I was surprised in the past couple of weeks, I’ve had 2 clients call to ask me about wood burning stoves that they are looking to purchase and wanted to know how it would affect their homeowners insurance.  As we transition out  of heating season into warmer weather, this can be the ideal time to find good deals on close-out stoves. 

These clients wanted to know what they should consider from an insurance stand-point regarding the purchase of their wood burning stove.  The first thing that you want to make sure is that the stove is U.L. listed.  “U.L.” stands for Underwriters Laboratories, Inc., which is a non-profit safety testing and certification organization.  You can tell if a stove is U.L. listed because it will state it right on the metal plate attached to the stove that tells you the make and model of the stove.  It will usually give you a U.L. number to reference.  This assures you that the stove has met Underwriters Laboratories safety standards. 

Next you want to make sure that it is installed by a qualified and insured contractor.  Correct installation is important because if a U.L. listed stove is installed improperly there is a greater chance for fire damage to your home.  When reviewing a contractors insurance ask for his insurance agent to send you a copy directly listing yourself as a “Certificate Holder” on the policy.  This way you will be notified of any changes to the policy or if it cancels.  Also, make sure that the contractor has adequate coverage.  You would want the contractor to have at least enough liability coverage to cover the cost of rebuilding your home in case of a fire. 

Now most contractors are going to install a wood burning stove that meets an insurance companies requirements.  If you want to double check the installation guidelines, call your insurance agent and ask them to send you the minimum requirements that they are looking for when they inspect a wood burning stove and compare them to the contractors. 

After the stove is installed be sure to conduct proper maintenance on the stove.  Heating fires account for 36% of residential home fires in rural homes every year.  Often these fires are due to creosote buildup in chimneys and stovepipes. 

For more information on woodstove safety, check out http://www.usfa.dhs.gov/citizens/all_citizens/home_fire_prev/heating/fireplace.shtm.

According to the National Burea of Labor Statistics, 3 out of 10 homeowners operate a business out of the home.  More than 66% of the estimated 20.7 million people who work at home are self-employed and run a home based business.  It’s estimated that more than half of the homebased businesses are underinsured.  40% of those survey by the Independent Insurance Agents of America say they were uninsured because they believed that their homeowners insurance covered the business.

When you started your business out of your home, getting insurance to protect you probably wasn’t at the top of your to do list or you were one of the 40% above and thought that your homeowners insurance would cover you.  It is important to get insurance coverage for your home based business to protect you when the unexpected happens and it will!  Your homeowners policy specifically excludes any claims resulting from business pursuits and provides a minimal amount of coverage for any business property (usually less than $2,000). 

The least costly way to cover your business is to add an endorsement to extend your personal liability coverage on your homeowners policy to cover your business pursuits.  This is extremely important coverage to have, especially if you are going to have client meetings at your home, customers coming to you home to drop-off or pick-up merchandise, or have any other members of the public enter your home.  The liability coverage will protect you in case anyone is injured while they are on your property.  You can usually add business liability coverage to you homeowners insurance policy for less than $100/year.  If you wanted to get a separate business liability policy the premium would start at $300-$500/year.

Now most homeowners policies will limit the amount of coverage that they will provide for property related to the business, so you will have to purchase extra coverage to cover your business property.  So be sure to ask what the business property limits are to make sure that you are adequately covered.  You don’t want to find out at the time of a fire that your $10,000 of inventory that was destroyed was only insured for $2,000.  Now some insurance companies will automatically increase the amount of coverage for your business property when you extend your liability coverage.  The company will allow you to allocate up to 10% of the insurance that you carry on your personal belongings to cover your business property. 

Other types of insurance that a home based business might want to take into considerations are: workers compensation (if you have employees), product liabililiy (if you make a product and it doesn’t work correctly or causes injury to someone), errors and ommission (if you provide a service like accounting, insurance or attorney), malpractice (for doctors that have offices out of their home)

Having your identity stolen, is a fear at the back of most people’s minds.  There is a great deal of our personal information in electronic form that is held by companies.  If these companies are hacked into our information can be compromised.  Before you know it you are suddenly receiving collection notices for credit cards that you don’t have and for services that you haven’t received. 

Now if you have a homeowners or renters insurance policy with Erie Insurance they have a Identity Recovery Coverage that you can add to your policy for $20/year.  This coverage provides you with $25,000 to help you cover the cost of restoring your identity.  The $25,000 includes $5,000 for loss wages that you may have to incur because you have to miss work to go to legal hearings associated with recovering your identity.  The $25,000 also covers the cost of re-filing applications for loans, grants or other credit instruments, certain legal fees, notarizing affidavits, ordering credit reports and actual costs for supervision of children, elderly or infirm relatives or dependents. 

This is a nice coverage to help you recover your identity, but it’s not going to help you prevent your identity from being stolen or help you identify if you identity has been stolen.  If you are really concerned about having your identity stolen, I would recommend one of the companies like Lifelock, Identity Guard or Watchdog, which are going to actually help to prevent your identity from being stolen.

Everyone sooner or later will have a contractor come to their house to do some repair work.  It can be as small as fixing a leaky faucet, adding a few new electrical outlets or larger jobs like re-roofing your house or building an addition.  It is important to always get 3 quotes for any major repairs to make sure that you are getting the best value for your money. 

When you are getting your quotes you will have the common questions that will help you determine which contractor will get the job, like what materials will you use?, how long will it take to complete the job?, when would you be able to start?, do you offer any type of warranty?.  These are all valid questions, but the question that most people will overlook is whether they have insurance or not. 

Now most contractors will volunteer their insurance information to you and show you a piece of paper as they’re going through their presentation showing that they have insurance.  I would ask you to go a step further and ask them to have the insurance company send you a certificate of their insurance listing you as a “certificate holder” or even better an “additional insured”.  This will allow you to get a certificate directly from the insurance stating they have insurance and the amount of insurance that they carry. 

You wouldn’t want to find yourself in a situation that a contractor caused damage to your house, but you weren’t able to repair it because the contractor didn’t have insurance or they did have insurance at one point, but they were late on a payment and it cancelled the week before they started your job. 

I decided last week that this week’s blog post would be about contractor’s insurance because I had a prospect call looking for insurance for his business.  I asked him my usual questions learning more about his business and himself.  I usually ask if they have a website and he did, so I went and checked it out.  All over his website it stated that he was fully insured and bonded.  He seemed to be advertising this for quite a while because I googled his company name and I was able to find old promotional flyers on-line from previous years that stated the same thing. 

The funny thing is that when I was asking him about his business he said that he didn’t have prior insurance, so I called him back and asked when was the last time that he did have insurance, thinking that he may have just let it lapse for a month or a year.  He said that he never had insurance that he bought the business from his uncle in the 90s and he thinks that he may have carried insurance on the business back then. 

That is why it’s important not to rely on the ads that state that the contractor is fully insured and to actually take the extra step to have the insurance company send you a certificate verify their insurance coverage.  Now most contractors’ are honest, but it’s important to make certain that you are covered.  If someone comes in with a super low bid for your job, it might be a good indication that they’re not properly insured.

I was driving to the gym yesterday morning and I was listening to the Brenna and Brenna Law Forum on WHAM 1180.  This is a great show that I enjoy listening to when I’m able to catch it because they field calls from listeners and dispense some really good legal advice.

I was listening yesterday and a listener called in and said that their daughters’ apartment had a fire and she lost all of her belongings and didn’t have renters insurance.  The caller wanted to know if there was anyway that she could sue the landlord to pay for her lost belongings.  Apparently the fire marshal deemed the fire accidental due an electrical wire failure. 

Knowing that the woman didn’t have renters insurance the attorneys indicated that she may be at a loss to get her belongings paid for, but indicated that she could have an engineer inspection to determine the cause of loss or go back to the fire marshal to find out more about the cause of the fire.  The attorney’s believed that if she was able to determine that the fire was caused by the landlord’s negligence or caused by an electrical contractor that performed faulty work she might have the chance of suing the landlord and/or the electrician to have their insurance pay for her damaged belongings. 

Now this is obviously good advice because I’m assuming that the woman was probably out $15,000 or more and that is a big chunk of money.  The only problem is that she could be incurring costs that won’t necessarily guarantee that her belongings will be replaced.  An engineer’s inspection would probably run $200-$500 and who knows how much attorney’s fees would cost, maybe $1,000-$2,000.  She could potentially be out another $2,500 and still not have her belongings replaced. 

She could have saved herself the headache of getting an engineer’s inspection, hiring an attorney and going to court if she just purchased renters insurance in the first place.  Even if she would have purchased the bare minimum policy covering her contents for only $12,000 it would probably have cost her less than $100/year.  It’s crazy to think that she could pay $2,500 to try to have her belongings replaced after the fact, which isn’t guaranteed or just purchased a renters insurance policy for less than $10/month and been guaranteed that her belongings would have been replaced. 

Now obviously hindsight is 20/20, no one ever thinks that they will have a fire in their apartment, so they don’t think that need to insure for it.  That is what insurance is there for, you pay it hoping that you’ll never need it, but if you ever do need it, it’s nice to know that the insurance is there for you. 

I cringe every time a talk to a renter and they say that they don’t have renters’ insurance and don’t want to purchase it.  Especially if they are already paying for auto insurance, they can usually get a multi-policy that can substantially reduce the cost of renters’ insurance.  It can reduce the cost to $60/year or less.  I had one client that it only cost them an additional $3/year to have renter’s insurance after taking into consideration the discount they received on their auto insurance.

I’ve personally never had my home or apartment broken into, but I have had my car broken into.  Luckily, I keep hardly anything in my car, so the thief only made off with the change in my ash tray, I did have to pay to repair my door where he broke the lock.  Even though the financial damages were small the thief was able to take away something much more important for me, my security. 

After you have had a break-in you feel violated and vulnerable.  I couldn’t help but think to myself if the thief had found my address on my registration and was planning on breaking into my home at some point.  You are on high alert for a period of time after a burglary.  I’ve seen it a number of times with clients of mine that have had their house broken into.  When I’ve show up to a client’s house after an incident you can see vulnerability on the persons face.  There belongings are thrown everywhere, there are empty spaces where a TV, piece of furniture or picture used to be and the police are there going through everything trying to get fingerprints.

We all want to minimize the chance of having our house burglarized, so I’ve compiled some security tips to help us reduce the likelihood:

• When you take a vacation be sure to have your mail stopped or have a relative stop by and pick up your mail for you.
• If you are away for an extended period of time in the winter, have a relative/friend stop by your house to make some tire tracks in your driveway or have your driveway plowed.  This will give the appearance that someone is home
• If you are going away on vacation don’t announce it the various social media websites, like Facebook, Twitter and Myspace.  Wait until you get back to share the pictures of you on the beach sipping margaritas.
• If you have a security system on your home or are thinking of getting one make sure that the activation pad is in a place that can’t be easily seen from a door or window.  You don’t want a burglar to be able to see from the window if the system is activated or not.
• If you have children be sure to keep their toys put away and not left out in the yard.  If you have good toys in your yard, someone is most likely to think that you have good toys in your home, like expensive gaming systems and computers. 
• If you have a contractor come to your house to do some work, be sure to check all of your locks on your doors and windows afterwards.  Sometimes a contractor will unlock a door or window for easy entry later on. 

This is just a brief list of safety tips that was provided by Reader’s Digest.  I could have listed pages and pages of security tips to keep you and your property safe and secure.  The best rule of thumb is to use your best judgment to minimize the chance of being burglarized.

Some people don’t realize that their homeowners’ insurance limits the amount of coverage that they have for certain items like money, trailers, boats, etc.  When you look at the face of you policy you can see the total amount of coverage that you have for your personal belongings, but what you don’t see are these other restrictions that are buried in the actual policy. 

Most homeowners’ policies provide the following coverage amounts:

• $200 for money
• $1,500 for boats
• $1,500 for other trailers
• $1,500 for theft of jewelry
• $2,500 for theft of firearms

One of the Companies that I represent, Erie Insurance provides the following coverage amounts after endorsement:

• $750 for money
• $2,500 for boats
• $2,500 for other trailers
• $5,000 for theft, misplacing or losing of jewelry (Ultracover Policy only)
• $5,000 for theft, misplacing or losing of guns (Ultracover Policy only)

You can see that the underlying limits of coverage vary significantly.  Be sure to ask your current homeowners insurance company what types of coverage restrictions that they have in their policy.  You may find yourself under insured in some areas.

The above list is just an example of some of the limitations of coverage in the homeowners policy, there are more.  The ones above I just thought would be the most common that would pertain to most people.

It depends how the water enters your basement and if you have purchased the appropriate coverage.  If the water enters your basement through a crack in the foundation it wouldn’t be covered, but if it entered through a sewer or drain line or a sump pump failure it would be covered, if you purchased the sewer and drain back-up coverage with your homeowners policy. 

If the water in you basement is the result of flooding waters, then you would need to purchase flood insurance, which is a separate policy from your homeowners policy.