Do You Have Coverage Wherever Things Go Wrong?
Do You Have Coverage Wherever Things Go Wrong?How is this for bad luck?
* Bob goes on vacation to Cancun. While he's walking on a sidewalk one day, a car jumps the curb. He jumps out of the way and escapes injury, but his $2,000 camera gets run over by the car.
* To cheer himself up, Bob goes to a golf shop to try out some clubs. Forgetting where he is, he takes a practice swing; his back swing breaks the nose of the woman looking at putters next to him.
* Bob cuts his vacation short. He returns home to find snow and ice have accumulated on his driveway. The next day, he also receives an emergency room bill for the broken ankle suffered by a neighbor who slipped on the driveway while attempting to look in on his cat.
* Bob retreats to the hideaway cabin that he owns in the mountains. He chops some trees for firewood on what he thinks is his property. Actually, the trees are five feet on his neighbor's side of the property line.
Bob has a homeowner's insurance policy covering his house. Does it cover any of these losses? For three of the four losses, the answer is yes.
A typical policy covers an insured person's personal property anywhere in the world. It also covers property that person is using, even if he doesn't own it. The property is covered for losses caused by any of the perils listed in the policy, including fire, lightning, smoke, explosion, vehicles, and others. Therefore, Bob's policy will pay to repair or replace the camera damaged by the car. However, the insurance company will subtract his deductible from the amount it will pay.
In addition to insuring property, a homeowner's policy covers an insured person's legal liability for injuries or damages suffered by others. It covers liability for all of the person's actions anywhere in the world, except for types of losses that it specifically lists as not covered. Accidentally hitting someone in the face with a golf club is not on the list, so Bob's policy will pay the amount he owes for the woman's medical treatment.
Likewise, Bob has coverage for the neighbor's broken ankle. Since he invited the neighbor to check on his cat, and his driveway was not in a safe condition on which to walk, he is legally liable for the injury. The policy covers liability arising out of an "insured location." The term "insured location" has many definitions; one of them is the residence listed on the policy. Bob's policy lists his home, so it covers losses that arise from the home.
Unfortunately, the next loss is where Bob's luck runs out. His policy lists his home but not his cabin. It does not cover his liability that arises out of premises he owns, rents, or rents to someone else if that premises is not an insured location. Since he owns the cabin and did not list it on his policy, and it does not fit into any of the other definitions of "insured location," the policy does not cover his liability for accidents that happen there. Consequently, he must either seek coverage under another policy, if there is one, or pay for the damage to the trees out of his own pocket.
It's a good idea to have a periodic chat with a professional insurance agent about your life circumstances. If you have a place in the mountains, own significant amounts of special property such as jewelry, or conduct business out of your home, you need special insurance coverage. Make sure you have the right coverage before you have a run of luck like Bob's.
Feel free to call Khalid Umerani at NOVA Insurance Group (Tel: 703.263.7800) to discuss all your Property and Casualty (including Personal Umbrella) coverage needs. We are located in Chantilly, Virginia, adjacent to South Riding.
Labels: Allstate South Riding, Chantilly Personal Umbrella, South Riding Personal Umbrella
Are You Liable? Protect Yourself from Home Worker Lawsuits
Are You Liable? Protect Yourself from Home Worker LawsuitsAs the housekeeper is vacuuming your living room, she trips over one of your daughter's toys and seriously injures her back. While your neighbor's teenage son is mowing your front lawn, he steps in a large hole and sprains his ankle. Will your homeowner's insurance cover you if one of these workers decides to file a lawsuit?
Many homeowners do not realize that they could be held financially liable if a maid, landscaper, nanny or another house worker were to suffer from an injury on their property. Here are some things you should keep in mind before you hire a home worker:
Is that worker an employee or a contractor?
When you hire someone to help out around the house, you should figure out whether he or she is an employee or a contractor. This is one of the factors determines whether or not you are liable for a worker's injury. So, how do you know if the worker is considered your employee or a contractor? It all comes down to how much control you have over the worker.
Let's say you hire a nanny named Lisa to take care of your children and do some light cleaning in your home. Lisa follows your instructions about how to care of your kids and how to complete certain household tasks. You supply Lisa with the supplies and tools she needs to do her job. Because you have control over how Lisa works, she is most likely considered your employee.
On the other hand, let's say you hire a professional landscaper named Bob to fertilize and mow your grass, trim the hedges and plant flowers in your yard. Bob uses his own lawn mower and yard tools and he does yard work for other homeowners, as well. Bob also has a team of workers who help him with his business, and he pays these workers. In this case, Bob would be considered an independent contractor.
Of course, these are two fairly simple examples. If you are uncertain about whether a worker in your home is considered a contractor or an employee, consult a lawyer or tax professional.
Understanding worker's comp insurance
Some states require that homeowners who have house worker "employees" to carry workers' compensation insurance coverage for them. However, even if your state does not require this, you should still consider purchasing this insurance for your employees. Why? Because if one of your employees is injured on your property, you may have to pay for their medical bills and other expenses out of your own pocket. However, with workers' compensation coverage, the insurance company will cover the costs.
Alternatively, if you hire a house contractor, such as a landscaper, carpenter or plumber, they should be covered by their own workers' compensation insurance. If a contractor is injured while doing work on your property, he or she will be covered under that policy. If the contractor doesn't have enough coverage, you may be held financially liable. However, depending on the circumstances, you may be able to file a lawsuit against the contractor as they are required by law to have sufficient workers' compensation coverage.
If you are looking to hire a house contractor, it's important to ensure they are covered for worker injuries, property damage and uninstalled materials. Don't just take their word for it. Ask for written proof that they have a contractor's license, workers' compensation insurance for themselves and any subcontractors and general liability coverage.
Know what your homeowner's insurance covers
When it comes to coverage for home workers, every homeowner's insurance policy is different. Depending on your home state, your policy may include a provision that provides limited coverage for minor workers performing lawn mowing or other tasks that require the use of power tools on your property.
On the other hand, your policy may specifically exclude domestic workers such as nannies or maids. Your policy may cover the injuries of household employees, but only after a lawsuit is filed against you. Because homeowner's policies vary widely, it's important to read through your contract and talk to your insurance agent before you hire a home worker.
Consider an umbrella policy
If you discover that your homeowner's policy offers limited or no liability coverage for workers, you may consider purchasing additional liability insurance. While you may have some personal liability coverage through your homeowner's policy, it's probably not nearly enough to cover a major lawsuit from a home worker. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more-even if you win.
You can further protect yourself with what's known as an umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages. Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your home and auto insurance policies meet a minimum "attachment point"-typically a liability limit of $250,000 or $500,000.
Check with the Better Business Bureau
Before you hire a home worker, you should contact the Better Business Bureau for more information. They can tell you if any consumers have filed complaints against the worker. Visit the bureau's website at www.bbb.org.
Any questions about Allstate Homeowners Insurance Policies, please feel free to call Khalid Umerani, Agent, Allstate-NOVA Insurance Group at tel. 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate Aldie, Allstate Chantilly, Allstate South Riding, Allstate Stone Ridge, Khalid Umerani
The Many Colors of Insurance Fraud - And How to Prevent It
The Many Colors of Insurance Fraud - And How to Prevent ItAccording to the Coalition Against Insurance Fraud, a division of the Insurance Resource Council, one in five Americans or 45 million people say it is okay to defraud an insurance company in certain circumstances. Furthermore, according to a 2008 Four Faces study by the IRC, consumer tolerance of of specific insurance schemes has increased over the past ten years. To be more specific, the study says there is a decline in the number of Americans who believe it is unethical to:
- misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);
- file a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);
- inflate a claim to cover the deductible (84 percent, down from 91 percent); and
- misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).
Insurance fraud comes in many different shapes, colors and sizes. The one common denominator is that, regardless of the form it takes, it costs insurers, and ultimately you, the consumer, billions of dollars per year. What are some of the different types of fraud that take place and what can be done to prevent it?
Insurance fraud cuts a broad swath through the insurance industry and can occur anywhere in the insurance transaction from fraudulent applications for coverage to fraudulent filing of claims. Insurance fraud is not only committed by the insurance buyer, but by attorneys, physicians, and other third parties to the insurance transaction. Even insurance company employees have been caught bilking their employers. Following are some sobering statistics:
Fraudulent and abusive auto-injury claims are a costly problem. Fraud and "buildup" added $4.8 billion to $6.8 billion in excess payments to auto injury claims in 2007. That means 13-percent to 18-percent increases in payments under private-passenger auto policies from 2002. (Insurance Research Council, Nov. 2008)
Auto insurers lost $16.1 billion due to premium rating errors in private-passenger premiums in 2007. Premium rating errors account for 10 percent of the $166 billion in personal auto premiums. Fraud accounts for a portion of these losses. Some drivers will seek to lower their premiums by schemes such as deliberately misrepresenting mileage driven, how the vehicle is used and where it's registered. (Quality Planning Corporation, 2008)
More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)
Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. (Miami Herald, August 11, 2008). Medical identity theft comprises about 3 percent (249,000) of 8.3 million overall victims of identity theft. (Federal Trade Commission, Identity Theft Survey Report, 2007)
With the advent of the Internet, an aging population, and other trends making insurance fraud a lucrative business, it will be difficult to completely eradicate the problem. Federal and state authorities, insurers, and consumer watchdog groups are all working diligently to stem the tide of insurance fraud. Here's what you can do:
First, and most obvious is to not commit fraud. The temptation to lie on an insurance application to get a better rate, an example of what is called soft fraud, should be tempered by the fact that it increases the risk of insurers canceling or even rescinding coverage upon evidence of the fraud, not to mention the legal implications.
- Ask for detailed medical and repair bills and examine closely for unusual or suspicious charges.
- If you are involved in or witness an accident that appears to be of a suspicious nature, and you feel that it may have been staged, report the incident to local law enforcement.
- Report fraud when you become aware of it. If your state does not have a hotline, your insurance company probably does. So does the National Insurance Crime Bureau. A hotline exists for Medicare and Medicaid, and you can go on the Coalition Against Insurance Fraud's website for further information on reporting fraud (www.insurancefraud.org).
- As with credit card and social security numbers, guard your insurance identification card numbers and report any theft.
Need help with your insurance policies? Please call Khalid Umerani @ NOVA Insurance Group in Chantilly / South Riding, VA at tel: 703.263.7800
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate South Riding, Insurance Fraud, South Riding Insurance
Can I Borrow Your Car -- And Your Insurance?
“Bill, can I borrow your truck? I have to pick up a new mattress.” Questions like this are routine here in Virginia (Fairfax & Loudoun Counties). Friends and neighbors borrow and lend their vehicles. College roommates borrow their friends’ cars. Six cars are parked in a driveway at a party and one needs to be moved so another car can pull out. The owner tosses someone the keys and tells him to move it. When situations like these end with an auto accident, whose insurance pays – the owner’s or the borrower’s?
In general, the vehicle owner’s policy is primary and pays first in the event of a loss. If for some reason the owner’s policy does not cover the loss or provide enough insurance to fully cover it, the borrower’s policy will apply. For example, assume that Joe has a policy with an insurance limit of $100,000 for injuries to one person and Bill’s policy has a limit of $250,000. Joe borrows Bill’s car and severely injures a pedestrian, resulting in damages of $300,000. Since Bill owns the car, his policy will pay first. It will pay $250,000 (his limit of insurance,) and Joe’s policy will pay the remaining $50,000. If Bill’s policy does not cover the loss (for example, if he had let the policy lapse,) Joe’s policy would pay all of its $100,000, but Bill and Joe might be individually responsible for paying the balance.
The owner’s insurance will also be primary for damage to the car itself. However, the borrower’s insurance can make up for a difference in deductible. Suppose Joe has a $500 collision deductible on his car and Bill’s collision deductible is $1,000. Joe totals Bill’s $5,000 car in an accident. Bill’s insurance will pay $4,000 for the car ($5,000 minus the $1,000 deductible,) and Joe’s insurance will pay $500 (Bill’s deductible minus Joe’s $500 deductible.) If Bill’s insurance is uncollectible because he didn’t buy collision coverage, Joe’s policy will pay $4,500 ($5,000 minus the $500 deductible.)
A person must have the car owner’s permission to borrow before the owner’s insurance will cover him. The insurance company will consider the person to have permission if he had a reasonable belief that he could use the car. For example, if Bill at one time said to Joe, “Take the car whenever you need to; the keys are on my desk,” and Joe had in fact borrowed it several times with no objection from Bill, it would appear that Joe had a reasonable belief that he could use it. On the other hand, if Bill never said anything to Joe about using the car, and Joe had to search Bill’s home to find the keys, Joe’s belief that he could use it might not appear to be so reasonable. In this case, Bill’s policy might not cover Joe’s liability for injuries or damages. Worse, Joe’s policy might not cover him, either.
Permission must come from the vehicle’s owner, not from a member of the owner’s family. Joe will not have coverage if Bill didn’t give him permission but Bill’s teenage daughter told him to use it. However, the daughter has coverage if she borrows the car, with or without permission. A member of the owner’s family has coverage without having to prove they had permission. To be considered a family member, such a person must be related to the owner by blood, marriage or adoption.
Before borrowing someone else’s car, we advise people to do the following here in Virginia (South Riding & Chantilly areas zips incl. 20151, 20152 and 20105):
-Make certain you have the owner’s permission.
-Make certain the owner has insurance in-force on the car.
-Check your own insurance to see if it will cover damages the owner’s policy doesn’t cover.
Insurance Agent, Khalid Umerani, can assist you with the third item. Ask the questions ahead of time to avoid unpleasant surprises later. For more information on Auto coverage, contact Khalid Umerani at NOVA Insurance Group, here in Chantilly / South Riding, VA 20151
www.south-riding-insurance.comwww.loudoun-insurance.comLabels: Allstate South Riding, Auto Insurance in South Riding / Chantilly, Auto Liability Coverage, Fairfax Auto Insurance, Khalid Umerani, loudoun auto insurance, NOVA Insurance Group
