Category Archives: Blog

Lessons from Terrorism Insurance

“Well, it couldn’t happen here” was getting a pretty good foothold in this area.  We were beginning to forget about the apprehension of Ahmed Ressam by U.S. Customs officials in Port Angeles, Washington in 1999, and it was pretty much quiet as several potential incidents were thwarted by the FBI.  Then, along comes an incident like the Boston Marathon bombing to remind you that terrorism can happen anywhere. 

Past the human tragedy of terror, there is an economic aftermath that emanates from the incident like ripples on a pond.  Most immediately, the victims need care.  The dead are buried and the injured are treated.  In the case of the Boston Marathon bombing, many of the injuries are not only severe, but they will change the lives of the injured.  Amputations require immediate care, rehabilitation and then ongoing attention.  While we know already that several victims did not have insurance, informed sources are speculating that the care costs for those that do have insurance may exceed their coverage limits.

The business implications ripple out from there.  On the short term, businesses in the area of the bombing may have damage that needs to be addressed immediately and business interruption implications that can last longer.  In Boston, for example, the area around the crime scene has remained largely closed for eight days following the incident and the implications for the area have yet to be determined – will people gravitate to the area out of interest or avoid it out of concern for the associations.  There are estimates as many as 70% of businesses in urban areas may have terrorism insurance; those who do may be able to weather the interruption more easily.

After 9/11 –at over $32 billion the largest payout in the history of insurance until Hurricane Katrina in 2005 – the US enacted the Terrorism Risk Insurance Act which made the federal government an insurer of last resort in terrorism incidents.

Going forward, it hardly seems likely that lots of businesses in Port Townsend, Sequim and Port Angeles will be rushing out to buy terrorism insurance – at Homer Smith Insurance we don’t get many calls from people inquiring about it.  Even in our closest brush with terrorism to date, it appears the terrorist was just passing through on the way to larger targets far from here.

Nevertheless it is both true that terror incidents can occur anywhere and that these incidents give us an opportunity to reflect on how we would manage our own homes, lives and businesses in the midst of a major emergency.  There is plenty of overlap from a claims and business interruption perspective to make an event like the Patriot’s Day bombing a worthwhile opportunity for business owners or managers to spend some time reflecting on the impact of a disaster on their business and the steps – insurance being only one – that might be taken to mitigate the impact of disaster on their business and their lives.

Earthquakes, Insurance and Preparedness

If you don’t already have earthquake insurance on your home, it may be time to take another look.  Since the Nisqually quake fourteen years ago in February 2001, scientists have been looking at the fault lines in Western Washington. Their conclusions suggest that the Olympic Peninsula could be a hot spot for seismic activity — and that it could be hit hard during the region’s next big earthquake.

While no one knows how to predict when an earthquake will occur, the geological evidence suggests they do happen with a periodicity. There are about 5,000 earthquakes a year in the United States, according to the Insurance Information Institute. We know that major quakes struck Pacific Northwest in about 1100 A.D. and 1700 A.D., so within a couple hundred years or so it looks like we may be due for another. And, since Mother Nature doesn’t seem prone to waiting on our convenience, it can come at any time. The Nisqually quake was costly; about $2 billion in damages. It was also a wake-up call and after that quake a lot of effort has gone into strengthening the public infrastructure around Puget Sound as well as efforts by private homeowners to make seismic readjustments. Most of our homes here are of wood construction so retrofitting for earthquake mitigation mainly involves tying houses tighter to their foundations, bracing chimneys, strapping hot water heaters and generally making certain that pictures or other household items that can either tip over or fall off the wall are secured. Retrofitting public buildings is a bit more difficult since many of our historic structures out here on the Peninsula are made of brick.

Every family ought to have an earthquake kit stocked and ready for any emergency. Kits can be purchased in many stores or online, or you can make up your own. The general recommendation is for a three-day supply of food and water for every member of the family – including food and water for pets – together with supplies like bandages, flashlights and other survival items. These items can all be packed together in a large plastic trashcan or other container and stowed in the garage or anyplace it can be conveniently retrieved later. There are plenty of good sources of suggestions for items to stow in an earthquake kit, like the one here.

We began this piece noting that if you don’t have earthquake insurance this anniversary month of the Nisqually quake might be a good time to consider looking into it. You probably already know – or should know – that your Washington homeowner’s insurance policy is not likely to cover damage in the event of an earthquake. You will need specific earthquake coverage to provide protection.  Earthquake insurance costs vary with location, the type of building and its age; older buildings and brick buildings cost more to insure.

Earthquake coverage also generally carries a higher deductible than homeowners insurance; in Washington and other western states deductibles may be 10% or more of the insured value; $25,000 or more on a $250,000 home.  As always, if you can tolerate a higher risk, you can often lower premiums by agreeing to a higher deductible.

If you are considering earthquake insurance – or trying to decide whether you may need it – contact us here at Homer Smith Insurance.   We can help.

Insuring Your Boat or Yacht

Do you own a boat or a yacht?  While there is no hard and fast definition, if you are 29 feet and under in a recreational vessel, you probably have a boat; if you are 30 feet and on up to the current record holder, the Eclipse at 536 feet and use it for recreation, congratulations on owning a yacht.  Either way, you probably have an insurance policy on your vessel – either mandated by the bank that finances it or by the commonsense knowledge that one at fault accident aboard your uninsured vessel could destroy your personal finances.

As the owner of a small vessel, your concerns center on having adequate liability coverage and having sufficient coverage to protect your financial investment. The most comprehensive policy is an “all risk” policy that provides coverage for most perils except those that are specifically excluded in the policy. You should also check to make sure you have a “stated value” policy rather than an “actual cash value” policy. While actual cash value may sound like a benefit, it refers to the depreciated value of your boat at the time of loss. You may not be able to recover enough from the depreciated value of your vessel to replace it. Be sure at the time you take out your policy to set the stated value at a high enough level to assure your ability to replace your boat.

Homeowners policies often include some coverage (e.g., $1,000) for damage to small boats while they are stored at your home. Don’t mistake this coverage for marine insurance; it does not cover your boat when it is afloat.

The insurance policy on a small vessel can be understood a lot like your Washington automobile policy. It will have provisions for liability coverage, damage to the vessel, uninsured boater’s coverage and coverage for contents such as personal effects or fishing equipment up to a stated policy limit. There are some unique aspects to small boat policies. For example you can obtain a policy that can suspend coverage during the time your vessel is not in the water and to insure boats while they are being trailered. You need to consider how your boat will be used, transported and stored and make certain that all your needs are covered.

If you own a yacht, you have a bigger vessel and more potential complications, but that’s something you probably already know. Larger vessels can go farther, stay out longer and potentially reach a broader range of environments. You will need both hull coverage and protection and indemnity (P&I) coverage on your vessel. There are implications for coverage contained in maritime law and, if your yacht is US built, you may be subject to Jones Act regulations if you have crew aboard. The best advice for yacht owners is to seek the assistance of a knowledgeable agent in planning coverage.

At Homer Smith Insurance we have years of experience serving the boating community and the expertise to give you sound advice on your insurance needs for a boat or yachtCall 888-433-0031 and talk with our marine insurance specialist, Jim Maupin, today!

 

Renters cannot afford to be without renters’ insurance

It might be easy to say, “Well I just cannot afford renters’ insurance. My budget is so tight and probably nothing is going to happen to my stuff”. But have you considered natural disasters and fires? Apartment buildings go up in smoke all the time. Can you afford to lose all your possessions in one night? When you think about what it might cost you to replace everything after a lifetime of purchases, you likely will think you cannot afford not to buy renters’ insurance for your Washington home. Cheap Insurance Have you checked into the costs of renters’ insurance? You might be pleasantly surprised to learn that many policies are relatively inexpensive. Paying for insurance is not a bad deal for protecting your prized possessions, furniture and all your clothes. Theft We have all watched the comedy routines on TV where thieves come in and clean out an apartment right down to the carpeting. On TV, it is funny. However, in the real world, you really might have many of your most valuable belongings stolen. Just imagine trying to replace these possessions out of pocket! Homer Smith Insurance provides inexpensive renters’ insurance coverage for customers throughout Washington State, as well as policies for home, auto, marine and commercial insurance – call one of our agents today!

Washington Service Animals

We live in a very pet friendly area in a pet-friendly state so there are dogs just about everywhere.  We feel it is worthwhile to share some information and observations on pets, people and business.  

One major area that ought to concern any business is the issue of service dogs – or service animals generally.  Washington Law bans animals from some establishments and, of course, business owners may ban animals whether they are food establishments or not.  Service animals are a different story.  A service animal is allowed virtually everywhere.  Washington’s RCW 70.84 – the “White Cane Law” – states, in part:

“The blind, the visually handicapped, the hearing impaired, and the otherwise physically disabled are entitled to full and equal accommodations, advantages, facilities, and privileges on common carriers, airplanes, motor vehicles, railroad trains, motor buses, street cars, boats, and all other public conveyances, as well as in hotels, lodging places, places of public resort, accommodation, assemblage or amusement, and all other places to which the general public is invited, subject only to the conditions and limitations established by law and applicable alike to all persons.”

 

Interfering with these rights is a misdemeanor offense.

There are procedures for getting animals trained and certified as service animals and many people have either a special vest or other indication, but there is no requirement that an animal be certified or registered and while a business owner may ask if it is a trained service animal, they cannot ask about any disability nor seek proof of training.

If an animal appears disruptive or dangerous, it can be barred from a place of business. There is some good news for a business owner who has misgivings about allowing an animal in a confined space with other customers- particularly as that might impact their Washington Commercial Liability insurance.  Washington State has a law that places the responsibility for animal behavior squarely on the owner or person in control of the animal.  So, if somebody’s prize Pekinese decides to nip a toddler while on your premises, it should be their liability policy that provides the coverage.

In 2011 Washington passed House Bill 1728 which adjusted the definition of service animals to include miniature horses.  This was done to bring state law into conformance with national Americans With Disability Act (ADA) practice.  While we likely will not see a herd of miniature service horses wandering through Port Townsend or Sequim, it is important to know that horses and dogs can be legitimate trained service animals.  Of course we could be in big trouble if the decide to define our Elk in as well.

For those who need more information, the state has an FAQ page on service animals.  You can find it here.

What’s Your New Year’s Resolution?

New Year’s is a 4,000 year old celebration as we mentioned in an earlier post on this blog, and we get to credit the Romans for having it on January 1 instead of the middle of March as the Mesopotamians intended. The other thing we can credit the Romans for his the tradition of New Year’s resolutions. 

Julius Caesar changed the Roman calendar in 46 BC to reorganize the Roman year. Among the reforms he instituted, he named one month after himself, now July, and he ran in a new month called Januarius after Janus, the Roman god of doors and gates. Finally, Caesar set the Roman New Year to begin in January. As a god, Janus is generally shown with two faces – one facing forward and one facing back, a fitting representation for a new year. The Romans themselves evidently saw Janus as representing new beginnings and it was a custom for Romans to pray to Janus whenever they undertook a new task.  He also became a symbol for resolutions and many Romans looked for forgiveness from their enemies and also exchanged gifts before the beginning of each year – a sort of “everything changes with the new year.”

While the Romans seem like they may have had some lofty interpersonal goals centered on the New Year, we have largely left noble proclamations of change to political and religious leaders and most of us concentrate on more mundane goals, like eating less and quitting smoking.  In the US, our top 10 list of resolutions (courtesy of about.com) reads like a row of self-help books:

1. Spend More Time with Family & Friends
2. Fit in Fitness
3. Tame the Bulge
4. Quit Smoking
5. Enjoy Life More
6. Quit Drinking
7. Get Out of Debt
8. Learn Something New
9. Help Others
10. Get Organized
(http://pittsburgh.about.com/od/holidays/tp/resolutions.htm)

These days, about 1 in every 2.56 adults will make a New Year’s resolution – with about 207 million adults in the US population, that is about 80 million resolutions.  Given the nature of the top 10 resolutions listed above, it’s a good bet those resolutions will involve breaking some sort of negative pattern. Unfortunately, as most of us know, this type of change ain’t easy.  A University of Washington study done in 1997 discovered that 47 percent of the 100 million adult Americans who make resolutions give up on their goals after two months. If this figure seems low, from your personal experience, more recent research at the University of Minnesota pegs the number at closer to 80%. A contemporary website, bookofodds.com, puts the odds that an adult who makes a New Year’s resolution will not keep it for more than one week at 1 in 8.33, the odds for a month are 1 in 2.7 and for a year 1 in 1.15.  In short, if you like to make New Year’s resolutions of the large and life-changing variety, don’t entertain high hopes of success.

Experts in these matters suggest staying away from the sort of grandiose and hard to define resolutions and stick with simple goals that can be measured and try to stick to those one day at a time.  Take a small number of goals you are really interested in and create a specific plan of action to achieve them. Write down your plan and put it somewhere where you can see it regularly. You can share it with people you trust to help you keep it but steer clear of broadcasting it to everyone you know. Keep track of your progress and if you stray from your plan, forgive yourself for your transgressions and get back on your plan.

Good luck in the New Year from all of us here at Homer Smith Insurance.  And if one of those simple resolutions includes reviewing your insurance needs to make sure you are up to date and adequately covered, don’t hesitate to give us a call.  We can help you keep that resolution.

New Year’s Eve and the Times Square Ball

The earliest known New Year’s celebration was in Mesopotamia about 4000 years ago; unfortunately, the guest list has been lost so we don’t have any idea of who came. Historians think it would have been celebrated in mid-March around the time of the vernal equinox. New Year’s didn’t get moved to January till about 150 B.C. when the Romans changed the calendar, created January as a month and decided to start their civil year – the time at which newly elected senators were installed – in January.

There was probably a good seasonal reason for having the new year start in the spring since that would have signaled the beginning of the agricultural year. The change to January really underscored the civil nature of the holiday.  Charles Lamb, a 19th-century essayist, wrote a defining piece about New Year’s. He wrote that every man has two birthdays in every year that set him thinking about his mortality. One was his birthday, which Lamb described as being mostly for children; the other was New Year’s.”… the birth of a New Year is of an interest too wide to be pretermitted (disregard intentionally or allow to pass unnoticed) by king or cobbler. No one ever regarded the First of January with indifference. It is that from which all date their time, and count upon what is left.”

It appears our 19th-century ancestors, and maybe folks long before that, were pretty much party animals around the new year. Throughout the 19th century the crowds used to gather in lower Manhattan at Trinity Church to celebrate and listen to the tolling of the bells. Huge crowds would come—up to 15,000 people some years—the tolling of the bells and to welcome the New Year. A New York Times article from 1897 reports: “The crowds came from every section of the city, and among the thousands, who cheered or tooted tin horns, as the chimes were rung out on the night, were many from New Jersey, Long Island, and even Staten Island.”

The traditional celebration at Trinity Church hit a bit of a bump in 1894 when  Rector Dr. Morgan Dix ordered that the bell-ringing cease.  That was not a particularly popular decision and it was protested by the locals and local newspapers; a year later the bells returned, but the damage was done. 

The New York Times moved from Lower Manhattan to Times Square and, in 1904, the New Year’s Eve celebration moved with it.  New Year’s 1904 commemorated the official opening of the new headquarters of The New York Times. The paper had lobbied the city to rename Longacre Square to Times Square and the paper’s owner, Alfred Ochs, spared no expense to ensure a terrific party.  A street festival ran all day and ended with a fireworks display set off from the base of the Times tower.  At midnight the sounds of cheering, rattles and noisemakers from over 200,000 attendees could be heard miles up the Hudson River.

The night was such a huge success that Times Square instantly replaced Lower Manhattan’s Trinity Church as the place to go in New York City to ring in the New Year. Two years later, New York City banned the fireworks display, no doubt worried about the insurance implications and the likelihood of fire. That did not deter Alfred Ochs. Ochs and the Times had a seven-hundred-pound, illuminated, iron and wood ball constructed that they lowered from the Times tower flagpole at exactly midnight to mark the end of 1907 and the beginning of 1908.

The Times Square event would prove so popular that it sparked the beginnings of similar celebrations that have literally gone worldwide. In New York, the event now draws about 1 million people a year and presents a huge security issue for the New York police force.

Our on the Peninsula we will not draw a million people but we can hope to have a good time and a safe holiday at venues from Port Townsend’s First Night to events in Sequim and Port Angeles.  Here at Homer Smith Insurance we wish everyone a safe and healthy New Year.

New Years Eve Around The Corner – Stay Safe

With the New Year on the horizon it’s time for a holiday season reminder to be particularly careful when driving around our area. Washington State’s Target Zero plan for reducing auto fatalities is virtually certain to involve emphasis patrols for speeding and drunk driving – two major risk factors for auto fatalities in Washington state and nationwide. The State Patrol has already begun DUI emphasis patrols in Eastern Washington and will continue through January 2 of next year. And why not, these patrols appear to be effective since Washington fatalities are down. Here on the Peninsula we had only 11 fatalities in 2011 and only five of those were considered alcohol-related.

The period between Christmas and New Year’s always shows an increase in traffic fatalities nationwide.  But, New Year’s is not the most dangerous time to be on the road; that record belongs to Thanksgiving.  That may relate to the number of passenger miles driven on this holiday that traditionally involves a great deal of travel.  In fact, when you look at the top five dangerous days to be on the road they correlate well with the amount of travel.  They are:

  1. 1. Thanksgiving Day
  2. 2. Labor Day
  3. 3. July 4th
  4. 4. Memorial Day
  5. 5. Christmas Day

New Year’s does have the distinction of having the highest proportion of alcohol related fatalities.

The fatality rate may not be a complete surprise. New Year’s is a complicated holiday. While it traditionally involves partying there seems to be a general sense that it is a time for friends and family. Seven percent of Americans say they don’t celebrate New Year’s Eve at all and 62% say they stay home. The vast majority 90% claim they spend New Year’s Eve with friends and family.

There are plenty of ways to enjoy the holiday in relative safety and they don’t necessarily involve not joining in the celebration. Here on the Peninsula the Jefferson County Historical Society has been orchestrating a family-friendly, alcohol free celebration called First Night for five years.  This is a party that begins and ends early enough for everyone to get home before the late-night revelers are on the road. It’s a good way to start your new year.

The Peninsula Home Fund – A Fundraiser Benefitting Our Community

The Peninsula Home Fund is a local institution that will enter its 27th season in 2015.  Although many of the donations come in around the holidays, the fund accepts donations year round.  This fund helps teens, families and the elderly to get through an emergency situation” in the words of a Peninsula Daily News article. The fund grew slowly through the 1990’s and in the year 2000 raised $42,703. The money raised through the Home Fund is administered by OlyCAP and helps individuals and families across the peninsula, or as the News is fond of putting it, “from Port Townsend to Forks, from Quilcene and Brinnon to Sequim and LaPush.”  Homer Smith Insurance has been a strong, local supporter of OlyCAP for decades, and appreciates the the Peninsula Daily News fundraising efforts for this organization. The fund has continued to grow, setting new records every year and hitting the $150,000 range around 2006. Last year the fund set its current record of $268,389; odds are that record will be broken again this year. The Home Fund and its series of uplifting stories have become a PDN staple in November and December and they do a great job of showcasing how even small amounts of support can leverage changes in people’s lives. Administration of the Peninsula Home Fund has fallen to OlyCAP since the inception of the fund. Within OlyCAP, the fund is unique because it is one of only a few programs that is locally funded and not hedged by state or federal rules. The fund represents discretionary dollars that can be used to provide assistance for all sorts of basic needs that may not fall under other programs. Common uses include assistance with rent, utilities, energy, prescriptions, gas and public transportation but there are many other uses. One use that seems to be growing is the provision of prescription eyeglasses.  Funds can also be combined creatively with other funding sources to solve a particular problem. For example, a person who had received rental assistance from one program might get help for moving expenses from the Home Fund to enable them to solve their housing situation. Home Funds dollars are managed within OlyCAP by a combination of staff and volunteers, which helps keep administrative expenses low. Home Fund volunteers are a small but dedicated group who care deeply about the work they are doing. One volunteer, Rich Ciccarone, was interviewed by the PDN several years ago and spoke movingly about his experience as a volunteer. The use of volunteer program administrators gives the Home Fund a unique local character and obviously deepens the relationship between the volunteer and the community; Rich is now Chairman of OlyCAP’s Board of Directors. More than 3200 individuals, couples and families (many of them with children) in Jefferson and Clallam counties were helped in 2013 by the Home Fund, offering them a “hand up, not a handout.” This period from the end of November to early January is the major fundraising period, although the fund itself never closes.  Even though the fund is at record highs, it continues to be based mostly on small donations and any amount is always welcome. You can donate to this unique peninsula institution through the Peninsula Daily News or online THROUGH THIS LINK.

Insuring Nonprofits

We work with a lot of nonprofit organizations here and there are frequent questions about the types of coverage needed and few simple answers.  Nationally, most claims involving nonprofit organizations are accidents and injuries related to automobiles or slips, trips and falls at nonprofit locations and special events. While these represent the great majority of claims in numbers – up to 90% – they account for only about 65 percent of dollars paid in claims.  It is allegations of professional errors and omissions, improper employment practices, wrongful termination, abuse and harassment that are difficult to resolve and expensive to defend that account for the 35% remaining claims dollars paid.  In addition, the specifics of each organization’s mission and their operational activities will create different types of risk.  For example, if the organization owns vehicles that are driven by volunteers, they need to address liability both for the nonprofit and for the volunteer; if they perform any professional services they may need to consider errors and omissions coverage.  

Nonprofit managers need to take a fairly sophisticated look at their risks to do the best job of organizing their insurance portfolio.  The State of Washington provides some limited protection for volunteers in nonprofits under a “good Samaritan” law RCW 4.24.670 and this law should be taken into consideration because there are provisions impacting the amount of liability insurance to carry based on annual budget.  Washington insurance for worker’s compensation is also managed through the Department of Labor and Industries and is a given in this state unless the nonprofit is large enough to consider self-insuring.

Nonprofit managers should consider their need for the following types of policies:

A Commercial general liability (CGL) policy to address risk of accidents claims involving bodily injury or property damage. Slips, trips and falls are the most common claims covered by CGL policies.

Directors’ and Officers’ Liability insurance (D&O) to address risks arising from management decisions.  This can cover management decisions by volunteer (e.g. Board of Directors) and staff leaders of a nonprofit. Wrongful employment practices – discrimination in hiring or firing – and harassment of one form or another are common claim filed under a D&O policy.  In the case of Boards, there may be some limited protection offered under a homeowner’s personal policy, and more if the individual has a personal “umbrella” policy.  A risk manager – and board members – should consider the options here carefully.

If the nonprofit owns a property or rents and has significant equipment, property insurance coverage is important.  Claims under these policies cover repair or replacement of essential property, such as office repair and replacement of equipment used in programs.

Any nonprofit that owns its own automobiles or has volunteers who use their own vehicles in service of the organization should take the time to consult with their insurance agent or broker.  Commercial auto, automobile liability and non-owned auto insurance address different aspects of the use of owned, rented and borrowed vehicles.  In addition, an insurer may impose specific requirements to continue some types of coverage; non-owned vehicles coverage, for example may require submission of driver information on a regular basis.

There are other coverage’s that can be obtained for specialized circumstances, such as policies that address risks of fraud or embezzlement which may be important to an organization that handles a lot of cash and data security coverage that addresses the loss of data or equipment that is not generally covered in regular property insurance policies.  A nonprofit that is funded through sales of goods or services may need to consider business interruption insurance to cover expenses such as renting temporary office space and equipment if some event makes it impossible to carry on the normal business of the nonprofit.