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Read Great Tips in Our Insurance Blog

Uninsured MotoristsIn today’s economy where many people are looking to cut any costs they can, the number of drivers driving around without insurance has increased. Also, drivers are driving around with lower liability limits than maybe they had during good economic times. This makes the coverage of uninsured and underinsured motorist even more import. So I thought with this blog post, I would take the opportunity to explain a little bit more about what exactly that coverage does.

Uninsured motorist coverage protects you if you are hit by someone who has no insurance (up to your uninsured motorist limit) where as underinsured motorist protects you if you are hit by someone who has very low limits, limits lower than your own liability limits. Both of these coverages should be included in your typical auto insurance policy.

The best way to explain what these coverages do is to give you an example of situations where this coverage comes into play.

Say that you were to be driving down the road and an individual ran a red light and slammed into you causing you bodily injury. Say that they also didn’t have any insurance to help pay for your $40,000 of medical bills from the resulting injuries. This is where your uninsured motorists coverage on your personal auto policy steps up. Under that coverage they would pay the bills of $40,000 along with other expenses such as lost wages.

Using the same example as above but lets say this time the person who ran the red light does have insurance but they have state minimum limits. The most that will pay out under a state minimum limit policy in Ohio is $25,000 per person. That means you would be left with $15,000 in medical bills plus your lost wages. However, this is where underinsured motorist coverage helps. As long as your auto policy has higher limits than the individuals who hit you, it will pay the extra costs (up to your policy limits).

One last thing to note, on this type of coverage you can purchase even more coverage on an umbrella policy in increments of $1million dollars.

Property Insurance 2Arctic temperatures can have a dramatic effect on your building — and your livelihood. Regular maintenance and a winter weather plan can help you avoid any negative impact.

Winter storms frequently cause electrical power failure, which in turn can disable your heating system. If this happens, water-filled piping (such as sprinklers, domestic water pipes and heating, ventilation and air conditioning systems) may freeze and rupture. It is important to assess the potential for this hazard.
     1. Inspect all safety shutoff valves and cutoff switches on combustion equipment such as rooftop units, boilers and ovens, including water main shutoffs and main electrical service   disconnects.
     2. Have qualified contractors or staff properly inspect heating, air-handling units and space heaters on at least an annual basis. Assure that space heaters are monitored for fire safety.
     3. Review the location and storage of flammable liquids such as propane, gasoline and diesel fuel. Should your sprinkler system freeze and require that it be disabled, it is recommended to reduce this storage to a minimum to minimize the amount of fuel in a fire.

Without proper winter weather preparation, your business could experience property damage — roof collapse, pipe rupture and more.

There are some strategies you can implement to protect your facility and minimize the impact of severe weather on your business:
     1. Maintain building temperatures above 55 degrees. Plan for maintenance personnel to properly monitor buildings during cold snaps, making more frequent visits to buildings or areas of buildings not normally occupied.
     2. Inspect all areas along the inside and outside perimeters of the building to ensure they are sealed and there are no drafty areas.
     3. Maintain roofs in good condition, including repairing leaks, securing flashing and clearing debris from the roof, roof drains and overflow scuppers.
     4. Check that downspouts are secured to buildings and clear of leaves and debris. If they iced over during a previous winter, consider properly installing heat trace to prevent major icicles and dams.
     5. Make sure all building openings are weather-tight so they do not admit cold air.
     6. Consider how you’ll address removing snow accumulation on your roof. If you or a contractor use a snow blower, make sure the height of the snow blower shave plate is adjusted higher as to not damage the underlying roofing material.

Gusting winds, heavy snow and bitter temperatures can create catastrophic property losses and havoc in your life, but a little preparation can prevent losses, saving you time and money.

Directors and Officers InsEvery corporation relies on the guidance of its board of directors for success. Although lawsuits against larger, publicly traded companies receive the lion’s share of media attention, privately held corporations are also vulnerable to lawsuits by competitors, government agencies, creditors and employees. You can protect your hard-earned success by purchasing directors and officers insurance (D&O) coverage for your company.  Having directors and officers insurance coverage in place can help you attract the talent you need for your board. Directors or officers of privately held companies who do not insist that the company purchase D&O insurance are putting themselves, their spouses and their estates at financial risk. D&O insurance minimizes risk to their personal assets.

Not having D&O coverage can have a serious impact on a company’s viability. Even a financially sound business may have insufficient funds to defend officers and directors in the event of a lawsuit. A D&O policy will take care of defense costs and settlement, even if the company ends up in bankruptcy.
States impose statutory duties on corporate directors. D&O coverage protects the company and its directors from claims arising from alleged or actual failure to uphold those duties.

Directors are under legal obligation to govern their corporation and carry out their responsibilities of office:
- in good faith
- in the best interest of the corporation
- with the care that an ordinary prudent person in a like position would exercise under similar circumstances

Similar duties are imposed on officers of a corporation who may or may not serve on the board. Both directors and officers share the duty to:
- grow the company by prudently managing the affairs of the business
- exercise due diligence that is standard for operating the business
- maintain loyalty to the corporation to avoid conflicts of interest
- obey the corporate charter and state corporate statutes

Policy limits and other factors can vary. Your legal advisers and local independent insurance agent can help you determine how much coverage you need. Premiums are based on the coverage limit requested and other factors such as type of business, financial strength, claims history and deductibles.

Additional coverages, such as employment practices liability, fiduciary liability and cyber liability insurance, may also be available to eligible companies for an additional premium.

Gap InsuranceEvery time you step off the Tube in London's Underground you hear a women's voice in her perfect British accent reminding you to "Mind the gap". It is a good thing too. At some stops on the Underground there is a pretty big gap waiting for you as you exit and if you got caught in one of those monsters you could be in some trouble. The same is true for the gap that occurs in leases and loans on cars. Normally over time a vehicle's value depreciates faster than the loan or lease can be paid off. This is commonly referred to as being "upside down" on your loan or lease. If during this "upside down" period you total a vehicle in an accident there is going to be a gap between what the insurance company will pay you (actual cash value of the car) and what you still owe on your loan or lease. The good news though is there is insurance that covers this gap and it is appropriately named GAP insurance.

GAP insurance coverage helps pay for the difference between actual cash value of the car and what is owed on the loan or lease. One thing to keep in mind though, GAP insurance from personal auto insurance companies does not cover the cost of warranties or other add on charges that might have been included in the loan or lease.

So for an example, you totaled your vehicle and the insurance company is going to value your car at $5000 but your loan was still $7000. Let’s also say that of the $7000, $500 of it is because of the warranty that you had purchased. Therefore, the insurance company (if GAP insurance was on your policy) would give you $6500 ($7000 due on the loan minus the $500 warranty cost) instead of $5000.

Rental Property InsuranceOver the last few years many homeowners have turned into landlords. With the real estate market drop, those that decided to purchase a new house also decided to not sell their prior home for fear of a financial loss on the property. Instead, they have turned their prior house into a rental. The trend still continues today even after the real estate market has rebounded some because landlords are seeing great cash flows from renting.

Here at Fey Insurance Services we insure a number of these properties and on occasion we are asked by clients if we have any insurance tips in renting a property. When asked we always mention these five things:

1. Temperature Requirement in the Lease: It is a good idea to include a clause in your lease that requires the tenant to keep the heat no colder than 59 degrees. This is important because around the Holidays many tenants will travel and if they want to try and save a buck they may turn off the heat. Pipes do not enjoy this especially with a polar vortex threatening again this year. This way, if they do turn the heat off and pipes break you can pass that damage on to the tenant.

2. Renters Insurance for Tenants: Since you may have passed on the risk of pipe freezing damage to your tenant you then want to make sure they have insurance in place to pay for such damages. Requiring tenants to have renters insurance is a good idea. Not only does it protect their contents (which is excluded under your policy), it protects your property if they are negligent in causing damage to your property. I would recommend they have liability limits at least the value of your property.

3. Dogs: Know your states laws on dog attacks. For example, in Kentucky there was a law recently passed that could drag landlords into dog attack claims. This may make it difficult to get insurance for a property that has a dog. If you are going to allow dogs to live on your premises it is best to limit which kinds as some insurance policies exclude coverage for "vicious dogs".

4. Loss of Rents Coverage. Make sure your rental property insurance policy includes coverage for loss of rents. If you sign a year's lease with someone and then have a fire a month later, you are going to be out 11 months of rent or at least however many months it takes to rebuild the house. You can recoup this loss with loss of rent coverage. Also, make sure that you have enough loss of rent coverage. Many polices give you 10% of your dwelling limit or give you a flat $25,000. Add up your annual rents and make sure you have enough coverage.

5. Certificates of Insurance from Contractors: Unless you yourself are handy, you may be employing contractors to do fixes around your rental property. We strongly recommend you ask these contractors for proof that they have insurance. If they were ever to cause damage to your tenants contents or to your tenants person, you would want to make sure they have insurance to cover such things.

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