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party etiquette

 

A good host is a responsible host when it comes to serving alcohol

Parties and social gatherings are often a big part of the holiday season. But hosts who serve alcohol should take steps to limit their liquor liability and make sure they have the proper insurance, according to the Insurance Information Institute (I.I.I.).

alcoholic drinkSocial host liability, the legal term for the criminal and civil responsibility of a person who furnishes liquor to a guest, can have a serious impact on party throwers. Social host liability, also known as “Dram Shop Liability” laws vary widely from state to state, but 43 states have them on the books. Most of these laws also offer an injured person, such as the victim of a drunk driver, a method to sue the person who served the alcohol. There are circumstances under these laws where criminal charges may also apply.

“Because you can be held legally responsible for your guests’ actions after they leave your party, hosts need to be particularly careful,” said Loretta Worters, vice president of the I.I.I. “While a social host is not liable for injuries sustained by the drunken guest (as they are also negligent), the host can be held liable for third parties, and may even be liable for passengers of the guest who have been injured in their car.”

Before planning a party in your home, it is important to speak with your insurance agent or company representative about your homeowners coverage and any exclusions, conditions or limitations your policy might have for this kind of risk. Homeowners insurance usually provides some liquor liability coverage, but it is typically limited to $100,000 to $300,000, depending on the policy, which might not be enough.

Whether you are hanging out with a small group of friends for cocktails or throwing a big family bash, remember that a good host is a responsible host, and needs to take steps to ensure guests get home safely if they have been drinking.

How to protect yourself and your guests

If you plan to serve alcohol at a holiday party the I.I.I. offers the following tips to promote safe alcohol consumption and reduce your social host liability exposure:

  • Make sure you understand your state laws. Before sending out party invitations, familiarize yourself with your state’s social host liability laws. These laws vary widely from state to state. Some states do not impose any liability on social hosts. Others limit liability to injuries that occur on the host’s premises. Some extend the host’s liability to injuries that occur anywhere a guest who has consumed alcohol goes. Many states have laws that pertain specifically to furnishing alcohol to minors.
  • Consider venues other than your home for the party. Hosting your party at a restaurant or bar with a liquor license, rather than at your home, will help minimize liquor liability risks.
  • Hire a professional bartender. Most bartenders are trained to recognize signs of intoxication and are better able to limit consumption by partygoers.
  • Encourage guests to pick a designated driver who will refrain from drinking alcoholic beverages so that he or she can drive other guests home.
  • Be a responsible host/hostess. Limit your own alcohol intake so that you will be better able to judge your guests’ sobriety.
  • Offer non-alcoholic beverages and always serve food. Eating and drinking plenty of water, or other non-alcoholic beverages, can help counter the effects of alcohol.
  • Do not pressure guests to drink or rush to refill their glasses when empty. And never serve alcohol to guests who are visibly intoxicated.
  • Stop serving liquor toward the end of the evening. Switch to coffee, tea and soft drinks.
  • If guests drink too much or seem too tired to drive home, call a cab, arrange a ride with a sober guest or have them sleep at your home.
  • Encourage all your guests to wear seatbelts as they drive home. Studies show that seatbelts save lives.

Source: Insurance Information Institute

host liquor liability

Do you sponsor corporate functions, holiday parties, meetings or other social events where alcoholic beverages are served? Do you rent to tenants who sell or serve alcohol? If so, you need to be aware of liquor liability exposures and the extent of coverage provided by your insurance for claims related to selling, serving or furnishing alcoholic beverages.

liquor liabilityA Commercial General Liability (CGL) policy contains language that excludes liquor liability coverage if your company or organization is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. However, if your business doesn’t involve alcoholic beverages, a CGL policy provides Host Liquor Liability coverage for an organization or person for certain events or functions that are incidental to the named insured’s business.

If a guest or employee at a company sponsored event overindulges and injures others (nonemployees) due to their intoxication, an unendorsed CGL will protect the insured from claims made by persons injured by the over served employee or guest.

Keep in mind that if you are selling liquor by the drink or charging an admission for an event, it can create a situation where coverage is excluded under a CGL, which would require separate coverage for your protection.

A landlord that has a tenant whose business involves alcoholic beverages needs to be sure that they are protected. In some states, the landlord can be held liable for actions of a tenant.  While naming a landlord on a CGL, as a form of indemnification, is often part of a commercial lease, a CGL will not provide liquor liability protection for a landlord due to the exclusion. The landlord would want to be named on a liquor liability policy.

Does hiring a bartender eliminate liability?

Hiring a professional bartender, who is trained to recognize and handle circumstances of intoxication, can reduce your risk. It does not, however, necessarily absolve you of all potential liability, and lawyers tend to sue all possible parties if an incident occurs. Having a bartender at least establishes someone else as being primarily responsible.  It may also help in defending a claim and can potentially reduce damages you might have to pay. Prior to an event, be sure to obtain a Certificate of Insurance from the bartender to be sure that he/she has adequate liquor liability coverage.

Certain types of events may have other types of increased liability depending on the circumstances. Our Associates can help you determine if you need to purchase special coverage and identify ways to reduce potential lawsuits. You may also want to discuss concerns with your legal counsel. Some businesses find it easiest and safest to prohibit drinking during business hours, including business lunches, dinners and other company events.

Other articles:

7 Steps to Limiting Liquor Liability

How to create a drug and alcohol policy

Thanksgiving Safety Tips

Thanksgiving Safety Tips Murphy InsuranceThanksgiving Day is a fun holiday that many of us look forward to all year. As you plan and prepare for your Thanksgiving feast, be sure to keep safety a focus, too.  With heightened activity in the kitchen and other entertaining going on in your home, you don't want to get distracted and have your holiday go up in smoke. 

The National Fire Protection Association (NFPA) says Thanksgiving Day is the leading day for home cooking fires, with three times as many occurring on Thanksgiving as any other day of the year. In 2016, there were 1,570 fires on Thanksgiving.  
 

Kitchen Safety Tips

  • Always stay in the kitchen when you are frying, grilling, or broiling food so you can check it regularly. If you have to leave the kitchen for even a short period of time, turn off the stove.
  • Stay in the home when cooking your turkey. Use a timer to remind you that you are cooking.
  • Keep anything that can catch fire such as oven mitts, wooden utensils, food packaging, towels or curtains away from the stove top.
  • Keep children away from the stove. The stove will be hot and kids should stay 3 feet away.
  • Keep knives out of the reach of children.
  • Make sure kids stay away from hot food and liquids. The steam or splash from vegetables, gravy or coffee could cause serious burns.
  • Be sure electric cords from an electric knife, coffee maker, plate warmer or mixer are not dangling off the counter within easy reach of a child.
  • Keep matches and utility lighters out of the reach of children — up high in a locked cabinet.
  • Never leave children alone in a room with a lit candle.
  • Keep the floor clear so you don’t trip over kids, toys, pocketbooks or bags.
  • Make sure your smoke alarms are working. Test them by pushing the test button.

If things go wrong and you have a cooking fire…

  • Just get out! When you leave, close the door behind you to help contain the fire.Call 9-1-1 or the local emergency number from outside the home.
  • If you try to fight the fire, be sure others are getting out and you have a clear path out of the home, and that someone has called the fire department.
  • Keep a lid nearby when cooking to smother small grease fires. Smother the fire by sliding the lid over the pan and turn off the stove top. Leave the pan covered until it is completely cooled.
  • For an oven fire, turn off the heat and keep the door closed

Source: National Fire Protection Association

protect against burglary

Burglars won't find your home an "easy mark" if they are forced to work in the light, if they have to take a lot of time breaking in, or if they can't break in without making a lot of noise.

burglarResearch shows that if it takes more than four or five minutes to break into a home, the burglar will go elsewhere.

Most insurance companies provide 2 percent to 15 percent discounts for devices that make a home safer—dead-bolt locks, window grates, bars and smoke/fire/burglar alarms.

However, when improving the security of your home, don't exchange security for personal safety. Don't make your home such a fortress that you are unable to escape in case of a fire or other emergency. 
 

Check your home for weaknesses and correct them 

  1. Take the time to "case" your house or apartment, just as a burglar would. Where is the easiest entry? How can you make it more burglar-resistant?
  2. Trim trees and shrubs near doors and windows, and think carefully before installing a high, wooden fence around your back yard. High fences and shrubbery can add to your privacy, but can also be an asset to a burglar. Consider trading a little extra privacy for a bit of added security.
  3. Force any would-be burglar to confront a real enemy—light. Exterior lights and motion detectors, mounted out of easy reach, can reduce the darkness a burglar finds comforting.
  4. Simple security devices—nails, screws, padlocks, door and window locks, grates, bars and bolts—can increase the amount of time it takes to break into your home.
  5. Invest in a burglar alarm. The most effective ones also ring at an outside service.
  6. Are any of your valuables—paintings, a silver collection or a computer—easy to see from outside the house? Rearranging your furnishings might be advisable if it makes your home less inviting to criminals. 
     

Simple security steps

Doors

Make sure you have strong doors. Outside doors should be metal or solid hardwood, and at least 1 3/4 inches thick. Frames must be made of equally strong material, and each door must fit its frame securely. Even the most efficient lock, if it is placed in a weak door, will not keep out a determined burglar.

A peephole or a wide-angle viewer in the door is safer for identifying visitors than a door chain.

Sliding glass doors present a special problem because they are easy to open, but you have these doors, you can find special locks for them. A broomstick in the door channel can also help, but cannot be depended on.
 

Locks

Deadbolt locks are best. They usually are locked with a key from the outside and a thumb turn on the inside. The cylinder (where the key is inserted) should be pick-resistant. Ask your hardware dealer for a reputable brand or buy your locks from a locksmith.
 

Windows

Key locks are available for all types of windows. Double-hung windows can be secured simply by "pinning" the upper and lower frames together with a nail, which can be removed from the inside.

For windows at street level or on fire escapes, consider installing metal accordion gates.
 

Home security habits

  1. Establish a routine to make certain that doors and windows are locked and alarm systems are turned on.
  2. Avoid giving information to unidentified telephone callers and announcing your personal plans online or in public notices (such as giving your address when advertising items for sale).
  3. Notify the police if you see suspicious strangers in your area.
  4. Don't carry house keys on a key ring bearing your home address or leave house keys with your car in a commercial parking lot or with an attendant.
  5. Don't hide your keys in "secret" places outside your home—burglars usually know where to look.

Vacation tips

  1. Leave blinds open in their usual position.
  2. Have mail and packages picked up, forwarded or held by the post office.
  3. Lower the sound of your telephone ringer and answering machine so they can't be heard outside.
  4. Arrange to have your lawn mowed in summer and your walk and driveway shoveled in winter.
  5. Stop newspaper deliveries.
  6. Ask a friend to pick-up "throw-away" newspapers and circulars.
  7. Use automatic timers to turn lights on and off in various parts of the house at appropriate times. Consider connecting a radio to a timer.
  8. Tell police and dependable neighbors when you plan to be away and join with your neighbors to keep a close watch on what's happening in your area—working closely with them is a good way to prevent crime. 

Source:  Insurance Information Institute

check your smoke detector

When it's time to set the clocks forward in Spring or backward in the Fall for Daylight Savings Time, fire safety officials recommend checking that your smoke alarms and carbon monoxide detectors are in working order. Batteries don't last forever. Vacuum them to remove dust, replace batteries and test the alarms. This small effort could make all the difference in an emergency.

The life expectancy of smoke alarms is generally 8-10 years, after which point their sensors can begin to lose sensitivity. The test button only confirms that the battery, electronics, and alert system are working; it doesn’t mean that the smoke sensor is working. Over time dust gathers in detectors which diminishes sensitivity. You can test sensors using an aerosol can of smoke alarm test spray that simulates smoke. Both hard-wired and battery-operated detectors need to be checked and replaced as needed.

If your alarms are over 10 years, why take a chance? It's recommended to replace all detectors at the same time to ensure that you're using up-to-date technology throughout your home.  It's also easier to keep track of when it's time to replace them.

Most fatal fires occur at night. Thousands of lives are saved each year simply because people have working smoke detectors to alert them. Working smoke detectors decrease the risk of dying in a house fire by nearly 50%. Many fire deaths are caused by inhaling the toxic smoke and gases emitted in the states of a fire, so early warning can make all the difference between life and death. 

Carbon monoxide is a colorless, odorless gas produced whenever any fuel such as gas, oil, kerosene, wood or charcoal is burned. Exposure to CO can produce headache, dizziness, nausea, fainting, and at high levels, can cause unconsciousness and death. Hundreds of people die accidentally each year from CO poisoning caused by malfunctioning or improperly used fuel-burning appliances (EPA data). Therefore, knowing the symptoms and having an alarm to alert you to a CO buildup can be the difference in saving lives.

smoke & carbon monoxided alarms

Smoke alarm and carbon monoxide detector requirements can vary from town to town, so it's a good idea to check with your local fire department regarding local regulations for fire and smoke detector placement and type. Every home needs working smoke alarms to provide an early warning.

Smoke alarms installed in all bedrooms, hallways that lead to sleeping areas, basements, and each additional level of your home. Generally, smoke alarms should be mounted on the ceiling 4” from the wall; wall mounts should be 4-12” from the ceiling. Do not install near windows, vents or other draft areas.

Carbon monoxide detector alarms are required to be located on every level of a home or dwelling unit including habitable portions of basements and attics. On levels with sleeping areas, the alarms must be placed within 10 feet of the bedroom doors. 

prepare and practice your escape plan

If a fire were to occur, how would you get out of your home? You should have an evacuation plan with at least two escape routes. Make sure that everyone in your family knows the routes and practices how to crawl low under smoke. Determine a location where to meet outside so that you'll know everyone is out. 

Fire officials also recommend

  • Testing smoke alarms monthly by pushing the 'test' button, which activates the alarm.
  • Install fire extinguishers in or near the kitchen
  • Preventative house cleaning to reduce or eliminate fire hazards

 

What is gap insurance?

car gap insurance

How gap insurance works

When you buy or lease a new car or truck, the vehicle starts to depreciate in value the moment it leaves the car lot. In fact, most cars lose 20 percent of their value within a year. Standard auto insurance policies cover the depreciated value of a car—in other words, a standard policy pays the current market value of the vehicle at the time of a claim.

car gap insuranceIf, when you finance the purchase of a new car and put down only a small deposit, in the early years of the vehicle's ownership the amount of the loan may exceed the market value of the vehicle itself.

In the event of an accident in which you've badly damaged or totaled your car, gap insurance covers the difference between what a vehicle is currently worth (which your standard insurance will pay) and the amount you actually owe on it.


When you might need gap insurance

  • It’s a good idea to consider buying gap insurance for your new car or truck purchase if you:
  • Made less than a 20 percent down payment
  • Financed for 60 months or longer
  • Leased the vehicle (carrying gap insurance is generally required for a lease)
  • Purchased a vehicle that depreciates faster than the average
  • Rolled over negative equity from an old car loan into the new loan


Where you can get gap insurance

Your car dealer may offer to sell you gap insurance on your new vehicle. However, most car insurers also offer it, and they typically charge less than the dealer. On most auto insurance policies, including gap insurance with collision and comprehensive coverage adds only about $20 a year to the annual premium.

Source: Insurance Information Institute
 

winter business preparation tips

New England winters are known for their unpredictability. Keeping your business operations running smoothly and safely this winter is dependent on being prepared for whatever winter weather might bring. Below are a few of the steps you can take to address the most common problems that cause property damage in winter.

winter business preparation tipsCold air in enclosed spaces

  • Visually inspect concealed spaces for gaps in wall materials; water pipes in these areas can freeze if unprotected
  • Keep these spaces warmed to at least 50° F or use certified heat tape

Sprinkler systems and related equipment

  • Keep building temperatures at 50° F for wet-pipe systems, including the enclosures housing a riser equipped with a dry pipe valve
  • Dry pipe systems should be drained at the low point prior to the onset of cold weather
  • Service and inspect all hydrants, tanks, fire dept. connections and sprinkler system accessories before the onset of cold weather

General building protection

  • Inspect vacant properties or unoccupied areas of a building during cold weather to be sure heating systems are functioning properly
  • Identify sources of cold air infiltration and repair leaks or seals
  • Inspect roofs to be sure they can withstand snow loads; remove snow from roofs if roof strength is in question
  • Keep gutters, downspouts and roof drains clear to avoid clogging and freezing

Preventing ice dams

  • Increase insulation above ceilings inside the building
  • Consider the use of heating cables to prevent ice dams
  • Increase ventilation in attic spaces
  • Inspect roofs for evidence of standing water (mold, mildew, vegetation) that might indicate future problems, and address the situation with a roofing contractor
  • SAFELY remove snow with a roof rake or stiff-bristled broom when ice dams have been a problem (always follow OSHA guidelines for worker safety during roof work)

Responding to a heat loss event

  • Drain any equipment that contains water that could freeze if the temperature drops
  • Investigate sources of temporary heat to be prepared for low temperatures
  • Train security or maintenance/facility personnel in how to close automatic sprinkler valves if a leak or break should occur

Taking the above steps and performing routine maintenance of your property can be key to preventing property damage during winter months and throughout the year.

Source:  Hanover Insurance

identity theft

Tips for protecting your identity and finances

Identity theft is the act of taking someone’s personal information and using it to impersonate a victim, steal from bank accounts, establish phony insurance policies, open unauthorized credit cards or obtain unauthorized bank loans. In some more elaborate schemes, criminals use the stolen personal information to get a job, rent a home or take out a mortgage in the victim’s name.

identity theft insuranceClose to half of identity theft cases are the result of a lost or stolen wallet, checkbook, credit card or other physical document. But as online shopping becomes increasing popular, it can also pose an identity risk.

Victims of identity theft are often left with lower credit scores and spend months or even years getting credit records corrected. They frequently have difficulty getting credit, obtaining loans and even finding employment. Victims of identity theft fraud often travel a long and frustrating road to recovery; depending on the severity of the identity theft fraud damage, the recovery process can take anywhere from a few weeks to several years.

Most homeowners and renters policies provide coverage for theft of money or credit cards; however, the amount of coverage is limited (usually $200 in cash and $50 on credit cards). Once you have reported the loss or theft of your credit card to the issuing company, you are responsible for only $50 of unauthorized use.

Some companies now include coverage for identity theft as part of their homeowners insurance policy. Check your policy to find out. Others sell it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy which can run about $25-$50 annually. Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. It generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). Some companies also offer restoration or resolution services that will guide you through the process of recovering your identity.

Use of stolen credit card numbers is among the most common forms of identity theft, but some schemes use electronic means, including online scams like ‘phishing’, in which thieves use email inquiries purporting to be from financial or other online organizations, to obtain sensitive account information. Others might use more old-fashioned methods, such as ‘dumpster diving’—rooting around in people’s garbage to collect financial information.

Many credit card companies are now using radio-frequency identification (RFID) chips in their credit cards instead of magnetic stripes. The advantage is quicker, more efficient transactions, especially those carried out at traditionally cash only retail outlets, such as fast-food restaurants or convenience stores. However radio frequency identification may make it possible, in some cases, for identity thieves to use a simple electronic device to capture the information. The scariest part is that it can happen right in your presence, without you even knowing it.

Tips for avoiding identity theft

  • Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.
  • Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards. Don’t fall prey to “shoulder surfers” who may be nearby.
  • Always take credit card or ATM receipts. Don’t throw them into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.
  • Do not give out personal information. Whether on the phone, through the mail or over the Internet, don’t give out any personal information unless you have initiated the contact or are sure you know who you are dealing with and that they have a secure line.
  • Proceed with caution when shopping online. Use only authenticated websites to conduct business online. Before submitting personal or financial information through a website, check for the locked padlock image on your browser’s status bar or look for "https://" (rather than "http://") in your browser window. If you have any concerns about the authenticity of a Web page, contact the owner of the site to confirm the URL.
  • Be aware of phishing and pharming scams. In these scams, criminals use fake emails and websites to impersonate legitimate organizations. Exercise caution when opening emails and instant messages from unknown sources and never give out personal, financial or password related information via email.
  • Make sure you have firewall, anti-spyware and anti-virus programs installed on your computer. These programs should always be up to date.
  • Monitor your accounts. Don’t rely on your credit card company or bank to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your credit card company or bank immediately.
  • Order a copy of your credit report from each of the three major credit bureaus. A new law that took effect December 1, 2004, entitles you to one free credit report per year. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you've been sued, arrested or filed for bankruptcy. Make sure it's accurate and includes only those activities you've authorized.
  • Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. If you suspect a problem with your credit card, change your password.
  • Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

In order to make it more difficult for identity thieves to open accounts in your name, you can also contact the fraud department of any of the three credit reporting agencies to place a fraud alert on your credit report—by law, the agency you contact is required to contact the other two agencies. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts. The three major credit bureaus are Equifax, TransUnion and Experian.

If you are the victim of a crime, report it to the credit card company and police immediately. Ask for a copy of the police report. You will need it if you want to file an insurance claim or report the crime to the FTC for their assistance. Victims of identity fraud can contact the FTC online or at 877-IDTHEFT.

Most homeowner, condominium owner and renter insurance policies offer identity theft coverage as an optional endorsement. If you'd like more information, please contact us.

Additional resources

Source: Insurance Information Institute

Canceled

There's a difference between an insurance company canceling a policy and choosing not to renew it. Learn why your insurance might not be renewed.

Auto insurance cancellation

cancelledInsurance companies cannot cancel a policy that has been in force for more than 60 days except when:

  • You fail to pay the premium
  • You have committed fraud or made serious misrepresentations on your application
  • Your drivers license has been revoked or suspended.

Auto insurance non-renewal

Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).

There are a number of reasons an insurance company may choose not to renew a policy, and it may have nothing to do with you personally. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.

However, a nonrenewal can also be due to your record or your actions. Doing something to considerably raise the insurance company’s risk—like driving drunk—would be cause for non-renewal.

If you've been told your policy is not being renewed and you want a further explanation or think the reason is unfair, call the insurance company’s consumer affairs division. If you don't get a satisfactory explanation, contact your state insurance department.

Note that nonrenewal at one insurer doesn't necessarily mean you'll be charged a higher premium at another insurance company.

Source: Insurance Information Institute

prepare for disaster

A Trusted Choice® survey shows that many homeowners lack basic financial protections to withstand unexpected disasters.

As disaster season peaks, a new national consumer survey commissioned by Trusted Choice® and the Independent Insurance Agents & Brokers of America (IIABA or the Big “I”), reveals that many homeowners lack adequate insurance coverage, do not fully understand their homeowners policies and do not have enough savings to support their households in the event of a disaster.

The August 2016 homeowner survey found:

  • At least 73% of respondents don’t have a flood insurance policy that is separate from their homeowners coverage;

  • More than 40% of those surveyed don’t have or don’t know if they have coverage that will fully replace their belongings and home in the event of a disaster;
  • At least 28% of homeowners polled do not have enough savings to support their households for even one month after a disaster if they had to leave their home. Only one-third said they could support their household for more than three months in this circumstance.
  • Less than one-third of respondents have an up-to-date and complete home inventory stored away from their premises.

prepare for disaster“Most people think that a basic homeowners policy will cover them in the event of a disaster, however these new findings highlight that a startling number of homeowners have not taken some of the most basic steps to adequately prepare for a disaster such as a hurricane, flood or fire,” says Robert Rusbuldt, Trusted Choice® president and Big “I” president & CEO. “This is disturbing as hurricane and wildfire seasons are about to peak, affecting many parts of the country.”

With almost three-quarters of respondents lacking proper flood insurance coverage, they are completely vulnerable and have no protection from damage caused by rising water or flooding including common problems such as seepage of underground water into a home, leaky roofs and toppled trees from saturated soil. According to FEMA, floods are the leading disaster in the United States, and people outside high-risk flood areas file more than one-fifth of all National Flood Insurance Program (NFIP) flood insurance claims.

The survey also showed a lack of basic understanding regarding standard homeowners insurance coverage. More than one-fifth of survey respondents didn’t know whether they have replacement cost coverage for their belongings and home (which allows them to replace lost possessions with new items) or if they have actual cash value coverage (which takes depreciation of the structure and personal items into consideration). In most standard homeowners policies actual cash value is the default coverage.

“The risk of financial ruin in the event of a major disaster is significantly higher for those homeowners who have only actual cash value coverage because they cannot fully recoup their losses,” continues Flannagan. “Sadly, this survey shows that only 58% have replacement cost coverage. Trusted Choice® recommends homeowners purchase replacement cost coverage and take a hard look at their finances to ensure they are prepared.”

Unfortunately, this new research shows that more than half of those surveyed (56%) have just enough savings to support their households for three months or less if they had to temporarily move away as a result of a disaster to their property. Notably, 28% said they couldn’t sustain for even a month. Most alarming, 14% of those surveyed reported that their savings would be drained in less than a week. For off-premises living expenses in these cases, a standard homeowners policy provides only limited protection (usually 10% of the coverage on your home) and a flood policy provides NO COVERAGE.

The survey was conducted for Trusted Choice® and the Big “I” by MFour Mobile Research, Inc. using MFour’s Surveys on the Go® Smartphone Application Panel which includes Apple and Android mobile device users. MFour is an independent research company headquartered in Irvine, California. Interviews of a nationally representative sample of 1,000 U.S. homeowners were conducted in August 2016 and weighted by age and gender to represent the general U.S. population over age 18.

Source:  Massachusetts Association of Insurance Agents

 

The information provided in these articles are only general descriptions and should not be relied upon as complete, correct or accurate for your specific situation. All coverage informaiton is subject to policy provisions, endorsements and may be  subject to your meeting underwriting qualifications. Murphy Insurance Agency is not engaged in rendering legal, accounting or other noninsurance professional services. Consult an appropriate professional for advice regarding your own situation.