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pertinent industry news and offer more in-depth insight into various
types of coverage and endorsements. We publish our newsletters
at least once each quarter. We hope you enjoy it.
Thank you for your patronage!
What is a "Manifestation
of Willingness to Renew" And Why Does It Matter?
From time to
time, a few of our insurers may issue documents on your
insurance policies that may seem unnecessary to you. We've
had a few questions about these in recent weeks, so we
thought we'd take a moment to address them.
Most insurance
companies begin working on issuing renewal policies or quotes
somewhere between 120 and 60 days prior to the expiration of that
policy. So if your policy expires on January 15th, there's a
good chance your insurer is already examining your policy and
deciding if they want to renew it, at what premium they would be willing
to do so, and whether or not there are any changes to their coverage
they want to implement.
That 60 day mark is
important to companies, because if they want to change the language
of a policy or get off of it completely,
they're obligated by insurance regulations to send a notice
at least 60 days prior to the expiration of that policy (in Illinois
and Missouri, Indiana has different regulations that vary based on
the type of policy in question). The Department of Insurance
for these respective states have set this deadline so that consumers
aren't left scrambling for coverage at the last minute. If an
insurer misses that deadline, they're obligated to renew coverage as
it was the prior year.
If a carrier
is going the non-renewal route, they would issue a "Notice of
Non-Renewal" to the policy holder. If they're changing the
wording of their policies, they have to issue a different type of
notice, typically a "Manifestation of Willingness to Renew"
or a "Notice of Conditional Renewal." Basically,
the latter of these notices say "we
are willing to continue writing this policy for you, but with the
following changes to the policy form." They
will then include an outline of the changes being made.
These
modifications to policy language could happen for a variety of
reasons. Often times, they're simply to
clarify wording. Occasionally, they are to broaden
coverage provided and sometimes they restrict coverage. In
almost all instances, it's because past claims and incidents
have brought existing policy language under closer scrutiny,
hence the company's desire to clarify, expand or restrict the
wording to what was originally intended.
They can be
confusing; usually they'll only reference the section and paragraph
of the change and the change in wording. To get a better idea
of the full extent of the change, you'd have to dust off your
policies and go digging through them to read the complete section or
paragraph to try to understand the change.
If there's ever a
change that would have us concerned about
the comprehensiveness of your protection, we would address
that directly to you and, of course, look for alternatives, if
the situation warranted.
Winter Fire Safety Tips
The single most important thing you can do to keep
your family and business safe from fire is to have a smoke alarm in
every bedroom and on every level of your house. Smoke alarms
reduce the risk of home fire deaths by 50 percent.
With winter approaching, it is important to remember
certain safety rules when heating your home or business.
Furnaces
A malfunctioning furnace can produce carbon monoxide,
a "silent killer," that can spread throughout your house,
and an undetected gas leak can create a highly flammable and explosive
environment.
Change
the unit's filter once a month and have a qualified professional
check the unit once a year. Install carbon monoxide
detectors, following manufacturers guidelines.
Be
sure all furnace controls and emergency shutoffs are in proper
working condition. Leave all furnace repairs to qualified
specialists - DO NOT attempt repairs yourself.
Inspect
the walls and ceiling near the furnace and along the chimney
line. If the wall is hot or discolored, additional pipe
insulation or clearance may be required.
Ensure
the flue pipe and pipe seams are well supported and free of
holes or cracks. Look for soot along or around seams, as
this can indicate a leak.
Check
the chimney to make sure it is solid; are there cracks or loose
bricks? All unused flue openings should be sealed with
solid masonry.
Keep
trash and other combustibles away from the heating system.
Wood burning appliances: stoves
and fireplaces
Most experts do not recommend the installation of any
wood-burning stove unless it is airtight and has controlled airflow
(wood-burning stoves are also a major concern of home insurers).
If you are burning a lot of wood, your stovepipe and chimney
may have a heavy buildup of creosote, which can lead to a fire in
your chimney and spread to the roof of your house.
Fireplace
chimneys should be inspected and cleaned at least once a year,
and stovepipe chimneys should be checked once a month and
cleaned as needed.
Ensure
proper installation. Adequate clearance for wood stoves is
at least 36 inches from combustible surfaces.
Wood
stoves should be of good quality, solid construction and design
and UL listed.
Do
not use lighter fluid, charcoal starter, gasoline or other
flammable liquids to start or accelerate the fire.
Keep
a glass or metal screen in front of the fireplace to prevent
embers or sparks from escaping. The area under and in
front of the unit should be made of noncombustible substance.
No carpets or throw rugs.
Never
burn charcoal indoors! Burning charcoal can give off
lethal amounts of carbon monoxide.
Before
you go to sleep, be sure your fire is out. Never close
your damper with hot ashes in the fireplace or wood stove.
A closed damper can help rekindle the fire, forcing toxic
carbon monoxide into the house.
Never
break a synthetic log apart to quicken the fire, and never use
more than one log at a time. They often burn unevenly,
releasing higher levels of carbon monoxide.
When
emptying the ashes from the wood stove or fireplace, put them in
a metal container and place outside the building. Let them
sit for a while to cool, or add water to the container to make
sure all the ashes are out before disposing of them.
Other
Winter Fire Threats - Holiday Specific
Each year,
there are an estimated 10,000 fires involving Christmas Trees. Most
of these involved short circuits from the use of extension cords or
connecting too many strans of lights. One of our favorite
episodes of Mythbusters
involved tests to see if the heat from Christmas lights could spark a fire
- they did not. And as tests by the National Fire Protection
Association show, when a dry tree goes up in flames, it goes fast.
Another more common
holiday fire involves frying turkeys. The news clip below has
some some safety advice for those using fryers this Thanksgiving.
Spotlight On: Crime Insurance
Don't Get Robbed Twice -
Understand Crime Insurance
First
off, some scenarios:
1. Your
business has been burglarized and you find yourself standing amid
broken glass. There's trashed shelving, broken displays and missing
merchandise. While vowing revenge the thought comes to you mind: will
my insurance cover this?
2. You
realize your favorite cashier is stealing from you. Taking $20 here
and $50 there for several months. Now your loss totals more than
$2000. You make a note to call your agent the following day and ask: will
my insurance cover this?
3. You
can't believe it! Although your inventory records say you have 50,000
widgets in stock, there are only 1000 in the warehouse. What happened
to the other widgets? Lost? Stolen? Never delivered? As your heart
sinks over the lost sale, you think: will my insurance cover
this?
4. You
watch sullenly, held motionless by the gun, as the thief cleans out
the cash from your register. As fear mixes with anger, its doubtful
that you're presently asking yourself: will my insurance cover
this?
The
quick answers to the above are partially, possibly, unlikely and
maybe.
One of
the often confusing attributes of crime insurance is that the terms
used in the insurance policies reflect legal definitions, not the
meanings we assume in everyday conversation. For example, in relating
any of the above situations to a friend, you may describe all four as
"I was robbed" or "that thief took everything I had!"
Yet,
according to an insurance policy, the above incidents are four very
different types of claims, and are described by four different, and
sometimes mutually exclusive, terms. In order of their appearance,
the terms are burglary, employee dishonesty, disappearance
and robbery. All of them, once connected to a dishonest act,
are considered a form of theft.
The
significance of knowing these terms, and the types of crime each
refers, is that you purchase crime insurance to cover each crime or
combination. For example, if your crime policy only provides burglary
coverage, only the first scenario above would be a covered loss. If
your policy only covers robbery, then only the last of the
four would be covered.
So, if
you want to be sure you have the proper crime insurance, do you have
to memorize a batch of legal definitions, or risk buying the wrong coverage
for your business? No, you just need a good agent or agency (like
us!) who deal with crime insurance and already familiar with the
vagaries, and can make sure you get the coverage most needed by your
business.
There
are a couple basic issues to consider with crime insurance. First
off, what is it you are afraid will be the focus of the crime? For
some businesses, cash is their biggest exposure. For other
businesses, merchandise may be the key target. A jewelry store may
have little cash on hand and a guard on duty during store hours.
Their real exposure may be the risk of someone breaking into the
store safe and making off with a small fortune in merchandise.
Second,
who is most likely to commit the crime? For many businesses, the real
exposure isn't someone outside the business trying to break in, but
rather someone inside the business carrying the property out. It will
do you no good to put bars on the windows, install a state of the art
security system and then hand the keys to an employee you hired last
week and say, "be sure to lock up on your way home." Do you
have a bookkeeper, cashier or store clerk who can readily walk out
the door with your property?
For other businesses, particularly those with few or
no employees, the greatest exposure will clearly come from the
outside. Below is some sample policy language from some of the
more common policies we sell concerning various forms of theft.
The exhibits linked to above are used as examples
only. Always read your policy, as the language in it may
differ. A criminal may steal your stuff. Don't let poor
insurance planning and protection steal your dream.
Portions
of this article were culled from the Trusted Choice website.
Illinois Gaming Update
Earlier this summer the Illinois Gaming Board began
taking applications online for gaming licenses. Prior copies of
applications have circulated around these last few years as Illinois
moved closer to adopting legalized video game gambling. Last
August, we passed along some tips to
help you prepare for the very thorough document and background check
the Illinois Gaming Board has.
But now the machines are going live. The app can
be found at https://www.igb.illinois.gov/vla/.
Here are some things to keep in mind as you prepare to file your
application:
Having
the first application in does not mean first application
approval. The IGB conducts an exhaustive review of
applicants and that process may take longer with some applicants
than others.
Make
absolutely sure that information is accurate and truthful.
You
cannot submit your application, withdraw it, and resubmit
it. It has to be right the first time.
It's
recommended that applicants have another set of eyes look over
their application before submitting to verify the completeness
of the app.
We know this
is a law many of you have been watching closely and anxiously awaiting
the passage of. We'll pass along any further information on
this subject as it comes out. If your business has your
machines in, we'd love to hear feedback about them, the process of
getting approved and getting your machines in, and the results you're
seeing so far. Has it been worth it? More trouble than
it's been worth? Start a discussion on our Facebook page.
Personal Articles - Are
Yours Covered?
If you
believe Hollywood's depiction of a typical heist, you'd think that
only cars and cash are the targets for thieves looking to strike it
rich. Not so. There are tons of cases involving stolen antiques, art,
and collectibles. While reading an article about a March 2012 case
where a thief conspired and stole historical documents from museums
in Pennsylvania, New York and Connecticut, then sold them for profit,
we came across an FBI statistic that estimated $4.6 billion in in
lost property in 2010.
A good
portion of that was stolen collectibles. Of all burglaries recorded,
nearly 74 percent were burglaries of residential properties. Top
targets for burglars entering a home include: electronics, jewelry,
art, antiques, collectibles, and rare items.
It's an
insurance agent's job to help clients protect what they collect.
Typical homeowners' coverage may fall short to protect the valued
collections of personal lines customers: at the time of claim,
sublimits for collections may restrict coverage well below the value
of a collection. A homeowners policy likely does not cover risks such
as accidental breakage, flood and earthquake.
First,
let's look at some of the more sought-after collectibles and the
risks they present.
Antiques
Antique
collections are the most targeted item for thieves because they're
hard to trace and easy to resell. There seems to be a recent
fascination with antiques in the last decade or so, with shows like
PBS' Antiques Roadshow and the History channel's Pawn Stars
and American Pickers sending folks digging through their
parents' basement and/or buying up vacated storage units hoping
to find treasure among trash. Some thieves even go to extreme measures to get their target.
Sports
Cards
Similarly
targeted, but only very rare cards collected by active collectors
would be difficult to unload without attracting attention.
Coin
Collections
One of
the more sought after items for thieves, coins are easy to steal and
seemingly easy to dispose of. Even so, some thieves seem to have no
idea how valuable some of the coins can be. A collector in Oregon was reunited
with most of his collection after thieves deposited them in a
supermarket coin counting machine. They got $450, but the collection
was worth several thousand dollars.
An
upward trend in gold and silver prices is boosting the appeal of
stealing coin collections. Here's one example of an uninsured loss of over $160,000.
Fathers,
lock up your daughters - or rather, your daughters toys. Barbie dolls
are sought-after collectibles. One collection of 25 dolls valued at $2000 was stolen
in Virginia in the last year. The motherlode of all Barbie stashes
though - 5000 dolls - was valued north of $1 million at the time of
it's theft in 1992. That loss was also
uninsured, although the collection was recovered later that same year.
Entertainment,
Media, Movie and Record Collections
When a
California man pleaded guilty in March to stealing
movie posters and reselling them, the victim (CBS) valued the posters
at $450,000.
Figurines
Your
great-aunt's figurines aren't just pretty - they may also be
valuable. A St. Louis woman was sentenced to a year in jail for stealing Steuben Crystal glass figurines valued
at $15,000 from a local residence.
Firearms
and Fishing Gear
Guns
are a popular target for thieves. In one instance, a firearm dealer returning home from a
gun show had more than $200,000 in guns stolen from his truck as he
sat inside a restaurant.
Military
Gear and Historic Collections
Any
item of historic significance can be stolen and may be valuable. Take
the case of the Civil War flag from the Indiana War Memorial
Museum that was swiped in 1997. It took 10 years, but the
flag was finally returned when an antiques dealer spotted the flag
while visiting a business liquidation sale and notified the FBI. The
flag, valued at $50,000, is now back with the museum.
There are collectors and valuable
collections on every American street. All it takes is the right
thief to recognize the value of certain collectibles. There's
a litany of uninsured horror stories we could link to, so
how do you properly protect your stuff?
How to Insure Your
Valuables
Some of your special possessions
covered under your homeowners policy may be severely underinsured, or
even completely uninsured. Homeowners policies may cover
certain items such as jewelry, electronics and other valuables.
However, the amount of coverage is often limited. Depending on the
item, the coverage may be anywhere from $500 to $2500 and may include
a deductible.
For example, your jewelry
may be included on your Homeowners policy under Coverage C - Personal
Property for any type of loss covered under the
policy. Unless your jewelry is stolen, in which case you may
have a sublimit of just a couple thousand dollars.
Special
Limits on Personal Property, from a sample Travelers Homeowners
policy. Click here to enlarge.
How can you insure your valuables
that may not be covered, or covered adequately, by the Personal
Property section of Homeowners policy? The solution would be to add a
personal articles floater (PAF, for short) to your policies. Depending
on the carrier, a personal articles floater may be a separate policy
or a supplemental rider added to your Homeowners policy.
What can be covered
under a personal articles floater?
If you own any of the following,
you may want to ask about whether they are protected under your
current homeowners insurance policy or if you need a PAF:
Jewelry
Artwork,
including paintings, statues, rugs, etc...
Furs
Cameras
& video equipment
Musical
instruments
Sporting
equipment
Stamps
& coin collections
China,
crystal & silverware
Why use a Personal
Articles Floater?
An item's value is not the only
consideration when determining whether to buy a PAF policy. The
type of peril to protect against should be considered, whether a
stone falls out of your engagement or wedding ring or you computer is
damaged in a flooded basement. These are damages typically
covered under a personal articles floater policy versus a homeowners
policy.
Depending on where you buy your
policy, you can either itemize your valuable items on a separate
personal articles floater or list your items on a blanket
coverage. Insurance companies have different requirements
depending on the item(s) and respective value(s).
If you have appraisals for your
valuables, you should be able to get the PAF written on an
"Agreed Value" basis. Having an appraisal on a piece
of artwork means that if you were to file a claim, you would be
reimbursed for the appraised value.
If you don't have appraisals but
have some sort of proof of purchase, such as a receipt, the total of
all items would be included on a blanket coverage. However, the
coverage is based on replacement cost or actual cash value versus agreed
value. So you may not be covered for the full amount of what you
paid for the actual lost piece.
Regarding "pair and
set" coverage, which would be used for jewelry including
earrings or an engagement ring and matching wedding band, the carrier
will reimburse you for the full cost of the pair or set as long as
you surrender the existing pieces you have in your possession to the
carrier. In other words, if the policy reimburses you for the
loss of one earring and you have to buy a pair to replace them, you
have to surrender the other earring as part of the claim.
How to Buy a Personal
Articles Floater
Here are some steps to make sure
you're buying the proper policy for insuring your jewelry and other
valuables:
List
your valuables. If you have a
collection of items you would like to insure, provide a list of
these items to your agent. The list should include a
detailed description of each item and their appraised or
purchased value. An appraisal is typically acceptable if
it was done within the last 5 years.
Check
your policy provisions for newly acquired property. What
happens if you buy a new piece of artwork or jewelry after the
policy is in place? Make sure you understand what you have
to do to get it covered under the policy.
Is
there a deductible? Ask your agent if the
personal articles floater has a deductible and if you can adjust
the size of the deductible to minimize the premium cost.
Keep
photos or video of your valuable items in addition to appraisals
and proof of purchase.
You'll need these in case you ever have to file a claim, so be
sure to keep them in a safe deposit box or scan them and keep
several electronic copies in different locations.
Consider
installing an alarm system in your home.
Increased home security should translate into a discount on your
premium.
Can
you store your jewelry and other valuables off-site?
If the items can be placed in a bank safety deposit box, this
will also qualify for a significant savings on the policy
premium.
We've written in the past about Mine Subsidence (Spring 2007, Spring 2010, Summer 2011) - usually in the
spring, when the ground softens and thaws, as that's generally when
there are more incidents of Mine Subsidence.
But there was one recent incident of Mine Subsidence
that caught our attention. The US Ice Sports Complex in
Fairview Heights, Illinois recently sank due to mine subsidence.
We've heard some parts have dropped as much as 22 inches. The
ice surfaces are cracked, the building has structural damage and all
events at the facility have been shut down since October 8th until
further notice.
In one interview we caught, a representative from the
Illinois Department of Natural Resources (IDNS) said the mine
the rinks sit atop of was closed in 1954 and runs 150 feet
deep. Much of the Metro-East area has a history of
mining. The Illinois State Geological Survey Prairie
Research Institute out of the University of Illinois has an interactive map tool, where you can
enter your address and see known mines in your area.
We've tried to find similar tools for Missouri and
Indiana. This link seems to be the best we
could dig up for Missouri, although the mapping tool seems slow and a
bit clumsy to use. Indiana has a decent mapping tool,
where you can also search by address.
Now, the problem with mapping tools is
two-fold. First off, older mines may never have been
mapped, period. Secondly, they may have been recorded
before the days of GPS, which may lead to some margin for error with
the maps. Heck, the Indiana Geological Survey out of the
University of Indiana has a plea for citizens on their homepage, urging
them to turn any old mine maps they find over to them, so that they
may update their own mapping tools.
It's unknown whether or not the US Ice Sports Complex
had mine subsidence insurance, but we would venture to guess they
did, given that Fairview Heights, IL is known to be greatly
undermined. But there could be another problem. In
Illinois, the maximum amount of mine subsidence on a commercial
property through the Illinois Mine Subsidence Insurance Fund is
$750,000. The extent of the damage is unknown, but it would not
be a stretch to imagine damages running past that amount. Mine
Subsidence coverage is available beyond that amount, but not through
the fund. Additional coverage would've needed to be purchased
through another insurance market, which can be difficult to find and
expensive to obtain.
Residential
Pricing for Mine Subsidence coverage in Illinois.
The maximum available on homeowners policies is
$750,000 through the fund. Mine Subsidence coverage is fairly
inexpensive, as depicted above.
Missouri does not have a state-run Mine
Subsidence insurance fund, only a fund to repair land, not
property. Structural repair is the responsibility of homeowners
and their insurers, if their insurers offer the coverage themselves.
Indiana, like Illinois, also has a state-run Mine
Subsidence Program. The maximum limit available is $200,000 per
structure. Here are some additional details about Mine Subsidence
coverage in Indiana. Again, to get Mine Subsidence
coverage in excess of the maximum amount under the state fund, you
would have to find coverage through another insurer issued on a
separate policy, which can sometimes be tricky to find and expensive
to purchase.
According to the Department of Transportation, traffic accidents happen
about that many times an hour across the United States. Are your
personal auto limits up to par? Or are you carrying low-limit,
cut-rate coverage?
We
offer a full-line of personal lines coverages for home, auto, boats,
motorcycles, RVs and more. Give us a shot at your next renewal to
see how we compete.
Carrier Corner
We represent over 15
insurance carriers directly and have access to many more via brokers,
but you may only know one or two that we deal with. Each issue,
we'll highlight one of our valued partners in this space.
Stonegate
Insurance
Stonegate
is a newer insurance company that we have just contracted with in the
last 2-3 months. Right now, they only operate in Illinois
and are not yet rated by A.M. Best or any other 3rd party analysis
firm.
Stonegate's
appetite is what led to us giving them a shot. In addition to the
usual Personal Lines risks - home, auto, condos, renters,
and rental property, their goals for desired Commercial
Lines accounts closely aligns to what we write the most of -
hospitality businesses of all shapes, sizes and characteristics, used
auto dealers and small-to-medium contractors.
We
know they won't be a fit for everyone. Whenever possible, we'd
much rather place your insurance with a company that's highly rated and
more experienced. But they may be an alternative for some of our
clients with fewer options.
Our office will observe the following holiday schedule.
Wednesday, 11/21
Noon close
Thursday, 11/22
office closed
Friday, 11/23
office closed
Tuesday, 12/25
office closed
Tuesday, 1/1/2013
office closed
We wish you and your family a safe and happy
holiday season, and best of luck in 2013.
Bret Dixon Insurance recently became a Trusted Choice
Agency. Learn more about ithere.
