Sixty years ago, when the 1950 census data was released, it showed that eight in 10 households were occupied by married couples. Fifty years later, the 2000 census data showed that number had declined to just over 50%, signifying a sea change in the typical American household. Almost half of households were occupied by a single individual, roommates or unmarried couples (the 2010 census data is still in the process of being made public).
If you are in the “living together but not married” category, you should pay close attention to the language in your home and auto insurance policies that specifies which individuals are covered—in insurance terms, the “insureds.”
Most standard home insurance policies restrict coverage to a “named insured”—the individual person(s) named on the policy and his or her resident spouse. The policy then extends coverage to “resident relatives,” a term referring to individuals related to the named insured by blood, marriage or adoption (or someone under 21 in your care, such as a foster child) who are residents of the named insured’s household.
This means that a home insurance company has no obligation to cover a non-insured’s liability or to defend that person in a lawsuit alleging liability.
Consider this scenario: A girlfriend and her teenage son move in with the woman’s boyfriend. The son seriously injures another child in a tackle football game at the park down the street. That child’s parents file a suit against the mother/girlfriend.
Unless she has her own separate insurance policy (such as a “renters” insurance policy) or has been added as a named insured on the home insurance policy (which most insurance companies won’t do if she isn’t a relative), she has no coverage.
The problem doesn’t stop with liability. Chances are the girlfriend and her son will also move some of their personal property in with them, but clothes, electronics, school supplies and whatever else belongs to them may not be covered by the homeowner’s insurance policy either. Most policies exclude coverage for personal property that is owned by roomers, boarders or tenants. This personal property exclusion is another reason why a renters insurance policy is essential for non-insured roommates.
The auto policy also has a “named insured” which includes the individual listed on the policy and his or her spouse. The insured on an auto policy varies depending on the coverage. For example, liability, medical payments, and uninsured motorist coverage each have their own definitions of “insured.”
Say an adult boyfriend and girlfriend (or same-sex couple) each have a car and their own personal auto insurance policies. One has high limits of liability on their policy, maybe $100,000, and the other has lower limits, like $25,000.
Let’s look at liability coverage in this scenario. This section of the policy covers the “named insured” and “family members” for liability arising out of the use of any auto. It also considers any other person an “insured” while that person is occupying a car (with permission) that is insured under your policy.
Dig deeper, however, and you’ll see that the policy excludes coverage while the “named insured” or “family member” is operating a vehicle that is furnished or available for regular use.
If the girlfriend is driving the boyfriend’s car and gets into an accident causing injuries, his auto insurer would pay up to the policy limits—in this case, $25,000. Unfortunately this may not be enough money to cover the full liability if the injuries are severe, and the liability policy with $100,000 limit might not be available as a fallback, even though it covers the driver for the use of any auto. That’s because the driver’s insurer can argue that this car is available for the driver’s regular use since the car owner and driver live together and that, under that circumstance, coverage is excluded by the policy language.
The good news is that these scenarios have solutions that I can advise you on. Call today!
That’s a question every consumer asks from time to time. Everyone is curious and concerned as to whether he or she is getting a good value for the money, whether it’s for a candy bar, a car or an airline ticket.
It’s a good question to ask about insurance, too. After all, Americans spend a lot of money on insurance for homes, autos and businesses. In 2008, American drivers spent $161 billion for personal automobile insurance, reported the A.M. Best Co., an insurance research and ratings firm.
This large market for auto insurance is highly competitive. Consumers play a large part in keeping insurance rates competitive by virtue of shopping—whether online, by telephone or on the World Wide Web. More than one of four (about 28 percent) of auto insurance buyers shopped around for car insurance in 2009, reported J.D. Power & Associates in its 2009 national auto insurance study.
But consumers aren’t the only ones shopping around for auto insurance. So too do independent insurance agents, including Trusted Choice® insurance professionals.
On average, Trusted Choice® insurance professionals provide consumers with property/casualty insurance options from eight different insurance carriers, reported the 2008 agency universe study conducted by Future One, a collaboration of the Independent Insurance Agents and Brokers of America (the Big “I”) and leading independent agency companies. For automobile insurance, those agents may compare rates and coverages at even more insurance companies, through their use of software that allows them to compare multiple policies and multiple carriers.
For auto insurance buyers, research showed that independent agents rank most highly on the most important element of customer satisfaction. The J.D. Power study measures customer satisfaction with auto insurance companies across five factors (in order of importance): interaction, policy offerings, billing and payment, price and claims. Insurers who sell their auto insurance products through agents performed “stronger in the interaction factor than do direct insurers,” reported J.D. Power.
Overall, customer satisfaction with auto insurance companies reached a five-year high in 2009, reported the J.D. Power study. The biggest improvement in satisfaction among the five factors has been in price. Interestingly, 42 percent of customers in 2009 reported that their auto insurance premiums declined without switching insurers.
Are you overpaying for auto insurance? Thanks to a competitive market that includes Trusted Choice® insurance professionals, the answer probably is no. If you’re not sure, ask Jon Jepsen at SentryWest (a Trusted Choice® insurance professional) to review your options.
You have a computer. So who doesn’t? According to the latest reports, the vast majority of Americans have at lest one personal computer at home. And many count themselves among the “multi-wired” households, with one or more PCs, handlhelds (such as Palms or Pocket PCs), set-top boxes, Internet access, and a fast-growing minority have enough equipment to have installed home networks to tie everything together. Add in a few beepers and cell phones and we are talking significant value!
With this much money tied up in such items, can you count on your homeowners insurance to step in if you suffer a loss?
Looking at a standard policy, the answer is affected by several factors.
Perhaps the major question is how much do you use these devices for business purposes? A typical homeowners policy limits coverage to $2,500 total for items used primarily for business purposes. Note the key word is “primarily.”
Doing your taxes or bringing home some work is not enough to make your PC subject to the business property limit. But for the many people that have set up a home-based office, either for regular telecommuting or for an in-home business, the $2,500 limit will kick in. And also note the limit applies to ALL such property. Include your filing cabinets, office furniture, printer, fax machine, bookshelves or whatever else makes up your business at home and the $2,500 limit is usually met rather easily.
But here’s the REAL kicker – if you use that business notebook (or “laptop”) computer while away from your home, the business property limit drops to $1,500 (if you have a car accessory to power the device). That limit also includes any accessories to be used with the computer, such as a portable printer, projector, external drive or zip disks.
A second consideration is what causes of damage are covered?
In a standard policy, first see what specific covered causes (known as “perils”) are listed. Simple breakage is not included. Anyone who has ever accidentally dropped their laptop knows that sinking feeling of wondering if they have seen the last spark of life from their trusted companion. It’s the one time many folks actually look forward to seeing the Windows logo appear on start-up!
Another possibility not typically covered is power surges or spikes. If one of these occurs and fries your computer’s circuits, there will be no payment for the damage under your policy.
So how CAN you be sure to get the best coverage for your computer? First, talk to me, your local Trusted Choice® insurance professional, about what options are available under your current coverage to tailor it to best fit your particular equipment and needs. The answers are different depending upon whether business is involved or if all of your computing power is for personal use and entertainment. Standard endorsements to your policy are available to raise the internal limits (such as the $2,500 and $1,500), and/or broaden the perils provided by the policy (either for all your property or just the computer and accessories).
Also don’t overlook the good habits of computer usage that have nothing to do with your insurance, but might either prevent the loss or make it less painful.
For more ideas, read through the documents that came with your computer, log onto the manufacturer’s Web site, and check with many of the other help sites pertaining to computers or your type of business. And don’t forget to Jon Jepsen, your Trusted Choice® insurance professional. While I have expertise in helping you arrange coverage for your potential claims, you might be surprised how much I know about preventing them!
After all, the best possible claim is the one that never happens!
Jonny Jepsen, CIC