We recently asked our fans to tell us the most common questions about insurance that they have or that they hear from others. Here are some simple answers for those questions.

• Why did my premium go up when I haven’t had any claims?

Premiums may have gone up for all insureds in your class. Insurance involves a lot of people sharing the losses of a few people. When, overall, losses go up, your share (in the form of your insurance premium) goes up.

• Why did the amount of coverage on my house go up when the value has gone down?

That depends on how you define “value.” If you’re talking about market values which have declined in the current real estate market in the past couple of years, the resale value of your home may be depressed. However, insurance covers the cost to rebuild or replace your home or property. The real estate market has little to do with that. If construction costs rise, your policy limits should increase accordingly.

• Do I need to buy the coverage when I rent a car?

We suggest that you purchase the loss damage waiver in case the vehicle is damaged. While most auto insurance extends to rental cars, your policy probably has exclusions that aren’t in the loss damage waiver. Likewise, there are things the loss damage waiver doesn’t cover that your insurance does. Having both makes it less likely that you will have an uncovered loss.

• Why did my business liability insurance after 18 years and never had a claim go from $17,000 a year to almost $30,000 a year?

Premiums may have gone up for all insureds in your class. Insurance involves a lot of people sharing the losses of a few people. When, overall, losses go up, your share (in the form of your insurance premium) goes up. In addition, your premium may be based on payroll, sales, or some other factor that has increased substantially. If your business is growing rapidly, your exposure to loss probably is too. Your insurance premium may be reflecting that growth.

• Is it true a red sports car costs more to insure than a black sports car (same year, make & model)?

Nope. The color of your car has absolutely nothing to do with the cost of insurance. This myth may be based on the premise that a red sports car is flashier than a black one and might attract the attention of local law enforcement if you’re driving a bit too fast. Getting speeding tickets almost certainly will increase your insurance costs.

• Why does my car insurance go up when my car keeps getting older?

The component of your premium that pays for physical damage claims to your car usually goes down with age. However, other coverages like liability might go up. In addition, experience for that model car or for all insured cars in general may be going up so your increase is similar to that being experienced by others insured by your insurance company.

• What’s my credit got to do with my insurance?

Statistical studies have demonstrated that loss experience is directly proportional to an insured’s credit score. For that reason, some insurance companies use that as a factor in establishing rates if permitted by law in your state.

Courtesy: The Trusted Choice

Today more than 43 million Americans are operating full- or part-time businesses from the comfort of their homes, and these numbers continue to grow every year. One of the secrets to running a successful home-based business is being able to separate your business activity from your home activity. Jon Jepsen of SentryWest Insurance in Salt Lake City, Utah understands these principles and can help guide you through the challenging maze.

Whether you spend two hours or 62 hours per week on your at-home endeavor, it remains a business with all the risks and rewards associated with owning a business. To safeguard against the risks, Jon Jepsen wants you be aware that your homeowners insurance policy offers limited or no protection for your business while it is being operated from your home.

If you rely on your homeowners policy as your only means of insurance protection, you may find your business underinsured or uninsured in the event of a loss.

Doesn’t My Homeowners Policy Cover My In-Home Business?

Homeowners policies were never intended to cover business exposures. Consequently, coverage for the items you use in your business such as computers, fax machines, filing cabinets, tools and inventory are limited to $2,500 in your home and $250 away from home under most policies. And your homeowners coverage provides no liability insurance for your home-based business.

How Do I Get The Coverage I Need?

First, let’s take a look at what coverage you may need. Insurance coverage generally falls into two categories. This is true of homeowners, auto and most business policies. Those two categories in business terms are:

• Property Coverage–Your business structures and possessions are covered against loss or damage caused by certain covered risks such as fire and theft.

• Liability Coverage–This means that if you become legally obligated to pay money to another person for bodily injury or property damage caused by your business, your insurance company will cover those costs (up to the maximum indicated in your policy), including the costs of defending your business in the lawsuit. This liability coverage extends to medical payments for injured parties, for which you may be held responsible.

Of course, every business has its own special requirements. There are many specific insurance coverages available to address the needs of your in-home business.

What Are My Policy Options?

There are several types of insurance policies available for in-home businesses. They include:

• Incidental Business Endorsement–Depending on your business, you may be able to attach an “incidental business endorsement” to your existing homeowners policy which will cover other structures or equipment on your premises that you use for business. This endorsement can also be tailored to include your business liability.
• Business Owners Package Policy–If your in-home business does not qualify for coverage under the “incidental business endorsement” you can purchase coverage for your home-based business under a business owners package policy, referred to as a BOP, which provides property and liability coverage.
• In-Home Business Owners Policy–Some insurance companies offer policies that combine homeowners and business owners coverage into a single policy, designed specifically for in-home businesses. These policies provide both business coverage such as business liability and replacement of lost income, and homeowners coverages such as fire, theft and personal liability. These policies eliminate gaps and duplications in coverage, and the rates reflect the in-home status of your business.

Check with Jon Jepsen at SentryWest Insurance or your independent insurance agent to determine which of these coverages is appropriate for your in-home business.

Vehicles Used In Your Business
If you have a personal vehicle that you sometimes use for business or if your in-home business is the owner of one or more vehicles, Jon Jepsen, or your Trusted Choice® insurance professional, can advise you whether you will need to purchase a Personal or Commercial Automobile Policy.

Protecting Yourself

If your in-home business is your full-time occupation, you may need health and life insurance and a retirement plan. In other words, you may need to provide employee benefits to yourself. Some options to consider are:
• Life Insurance–The insurance company pays a stated amount of money upon your death to the person(s) named as beneficiaries by you.
• Disability Insurance–This insurance provides for payments to be made to you if sickness, disease or bodily injury prevents you from being able to work.
• Health Plan–There are various plans available that cover doctor visits, hospital services, medical tests and other costs incurred in medical care.
• Annuities–These are periodic monetary payments made over a specified term or for your life. You make payments to the insurance company in a lump sum, periodically, or as you arrange with the insurance company. It may be possible to purchase a combination of annuity and life insurance.
• Workers Compensation–If you hire employees, you will need to know about this type of insurance. All states require employers to purchase it if they have employees. Workers compensation insurance offers a schedule of benefits, without regard to liability, should an employee become injured as a result of a job-related accident or suffer an illness attributable to a workplace cause. If you own an incorporated business, workers compensation also can cover you in case you are injured.

A Final Note
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Remember that in order for any business to be successful it must be run like a business, regardless of its location. A crucial element in business success is the ability to minimize risks which can be accomplished with a comprehensive insurance program. Check with Jon Jepsen of SentryWest Insurance, or your Trusted Choice® insurance professional, for the best business coverage for your in-home business.

Beauty salons are an excellent choice of businesses to own.  Even in a poor economy, your clients want to look and feel their very best.  As a salon owner or an independent salon professional, what better place to run your business than from one of the fabulous suites at Image Studios.   Your beauty salon may focus on providing hair styling services or it may offer additional luxuries such as manicures and pedicures, make-overs and tanning. As a salon professional, your customers trust your judgment, training and skills when they pay your salon for services. If your customers feel you made a mistake (or even if they just slip and fall), it is possible they could sue you for the actual or perceived damages. That’s why it’s important for you to carry liability insurance.

There are two basic types of liability insurance every salon owner should carry: business liability (also called general liability) and professional liability.  Business liability protects you against bodily injury lawsuits.  For example, a lawsuit claiming that a customer or visitor was injured while on your premises (most commonly a trip and fall). Business liability also provides protection against third party property damage claims; personal injury lawsuits involving libel or slander; claims arising from the physical eviction of a person while on your premises and/or claims of false arrest; and claims arising from false advertising.

The second type of coverage is professional liability. Unlike business liability, professional liability only covers your professional services. That is to say, professional liability might protect you against claims made by customers who suffer an injury arising out of services provided by your business as a beauty salon (hair coloring etc.).  For example, if an up and coming model comes to your beauty salon for hair and makeup styling, she trusts you to make her look good enough to win the modeling job she is after. If she claims that she didn’t get the job because your makeup artist did not prepare her properly for a black and white photo shoot, she may sue your salon for the losses in income. Your beauty salon professional liability insurance can help pay for your litigation expenses and potentially reimburse you for the losses in work time while you’re defending yourself in the lawsuit. Your professional liability insurance policy is also structured to pay for legal awards and settlements when applicable.

If salon professionals do not properly manage their risk and buy the proper liability insurance, their personal assets could be at risk – including their car and home.  The risks associated with running a beauty salon are great and only with the right insurance plan can salon professionals lessen and manage those risks. Jon Jepsen at SentryWest Insurance is an independent insurance broker who offers policies tailored specifically to the needs of the beauty industry and includes general liability and professional liability coverage within the custom package of insurance.

If you have questions for Jon Jepsen or would like to receive a competitive quote, please go to  www.imagestudiosinsurance.com.

Other Beauty Salon Claims Examples:

• The salon professional completely lost track of time as two chatty customers were drying their hair. The patrons stayed under the dryers for 2 hours and completely burned their scalps. They sued the insured for injuries.
• In order to get ready for a wedding, an entire bridal party of 8 went to the beauty salon. The salon was not equipped to handle so many customers. Amid the chaos, one of the employees left a sink running overnight. The water caused both $14,000 in building damage and $6,000 in business personal property damage. In order to repair the damage, the beauty salon had to shut down for three weeks, causing a $14,000 loss in income and $10,000 extra expenses to get the store up and running again. This loss was included in the business income with extra expense coverage.
• A customer of the nail salon sued the salon professional for cutting their toe while receiving a pedicure, recovering damages for $2,000.
• A barbershop installed a bright neon sign above the front door in order to attract new customers. During a heavy windstorm, the sign cracked, and a portion of it fell to the ground smashing into pieces.
• After a bad hair cut, a recent high school graduate decided to vandalize the barber shop by throwing a rock through the front glass storefront window.
• An employee of a beauty salon was going through tough financial times. They ‘forgot’ to turn on the alarm system when closing up for the night. No signs of break-in were evident. The owner noticed inventory levels were repeatedly lower when this employee closed the store. Cash in the register also was mysteriously low on these same nights. The insured notified the agent, and made an employee dishonesty claim, and a money and securities claim.
• The piping within the hot water heater ruptured from over usage, causing the nail salon to have to shut down for 4 hours. An equipment breakdown claim was made.