Homeowner policies aren’t designed to insure in-home businesses. Homeowner premiums assume that the insurance protection is for a residence and related structures. Therefore no liability coverage is available for loss related to business activity such as:

• customers who slip and fall on your premises
• damage to business property you own or that is in your care or custody
• injury caused by things you make (products liability)
• damage due to services you promote or provide (professional liability)

Nearly as important, your insurer is also unlikely to defend you against claims involving a business.

Generally, a standard homeowner’s policy does not provide workers compensation coverage for any employee. Medical expense and liability coverage may be available for workers who are ineligible for workers compensation, such as maids, butlers, or nannies. However the coverage only applies while the employee is performing residential tasks.

Example: You send your nanny to make copies of your business proposal and, on the way to the copy center, she is seriously injured in a fall. Your policy won’t provide any medical expense coverage for your nanny because she was performing a business-related chore.

There is no coverage for detached garages, barn, or similar structures on your residence premises if they are used in whole or part for business.

Example: You store $3,000 worth of equipment and supplies that you use in your job in your garage and the garage burns down. The fire loss to the garage becomes ineligible because of its partial business use.

A basic homeowner policy may provide very modest coverage for selected activities. However the coverage may be limited to as little as a few hundred dollars. Items that may be covered includes business personal property kept in or around your home, business personal property kept at a location other than in or around your home or landlord's furnishings (property in a part of your home that you rent out to the public). One method for improving your coverage is to add options to your policy to do the following:

• increase the coverage limits for business personal property
• cover garages and other buildings that are rented to others
• protect electronic business equipment which is usually used in a vehicle while such equipment is located outside of a vehicle
• provide theft coverage for landlord's property
• acquire limited business personal property and liability coverage for a in-home daycare
• cover a condo unit owners' liability for damage caused by renters
• provide premises liability coverage (i.e. slips and falls by customers)

Season’s Meetings

Holidays often include celebrations that bring together families and friends in private homes across the country. Food, fun, talk and spirits flow generously and, to add a sobering thought, so do injuries and accidents. It’s not news to hear that increased drinking leads to increases in personal tragedies, but it’s important to get reminders that individuals must be responsible for their actions. One major area of responsibility is as a party host. Hosts are given the credit for the enjoyment that their guests experience at a party. On the dark side, party-givers are also asked to bear partial or full responsibility for guests who cause damage or injury on the way home from a gathering. In other words, they may be sued for contributing to losses caused by alcohol-impaired guests.

Applying Risk Management (Common Sense) to Hosting

The good news is that the brunt of responsibility, even via lawsuits, has to be faced by the individuals who directly caused the loss. There would have to be strong evidence to support a host being held financially responsible, since any involvement is indirect. For example, Jane provides drinks to Barrie, who then plows into the side of Chris’ car and garage.

While a homeowners policy may offer coverage if a host has substantially contributed to a loss, an insurer may be able to deny a claim for a number of reasons, including:

• A gathering involves the host making an income
• The involvement of paid bartenders
• The party is thrown as a fundraising event
• A host’s knowledge that the guest was impaired and continued to serve liquor
• The host failed to make arrangements for impaired guests (designated drivers, taxis, lodging, etc.)
• Local or state law(s) related to providing alcohol

Of course, the best course of action is to make sure that parties are thrown responsibly, are done as a social (rather than business or commercial) event, and that the chances of sending drunk guests on the road are minimized. A good host will make sure that food is available, that a liquor supply under his or her control is cut-off and that impaired friends or relatives are prevented from endangering themselves or others. No holiday celebration should end up with a lawsuit.

Do I Need Flood Insurance?

The simplest way to answer this question may be to walk to the nearest mirror. If the person you see in the mirror owns any significant amount of property that can be damaged or destroyed by water, then you should seriously consider buying flood insurance. Most persons may buy coverage offered by the National Flood Insurance Program. If your community doesn't participate in the program, you'll have to look into coverage from private insurance companies. What's The Likelihood Of Suffering A Flood Loss?

The chances of your business, home or personal property being damaged by a flood depends primarily upon where you live. A flood loss also depends on other factors such as: how much of a flood warning you receive, the level of flood precautions that are taken by yourself (such as moving personal property from lower levels to higher levels), and the precautions taken by your community (such as the use of flood controls in construction standards or sandbagging threatened areas).

Since floods are related to weather conditions and tend to have widespread effects, your chances of a flood loss are significantly higher than experiencing many of the types of losses that are covered under your homeowner policy, such as fire or windstorms. Many people have the obsolete belief that flood insurance is only needed if you live in a flood prone area. I Live In A Flood Zone?!

If you have ever heard the term "flood zone," you may think that it refers to locations that are particularly vulnerable to flooding. The truth is that, wherever you live in the USA, you live in a flood zone. While your area may have a lower chance of flooding than a coastal area or a location situated near a body of water, your area could still experience flooding. A very dry part of the country can be susceptible to flash floods; hilly locations may be harmed by drainage; snowy locations may suffer from heavy snow thaw; other areas may suffer deluges or flooding due to a heavy rain season which has soaked the surrounding soil. So, if you've insured yourself against fire, wind and other causes of loss, it certainly makes sense to also protect yourself from the potential of a flood loss. Why Worry When Disaster Coverage Is Available?

You may believe that, even if you suffer from a flood, your loss may be taken care of when the government declares your location to be a disaster area. However, you're still taking a couple of large risks. First, your flooded locale may not be deemed a disaster area. Second, being designated as a disaster area is not a bargain. Disaster area status only gives citizens access to government disaster loans. IF you qualify for assistance, you have replaced insurance protection with an obligation to pay off a large, long-term loan. Is it worthwhile to gamble on an opportunity to pick up more debt? You'll find flood insurance to be a cheaper and much more valuable alternative. Don't Be "All Wet"

You don't have to leave yourself unprotected. Your agent, an insurance professional, can help you with detailed information on the National Flood Insurance Program. You can also ask for help in getting the coverage you need to "keep dry" and secure in the face of a flood.

One rite of summer is to enjoy fireworks. However, it’s important to think before setting off your first firecracker, sparkler, smoke-bomb or bottle rocket.

For all their fun, fireworks are capable of seriously injuring persons and property. If you do cause damage, are you insured? In most instances, if you carry a homeowners policy, you are protected. For instance, imagine you are setting off some fireworks in your driveway for your children and their friends. Suddenly, a sparkler you gave to a neighbor’s child violently flares up, burning her hand and face. Your policy could cover her injuries a couple of ways. If the injuries are minor, her medical treatment could be handled under the Medical Payments portion. However, if the child’s injuries are more serious and her parents sue, your policy’s liability portion should handle your legal defense as well as a legal judgment.

Here’s another example of a loss that could be covered. While setting off some bottle rockets, one takes off and smashes through a window of a house across the street. The rocket sets the home’s living room curtains on fire. The neighbor is able to put out the fire with a garden hose, but the result is thousands of dollars in damage caused by fire and water. Your policy should handle this damage.

Coverage Shortfalls

There are instances where your homeowner policy does not offer coverage. If it’s illegal for you to set off fireworks, this legal hurdle could result in any loss being excluded by the policy. Since a homeowner is meant to handle losses related to owning and living in a home, there’s no coverage for a person who uses their home for making, selling, storing or distributing fireworks. Any business activity involving fireworks is going to cause a big problem if a loss occurs.

Injuries to yourself or others in your household are not covered because Medical Payments and Liability coverage is designed to handle loss suffered by persons outside of your household. Also, if the injury was not an accident, there’s no coverage. Playfully tossing a firecracker or aiming a bottle rocket at another person could be considered intentional, even when no injury was intended.

So when dealing with fireworks, make sure they’re legal, that they’re used carefully and only for entertainment. Then your chances are good that any loss may also be covered.

Homeowner and other policies that protect private residences have, for most of their history, been written assuming that the property owner is an individual or married couple. Such policies define an "insured" or covered person as an individual, married couple or spouse of the individual listed on the policy. Recently, this assumption regarding "insured" is changing as it has become common for homes to be owned by trusts.

The change is prompted by another reality concerning homes. Besides use as a residence, a home is also often a primary financial asset. As property owners become more sensitive and savvy in handling their finances, the use of trusts to pass on property has expanded. A trust refers to any asset that is controlled or owned by an artificial entity, the trust agreement. Typically, the property owner becomes the trustee, having rights to use the home as a residence, but the legal ownership resides in the trust. The trust allows for tangible property to be passed along to heirs with much more for favorable tax treatment. However, there are consequences that affect insurance coverage and which should not be ignored.

If your home or personal property (furniture, furnishings, etc.) have been transferred into a trust, it is important to share this information with your insurance agent. Then you both may take steps to make sure that the insurance needs of both the trust and the property-users are covered. It is particularly important that liability protection remains intact.

Depending upon the insurer, your homeowner, auto and umbrella policies may have to be modified so that the trust arrangement is recognized and is protected by the policies. It may be that the policy wording already handles things by including trusts or trustees within the meaning of "insured." In other instances, endorsements may have to be added to include the proper additional insurable interest so that property and liability coverage expands to protect the property held in trust and the trustees.

The existence of a trust means you need to get an insurance professional involved to make sure you can still trust the protection of your various insurance policies.

Most homeowners recognize the importance having snug, dry home. Now there’s a reason to put more emphasis on keeping it dry….toxic mold. A certain form of mold, called Stachybotrys (pronounced stakki-botris), is appearing in more headlines. Unfortunately, the mold, which is capable of causing illness in humans, is also becoming a familiar topic in courtrooms.

Toxic mold, like other more common molds (such as penicillin), is found indoors and can grow on nearly any type of damp or wet surface including wood floors, carpeting, tiles, drywall, paneling, insulation, etc. The only conditions necessary for its formation is moisture, food (organic material) and time. Besides mold’s ability to physically damage a home (staining, warping, deterioration), the spores from this type of mold can become airborne, making people susceptible to developing allergic or respiratory symptoms. Research is ongoing to determine whether mold exposure may also cause more serious health problems.

Damage to a home or its occupants that is caused by toxic mold is typically excluded. Insurance policies are designed to handle accidental causes of loss and items such as mold infestation, rusting and rotting are seen as home maintenance issues. However, in one notorious court case, a family in Texas was awarded several million dollars because its insurer allegedly mishandled a loss, creating a condition that allowed the growth and spread of toxic mold.

Rather than be concerned over the possibility of insurance coverage, prevention is the best course of action. Inspect in and around your home, looking for indications of moisture. Correct any conditions that could cause moisture build-up such as leaky roofs or plumbing, condensation, leaking appliances, etc. Keep your home snug and dry and avoid a moldy problem.

Why Renters Don't Buy Insurance

People are renters for different reasons. Regardless whether renting is because of financial necessity or a lifestyle preference, renters often decide that insurance isn't necessary. Renters frequently choose not to insure for reasons such as:

• Insurance isn't necessary because there's no home, garage or similar property to worry about
• There's coverage automatically provided by my landlord, host or relative with whom I'm living
• I can't afford it
• I don't have enough possessions to insure
• There's little chance that anything will happen to my possessions

Busting Renters Insurance Myths

The only thing true about the above reasons for not getting renters insurance is that they can cause real misery from an uninsured loss. Renters need to consider the following:

• possessions are purchased over time. This fact makes it less obvious that a renter may own tens of thousands of dollars worth of property that needs to be insured
• Many belongings are very high-value. Renters should consider what jewelry they own and pay particular attention to their electronics situation (stereos, CDs, CD players, game systems, speakers, computers, etc.) Even modest living areas can hold lots of expensive property.
• Renters insurance is affordable, often well under $200 per year.
• Insurance policies carried by landlords typically offer little or no coverage for property that is owned by tenants and guests.
• The same things that can damage a building can damage the property in the building, particularly natural disasters and fires; so a building's contents are very vulnerable to loss

What about being sued?

Renters who don't carry insurance should remember that they also need protection for their legal obligations to others. What if you're on a softball team with your friends and you smash a line drive into the face of another player? Emergency treatment and cosmetic surgery is expensive.

If you rent and you don't have insurance…then you have a very good reason for contacting an insurance professional to get you covered….now!

What Is An Attractive Nuisance?

This is a term originated by a judge to describe property that attracts youngsters and, because of their dangerous nature, creates a special obligation to property owners. Examples are:

• swimming pools
• trampolines
• empty buildings
• appliances kept outside
• excavations
• construction materials

All of these can lure children onto property and they all have the potential to cause serious injury. Why Do Attractive Nuisances Create A Special Obligation?

A special obligation exists because of such property's child endangering nature. Children do not have the reasoning ability of adults. When an opportunity to have fun pops up, it's a rare child who thinks about the chance of being injured. A property owner with an attractive nuisance on his property cannot escape liability because of a trespassing child. When an attractive nuisance is involved, adults have to make a special effort to protect children from their blind sense of adventure or face the consequences. How Do You Handle Attractive Nuisances?

The answer is…do whatever it takes to prevent a child's access to the nuisance. Therefore, in order of their effectiveness:

1. Eliminate the nuisance:

Examples:

• have old appliances hauled to a junk yard
• tow old, non-running vehicles away
• get rid of construction materials immediately after a building project is complete

2. Secure the nuisance

Examples:

• take off doors or covers from large appliances awaiting garbage pickup
• keep sharp tools, especially power tools and equipment, locked away
• store construction materials in a garage or shed

3. Reduce the chance for injury from a nuisance

Examples:

• install a pool cover and have a locked fence to prevent access to pool
• do not allow younger children to use equipment such as trampolines
• make sure there's adult supervision of children using play equipment

If you're not certain about whether you have an attractive nuisance situation, discuss the situation with an insurance professional.

Vacant Or Unoccupied?

First, there IS a difference. Webster's Encyclopedic Unabridged Dictionary of the English Language has the following to say:

Unoccupied: without occupants, but not devoid of furniture or other furnishings.

Vacant: having no tenant or contents; empty, void.

The difference between the two is a matter of time and intent. While not being occupied is a temporary condition and an exception to a residence normally having occupants, vacancy generally represents abandonment of property. So what's the point? Well, either condition may affect your coverage under a typical homeowner policy. It is quite important to understand the consequences of either condition in order to keep your coverage intact. Peeking At A Homeowner Policy

Generally, a homeowner policy has a couple of areas that may be affected by a home's occupancy status: damage caused by freezing, or certain property and loss due to vandalism. Let's talk about them in detail.

A homeowner policy usually protects a home from any loss that is caused by a frozen:

• plumbing system
• heating system
• air conditioning system or
• appliance

Example 1: Fern Guddyson and her family leave their home in Minnesota in January. They'll spend the next 10 weeks in Miami because Fern is teaching a graduate course in Zen awareness at Palm Leaf University. During a bitter cold spell at their home at the end of March, the water line to their refrigerator (for its ice-maker) freezes and breaks. Later, when the line thaws, it overflows and, eventually, soaks all of the home's oak flooring and carpets. Fern makes a claim to her insurer when the family returns home from Miami. The insurance company's claims department rejects the claim when they find out the home was unoccupied for more than 30 days before the loss.

Unfortunately for the Guddysons, most homeowner policies will not cover freeze-related losses that occur during an extended period in which the home is either vacant OR unoccupied. But this loss of coverage can be avoided if the homeowner takes precautions to help avoid such losses. Precautions usually involve either draining any systems or appliances of water and shutting off the home's water supply, or by keeping the home heated during the absence. Freezing

A homeowner policy typically offers protection to a home that is damaged by acts of vandals. with an important exception. Let's visit the Guddysons again.

Example 2: Fern Guddyson and her family leave their home in Minnesota in January. Again, they'll be in Miami for the next 10 weeks while Fern gets her doctorate in surfing from Palm Leaf University. A week before the Guddysons return (in late March), a group of kids break out most of the windows in the home. They then take a variety of tools found in Mr. Guddyson's toolbox and smash doors, floors and walls. Fern makes a claim to her insurer when the family returns home from Miami. The insurance company's claims department estimates the damage and gives Fern a check to cover her loss.

Typically, vandalism losses are covered even during periods of extended unoccupancy. However, if the Guddysons had emptied their home of all furnishings and turned off the power for the time they were gone, the vandalism loss would not have been covered. Why Are Such Exclusions Necessary?

Homeowner policies contain such exclusions in order to avoid special loss situations. A vacated home becomes an attractive nuisance, often attracting acts of vandalism. If a home is to be vacated, it may be necessary to purchase dwelling fire coverage to protect the home. In regards to loss caused by freezing, insurers want to encourage homeowners to do a little planning in order to reduce or eliminate the chance that a system or appliance causes a loss. If an insured refuses to act responsibly toward their property, they risk the chance of an uninsured loss.

If you're facing a situation in which your home will be unoccupied or vacant for an extended period, talk to your agent and make sure you do whatever is necessary to preserve your full insurance protection.

Headlines Hit Home

Many Americans have been horrified and confused over the shootings which have occurred in schools nationwide the past several years, and the Columbine High School tragedy has been of particular concern. After having these events splashed over the airwaves and newspapers; the consequences of these actions have to be dealt with by the survivors. While citizens, authorities, social and psychological experts, gun opponents/proponents are all wondering why such things happen, the focus is beginning to shift to pointing fingers. Who's Responsible?

The shootings have created both human and financial consequences and armies of lawyers are being formed to hold someone financially accountable. Let's not oversimplify these events; there are elements that make them different from each other. The individuals involved and the particular circumstances that triggered each event are not similar enough to treat them in the same manner. However, the acts do have an important element in common. Since all of these acts have been performed by children, it may appear understandable that their parents are the first to be held responsible.

The first source that other parties look to for financial relief are insurance policies. In such instances, would the parents' homeowner policies respond to lawsuits over the actions of minors who injure or kill their schoolmates? The answer is…..it depends. What Do Homeowner Policies Intend To Cover?

Homeowner polices are called package polices because they offer coverage in two major sections. Section I protects the property that belongs to the policyholder such as his home, garage, storage sheds, household furnishings and even the increased living expenses created by the loss of use of such property. Section II provides coverage against the policyholder's legal responsibility for injuring other persons or damaging their property. While the shootings certainly involve substantial injuries and property damage, homeowner policies may not provide coverage.

Homeowner insurance policies intend to respond to events that are accidents. While the language differs among policies, generally, the premiums you are charged for this liability protection is based upon having to defend and make payments to injured parties because of losses that are neither intended nor foreseen by the policyholder. Of course, the particular loss details have a great deal to say about whether the event can be considered an accident or not. How the loss was caused, the age of the person causing it and other circumstances affect coverage. Are Shootings Covered?

The question of the hour is: will a homeowner policy pay for the financial consequences of a person shooting someone else? Surprisingly, nothing is clear cut. For instance, it could pay if the shooting involved a person who was defending himself or protecting another person. It may pay if a person was practicing on a gun range and a shot ricochets and injures another. It may even provide coverage if one person aims directly at another and fires a weapon, but the person holding the weapon is, say, a toddler.

Many homeowner policies define whom are considered to be mature individuals and, generally speaking, the age is 13 years or older. Acts involving both guns and persons who are this age or older are excluded from coverage under a homeowner policy. Why? Because such persons should be old enough to understand the extreme danger represented by guns. The choice in deploying a gun or similar weapons against other persons can rarely be considered accidental and, in most instances, are the full responsibility of the weapon-wielder.

But again, there can still be instances where a homeowner policy may be required to defend or pay for such losses, including instances:

• where a parent may be held to be indirectly responsible for the actions of a child
• where the shooter is found to be mentally impaired or is otherwise considered unable to have understood the nature of his or her actions
• where a court may interpret a policy as being applicable to a shooting.

The fact is, the question of insurance coverage for such horrible events is as confusing and complicated as why such events ever occur. Only the passage of time and legal findings have the chance to make this subject any clearer.

You should check your homeowners policy to make sure that your building and personal property is covered on a special form rather than a named peril basis. Named peril means that the policy insures against the sources of loss (perils) that are listed in the policy such as fire, earthquake or hail. Special form coverage protects property against any source of loss that is not specifically excluded. Under named peril coverage, the policyholder may have to prove to the insurer that a loss was caused by a listed peril. With special form coverage, the insurer can only deny a claim if it can prove that the source of loss is excluded.

Generally, a special form policy is preferable since it offers more coverage than a named peril policy.

Here are a few examples of losses where special form coverage made the difference and a claim was paid:

• A battery was left on a hardwood floor. When the battery acid leaked out, it spread to the point that it was necessary to replace a large section of the floor.
• An insured tipped over a bucket containing ammonia for soaking diapers. The solution ruined a room’s wall-to-wall carpet.
• A deer jumped through a picture window. It went wild in the house, denting walls and furnishings and bleeding as it ran. It eventually jumped through another window.
• A washing machine was running when its load of clothes became unbalanced. As the washer’s spin’s cycle began, it shook and "walked" from its position into a brand new water heater, poking a hole in the heater’s casing and breaking its glass liner.
• An insured was walking on the floor joists of his unfinished attic. The insured slipped off of the joists and fell through the living room ceiling, causing extensive damage.
• A two-year-old boy found a hammer and went on a spree through his parent's house, seriously damaging several plaster walls, a toilet bowl, wash basin, dressing table and other items.
• A bucket of paint was spilled on an insured's hardwood floors, getting into floor cracks and pores. It was necessary to replace much of the wood.
• Finally, an insured converted his oil furnace to gas without removing the home’s oil-input pipe. On its regularly scheduled day, an oil company tanker arrived and pumped 500 gallons of oil into the insured's basement.

Properly valuing your personal possessions is very important but can often be both tedious and difficult. However, the task is nearly impossible if you don't have good documentation of what you own.

The following list could be very helpful in identifying what you own and, more importantly, used as proof of loss in case disaster strikes such as a serious storm, theft, or fire. If you print and complete this list, make a couple of copies, keeping one or two at a location away from your home. If you also want to keep a copy at your home, use an insulated safe (small ones are sold for in-home storage of important papers). Another good location is to put a copy in a plastic bag and keep it in your freezer (which can offer extra protection for non-food items).

Besides listing what you own, it's also good to do the following:

• take pictures of and/or videotape your possessions
• keep your sales receipts
• keep your warranty information
• get appraisals and keep them current (appropriate for expensive property)

For items which you don't have receipts or product information, include information on when and where you bought the property.

It may seem like a lot of work, but you'll be happy to have this gold mine of information to assist your insurer in giving you protection against loss of your possessions. General Personal Property Inventory completed by______________________ Date completed____________________________

$__________Sofa, couches, etc.

$__________Chairs

$__________Tables, end tables, etc.

$__________Desks, secretaries

$__________Chests, cabinets

$__________Cupboards, buffet, etc.

$__________Lamps

$__________Pictures, wall hangings

$__________Clocks

$__________Decorations

$__________Books

$__________Draperies, curtains, blinds

$__________Rugs

$__________CD players, DVD players and accessories

$__________Radios

$__________Televisions

$__________VCRs, Camcorders

$__________Home entertainment accessories (speakers, digital equipment)

$__________Computers, scanners, copiers, monitors, printers, speakers

$__________Other computer accessories

$__________Table linens

$__________China, chinaware

$__________Crystal, glassware

$__________Kitchen appliances

$__________Small appliances

$__________Cookware

$__________Cutlery, utensils, etc.

$__________Beds, mattresses

$__________Dressers, vanities

$__________Bedding, blankets, linens

$__________Bath towels, linens

$__________Suits (men's, women's)

$__________Coats (men's, women's)

$__________Dresses

$__________Jackets, sweaters

$__________Skirts, slacks

$__________Shirts, blouses

$__________Hats, gloves

$__________Purses, billfolds

$__________Costume jewelry

$__________Robes, lounging wear

$__________Shoes, boots, slippers

$__________Luggage

$__________Sports equipment

$__________Miscellaneous effects

$__________TOTAL Valuables and Treasures

$__________Fine jewelry (list items separately at the bottom of the page)

$__________Valuable furs (list items separately at the bottom of the page)

$__________Art treasures

$__________Silver, silverware

$__________Camera equipment

$__________Guns and accessories

$__________Musical instruments

$__________Stamp collection

$__________Coin collection

$__________TOTAL

$__________GRAND TOTAL OF ALL ABOVE

List specific items and value below:

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

$__________ item__________

Check with your exchange student program coordinator to see what kinds of coverage are automatically provided for the child. Is there health insurance, travel insurance, special liability protection if the child should injure someone or someone's property? What and who exactly is covered and who is responsible for what? Exchange student "stuff"

An exchange student in your care who is under the age of 21 is automatically an insured under the homeowners policy as if the child were a relative child. Under your homeowners policy, the exchange student's "stuff" is covered while it is on your residence premises, or while away from the premises. Coverage away from the premises is normally limited to 10% of contents coverage, subject to a minimum limit of $1,000. Normally exchange students travel light, but review your coverage to make sure your limits are adequate if the student shows up with expensive racks of clothing and jewelry. Liability coverage that applies to your family also applies for damage and bodily injury done by an under 21 years of age exchange student.

If the exchange student is over the age of 21, then he or she is considered a guest. You can volunteer to include guest's "stuff" while on your residence premises or while you and the guest are at some other residence premises. However, sometimes it is difficult to determine whether the older exchange student is a guest or a tenant - someone who is paying you a reasonable rent for staying in your home. These are questions for a qualified personal lines agent who can help you design the proper insurance package to cover your particular situation. Exchange students driving

First, make sure that the exchange student is permitted to drive under the rules of the exchange student program. If the student may drive, make sure that he/she has a drivers license that is valid in your state. Contact your local motor vehicle department for advice.

Anyone, with your permission, who drives your insured vehicles is normally covered for liability insurance for damage that the permitted driver does to other property and people, subject to the limits of insurance under the Personal Automobile Policy Form that is available in most states. Coverage to damage done to your vehicle, above any deductible, is also available when you have the appropriate collision and comprehensive coverages. Please check with a qualified automobile insurance agent after reading this and before your exchange student arrives. Virtually every state has its own special state-mandated endorsement that will expand or limit the coverage we describe here. Companies may use different forms that give broader or even more limited coverage than the Personal Automobile Policy Form.

If you expressly forbid the exchange student to drive your vehicle and the student does anyway, you may not have coverage under the policy, but you may still be found liable under a court of law - perhaps for improper supervision of a minor. Permission to use the vehicle in some policy forms must come from you, not your own child, or even Uncle Fred.

Medical payments coverage will apply to the exchange student who is injured in an accident while occupying or driving your car with your permission.

Discourage any exchange student who is a minor from purchasing a car, truck, motorcycle, RV, boat, moped, scooter or any other vehicle. An exchange student is a foreign national, on a temporary visa, a minor, and only in your temporary care. If the vehicle is purchased anyway, discuss the event with legal counsel retained by the exchange student program, or if such counsel is not available, discuss with your own attorney. Do your best to impound the vehicle until you can straighten out the legalities.

Most exchange students are great kids, but like any other children, they have diverse personalities and can be influenced by the "wrong crowd." Remember, while he or she is in your care -- you are responsible for the exchange student's actions and well being. Health insurance

Check with your exchange student program. Most programs have blanket coverage for exchange students. If not, discuss with the parents of the exchange student, before the student arrives, what coverage the child will have while in the USA. If coverage is not available, you can often arrange for short-term individual policies from an individual health insurance carrier. You normally cannot add exchange students to your group health or individual health insurance policy.

Insurance policies continue to be written conservatively. In some instances, they still reflect situations that were prominent decades ago. One example is the way that policies define the persons it insures. Most policies are designed to cover:

• single individuals
• traditional married couples
• traditional family - husband, wife, children
• relatives sharing the same household

However, when two or more unrelated individuals live in the same residence and/or share the use of the same vehicle(s), the coverage situation becomes confused. It’s still common for either policy wording or company underwriting rules to limit or bar convenient coverage for an unrelated person. Why one or more unrelated persons are together is their business; the relevant consideration is how are their insurance needs met?

Homeowners Insurance

If you share an apartment or rent a home and each of you retains separate ownership of your property, each of you should carry your own tenant's policy. If you own the home jointly, but maintain separate ownership of your personal property, you might consider the following strategy:

1. Name one individual as the "named insured" on the policy. The named insured is covered for his interest in the dwelling and personal property (such as clothes, appliances, furniture, etc.). Further, the named insured is also protected against losses involving his legal liability to others including payments for medical services.

2. Add the other owners as additional insureds - residence premises. The other owners then will have coverage for their interest in the dwelling, premises liability and medical payments to others.

3. Finally, each additional insured should buy their own tenant's policy to cover their personal property.

Auto Insurance

If each person has his or her own vehicle, the insurance question couldn't be simpler. Each vehicle should be insured by the individual owner. However, if two unrelated people share ownership of a vehicle, the policy covering the car should have a joint coverage endorsement added to it. A joint coverage endorsement (which may have various names) should result in giving the co-owners the same coverage as if they were related. (This endorsement is not available in all states.) The same strategy may be used when only one person owns the household's vehicle. The other person (who does not have his/her own car) may be added via a joint coverage endorsement. However, other options may exist such as (depending upon the insurer): the non-owner resident may be added to the owner's policy as a part-time driver or the other person might purchase a "non-owned" auto policy to get automobile coverage.

The insurance industry is making halting steps to acknowledge a broader range of ownership arrangements, including policy forms that allow policies to reflect domestic partnerships. How can you be sure about whether your interests are properly covered? Easy…speak to an insurance professional; discuss your situation in detail and then determine the best way to structure your policies.

There's Just No Time

Oh the demands on you…a job, family, your hobbies, volunteer work, your children's school and recreational obligations, the lawn and garden, house cleaning, repairs and on and on. Like many of your peers, you might find that you just don't have the time to get all of it done. Also, like many of your friends and neighbors, you may be "outsourcing" some of your responsibilities. Everything Old Is New Again

In days of old, a mark of the wealthy was to have most of your work done by servants. While this is still true of the very wealthy; a newer development is that this is now becoming a mark of the middle-class. Increasingly, more people are hiring folks to either assist or takeover duties such as:

• child-rearing
• gardening
• decorating
• housecleaning
• laundry
• grocery shopping
• personal errands
• child-transport
• minor home repairs
• lawn maintenance
• meal preparation
• exercise

While such help used to fall under the auspices of butlers, maids and nannies, today, individual specialists are providing similar services on either a part-time or full-time basis. Personal Services and Personal Liability

When personal services are provided by a commercial business, such as a limousine or laundry service or a lawn care company, there's generally no need to worry about being held liable for injury to another person or their property.

Example: The Burlies never had time to take care of their lawn. As their grass grew thinner and the weeds spread, Mr. Burlie decided to sign-up for the "Green Thumb" package from Lucky's Lawn Services. One afternoon, a Lucky Lawn specialist arrived at the Burlie's home, unraveled a hose and began to spray a weedkiller. A few minutes later, Stevie, who lived several homes away from the Burlies, came rushing by on his skates. Stevie didn't see the hose until it tangled his wheels and sent him headlong onto the cement curb. In this instance, Lucky's Lawn Services would be responsible for the injuries.

However, as individuals are hired by Joe and Jane America to perform personal services, the responsibility for injuring other people or damaging the property of others may begin to fall upon Joe and Jane. In these cases, will Joe and Jane have any help in paying for damages or injuries?. Homeowners Insurance To The Rescue

A person who employs the services of another may be held legally liable should the "employee" cause an accident. Can the average person who is guilty of nothing more than trying to make their lives a little less hectic depend upon their homeowners insurance for protection? Well, coverage depends upon the details surrounding an event. Generally a homeowners policy will exclude coverage for losses that are related to the covered person's (insured's) business or when other coverage, such as workers compensation or disability insurance, should apply to the loss.

Example: Molly Kelp really likes her neighbors' son, Peter, who is home from college. Molly knows that Peter is struggling for money to keep attending school, so she occasionally hires him to do jobs around her home. One day, she asks him to trim the branches of a tree that is in the front of her home. The branches are low enough to disturb traffic in the street. Peter jumps down from the ladder he's using for the job at the same time that a car is passing by. The ladder tips over onto the car's hood and the surprised driver swerves off the street and into the front of another neighbor's home. In this case, Molly's homeowner policy may apply to the damages caused by Peter. Why? Because the work was strictly related to Molly's use of her residence. If Peter caused an accident while carrying a ladder to paint Molly's law office which is next door to her home; coverage would be excluded. Do Your "Homework" On Personal Services

If you're not sure about what happens when a person you hire causes a loss, you need to do your homework. Discuss the details with an insurance professional and bring a copy of your insurance policy. Between the two of you, you should be able to make sure that your needs are covered.

Face the Coverage Facts

The majority of your coverage concerns are found in our consumer article titled "Which Homeowners Policy is Right for Me?" As a lucky owner of a timeshare arrangement, you may have a special coverage need. The insurance world has a tendency to focus on providing coverage for the most common needs. Naturally, unusual situations result in coverage gaps and owning a timeshare is such a gap. While insurance is readily available to handle individually owned seasonal or secondary residences, buildings, vacant land, or personal property; the common timeshare arrangement may not be handled by basic and/or optional homeowner coverage forms. Why Do Timeshare Arrangements Cause Coverage Problems?

Coverage gaps may exist because typical timeshare arrangements involve:

• real property with multiple owners
• living units that are often furnished with personal property that may be jointly or severally owned
• living units which are occupied by several individuals or families who have control of all of the property during their time of occupancy
• special agreements or stipulations that govern the property.

All of the above circumstances make it difficult to find coverage since standard policy forms are not constructed or priced to handle unusual or complex situations. All the Right (Coverage) Moves

Taking care of your coverage needs calls upon the quick involvement of an insurance professional. Here are some steps you should consider when you discuss your situation:

1. Bring a copy of all the residence related paperwork. The paperwork should include a valid contract that describes your ownership interest and obligations in the timeshare property.

2. Be open to the possibility that you may need to buy more than one policy to cover the jointly owned property, any personal property that's located at the residence, the joint liability exposure and any special assessments or liability assumptions agreed to under any contract.

3. Discuss the coordination needed to make sure that the coverage needs of all of the owners fit together so that no gaps exist when initially purchasing coverage. Further coordination will be necessary to make sure that, as circumstances change, the coverage is reviewed to make sure that it remains adequate.

4. Be flexible. Proper coverage may have to be provided by a specially modified personal insurance contract or even some form of commercial coverage may be necessary.

5. Take the time to ask that any coverage mentioned during a meeting with a qualified insurance professional be fully explained to you.

It's best not to generalize because coverage needs can vary substantially from one arrangement to the next. Your best bet is to discuss your current coverage and your coverage needs with a qualified agent in order to make sure that you're protected adequately and affordably.

What kind of home? You may not be looking at the correct article. This is the right place if…

You own a home (free standing, not rented, not a mobile home i.e.: the home is permanently attached to and part of the foundation).

Or,

You own a town-home (not a condominium or co-op or time share). Perhaps this town home is attached to another residence, perhaps not. I own the land that this town home sits on, but I am part of a town-home community)

See "I own or rent a trailer, manufactured housing, or double-wide..."

See Condominium or Co-op? Your Insurance Needs are Different

I Own a Time-Share in Addition to Having Another Residence...

Many companies have either their own Homeowners policy form or have endorsements to standard policy forms that help distinguish them from the competition. Some companies like new, high-valued homes, some companies do well with older or historic preservation homes. Others are comfortable with country homes or old farm homes and some don't like the city. It pays to shop around, both for the best coverage and for a company who likes homes in your area.

Find a company that wants to insure your home. If the company and agency already has a customer base in your area, consider them first. They understand how to insure homes like yours. This agency or company may not always have the cheapest policy, but they may have the best combination of coverage, price, service and claims expertise for your particular needs.

• Named causes of loss coverage is just that. The policy only covers for certain kinds of causes of loss to your property. You must prove to the company that one of the covered causes damaged your property.
• Risks of physical loss covers all causes of loss except those that are excluded. The company must prove that one of the excluded causes of loss damaged your building.

Many companies offer risks of physical loss coverage for your buildings and named causes of loss coverage for your "stuff". Other companies will offer risks of physical loss coverage for virtually all of your covered property. Risks of physical loss costs more, but here are some claims that would not be covered under named causes of loss policies:

• The washing machine in the spin cycle danced across the room and broke the water heater, cascading water throughout the home.
• A guest injured herself and bled all over the couch and carpet.
• While the insured cleaned the imported crystal chandelier, the chandelier fell, shattering into pieces.
• While working on the attic floor joists, the insured slipped and put his foot through the ceiling.
• A two year old boy went on a rampage with a hammer, smashing the bathroom toilet, sink, walls etc...
• The insured dropped a storm window. It cascaded through the home, down the stairs, damaging walls along the way.
• The insured was cleaning the bowling ball in the bathroom sink - the bowling ball slipped and shattered the sink.
• The insured's lawnmower kicked a rock through the exterior air conditioner.
• The insured slipped and threw a full paint can into the room; the spray hit virtually everything in the room.
• Freezing and thawing of ice on the roof caused a break in the wall and water damage to the interior of the home

The policy name for risks of physical loss coverage for buildings is often referred to as Homeowners form 3. To add risks of physical loss to personal property under form 3, you must have the Homeowners 15 endorsement. Some companies sell a Homeowners form 5 which does the same thing as the combined Homeowners 3 plus the Homeowners 15 endorsement. Other companies have their own risks of physical loss forms they call Special, Gold, Executive etc. Not everyone will qualify for risks of physical loss, but most companies sell the coverage.

NOTE: Your state may have restrictions or natural disaster cause of loss problems. Coastal states face wind problems. California, and certain Midwestern areas have severe earthquake problems. Some Western states have brush fire problems. Other areas face hail damage. Each state and company has its own rates and philosophy on how it will insure these common causes of loss. Check around.

Homeowners 8

• Insures for the same causes of loss as the Homeowners 2 form.
• Designed for older homes. Older homes generally were built with more expensive and/or exotic materials. You could not build most turn of the century homes today for any price.
• Contains no coinsurance penalty. You and the company agree on a maximum coverage limit if the building burns to the ground. NOTE: in most states the company only has to pay for the actual cost to repair or replace, so if the building costs less to rebuild than the limit of insurance, only the cost to rebuild is paid.
• Not all companies will write the Homeowners 8. Some states do not permit the sale of this policy.

• Coverage for your building.
  • You work with the agent to establish the replacement cost of your home.
  • You must insure to 80 or 90% of replacement value to avoid any kind of "under-insurance" penalty if you have a loss. These penalties can include reduced payment, or change from payment on a replacement cost basis to actual cash value. Actual cash value means depreciation. Roofs depreciate over 20 years. A 10 year old roof is 50% depreciated. Do you want only 50% of your repair bill paid? No. Work with your agent to make sure you insure to value.
  • Ask your agent if a guaranteed replacement value clause in the policy is available. The Guaranteed replacement value clause says that coinsurance will not be a factor if a properly prepared replacement cost valuation is submitted at the same time the policy application is submitted, provided this valuation is updated each year after.
• Coverage for your outbuildings - garages, sheds, barns, cabanas - are usually covered as a percent (10-30%) of your building limit of insurance. Normally these limits are adequate for the average 2 car garage, but not for carriage houses, three car garages or barns. You can increase the limits of insurance.
• Coverage for personal property ("stuff") is usually 50-75% of your building limit. Again, this may be adequate for the average homeowner, but are you average? How much stuff do you own? Is your stuff new - is it of superior quality?
• Additional living expense coverage is usually a percent of your building limit of insurance (20-40% or even a "no limit" form commonly called actual loss sustained).
  • Additional living expenses covers the additional cost of temporary housing, food and other increased costs of living when you are forced from your home by a fire or other covered cause of loss.
  • If you have a tenant, the homeowners form can cover your loss of rents if rent payments (by contract) do not continue after a covered loss.
  • For most customers, the limit of coverage provided by the standard policy will be adequate, but if your home will take a long time to repair or the loss occurs in the dead of winter, you may not have enough to pay the extra living expenses.
  • If you are in a disaster prone area (tornadoes, hurricanes, earthquakes, wildfires), we have seen recent occurrences where it has taken 2-3 times the normal time to repair property because materials and workers were overwhelmed with work or unavailable.
  • Actual loss sustained coverage is best, for there is no limit to worry about.
• Endorsements: Sump pump, ordinance or law, business in the home. There are literally hundreds of endorsements companies make available to provide additional coverage not found in the standard homeowners policy. This is where you need a good agent who specializes in personal lines insurance. Let the agent ask you a lot of questions. The agent needs answers to build the right policy for you. Homeowners policies are not cookie-cutter forms. Every family's needs differ and a good agent can help you design the correct plan for you.
• Theft limitations. This brief article is not the forum to discuss every limitation and exclusion under the Homeowners form. However, you need to know that certain "target" items have limited coverage for theft. The limit shown is the average theft limit in the market. Your company may provide less or more. Increase coverage by endorsement to the policy or through a personal article floater policy. (See Click here for information on insuring jewelry, furs and other high valued items
  • Jewelry and gems ($1,000)
  • Furs ($1,000)
  • Gold, silverware, pewterware ($2,500)
  • Guns ($2,000)
  • Building supplies - no coverage for theft
• Other Property limitations. The following property is subject to certain maximum limits of coverage. The limit shown is the average limit of insurance available in the market. Your company may provide less or more. Increase coverage for most by endorsement to the policy.
  • Electronics used in an auto ($1,000)
  • Money ($200) Including coin collections - face value only.
  • Stamps ($1,000)
  • Business personal property ($2,500 on, $250 off premises)
  • Other than boat trailers ($1,000)
  • Boat trailers ($1,000)
  • Boats - anything bigger or more valuable than a canoe - purchase a separate boat or yacht policy.
  • Credit card forgery ($500)
  • Fire department service charge ($500)
• Fine arts, antiques, Persian rugs, hummels and other collections should be appraised and listed separately in a personal articles floater or endorsement.
• Your personal property "stuff" can be covered for replacement cost. That five year old refrigerator that is only worth $100 but would cost $600 to replace could be covered for $600 for this endorsement. Ask for replacement cost contents coverage.
• Liability coverages are usually identical from form to form, however some companies will have special endorsements to improve coverage. We recommend that you always ask your agent to quote you an umbrella liability policy (improves coverage and increases liability insurance limits to $1,000,000 or more).
  • Liability covers you for your negligence in injuring other people or property on your premises or through the actions of many of your hobbies.
  • The policy also provides defense coverage, including hiring and paying for a lawyer (if necessary) and paying most court costs.
  • Covered claims include: slips and falls; baseball beans the neighbors child; you hit the foursome in front with your errant hook shot; your lawnmower spits out a rock into traffic and blasts through a car window, injuring the driver and the car.
  • Homeowners insurance does not, however, provide you any car insurance for any car you drive. High limits of insurance are recommended, and again, you should ask your agent about an umbrella policy to increase your coverage to $1,000,000 or more.
• Why high limits of liability insurance? Anyone can sue for anything and for any amount.
  • If your policy covers you for $100,000 liability insurance and you are sued for $200,000, your insurance company will advise you that you need to hire a lawyer at your own expense.
  • If the insurance company pays out the $100,000, it's obligation is done, but the lawsuit may not be over. Courts are backed up. The high cost, whether good or bad, of lawsuits, court fees and lawyers is not exaggerated.
  • The injured party may not have to pay a dime in attorney's fees until the lawsuit is won. You don't have that option. Your defense lawyer will want to be paid from the day of hire, often for each hour worked - even if you eventually lose the case.
• Medical payments coverage is for minor injuries to people other than residents of the household. You don't have to be sued or be negligent.
  • Example: Aunt Bertha from 200 miles away comes to visit for a few days. The day she arrives she slips on the stairs and breaks a hip.
  • The insurance company will pay up to the medical payments limit ($1,000 - $10,000 normally) for the medical expenses incurred. After the medical payments limit is used up, you must be negligent and/or sued by the injured person.

Deductibles save money. Combine your auto and home insurance with the same company. Many companies offer discounts on both auto and home when you insure them together (not available in all states). Some companies offer combination auto/home policies which usually provide superior coverage at a lower price than if you were to cobble all the coverages together using many policies (not available in all states).

Here we continue our brief discussion of typical coverages found in a homeowner policy. Be sure to see Part One of this topic.

In Part One, we discussed the homeowner policy's main sections for protecting the buildings and structures you may own (and which are used for residential purposes).. In Part Two, we discuss coverages D, which is also a property coverage; as well as coverages E and F which involve injuries to people. Coverage D--Loss of Use

This provides reimbursement for the cost of additional living expenses while your home is being repaired due to a covered cause of loss. Additional expenses normally include food, housing, and transportation. However, the expenses must exceed what your family normally incurs. Coverage E--Personal Liability

This section provides coverage if you are found legally liable for causing property damage or physical injury. Protection includes paying for your defense costs and any resulting judgment for covered incidents. Check with your agent for specific coverages since certain incidents are excluded from coverage. Coverage F--Medical Payments

This coverage provides immediate rapid reimbursement for small injuries to guests in your home. This coverage does not apply to resident members of the family. For example, if your child and your neighbor's child are both slightly injured while playing and need to go to the emergency room, this coverage will pay for your neighbor's expenses but not for your own child. Keep in mind that most coverages are subject to a deductible and have conditions and exclusions.

This is a brief overview of homeowners insurance. All of the coverage provided by the homeowners policy is subject to various limitations such as exclusions, policy limits, basis of coverage and deductibles. Further, the policy has a number of other conditions and duties which affect coverage. It's important that you discuss the details of coverage and any other insurance questions with your insurance agent. If you missed it, please read Part One of this topic which covers other typical homeowner coverages.

If you take the time to read your homeowners insurance policy, you should find at least six different sections of coverage. The names of the coverages may vary by insurance company, but they typically are referred to as Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability and Medical Payments coverages. These coverages are usually presented as sections of the policy and are often labeled Coverages A through F. In Part One, we discuss coverages A, B, and C, which protect property. Coverage A--Dwelling

The homeowner policy's first coverage section protects your house and any attached structures, such as garages, decks or fences. The typical policy covers your home when it is damaged by most common hazards (also referred to as perils or causes of loss) including fires or storms.

However, the following causes of loss are usually excluded from coverage under the homeowners policy:

Earthquake

Flood

Faulty maintenance

Damage from insects or vermin

Wear and tear, gradual damage or deterioration Coverage B--Other Structures

This coverage section protects structures that are not attached to the home, such as a detached garage, storage or utility shed, playground equipment and swimming pools. Coverage C--Personal Property

This covers your possessions, whether they are at your home or away with you on vacation. Personal property is often covered on a named peril basis. This means that only the causes of loss listed in the policy section are covered. The coverage is also subject to limitations and exclusions. Types of property having significant value, such as jewelry, fine arts, collectibles, etc., may require special protection. Talk to your agent about scheduling (adding ) coverage on a floater which broadens and extends coverage for higher value possessions. Actual Cash Value vs. Replacement Cost

Coverage under sections A and B is usually granted on either an actual cash value or a replacement cost basis. Actual cash value is defined as replacement cost minus depreciation. Replacement cost is the actual cost to replace the structure, regardless of depreciation. Check your policy to see which type of coverage you have. Coverage under section C is usually provided on an actual cash basis. However, your agent may be able to add replacement cost to your possessions just like that found in Coverage A.

Remember that this is merely an introduction to complex policy coverages. Be sure to contact your agent for detailed insurance information. Please watch for Part Two of this topic which discusses other, typical homeowner policy coverages.

Making sure that your condo or co-op is properly covered begins with a thorough reading of your condo or co-op documents (i.e., by-laws, provisions, regulations, etc.) It may help to have your agent review the papers, paying close attention to items such as:

What property is your responsibility to insure - the internal walls, appliances, your detached garage? What is the potential for loss assessments? Does the association or corporation insure common property at its replacement value? What is the association's deductible? Are you obligated to add any extra coverages or limits?

Next, be aware that your coverage typically comes in two forms. "Named causes of loss coverage" only covers the causes of loss specified. You must prove to the company that a covered cause damaged your property. "Risks of physical loss" covers all causes of loss except those that are excluded. The company must prove an ineligible cause of loss damaged your property. Risks of physical loss coverage usually applies to real property and named causes of loss coverage protects personal property. The former type costs more due to such policies typically covering a wider range of losses.

Regardless of the coverage type, condo/co-op policies generally cover the following:

Real property: coverage for the structural part of the condominium or co-op you individually own such as interior walls, appliances, fixtures, plumbing, ductwork, wiring, carpeting, flooring, possibly private garages, and permanent improvements you make to the property.

Personal property: possessions that are portable such as clothing, furniture, toys, books, objects of art, home electronics, computers, etc.

Loss assessment: required contributions that members make for the repair or replacement of property that’s owned in common.

Additional living expense: covers the additional cost of temporary housing, food and other increased costs of living when you are forced from your condominium or co-op by a fire or other covered cause of loss.

Liability coverages: covers you for your negligence in injuring other people or property on your premises (those accidents for which the condo association is not responsible) or through actions related to many of your hobbies. The policy also provides defense coverage, including hiring and paying for a lawyer (if necessary) and paying most court costs.

Medical payments: coverage is for minor injuries to people other than residents of the household and the payment does not require a lawsuit.

Keep in touch with an insurance professional during such trying times. They’re already committed to providing genuine help.

Most companies protect renters by using a homeowner policy that is designed especially for tenants. Typical policies cover your possessions for common causes of loss, additional living expenses related to making other living arrangements, medical expenses for treating people injured on your premises and, of course, lawsuits.

Protection under the standard tenants policy is on an actual cash value basis (item’s replacement cost less depreciation). Example: Stewart’s kitchen catches fire and his five year old refrigerator is destroyed. A new model of the refrigerator costs $750. His insurance company pays him $95, the difference being five years of deteriorating value. Most companies offer coverage on a replacement cost basis if you purchase a separate endorsement.

A typical tenant policy provides a limit equal to 20% of your contents insurance limit. If your contents limit is $15,000, then your additional living expenses limit will be $3,000.

Certain types of property are quite vulnerable to being stolen, therefore very limited coverage is available for items such as jewelry, furs, gems, gold, silverware, pewterware, money, securities, guns and accessories. Protection can be increased by adding additional coverage to the tenant policy or by purchasing a personal article floater policy.

Liability insurance covers you for damage you cause to others or their property. The policy also provides for the cost of a lawyer (if necessary) and most court costs. Examples of liability claims include: slips and falls; beaning a neighbor’s child with a baseball; hitting a golfer with your errant hook shot; or a friend breaking her hip when she trips on a skateboard your child left on the stairs.

In part 1, we discussed the problems that may lead to ice dams. In this part we discuss a different physical source of loss; but first let's look at an important legal responsibility created by the winter season. Creating A Clear Liability

Snow doesn't show favoritism. Instead of conveniently falling onto unused areas, it covers homes, sidewalks, driveways, roadways and everything else. As a responsible homeowner you need to arrange to make the travel ways on your property safe. This calls for clearing your walkways of snow and ice. It is also important to clear your property of items such as rakes, shovels, tools, toys and similar items. Remember that it takes only a small amount of snow to hide items that, during clear conditions, are easily seen and avoided. So make sure that you move such property and make repairs to uneven or cracked pavement. Keep in mind that clearing walkways (including stairs) is an invitation for pedestrians to use the path. So, once you clear an area, make sure that you keep it clear, especially from ice. Also, don't create piles of snow that can obscure either a driver's or a pedestrian's view. Finally, be sure that your property is safe for children who are enjoying winter. Don't allow children to slide around without being aware of pedestrians or motorized traffic and don't let anyone throw snow or iceballs at cars.

Don't forget the inside of your home. Visitors should be kept safe from harm by making sure you keep insides stairs and floors clear of slippery water. Keep things dry and consider providing mats that provide good traction and an area where folks can clear snow and ice from their shoes or boots. Firing Up A Hearty Loss

Do you own a fireplace, woodburning stove or portable heater? What about a gas or electric furnace? If so, you need to take steps to make sure that they are safe and used properly.

Have your furnace inspected to make sure that it will operate properly in cold weather. Clean filters and vents will go a long way to keep your furnace a source or warmth rather than a cause of a fire loss. An inspection should also make certain that your furnace is not a source for dangerous carbon monoxide buildup.

Fireplaces and woodstoves should also be inspected and, if necessary, thoroughly cleaned. A byproduct of burning wood, creosote, builds up in chimney and stove flues very quickly. Even a single wood-burning season could produce enough buildup to create a fire or severe smoke hazard. Don't do the inspection yourself. It's worth the cost to have a professional inspect and clean your fireplace or stove. Also, make sure that you don't burn soft wood or paper. Using anything other than hard woods exposes your fireplace or stove to quicker creosote buildup (soft wood) or more intense heat (paper) which could clog or contribute to cracking a flue or liner.

Be very careful with the use of portable heaters. Depending upon the type, they can be prone to malfunction or could be a hazardous source of burns, especially for children. Further, many types can be easily tipped with the combination of heat source and fuels, creating a serious fire hazard.

Finally, make sure you have fire/smoke and carbon monoxide detectors properly installed and in good working order. Test them and put in new batteries. Small expense; big payoff.

As always, an insurance professional is a valuable source of safety and insurance information. Don't hesitate to contact an agent to discuss your questions. If you haven't had the chance, please be sure to read part 1 of "Is Your Home Winter Ready" which discusses ice dams.

If you live in a climate that includes a cold winter season, you probably know that winter creates special challenges for homeowners. Regardless of the amount and types of insurance you carry, it makes more sense to avoid a loss rather than to have to replace or repair your property. We're going to discuss ice dams in part 1 and then talk about winter heating and liability situations in part 2. Dang those ice dams

Ice dam describes the formation of ice along a roof's edge. It occurs when snow accumulates on a roof and then there is a long period of cold weather. Under these conditions, an area of the roof, warmed by interior heat, melts the snow and the water runs down until it meets a colder area. The water first freezes, creating a dam. The dam of ice blocks additional water and the pooling water backs up and finds pathways into a home's interior. If the amount of water is significant, it can cause deterioration and decay to interior wood and plaster. Once an ice dam has forced water to find ways to escape inside a home, the roof becomes more susceptible to future ice dams and water damage.

Ice dams are often blamed on clogged gutters and downspouts. In some instances, this occurence can be a source of an ice dam. Another common scapegoat is the perception of a faulty roof design or roofing materials. However, roofing systems are designed to shed water, not to protect a home from water that collects and pools. Water is insidious and, given sufficient volume and time, it will defeat the newest, best designed roof and find ways into a home. Rather than the result of clogged gutters or faulty roofing, ice dams are most frequently caused by too much heat escaping outside and warming the roof. The warming occurs unevenly with the warmer area at the higher part of the roof melting the snow and then the cooler, lower area, particularly the roof edge, permitting the water to refreeze and then accumulate. The heated roof is usually caused by poor insulation or improper ventilation. Inadequate insulation lets too much heat escape into the attic and this creates a warmer roof. Improper ventilation creates moisture and heat buildup due to the lack of air movement. How to detect a problem?

Compare the way the snow is melting from the living area of your home with how snow appears on the roof over an unheated area such as a garage or shed.

Compare how your snow covered roof looks with your neighbors' homes.

Look for icicles. These are pretty to look at but heavy icicle buildup means that interior heat is melting a lot of snow and may contribute to ice dams. How to prevent ice dams.

There are a number of ways to help prevent ice dams:

• Clear excess snow from the roof. However, in order to minimize damage to the roof and roofing, hire a professional to remove the snow.
• Add rubberized or special roofing adhesives to help prevent pooled water on the roof from finding entry into the home's interior. Be careful with this since it is just a temporary measure.
• Inspect the attic and roof for cracks, holes or joints which permit warm air to escape to the roof, and seal or repair these areas.
• Add the recommended amount of insulation to the attic and exterior walls of your home to minimize escaping heat (this also reduces your heating costs).
• Reduce your home's thermostat and throw on warmer clothing during extended cold spells.
• Clear your gutters and downspouts and make sure that they are installed properly to let water escape from the roof.

How about installing heating cables on your roof? This remains a popular alternative for preventing ice dams, but it's a debatable method. These devices may only result in ice dams forming above the heated area. Further, the cables use more energy and often deteriorate, becoming brittle due to age and exposure to cold weather.

If you have more questions, an insurance professional is your logical choice to discuss your concerns and coverage needs. Remember to see part 2 of "Is Your Home Winter Ready?"

Basic homeowner policies provide very limited coverage for property such as jewelry. The reason for this is that jewelry is high-valued (especially in relation to its size), is easily lost or destroyed and is vulnerable to theft and fraud. If your jewelry holdings are modest (say just a few hundred dollars), perhaps the limited coverage provided by a basic policy is adequate. However, when high values are involved, consider buying special insurance coverage. A few options are available such as buying supplemental insurance that is attached to your homeowners or tenant's policy or purchasing a special, separate jewelry policy.

The important step is to discuss the coverage options with an insurance professional. Discussing the coverage will allow you to understand how a loss will be paid. Does the coverage consider values that increase over time? Does it cover mysterious disappearance (when you know the property is gone, but can't pinpoint when and how the property was lost) and other causes of loss, or just fire and theft? Discussing the coverage also helps you understand the steps you must take to make sure that you keep the maximum coverage in force and whether the coverage you receive is worth the additional price.

Documenting The Jewelry's Value

If the jewelry has just been purchased, a store receipt or certificate should establish the insured value. However, as time passes or circumstances change, the insured value should be reevaluated, perhaps by seeking an appraisal. Getting an appraisal that affirms your jewelry's current value is an excellent way to assure that your property is properly protected. Of course, make sure that you work with a competent appraiser (check their credentials and number of years of experience). It is also helpful to talk to a potential appraiser. Does she seem to have expertise? How willing and able is she to explain her work? There are several professional jewelry and appraisal associations that can give you information on appraisers and appraising methods. All of these items are important, especially since you have to pay a fee for an appraiser's services.

Handle With Care

Once you're certain about the value of your jewelry and the adequacy of its insurance coverage, you need to properly handle your jewelry. After all, who wants to actually file a claim? If you own a significant amount of expensive jewelry you may want to look into other precautions such as:

• Get new appraisals every two or three years, sending a copy to your insurer
• Take photos of your jewelry from several angles; again, share copies with your agent or insurance company
• Consider a quality in-home security system, including a hidden vault or storage area
• Take care on where and when your jewelry is worn to try to avoid becoming a theft target
• Keep original receipts and all appraisals, especially if they demonstrate that the jewelry's value is appreciating
• Ask your jeweler whether they have access to "Gemprint," a jewelry identification system that documents a jewel's distinctive markings much in the manner of fingerprinting.

Again, your first step is to talk to an insurance professional since he or she shares your concern that you have the protection you need at a price you can afford.

Coins Bear Interest (pun is intended)

The technical term for the study and appreciation of coins, currency, medals and similar property; is called numismatics; but let's use coin collecting instead. Collecting coins is one of our country's oldest hobbies and it is still quite popular. Coin collecting is particularly interesting because it can involve a hobbyist in geography, culture, history, precious metals, economics, monetary laws, politics and customs on either a national or international basis. It also touches upon the arts and sciences as it involves engraving, designing and even metallurgy. What Coverage Exists Under My Homeowners Insurance?

This hobby has a big impact on insurance coverage, regardless whether the collector is a tenant or a homeowner. Homeowner policies typically provide extremely limited coverage for property which can be used as a medium of exchange. This is especially true of collectible coins and currency which has a special value that, typically, far exceeds its face value.
One homeowners program, which represents an industry-wide standard for homeowners insurance coverage, contains a severe restriction on the limits available for money. In fact, regardless of the insurance limit that appears on the policy, the maximum amount of coverage is limited to less than $300 for any loss which involves money, including currency and collectible coins. Why Is Coverage So Limited?

It would be a losing proposition for insurers to offer liberal coverage for coin collections and similar property. Why? Because such property is:

• attractive to thieves,
• subject to fraud and counterfeiting,
• small in size but very high in value, and
• very vulnerable to destruction.

Standard policies recognize the above attributes and are designed to limit their exposure. What's a coin collector to do?

In the case of coin collecting, enthusiasts are encouraged to seek special protection for their valuable property. A collector has the option of adding a special endorsement to their basic homeowner protection or buying a separate policy. While arranging for coverage, a coin collector must meet three critical objectives. First, the collector must be able to prove their possession of the property. Second, the collector must find a reliable method to carefully document the current value of their property. Keeping careful and current records is essential to making sure that a loss is properly covered. A collector should maintain current inventories of their collection. A written inventory is good, but it could be backed up by photos or even video documentation. The collector should also keep independent verification of coin values such as guides and, when warranted, professional appraisals. Finally, the collector must be clear about their coverage:

• what is the total amount of coverage provided?
• is the coverage for each individual piece or a single (blanket) limit for the whole collection?
• what is the basis of loss settlement (actual cash value, guaranteed amount, replacement cost)?
• are their any special storage or notification requirements?

This may seem obvious, but it is very important to keep your insurer informed about any changes involving your coin collection. Keep your insurer posted about pieces you no longer own, new pieces you have acquired and any changes in values. If values have changed, make sure that you tell your insurer to adjust your coverage. You can even ask your agent or insurer to keep current copies of collection values and inventories in their files.

Collecting coins is a great recreation and it's worth a collector's time to make sure that their investment in it is properly protected.

Remind Me About Homeowners Limitations

In part 1, we told you that the typical homeowners policy contains substantial coverage limitations for certain types of property. The modest insurance protection affects property that is highly vulnerable to loss because it is targeted for theft and/or has a high level of value in relation to its size. Examples are gold, money/securities, precious metal-plated dinnerware, jewelry, furs, stamps, electronic property, business property, watercraft and firearms. How Do You Handle The Limited Coverage Situation?

You have to do something extra to your insurance program. Insurance companies are happy to provide more coverage, if they are paid for their trouble. Specifically, limited coverage can be handled using the following methods:

Increased Coverage C Endorsement - this form is only appropriate for property saddled with limited coverage for theft losses. This form is attached to a basic policy and it increases the theft insurance limit (ie. for jewelry from $1,500 to $5,000).

Scheduled Personal Property Endorsement - this form is used for increasing coverage for property that has protection reduced for all sources of loss. The property is removed from the basic policy's limits and is covered exclusively by the endorsement. This form takes more work since each item of property has to be listed and assigned a particular insurance limit.

Inland Marine Property Floater - this method works like the personal property endorsement, except that it is a separate policy. This alternative is more appropriate for persons owning substantial amounts of high-valued property. The coverage must often be purchased from specialized insurers and comes at a high cost. In order to qualify for such coverage, you may need to meet special circumstances such as having a residential alarm system or make use of vault storage. Another Advantage Of Special Handling

In order to arrange coverage under a schedule or an inland marine policy, the property must be properly valued. This often involves appraising the property. It's very helpful to have an expert source establish the current value of jewelry, furs or other valuable possessions. In fact, such property should be appraised every two or three years since their values often increase over time.

Do you still have questions about property that needs special handling? Talk to an insurance professional about your needs and make sure that you have proper protection.

Please refer to part 1 for more information on restrictions faced by certain types of personal property.

Limited Coverage For Certain Property

The typical homeowners policy offers plenty of coverage for personal property, usually offering a limit equal to half of the amount reserved for the residence (ex. Your home is covered for $150,000, so your contents and furnishings are covered for $75,000). While this is generous coverage, it doesn't extend to all types of property for all causes of loss. Certain types of property, because of its high value and liquidity, is far more vulnerable to loss...either easily destroyed, easily stolen or both. For instance, an insurer protects your sofa right along with your fur coat for the same basic premium, but the two types of property don't represent the same chance loss. Recognizing this fact, insurers put more restrictions on the coverage provided by a basic policy. Theft Coverage Limitations

When property is lost due to theft, coverage under a standard homeowner policy is severely limited (generally between $1,000 - $2,500) for the following types of property:

• jewelry, watches, furs, and gemstones
• dinnerware, serving sets, trophies and similar property made of or plated with silver, gold, platinum or pewter
• for firearms, accessories and related property

Several categories of property are subject to very modest limits (generally between $200 - $2,500) of coverage, regardless of the cause of loss (theft, fire, accidental breakage, etc). Specifically:

• money, bank notes, coins, medals, gold, silver and platinum (other than jewelry or dinnerware)
• securities, accounts, deeds, tickets, stamps, manuscripts, passports and similar property
• watercraft and related property including their trailers
• trailers not used with watercraft
• business property located in your residence
• business property located away from your residence
• certain types of electronic property (CD players, VCRs, TVs, radios, computers )and related accessories) which is lost or damaged while in a car or is located away from your home and used for business.

Please refer to part 2 on how to get more coverage for these classes of personal property.

A hobby is an activity a person does for fun or relaxation. If you have a hobby and you haven't thought about how it may affect your insurance needs, consider this an invitation to do so, immediately. There may be some aspect of the "fun" activity you do which should be thought through. Most hobbies involve a lot of personal time, but that's not an insurance concern. However, hobbies often require a large investment in tangible property and may even create some legal responsibility to other persons or their property. Hobbyists: Collectors and Activists

Hobbies tend to involve either collectors or activists. A collector is more likely to be concerned with gathering property with a characteristic in which he or she has an intense interest. Examples include people who collect stamps, art, coins, autos, antiques (which is a world of its own), comic books, baskets, dishes, glassware, sports memorabilia, etc. The key is that the collection of the class of property is the primary goal of this type of hobbyist. An "activist" (this writer's term) is a person who may also collect a certain type of property. However, the activist's primary goal is to purchase the equipment necessary to participate in the activity. Note that there's a fine line between such a hobbyist and a sports enthusiast. Examples are hunters, musicians, painters, sculptors, cyclists, and enthusiasts of many types, such as fans of model or radio control planes, helicopters, etc. Activists often have an interest in special pieces of property, such as a guitarist who also owns a guitar used originally by Chuck Berry. However, their investment in special property has much more to do with acquiring property, including extra parts, that facilitate their interest. An example is a ham radio operator who has an extensive inventory of radio parts for building and maintaining the tools of his hobby. With collectors, the focus should be placed on the nature of the property being acquired. With activists, besides attention to the property exposure, there should be equal emphasis on the liability exposure that's inherent in their activity. Coverage Needs Created By Your Hobby

Property Coverage - If you're spending the time to buy or trade for property that has special meaning, you should take a little more time to be sure that it's properly insured. Most homeowner policies may, at best, provide minimal protection for the types of property involved with most hobbies. Why? Items such as coins, stamps, antiques, guns, etc. are very vulnerable to loss, especially theft. Also, such property is very valuable in relation to its size. The value of collectibles kept in one room may be more valuable than all of the rest of your home's contents. Finally, even when collectible property is eligible for a policy's full coverage, that may not be enough. You may want your special property to be covered from more causes of loss than your family room couch. It may be worthwhile to buy an endorsement to add additional coverage for your collectibles to your homeowner policy. Depending upon the type and value of your collectibles, you may even have to consider specialty coverage.

Liability Coverage - if your hobby is more hands-on, then you must be sure you're protected against any legal liability related to your activity. You may want to ask yourself the following:

• Are there any liability dangers associated with the hobby?
• Does the hobby involve frequent travel to sites or meets?
• Does the activity attract frequent visitors to your home?
• Do you publish hobbyist newsletters or give advice to others?
• Do you actively sell or trade property on or away from your home?
• Does your activity involve equipment that's inherently dangerous to others?

Fortunately many aspects of a hobby, especially legal liability, are covered by a homeowners policy. However, your activity may need special or even business coverage. The way you spend your leisure time should be a diversion from your routine responsibilities. Don't let your enjoyment be interrupted by not being properly covered. Discuss your special interest with an insurance professional. An insurance professional has a special interest in making sure your coverage needs are met.

Ready, Set, Summer!

Summer witnesses a huge surge in personal activities. School ends and parents start searching for leisure and recreational activities for themselves and their children. The activities range from elaborate vacations or summer-long camps to simply buying play and sports equipment (or getting it out of storage) and renewing park and pool passes. Summer Fun's Dark Side

At the risk of being a killjoy, it's important to remember that good, clean fun can also have consequences when things go wrong. Using sports equipment such as tennis racquets, baseballs, baseball bats, Frisbees, lawn darts, or horseshoes have the potential to harm others. There is even greater harm posed by operating skateboards, bikes, mopeds, go-karts, and radio-controlled cars, helicopters and planes. An even larger area of concern may involve inviting friends over to use your driveway, play equipment or swimming pool. Basically, the potential liability comes from either you having fun at the expense of other persons or their property, or failing to take precautions that persons you've invited to your residence (or other places) are safe to enjoy themselves. How To Preserve Your Fun

The easiest way to prepare for your summer liability is to ask yourself some questions:

• What can I do to keep other persons safe from my activities?
• Am I prepared to be responsible for people I hurt or property I damage?
• How do I make my home and yard safe for fun-seeking visitors?
• Am I keeping my guests to various events safe?

While accidents happen, many can be prevented by making sure that you and your children enjoy your activities in a responsible manner. Operating bikes safely and in low traffic areas reduces the chance that others will be hurt. The safe use of games and equipment also make the likelihood of having someone injured more remote. In other words, it's important that your family uses sports and game equipment safely and appropriately. It also means that an adult be around to supervise many activities when necessary, such as when the fun may be more hazardous (street hockey) or when young neighborhood children are around. Supervision is critical for potentially dangerous activities such as the use of motorized recreational equipment, trampolines, and swimming pools, even small wading pools. It's also important to make certain that guests you invite for camping or hiking trips are watched after carefully. In many instances, you are responsible for the safety of your guests when you bring them along to enjoy outdoor activities, particularly boating or other activities involving water-related equipment. Home Inspection

Another way to reduce the chance of others being hurt is to do an inspection of your home and yard. Do you have an adequate fence (with secure or self-locking gate) to protect young children from a pool when you're not around? Is your playground equipment well-maintained and strong enough to support the weight of the children using it? Is your yard and driveway free of tripping hazards? Are dangerous items such as tools, chemicals and lawn equipment kept out of reach of children? If you can answer "no" to any of these questions, you're inviting trouble. Insurance Plays A Role

When accidents happen, they may be followed by medical expenses and, more seriously, lawsuits. You must be protected against such financial consequences. Don't assume you have coverage, especially when an activity involves motorized or powered equipment. You may have to add coverage to your homeowner policy or even buy special coverage for mini-bikes, mopeds, boats, all-terrain vehicles, etc.

So make safety a part of getting ready for summer fun. It's also smart to include a visit or call to your insurance professional to make sure you have the right coverage to support a fun summer.

Who Are Insureds?

A pivotal point in every mature parents' life is the time that their children leave to start their own households. Among the items that may be overlooked during this time is whether your grown children have bought their own insurance.

Most personal insurance policies define insureds to include the following:

• The person named (shown) on the policy
• The named person's spouse (who lives in the same residence)
• The other relatives of the named insured who live at the same residence

The problem with coverage begins when the living arrangements change. Related, But Not Residents

Blood is often perceived to be thicker than insurance contracts, but policy wording prevails. An adult son or daughter may think that, when a loss happens, coverage is available from mom or dad's homeowners or auto policy, but it isn't. Policies are typically clear. A relative is covered, but only if the relative is a full-time resident of the named insured's household. Even if the nonresident child lives next door, her parents' policy is not going to spread its coverage to take care of her belongings.

If this fact appears harsh, know that insurance contracts are meant to handle sources of loss that can be easily identified. Person A's cars or home is protected by Person A's auto or homeowner policy. Imagine if that weren't the case.

Example: The Rabbitfield's home and cars have been insured by Plausible Fire & Casualty for 20 years. In the last five years, the Rabbitfield's children have grown and started their own households. Per the Plausible home and auto policies, the insurance premiums and two policies that covered the original family's two cars and one home, now cover the original home and cars PLUS the following:

• Son Jimmy Rabbitfield's apartment and car
• Daughter Chana Rabbitfield's home and two cars
• Other son Perry's home, seasonal home and two cars
• Other daughter Bonnie's apartment and car.

Besides covering all of the property, the Rabbitfield parents' policies ALSO cover everyone's personal legal liability.

While it might be a bargain for insurance consumers if a single auto or homeowner policy could be stretched this far, it's not likely that the insurance industry could survive the flexibility. Being Independently Insured

Understandably, insurance is not always a priority for adult children who are now on their own. In the beginning, there's often a phase where the kids commute between "home base" and their new apartment or home and their property is at both locations. The new grown-ups typically have few possessions, especially possessions of high value, and this adds to the likelihood that insurance is overlooked or seen as unnecessary. However, even when possessions are few, EVERYONE has a legal responsibility to handle the damage they accidentally cause to other people and/or other people's property. When a child reaches adulthood, they've also reached the point where they need to get their own insurance.

If an adult child asks you for insurance advice, give them the name of an insurance professional you trust to help them get the exact protection they need.