property and casualty

DID YOU KNOW? Prepare For Back To School With Insurance Policy Review

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A back to school insurance review is vital for anyone with children living at college or boarding school. Whether it's the first year away or the last, going away to school has several insurance implications that need to be addressed to ensure adequate coverage.

Housing

Students living away from home for the first time present new worries for their parents. What if they have friends at their dorm and someone gets hurt?  What if they forget to turn off an appliance and cause a fire?  What if their laptop is stolen?

Many schools require first-year students to live on campus, so renter’s insurance may not be necessary. Some insurance companies include student housing in their definition of a covered location, but it pays to check with your agent.  If the policy language is unclear or if the policy does not automatically include student housing, a liability extension endorsement can be added to the policy for a very modest increase in premium, usually less than $50 annually.  The endorsement changes the home insurance policy to provide liability coverage to include a student's dorm room at school.  With this extra coverage, if someone gets hurt in their dorm, there is now no question about coverage.

But what about all the stuff they brought with them to school? Most home insurance policies will provide coverage for property located outside the main residence, with some restrictions – usually 10% of the property limit on the home insurance policy. For example, if your home insurance policy provides you with $200,000 of personal property coverage, up to 10% of that limit ($20,000) may be automatically covered while at college or boarding school.

There are two drawbacks to using this approach to cover property located in a dorm. First, the deductible from your home insurance policy would apply to the loss. If you have a high deductible on your home insurance policy, a small personal property claim at the dorm may not clear your deductible. Secondly, Loss of Use coverage (or sometimes called Additional Living Expense) does not extend to other locations listed on the policy. Let’s say a pipe bursts in the dorm, causing damage that will take months to repair. There is no coverage for additional living expenses you might incur while your child is living elsewhere.

If you don’t want to accept these policy limitations, a separate renter’s insurance policy should be implemented. Renter’s insurance will provide liability insurance for the dorm, or off-campus address listed in the policy, as well as the personal property at that location. The amount of personal property coverage is usually subject to a minimum amount ($20,000 to $25,000 is common), but a separate policy will allow you to secure a lower deductible, keep any losses from showing up on your home insurance policy, and provide you with Loss of Use coverage.  Expect to pay around $200 per year for a basic renter’s policy.

Whether you choose to extend coverage or take out a renter’s policy, don’t forget to list this location on your personal umbrella policy.

Itemized personal property

If you’ve made a significant financial investment in a laptop for your student, it may make sense to itemize it on your home insurance policy – much like you would a new piece of jewelry. Some insurance companies don’t like to schedule laptops, but it pays to check.  Expect to pay between $20 and $25 per-thousand of coverage.

Paying this additional premium gives you extra coverage for misplacing the laptop and accidental damage, with no deductible applied to the claim.

Cyber Liability

Free wi-fi might be a great way to attract students to a coffee shop or a study room, but it is also a great way to become a victim of identity theft. Your son or daughter might have your credit card information or other personal data on their cell phone, exposing you to financial loss.  Many home insurance policies offer optional cyber liability coverage by endorsement.  The amounts of coverage can vary widely, and there may even be customizable limits within the endorsement, so a conversation with your agent is essential.

Vehicles

If your son or daughter does not bring a car with them to school, you may be able to get a discount on your auto insurance. Most companies will provide an “away at school” discount if the school is at least 100 miles from home.

If they bring a car with them to school, coverage will need to be amended to show a different “garaging location." Depending on the state and the insurance company, a separate auto policy may need to be written if the car is garaged in a different state.

It is also important to remind your son or daughter that the insurance follows the vehicle. If they let their roommate, a friend, or a friend of a friend borrow their car, the insurance on the car pays for the claim. By extension, this means your personal umbrella would also cover the claim if the claim was severe.  Strongly discourage your child from letting anyone use their car while it is with them at school.

And DO NOT let them sign up as a driver for Uber or Lyft while they are at school. They might think it’s a good way to make a few extra dollars, but there are absolute coverage exclusions on auto insurance policies when vehicles are used as a taxi or livery service. Uber and Lyft provide their own insurance, but there may be coverage gaps as to when their coverage applies and when it does not and how it coordinates with your own policy. The risk far outweighs the financial reward.

Have questions about a back to school insurance review? David Miller has answers. Miller, who writes the monthly, DID YOU KNOW? blog is The Plexus Groupe's Vice President, Client Executive for Private Client Solutions. Miller can be reached by calling 846-307-6141.

DID YOU KNOW? Texting While Driving Deaths On The Rise

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Drunk driving is down by 65 percent since 1982, but deaths and injuries caused by distracted driving – like texting while driving – are on the rise. People are busier than ever, juggling home and work lives, managing kids' schedules and rushing from one thing to the next. It is no wonder that people use their time in the car to navigate their day -- making appointments, responding to email, returning a text -- when instead they should just navigate the road.

This wasn't always the most prevalent problem on the road. Alcohol was.

According to the National Institutes of Health, in the mid-1970s, alcohol was:

  • a factor in over 60 percent of traffic fatalities
  • involved in two-thirds of traffic deaths among persons 16 to 20
  • allowed to be purchased by anyone 18-years old.

Since then, a number of factors have been implemented to reduce drunk driving fatalities. Some of those reasons include:

  • the drinking age is now 21 in all 50 states.
  • The level at which a person can be arrested for drunk driving has dropped from a 0.10% blood alcohol content (BAC) to 0.08%
  • a zero tolerance law of 0% BAC for underage drinking have been adopted.
  • drunk driving has been stigmatized
  • the use of designated driving has been promoted.

 

According to Responsibility.org, these efforts have reduced alcohol-impaired driving fatalties by 65% since record keeping began in 1982.

But with the onslaught of cell-phone use -- over 330 billion Americans use one daily -- the statistics for distracted driving are going in the other direction.

According to the Centers for Disease Control, approximately 9 people are killed and 1,100 people are injured per day due to distracted driving and these statistics don’t include near-misses where an accident was avoided at the last second.

A number of years ago, Car and Driver magazine conducted a test that measured the reaction time of a drunk driver compared to a texting driver. The texting drivers took significantly longer to react to an alert than drivers who were legally drunk, yet texting and driving continues virtually unabated.

Despite these statistics, legal deterrents for distracted driving lag far behind those that have been implemented for drunk driving. In Illinois, the average fine for texting and driving is $75 for a first offense and little or no change in your insurance premium with most insurance companies.  Contrast this with a first-offense DUI in Illinois – A one-year suspension of your driver’s license, a fine of up to $2,500 (not counting attorney fees), and up to one year in jail.  From an insurance standpoint, a DUI may also result in non-renewal of your auto insurance, or astronomical increases in your premium combined with coverage restrictions or eliminations for up to seven years.

In order to fill this void, the insurance industry needs to get tougher on distracted driving. Awareness campaigns are a good first step, but meaningful financial penalties need to be implemented as a deterrent. Perhaps tripling a policyholder’s collision deductible for a distracted driving claim would work because it would have an immediate financial impact at the time of loss.

Have questions about your home and auto insurance coverage and want to make sure you are covered if a texting while driving accident occurs? David Miller has answers. Miller, who writes the monthly Did You Know blog, is The Plexus Groupe’s Vice President, Client Executive for Private Client Solutions. Miller can be reached by calling 846-307-6141.

DID YOU KNOW? Pool Safety Ensures A Swimming Summer

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Ensure pool safety before diving in headfirst. Whether you own a pool or get invited to a friend’s pool, ensure pool safety by having a plan to prevent injuries, adequate insurance coverage and a regular maintenance schedule.

According to the Centers for Disease Control and Prevention (CDC), an average of 356 drowning deaths in pools and spas occur in the United States each year, with 77 percent of the deaths involving children under age five.

While drownings are certainly the most tragic, common injuries include:

  • Clothing, jewelry, or fingers becoming entangled in drains
  • Head injuries caused from diving into shallow water
  • Overexposure to chemicals used to treat the water
  • Slipping and falling on stairs, decks, or ladders

 

If you own a swimming pool, you must take reasonable precautions to ensure pool safety and prevent people from being injured. Some of the acts a “reasonable person” would be expected to do to include:

  • Keeping the pool in good repair
  • Limiting access by enclosing the pool with a fence
  • Installing a locking hard cover when the pool is not in use
  • Providing adequate supervision for children and non-swimmers
  • Posting warning signs where appropriate
  • Ensuring that lifesaving devices are readily available
  • Refusing to allow intoxicated guests to swim
  • Keeping the area around the pool well-lit and maintained

From an insurance standpoint, a personal umbrella policy is also a must-have.  It won’t ensure pool safety or prevent an injury, but it will provide you with additional liability insurance should a tragedy occur.  Most importantly, legal defense costs incurred during the claims process would also be covered, without subtracting from the limit of liability.

Besides adequate insurance coverage and a regular maintenance schedule to ensure pool safety, it is important to talk about pool safety with your children. Some tips include not allowing them to swim unattended, avoiding unsafe pools and pointing out possible hazards to those who owns unsafe pools.

If you own a pool, have set safety rules, maintain it regularly, make sure your insurance policy has adequate coverage and then slather on some sunscreen and float your days away, worry free.

Have questions about pool insurance? David Miller has answers. Miller, who writes the monthly Did You Know blog, is The Plexus Groupe’s Vice President, Client Executive for Private Client Solutions. Miller can be reached by calling 846-307-6141.

Plexus Points: Three insurance stories to check out

We find insurance fascinating at The Plexus Groupe. And we love to read about the subject. With this in mind, here are three stories business professionals and the insurance-curious will want to click through and read: 

-- Like to take vacation cruises? Here's one on insurance for such trips.

-- On driverless cars and auto insurance.

-- Trains carrying crude oil through Canada will need to carry at least $25 million in insurance.