We find that many adult children assume that their parent’s home and auto insurance policies will extend to them and their possessions in the event of a loss. This assumption is often false. Insurance policies are typically clear and will cover an adult child only if they are a full-time resident of the insured’s household. When your children reach adulthood they need their own insurance even if they live next-door.

At this point in your adult child’s life, insurance may not seem important because they’re moving around with, generally, low-value possessions. However, even when possessions are few, everyone has a legal responsibility to handle the damage they accidentally cause to other people and their property. If your adult child asks you for insurance advice, give them the name of your Peoples First risk manager to help them get the exact protection they need.

Property Considerations

There are gaps between your business insurance policies and your employees’ homeowners policies, leaving you vulnerable to loss due to property theft or damage. If your employee is using your company’s computer equipment to perform their job from their home, it may not be covered. Additionally, if employees use their own computer to perform company work, it may not be covered either. This is because residential insurance policies severely restrict or exclude coverage for business property. A further complication is that business property usually consists of high-valued items that are vulnerable to damage and/or to theft. Such property includes fax machines, copiers, computers, computer peripherals (monitors, printers, scanner, modems, routers), phones, answering machines, PDAs, etc.

Liability Considerations

Personal insurance policies that include liability protection typically exclude business-related losses. Further, different policies can be quite broad in interpreting how a loss is connected to “business.” Liability Policies A and B would routinely respond to handling an insured who spilled hot coffee on a guest in his home during the work day. What if the visitor was your company’s client rather than the employee’s social guest? Policy A may still offer coverage because it considers the coffee spill to be a common home hazard. Policy B, however, may flat-out exclude the loss because the injured person was in the home for a business reason.

Vehicle Liability

Your telecommuting employee will be using their personal vehicle less for going to and from work, but perhaps more for tasks related to their job, such as making deliveries or client calls. Many instances of job related use might be excluded from their personal auto coverage, which could result in a dispute.

Please read Part 2 in next Monday’s blog.

Most Rock Hill individuals use their homeowner or residential insurance policy to handle their hobby activities as a collector or enthusiast. A homeowner (HO) policy usually includes a definition of “business” and some are so broad that nearly any activity qualifies as a business. In such instances, a hobbyist or enthusiast should consider whether separate business insurance is necessary.

Is Your Hobby a Business?
Let’s say you love photography and take pictures at events such as weddings to finance this passion. While you consider this to be a hobby, your insurer may define your activities as a business. If your camera equipment is stolen or damaged, there may be as little as $250 protection under your HO policy. HO coverage for business property differs depending on whether the property is located at or away from your residence.

Imagine being a photographer at a wedding. As you are snapping photos of the wedding party, a large boom stand with hot lighting equipment tips over injuring the maid of honor and the flower girl. If the injured women sue you since the injury is part of a business activity, your HO may exclude coverage.

When Your Job is Out of Your Home
There are numerous types of sales and service jobs. These include cosmetics, clothing, kitchen supplies, home decorator items, computer repair, web site design, photography, music lessons, auto repair and many contractors. Each job involves some type of business property that is excluded or severely limited under the HO policy. Therefore, each situation may need to be covered by business insurance.

Although independent consultants are in business, too often they think their HO policy will provide coverage because they don’t have special equipment or leave their home office to run their business. Office furnishings such as laptops, PDAs, desks, chairs and file cabinets are subject to HO policy limitations. Without adjustments to the homeowner policy there may be little or no coverage for property used in a business.

Need More Insurance?
The legal form of the business may create a need for business insurance. If a limited liability company, corporation or partnership is formed, the related activity is a business and needs business coverage. Also, most HO policies will not provide coverage for employees or for any professional liability.

What can you do? First, determine if your activities qualify as a business. Then talk to Peoples First to determine what coverage is provided by the policies you currently have and what options are available to fill-in any gaps in protection.

Did you know that your hobby may significantly affect your personal insurance needs? Hobbies often require a large investment in tangible property and may even create some legal responsibility to other persons or their property. Home owners insurance in Rock Hill and surrounding areas may or may not provide asset and liability protection for your hobbies so we encourage you t read this blog post and the next.

Are you a collector or an enthusiast?

A collector acquires a category of property such as stamps, sports memorabilia, comic books, dishes or glassware. An enthusiast collects property relating to a physical activity like hunting, music, cyclist, or painting. A collector’s focus is on physical property. An enthusiast’s focus is on this as well as the liability exposure that is inherent in their activity.

Eligibility of Collectible Items

Your special property should be properly insured and most homeowner policies provide minimal protection for collectible property. Why? Collectible items are often fragile, valuable in relation to size, and worth more as part of a collection. The value of collectibles kept in one room may be more valuable than all of the rest of your home’s contents. Regular homeowner coverage is not designed to handle high-valued property that is easily destroyed, lost or is vulnerable to theft.

Consider Supplemental Policies

Even when collectible property is eligible for a policy’s full coverage, this may not be enough. You may want your special property to be covered from more causes of loss than your family room couch. It may be worthwhile to buy an endorsement to add additional coverage for your collectibles to your homeowner policy. Depending upon the type and value of your collectibles, you may even have to consider specialty coverage which typically makes consideration for replacement cost and for property that appreciates in value.

If your hobby is more hands-on, then be sure you’re protected against any legal liability related to your activity. Ask yourself the following:

• Are there any dangers associated with the hobby?
• Does the hobby involve frequent travel to sites or meets?
• Does the activity attract frequent visitors to your home?
• Do you publish hobbyist newsletters or give advice to others?
• Do you actively sell or trade property on or away from your home?
• Does your activity involve equipment that’s inherently dangerous to others?

Fortunately, many aspects of a hobby, especially legal liability, are covered by a homeowners policy, but your activity may need special or even business coverage (see part 2 of this blog post). Don’t let your enjoyment be interrupted by inadequate protection. Discuss your special interest with Peoples First and we’ll assess your coverage needs so you can enjoy your hobby.

Here are some methods to help minimize the cost of a new driver:

• Have your child complete a driver training class. The class’ cost is easily offset by lower insurance premiums. You also gain a more competent young driver.
• Ask your insurance company if it gives discounts to students with good grades.
• Find an insurance company that charges a rate according to the car your new driver usually drives instead of assigning him or her to the most expensive vehicle.
• Minimize your child’s driving as insurance companies charge lower premiums for less frequent driving.
• Build a long-term relationship with your insurance company. Some will reward longevity by forgiving a driver’s first accident or minor traffic violation.
• Increase your physical damage deductibles or, for older vehicles, eliminate this coverage.
• Think carefully about giving a young driver his or her own car. Coverage for young drivers who have full-time access to a vehicle is very expensive. Make sure you balance the considerations of convenience, cost and safety.
• If your child owns a vehicle, he or she should have a separate policy. However, if you share the cost of the car and its insurance, it may make sense to also own or co-own the vehicle. Your ownership interest lets you take advantage of a multiple-car discount.
• Urge….URGE your child to NOT text and drive.

While we all seek to lower our insurance premiums, don’t overlook the importance of protecting your child from the financial consequences of causing a serious accident. Further, you may need to protect yourself since you could also be sued for an accident caused by your son or daughter. You might consider getting higher limits of liability by purchasing an umbrella policy.

Talk to a Peoples First professional about more strategies to keep your new driver affordable and have their addition cause minimal impact on your automobile insurance policy in Rock Hill and surrounding areas. We’re always here to help.

Here are recommendations for developing safe new drivers in your household:

• Make them pass YOUR driving test, which should include the ability to drive under adverse conditions (dark, fog, rain, ice, snow, rush-hour traffic, etc.).
• Be certain that he or she can properly pass vehicles, maintain a correct distance, park, merge and exit, change lanes, make turns, obey speed limits and be aware of pedestrians.
• Make sure your child understands traffic laws and has a healthy respect for the power of the automobile.
• Be a proper role model by using seat belts, not using your cell phone, and never using alcohol or drugs while driving.
• Enroll your child in a course on defensive driving as a tool for avoiding accidents and increasing his or her driving confidence.
• Require your child to understand, sign and comply with the “Youthful Operator Driver Safety Agreement.”
• Provide your child with a well-maintained vehicle, equipped with air bags and anti-lock brakes. Also, avoid vehicles that are vulnerable to serious damage during collisions or due to “rolling over.”
• Control your child’s driving privileges and curtail or revoke them in response to poor behavior.

We also encourage you to have your child watch our “Teen Driver” video that explains the importance of safe driving and the basics of auto insurance. This video is on our Personal Insurance page.

Talk to a Peoples First professional about more strategies to keep your new driver safe and keep your auto insurance down for Rock Hill and surrounding areas. We’re always here to help.

To Sue or Not to Sue?

In many instances, filing a lawsuit is unavoidable. For instance, when a person seeking coverage has his claim denied, a lawsuit may be the only action that is available. But seeking satisfaction in court can be its own problem. Court calendars (dockets) are often backed up so it could take months or even years before a hearing can take place. Trials may be followed by one or more appeals. The legal expense can be staggering, involving court costs, filing fees, attorney costs, research costs, fees for expert witnesses and a host of other expenses. Time and cost considerations are great incentives for finding other methods to resolve disputes.

Alternative Dispute Resolution

When disagreeing about the amount that should be paid for a loss, mediation and arbitration are popular alternatives to suing your insurance company. Each is a form of Alternative Dispute Resolution (ADR) since they are alternatives to going to court.

• Mediation – This process involves the two parties meeting to discuss their situation with the help of a mediator. The mediator typically has special training and a legal, financial or similar background. As a disinterested party, the mediator studies information from both sides of an argument. Mediation sessions begin with each party fully explaining their position to the other party and the mediator. It is critical that each party is able to explain their side of the issue without interruption. The mediator then discusses each party’s position in private. Afterwards, the mediator shuttles between the parties and tries to negotiate a settlement. The most important features of mediation are that the process is voluntary and the disputing parties are actively involved in reaching a solution.
• Arbitration – This is a method that is frequently required by an insurance policy provision. Under arbitration, you and the insurance carrier each select a representative (arbitrator). Once the arbitrators are selected, they agree on another arbitrator who acts as the arbitration judge. The three persons discuss the merits of the situation and, once any two of the three persons agree on a settlement amount, the process ends. Arbitration differs from mediation in two important respects. First, the disputing parties are bystanders, waiting for a decision to be made by their selected representatives. Second, arbitration is (generally) binding on both parties.

If you are in a dispute with your insurance carrier, no course of action is perfect. Considering the cost and time involved with lawsuits, it makes sense to take advantage of other options to handle high-stakes disagreements. If you need more information, Peoples First is able to navigate you towards an advisable way to reach agreement with your carrier.

Top choices include potato and tortilla chips, popcorn, pretzels, puffed cheese snacks, dip mixes, canned dips, guacamole, chicken wings, and beer.

Are you surprised that antacid sales also increase—by 20 percent—the Monday after the Super Bowl?

Save some money on antacids by eating and/or serving these healthy snacks:

• Fresh fruit salad
• Vegetable platter
• Hummus or low-fat spinach dip
• Homemade pizzas with veggie toppings
• Rotisserie chicken
• Air-popped popcorn
• Unsalted mixed nuts
• Flavored waters

Wear reflective vests or apply reflective strips to your and your family’s clothing when you’re out doing winter activities, because winter days get dark quickly.