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The Murphy Insurance Blog

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News, updates and useful tips about insurance products and the insurance industry. We also provide insights on community events, local news and information that affect your everyday life. Enjoy!

insurance when living together

 The term cohabitation most commonly refers to unmarried couples living together, but it also applies to roommates and other living situations. If you choose to cohabitate, take care to obtain the right coverage for your situation. The general overview below highlights key concerns; however, it doesn’t address every circumstance. Talk with our Associates about your specific situation, so that we may offer you appropriate guidance.

Homeowners’ & Condominium Owners’ Insurance

Insurance companies have made it easier for unmarried couples to purchase a homeowners’ policy together, which wasn’t always the case. However, if only one partner owns the home/condo, the other partner’s possessions and liability are not covered by the home policy. In this situation, there are two solutions. 1) Add your partner to the policy as a co-occupant. 2) Have your partner buy a renters’ insurance policy. We can help you determine which option is best for you. The value of possessions add up quickly, and everyone should have liability protection.  

living together insuranceRenters’ Insurance

If you rent, your landlord’s insurance does not protect your possessions or your liability. You need a renters’ policy. Some companies will cover both unmarried partners under one policy; others require separate policies. Roommates should each have their own renters’ policy. An additional benefit is that renters’ insurance can qualify you for auto insurance discounts.   

Auto Insurance

Drivers—Automobile policies have very specific language outlining who must be listed as a driver for coverage to apply. Whether a couple/family or simply roommates, the key question is “Do you allow each other ‘regular use’ of your vehicle(s)?” Regular use doesn’t simply mean daily or weekly use; it also applies to any patterned monthly or allowed usage. If in doubt, it’s better to be safe and list each other as drivers. You don’t want to have a claim and have a coverage questioned or denied because you didn’t address having drivers listed properly. 

Discounts/Savings—If an unmarried couple owns multiple vehicles jointly, you may save money by having one car insurance policy and qualifying for a multi-car discount. Another issue to keep in mind is that to qualify for a home/auto multi-policy discount, a vehicle must have the homeowner’s name on the vehicle registration.   

Umbrella & Life Insurance

For additional liability protection, unmarried couples should consider a personal umbrella policy. If you rely on each other financially and/or have children, make sure that you have sufficient life insurance in place. If you’re doing financial planning remember that insurance is a key element.  

 

business interruption insurance

Standard property insurance covers physical damage and losses—furniture destroyed in a fire, a storm-damaged office building or stolen equipment. This coverage can help you pay the costs of rebuilding or replacing damaged property. But what about losses resulting from your business’s inability to operate because of property damage? For this type of loss, you’ll need business interruption insurance, also known as business income insurance.

Coverage to keep your business afloat

business interruption insuranceWhen your business is shut down due to a damaging event—a fire or windstorm, for instance—you lose revenue. In addition, your business is still obligated to pay its bills and may incur additional expenses as a result of the disruption. Fortunately, if you have business interruption coverage, many of these costs and losses can be reimbursed. Generally, business interruption insurance will cover:

  • Revenue lost due to the closure.
  • Fixed expenses, such as rent and utility costs.
  • Expenses of operating from a temporary location.

Your policy may cover additional extra expenses associated with the disruption—for instance, advertising to announce your new temporary location.

To receive appropriate reimbursement from your business interruption coverage, there must be direct physical damage to the property resulting from an insured event.

Determining a business interruption loss involves establishing what the business would have earned had the loss not occurred. Insurance companies take into account past tax returns, profit and loss statements, projected sales and non-continuing expenses. It is crucial to keep very accurate records so that your business interruption losses can be properly projected.

Obtaining business interruption coverage

Business interruption coverage is not sold as a stand-alone policy. It can be obtained as part of the following types of policies:

  • Commercial Property Insurance—You can add an endorsement or rider to commercial property insurance that will extend the policy’s coverage to business interruption losses.
  • Business Owners Policy (BOP)—Intended for small businesses, this type of insurance package policy includes property, liability and business interruption coverage.
  • Commercial Package Policy (CPP)—CPPs are flexible policies that can be customized with a range of options, including business interruption coverage.

Other types of policies may include business interruption coverage for certain circumstances. For instance, some kidnap and ransom policies will cover business interruption loses resulting from a covered event.

Understanding the limitations of business interruption coverage

While business interruption insurance can help your business survive a disaster, there are limitations and exceptions to this type of coverage. If you obtain business interruption coverage as part of a commercial property policy, the coverage will only extend to events delineated in the core coverage. If your property insurance does not cover wind damage, you cannot receive business interruption insurance if your company is displaced because of a windstorm.

There are also time limits on business interruption coverage, so be sure to discuss limitations and exceptions with your insurer or insurance professional, and whether purchasing extended business income coverage is a good option for your business.

Get a second opinion on business insurance

 

 

 

 

source: Insurance Information Institute

There are four events that should trigger a review of your policy:

1. When your policy comes up for renewal

review your insuranceDon’t just automatically send a check to your insurance company. Take the time to review your coverage and call your agent with any questions or concerns that you may have regarding your homeowners insurance. Ask yourself the following questions:

  • Has the company made any changes in coverage since last year?
  • Does my policy now include a separate deductible for risks like hurricane or hail?
  • Should I raise the deductible to save money?
  • Am I taking advantage of all available discounts?
  • Do I need to raise the amount of coverage for liability, personal possessions or the structure?
  • Should I comparison shop for a cheaper rate?
  • Do I need flood, earthquake or an umbrella policy?

2. When you've made major purchases or home improvements

If you have made any major purchases, make sure that you have the proper coverage. And, don’t forget about gifts. If you have received a diamond engagement ring or if a member of your family has bought you expensive artwork or a computer, talk to your agent about either increasing the amount of insurance you have for your personal possessions or purchasing a floater/endorsement for these items. A floater will give you higher and broader coverage for these items than you have under your homeowners policy.

If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don't report the increase in square footage to your insurance company. Don’t forget about new structures outside of your home. If you have built a gazebo, a new shed for your tools or installed a pool or hot tub, you need to speak to your agent. Keep receipts and records in case you need to forward copies to your company.

3. When you've made your home safer

If you have installed a state-of-the art fire/burglar alarm system or upgraded your heating, plumbing or electrical system, make sure that your insurance company knows about these improvements. You may qualify for a discount.

4. When you experience major lifestyle changes

Marriage, divorce, or adult children who move back into the family home, can all affect your homeowners insurance. When people move in or move out, they take their belongings with them. And you may need additional coverage if there is a sizable increase in the value of the belongings in your home.

Starting a home-based business can also trigger changes in your coverage. You will need to get additional coverage for business liability and equipment. If the business is your primary source of income, you may need a Businessowners Package Policy (BOP). You may also need professional liability coverage, which is excluded under in-home business and businessowners policies. For more information, see Business Insurance.

Source: Insurance Information Institute

If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You will need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.

  • Collision covers the damage to the car from an accident with another automobile or object.
  • Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.

leased car insuranceThe leasing company may also require "gap" insurance. If you have an accident and your leased car is damaged beyond repair, or "totaled," there's likely to be a difference between the amount that you still owe the auto dealer and the check you'll get from your insurance company. That's because the insurance company's check is based on the car's actual cash value which takes into account depreciation. The difference between the two amounts is known as the "gap."

On a leased car, the cost of gap insurance is generally rolled into the lease payments. You don't actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a "gap waiver." This means that if your leased car is totaled, you won't have to pay the dealer the gap amount. Check with the auto dealer when leasing your car.

If you have an auto loan rather than a lease, you may want to buy gap insurance to protect yourself from having to come up with the gap amount if your car is totaled before you've finished paying for it. Ask your insurance professional about gap insurance; it may not be available in some states.

storm damage

You purchase homeowner insurance to financially protect your home and possessions in case of damage. When bad weather causes damage, home insurance coverage for a storm related loss can depend on the situation as well as the type of coverage you’ve purchased.

Typical homeowner policies (HO3 policy form) include coverage for a variety of causes of loss (aka perils); however, certain causes of loss may be excluded, which helps to keep policies affordable. You may be able to expand your coverage by:

storm insurance coverage - lightning & more

  • Purchasing an endorsement to your homeowner policy; i.e. sewer back-up, service line coverage and broader coverage for contents
  • Purchasing a separate policy, i.e. flood insurance because floods are not covered by homeowner insurance.

Check your policy details about what causes of loss are covered by your policy and what is excluded. Speak with your agent if you have questions or want to explore options for enhancing coverage. Below are some general rules for common weather related loss situations. Keep in mind that coverage limits and deductibles apply to covered losses.

wind, hail & fallen trees

Wind and hail that damages roofing or shingles, and wind-driven rain, hail or snow that causes internal damage due to wind are generally covered by homeowner policies. If a storm or weight of snow, sleet or ice causes a tree to hit your home or another insured structure such as a detached garage or shed, a typical home insurance policy covers damage the tree causes to the structure and contents inside (when the damage causes a hole in the building). It also provides limited tree debris removal coverage ($500 or slightly more) when a tree hits your home or a covered structure. But, if a tree just falls in your yard, it’s generally not covered. In the winter, if the power goes out for an extended period of time, you may experience frozen pipes that could break/leak when the power comes back on. Home insurance typically covers resulting damage.

lightning 

If your home is struck by lightning, the damage to the structure is covered by typical homeowner insurance. Generally, damage to appliances and electronics due to power surges related to a lightning strike on your property are covered. However, if a power surge results from an off property electrical issue, homeowner policies typically don’t provide coverage unless you have purchased expanded coverage on personal property. Also, the amount of coverage for appliances or electronics depends on the specifics of your policy such as the coverage limit amount, deductible and whether you’ve chosen personal property replacement cost or actual cash value protection. It’s always a good idea to use quality surge protectors and test them to make sure they are working properly to help prevent a claim situation.

water, floods & ice damage

Water from rainstorms or ice can cause significant damage to a home. Homeowner insurance typically covers damage from hail and ice; however, when it comes to water, coverage depends on the cause of the loss. Wind-driven rain or a frozen pipe bursting are typically covered by home insurance; however floods from rain or a body of water overflowing are not covered by home insurance and require a separate flood policy, which has its own coverage limitations regarding definitions of a flood and coverage availability.

Sewer back-ups, which can happen after a heavy rain storm, are often excluded from home coverage unless you specifically purchase the coverage by adding an endorsement. However, seepage, where water enters due to saturated ground or poor drainage, is not covered by homeowner policies or flood policies.

When it comes to your home’s contents, it’s also important to understand your coverage. For example, a typical home policy covers damage to the structure from water damage due to ice dams; however, your personal property is often covered on a “named perils” basis and may not be covered for ice dams unless you choose to purchase extended coverage. Your agent can help you to understand your current coverage and options.

earthquakes

Earthquakes and earth movement are not covered by homeowners insurance. However, earthquake insurance is available either through an endorsement. You don’t have to live in a high risk area like California to face a risk of earthquake. New England has historically experienced severe earthquakes and it could happen again.

plan ahead

Before you have a claim is the time to understand storm damage coverage and what may or may not be covered by insurance. This will allow you to either purchase additional insurance protection if available and transfer the risk, or understand what may not be covered so that you can take preventative measures in advance. 

hurricane preparedness

Precautionary measures can temper the ravages of these destructive storms

Hurricanes can shatter lives as well as damage property. Being prepared can help you, your family or your business minimize the impact of the storm. The best time to start is before the threat is imminent. Don't wait until a hurricane watch is issued, because it may already be too late to take certain precautions. Reduce property damage and get through any hurricane emergency with less stress by preparing early in the season.

1. Plan your evacuation route well ahead of time

If you live on the coast or in a mobile home, you may have to evacuate in the event of a major storm.

While you'll no doubt get instructions from the local government, it's wise to create your evacuation plan well before a disaster strikes. This way, you can know ahead of time about the nearest shelters, take your pets into account in your plan, make sure to take important papers and make a trial run.

2. Keep non-perishable emergency supplies on hand

When a hurricane warning is issued, people run for the stores. As much as possible, get ahead of the rush having the following on hand:

  • Extra batteries
  • Candles or lamps with fuel
  • Matches (keep these dry)
  • Materials and tools for emergency home repairs–such as heavy plastic sheeting, plywood, a hammer, etc.
  • Prescription drugs
  • A three-day supply of drinking water
  • Food that you don’t have to refrigerate or cook
  • First aid supplies
  • A portable NOAA weather radio
  • A wrench and other basic tools
  • A flashlight

If you need to evacuate, you'll bring these supplies with you. As expirations dates approach (for example, food or batteries), use the items and replenish your emergency stash.

3. Take an inventory of your personal property

Creating a home inventory will help ensure that you have purchased enough insurance to replace your personal possessions. It can also speed the claims process, substantiate losses for income tax purposes and is helpful should you need to apply for disaster aid. In the event you need to evacuate, be sure your home inventory is among the important documents you take with you.

4. Review your insurance policies

This hurricane season insurance checklist can help you to understand your coverage and whether it’s adequate to repair or rebuild your home, if necessary, and to replace your belongings

Keep in mind that your homeowners insurance covers the cost of temporary repairs for hurricane damage, as well as reasonable additional living expenses (ALE) over and above your normal living expenses if you have to relocate (such as the extra expense of getting to work or to school if your temporary home is in a different community).

However, your homeowners policy doesn’t cover flood damage, so you may want to consider looking into flood insurance. If you live by the coast, you may also need a separate policy for protection against wind and wind-blown water damage.

If you have questions about what your current policy will cover or need to augment your current coverage, contact your insurance professional.

5. Take steps to protect your home

Hurricane force winds can turn landscaping materials into missiles that can break windows and doors and much of the property damage associated with hurricanes occurs after the windstorm when rain enters structures through broken windows, doors and openings in the roof.

While retrofitting your home to protect against these possibilities is undoubtedly an expense, you can do it in stages.

  • Replace gravel or rock landscaping materials with shredded bark, which is lighter and won't cause as much harm.
  • Cut weak branches and trees that could fall on your house and keep shrubbery trimmed.
  • Install storm shutters to protect your windows from breakage. Alternately, fit plywood panels to your windows, which can be nailed to window frames when a storm approaches.
  • Make sure exterior doors are hurricane proof and have at least three hinges and a dead bolt lock that is at least one-inch long.
  • Sliding glass doors should be made of tempered glass and, during a storm, covered with shutters or plywood. These types of doors are more vulnerable to wind damage than most other doors.
  • Replace old garage doors and tracks with a door that is approved for both wind pressure and impact protection. Wind coming into your home through an opening this large poses grave problems for the rest of your home—especially your roof.
  • Seal outside wall openings such as vents, outdoor electrical outlets, garden hose bibs and locations where cables or pipes go through the wall. Use a high quality urethane-based caulk to prevent water penetration.
  • If you have a boat on a trailer, know how to anchor the trailer to the ground or house—and review your boat insurance policy.

6. Take steps to protect your business

Hurricanes take a toll on businesses, too so be prepared.

  • Keep contact information for employees, suppliers and vendors current so you can check on their wellbeing and communicate next steps for resuming normal business operations.

For more preparedness tips, handy checklists (including ones you can personalize yourself) and evacuation planning advice to cover a variety of disasters, get the I.I.I.’s Know Your Plan app. It's a great tool to help get you and your family—including pets—organized and ready to act more quickly if an emergency strikes.

Additional resources

Institute for Business & Home Safety

Source: Insurance Information Institute

 

4th of July Safety

The celebration of the birth of our nation on Independence Day often involves fireworks, backyard barbecues, boating, beaches and other outdoor fun.  Although gatherings will be smaller and hopefully following social distancing guidelines, there are lots of reasons to celebrate despite the challenges of COVID-19, Whether it's July 4th or any other summer celebration, here are a few tips for keeping safe while you're having fun.

keep kids safe

Make sure children are supervised while celebrating outside during the holiday. Whether it’s in the pool, on the beach or just the backyard, it takes just moments for kids (especially small ones) to get into trouble.  Watch for choking hazards with small toys or other items. Never leave a child unsupervised near a body of water.  Lifeguards aren't babysitters. If you are at a pool follow pool safety rules.  Turning your back for just a moment could result in tragedy. Know how to recognize signs of drowning.

grilling safely

Grilling is a great way to bring family and friends together, but be sure to follow grilling safety guidelines.  Be sure you clean and safety check your gas or charcoal grill before using it, and don’t leave it unattended. Grill-related incidents cause millions of dollars of damage. Also, follow safe food preparation protocols to ensure that no one gets sick.

drink responsibly

If you have alcoholic beverages, know your limits and be responsible.  Accidents can happen more easily when under the influence.  Have a designated driver to make sure you and/or your guests get home safely from your July 4th celebration whether it’s at your home or elsewhere.  Don’t drink and drive!

leave fireworks to the professionals

Massachusetts law prohibits private citizens from using, selling, or possessing fireworks. This includes fireworks purchased legally elsewhere and then transported into the state.  Due to COVID-19 restrictions, most large gatherings including annual parades and fireworks displays are cancelled through the end of summer. It will simply make it all the more enjoyable when we can gather again and celebrate safely.

stay hydrated

Drink plenty of water and fluids while out in the hot sun to avoid dehydration and other heat sickness. Consuming alcohol in the sun can cause dehydration, so be sure to drink water along with your adult beverages. Keep an eye on children, the elderly and pets, who are all more at risk of heat stroke. Take breaks in the shade when possible.

apply sunscreen

On the beach, backyard or park, use sunscreen to protect yourself and children from sunburns and potentially skin cancer. Protective clothing, sunglasses and sunscreen make a huge difference. For very young children, talk to your doctor about appropriate products.

follow safe boating practices

If your celebration involves being on the water, review safe boating practices. If it’s your boat, be sure that you review safety practices with guests before you set sail, and that there are enough appropriate life jackets for everyone. Be sure to follow state boating laws and travel at safe speeds. Don’t drink and drive applies to boats, too.

flood

 

floodMany people underestimate the potential for flooding. When a heavy rain storm or hurricane hits, there can be severe damage caused by floods.  Rising and pooling water that lead to flooding don't only happen near rivers, lakes and wetlands...it can happen even in low risk areas due to clogged storm drains, high volumes of rain and other causes.  

Lack of frequency can make it easier for some to rationalize why they might not need to have flood protection since it’s not that common; however, it doesn't mean that it can't happen, which is why you need protection. Did you know that:

  • Homeowners are 4 times more likely to sustain a loss from a flood than a fire.
  • 25 percent of all flood insurance claims are filed in low- to moderate-risk areas.
Here are some common questions that we get about flood insurance:
 
Q. Does my homeowner, condo or renter policy cover floods?
A. No. It is specifically excluded from these policies. You must purchase separate flood insurance. Flood insurance coverage is limited. Often the amount you can purchase is less than the amount you have purchased under your home insurance; however, in a flood situation, some coverage is better than no coverage.   
 
Q. What does flood insurance cover?
A. It covers physical damage to your property and possessions. However, the coverage is more limited than the protection provided under your homeowner policy, so it’s important to understand the differences. Read the National Flood Insurance Program Summary of Coverage for more information.
 
Q. How much does flood insurance cost?
A. The cost of coverage is controlled by the National Flood Insurance Program (NFIP) implemented by FEMA. The premium cost will vary depending on your property location and the structure. It also depends on flood zone based on federal flood maps and several other factors. If you live in a low-to-moderate risk area, you can receive preferred rates. Your premium will also be lower if you choose a higher deductible. Rates are set by the NFIP and are the same regardless of where your purchase insurance.
 
For additional details, review our flood insurance page. The NFIP website also provides a wealth of information, www.floodsmart.gov. If you don’t have flood insurance but believe you have potential flood risks at your property, even if low, it's worth taking the time to learn more and get a flood insurance quote. You may be surprised at how affordable it can be.
 

sewer back up and sump pump overflow

For Part 2 of our discussion on common storm related claims issues, let’s talk about sewer back-up and sump pump overflow issues. Heavy storm rains and other situations can cause a sewage back-up. Also, if your basement has a tendency to get water when it’s very rainy, you may have a sump pit with a pump to move the water out. But, what if the pump motor fails or the power goes out?. When these problems occur, they can cause a mini disaster.  

sewer back up and sump pump overflowQ. Is water damage caused by a sewer back-up or failed sump pump covered by my homeowner policy?
A.
No. These events are specifically excluded in a standard homeowner policy, yet many homeowners mistakenly assume that these situations are covered. 

Q. Can I purchase coverage for a sewer back-up or sump pump failure?
A.
Yes. You can purchase limited coverage either as part of a package endorsement that increases several coverages on your policy or as a separate “Water Back-up and Sump Discharge or Overflow Endorsement” (click to view sample) to your policy. The coverage is usually limited to $2,500 or $5,000, which keeps the cost low, and it gives some assistance that can help when needed. Generally, the average cost is about $100, and in some cases, you can purchase more coverage. 

When you consider that your furnace, hot water tank, washer and dryer, and many other household items are located in your basement, it’s worth purchasing the maximum coverage available. We generally recommend this coverage to our customers; however, not everyone purchases protection. If you aren’t 100% sure that you have this coverage and want to have it in place, be sure to review your policy or contact your agent.

Fallen Free Insurance Claim

When a major storm or hurricane comes through your area, there are often downed trees. There is some coverage as outlined below, but it's typically minimal in comparison to the damage a falling tree can cause.  Here are some of the most common questions that we here related to fallen trees and insurance coverage.

Fallen Trees 

Q: What coverage is available for the removal of fallen trees?
A. If a windstorm or weight of snow, sleet or ice causes a tree to hit your home or another insured structure such as a detached garage or shed, a standard home insurance policy generally covers damage the tree causes to the structure and contents within it (when the damage causes a hole in the building). It also provides limited tree debris removal coverage of up to $500 when a tree hits a covered structure. If a tree just falls in your yard, it’s generally not covered.  

In some cases, insurance companies may offer a special endorsement that provides $500 or slightly higher amounts of tree debris removal coverage when a covered building is not involved. It’s important to remember that tree coverage is subject to your policy deductible, and the cost of removing a tree may fall within a typical $500 or $1000. But, don’t assume that you’re not covered; it’s always good to ask your agent.  

Q. If a neighbor’s tree falls on my house, whose policy covers it?
A.
Your policy covers damage to your home, so your insurance policy would provide the coverage. In some cases, if the tree was in poor health and/or not properly maintained, your insurance company may try to be reimbursed by your neighbor’s insurance company through a process called “subrogation”, which may allow you to be reimbursed for your deductible. 

Q. Does insurance cover removal of a tree before a storm to protect a house from the tree potentially falling on it?
A.
No. While taking preventative measures to avoid a tree crashing onto your home is wise, general maintenance isn’t something covered by insurance policies. Yes, it’s true that removing a tree isn’t cheap, but considering that tree removal coverage is limited after a tree falls, it’s better to take a tree down before it damages your house and potentially injures someone. Would you rather control how the tree comes down or have mother nature drop it randomly on your property? My choice would be to control it. 

Q. If a tree falls on my car, what insurance policy covers damage?
A.
Cars damaged by a falling tree are covered under the comprehensive coverage part of your auto insurance policy. If you have a car that you only drive seasonally and take off the road, it’s important to keep comprehensive coverage on the vehicle even while it’s in storage in case it is damaged by fire, falling trees or other covered situations.

This is a general discussion of the issue. We recommend reviewing your policy and speaking with your agent for specific details about the coverage you;ve purchased. 

Photo: FEMA/Nicolas Britto

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