Guide To Your Homeowner’s Insurance

Bradshaw & Weil, Inc. is your partner for home insurance in Paducah, KY. If you are in the market for a new home then you undoubtedly know the importance of insurance before your purchase is complete. Many people do not appreciate insurance because they do not understand it. They just want the best price. Our commitment to our clients is to help them understand the benefits of their policy and ensure they are properly covered while hopefully saving them money in the process.

Part 1- Your Structure

Coverage for things you own (property)

A- Dwelling
B- Additional Structures (or Other Structures)
C- Personal Property
D- Additional Expenses (or Loss of Use)

Coverage A- replacement cost of your dwelling is calculated using the construction features of your home and represents the cost to rebuild from the ground up. Coverage B, C, & D are automatically calculated percentages of Coverage A. They can usually be increased if you have more value in those areas but not decreased.

Coverage B-refers to structures on the premises that are separated from the dwelling by clear space (think detached garage, in some cases a fence, etc.).

Coverage C-refers to personal belongings such as clothing or furniture.

Coverage D– refers to expenses related to maintaining the insured’s normal standard of living when their home has become uninhabitable due to a covered loss.

If you are wondering why the number you see listed beside Coverage A is higher than what your bank or realtor is telling you, then read our next blog post, “Why Is My Coverage A So High?”

Part II

Coverage for things you do to others (liability)

E- Bodily Injury and Property Damage Liability
F- Medical Payments to Others

Coverage E– for someone to collect payment the insured would have to be found negligent and legally obligated to pay damages for bodily harm, sickness, disease, or physical injury to or destruction of tangible property.

Coverage F pays only necessary medical expenses that caused bodily injury. The insured does not have to have been negligent.

Contact us today to talk with an agent about your limits of insurance.