Insuring a Home-Based Business

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Did you know that, according to the Small Business Administration, more than half of all businesses in the United States are based out of the owners’ home?

Many of these entrepreneurs assume their homeowners insurance will step in if they ever experience a property loss to their business equipment or a liability claim.

Unfortunately, that simply is not the case.

For example, did you know that if a delivery person was injured at your residence while dropping off a business package, that he or she would most likely be excluded from coverage on your homeowners policy? Or that if customer information was stolen or destroyed from your home computer that you would not receive assistance from your homeowners insurance company to recover the data?

Below is some insight in determining if your home-based business needs insurance coverage and where to properly obtain it.

If you have any questions at all on coverages, options or pricing, please don’t hesitate to reach out to our office.

Do I Need Coverage?

Determining whether or not you need coverage is the first step in properly protecting your business. The following questions will provide some insight into whether or not you need additional insurance coverage:

  • Does your homeowners policy limit coverage of any business equipment? Most homeowners policies will either provide a small sub-limit for business equipment or exclude coverage completely.
  • Do you have an office, but work from home regularly? If you regularly work from your home, you may need additional coverage for protection against work-related incidents that could occur in your home.
  • Do clients, vendors, or employees visit your home, or do you visit other people’s homes as part of your operations? Injuries to a third-party at your residence for business purposes are surprisingly not covered by most homeowners insurance policies.
  • Do you store vital data or customer information electronically at your home? Most homeowners insurance policies do not cover lost business data, so if you have a disaster at your residence, you may be forced to recover that information on your own.

How Do I Obtain Coverage?
Home-based business owners typically have three types of business insurance options to consider. The policy you choose will depend on your business’ size and type, how often you have business visitors to your home and your exposure to liability, among other factors. The three types are:

Rider or endorsement to your homeowners insurance policy. Some insurance companies will allow you to add coverage for a minimal cost to your homeowners policy. However, it should be noted that the coverage provided is extremely limited for property coverage and liability protection. While it may be appropriate for a small one-person operations with limited risks, keep in mind that you could still be on the hook for a large liability loss.

In-home business policy. This type of policy typically combines the homeowners and business coverages into a single policy. While the policy does provide some additional protection for lost income, they are still usually pretty limited with liability protection and exclude any errors and omissions coverage.

Business owner’s policy. This type of policy is by far the most comprehensive for business owners. In addition to higher liability limits (usually $1,000,000 per occurrence), they provide much better coverage for claims like loss of business equipment, loss of records and data, lost income due to a claim, and even some secondary auto coverage (non-owned and hired vehicles). Depending upon your type of business, the coverage can be fairly inexpensive as well. Most policies start at $500 in annual premium.

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Boat Insurance

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Boat Insurance

During the summer boats are an extremely popular activity for families.  However, do you know if your boat has the proper insurance coverage?
Did you know that your homeowners or renters policy typically provides some small boat coverage?  The coverage is very limited – it covers property damage only, can only be used on boats with less than 25 mile per hour horse power, and coverage is usually limited to $1,000 total for you boat, motor, and trailer.   Liability coverage is not included, but it may be added with an endorsement.
Larger and faster boats such as personal watercraft such as jet skis and wave runners require a their own separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.
For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis.
Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.

Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.

Boat insurance also covers:

  • Bodily injury—for injuries caused to another person
  • Property damage—for damage caused to someone else’s property
  • Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
  • Medical payments—for injuries to the boat owner and other passengers
  • Theft

Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.
Boat owners should also inquire about discounts for the following:

  • Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
  • Coast Guard approved fire extinguishers
  • Ship-to-shore radios
  • Two years of claims-free experience
  • Multi-policies with the same insurer, such as a car, home or umbrella policy
  • Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.

If you would like to receive an insurance quote on your boat, please fee free to contact our office.

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Pool Safety

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With summer quickly coming upon us, this means it’s time to lay out next to a pool, take in some sun, and just relax.

Not to put a damper on that, but did you know that according to The Pool Safety Resource drowning is still the second-leading cause of death for children under age 14?

So while we certainly hope you’re able to spend some time swimming and barbecuing with the family, we want to make sure you’re aware of the safety precautions you should take in and around swimming pools.

We have compiled a list of the top safety measures you can take from Pool Safely, American Academy of Pediatrics, and The Pool Safety Resource.  Below you will find both an infographic and list of pool safety tips to help keep you safe.

Hope you have a fantastic summer!

Pool Safety Infogrpahic

Pool Safety Tips

  1. It’s the most obvious, but by far the most important: NEVER LET YOUR CHILDREN SWIM ALONE.
  2. Install a fence around the pool. The fence should be at least 4 feet high with a self-closing latch. If you are not using the pool, the gate should remain locked. (Remember that as a pool owner you’re responsible for anyone who comes onto your property and into your pool.)
  3. Keep safety equipment like life rings, shepherd’s hooks, and a first-aid kit in plain-view from the pool.
  4. Keep a phone with you by the pool at all times.
  5. Take CPR and basic first-aid classes so you know how to respond in an emergency.
  6. Remove all toys from the pool when you’re not using it so that kids aren’t tempted to reach for them.
  7. Teach your children basic water safety tips including how to find the nearest wall and how to pull themselves out of a pool.
  8. Secure the pool with a cover so that kids cannot access the pool when you’re done swimming. (Remember a pool cover should not be a substitute for a fence.)
  9. Install a surface wave or underwater alarm.
  10. If a child is missing, check the pool or spa first. Go to the edge of the pool and scan the entire pool-bottom and surface-as well as the surrounding area.
  11. Maintain the pool properly. Make sure all drains are functioning the way they should. Also, check the pool edges for loose tile or concrete.
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Carseat Safety

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If you have children, it’s so important that you have them properly secured in their carseats while driving.   While child safety seats are wonderful at preventing potential injuries in an accident, wrong usage of them is very common.  When you think about it, even a small error in how the seat is used versus how it should be used can be the cause of serious injury or accident.

The following list of tips will help ensure you are using your carseat safely:

  1. Never put an infant in the front seat of a vehicle with a passenger air bag.
  2. Route harness straps in lower slots at or below shoulder level.
  3. Keep harness straps snug and fasten the clip at armpit level.
  4. Make sure the straps lie flat and are not twisted.
  5. Dress your baby in clothes that allow the straps to go between the legs. Adjust the straps to allow for the thickness of your child’s clothes.
  6. To keep your newborn from slouching, pad the sides of the seat and between the child’s legs with rolled up up diapers or receiving blankets.
  7. Put the car seat carrying handle down when in the car.
  8. Infants must ride in the back seat facing the rear of the car. This offers the best protection for your infant’s neck.
  9. Recline the rear-facing seat at a 45-degree angle. If your child’s head flops forward, the seat may not have reclined enough. Tilt the seat back until it is level by wedging firm padding such as a rolled towel, under the front of the base of the seat.

Do not use a car seat if any of the following apply:

  1. It is too old. Look on the label for the date it was made. Most carseats now have an expiration date where you are not supposed to use the seat past that date.
  2. It does not have a label with the date of manufacture and model number. Without these, you cannot check on recalls.
  3. It has been in a crash. If so, it may have been weakened and should not be used, even if it looks all right.
  4. It does not come with instructions. You the instructions to know how to install and use the car seat properly. Do not rely on the former owner’s instructions. Get a copy of the manual from the manufacturer.
  5. It has cracks in the frame of the seat.
  6. It is missing parts. Used seats often come without important parts. Check with the manufacturer to make sure you can get the right parts.
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Does my credit score affect my insurance premiums?

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What does my credit rating have to do with purchasing insurance?

Everyone knows that credit scores are an evaluation of your payment history on a variety of consumer debt items like your home, credit cards, auto loans, etc.  Credit scores are also used for a variety of other purposes such finding a place to live, getting a cell phone, and, most recently, buying insurance.
Insurance companies have found a direct correlation between one’s credit score and likelihood of filing an insurance claim at some point in the future.  According to the actuarial tables and statistics the lower your credit score, the more likely you are to file a claim. So insurance companies are knowing using credit scores to generate an “insurance score” as part of the underwriting process.  Your insurance score plays a large role in determining the premiums charged by your homeowners and auto insurance companies.
Therefore a solid credit history can go a long way to decreasing your insurance premiums.  We recommend checking your credit score regularly and requesting that any discovered errors are immediately corrected.
The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies—Equifax, Experian, and TransUnion—to provide you with a free copy of your credit report, at your request, once every 12 months. For more information, go to the Federal Trade Commission’s Web site on credit.
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Arvada Insurance: Different Types of Home Insurance?

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Did you know there are different types of home insurance.   Each policy type varies dramatically in the coverage it provides.  The following types of homeowners policies are fairly standard across the country though they might differ slightly in coverage or name across different states.

If you own the home you live in, you have several policies to choose from. The most popular policy type is the HO-3, which provides the broadest coverage.
Policy Types: 
HO-1: Limited coverage policy
This “bare bones” policy covers you against 10 named disasters (fire, lightning, and wind to name a few). It’s no longer available in most states.

HO-2: Basic policy
A basic policy that provides protection against 16 named disasters instead of 10. There is a version of HO-2 designed for mobile homes.
HO-3: The most popular policy
This “special” policy protects your home from all perils except those specifically excluded.

Coverage Levels
Besides the different policy types, there are also varying degrees of claim payment.  The following list outlines each one.

  1. Actual cash value.  
    This type of policy pays to replace your home or possessions minus a deduction for depreciation.
  2. Replacement cost.  
    The policy pays the cost of rebuilding/repairing your home or replacing your possessions without a deduction for depreciation.
  3. Guaranteed or extended replacement cost.  
    This policy offers the highest level of protection. A guaranteed replacement cost policy pays whatever it costs to rebuild your home as it was before the fire or other disaster–even if it exceeds the policy limit. This gives you protection against sudden increases in construction costs due to a shortage of building materials after a widespread disaster or other unexpected situations. It generally won’t cover the cost of upgrading the house to comply with current building codes. You can, however, get an endorsement (or an addition to) your policy called Ordinance or Law to help pay for these additional costs. A guaranteed replacement cost policy may not be available if you own an older home.Some insurance companies offer an extended, rather than a guaranteed replacement cost policy. An extended policy pays a certain percentage over the limit to rebuild your home. Generally, it is 20 to 25 percent more than the limit of the policy. For example, if you took out a policy for $100,000, you could get up to an extra $20,000 or $25,000 of coverage.Even though a guaranteed/extended replacement cost policy may be a bit more expensive, it offers the best financial protection against disasters for your home. These coverages, however, may not be available in all states or from all companies.
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What Does a Denver Homeowners Insurance Policy Cover?

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One of the questions we frequently receive from our Denver and Arvada clients is what coverage their homeowners insurance policy specifically covers.
A standard homeowners insurance policy includes four essential types of coverage:

  1. Coverage for the structure of your home.
  2. Coverage for your personal belongings.
  3. Liability protection.
  4. Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.

1. THE STRUCTURE OF YOUR HOUSE

This is the primary coverage provided by a homeowners insurance policy and pays to repair or rebuild your home if it is damaged or destroyed by a covered claim.  It’s important to note that damage caused by a flood, earthquake or routine wear and tear and not included in standard homeowners policies.  Also, when purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home.

2. YOUR PERSONAL BELONGINGS

Your furniture, clothes, and other personal items are covered if they are stolen or destroyed by a covered claim on your policy.  The limit of insurance provided is usually a percentage (typically 50 – 70%) of your home’s dwelling limit.

Most insurance companies include off-premises coverage as part of the policy. This means that your belongings are covered anywhere in the world. Some companies limit the amount to 10% of the amount of insurance you have for your possessions.

It’s also important to note that expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewelry and furs. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it’s appraised value.

3. LIABILITY PROTECTION

Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets.

The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy. You are also covered not just in your home, but anywhere in the world.

Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage.

4. ADDITIONAL LIVING EXPENSES

This pays the additional costs of living away from home if you cannot live there due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other expenses, over and above your customary living expenses, incurred while your home is being rebuilt.

Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20 percent of the insurance on your house. You can increase this coverage, however, for an additional premium. Some companies sell a policy that provides an unlimited amount of loss-of-use coverage, but for a limited amount of time.

If you have any additional questions on homeowners insurance; or, if you would like to receive a FREE insurance quote, please don’t hesitate to contact our office.

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10 Ways Arvada and Denver Metro Residents Can Save on Home Insuranc

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Over the past few weeks we have been providing tips and tricks for saving on auto insurance.   So this week we thought we would provide the top ways you can save money on your home insurance.

1. Ask for discounts

The quickest way to save money on your home insurance is to take advantage of the discounts available to you.   For example you may be able to add the following discounts to your policy:

  • Multi-policy discounts
  • Senior citizen discounts
  • Nonsmoker discounts
  • Claim-free discounts
  • Marital status discounts

Every insurance company offers different discounts, so we recommend working with an independent insurance agent to find out the what discounts are available to you.

2. Install security features

In 2009, burglary victims (in all structures, including homes) lost an estimated $4.6 billion to property damage and theft, according to the FBI.
Your insurance provider may offer discounts if you install safety features. For example, security features like deadbolts, fire extinguishers, and security alarms can add discounts anywhere from 5 percent to 20 percent.
3. Raise your deductible

Raising your deductible is one surefire way to lower your monthly homeowners insurance premium.  If you can afford to go slightly more out of pocket in the event of a claim, then you could potentially save another 10 to 15 percent.

4. Disaster-proof your property

Adding stronger weather-resistant features to your home like storm shutters or better roofing material can lead to dramatic savings on your insurance premiums, especially in areas that are prone to disasters like high winds or flooding.

5. Review your insurance policy

We recommend reviewing your insurance policy every year to ensure that you not only have the right insurance coverage, but that you also aren’t purchasing unnecessary coverage as well.

6. Double check your property limits

This may sound obvious, but if you paid $200,000 for your house, you don’t need to have $200,000 worth of coverage, because part of the purchase price included the lot your house sits on. You should carry insurance coverage equal to the cost of rebuilding the structure.

7. Inventory your possessions 

Understanding the right limit to use for your stuff can save you money on premiums and help you tremendously in the event of a claim.

Final Note
While it’s always nice to save money on your insurance, we don’t ever recommend purchasing liability and property limits  at lower amounts than what will sufficiently protect you and your family.   It’s never a good idea to put your personal assets in jeopardy to save $50 on your premiums.

If you would like to see where you can save more on your insurance premiums, or if you would like some insurance quotes on your home, please don’t hesitate to give us a call.

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