Potential Coverage Gap from Domestic Employees’ Owned Autos

If you have a domestic employee, such as a gardener, housekeeper, or nanny, who drives his or her own auto while working for you, there is a potential for you to incur liability arising from their driving that would not be adequately insured. If your employee negligently causes an accident, you as the employer can be drawn into the lawsuit and held liable. Your employee’s own insurance, if any, will protect you up to its policy limits, but you are on your own after that. And your personal auto policy may not respond to cover the difference. The courts have ruled in different ways on these types of loss situations.

For example, assume your housekeeper negligently injures someone in a serious accident in her own vehicle while out buying groceries for your household. Further assume she has low liability limits or even no auto liability insurance. If she is sued, the injured party may uncover information about you, her employer, and how her driving in this incident was related to her employment with you. As a result, your “deep pockets” may just get you named in the lawsuit.

If you engage domestic employees or contract workers who may drive their vehicles in their work for you, the following tips may prove helpful.

• Ask any employees or prospective employees to provide you a current copy of their driving record. The employee can order this online through http://www.dmv.org/driving-record.php. If they do not have a good driving history, do not allow them to run errands for you.
• If the domestic employee has a good driving record and you ask her to occasionally use her own car to run errands, ask for a copy of her current auto policy and verify that it has at least moderate liability limits.
• Ask your insurance agent to confirm with your auto insurance company underwriter that your PAP policy will provide a defense and cover judgments in excess of your employee’s limits if you are ever named in one of these suits. If possible, get a copy of a letter from the underwriter.
• If the domestic employee has an excellent driving record and a sterling employment history with you, consider having her use your auto to run errands to avoid any question that your PAP will protect you if she negligently causes an accident while working for you.
• Periodically review your employee’s driving record and auto insurance policy.
• Consider procuring a personal umbrella policy that will normally provide coverage on top of your PAP. However, if the loss is not covered under your auto policy but is covered under the umbrella form, you would only be responsible for the retained limit or deductible amount, which ranges from $250 to $1,000.

Pitfalls of Purchasing Travel Insurance Online

If you are planning your family's winter vacation, you may want to consider vacation-related losses. Travel insurance can be purchased to cover this potentially large exposure. It is designed to protect an insured from a wide variety of travel-related losses, including trip cancellation or interruption, emergency medical events, emergency evacuation, lost or delayed baggage, personal effects, lost or stolen passports and visas, and legal expenses. This coverage is increasingly purchased through the Internet.

The following are some helpful tips to review when considering the purchase of travel insurance online.

• When you purchase travel insurance online, determine if you will immediately receive a policy number along with a printable copy of your policy documentation. Some Web sites are not fully automated and cannot complete your purchase. However, they make it look like they can. If you do not receive an immediate policy number, then you have ordered from a Web site that simply holds your data until an operator manually types your order onto the insurer’s Web site. If this happens to you, cancel the policy. An agent is required by law to give you a full refund (minus a small administration fee of around $5) within 10 days of your purchase. The practice of manually typing orders is less than ideal because there are many potential problems with security, typing errors, and privacy.
• Is the agent affiliated with the insurance company? Call the insurance company to check if the agent you are using is, in fact, one of their representatives. Some Web sites sell policies for insurers even though they are not agents.
• Does the Web site list each plan (with slight distinctions) several times? Some Web sites list each plan multiple times because they lack the technology to allow options to be selected by the user. Unfortunately, this makes comparing policies very confusing because you are presented with a single plan several times, each with only minor differences.
• Avoid Web sites you access via spam because these are often disreputable. A better way of finding established and reputable Web sites is to utilize search engines that link you to the travel insurance Web site or to ask friends or family if they have had excellent experiences with any online travel insurance services.

If you would like more information about vacation insurance, please contact Hunter Insurance at (401) 769-9500.

Give Your Gifts with Peace of Mind

Imagine you receive or give a beautiful piece of jewelry this Holiday season only to have a stone fall out after a warranty has ended, and upon examination of your home insurance policy, find that the jewelry was not covered for this type of loss.

Not all homeowner’s policies cover the loss of expensive gifts, but fortunately, you can add valuable items insurance. Valuable items insurance is a blanket endorsement that expands coverage to protect certain valuables against all risk of physical loss anywhere.

Valuable items insurance also does not count towards your homeowner’s loss surcharge in the event of a covered loss because no deductible applies in most circumstance.

This Christmas, if you receive a valuable gift, or if you’re considering giving, enjoy your gift with peace of mind knowing that Hunter Insurance has you covered.

Call Hunter Insurance today to learn more about insuring your valuable items at 401-769-9500.

Happy Holidays!

Steps to Take to Reduce Exposure to Water Damage Losses

Water damage losses can create severe financial difficulties, particularly since not all water losses are covered by the homeowners policy. There are numerous ways by which you can safe-guard your home from water damage losses, including the following.

• Your home’s drainage system should be checked to verify that proper water drainage occurs. For example, gutter downspouts should extend the proper distance from the foundation.
• Your yard should be properly graded to slope away from the home to allow surface water to adequately drain.
• A sump pump system should be considered in your basement to keep unwanted water out of this vulnerable part of your home.
• Your washing machine hoses should be periodically checked since these hose failures cause millions of dollars of water losses each year. Hoses should be replaced at the first sign of wear. Many adjusters recommend that insureds upgrade to the heavy-duty wire mesh hoses or stainless steel hoses during this replacement.

Personal Catastrophe Planning

The prevalence of major catastrophes such as tornadoes, floods, and hurricanes drive home the point that personal catastrophe planning is an essential part of any personal risk management program. Catastrophes, whether natural or man-made, can strike individuals and families at any time without warning. You should develop a comprehensive disaster plan that addresses the following nine items.

1. Identify hazards in your home, such as frayed wires or large amounts of gasoline stored in the garage. Hazards should be reduced as much as possible.
2. Learn first aid and CPR skills, which can lessen injuries after they occur.
3. Make certain your children learn your full name, address, and phone number at the earliest possible age.
4. Develop an emergency evacuation plan. For example, you should work with family members to establish escape routes and rehearse these periodically.
5. Establish a disaster meeting place and an outside family contact. For a sudden emergency, a location right outside the home should be arranged. Consider designating a friend or relative in another city as a common contact through whom the family can communicate if separated by a disaster.
6. Keep an adequate water storage supply to use in the event you become stuck in your home. Several days’ worth of bottled water should be stored in a cool, dark location.
7. Prepare a food supply, including canned meats, fruits, and vegetables. You should include a manual can opener and disposable utensils and plates along with the food.
8. Store emergency supplies, such as a first aid kit, flashlights, batteries, prescriptions, and a lantern.
9. Prepare a portable pet disaster supply kit for pets, including dry food, potable water, and proof of vaccination. Proper identification on the pets is essential.
10. Practice, modify, and maintain the plan every 6 months.

Steps to Take to Reduce Exposure to Water Damage Losses

Water damage losses can create severe financial difficulties, particularly since not all water losses are covered by the homeowners policy. There are numerous ways by which you can safeguard your home from water damage losses, including the following.

• Your home’s drainage system should be checked to verify that proper water drainage occurs. For example, gutter downspouts should extend the proper distance from the foundation.
• Your yard should be properly graded to slope away from the home to allow surface water to adequately drain.
• A sump pump system should be considered in your basement to keep unwanted water out of this vulnerable part of your home.
• Your washing machine hoses should be periodically checked since these hose failures cause millions of dollars of water losses each year. Hoses should be replaced at the first sign of wear. Many adjusters recommend that insureds upgrade to the heavy-duty wire mesh hoses or stainless steel hoses during this replacement.

Proper Coverage for Your Jewelry

Many people overlook the need to properly insure their expensive jewelry, believing that it is automatically covered by their homeowners policy. While homeowners policies do cover jewelry, this insurance usually is subject to a much lower limit than the overall contents coverage. This is called a “sublimit,” and a typical sublimit is $1,500 for loss by theft of jewelry, watches, and precious and semiprecious stones. If your jewelry is worth more than the sublimit in your homeowners policy, you should consider purchasing specific insurance to cover it. The following is a good process to follow.

• Arrange an appointment with your agent to review your jewelry coverage. Bring as much information about your jewelry portfolio as possible, including any appraisals.
  
  
• If you have not had your high-valued jewelry appraised within the last 3 years, consider obtaining an appraisal from a reputable jeweler. Insurance companies often require an appraisal from a graduate of the Gemological Institute of America (GIA) on more expensive jewelry. The Institute’s G.G., G.J., or A.J.P. designations at the end of an individual’s name indicate that the jeweler has achieved a high level of professionalism with an education backed by a respected nonprofit organization.
  
  
• Make sure the appraisal has a description of the diamond’s four C’s—(a) carat, (b) cut, (c) clarity, and (d) color. The “carat” refers to the weight of the diamond. The quality of the “cut” of the diamond results from the way light enters the stone and is reflected back. “Cut” is also used to refer to the diamond’s shape, such as round or pear-shaped. The “clarity” refers to the prevalence of minor spots, lines, bubbles, or other natural imperfections within the diamond. The “color” denotes the tint a diamond may possess. Remember that the better the appraisal, the fewer problems you will encounter with the insurer if you ever have to make a claim.
  
  
• Purchase inland marine coverage that can be added via an endorsement onto your homeowners policy. This endorsement (also available as a separate policy) provides much broader coverage than the limited protection found on the unendorsed homeowners policy.
  
  
• Consider keeping any valuable jewelry you rarely wear in a safety deposit box at your bank.
  
  
• Review your jewelry protection with your agent at least every 2 years or whenever you sell or purchase high-value jewelry.