Does Your Homeowners Insurance Cover Your Kids In College?

Getting a child ready for college is stressful and exciting and insurance is probably the last thing on your mind. That’s expected; after all beyond all of the emotions you feel, you still have to help them buy bedding, a laptop, and all the dorm room decorations and necessities. But after you have spent a small fortune on their personal items, do you wonder if your insurance policy will cover these things while they are off at school? Unfortunately the answer is that it depends. And this vague answer means you really need to be sure that you are clear on the rules of the NC homeowners policy as it applies to children away at school.

A few years back, the North Carolina homeowners insurance policy form was changed and one of these amendments was a change in the wording regarding your child’s possessions while off at school. The new policy form changed the definition of an insured, (a person covered by the policy), to state that a student who lives away from your home is covered as an insured only if her or she attends school on a full time basis and is either your relative and 23 years of age or younger; or not your relative and 20 years of age or younger if still in the care of an insured. An older student or a part time student who lives away from home may be added to the policy as an additional insured for an additional charge on your policy.

Now I’ll be the first to admit that the last sentence in that paragraph above was a long stringy one that really ought to be read a second time. Go ahead and reread it, then I’ll show you just how people get caught by legalese in insurance policies. So, go ahead, reread the paragraph above, then come back here, I can wait.

Ok, the easy part to understand, and the part that most people notice first is the age parameter. You probably thought, ok, my child is 19 years old and is also my relative so my policy protect them. But did you also notice that the student must be a full time student? So what, surely your kid is full time. But what does full time really mean? I’m sure when you pay that tuition bill you had no doubt that you were paying for a full time student. But it doesn’t matter what you think is full time, what really drives the coverage is how the insurance companies define full time student. I have talked with several insurance company claims departments to better understand the answer to this question. And what they tell me is that insurance companies will go by the child’s school’s definition of a full time student. And that definition can vary a great deal from one school to the next. Some schools might define a full time student as one taking at least 12 credit hours that semester while others might require your child be registered for 16 or more hours to reach that designation. Summer school can have its own unique designation as well. This means it is up to you, the parent, to find out for yourself where you stand in your own particular situation and plan ahead for it with your homeowners insurance policy.

So what do you do to protect your child’s posessions if you determine that he or she is not covered by your homeowners policy? There are two options for you. One option is to add the endorsement number HO 0458 to your homeowners insurance policy. This endorsement will name your child as an insured. This endorsement usually costs around $75 per year. The other option, and I like this one better, particularly for older students, is to buy an HO-4 insurance policy for your child in his or her name. The HO-4 form, sometimes referred to as a tenant homeowners policy, is a homeowners policy designed for renters. This will allow them to choose a contents property limit and a liability limit as well as a deductible that best suits them. This may cost more or less, depending on the amount of coverage you need for your child but it can stay with them for as long as they keep renewing and updating it. I like this option also because it teaches your child early on, just how important it is to have both property and liability insurance for their particular household at all times. This also removes the doubt about coverage as the child moves back and forth and out to other places in the Summer and so on. As long as they keep renewing and updating the address on that policy, they will have protection.

It’s exciting and sometimes emotionally exhausting to get one of your children ready to go to college, believe me, I’ve done it 3 times now. And for those of you with children in college, I don’t want you to forget to carefully consider the insurance issue. Losses happen in colleges just as anywhere else and you may not be able to easily afford to buy all of their possessions all over again. Here at Clinard Insurance Group, located in lovely Winston Salem, NC, we try our best to educate our customers and the general public about insurance issues that affect their lives. We want every insurance consumer to be an informed buyer. If we can help you with your auto insurance, your home insurance, your business insurance or even your life insurance, please call, us, toll free, at 877-687-7557 or visit us at www.ClinardInsurance.com.

Consent To Rate Letter – Don’t Just Sign Over A Blank Check To Your Insurance Company

The consent to rate letter in North Carolina is the legal way for your insurance company to get you to agree to let your insurance company charge you more than the highest rate allowed by the NC Insurance Department. If you receive this form from you insurance company, don’t sign it without first checking in with an independent agent that you trust. There are usually many much better options than to sign this letter and watch your rates skyrocket. I’ve written about the consent to rate letter and what you should do in the past and you can, click here to read past blogs. Now, however some insurance companies are employing the consent to rate letter in a more insidious fashion. Their new technique uses this form as a way to get around ratemaking rules in North Carolina. Be careful; don’t sign this without a second opinion.

To understand the consent to rate form, it helps to understand how insurance rates are generated at in North Carolina. This state is unique in that the NC rate bureau holds most of the power in the rate making process. Here, the rate bureau decides the maximum rate that insurance companies can charge for each type of policy. After that, each insurance company then files their deviations from this rate. Usually, the rate bureau maximum rate is far above what any insurance company would be able charge for a policy and still be competitive. What happens is that insurance company rates are discounted down from the maximum rate, often as much as 55%. There is a loophole to the maximum rates that can be charged though. If an insurance company can get you to agree in writing to pay rates above the rate bureau maximum rate, then they are allowed to do so. The consent to rate form is the vehicle for getting your written consent. So, whatever you do, don’t sign a consent to rate form without first exploring all of your alternatives.

There are legitimate uses for the a consent to rate form. Imagine if you have had a few insurance claims and you are not able to buy insurance anywhere from any other company because they all think you are just too risky for the rates that they have filed with the rate bureau. Using the consent to rate letter allows them to charge a high enough rate to accommodate the riskiness of your particular situation. In that situation, the consent to rate form can allow you to buy insurance when otherwise you might not be able to.

Right now, the marketplace for homeowners insurance in NC is currently in a state of turmoil. The biggest reason for this is because the high risk beach houses that are covered by the market of last resort provided by the government do not have a high enough rate to cover their risks for wind and hail and hurricanes. This wind pool is extremely underfunded and will result in billions of dollars of losses in the event of a large hurricane hitting our coast. The underfunded risk of loss used to be pushed on to the backs of the insurance companies on an unlimited basis. Insurance companies of course do not like unlimited liabilities so a few years ago the law was changed to allow wind pool shortfalls to be assessed to all homeowners policies across the state. This means if there is a large hurricane, then your homeowners policy, no matter where in NC you live, will be assessed with an annual assessment of up to 10% of the policy premium each year until the wind pool is made whole again. If we have more than one hurricane then you could see multiple assessment charges on your policy each year. This sneaky and horribly unfair approach will still not cover the shortfall that the wind pool might face and so insurance companies remain on the hook for a large share of this risk as well. This drives the insurance companies to want higher rates for all North Carolina homeowners policies but they have trouble getting around the rate bureau. They need a loophole for an end run around the rating process. Now I am hearing that some insurance companies are using the consent to rate form to do just this. They plan to have their customers sign a consent to rate form on every policy, then they can hold these consents in your file until they need to use it to dramatically increase your rates.. If you sign one of these forms on an open ended basis like this, then your insurance company has essentially hung the sword of Damocles over your head. You will be agreeing to a rate increase above the maximum rate, sometime in the future, to be used when the insurance company wants it or needs it. I have to believe that eventually the rate bureau will not tolerate this kind of rate meddling but until they do, you should do whatever you can to be sure that you don’t let them take advantage of you. DO NOT SIGN A CONSENT TO RATE FORM UNTIL YOU HAVE EXPLORED YOUR OPTIONS WITH AN INDEPENDENT AGENT!!

At Clinard Insurance Group, we are an independent insurance agency located in Winston Salem, NC. We represent dozens of different insurance companies and we can help you with your home and auto insurance, no matter where you live in NC. If you have received a consent to rate form and are not sure what to do, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Did Your Homeowners Deductible Go Up To $1000 While You Weren’t Looking?

Pity the poor insurance companies trying to make a buck selling homeowners insurance in North Carolina. These policies tend to lose money as a group, year in and year out due to tornadoes and hurricanes and they also subject the insurance companies to the risk of large assessments to help pay for the underfunded beach plan which picks up the wind and hail exposure to the beach houses on our coast. But, if they can’t sell you a homeowners policy, then they are not likely to be able to sell you an auto insurance policy. And that’s where they make their real money. For the past decade or so, personal auto insurance has been the most profitable line of business for insurance companies doing business in North Carolina.

Now a new cost reducing solution is sneaking up on those who purchase NC homeowners insurance. The latest insurance company strategy is to apply a minimum deductible requirement to all homeowners policies. This stragegy first appeared several years ago with a few insurance companies that wanted to reduce their homeowners presence in certain higher risk areas of the state. Instead of just cancelling all of the policies in that area in a wholesale fashion, they began adding wind and hail deductibles that were based on a percentage of the total loss. So, if you have a 5% deductible and a $100,000 loss, then your total deductible will be $5000. With the more aggressive companies, these percentages went as high as 15%.

Now we are hearing that one of the largest homeowner writing insurance companies in NC is considering implementing a minimum $1000 deductible on all of its policies, both new policies and renewal policies. Now a change of this type will certainly be accompanied with some notice in the renewal and an insurance company spin that tells you how this is best for you, but the sad reality is that very few homeowners will take the time to read this notice and so they will be blissfully unaware of this new, higher deductible until after they experience a loss. Then the surprise will sting.

So, as a buyer of NC homeowners insurance, what can you do to protect yourself? Well, first of all, you should always check your renewal policies very carefully and read and understand any notices of changes to that renewal. If your insurance company has forced a higher deductible on your policy, and if that’s not what you want, then call your agent and see if they can provide you with another option. We represent dozens of companies and so far, none of ours are implementing these new, higher minimum deductibles except for a few exceptions in coastal counties.

Clinard Insurance Group is located in Winston Salem, NC and we help homeowners every day, all across North Carolina with their home and auto insurance needs. If your insurance company is ramming a new $1000 deductible down your throat and you don’t like the way that tastes, please give us a call. We will take as much time as you need to go over your home insurance in detail and help you make sure that you get the policy you want at rates that will truly surprise you (And I mean surprise in a good way, not in a higher minimum deductible way). Give us a call, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Rent House Insurance – Did You Forget About Liability Insurance

Landlords come in so many types, from the accidental landlord, stuck with a property he can’t sell and must rent, all the way to the professional landlord who owns many houses. Most landlords tend to focus first of all on the insurance for the structure itself, often called Dwelling Fire Insurance. This is a known loss exposure, meaning that if the house burns to the ground, you know exactly what you have to lose. But there is another danger out there for the landlord, and overlooking this open ended exposure can present a large and unknown loss, one that cause you to lose values far beyond what you have in the rent house itself.

What we are discussing here is the liability exposure that comes from owning and renting a dwelling to others. Your tenant could be injured, they could have a friend over who is injured, as well as all kinds of other potential types of losses. In North Carolina, most dwelling fire insurance policies, which cover the house itself and sometimes the landlords personal possessions inside, often do not have a mechanism for protecting you from liability exposures that are related to owning and renting the house. So how do you protect yourself against this exposure?

If you are a landlord with just a few policies, the easiest approach is to use your homeowners insurance policy to extend the liability from your homeowners insurance to your rental property. Most homeowners policies will allow this up to some total limit of locations, usually no more than 4. This strategy is a good one if you have an umbrella policy as well since this will extend the liability protection for your rental house directly to the umbrella policy, thus giving you much higher limits of coverage.

Another approach is to find an insurance company that will allow you to add liability to the dwelling fire policy form. Not every company can or will do this, but if you look hard enough, you should be able to find a company that can do this for you. Typically this will cost more than adding the protection through your home insurance but prices do vary so perhaps you should check both. If you add the liability protection to your dwelling fire insurance policy, then you should be sure to remember to add the dwelling policy to your list of underlying policies on your umbrella policy if you have one. This approach may also be more expensive on the umbrella policy, or it may make no difference at all to the costs.

For landlords with many locations to insure, usually the best approach is to purchase a general liability insurance policy to list all the locations on one policy.

Take the time to evaluate carefully how much liability insurance to buy for your rental property. It is relatively cheap to move to higher and higher limits so purchase the most insurance that you can afford. Remember, you are insuring a large, unknown loss here. There is no way of knowing how high the loss could go and ultimately this means you are trying to protect everything that you own, so don’t scrimp on limits here.

At Clinard Insurance Group, located in beautiful Winston Salem, NC, we want all of our clients to be informed insurance buyers. We want you to have the information that you need to make wise, and informed decisions about protecting your assets from loss. If we can help you with insuring your rental property in North Carolina, please feel free to call us, toll free, at 877-687-7557, or visit us on the web at www.ClinardInsurance.com.

You can read more detailed blogs about personal and business insurance products by visiting our onsite blog at www.InsuranceAnswerGuy.com.

Borrowing A Friend’s Trailer? Will Your Auto Insurance Cover It?

Has this ever happened to you? You have something too large or too messy to move with your car and you can’t find a truck to borrow, but you do have a buddy with a trailer. Most people don’t remember to even question if they have insurance on the trailer, they just hitch it up and go. So, if you took the time to seek an answer to this question, congratulations, you are one of the few worries about the details.

This talk is based solely on the North Carolina personal auto insurance policy. I can’t provide an all inclusive coverage analysis in this blog as there are always lots of variables from one situation to the next, and there may be specific exclusions or limitations that apply to your policy or your situation. But, generally, the following will tell you what to expect about how your insurance will come in to play when when you hitch up a friend’s trailer to your car.

The NC personal auto policy will extend the liability protection afforded to your car, to the trailer that you are pulling so long as you are not pulling the trailer for commercial purposes. But here’s the catch: your personal auto policy does not provide any physical damages protection for the trailer. This means that if you damage someone’s person or property with that trailer, then your personal auto policy will respond and protect you. If damage to the trailer itself you will not have coverage for that loss.

So the best plan is to ask your friend if there is collision and comprehensive coverage on the trailer you will borrow. If not, then you are going without coverage as far as the trailer’s damage is concerned and you should make a plan with your friend about how you will repay those damages.

At Clinard Insurance Group in Winston Salem, NC, we are an independent insurance agency. We help our family clients with home insurance, auto insurance and life insurance all across North Carolina. We also write business insurance and have niche specialties in used car dealers, restaurants, repair shops and small contractors. We want to help all insurance consumers be informed buyers. If we can help you with any of your insurance needs, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Insurance For Your NC Rent House – Did You Remember Personal Injury Coverage?

If you own a rentl house in North Carolina, then surely you bought a dwelling fire insurance policy in case it burns. I hope you also extended liability protection from your homeowners insurance policy to that rental house location. But there is one other step that most landlords forget to take when setting up insurance on their rental properties. I’m talking about the personal injury endorsement that can be added to your homeowners insurance policy.

The NC personal injury endorsement on your homeowners policy is good option and a super deal for incidental landlords who own just a few properties and who have already extended the liability protection from their homeowners insurance to their rental locations. Start with the fact that it is usually very inexpensive, rarely more than $25 a year. Second of all, the coverage that this endorsement adds seem tailor made for landlords. Let’s take a quick look at some of what this endorsement adds in terms of protection for the incidental landlord.

NC endorsement number HO3282, edition date 05/03, defines personal injury among other things as false arrest detention or imprisonment, malicious prosecution, wrongful eviction or wrongful entry into or invasion of the right to private occupancy by a landlord or lessor. These are all perils for which the landlord has high risk. In NC, the law is complex regarding tenant eviction procedures so the wrongful eviction protection of this endorsement alone makes it worth the money in my opinion. There are other actions included in the definition of personal injury but those I mentioned above are the ones most important to landlords. The way the endorsement works is simply to add these definitions to what is included in the liability coverage of your homeowners policy.

But a word of caution is needed here. Just adding this endorsement to your policy doesn’t give you carte blanche to proceed against your tenants without concern for their rights. The exclusions section of this endorsement makes it clear that prior knowledger that your actions will violate the rights of another and will inflict personal injury voids your from coverage. This can be found in the exclusions section of the endorsement and you should read and understand all exclusions on this endorsement before you add it to your policy.

Landlords have plenty to worry about day to day. If you own a rental property, then please make sure that your agent takes the time with you that you need to fully understand and explore all of your options for protection. At Clinard Insurance Group, in Winston Salem, NC, we work hard to help all insurance consumers to be informed insurance buyers. We insure many incidental landlords and have helped people in this position for many years. If we can help you answer your questions regarding homes you rent to others in North Carolina, please feel free to call us toll free, at 877-687-7557 or visit our web page for dwelling fire insurance.

Your Life Insurance Premiums – Are You Paying The Salaries of Workers Who Have Already Been Fired?

Most people who are still paying premiums on older life insurance policies are paying for long gone data entry workers. When I first entered the insurance business, back in the early 80’s, one of the truths that was preached by the older guys was that everyone should purchase as much life insurance as they can afford and do it as soon as possible and then plan to hang on to that policy for the life. The reasons were that you never know when you might die or get sick and become uninsurable of course, but the other reason was because life insurance rates were always going to be more expensive the older you got. This makes good sense, even now, I mean the older you get the more likely you are to die.

But a strange thing occurred in the life insurance industry over the past 30 years that no one ever considered back then. It turns out, that for most people who are in good health; life insurance rates may actually be going down as they get older. Now this seems counterintuitive but there are a couple of reasons for this. I’ll explain them for you

Life insurance rates are driven by lots of things but mostly there are two important factors. The two things that have a huge impact on life insurance rates and which have changed dramatically in the recent past are mortality tables and the expected expenses in the policy. Let’s take a quick look at each of these and how changes in them might now represent a huge opportunity for you save some money on your current life insurance policies.

Life expectancy has been increasing steadily with improving safety, medical technology and patient care and preventative medicine. As this changes, we see corresponding changes in the mortality tables that used to calculate the rates on life insurance policies. But remember, since a life insurance contract by nature is a long term contract, all the calculations have to be done at the beginning of the policy and these remain unchanged over the life of that policy. So, if 15 years ago your life expectancy was 2 years less than it is today, this means that your 15 year old life insurance policy rates are based on old data. A similar new life insurance policy, with rates based on an updated mortality table, would likely cost you less money each year for the same or better protection.

Now let’s look at how technology changes life insurance rates. Thirty years ago, when I first got into the insurance business, life insurance companies employed vast numbers of data entry clerical staff to make calculations and updates on life policies regarding their cash values, surrender values and other features that change over time. Today, those same calculations are done in seconds by computers. Close your eyes for a moment and just envision floor after floor of empty desks and cubicles in the buildings of these large life insurance companies. Yeah, those workers are gone and have been gone for nearly a decade but you are still paying for them. Remember who earlier I explained that life insurance contracts, because of their long term nature, have to include all of the expected expenses from the beginning for the life of the policy. The longer you hang on to these older policies, the more money the life insurance company makes and the more you spend over and above what you might need to spend on a newer, more modern life insurance contract. Makes no sense for you to continue to do this does it?

So what do I see from day to day from my vantage point in this business? Well, usually, people in good health who come to us and want us to update their older life insurance policies end up with several options, all of which are good. In most cases they can reduce or eliminate their life insurance premiums, or keep on paying the same premium but let their new policy build up a much larger cash value. Also, in most cases they can add a long term care rider to a new life insurance policy for free.

The take away message here for you is that if you have a life insurance policy that is 10 or more years old, you really should take 5 minutes of your time and give us a call and let us take a look at your situation. It is unusual when we are unable to provide better coverage at a lower cost. I know that messing with life insurance is boring and paperwork seems like a hassle, but the next time you worry about how much of your money is burning away with these increasing gas prices, I want you to remember this easy way to perhaps put some money back in your pocket. For more help with your life insurance needs, please call Clinard Insurance Group, toll free, at 877-687-7557. Or you can visit us on the web at www.ClinardInsurance.com. We will be more than happy to help you figure out if you are still paying the salaries of workers who were fired years ago.