February 2013

Although gun control remains a controversial issue, when it comes to insuring firearms, Homeowners coverage offers some clear guidelines.

If you have rifles and pistols in your home, your policy will insure them against fire damage or theft, usually up to $2,500. Although a Homeowners application might not ask specifically about firearms, the higher liability risk that guns present means that failing to inform your agent or insurance company in advance about them could result in denial of a claim for loss or damage to them.

Because of this greater liability exposure, your insurer might require you to show that you’ve taken such sensible precautions as installing trigger locks, securing firearms properly in locked gun cases, and keeping them away from children. If you have a collection of guns that’s particularly valuable (for example, antique sidearms), you might need to buy a policy rider that ensures their replacement or reimbursement — much as with other big-ticket items, such as jewelry and fine art.

If you shoot someone else or yourself accidentally while in the home, your policy might pay for some or all of the damages, (medical bills, property damage, liability claims, and so forth), depending on the amount of coverage. However, to guarantee full protection, you would need additional policy riders, such as “Sporting Firearm insurance,” “Collector’s Firearm insurance,” or “Gun Club Liability insurance.”

To learn more about firearms coverage in your home, please give our agency a call.

Wrecking a car and lying about it or staging an accident to get a payout are crimes that can cost a perpetrator dearly. Similarly, any inaccuracies reported (about a child’s GPA, ZIP code where a car is garaged, etc.) for financial gain is also technically fraud.

This type of “soft fraud” is far more common than hard fraud — and is much harder for the industry to deal with because it’s so difficult to detect. Consider “claims padding,” such as urging a body shop to fix dents that never happened after a car accident or claiming more serious pain or injuries than actually suffered.

Although perpetrators might think of these as victimless crimes, everyone with an Auto policy pays for them in higher rates needed to offset the cost of phony claims.

Here are a few common examples of soft fraud, as described by Allstate and the auto buying and research site, CarsDirect.com:

• Grade faking: A parent or student lies about high grades to get a good-student discount.
• Location lies: A policyholder tries to get a premium cut by using a parent’s address in a rural, less-traveled area to register and insure a car that’s usually driven in a more accident-prone city. He also tells his insurer that he drives half the miles that he really does.
• Missing drivers: A family fails to inform their insurance company that there are two teen drivers in the household, not just mom and dad.

Soft fraud is usually treated as a misdemeanor. Depending on the seriousness of the offense, it could cost the scammer a fine of up to $15,000, jail or prison time, and probation — not to mention the humiliation of going through the legal system.

Say you operate a vehicle frequently, but don’t actually own one. Nonowners Auto Insurance is the product you’re looking for.

These policies generally provide Liability coverage only, which protects you if you’re at fault for any injuries or property damage suffered by another driver or pedestrian. Nonowners Auto usually does not include Comprehensive, Collision, Towing reimbursement, or Rental reimbursement coverages. In many cases, you won’t have to pay a deductible.

If you occasionally borrow the car of a friend or family member, the owner’s Auto policy will cover any accidents. However, a Nonowners Auto policy can still pay off in such situations; for example, if the owner has low Liability limits.

This coverage might make sense if you rent cars regularly. Insurance sold by a rental agency is often expensive — from $7 to $14 a day for a Liability policy.

However, bear in mind that Nonowners Auto insurance will not cover damages to a car you rent. For this reason, it often makes sense to purchase a Collision Damage Waiver — commonly known as a “loss damage waiver” — from the rental agency. Although this is technically not insurance, it will protect you from responsibility for damage to or theft of your rental. Some waivers also offer coverage from “loss of use” fees charged to renters while the car is being repaired. Waivers usually cost $9 to $20 per day.

For more information about Nonowners Auto coverage, please feel free to get in touch with us.

You’re probably familiar with the basic discounts that most insurance companies offer on Homeowners coverages, such as bundling Home and Auto insurance, loyalty rewards, and installing smoke detectors and/or home security systems.

However, a growing number of companies offer significant premium discounts on Homeowners insurance to policyholders who are:

• Senior citizens. If you’re 60 or older, you could lower your premium by as much as 15%.
• Non-smokers. If you’ve given up the habit — or have never picked up a cigarette, cigar, or pipe — you might qualify for a discount.
• Married couples or widows/widowers. Could be eligible for discounts of up to 5%.
• New buyers who have closed a home purchase within 60 days.
• Willing to increase coverage to reflect a rise in inflation.
• Ready to buy coverage for the full value of a home.
• Prepared to buy from a new carrier before the policy with your current insurance company expires.
• New policy holders with the company (the “welcome” discount) and purchasing coverage for the entire value of your home.

You might also be eligible for a discount if you don’t have a Property damage claim for a specified period, such as three years.

Bear in mind that many insurance companies might not offer some (or any) of these discounts.

To see if you’re eligible, check with the professionals at our agency. We might be able to save you some big dollars.