Jewelry, Guns and Silverware on the Homeowners Policy

Question: Does my homeowners policy cover jewelry, guns and silverware? What about other valuables in my home?

That’s an excellent question, and one that is frequently asked by our customers. Most families own jewelry and other valuable items that may need special coverage.

Your homeowners policy covers all personal property owned or used by your family, with exceptions for motor vehicles, trailers and watercraft, among other things.

However, special coverage may be needed for some items of personal property, because the typical homeowners policy either limits the amount of coverage available on those items or doesn’t adequately address the unique values of the items. In addition, most homeowners policies don’t cover causes of loss that affect items of valuable property with regularity.

Here are examples of losses that may not be covered by your policy:

  • Expensive jewelry is especially susceptible to loss by theft, as are guns, furs and silverware. For this reason, virtually all insurance companies provide only a small amount of coverage for theft of these items. The limit may be as low as $500 on some policies.
  • Some policies provide a limited amount of coverage on personal property when it is away from your home. If you take expensive jewelry or guns with you when you travel, this could be a problem.
  • Most policies don’t cover precious stones if they are lost from their settings, or fragile objects if they are dropped and broken.
  • Antiques, fine art and other collectibles may not be covered for their full values.

If you own any of the following types of property, talk to your agent about the need for special coverage that will provide the protection you need:

  • Jewelry or Watches
  • Furs
  • Coin or Stamp Collections
  • Precious or Semi-Precious Stones
  • Firearms and Related Equipment
  • Silverware, Goldware or Platinumware and Related Objects
  • Objects of Fine Art
  • Collectibles
  • Cameras
  • Musical Instruments

 

This article was prepared and made available to Hill Insurance Agency by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.

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Rental Car Coverage

Should I purchase the Loss Damage Waiver offered by the rental agent when I rent a vehicle?

This is a great question, and one that our customers ask frequently.  Whether you rent a vehicle for personal use while on vacation, or as a substitute while your vehicle is out of commission for repair or service, or for business use while out of town, there comes that time when you’re standing at the rental car counter and the agent asks the inevitable question:  “Do you want to buy our loss damage waiver (or our insurance coverage)?”

Most loss damage waiver (LDW) fees are outrageous.  Sometimes they cost more than the daily rental fee itself.  But are they worth the additional cost?  The answer may depend on your tolerance for risk and inconvenience.  You must decide if the extra cost is reasonable, considering the potential for an uninsured loss should something happen to the vehicle during the term of the rental contract, and the resulting inconvenience of dealing with the rental company and your insurance company to satisfy the rental company’s demands.

First, you should know that the LDW is not actually an insurance policy.  It is a waiver of the rental company’s requirement in the rental contract that you bring the vehicle back in the same condition as when it left their lot.  Most rental contracts make you responsible for any damage to the vehicle, including theft and weather-related damage.  When you purchase the LDW, the rental company is removing that provision from the contract on a conditional basis. 

If you don’t purchase the LDW and the vehicle is damaged, here are some of the costs for which you could be held responsible under the rental contract:

  1. Cost to repair damage to the vehicle, or the full value of the vehicle if it is a total loss
  2. “Diminished value” of the vehicle – the difference between what the vehicle was worth before the accident and what it is worth after repairs have been made
  3. “Loss of use” – the amount of money the rental company loses on rental fees while the vehicle is out of service for repair or replacement 
  4. Administrative or loss-related expenses incurred by the rental company, such as fees for towing, appraisal, and claims adjustment, plus general office expenses for handling the paperwork

Whether all or any of these costs are covered by your personal auto policy depends on several factors.  One big factor is the type of personal auto policy you have purchased.  Insurance companies sell different policies in Texas and the coverage and exclusions are not the same from one company to the next.  Some companies sell a policy that covers damage to the rented vehicle in the liability section of the policy, while others sell a policy that covers damage to the rented vehicle in the physical damage section.  Each type of policy is discussed separately below. 

We encourage you to ask your agent which type of policy you have, because as you will see, the differences are significant.

Reasons to purchase the Loss Damage Waiver when you have a policy that covers damage to the rental vehicle in the liability section:

1.  Your limit of liability may not be sufficient to satisfy the rental company’s demands.

Coverage for damage to the rental car and related costs are provided by the property damage liability section of your personal auto policy.  If the property damage limit of liability is not sufficient to cover the value of the vehicle you rent, plus pay for any other costs the rental company demands, you will be personally responsible for the costs that exceed what your insurance company has to pay.

 2.  Your policy may exclude rented pickups and vans used for business purposes.

If you rent a pickup or van for business purposes, your personal auto policy may not provide coverage at all.  Some insurance companies consider an SUV to be a pickup or van, and may therefore not cover any damages arising out of the use of an SUV rented for business purposes.

 3.  Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory.  If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

 4.  Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company. 

 5.  You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away.  When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

Reasons to purchase the Loss Damage Waiver when you have policy that covers damage to the rental vehicle in the physical damage section:

1.  Your policy may not cover damage to the rental vehicle at all.

Coverage for damage to the rental vehicle and related costs are provided by the physical damage section of your personal auto policy – IF your policy provides physical damage coverage on at least one of your covered vehicles.

 2.  Your insurance company may not pay the entire amount demanded by the rental company.

When your policy provides physical damage coverage on one of your covered vehicles, the policy covers damage to a rented vehicle.  The amount payable by the insurance company is the lesser of the “actual cash value” of the vehicle or the amount “necessary” to repair or replace the vehicle, minus your deductible.  In addition, the policy covers “loss of use” with a daily limit (usually as low as $20 per day) and a maximum limit (usually $600), and there is usually a 1- or 2-day waiting period before the policy will begin to pay these expenses.  Because of all these limitations, you may become personally responsible for:

  • § The amount demanded by the rental company to repair or replace the vehicle in excess of “actual cash value” or the amount “necessary” to repair or replace;
  • § The amount of your deductible;
  • § The amount demanded by the rental company for “loss of use” in excess of the daily and maximum limits payable by your insurance company;
  • § The amount demanded by the rental company for “diminished value” of the vehicle, even after the repairs are complete;
  • § The amount demanded by the rental company for administrative or other loss-related expenses.

 3.  Your policy may exclude some electronic equipment.

Your policy may exclude loss to some electronic equipment that receives or transmits audio, visual or data signals.  If you rent a vehicle equipped with a GPS receiver, for example, your policy may not cover it.

 4.  Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory.  If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

 5.  Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company. 

 6.  You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away.  When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

 Bottom Line

We recommend that you buy the Loss Damage Waiver from the rental company.

This article was prepared and made available to Hill Insurance Agency LP by the Independent Insurance Agents of Texas, which is solely responsible for its content.  Please read your insurance policy.  If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply.  The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.

Small Businesses and the Affordable Care Act

You know the value of providing health insurance to your employees.  But the legal technicalities can be a real challenge for small businesses.  The Affordable Care Act offers rights and protections, choices and tax credits; but what about mandates, restrictions and penalties?  On average, small businesses pay about 18% more than large firms for the same health insurance policy because they lack the purchasing power that larger employers have.  Below are some key points that may affect your small business.

Is My Business Covered?

If you have up to 25 employees, pay average annual wages below $50,000 and provide health insurance, you may qualify for a small business tax credit of up to 35% or your premium contribution (up to 25% for non-profits) to offset and bring down the cost of providing insurance to your employees.  The maximum credit will be available to employers with 10 or fewer full-time equivalent employees and average annual wages of less than $25,000.  To be eligible for a tax credit, the employer must contribute at least 50% of the total employee premium cost.  Businesses that receive state health care tax credits may also qualify for the federal tax credit.  Dental and Vision care qualify for the credit as well.  For 2014 and beyond, small employers who purchase coverage through the new Health Insurance Exchanges can receive a tax credit for two years of up to 50% (up to 35% for non-profits) of their contribution.

Do My Retired Employees Qualify for Any Programs?

Under the health care law, employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program.  This program is designed to lower the cost of premiums for all employees and reduce employer health costs.  Health insurance premiums for older Americans are over four times more expensive than they are for young adults, and the deductible these enrollees’ pay is, on average, almost four times that for a typical employer-sponsored insurance plan.  Businesses, other employers, and unions that are accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents.  Savings can be used to reduce employer health care costs and provide premium relief to workers and their families.  Applicants who are approved into the program receive reinsurance for the claims of high-cost retirees and their families (80% of the costs from $15,000 to $90,000).  The program ends on January 1, 2014 when State health insurance exchanges are up and running.

What Options Are Available for Small Businesses?

In 2014, small businesses with generally fewer than 100 employees can shop in an Affordable Insurance Exchange, which gives you power similar to what large businesses have to get better choices and lower prices.   Access to purchase health insurance coverage through the exchange is limited to citizens and lawful residents. Individuals with income up to 400 percent of the federal poverty level (FPL) may be eligible for premium subsidies and cost sharing reductions for coverage purchased through the exchange.  Exchange eligibility determinations must be streamlined and coordinated with eligibility determination for Medicaid and the Children’s Health Insurance Program (CHIP).

What Is a Qualified Health Plan?

A qualified health plan is a health plan that is certified to provide essential health benefits and is offered by a health insurer licensed and in good standing to offer health insurance coverage who agrees to offer at least one qualified health plan in the silver level and at least one plan in the gold level, who agrees to charge the same premium rate for each qualified health plan in and out of the exchange, and who complies with other requirements of the exchange.    Qualified health plans will have a minimum actuarial value and be categorized according to their actuarial value as Bronze, Silver, Gold, or Platinum.

What are the Minimum Coverage Requirements?

Essential health benefits adopted by Health and Human Services (HHS) will be the minimum coverage requirements for qualified health plans that include at least ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care.

 What If I Have Less Than 50 Employees?

Employers with fewer than 50 employees are exempt from new employer responsibility policies.  They do not have to pay an assessment if their employees get tax credits through an Exchange.  The Affordable Care Act does not require employers to provide health insurance for their employees.  The Employer Responsibility provision of the Affordable Care Act applies to businesses with more than 50 full-time workers.  In 2014, the Affordable Care Act will require large employers to pay a shared responsibility fee only if they do not provide coverage and taxpayers are supporting the cost of health insurance for their workers through premium tax credits.

Is There Anything on the Internet That Might Help?

In 2010, the Department of Health and Human Services established a new consumer website with easy to understand information about affordable and comprehensive coverage choices.  The website also provides information to small businesses about available health coverage options, including information on reinsurance for early retirees, small business tax credits and how to shop for insurance in the Exchanges that will increase the purchasing power of small businesses.

For more information, please contact your agent or Hill Insurance Agency LP.

Hill Insurance Agency LP is an independent insurance agency and a member of the Independent Insurance Agents of Texas (IIAT).  We represent a number a national and regional insurance carriers, and have broker relationships with access to over 200 carriers.

Resources:  Healthcare.gov, Department of Labor, Internal Revenue Service and Texas Department of Insurance

This article provides information about the law designed to help users with their business needs.  But legal information is not the same as legal advice — the application of law to a business’ specific circumstances and needs.  Although we make efforts to ensure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurances that our information, and your interpretation of it, is appropriate to your particular situation.

Seven Shopping Strategies for New Car Buyers

New car shopping can be a lot of fun, especially if you’re a car enthusiast. But others can find the experience stressful and tedious. Either way, there’s a lot to think about. According to a survey of car shoppers, overall purchase price is the most important factor when shopping for a new car (46 percent), followed by make and model (31 percent).

Safety and performance come in a distant third, tied at seven percent. But whether you’re turned on or turned off by the dizzying array of car choices, trim options, “expert” reviews, incentives and other deals, it definitely pays to approach car buying strategically.

So if you’re in the market for a new vehicle and you find yourself having trouble keeping a clear head, just keep these strategies, courtesy of Hill Insurance Agency LP in mind:

  1. Decide how much money you can spend and what type of vehicle best suits your needs. Just looking for the basic transport capability of a small or medium sedan? Or do you need the hauling capacity of a van or SUV? Something practical? Something sporty? Something in between?
  2. Research crash tests and accident data available from the Insurance Institute for Highway Safety.
  3. Shop around for financing. If you can, apply for and get approval for a loan from a bank, credit union or other financier before you even visit the dealership. Being a “cash buyer” gives you an advantage when you do finally meet with the dealership’s financing person.
  4. Test drive the car. Try to drive in conditions that will be similar to those under which you’ll drive every day.
  5. Check pricing for your desired make and model at two or three dealerships and use that information to help you negotiate the best deal.
  6. Get a firm quote, in writing. This should include not only the cost of the car, but any fees and the sales tax.
  7. Inspect your new car carefully before driving off the lot. Make sure all the options you’ve ordered are included and that the body and paint are free of scratches or dents.

Finally, it’s important to consider the cost of auto insurance, although it seems that few people realize that what they pay for insurance can add significantly to the vehicle’s total cost.

Wise car buyers know to shop around for insurance and find out how costs compare. They also know to visit an independent insurance agency – like Hill Insurance Agency LP.  We can check with several companies to find the best combination of coverage and price.

To get a Progressive quote with Hill Insurance Agency LP, visit progressiveagent.com or call us at 800-937-9594.

Can my child take our insurance to college?

My son (daughter) is leaving home to attend college this fall.  Will my auto and homeowners insurance policies cover him (her) while at college?

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This is a great question, and one that our customers ask frequently.

When college students move from home to their home-away-from-home – a rented dorm or apartment – insurance issues can arise and should be addressed before they leave home.

One key question that arises in discussing these issues is whether the student is still considered a resident of your household.  This is a legal question, but your homeowners and auto policies both contain provisions that apply the broadest coverage available in those policies to persons who are legally considered residents of your household.

It is generally accepted that students living away from home while attending college are residents of their parents’ household. Based on previous Texas court decisions, the real test is whether the absence of a person from the household is intended to be permanent or only temporary – whether there is physical absence coupled with intent not to return. This leaves a great deal of room for interpretation. There may be borderline cases that require you to think about alternatives. For example, it may be difficult to consider a 23-year-old graduate student living in an apartment year-round to be a resident of your household.

Homeowners Policy
Your homeowners policy covers personal property owned or used by a resident of your household while the property is located anywhere in the world.

However, most policies limit the amount of coverage on personal property to 10 percent of the amount shown on the policy for personal property, when the property is located at another residence away from the home address.

Look at your policy and find the limit provided for personal property.  Take 10 percent of that amount, and then think about the items your student has taken to college:  clothes, TV, computer, other electronics, furniture, and household items.  How much would it cost to replace all those items if they were all lost at the same time in a fire or other catastrophe?

In addition to the dollar limitation, some policies don’t cover theft of personal property from the student’s residence, except while the student is temporarily living there. This is a definite problem, especially when the apartment is owned, or rented for a 12-month term, and the student comes home for the summer.

Your homeowners policy also provides liability coverage in case a family member is legally liable for another person’s injury or damage to another person’s property.  This coverage clearly applies to accidents at home or away from home, but some policies limit the coverage when an accident occurs at an owned or rented residence other than the family home.  Some insurance companies offer liability coverage at separate residences for an additional cost.

After all of the above information is considered, it’s easy to see there are potential coverage gaps in your homeowners policy when a student leaves home for college. That’s why we recommend that you purchase a separate tenant or renter’s homeowners policy for the student’s residence, whether it is an apartment or a dorm room.  The cost of such a policy is small compared to the benefits it provides.

 Automobile Policy

If your student takes one of your family vehicles to college, the coverage provided by your family automobile policy follows the vehicle anywhere in the United States and Canada.  This includes coverage for damage to the vehicle itself (if you have purchased such coverage on that vehicle) as well as liability coverage for injury or damage to other persons or property.

If your student doesn’t take a vehicle to college, some coverage under your policy may still apply if they are riding in or even driving a vehicle belonging to someone else.

Students Who Are Not Legal Residents of Your Household

Coverage complications can arise on your homeowners or auto policy if your student for whatever reason is not considered a legal resident of your household, as was mentioned in the first part of this article.  We encourage you to discuss your personal situation with us and your attorney.  To be safe, we will likely recommend separate homeowners and auto policies for the student.

This article was prepared and made available to Hill Insurance Agency by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.

When Your Teenager Starts to Drive

My teenager just received a license to drive. Do I need to add him/her to my policy now? Will it increase my premium?

These are great questions that our customers ask frequently.

The short answers are “yes” and “yes.”

Most personal auto policies written in Texas extend liability coverage to anyone using a covered auto with your permission, including children when they begin to drive. However, some policies exclude family members who have not been reported to the insurance company and are not listed as drivers on the policy.

Failing to report your newly-licensed teenager is a dangerous game to play with your family assets. In fact, some companies may consider this to be “insurance fraud” and refuse to pay a claim involving a young driver who has not been reported – especially if the youngster had a license when the policy was first purchased.

Insurance companies expect you to report all drivers in the household and will charge a premium based on the appropriate driver classification. In the case of a youthful operator, that premium will depend on whether the driver is the principal operator of a family vehicle or just a part-time operator.

Be sure to discuss your family’s insurance needs with your insurance agent. After considering your specific circumstances, you and your agent can make a decision regarding auto insurance that is appropriate for your family and your insurance budget.

This article was prepared and made available to Hill Insurance Agency LP  by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.

Why should you buy insurance from an independent insurance agency?

Today’s consumer has three choices when making a decision to purchase insurance products:

  • independent agent
  • captive agent
  • direct writer

An independent agent is one who is self-employed, is paid on commission and represents multiple insurance companies. Independent agents save customers time by shopping on their behalf for both the best price and the best coverage.

A captive agent or exclusive agent is an employee of only one insurance company and is restricted by agreement from submitting business to any other company unless it is first rejected by the agent’s captive company (State Farm, Farmers, Liberty Mutual, Nationwide, etc.).

A direct writer is an insurance company that sells directly to the consumer with no agent involved (GEICO, USAA, Esurance, etc.).

Of the top 50 property/casualty insurance companies in Texas, ranked by total premium volume written, more than half are available to independent agents

Independent agents

  • Are free to place a client’s insurance with any company the agency represents
  • Evaluate the insurance needs of clients and recommend the best coverage to meet those needs; they do not set insurance prices or pay claims
  • Help customers through the claims process in dealing with the insurance company
  • Write 80 percent of the $12 billion in commercial insurance purchased in Texas each year
  • Handle insurance for about 1 million Texas home owners
  • Write about 2.8 million auto insurance policies every year

Hill Insurance Agency LP is an independent insurance agency and a member of the Independent Insurance Agents of Texas (IIAT).  We represent a number a national and regional insurance carriers, and have broker relationships with access to over 200 carriers.