Insider's Insurance

Blogging is a wonderful way to share your ideas and thoughts with other people. The medium has taken off like wild fire with millions of enthusiastic people writing to their heart’s content on the internet. Despite such enormous energy being expended on this activity, very little thought or concern has been given to the potential harm one could bring upon themselves with their written words. The exposure people may be opening themselves up to, unknowingly, is called, “libel.” Libel is defined as a false publication, as in writing, print, signs, or pictures, that damages a person’s (or entity’s) reputation.

With respect to your insurance coverage, you may have coverage for the damages you cause through your writing if you have what is called, a personal injury endorsement on your Homeowners policy. This endorsement provides coverage for a lawsuit brought on by unintentional libel, defamation of character, or slander. Other exposures that could present a danger to well meaning bloggers include copyright infringement or plagiarism. In order to cover these exposures, coverage would have to be obtained through a commercial insurance policy or a specialized policy such as those sold by The Media Bloggers Association. If you would like to learn more about this important topic please contact me at Ericson Insurance Advisors.

Congratulations! You found better coverage, service, or premiums and decided to move your insurance. This the point where mistakes can cause major headaches for you. These headaches will be caused by nasty letters from your mortgage company, unexpected cancellation notices from your current insurer, and even surprise increases in premiums from what you thought would be your new coverage.

Relax, the blunders can all be prevented with the right knowledge and planning. Without this knowledge and planning you can expect sleepless nights and several calls to your new insurance advisor wondering what is going on. If you or your advisor understands the 5 biggest mistakes that can occur during an insurance transition, calamity is easily avoided.

1. Mortgage company is not notified of change of insurance – Every bank requires insurance on a home that they financed. If a change is made to your insurance, your bank should be notified immediately.
2. Allowing your old insurance to cancel on its own – This mistake is interpreted to mean that you did not pay your bill and may have a negative effect on your insurance.
3. Not replacing your old automobile ID cards – This can cause major hassles if you are stopped by the police and your ID cards are out of date.
4. Not using the same effective dates – Using different effective dates from those on your old policy will create a gap in your coverage.
5. Not informing your new advisor about all losses or violations – This can result in a change in the premium once your policy is issued.

There are several other mistakes that can be made in the course of a transition, but an insurance advisor who is aware of them can make the transition very smooth for you.

Most homeowners insurance policies sold today can be described as “Open Perils” policies versus “Named Peril” policies. With “Open Perils” you will have more types of losses covered because of the way the policy is written. The “Open Perils” policy covers all causes of loss except for those that are specifically excluded. This is the exact opposite structure of the “Named Perils” policy, which states that it only covers those perils that are specifically listed in the policy.

Here is a list of named perils:

1. Fire
2. Lightning
3. Windstorm
4. Hail
5. Explosion
6. Riot
7. Civil commotion
8. Aircraft
9. Vehicles
10. Smoke
11. Vandalism
12. Malicious mischief
13. Falling objects
14. Weight of ice, snow, or sleet
15. Accidental discharge or overflow of water or steam
16. Sudden and accidental damage from artificially tearing apart, cracking, burning or bulging
17. Freezing
18. Sudden and accidental damage from artificially generated electrical current
19. Volcanic eruption
20. Theft

The popularity of the “Open Perils” policy is primarily due to the insurance industry’s desire to provide better coverage for its customers. Better coverage, however, should not be construed as complete coverage that covers everything that might happen.

When you look closely at the exclusions in the “Open Perils” policy you may notice some large gaps in coverage.  The good news is that some of these gaps can be addressed with additional coverage options.  Having an awareness of what is not covered will enable you to decide whether the optional coverages are worth the extra expense.

Please see the list below for several of the most common exclusions from a homeowners policy.

1. Ordinance
2. Law
3. Earth Movement
4. Power failure
5. Neglect
6. War
7. Nuclear Hazard
8. Intentional Loss
9. Water damage
10. Acts or Decisions
11. Faulty, inadequate or defective planning, zoning, etc…

NOTE: These lists may not be complete or representative of all Homeowners policies.

Taking the time to prepare an inventory of your personal property can alleviate any concerns you have about receiving the maximum reimbursement from your insurance company.  It will also save you from feeling overwhelmed with minutia when you are dealing with the stress of a large loss.

A home inventory will provide you and the insurance company with the details needed to demonstrate the value of your damaged possessions. The details can include video, pictures, bills, receipts, appraisal forms and any other documentation you have describing an item’s value.

There are several ways to prepare a home inventory and having as much detail as possible is recommended. A simple way to do this is to take pictures of everything you have and store them in a safe place. If you would like to be more detailed you can download a free software program that will help guide you through the process. One such program is available at www.knowyourstuff.org.

You may also want to hire a professional to handle the task for you instead of doing it yourself. This is recommended if you have high value property that requires a higher level of expertise and care. There are several reputable companies in Connecticut and New York who specialize in preparing home inventories that would be happy to assist you.