Personal Perspective

Social networking Web sites, such as MySpace, Facebook, and LinkedIn, are growing increasingly popular with young people and adults alike. These sites allow people to reconnect with old friends and colleagues and to make new connections. However, as with most other Web sites, these sites allow the posting of communications that the posters might come to regret. These posts can cause hard feelings and might result in significant financial loss.

In the winter of 2009, a teenager from Oceanside, New York sued Facebook, four of her high school classmates, and their parents for $3 million. The suit accused the four classmates of bullying and humiliating her in a forum on Facebook. They allegedly posted derogatory and false statements about her that were intended to hold her up to “public hatred, ridicule and disgrace.” Whether or not the allegations prove to be true, the teenagers and their parents need legal defense and possibly resources to pay judgments against them. They might look to their Homeowners insurance policies to cover these costs, but will the policies respond?

A standard policy will probably not cover this. The policy pays amounts for which the policyholder (the insured) is legally liable, plus the costs of legal defense, for bodily injury or property damage done to someone else. The policy defines bodily injury as meaning bodily harm, sickness or disease; it defines property damage as injury to, destruction of, or loss of use of physical property. Neither of these definitions includes saying or publishing something that injures another’s reputation or feelings. Consequently, the policy is unlikely to cover a post on Facebook. The girl from Oceanside did not allege that her classmates hurt her body, made her sick or passed her a disease; she accused them of making her life miserable. The policy does not cover that offense.

Insurance companies might offer special personal injury coverage that can be added to Homeowners policies. This coverage pays for the insured’s liability for several offenses, including oral or written publication of material that violates someone’s privacy. If any of the Oceanside classmates’ parents have this coverage, their insurance might cover the claims.

Another potential source of coverage is a Personal Umbrella policy. An Umbrella provides additional insurance in situations where a loss has used up the amounts of Liability insurance under Homeowners or Auto policies. It also covers some liability losses that those policies do not cover, such as personal injury losses. Umbrellas typically carry a deductible of $250 or $500. Suppose one of the parents in the Oceanside case does not have personal injury coverage on his Homeowners policy, but he does have an Umbrella. The Umbrella will pay for his and his child’s defense and their shares of any judgment, minus the $250 deductible. If he does have the coverage on his Homeowners policy, this policy will pay until its limits are exhausted, and the Umbrella will pay the rest, up to its limit.

The costs of enhanced Homeowners policies and Personal Umbrella policies will vary from one insurer to another. Also, the terms of Umbrella policies vary among companies. One of our insurance agents can provide information on coverage options and prices.

Communicating online has become an ordinary part of life today. Web sites like Facebook offer new and exciting ways to meet new people and to stay in touch with people all over the globe. However, they bring with them their own unique risks. Anyone using sites like these should be careful with what they and their children are saying, and they should make sure they have proper insurance backing them up.

A recreational vehicle, such as a motor home, can be a significant investment. RV owners shop for their vehicles carefully before they plunk down tens of thousands of dollars. Although finding the right RV and arranging financing are the first steps toward ownership, it is important to pay as much attention to the next step: Securing the right insurance coverage for the new vehicle.

Some RV owners might be tempted to simply add coverage to their existing Auto insurance policy. Many Auto insurance companies will do this, but it might not make the most financial sense for the owner. For several reasons, a special RV insurance policy might better meet the owner’s needs. First, motor homes are larger and heavier than most passenger cars and trucks. In an accident, they are capable of causing injuries and damage much more severe than lighter vehicles. It might make sense for the owners to buy larger amounts of Liability insurance for the RV than they have for a car. Liability insurance pays for the owner’s liability to others for injuries or damages. The amount of insurance covering a car might not be enough to properly cover an RV.

Also, insurance companies calculate Auto insurance premiums based on several factors, including commuting distance. They assume that the car owner will use the vehicle frequently. These rates are inappropriate for RVs, which normally receive much less frequent use.

Standard Auto insurance policies provide little or no coverage for personal belongings that suffer damage in a car accident. Often, Homeowners insurance will cover these items, but the policies might limit the amounts of coverage or might carry deductibles of $500 to $1,000 or more. Insurance companies that specialize in RV insurance design policies to cover the items that customarily travel in a motor home, like clothes, tools, electronics, dishes and sporting goods.

The RV insurance policy might also do a better job of protecting against damage to the vehicle itself. Comprehensive and collision coverages in Auto insurance policies pay the cost of repairing or replacing the vehicle after deducting an amount for depreciation. This can leave the RV owner with a large out-of-pocket cost if he has a balance outstanding on his loan and his vehicle is a total loss. Also, the depreciated payment amount will probably be too little to purchase a comparable replacement vehicle. An RV policy provides Agreed Value Coverage, which means that the insurance company and the owner agree in advance on the RV’s value and the company does not deduct anything for depreciation. The company will need a copy of the RV’s bill of sale or a professional appraisal before it agrees to a value.

RV policies also often provide unlimited coverage for towing and roadside assistance, whereas Auto policies might limit this coverage to a small amount. The RV policy might also provide Emergency Expense Coverage to pay for transportation and lodging if an accident disables the vehicle. RV policies might feature “disappearing deductibles,” where the deductibles decrease for every year that the owner is claim-free. Discounts often apply for safe driving, passing driving safety courses and vehicle safety features.

Are you a current and prospective RV owner? Contact one of our agents today. We can explain the different coverage and price options available and recommend financially solid companies. With the right insurance, RV owners can relax and enjoy a mobile lifestyle.

Many people latch onto a certain color in preschool and remain ever-faithful to that shade throughout their lifetime. Whether it’s blue, pink or green, they might deck out their childhood bedroom in their favorite hue, refuse to wear any other shade in junior high and even dye their hair that color in high school. Later, when it comes time to buy their first car, these color-faithful people usually choose a vehicle in — what else — their beloved favorite color.

Although this is no surprise, some research reveals that the color of your car actually speaks volumes about your outlook on life, your personality — and even your driving style. For example, a United Kingdom study shows that black cars were twice as likely to be involved in U.K. car accidents than cream-colored cars.

Here are a few more interesting findings from the same U.K. study:

• Black cars are usually driven by aggressive people who consider themselves “outsiders.”
• Silver cars are usually owned by cool, calm, and slightly detached drivers.
• Green cars are often driven by people with “hysterical tendencies.”
• Yellow cars are typically chosen by idealists with upbeat, optimistic attitudes.
• Blue cars are usually driven by introspective people who are cautious drivers.
• Gray cars are usually chosen by calm, sober drivers who are dedicated to work.
• Red cars are driven by energetic people who are fast talkers, movers, and thinkers.
• Pink cars are often chosen by gentle, loving people.
• White cars can signify status-seeking extroverts.
• Cream cars, the least likely to be involved in an accident, are generally driven by self-contained, reserved people.

Does color affect rates?

Based on this particular U.K. study, car color can reflect a driver’s personality — but can it affect their insurance rates? Many people seem to believe so.

According to a 2005 Chicago Sun-Times article, 25% of surveyed drivers said they believe the color of a person’s car does affect their Auto insurance rates. After all, aren’t drivers of red cars typically risk-taking, speed-demons and drivers of black cars overly aggressive, road ragers? If that’s the case, wouldn’t drivers with those color cars be viewed as a higher risk to the insurance company and therefore be forced to pay higher rates?

The answer is no. Insurance companies do not take the color of your car into consideration when they calculate your premium. Your insurer probably has no idea what color car your drive unless you offer up that information.

Typically, insurance companies determine your rate based on some or all of the following factors:

• Your vehicle’s make, model, body type and engine size
• Your personal credit history
• Your driving record
• Your usage of the car (such as if you are using the car for work, pleasure or as a collectible)
• How many drivers will be using the car and their ages
• How many vehicles you own
• What kind of coverage limits you want
• Where you live
• Your weekly, monthly, or annual mileage

So, go ahead and buy your next car in your favorite hue to match your house, your clothes or even your hair. Although it might advertise your personality to the world, your car color will have no affect on your insurance rates.

Late for an early morning business meeting, you grab a cup a coffee and rush out the door — only to discover your car’s windshield has been smashed to bits. Your heart immediately plummets and your hands begin to shake with anger. Now what? Although you might be tempted to burst into tears or launch into a fit of rage, it’s important to take a few deep breaths and focus.

Fortunately, if you have comprehensive coverage, your Auto insurance should cover the damage to your car. However, to ensure you receive the money you need for repairs, you will need to follow a few specific steps:

Notify the police

If your car has been vandalized, you should contact the police within 24 hours of the vandalism. It’s important to file a police report so that you have an official record of the incident. This record will help your Auto insurance company resolve your claim.

Call your insurance company

You should also contact your auto insurance company to file a claim. Don’t delay — most insurance companies say you must file your claim as soon as possible in order to receive benefits.

Your insurance company may request a police report, personal statements and other documentation. Additionally, if any items that are protected under comprehensive coverage were stolen from your car (such as an aftermarket car stereo), they may ask for receipts for these items. Try to provide your insurance company with as much documentation as possible because this will help them resolve your claim more quickly.

Prevent further damage

Some insurance policies require you to take measures to protect your car from additional damage after vandalism. For example, if your window has been broken, you will need to cover it with plastic or another protective material as soon possible. This will ensure that the interior of your car is not further damaged by rain, snow, wind or other elements. Your insurance company might reimburse you for the materials you buy to protect your car, as long as the expenses are within reason.

If you knowingly leave a broken car window uncovered, and your car interior or electrical systems are damaged by weather, your insurance company will not cover this damage. This is why it’s so important to take measures to protect your car as quickly as possible.

Generally, once the police have taken any evidence they might need from your car and say you can move your vehicle, you should immediately take steps to protect your car from further damage. You do not need to wait for your claims adjuster to assess the damage before taking these steps.

Let your insurance company resolve the claim

Once your insurance company assesses the damage to your car, they will tell you whether or not the damage will be covered. If it is covered, they will give you a few options for repairing your car to its pre-vandalism condition. If your window was broken and your dashboard was damaged, they will be repaired. If your car stereo was stolen, the insurance company will give you a new one comparable to the one you had.

If you have any questions or concerns about your claim, do not hesitate to contact your insurance company. They understand having your car vandalized is an invasion of privacy, and they want to help you through this difficult time.

Severe weather is one of the most common sources of natural disasters, and no region of the U.S. is off limits. Does your family know what they should do in the event a weather-related natural disaster strikes?

According to the Home Safety Council, fewer than 30% of U.S. families have created and discussed an emergency communication plan. One of the reasons that so few families have developed one is that many people believe it requires considerable time and effort.

Creating an emergency communication plan is actually easier than you might think. The first component that you should have, according to the Home Safety Council, is a corded land line phone in your home. It is the most reliable source of communication in an emergency because it will continue to operate even if the power goes out in the house.

In addition to a communication plan, the Home Safety Council offers the following recommendations:

• Have a “Ready-to-Go-Kit” – In a duffel bag or backpack, place one gallon of water per person, non-perishable canned food, a can opener, paper plates and cups, plastic utensils, a flashlight and extra batteries, a battery-operated radio, a change of clothes for each family member, personal hygiene items, a small first-aid kit, and pet food and supplies. Keep the kit near any medications you would need to take with you in an emergency.
• Have a “Ready-to-Stay Kit” – You might have to stay inside your home for an extended period of time, and this kit will help you survive. In a large plastic tub with a cover, or easily accessible cabinet designated for this purpose only, place three gallons of water per family member, enough non-perishable canned food and snacks for at least three days, a can opener, toilet paper, blankets, books and games to keep you busy, a flashlight and extra batteries, a battery-operated radio, a small first-aid kit, paper plates and cups, plastic utensils, a change of clothes for each family member, personal hygiene items, and pet food and supplies.
• Designate a safe meeting place outside your home.
• Designate a safe place to seek shelter in your home in case of severe weather. Your survival supplies should be stored in this location.
• Teach young children how to use the phone to call for help.
• Update wireless phones with “in case of emergency” (ICE) contact information.

As money gets increasingly tight, consumers are trying to save wherever possible. Insurance policies are one place that people typically look to cut costs. But, are there ways you can save when it comes to insurance without jeopardizing your coverage? Many insureds believe so. One method of cutting back on your premium costs is to reduce the dwelling or liability limits on your homeowner’s policy. Similarly, you could also request a reduction in the liability limits on your Auto insurance policy.

However, not only do these methods fail to save you money in the long run, they also make you increasingly vulnerable to risk. Consider how much you could lose if a judge decided against you in a liability suit, or someone was hurt in your home.

A wiser course of action is to increase your policy deductibles. On a homeowner’s policy, raising your deductible from $250 to a $500 could realize a premium savings of 10% to 15%. You could also consider raising the deductibles on the physical damage section of your Auto insurance to save money on the premium. Having a $500 deductible on both comprehensive and collision can save you as much as 30%. A $1,000 deductible could result in even more savings.

Many insureds argue that if they do need to file a claim, they won’t have $500 to cover the newly increased deductible. Although $500 might sound like a large amount of money to get together, it is actually only $250 more than you would have needed if you still had the original $250 deductible. Keep in mind that with the savings benefit you will get from a higher deductible, you should be able to save that extra $250 in less than 2 years.

For those larger savings, consider a graduated approach. If you are not financially able to go from paying a $250 deductible to paying $1,000 deductible, raise your deductible to $500 now, and put the money you save into a dedicated savings account for the purpose of accumulating money to increase your deductible again. When you have saved enough in the account, increase the deductible to $1,000.

Raising your deductible will definitely save you money over the long-term. More importantly, it will not put you at an increased financial risk. Give our office a call today!

Many people collect paintings, sculptures, antiques, and other works of art with values ranging from garage sale prices to thousands of dollars. The International Risk Management Institute states that art becomes valuable for one of three reasons: Cultural significance; owner’s subjective value; or the marketplace’s estimate of its worth. Regardless of the reason, damage to a valuable work of art will likely cause the owner significant financial loss.

A standard Homeowners insurance policy provides some coverage for fine art, but is unsuitable for high-priced works. The insurance company will pay for losses to art caused by fire, water damage, vandalism, theft, and a limited number of other causes. In the event of a loss, the company will pay the item’s replacement cost after subtracting depreciation. For example, if fire destroyed a painting worth $1,000 on the open market, the Homeowners policy would pay the cost of replacing the canvas, paint and frame after subtracting some amount to reflect the age of those materials. This amount might be nowhere close to the work’s market value.

For this reason, art owners might want to buy separate insurance on their fine arts. This insurance can be in the form of an addition (also called an endorsement) to the Homeowners policy, or via a separate policy (sometimes called a “fine arts floater”). A fine arts floater insures paintings and drawings; art glass windows; valuable rugs, statues, furniture, and books; and “other bona fide works of rarity, historical value or artistic merit.” These items must be in a private collection owned by the policyholder; there is no coverage for works owned by a museum, business or government agency. The policy lists high-value art works individually on the policy with their associated coverage amounts and shows a combined insurance limit for all lower-value pieces. If the policyholder buys a new piece during the policy period, the policy provides automatic coverage for 90 days. The most it will pay for a new piece (until the owner reports it to the company) is 25% of the amount of insurance covering items specifically listed on the policy.

If the owner plans to transport an artwork from the address shown on the policy, coverage will apply only if competent packers handle the move. Coverage does not apply to a piece while it is in the custody of an art dealer, museum or auction house if the entity has insurance covering it. Also, the policy will not pay for damage to pieces while they’re on exhibition off the owner’s premises; the owner can extend coverage off-premises by adding the address of the exhibition to the policy.

The policy covers damage to fine arts from all causes except:

• Actions of governmental or civil authorities
• Intentional damage
• Neglect
• Repair, restoration, or retouching processes
• Breakage of glass, statues, and other fragile articles unless fire, explosion, collision, windstorm, earthquake, flood, malicious mischief, or theft caused the loss. For an additional premium, the company may remove this limitation.

In the event of a loss, the company will pay the amount shown on the policy for items specifically listed on the policy. For other pieces, it will pay amounts equal to their replacement cost minus depreciation, up to a maximum of $500 per item.

To accurately determine an item’s value, the insurance company may require an expert appraisal. It may also require the policyholder to take certain precautions to safeguard especially valuable pieces. One of our qualified insurance agents can give advice on appropriate coverage and companies. Anyone who owns these treasures should make certain the right insurance is in place. Contact us today!

Rushing to make it to work on time, Bill sees the traffic light up ahead turn yellow. He speeds up to make it through the intersection, but the light changes to red before he makes it to the other side. When he doesn’t see any flashing blue lights tailing him, Bill breathes a sigh of relief assuming he didn’t get caught — or so he thought.

A week later, Bill is shocked to receive a ticket for $150 in the mail. As he dashed through the red light a week before, a small camera at the traffic light snapped a picture of his car and license plate number. The Department of Transportation then tracked down Bill as the registered owner of the car and mailed the ticket to his home address.

Say cheese!

As more cities install red light and speeding cameras, tickets by mail (like the one Bill received) are becoming increasingly common. Obviously, drivers are never thrilled to receive a speeding or traffic violation ticket for $100 or more in the mail. Some argue the cameras are an invasion of their privacy while others complain that local police departments are just looking for a quick and easy way to boost their budgets.

Despite these protests, traffic violation cameras aren’t going away any time soon. Such cameras are skyrocketing in popularity nationwide. From San Diego, California to Atlanta, Georgia to Scottsdale, Arizona, cities are activating these red light/speeding cameras. Traffic camera fines range anywhere from $100 to $500 or more.

Cities with traffic cameras enjoy a phenomenal return on their investment. As a matter of fact, red light/speed cameras in Cleveland, Ohio caught more than 2,300 traffic violators within the first month of operation. Each Cleveland red light violator was charged $100 per citation, while speeders were fined between $150 and $200.

Unfair violations

Many drivers complain that these red light and speeding cameras can lead to unfair tickets. For example, let’s say you let your sister borrow your car. If a camera snaps her running a red light, the ticket will be mailed to you because you are the registered owner.

Some states, like Georgia, give drivers a chance to contest the ticket if the owner was not driving the car when the violation occurred. However, other states say the owner of the car is responsible for paying the ticket regardless of who was driving their car.

An uptick in accidents

Some research shows that red light and speeding cameras may lead to more traffic accidents. A 2008 study by the University of South Florida’s College of Public Health revealed red light cameras significantly increase crashes. This could be because drivers are stopping abruptly at intersections when the light turns yellow in fear that they will receive a camera violation. With so many cars slamming on the brakes at intersections where cameras are present, many cities have seen a sharp rise in rear-end collisions.

Studies from North Carolina, Virginia, and Ontario have also reported cameras are linked with increases in car crashes, including accidents involving injuries. A study by the Virginia Transportation Research Council also found that cameras were associated with higher crash costs.

However, while rear-end collisions have increased in some areas, studies show that more serious side-impact crashes have decreased due to fewer drivers running red lights.

Driving up insurance rates?

Many drivers worry that these camera tickets will lead to higher Auto insurance premiums. However, because red light and speeding camera tickets are considered civil penalties, they should not result in points on your driver’s license or have an impact on your insurance rates. However, if you rear-end a driver who slams on their brakes at a camera-monitored intersection, you probably will see a hike in your Auto insurance premiums.

Umbrella insurance policies can be an important feature of personal financial plans. They provide additional insurance that takes over when a claim uses up all of a Homeowners or Auto insurance coverage. They even cover some losses that Home and Auto insurance do not cover, though the policyholder must pay a small deductible for them. They provide insurance amounts as low as $1 million and can provide $5 million or more. Despite the large amounts, they are not just for wealthy people. Here are five (actually six) situations where Umbrella policies are vital:

• Auto insurance: A man is late for work and speeding on the highway. He loses control on icy pavement and strikes another car in the driver’s side. The other driver suffers serious injuries. Hospitalization, follow-up care, medicine, rehabilitation and pain and suffering tally up to $900,000. The at-fault driver has an Auto insurance policy that covers $250,000 for injuries to any one person. If he has an Umbrella with a $1 million limit, it will pay the remaining $650,000.
• Bonus Auto insurance scenario, based on a true story: The policyholder’s son loses control on a highway overpass. His car plunges off the overpass and lands on a row of vehicles for sale in a Lexus dealer’s lot. Six vehicles are damaged to the tune of $150,000. His father’s Auto insurance covers $100,000 in property damage from any one accident. If he has an Umbrella, it will pay the remaining $50,000.
• Homeowners insurance: A homeowner has insurance that covers her liability for bodily injuries to others, up to $300,000 per accident. A neighbor who has three children under age 10 drowns in her swimming pool. His estate sues her for $1.5 million. Her Homeowners insurance will pay $300,000; if she doesn’t have an Umbrella, she is responsible for the remaining $1.2 million.
• Boats: A man has a Boat insurance policy that covers his liability for injuries to others up to $300,000 and an Umbrella policy with a $2 million limit. He loans his boat to a friend for the weekend. The friend takes it out on a lake with three buddies and a case of beer. He becomes intoxicated and plows into another boat late at night. The survivors and the estates of the deceased sue the driver and the boat owner. The court finds the owner 20% liable for the $5 million judgment. His boat policy pays $300,000 and his Umbrella pays $700,000.
• All-terrain vehicles: A man’s grandson from out of state visits him for the holidays. He takes the boy out for a spin on the ATV he bought the week before, but the boy bounces off and suffers critical injuries. The man bought coverage for the ATV under his Auto policy, but the most it will pay is $100,000. The boy’s medical care will cost $750,000. His grandfather’s Umbrella policy will pay $650,000.
• Personal injury: A woman loudly repeats a rumor she heard about one of her neighbors. The neighbor sues her for defamation of character and wins $500,000. The woman’s Homeowners insurance does not cover defamation, but her $1 million Umbrella does. After she pays a $250 deductible her Umbrella pays the rest.

Severe accidents like these can and do happen to people every day. When something like this happens, an Umbrella policy might be all there is to keep the person responsible from financial ruin. One of our insurance agents can explain coverage details and provide estimates of the cost. The relatively low cost could be well worth the peace of mind should a catastrophic accident occur.

From glittering bracelets and watches to sparkling rings and necklaces, jewelry can be found in almost every home. Unfortunately, these trinkets and charms are not always properly protected. If you own expensive or extremely valuable jewelry, it’s important to make sure you have the appropriate insurance.

Understanding the “sublimit”

You might assume your valuable jewelry is fully covered by your Homeowners insurance. Although most policies do cover jewelry, the payout is oftentimes much lower than the actual value of your bling.

Why wouldn’t your insurance pay the full value of your jewelry if it’s stolen from your home? It all comes down to what’s called the “sublimit” — this is the limit on the amount the insurance company will pay for specific types of personal property. Although your policy’s total personal property limit might be $75,000, the sublimit for jewelry might be as low as $1,500.

Read the fine print in your contract and find your policy’s sublimit for jewelry. If your jewels are worth more than the sublimit, you might want to purchase additional insurance.

Five steps to jewelry protection

If you decide to purchase additional insurance to fully protect your jewelry, follow these five simple steps:

1. Get it appraised: If your jewelry has not been appraised within the last three years, take it to a jeweler for an appraisal. Be sure to choose a trustworthy jeweler who is a graduate of the Gemological Institute of America (GIA). (Most insurance companies require that higher-end jewelry is appraised by a graduate of the GIA.) Look for the designations G.G., G.J. or A.J.P. at the end of the jeweler’s name to ensure they are well-educated and reputable.
2. Look for the four C’s: If you are getting a diamond appraised, the appraisal should include a description of the four C’s: Carat, cut, clarity and color. These four details allow the jeweler to make an accurate appraisal, which will be very important should you ever need to file a claim with your insurer.
3. Consider Inland Marine coverage: You can either purchase this type of insurance coverage as a separate policy or you can have it added onto your Homeowners policy as Supplemental Jewelry coverage. Inland Marine coverage offers much more coverage for jewelry than just your Homeowners policy alone.
4. Keep jewelry locked away: Be sure to keep your valuable jewelry protected in a lock box at home. If you own jewelry that you rarely wear (such as family heirlooms), you might consider locking it up in a safety deposit box.
5. Review coverage regularly: Look over your jewelry coverage at least once every two years to make sure it is up to date. Also, if you sell any jewelry or purchase new high-value pieces, it’s important to update your policy as soon as possible.

Whether your jewelry box is spilling over with brand new jewels or you own one or two family heirlooms that are absolutely irreplaceable, it’s important to protect these valuables. To learn more about jewelry coverage options, talk with one of our insurance specialists.