Winterize Your Outside Faucet

Disconnect your outdoor hoses from their outdoor faucets before it gets too cold. We have already had the first freeze warning for Fall 2010, so if you have not done so, now is a good time to disconnect your outdoor hoses from their outdoor faucets and store the hoses away. If you fail to do this, you run the risk of the water in the attached hoses freezing and cracking the water pipes going into your house. In the Spring when you turn on the hose you could have substantial water damage in your home from the cracked pipes.

Insurance Term: "Underwriter"

When discussing insurance, whether in the news or with your own insurance agent you hear the term “Underwriter”. I thought that with this blog post I would tell you a little bit about what an underwriter does in the property and casualty insurance world and tell you where there name comes from.

An underwriter is a person who works for a financial institution, and for this blog we will specifically talk about a property and casualty insurance company. The underwriter’s job is to assess risk and determine if an individual or business is eligible for the insurance company’s products and what pricing they will receive. They pour over the data give them by either you the customer, your insurance agent, other third party data sources and/or the historical data of your account to help them come up with their decisions.

So where does the term “Underwriter” come from? Back in the late 1600’s groups of merchants, investors and sea captains gathered at a little coffee shop in London owned by a man named Edward Lloyd. Between sips of Ed’s coffee the merchants who had a large cargo of goods to ship overseas would sit down with business investors and ask them to give some kind of financial backing if something happened to their cargo of goods while being shipped. Investors would agree to pay for the lost cargo if the ship didn’t make it to its destinations but required a fee or premium from the merchant for taking on this possible loss. Eventually the merchants started to post on the walls of Ed’s coffee shop the amount of backing they needed for their shipment. The investor would then come and writer their name under the request and there the contract was bound. The fact that the investor wrote “under” the request is key because there is where they came up with the term “Underwriter”.

One other item to note; does the named Lloyd sound familiar? Edward Lloyd’s coffee shop was the birth place of Lloyd’s of London.

Products and Completed Operations Hazard

If you manufacture, sell or distribute a product, there is a possibility that the use of the product could cause bodily injury. The example everyone thinks of is a stepladder. Next time you are at the home improvement store take a look at all the warnings that ladder manufactures put on their product. Who really needs to be told not to stand on the top rung of a ladder? But, it is because of the product liability hazard that manufacturers feel it is necessary to include so many warning with their products. Even if you are not the manufacturer, and simple sell someone else’s products, you could still be liable.

The second part of this coverage is completed operations coverage. If you install or repair products such as a heating system, you could be negligent should damage be caused by your work after you work is done. Let’s say that you installed a new furnace in a restaurant, and later that day a fire ensues. The fire marshal determines that product literature that was left inside the furnace caught fire further melting a plastic cover causing black smoke to spread throughout the premises. The business had to close until repairs and cleanup could be completed. A substantial amount of money was lost and the cleanup was in the thousands of dollars.

Both of the situations cited above would be covered if your policy includes products and completed operations coverage. Not sure if your package includes this coverage; give us a call to review.

Insurance Score, What is it?

When it comes to figuring out what premium an insurance company is going to charge a person to insure them, there are a lot of factors. On a homeowner it depends on the year the house was built, where the home is located, what kind of construction is the house, etc. On auto insurance it was based on age of the driver, type of vehicle, how much you drive the car, what type of limits and deductibles you have, etc.

A number of years ago a new factor was added to this list for both home and auto insurance called insurance score. An insurance score helps insurance companies determine the future likelihood of auto or home claims. The insurance score takes into account two major categories. The first is your past claims history, meaning what claims have been reported and paid by the home and/or auto insurance company.

The second is your financial behaviors. By financial behaviors they mean things like your current outstanding debt, how much credit history you have, how often you pay or not pay bills on time, have you ever foreclosed or declared bankruptcy, how often do you apply for credit card or other loans. It does not factor in, however, your age, race, income level, marital status, etc.

So what does this insurance score do to your insurance premiums? Well, if you have a good insurance score, companies give you a break on pricing because they feel you are less likely to have insurance claims and therefore should be paying less in insurance premiums. If you have a poor insurance score, then they may charge debits to your insurance premium which can then cause your premium to increase. As mentioned earlier, insurance companies feel that if your insurance score is poor then you are more likely to have claims and therefore you should pay a higher premium.

This is great news for those with good insurance scores but bad news for those with poor scores. So, it is important to stay on top of your financial behaviors, not only so you can get a good credit score and better loan rates but also so that you can have a good insurance score and have better insurance premiums. It is important to make sure you monitor your bill paying, keep outstanding debt to a reasonable level and just have a good overall credit history.

One final thought, Fey Insurance Services is not a big fan of insurance scores but it is something that all insurance companies are using. The main reason we are not a big fan of insurance score is that there is no way to inform a customer exactly why their score is what it is. Your credit score is a big factor in determining the insurance score, and it is private information. We prefer methods all parties totally understand. However, as mentioned previously, all insurance companies are filed with the states to be able to use these scores so it is out of our control. We can simply keep you educated on how it can affect you and make you aware of the factor.

Leaving Your House Vacant? Consult Your Agent!

In today’s real estate market it can be somewhat common to purchase a new home with out having first sold your current home. Prices are low so if you want to upgrade your house, now seems to be the time even if you know you may have to wait a few months until you sell your current home. So many are purchasing a new home, moving into it and then leaving the old home vacant until it sells. This can pose an insurance problem that Fey Insurance feels many don’t realize.

In a typical homeowner policy there is wording that refers to a 60 day period. For sixty days your homeowner policy will have no change in coverage once it becomes vacant. However, and this is important, once the house has been vacant for 60 days some of the coverages are no longer provided. Example, vandalism or malicious mischief claims would no longer be covered. Same with glass breakage claims. The reason for this is that a homeowner policy is priced and designed for buildings that are being lived in and cared for by the owners. Once the owner no longer lives there and it is vacant then the building is more at risk for claims and therefore the insurance companies require it be on a special vacancy policy. What does vacancy mean? Vacancy means the following, “Substantially empty of personal property necessary to sustain normal occupancy.”

So if you are considering purchasing a new home and leaving the current home vacant until it sells, please be sure to call your insurance agent so they can make sure coverages don’t disappear from your policy

Cincinnati to have a Ban on Texting While Driving

On Wednesday Sept 8^th Cincinnati’s City Council voted to ban texting (reading or writing) while driving in Cincinnati, OH. This new law carries a $100 fine. The offense is a primary offense meaning you can be pulled over if all you are doing is violating the texting ban. The new law is scheduled to go into effect in the next 30 days.

You can still use your phone to make calls and you can still use portable GPS Navigation Systems. One thing to make note of on the GPS devices is that you are only allowed to input information into the device if the vehicle is not moving and is out of the way of traffic. The extra stipulation on use of GPS Systems leads me to believe you can be pulled over for inputting data into the device while you are still driving.

Our Cincinnati insurance agency office wanted our clients to know this information so that they can be safe and legal when driving around the Cincinnati, OH area.

Rental Car Insurance: Buy or Not Buy

During the summer our agency receives a lot of phone calls from clients who are sitting at the airport getting ready to sign up for a rental car. The rental car employee has just asked them if they wish to purchase the “extra” insurance from the rental car company, and they are not certain if their personal auto insurance protects them on rental cars or not. So they pull out the cell phone and call Fey Insurance Services. Our answer is always this, “It is not a black or white answer.

Unfortunately it is a gray answer so we recommend you purchase at least the “Collision Damage Waiver”. Normally the client is somewhat confused on what the “gray” answer is but the beach is calling and they want to get on their way. So, I thought with this blog article I would hit on two reasons why it is a “gray” answer when it comes to purchasing insurance from the rental car company on a rental car.

The first reason is contract language. Two contracts would be involved if you did not purchase rental car insurance from the rental car company. The contracts would be the one between you and the rental car company (the one you sign in order to rent the car) and the contract between you and your personal auto insurance company. Each of these contracts can be different depending on which rental car company you are using, which state you are in and which personal auto insurance company you have. Because of this there are all kinds of possible gaps in insurance coverage. An example gap is “loss of use”. A number of rental car companies will charge you for the loss of use of the car while it is in the repair shop after you caused an accident that damaged the vehicle. This means that if it takes a week for the car to be repaired they will charge you a week of rental. Some insurance companies do pay this extra cost and some don’t. Gaps like this can be avoided by just spending the extra money on “Collision Damage Waiver”.

A second reason we feel it is a gray topic and you should just purchase the extra coverage is that often times you drop off a car after your trip and no one from the rental car company is present to help you check for damages to the car. We have had a couple of cases where our clients received a letter from the rental car company seeking money for a ding or scratch. They swear they never caused any damage to the car. Unfortunately, when they turned the car in there was no one to sign off that the car was returned undamaged. So, when another vacationer in an unfamiliar car at an unfamiliar airport (who is late for their flight) pulls in next to you to drop off their rental car, and they bump into the car you had just dropped off twenty minutes ago, you have no way of proving you where no longer responsible for the vehicle when the damage occurred.

So we recommend you play it safe next time you rent a car and purchase at least the “Collision Damage Waiver”.