Memorial Day

Posted by on May 24, 2017 in Blog | Comments Off on Memorial Day

Memorial Day

Memorial Day weekend is upon us which is a sure sign summer’s almost here and kids everywhere are counting the days until the end of the school year while planning what they’ll do over the summer. All of us look forward to having a three-day weekend, whether it’s what sales at local malls to take advantage of, make a trek to the beach or enjoy a dip in the swimming pool. Grills will be fired up for burgers, hotdogs, and other culinary delights for gatherings of friends and families.

Memorial Day has a much deeper meaning for many Americans, however. For them, it’s a time to pause, reflect, and remember those paid the ultimate sacrifice to secure our freedom. Over 1.3 million men and women have lost their lives in all US wars enabling us to enjoy that freedom however we choose to do so. Another 1.5 million were wounded in some way and over 38,000 went missing in action during these wars.

Enjoy your holiday, I will be spending it with family, but take a few minutes to remember those who served in the armed services and gave us the gift of our freedom. Better yet, thank someone you may know for their service, past or present, and let them know you are grateful for their sacrifice. They’ll appreciate your acknowledgement because it matters. I’ll be thanking my dad and sister. Freedom isn’t free as almost 3 million men and women can attest.

Happy Memorial Day!

Ed Wise

Wise Insurance Group

An Overview of Renters Insurance

Posted by on May 22, 2017 in Blog | Comments Off on An Overview of Renters Insurance

An Overview of Renters Insurance

I’ve written several renters insurance policies in the past few weeks for new college grads, people relocating to north Texas, and someone going through a divorce. Some purchased them because the lease requires it while others simply want their personal property covered against what may happen. I felt it to be a good time to revisit renters insurance and the coverage contained in a typical policy.

Personal Property or contents is the coverage for everything you move into an apartment or home you’re renting. This includes furniture, electronics, clothing, dishes, cookware, linens, appliances, computers, phones, artwork and jewelry. How much coverage you need depends entirely on what you own. I recommend prospective clients review what they own and create an estimate of the cost to replace each item, even the loveseat your parents gave you!

Personal Liability protects you when someone comes into your home, invited or not, they get hurt and then sue you for negligence. This may entail someone falling in your apartment, tripping over something, or even being bitten by a pet. Depending on the company, renters insurance typically comes with $50,000 in coverage, although I recommend either $300,000 or $500,000 depending on your income level and what you do professionally.

Medical Coverage is designed to take someone who doesn’t live in the home, to receive medical attention when hurt. It may not keep them from suing but it can be very nice for someone who’s not badly injured. Typical coverage limits range from $1,000 to $5,000, with a nominal difference in cost between these levels.

Loss of use helps financially if you need to move out of your home and rent another due to a claim. This can be used to pay for a few days in a hotel while your apartment is being dried out form a massive water leak, to up to a year if it’s damaged by a fire. Not everybody can cashflow paying for two places to live.

Options are available on renters insurance policies for those who want or need them. If you own nice artwork, jewelry, a great baseball card collection, or incredible electronics, you can protect them better with scheduled coverage. Concerned about water or sewage back up or broken windows? There’s optional coverage for that too, as well as coverage for earthquake damage, floods, and more.

Deductibles are the amount you pay out of pocket before the policy pays for the claim. This is usually stated in a dollar amount such as $250, $500, $1,000 etc. A high deductible results in a lower renters insurance premium, while a lower deductible increases what you pay for the policy.

Discounts are available if you live in a gated community, have security guards on the premises, have a local or monitored burglar and/or fire alarm, smoke detectors, sprinkler system, fire extinguisher, or have your car insurance written by the same company. Find out what’s available!

Have a question about renters insurance? Please ask them, and share your experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Commercial Insurance Hired and Non-Owned Auto Liability

Posted by on May 17, 2017 in Blog | Comments Off on Commercial Insurance Hired and Non-Owned Auto Liability

Commercial Insurance Hired and Non-Owned Auto Liability

If you’re a small business owner or run a non-profit, did you know you could be sued if an employee or volunteer is involved in an accident while driving their own car or a rented vehicle on business? Unfortunately, it’s true and there is an option that may be added to your commercial insurance policy or purchased separately, if it can’t be added to your general liability insurance, to protect you in such an event. It’s referred to as hired and non-owned auto liability, or HNO liability, and it could save your bacon financially.

Let’s suppose that you send an employee or a volunteer out to pick up office supplies, lunch, coffee, set up a trade show booth, or deliver something to a client or donor. The employee or volunteer looks down at their phone and is involved in an accident. The person they hit is hurt and the employee or volunteer’s car insurance doesn’t cover the victim adequately, then the victim may decide to sue your company or non-profit. Without this coverage, you’d have to pay for defense cost and possibly the liability claim out of your own pocket. That’s where hired and non-owned auto steps in.

A good HNO auto liability policy will provide coverage for at least three things including liability claims, defense costs, and actions of your employee, temporary staff, or volunteer.

  • Liability Claims provides protection for liability claims to your business or non-profit if an employee or volunteer is involved in an accident when driving their vehicle or a rented vehicle for business purposes.
  • Defense Costs enables the insurance company to appoint an attorney to defend your business or non-profit in a lawsuit, even a frivolous or groundless one. That beats having to pay for one out of pocket!
  • Employee / Staff Actions protects your business or organization to the extent it is liable for an employee’s (full time or part time) or volunteer’s actions when driving their personal or a rented vehicle.

It’s also important to note what most HNO auto liability policies don’t cover.

  • The Employee is not covered when driving a vehicle by the HNO policy; it’s for your company or organization.
  • Physical Damage to the employee’s or volunteer’s vehicle is also not covered. That’s covered by their car insurance policy.
  • Transportation of Property such as a company laptop, tradeshow booth, or other organizational property is not covered if damaged while being transported.

Is your business or non-profit covered? To find out if this is included by your commercial insurance policy, ask your agent. It’s much better to find out before an accident happens than after one when it’s too late. Do you have a question, comment, or experience you’d like to share? You can share them with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Duplexes and Home Insurance

Posted by on May 15, 2017 in Blog | Comments Off on Duplexes and Home Insurance

Duplexes and Home Insurance

A homeowner called me last week to discuss home insurance on her Dallas area duplex. It was coming up for renewal and she wanted to confirm she was not over paying for her home insurance. I was delighted to review her current rate and advise her on her coverage. Based on that conversation, let’s review insurance considerations for a duplex.

There are many ways to write home insurance on a duplex, however, it hinges on two key issues; do you own one or both sides and who lives there. Let’s look at a couple of examples of how home insurance companies approach this.

One Side Owner Occupied: This is the easiest of all the scenarios. When a person owns only one side lives in it as their primary residence then we quote a standard home insurance policy on just their side. The policy covers only their half of the duplex including their portion of the roof, exterior walls, interior finish out, and their personal property or contents. Whomever owns the other half of the duplex is responsible for covering their half.

One Side Tenant Occupied: When the owner only owns one side and rents it to a tenant, then we write a rental property policy for their half of the duplex. The policy covers only the half they own including their portion of the roof, exterior walls and interior finish out. Personal property is usually not included unless the owner is providing appliances such as a washer and dryer for the tenant. The tenant is responsible for protecting their personal property with a renter’s policy.

Both Sides Tenant Occupied: Like the one side tenant occupied case, a rental property policy is written on both sides of the duplex with each tenant needing a renter’s policy to cover their personal property.

Both Sides Owned Mixed Occupancy: This was the case of the person who called me last week. She owns both sides, lives in one side and rents out the other side to a tenant. Home insurance companies approach this in a couple of different ways.

  • Write a primary home policy over both sides, however, only the owner’s personal property is covered under the policy. This approach may also be used if the second half is occupied by an immediate family member such as a parent or adult child. The family member, like a tenant, will still need a renter’s policy to protect their personal property.
  • Write a primary home policy over the owner occupied side and a rental property policy over the tenant occupied side.
  • One company writes a primary rental property policy over both sides and covers the owner’s personal property with a renter’s policy.

After reviewing my options, I informed the person who called me she had an excellent rate. However, I was concerned she had some gaps in her coverage I would have addressed differently and made three suggestions she should address with her current agent. I believe it’s important to point out gaps in coverage when I see them. What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Car Insurance and Which Car Teen Drivers Are Rated On

Posted by on May 10, 2017 in Blog | Comments Off on Car Insurance and Which Car Teen Drivers Are Rated On

Car Insurance and Which Car Teen Drivers Are Rated On

A client called me last week who was surprised at the increase of adding his youngest son with a brand-new driver’s license to the family car insurance policy. I’m reviewing his options, but thought this was a great example of how car insurance companies take different approaches concerning vehicle assignment when adding a teen driver. These differences can result in some very surprising rates, especially if the new driver will be sharing one of the family cars!

All Vehicles: The company my client is with does not assign any driver in the household to a specific vehicle on the policy as their primary vehicle. Instead, it opts to rate the policy with the teen driver, as well as all other drivers, to every car on the policy, whether they will drive them or not. The reasoning for this approach is the teen driver has access to each car in the household and is therefore rated on each vehicle. In this case, the teen with the new driver’s license is listed on his mom’s BMW and brother’s sports car resulting in a dramatic increase in the family’s rate.

Most Expensive Vehicle: Other car insurance companies will rate the teen as the primary driver on the most expensive vehicle in the household, even if they are not allowed to drive it. This too can have dramatic effects on the family premium since a newly minted driver is several times more likely to be involved in an accident the first two to three years of driving.

Vehicle Assignment: Still other car insurance companies allow each driver in the household to be assigned to a specific vehicle as their primary vehicle. In this instance, we can assign the teen, or other family members, to a specific vehicle as the primary one they’ll be driving. While all vehicles are still available for the teen to drive, rating them mostly on either dad’s, mom’s, or a sibling’s vehicle keeps the premium more realistic overall.

Own Vehicle: A variation on the vehicle assignment option, is when the new driver will have their own car and we’re able to assign them as the primary driver on that vehicle. Preferably, this will be a used vehicle with four doors, or a small pickup truck, or SUV which tend to carry more favorable car insurance rates than a two-door car or newer vehicle. The teen is still listed as a potential driver on the other vehicles, however, the car insurance company recognizes they will be the primary driver of a specific vehicle rather than dad’s or mom’s more expensive vehicle.

I’m working through my client’s options with our other carriers to determine which car insurance company will give him the very best rate! I’m grateful we have several options to work with! What’s been your experience? Share them with me, along with any questions or comments you may have on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Texas Townhouse Insurance

Posted by on May 8, 2017 in Blog | Comments Off on Texas Townhouse Insurance

Texas Townhouse Insurance

I wrote about condominiums and condo insurance last week and this week, I wanted to follow that up with an overview on townhouse insurance. The reason for addressing townhouses as a distinct home type is they have elements of a traditional single family home. They also share something in common with condominiums as they have a mandatory homeowner’s association and are usually found in highly planned communities.

Since a townhouse shares features with both single family homes and condos, there are usually two ways the townhouse insurance can be written. Which one’s the right one for your townhouse depends on who’s responsible for the home’s exterior walls, roof and foundation. This is usually clearly outlined on the association policy.

Once I’ve gathered information about the home from the owner or buyer, I call the person who administers the HOA policy to ask whether it covers the exterior and roof of the town houses in the community, or does it just provide liability coverage for the association. Whenever possible, I’ll request a copy of the certificate of insurance to verify what’s covered by the association policy.

If the association policy only provides general liability and related coverage for the association, I’ll quote a standard home insurance policy which provides coverage for the complete structure of the townhouse including exterior walls, roof, interior finish out and the owner’s personal property and liability. The only thing that differentiates this policy from a traditional single family is the “style” of home which is townhouse as opposed to ranch, Victorian, etc..

The location of the town house may provide a rating difference if located at the end of several homes. In other words, it’s an “exterior” versus an “interior” unit. The presence of a firewall between each home may also make a difference in the home’s insurance rate. Other items which may contribute to a lower rate is if it’s located in a gated community and is equipped with an interior sprinkler system.

If the association policy provides coverage for the townhouse’s exterior walls and roof, then a condo policy is called for. This policy type covers the finish out of the home, or sheetrock in, including the walls, flooring, cabinetry, plumbing fixtures, appliances, and personal property or contents of the homeowner.

Townhouses continue to grow their presence in north Texas, especially in the tear down and rebuild urban areas. I expect this trend to increase over the coming years as lot and home prices continue to rise in the Dallas / Fort Worth metroplex and people who prefer to live closer to work take advantage of mixed development communities. Besides, not everyone likes yard work!

Once I know the answer to what the association policy covers, I can then write the proper townhouse insurance policy. What questions, comments, or experiences do you have you’d like to share? Share them with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Do Texans Get Free Roadside Assistance and Towing!?

Posted by on May 3, 2017 in Blog | Comments Off on Do Texans Get Free Roadside Assistance and Towing!?

Do Texans Get Free Roadside Assistance and Towing!?

A couple of times a year I’m asked if it’s true Texans get free roadside assistance just for living in our glorious state. Usually the question comes from a client either because they saw it on Facebook or received an email which has been circulated (multiple times now). No, it’s not some fake news article and there really is an 800 number on the back of your Texas driver’s license stating it’s for Texas Roadside Assistance.

But like anything that sounds too good to be true, there are some things every Texan should know. So, before you cancel the roadside assistance coverage on your car insurance policy or your AAA membership, let’s address what is provided and what’s not.

Facts:

  • There is a number for Texans & it’s on the back of your driver’s license
  • The number is (800) 525-5555
  • This service was established in 1989
  • Please do not use it instead of 911, it’s not intended for that
  • The service is designed to help motorists with a legitimate need for assistance on Texas roads
  • The hotline is answered by Department of Public Safety personnel
  • Information is then passed on to the nearest police department, sheriff’s office, courtesy patrol or DPS office
  • It’s designed to respond to
    • People stranded with car problems
    • Hazardous road conditions
    • Debris on the road
    • Suspicious activity at a rest area
    • Obviously intoxicated or dangerous drivers

This is an excellent service however, there are a few things to be aware of before you use it.

  • Tow trucks are not dispatched at the expense of DPS or the Texas Highway Patrol.  If a tow truck is called, you will have to pay the bill
  • Our Texas Highway Patrol officers are not certified to repair your car nor do they carry a tool kit with them
  • For their safety and yours they do not perform repairs
  • They do not carry a gallon of gas with them to help you if you run out of gas
  • They do not perform locksmith service if you lock your keys in your car

The bottom line is if there’s a cost to be incurred, you will be responsible for paying the bill.  Me, I’m holding on to my roadside assistance plan! Have you used this service?  If so, share your experience with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Texas Condo Insurance

Posted by on May 1, 2017 in Blog | Comments Off on Texas Condo Insurance

Texas Condo Insurance

I had an interesting conversation last week with a Dallas area mortgage professional about condo insurance. He was working on his client’s loan and had several questions about coverage, which I thought would be useful in guiding a blog post for those who own, or are considering buying a condo.

Coverage: His first question was to confirm what a condo policy covers. There are two property areas most condo insurance addresses, the finish out of the condominium and the owner’s personal property.

The finish out amount should be enough to rebuild the condo if there were a total loss such as a fire. Since most condo association policies cover the physical structure, studs out and common areas, the condo owner’s policy covers the sheetrock in. This includes the sheetrock and what covers it (designs, specialty paint, paneling, etc.), electrical plugs, light fixtures, ceiling fans, cabinetry, floor coverings, and plumbing fixtures.

In addition to the condo’s finish out, the amount of personal property, or contents, coverage should be enough to replace everything the owner moves into their home. This includes furniture, electronics, clothing, dishes, appliances, etc.

There is one exception to this. I work with a couple of small associations whose policy covers the entire building including the condo finish out. In this case, the only property the owner needs to cover is their personal property as the association covers the entire physical structure.

Coverage Itemization: Some insurance companies show a single number for both the finish out, or replacement cost of the home, and the owner’s personal property. Other companies show these amounts separately. Whenever I work with a mortgage professional, I confirm how these are represented and when combined, how much is earmarked for the home and how much for the owner’s personal property.

Claims: The condo my friend was working on, had a claim against the association, so he wanted to know if this would impact his client’s rate. Whether it impacts the buyer’s rate is largely up to each insurance company, however, most of the ones I work with are only concerned about claims specific to the condo the owner is buying or owns. Those may or may not impact the rate as most companies only concern themselves with the buyer’s claims if this is a new purchase, or the owner’s prior claims if they are considering moving insurance to one of my carriers.

Optional Coverage: Lastly, the mortgage loan originator was curious about optional coverage the buyer was examining. Like most home insurance policies, condo insurance comes with a variety of optional coverage including personal liability, medical coverage for people who visit, water options, glass coverage, and much more. The one option I always recommend is loss assessment coverage which protects the owner against an association assessment for a major claim such as a fire or large hail claim. This option is very nice and protects the owner against having a major outlay of cash to satisfy an assessment.

I love good questions and a fun discussion about insurance. Our discussion helped the loan officer better understand the policy his buyer has chosen and that it meets their underwriting guidelines. What questions do you have? Share your questions, comments, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Teens, Car Insurance, and Two Questions

Posted by on Apr 26, 2017 in Blog | Comments Off on Teens, Car Insurance, and Two Questions

Teens, Car Insurance, and Two Questions

I’ve talked with two clients in the past week. Both are parents of teens who are about to start driving. One client has a teen son that’s about to get their learner’s permit while the other has a son who’s about to get their license. Both had two questions related to their car insurance.

The two questions I’m most frequently asked when it comes to teens who are about to get their permit or license is when they should add their teen driver to their car insurance policy and does it make a difference to the insurance rate if their child takes a parent led driver’s training course or an instructor in a driving school?

When to add a teen driver is dependent on the car insurance company and how they approach this. Companies usually falls into one of two approaches:

  • Some want the teen driver listed on the policy when they receive their learner’s permit.
  • Other companies wait to add the driver when they obtain their driver’s license.

In the first case, listing a teen driver with a permit does not impact the insurance rate, it simply is an acknowledgement there is another “driver” within the household. In this case, the teen with a learner’s permit is listed but not rated.  The rate changes only when the teen driver receives their driver’s license whether it’s when they turn 16 or at a later age.

For car insurance companies in the second group, since they do not require a permitted driver be listed, we only add them to the policy when they receive their driver’s license.  The rate is adjusted at that time to account for the new driver and the risk they represent.

In both cases, there is no set time between when a driver receives their permit or is awarded their driver’s license.  Teen drivers are only rated when they become licensed, not when they turn 16 or some other age.  That is up to the parent and the teen, not the insurance company.

Regarding my client’s second question, does the type of driver’s training class make a difference to their future rate?  The answer is, no. No insurance company I work with makes a distinction between a parent led or instructor led course.  In both cases, the student driver is awarded a certificate upon completion of the course and that’s worth a discount on the car insurance rate.  The only question is which class option is best for the emotional and relational health of both the parent and the teen!

Do you have a question or experience you’d like to share?  Share them with me on my Facebook, Google +, and LinkedIn pages!  I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

Home Insurance and Federal Pacific Electric Panels

Posted by on Apr 24, 2017 in Blog | Comments Off on Home Insurance and Federal Pacific Electric Panels

Home Insurance and Federal Pacific Electric Panels

I reviewed Sheri’s and my home insurance in March. It had gone up again and we’d been with the same company for several years, so it was time. I was very pleased with the rates I found with a couple of my other carriers and decided to call the underwriter to discuss our home since it was built in the mid 1950’s. She told me it would require an interior inspection, in addition to the exterior inspection. I was curious what they’d review and the criteria they’d use to determine whether to write my home insurance or cancel it. What I found out caused me to go to the next option on my list!

The interior inspection would cover several items including whether the electrical, plumbing, and heating and air conditioning systems were up to code and if they’d been updated since the home was built. They would also see if the electrical panel had circuit breakers or fuses and if it is a Federal Pacific panel. We’d replaced the interior and exterior HVAC system in 2016, the water heater in 2009 or 2010 and both were up to code. The one strike against us is we have a Federal Pacific panel and that would cause us to be declined.

I’d been asked by a realtor several years ago about whether a home insurance company would write a policy on a home with a Federal Pacific electrical panel before. Based on my research at the time, the company I was with would and I was not aware of any insurance company that wouldn’t. I’ve not run into any home insurance company since then who will decline a home insurance policy due to the presence of a Federal Pacific electrical panel until a few weeks ago.

Federal Pacific electrical panels were widely installed in millions of homes nationwide from 1950 until 1990. Many people and safety experts believe they are the cause of to 2,000 to 3,000 home fires annually. These fires occur when a circuit becomes overloaded, overheats and fail to “trip” or switch into the off position. A properly working circuit breaker will trip into the off position in no more than two minutes when overloaded. The Federal Pacific circuit breakers weren’t tripping and were believed to cause home fires.

The Consumer Product Safety Commission closed its investigation on Federal Pacific panels in 1983, as they didn’t find a serious risk of danger to consumers based on data at the time. The company, Federal Pacific Electrical Company sold the company’s assets to Challenger Electric which have been subsequently resold several times since then with no one having any ties to the original FPE panel makers.

In most cases, this still isn’t an underwriting question most agents are asking. Most home insurance companies do not specifically exclude coverage for a home with a Federal Pacific electrical panel. I considered having our panel replaced, however the average cost is about $2,000 meaning it will be done either later this year or next year. What do you think? Share your thoughts, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group