Monthly Archives: November 2011

Keeping Ahead of Risk with Washington Renters Insurance

A fire could ruin all your belongings!

Washington renters insurance is not usually the first type of insurance we consider when we look at protecting our property. Car and health insurance are normally the first that spring to mind. When you rent your home and particularly if you have valuable personal property, renter’s insurance is a necessity if you don’t want the expense of replacing your own possessions when they are damaged by fire or stolen.

As a renter, your landlord’s insurance won’t generally cover you for loss or damage of your personal property. The landlord’s policy will cover damage to your roof by a severe thunderstorm but usually will not cover water damage to your personal property. Renter’s insurance can also cover you for liability costs if someone injures themselves at your house.

There are different types of renter’s insurance available and you will need to know the difference between a policy which pays ACV (Actual Cash Value — payment according to the estimated value of the property at the time of the loss) and Replacement Cost (covers money that needs to spent to purchase new replacement goods). Your premiums will depend on the type of coverage and worth of the property to be covered.

To discover more about Washington renters insurance, contact one of our agents who will be able to provide more information about coverage to suit your needs and arrange quotes for the coverage you need. With Homer Smith Insurance, you can get the coverage you need for your rented property. Contact us today for more information!

 

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A Salute to Habitat

Homer Smith Insurance has been working with our community on the peninsula since 1950.  We have seen a lot of changes in that time but one thing that has remained steady through the years is the sense of community here.  Today we would like to celebrate one of our treasures – Habitat for Humanity. 

Habitat for Humanity is a national nonprofit organization that believes every man, woman and child should have a decent, safe and affordable place to live.  They support that belief by working with families and volunteers to build affordable housing for people around the world.  Habitat builds homes for people in need regardless of race or religion and engages volunteers and supporters from all backgrounds.  Among its prominent supporters are President Jimmy Carter and his family. 

There are Habitat for Humanity organizations in both Jefferson and Clallam Counties.  Habitat offers a hand up to people who cannot afford homes.  Community volunteers help neighbors to build a house; Habitat homeowners pay back the cost of their housing materials through a low cost mortgage that usually lasts 20 to 30 years.  While the actual building of homes is done by volunteers and families, it is donations from the public and earnings from Habitat second-hand furniture stores that help cover the cost of land, roads, utilities and other overhead that get the process started.

Each of the county organizations is active.  Recent news from Habitat for Humanity of East Jefferson County is that in November of 2011 they dedicated their 23rd and 24th houses.  In the last year, Habitat construction volunteers provided over 10,000 hours of service.   They also opened a pilot Neighborhood Revitalization project in Quilcene – one of only fifty five such projects around the country.

Habitat for Humanity of Clallam County is also very active.  They recently announced receipt of a 2011 Thrivent Builds with Habitat grant. The grant is funded through Thrivent Financial for Lutherans and will aid in the construction of houses planned for the coming year.

Both organization support Habitat Stores and you can check in online to see what furniture, treasures and artwork are available!

As a Washington home insurance agent, Homer Smith Insurance salutes the efforts of Habitat for Humanity as it works to support our community!  We hope you do as well.

Insurance – An American History

The history of insurance in America. dates to 1735 when Charleston South Carolina residents created the first American mutual insurance company, the” Friendly Society of Mutual Insuring of Homes against Fire.”  The company lasted only until 1741, when a series of major fires put it out of business.  The need for protection against the risk of fire continued and in 1752, Benjamin Franklin and others formed the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire- a mutual company that continues today as The Philadelphia Contributionship.  The Contributionship did more than insure homes against fire.  By establishing criteria for homes it would insure, the company helped contribute to standards that would one day be become both building codes and zoning laws. Before accepting a property for insurance, the company used surveyors to inspect each building. The directors reviewed the surveyor’s reports and set rates.  To assure payment of claims and the continuation of the company, the directors established a capital fund from which losses and office expenses could be paid.

Franklin extended his contributions to the development of insurance by helping to form the Presbyterian Ministers’ Fund in 1759.  Some religious authorities at the time were outraged at the time because insurance was viewed as putting a value on human life.  Criticism abated as critics learned that insurance worked to protect widows and orphans.  Like the Philadelphia Contributionship, The Presbyterian Ministers Fund continued through the year and has now been absorbed by the Nationwide Mutual Insurance Company. 

Ben Franklin’s hand is in both of the earliest insurance companies in America qualifying him to be referred to by some as the “Father of American Insurance.”

Throughout history, the types of insurance offered have been expanded in reaction to new risks   The industrial revolution created a necessity for business insurance and disability insurance.  The advent of motor transportation offered new risks to cover.   The Travelers Insurance Company sold its first accident policy in 1864 and the first auto insurance policy was sold in Ohio in 1897.  As time goes on, new types of insurance are created to match the risks of modern life.

The explosive growth of insurance products and the companies issuing them lead to fraud and scandal in the early years.  Some companies did not set aside the capital to pay claims – as the Philadelphia Contributionship  has done, running instead as Ponzi schemes here the premiums paid by current enrollees bankrolled claims.  Many state laws were passed in an attempt to rein in problems, but insurance was poorly regulated into the early 20th century. 

The Social Security Act in the 1930’s offered old-age benefits that cut into insurance companies’ territory and sent signals to the industry to begin regulating itself or see more government involvement. World War II brought group life and health insurance and consolidation that squeezed out smaller insurers.  The Supreme Court ruled in 1944 that insurance should come under federal regulation, but Congress passed the McCarran-Ferguson Act in 1945 that returned control to the state-level.

Control remains at the state level today, for the most part.   The industry has been called to task over rates based on gender, race and other factors and has responded by becoming more egalitarian and affordable.  The insurance industry has also become more complex as it to responds to the needs of business. Major insurance companies continue to increase in size as they merge with one another and with other companies in the financial industry. Insurance policies can be found today through a host of institutions offering a range of financial services.

So, whatever your Washington home insurance, life insurance or auto insurance needs, there is a huge industry there to help protect you against risk.  We are here to help.

Insurance – A Brief History

The idea that people who suffer a loss could be indemnified in some way has ancient origins.  Nearly 4,000 years ago the Code of Hammurabi, outlined more than 250 specific offenses or conditions and specified how each should be dealt with.  Much of the code was pretty stern stuff.  For example:  “If a man has committed highway robbery and has been caught, that man shall be put to death.”  However, many of the items in the code also dealt with compensation for offenses and some offered a notion of shared risk that predates private insurance. 

If the highwayman has not been caught, the man that has been robbed shall state on oath what he has lost and the (community) city or district governor where the robbery took place shall restore to him what he lost.

The notion of compensating individuals for losses beyond their control was born.

The Romans carried the insurance concept along a little further.  As funeral expenses increased, Roman citizens formed burial clubs that collected funds from the membership and paid funeral expenses to surviving family members. Later, in medieval times, Guild associations collected money from their members to support a common fund.  Depending on the guild and its interests, these funds could protect members from loss by fire and shipwreck, pay ransoms to pirates, provide burials or even offer support in times of sickness or poverty. This early safety net helped to encourage people to take up trades and helped generate increases in the amount and range of goods and services available.

The first known insurance contract was evidently signed in Genoa in 1347. Policies were signed by individuals who wrote their name and the amount of risk they were willing to assume in exchange for a premium payment at the bottom of the insurance contract – giving rise to the term underwriter.  The practice of exchanging a premium for a share of the risk was developed further in the coffeehouses of London in the 17th century.  One coffeehouse owned by Edward Lloyd, was a frequent meeting place for merchants, ship owners and others seeking insurance.  This lead to the rise of Lloyd’s of London.  At this time, underwriting was basically a bet.  The underwriter (insurer) made their own assessment of the risk and offered a premium in exchange for taking on that risk. For shipping insurance, for example, merchants or ship owners would go to Lloyd’s with a copy of the ship’s cargo to be read to the investors and underwriters who gathered there. Anyone interested in taking on the risk for a set amount signed at the bottom of the manifest beneath the figure indicating what share of the cargo they were responsible for. 

Formal assessment of risk awaited developments in mathematics.  Blaise Pascal and Pierre de Fermat contributed to ways to understand and express probabilities and understand levels of risk. These formalized the practice of underwriting and made insurance more predictable and affordable. In fact, it was the 1666 fire in London that spurred underwriters to begin to look at fire insurance and to estimate risk using tools like Pascal’s Triangle.  The insurance business further expanded at the end of the 17th century as underwriters developed mortality tables that allowed them to offer life insurance. 

Today, underwriters can use data, statistics and their understanding of circumstances to insure virtually any item or endeavor.  If you need insurance of any kind, your Washington Insurance agent can help you find it!

Insurance –Trust And Verification

Merriam-Webster’s Online Dictionary describes insurance as, “coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.” The central concept of insurance is “guarantee against loss”.  No matter what is covered by a given insurance policy, it involves trust. The insurance company has to trust the party seeking coverage to give accurate information about the nature and magnitude of the risk; the party purchasing coverage has to trust any claim for loss will be compensated fully and fairly. 

Our economy depends on the role played by insurance contracts. Large building projects, major equipment sales, vehicle rentals and a host of other transactions would be impossible without a way to protect the parties against loss. When policies are not handled in good faith, there are consequences that impact more than just the two parties. Third parties, such as other businesses or persons, may also be harmed by insurance contracts that turn out to be invalid either through the actions of the insurer or the applicant.

Insurers seek to insure qualified risks; qualified risks are assessed by using applications. An insurer relies on the information that an applicant provides on the application to decide whether a policy should be issued, how much to charge, what amount of coverage it can grant and any conditions for providing the protection. Insured parties have to trust the insurer can cover any losses they insure and that they will handle any loss fairly and efficiently. Ideally both parties approach the contractual agreement honestly and fairly.

Because there are times that people or companies do not act in good faith, there are formal protections for both the insurer and the insured.  Technology frequently makes it possible to check an applicant’s information to judge the potential risks and costs associated with providing insurance. 

In the Washington auto insurance market, insurance companies can review a person’s driving records in Washington and nationwide using state records, the Comprehensive Loss Underwriting Exchange (CLUE) or other claims information databases.  Tickets, traffic violations, DUI convictions, and other facts about a person’s driving record typically show up for at least three years and for some offenses seven years or more.

With Life, Disability or Health Insurance, an insurance company can consult the Medical Information Bureau. MIB maintains extensive databases of pre-existing conditions of potential clients.  If you have ever been denied coverage by an insurance company for health reasons applying somewhere else without disclosing the information will not work. If you lie on an application and the insurance company does not catch it, the company still has time to discover the lie and cancel the policy. Even if you die before the insurance company catches a misrepresentation the insurance company may perform an investigation before paying benefit.  Any material misrepresentation of fact could affect the contract and any benefits. 

When it is the insurance company that refuses to cover an eligible loss without a valid reason there are protections in state laws or regulations.  In Washington State, the Insurance Commissioner is charged with protecting consumers and regulating the activities of insurance companies and agents.  Their mission:  “We protect consumers, the public interest, and our state’s economy through fair and efficient regulation of the insurance industry.”

While there are times when one party fails to handle their insurance obligations in good faith, these are the exception. Our economy is made possible in some part because most parties deal with each other honestly and when they do not, there are ways of helping assure they do.  

Alcohol and Office Functions

You can serve alcohol safely at a company party or other setting, but if problems occur, your activities as an employer may be looked at closely.  Since employees may be encouraged or expected to attend an office function, there may be elements of supporting general business purposes by attending.  You want everyone invited – employees, family members or guests – to enjoy themselves and it is in your interest that no one go overboard. 

Offensive behavior at office parties, fueled by alcohol, can result in complaints of a hostile work environment or of harassment – claims for sexual harassment increase immediately after the holiday season.  As a work-related event, holiday parties must abide by all policies in the employer handbook.  In addition, society is less and less tolerant of drinking and driving. An impaired driver who causes an auto accident is much more likely to be sued and besides the driver, a lawsuit may include a business that provided alcohol.

There are some protections in Washington law and Commercial General Liability (CGL) policies generally provide coverage for liquor liability.  Holding an event at a venue that allows alcohol to be consumed or hiring a bartender may provide some insulation against liability, but check to make sure the venue or the bartender are adequately covered for liability – after the party is no time to find out that your coverage or the venue’s is insufficient.

In Washington, if an employee is served after he or she is “apparently intoxicated,” an injured party can sue both the server and the employer sponsoring the party.  Proof of apparent intoxication has been more lenient in employee party lawsuits than in other commercial settings.  Also, if minors are served at your party, you may be liable for their injuries resulting from serving them alcohol.

Here’s some practical advice to help manage your liability as an employer. 

Always remind employees that company policies are in force during the employee party and that hostile or harassing behavior will not be tolerated.  Bear in mind that, if you have a written policy, be prepared to enforce it.  Otherwise, you will have set a standard that you are not living up to.

Avoid serving liquor to employees who are apparently intoxicated and discourage intoxicated employees from driving or engaging in other hazardous activities.  Consider using professional servers who can better recognize signs of intoxication and never instruct servers to promote consumption.  Make sure all possible steps are taken to avoid accidental service to minors.  Be careful in continuing to socialize after a party is over to maintain the same vigilance – the after party may be viewed as an extension of the event.

Remember that one hallmark of intoxication is impaired judgment. If employees are encouraged or allowed to become intoxicated, you can anticipate that some may exercise exceedingly bad judgment, either for their own safety, or for the safety of others.  To assure safety, consider tactics like cab vouchers to help people get home safely. 

With a little planning and common sense, and the expert help of your Washington business insurance agent, you can host a sensible and safe event for your employees.  

Have a Wonderful Thanksgiving

There is plenty to be thankful about on Thanksgiving – family, friends and food are the order of the day.  Thanksgiving is also a great day to stay alert.  New Year’s Eve is a distant second to Thanksgiving for the largest number of drunk driving fatalities.  People are among family and friends and may be inclined to indulge in food and drink.  Do help everyone at your celebration to get home safely. 

Then there are the kitchen festivities.  People can get a bit careless or distracted or just long enough for disaster to strikes.  An insurance company study found that grease and cooking-related claims more than double on Thanksgiving Day. More than $15 million in property damage may be attributable to turkey deep-fryer fires alone and oil splatter lands children and adults in emergency rooms.

Data from the U.S. Fire Administration estimated 2,000 Thanksgiving fires in residential buildings between 2006-08 and these accidents were estimated to have caused an average of five deaths, 25 injuries and $21 million in property damage.  Fires are reported most frequently between noon and 1 p.m. and are most commonly cooking related. 

SOME SAFETY TIPS

* When deep frying turkeys 8-10-pound turkeys are the most appropriate size;

* Make sure turkey is not partially frozen or have water on it when deep frying – either can cause oil splatter;

* Use peanut, canola or sunflower oils in the fryer;

* Never leave any cooking pot unattended. Keep children and pets at a safe distance;

* Make sure a fire extinguisher is handy at all times. Never use water to put out a grease fire; 

* Use well-insulated potholders or oven mitts when touching pot or lid handles;

* Avoid drinking while using a fryer or cooking;

* And, keep an eye open for those who may be overindulging in alcohol – including watching your own consumption.

Stay safe and have a wonderful Thanksgiving from your Washington Insurance Agent!

Roommates And Domestic Partners

When unrelated people live together it is their business alone, but if they share the same residence and use the same car or need to consider health insurance it is important to look at the insurance ramifications.  In general, insurance policies are designed to cover single individuals, traditional married couples, a traditional family – husband, wife, children or relatives in the same household.  Your insurance policy may bar convenient coverage for an unrelated person in your household. This is not necessarily a difficult problem to solve, but you need to be aware of possible problems in order to solve them.

If unrelated persons share an apartment or rent a home and each retains separate ownership of property, each should carry their own tenant’s policy. If unrelated persons own a home jointly, and have separate personal property, it is more complex.  You could name one individual as “named insured” on a policy, then add other owners as additional insureds. The named insured would be covered their interest in the home and personal property (such as clothes, appliances, furniture, etc.) as well as being protected against losses involving his legal liability to others including payments for medical services.  The “additional insured” can have coverage for their interest in the dwelling, premises liability and medical payments to others.  Each “additional insured” should get a tenant’s policy to cover their personal property.

With Washington auto insurance, if each person has his or her own vehicle, the insurance question couldn’t be simpler. Each vehicle gets insured by the individual owner. Again though, if two unrelated people share ownership of a vehicle, the policy covering the car should have a joint coverage endorsement added.  This endorsement should give co-owners the same coverage as if they were related. Other options may include adding the non-owner resident to the owner’s policy as a part-time driver or purchasing a “non-owned” auto policy to get automobile coverage.

Health insurance is often provided though employers.  Washington law requires state registered domestic partners to be treated the same as married spouses. This generally (but not always) means any benefits an employer provides to a spouse must be provided to registered domestic partners.  Private health insurance policies covering domestic partners can also be found.  The insurance industry is taking steps to acknowledge a broader range of ownership arrangements, including policy forms in many areas of insurance that allow policies to reflect domestic partnerships. Now, many couples of the same and opposite sex are able to share insurance just as a married couple would and reap all the benefits of doing so. 

How can you be sure about whether your interests are properly covered? Speak to your insurance professional; discuss your situation in detail and then determine the best way to structure your policies.

Protect Your Identity From Theft

Identity theft is an increasingly frequent crime.  According to Javelin Strategy & Research identity fraud cases rose by 12 percent in the U.S. last year (2010), to 11.1 million.  Victims should have some way of recovering their financial losses when it happens.  This type of theft is not generally covered by a basic homeowners insurance policy, though it may be an optional endorsement on a homeowner’s insurance policy.  While you may or may not need to insure against the risk of loss from identity theft, for sure you need to pay attention to how to minimize its occurrence.  Check with your Washington home insurance agent to see how you are covered.

Our increasingly electronic world has created many more opportunities for identity theft.  Credit cards, funds transfer cards, ATMs, wireless payments, slipshod business practices and the Internet all contribute to making identity theft a problem for individuals and businesses.

ID theft is a term that describes virtually any dishonest and unauthorized use of private information. In the past, it described forgery or passing oneself off as another person to trick someone out of money or property. Today, it may describe any use of another person’s confidential information to fraudulently obtain goods, services, or other financial benefits. The gold mine of information for identity thieves is a social security number. This can be been used to get other private information such as driver’s history, credit information, bank accounts, loan information, credit cards, occupational history, military records, mortgage information, investment accounts and so on. This may allow a criminal to use another person’s accounts, secure loans, and charge a host of goods or services; the list of opportunities is limited only by the criminal’s resources and imagination.

It is basically up to the individual consumer to guard against ID theft – even if businesses and government regulations are ramping up security activities.

Even when financially protected, ID theft victims typically have costs associated with clearing up the aftermath.  These include correcting a credit history and straightening out accounts and records. This often takes months and may involve legal fees.

There is insurance coverage ID theft that may reimburse legal fees or pay costs related to correcting records. The most effective protection is for individuals to prevent becoming ID theft victims. Here are some ways ID thieves work: 

  • Dumpster Diving  – rummaging through trash looking for stuff with your personal information on it.
  • Skimming.  — using a special storage device to steal credit/debit card numbers when you are using your card.
  • Phishing. —  pretending to be a financial institution or company (on-line or in email) to get you to reveal your personal information.
  • Changing Your Address — diverting your billing statements to another location by completing a change of address form.
  • Old-Fashioned Stealing – your wallet or purse; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They also steal personnel records, or bribe employees who have access.
  • Pretexting –thieves may use false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources. For example calling and claiming they are you. 

There are ways to defend yourself:

  • Keep banking information and your Social Security Number safe, perhaps in a locked file.
  • Use care in on-line transactions. Is the Website you use secure?
  • Verify that websites for online transactions are legitimate
  • Use password protection on smart phones and don’t leave them unattended
  • Shred paper thoroughly. ID thieves steal mail by going through garbage.
  • Check bank and business records for irregularities. Track down the unusual transactions or entries.

These and other common sense precautions can help minimize your exposure to identity theft.  

Firsts in Auto History

Did you know the Duryea Brothers – Frank and Charles – developed the first commercial automobile business in Springfield Massachusetts?.  The brothers were bicycle makers who developed an interest in gasoline engines and saw the benifits of putting engines on wheels.  

Their first car was built and tested on the streets of Springfield, Massachusetts in 1893 and the Duryea Motor Wagon Company was founded in 1896.  The company had sold thirteen cars of the model Duryea by 1896.   It was an expensive limousine, which remained in production into the1920s.

America’s First Automobile Race was in 1895.  Six cars left Chicago’s Jackson Park on November 28, 1895 for a 54 mile race to Evanston, Illinois and back through the snow.  Frank Duryea won the race in car #5 in just over 10 hours at an average speed of 7.3 mph.  He won $2,000 and the Chicago Times-Herald Newspaper that sponsored the race wrote, “Persons who are inclined to decry the development of the horseless carriage will be forced to recognize it as an admitted mechanical achievement, highly adapted to some of the most urgent needs of our civilization.”

The first automobile accident was not long in coming.  The Duryea’s offered the first commercial automobile, the Duryea motor wagon, for sale in March 1896. New York City motorist Henry Wells hit a bicyclist with his new Duryea two months later.  The cyclist got a broken leg and Wells spent a night in jail.  We recorded the nation’s first traffic accident.

The first automobile insurance policy was issued in Dayton, Ohio in 1897.  One Gilbert J. Loomis bought a liability insurance policy from the Travelers Insurance Company for one thousand dollars. The policy protected Loomis if his car killed or injured someone or damaged their property.

Maybe you can’t be first for any of these things, but you can certainly talk to your Washington auto insurance professional to make sure yours is up to date!