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Blog by Jerry Nicklow of Huff Insurance in Pasadena Maryland

Only pay for what you need for auto insurance?

Only pay for what you need is a dangerous concept for auto insurance?

We hear the auto insurance ads on TV and radio every day.  “Only pay for what you need.”

But is it even a possibility to make this happen?

The major issue we have wit this slogan is, can you really know how much insurance you really need?

I will discuss why the slogan ‘only pay for what you need” for auto insurance can be a dangerous concept.

Only pay for what you need for auto insurance

Auto accident | Only pay for what you need for car Insurance from Huff Insurance in Pasadena MarylandIs it possible to only pay for what you need for your car insurance?

There are several parts to an auto insurance policy.  There are actually some coverages on the policy that you can choose to pay for what you need.

Physical Damage portion of the auto insurance policy

For example, you can choose to have comprehensive and/or collision coverage.  This is often referred to as physical damage coverage and sometimes erroneously as “Full Coverage” (which really does not exist).  And within those coverages, you can choose the amount of the deductible that you want to carry.  The deductible is the portion that you would be responsible for paying should you file a claim.

So, if you have an older car, you may not need to carry collision coverage.  This is because the value of the car diminished so much, that it does not make sense to pay for the collision coverage.  So in this case, you can say that you do not need to pay for this coverage.

For physical damage coverage, the risk amount is known.  You know the value of your car (or at least the approximate value).  And you know the deductible amounts that you have chosen to pay for.  So if there is a claim, you know what you will be responsible for, whether or not you have physical damage coverage on your car insurance policy.

Liability portion of the auto insurance policy

Unlike the physical damage coverage above, liability coverage is a great unknown.  If you ask us how much liability insurance you need, we cannot give an amount as an answer.  Our answer to this question is “as much as you can afford to buy.”

In my opinion, it is impossible to only pay for what you need for liability insurance.

If you are at fault for an auto accident:

  • Can you tell me the extent of the injuries to the other party before it happens?
  • Can you tell me how much work they will miss or even if they will be able to work again?
  • Are you able you tell me the value of the person’s life should loss of life occur?
  • Can you tell me the amount of the lawsuit that you will be handed from the injured person’s attorney?

The short answer to all of the above questions is NO.  There is no way to know the answers to these questions ahead of time.

So therefore, how would it be possible to only pay for what you need for your auto liability insurance?

Are there auto insurance coverages that you can only pay for what you need?

There are some coverages on the auto insurance policy that you do not have to pay for if you do not need them.  They are usually the smaller add on coverages though.

These coverages can include:

  • Roadside Assistance:  If you have AAA or another third party service for roadside assistance, then you do not need to pay for it on your auto insurance.
  • Rental Reimbursement: If you have enough vehicles in your household, then you may not need to pay for rental reimbursement on your auto insurance.
  • Identity Theft: If you have identity theft coverage on you home insurance or through a third party, then you do not have to pay for it on your car insurance.
  • Original Equipment Manufacturer (OEM) Coverage: If you are Ok with using aftermarket parts for repairs to your vehicle, you do not need to pay for the OEM coverage on your auto insurance.

Call Huff Insurance at 410-647-1111

At Huff Insurance, we design insurance plans to fit your needs.  Call one of our experienced agents to help you today.

Insure your ATV, Motorcycle, Jetski or Boat with Huff Insurance

Toy Insurance. Do you insure your toys?

Do you have a toy that need insurance?

Do you have insurance for your motorized toy?

What do we mean by motorized toy?

In Maryland, these toys are very popular:

  • Boats
  • Jetskis/Waverunners
  • E-Bikes (pedal assisted bicycles)
  • Dirt bikes
  • ATV’s
  • Golf Carts
  • Compact Tractors
  • Etc.

Jetski Insurance | Waverunner Insurance | Huff Insurance | Pasadena, MDBoats and Jetskis/Waverunners

Did you know that boat insurance is not required to register and operate a boat or jetski/waverunner in Maryland?  Although insurance is not required, this toy needs insurance.

A scary statistic is that around 40% of boats and 50% to 60% of  jetskis/waverunners and other personal watercrafts on the water do not have any insurance.

And in Maryland, boater safety courses are not required for people born prior to 6/1/1972.  So there is a possibility of having an untrained, uninsured boater right beside you on the water.

If you have a smaller boat, usually less than 20 feet long and less than 50 horsepower, may be covered for liability under your homeowners insurance policy.  Check with your insurance company to verify.

Protect yourself by make sure you have the proper insurance for your water toy.

ATV InsuranceGolf Carts, ATV’s and Dirt Bikes

This is another category of toy that is not required to have insurance in Maryland.  (Unless the toy is registered for street use)

Golf carts ATV’s and dirt bikes can usually be insured on a motorcycle insurance policy.  There may be some coverage under your homeowners insurance policies for certain circumstances.  Check with your policy, agent or company to confirm your specific coverage.

E-Bikes

E-bikes have zoomed into popularity for a bunch of cool reasons.

First off, they’re a blast to ride on trails and make getting around the city a breeze, especially when you’re trying to dodge traffic jams or save money on gas.

They’re like regular bikes but with a kick of power that helps you go faster and not get as tired.

But here’s something you might not know: even though they’re awesome, most home insurance policies give them a thumbs down for coverage. That means if your e-bike gets stolen or damaged, you might be out of luck unless you get a special insurance policy just for your e-bike. It’s a smart move to protect your ride and keep the good times rolling without any worries.

Why is toy insurance important for you?

Not having insurance on your toys can create a very dangerous weakness in your insurance protection plan.  Not only should you have insurance on your toy, but you should also add it to be covered by your umbrella insurance policy.  If you do not have the proper insurance, you could be putting all of your assets at risk.

Real Life Example

We have a friend in California who owned a Gator style ATV.  He had a get together and his teenage kids were operating the ATV with their friends as passengers.  Unfortunately there was a tragic accident and one of the friends lost their life.  Our friend did have insurance on the ATV and had it added to his umbrella insurance policy.  The total payout for the claim was in the 5 million dollar range.  Fortunately, between the ATV insurance and the umbrella insurance, he had enough coverage to pay the claim.  had he not had the insurance, he may have lost everything he owned and possibly had his future wages garnished.

Could you pay a $5,000,000 judgement without having the insurance?

We believe in having the proper toy insurance

When our son was 12, we bought him a Polaris ATV for Christmas.

When we bought it, we made sure to buy an ATV insurance policy.  The policy did list him as an operator, even at 12 years old.  We also added the ATV to our umbrella insurance policy.  We were unwilling to risk our assets should there have been a tragic ATV accident.

When our son was 12, we bought him a Polaris ATV for Christmas.

When we bought it, we made sure to buy an ATV insurance policy.  The policy did list him as an operator, even at 12 years old.  We also added the ATV to our umbrella insurance policy.  Not doing so would have risked our assets should there have been a tragic ATV accident.

We hear of tragic accidents every year involving go carts, ATV’s, boats, jetskis, etc.  These accidents can and have caused serious injury or death.

You buy these toys to have fun.  Don’t risk everything you own by not taking the step to buy the right insurance for them.

Call Huff Insurance at 410-647-1111

We are here to work with you.  We want to make sure that your desire to have fun does not cost you your life savings.

Blog by Jerry Nicklow of Huff Insurance in Pasadena Maryland

Policy perks for homeowners insurance

Can you get policy perks for homeowners insurance with Huff Insurance?

Policy Perks for homeowners insurance from Huff Insurance in Pasadena MarylandThe answer is YES you can.  The TV and radio commercials lead you to believe that policy perks for homeowners insurance is only available through their company.

I’m here to tell you that most of these policy perks are available with our companies as well.

Policy perks for homeowners insurance can include:

Guaranteed replacement cost

This perk can be purchased alone or as part of an overall enhancement endorsement.  This perk guarantees that you will have full replacement cost for your home should a disaster strike.

There are times of disaster when the prices of labor and building materials can significantly spike.  This spike can actualy be big under certain circumstances.   It can cause the cost to rebuild your home to be more than the building coverage limit on your policy.   This policy perk will guarantee that the company will pay the full replacement cost to rebuild your home.

There are a some stipulations to the guaranteed replacement cost perk:

  • Your home has to be insured to for the replacement cost value at the time of the policy effective date.  You cannot just gorssly under insure you home and expect the company to pay for the replacement cost.
  • The ordinance and law limit may still be enforced.  The guaranteed replacement cost perk may not automatically increase the amount that the company will pay for added costs to rebuild up to current building codes.  Check out the blog and video by Nancy Nicklow titled Ordinance and Law Insurance- When Replacement Cost Is Not Enough.

Claim Forgiveness

If you go claim free with a company for a set number of years, the company will not directly charge you for the claim.  The time period for earning this perk for homeowners insurance is usually 5 years.  It can vary by company.  Keep in mind that although you may not be directly charged for the claim, you may still loss a claims free discount perk with some companies.

Claim Free Discount

Like claim forgiveness, the claim free discount perks can be earned.  The time period to earn this perk is usually 3 years with most companies.  As stated above, this discount can be removed even if the claim is forgiven with the claim forgiveness policy perk for homeowners insurance.

Multi Policy Discount Perk

This is a policy perk that can provide a great savings on your homeowners insurance policy.  The most common bundle discount is the auto insurance policy bundled with a home insurance policy. Combining these two policies can save you up to 20% on your insurance rates!

If you bundle more policies, the multi policy discount gets bigger.  Other policies that you can bundle for the discount include: Umbrella insuranceMotorcycle InsuranceBoat Insurance, Dwelling Fire Insurance (for rental properties), etc.

Call Huff Insurance at 410-647-1111

Call our office to discuss the policy perks that are available for your homeowners insurance.

 

**Not all policy perks are available from all insurance companies.  To see what perks are available to you, check with your specific auto insurance company.

Blog by Jerry Nicklow of Huff Insurance in Pasadena Maryland

Policy perks for auto insurance

Can you get auto insurance policy perks with Huff Insurance?

Policy Pers for Auto Insurance from Huff Insurance in Pasadena MarylandYES you can.  We know there is a national insurance company touting their policy perks on TV and radio on a daily basis.

Did you know that these same policy perks are available to you with most of our top rated insurance companies.

Perks for auto insurance policies can include:

Accident Forgiveness Perk 

Accident forgiveness is a perk where your car insurance rates will not be increased at your renewal due to being charged with an accident.

The insurance companies we represent make this per available in two different ways:

  1. You can purchase this policy perk as part of an auto insurance enhancement endorsement.  Most companies have an enhancement endorsement available on their car insurance policies that add one or more perks or additional coverages to the policy.
  2. The policy perk can be earned over a period of time.  So if you go three years without having an accident with that  company, they will add a first accident forgiveness perk to your auto insurance policy.  Depending on the time period of being accident free, you could have a minor accident forgiveness or any accident forgiveness perk.  For minor accident forgiveness, the insurance company sets a dollar threshold for the claim in order for it not to affect your rates at renewal.  For example, a claim under $5,000 may be used by some companies.

Keep in mind that this accident forgiveness only applies to the insurance policy that you have with that company.  If you decide to move your insurance, and the forgiven accident is within 3 or 5 years, it will be rated for with your new auto insurance company.

Some companies offer a claims free discount.  You may not get charged directly for the accident on your renewal with your carrier.  But you may lose the claims free discount that you have earned.

Insurance Bundle Discount Perk

This is a policy perk that can provide a great savings on your auto insurance policy.  The most common bundle discount is the auto insurance policy bundled with a home insurance or renters insurance policy. Combining these two policies can save you up to 20% on your car insurance rates!

If you bundle more policies, the multi policy discount gets bigger.  Other policies that you can bundle for the discount include: Umbrella insurance, Motorcycle Insurance, Boat Insurance, Dwelling Fire Insurance (for rental properties), etc.

New Car Replacement Perk

This policy perk is available to new cars that you may have on your policy.  Most companies have an age limit on the age of the cars to be eligible for this perk.  Usually 2 or 3 model years old. Therefore, if you buy this perk and your car is deemed a total loss due to a covered accident.  Your insurance company will replace your car with an new car of the same make and model.

You can purchase this perk as an option on an auto insurance policy.  Some companies include it on their enhancement endorsement packages.

Telematics Discount Perk

The telematics perk can provide a significant discount for your car insurance policy.  Most of our companies offer an up front discount for just signing up for their telematics program.  The up front discount can be 5% to 10%.  Based on your diving habits, you can earn a discount on your next renewal of up to 50%!   This is a great way for you to get a huge discount on your auto insurance for your safe driving habits.

Most companies now use a smartphone app for their telematics tracking.   They make it simple for you to sign up and register for their program.

Here is our blog that goes into the details of how the telematics program works.  This blog also contains a short video on the topic.

What is usage based auto insurance?

Safe Driver Discount Perk

Just like the telematics perk above, the safe driver discount, you earn this policy perk based on your safe driving habits.  Most auto insurance companies offer a discount if you do not file a claim in the past 3 to 5 years.  And some companies refer to this as their claims free discount.

Even if you have accident forgiveness, you can still lose this discount for having the accident.

Diminishing deductible perk

If you buy this perk, your comprehensive and collision deductibles can be decreased by an amount for each year that you go without having an accident.  For example, you start your policy with a $1,000 collision deductible.  Some companies will reduce your deductible by $100 for each year you go without a claim.  Co if you stay with them for 4 years and have no claims, your collision deductible will go down by $400, to $600.  If you have a collision claim in year 5, your deductible will be $600 for that claim and not $1000.

You can purchased this perk at the time of the policy inception.  You can buy it by itself or as a part of a car insurance company’s coverage enhancement endorsement.

Claims Free Cash Back Perk

You can get money back from your insurance company for not having a claim.  We have a couple of companies that will pay you back for safe driving.  If you buy this perk, you will get a percentage of your premium back for every year that you do not have a claim.

Call Huff Insurance at 410-647-1111

We are a Maryland independent insurance agency here to help you with your insurance protection needs.  We represent many insurance companies so we can find you the best policy with the best policy perks that fit your needs.

**Not all policy perks are available from all insurance companies.  To see what perks are available to you, check with your specific auto insurance company.

 

Blog by Jerry Nicklow of Huff Insurance in Pasadena Maryland

Premium Payment Concerns When Changing Home Insurance Companies

Are you changing home insurance companies?

Home Insurance paid with mortgage escrow | Huff Insurance | Pasadena, MD

If you are changing home insurance companies, besides comparing the coverage, here are a couple of things to keep in mind.

  1. How is the new policy getting paid? Who pays for your home insurance premiums?
  2. When do you cancel the old home insurance policy?

Who pays your home insurance premiums?

  • You
  • Your lender through mortgage escrow

Are you are paying your insurance premium directly?

If so, then there is no question about who is paying the new premiums when you are changing home insurance companies.  You would send a request to cancel the old policy and then pay the bill for the new insurance policy.

Does your bank or lender pay for your home insurance premiums?

If so, then when you change home insurance companies can determine who is paying for the new policy.

What if your bank does not pay for the new policy mid term?

If you are changing home insurance policies mid term, then you may be responsible to pay for the premiums for the new policy.  Most lenders set up the escrow account to pay home insurance premiums once per year.  So if they already paid for your home insurance policy at inception, they may not be willing to also pay for the new policy premium.  The good news is that when you cancel your old home insurance policy, any refund will come directly to you.

What happens if your bank does pay for the new policy mid term?

When changing home insurance policies, we have seen some banks that will pay for the new policy mid term.  Some banks will pay for the home insurance when they receive the new invoice.  In this case, they have essentially paid for two insurance policies in a single year’s time.  Doing so, may cause your escrow balance to fall below their acceptable threshold.  So when you cancel the old policy and get the refund, we usually advise our clients to send that refund to their bank and apply it all to their escrow account.  This will help ensure that the escrow account is not shorted and that their monthly payment will stay in line upon the annual escrow account review.

Are you changing your home insurance company at your policy renewal date?

If you are changing your home insurance at the policy renewal, there are some important time frames to keep in mind.

Insurance companies can send the policy renewal offer and invoice out up to 60 days prior to the renewal date.

So, if you are changing home insurance companies within 60 days of your renewal date, you need to do a couple of things.

Notify your lender right away that you are changing companies

  • If they have not yet paid the home insurance renewal, let them know that you are changing companies and to not pay the old company.  Get them a copy of the new policy and invoice to pay the new company.  They may also want to see the cancellation form for the old policy.
  • What if they already paid the old policy?  If the bank has already paid the old policy, then contact them to see how they want to handle paying for the new policy.  They can handle is a couple of different ways:
      1. They will pay for the new policy.  Some banks will do this to make sure that the new policy is actually paid for.  If they do this then you need to see how they want to handle the refund for the old policy.  Odds are that they will want you to send the refund back to them so they can apply it to your escrow account balance.  Doing this will help prevent a deficiency in your escrow account like we described above.
      2. They will not pay for the new policy.  In this case, you will have to pay for the new policy yourself.  But, like we described above, when you cancel your old insurance policy, the refund will come directly to you to keep.

Some of the direct or online insurance companies that may not have this conversation with you when you are changing your home insurance policy.  This can cause unwanted stress and confusion.  

Call Huff Insurance today to discuss this or any other insurance issues.

Your insurance agent should let you know of these scenarios when talking to you about changing your home insurance company.  If they are not, then do not hesitate to call one of our agents to help you.

Huff Insurance is an independent insurance agent that can handle all of your insurance needs.  We offer a wide variety of solutions for personal insurance and business insurance.

Need to find a lender to refinance your home?

Check out our blog on home refinancing with the link below and use the form on that page to request a lender referral.  We know several top local lenders that can help you with your refinance.  We do not receive any fees or renumerations for referring them.  Huff Insurance refers them because we trust them to handle your business.

Things to do with homeowners insurance when refinancing your mortgage?

Blog by Nancy Nicklow from Huff Insurance in Pasadena Maryland

Workplace Safety Guidelines

Guarding Health and Workplace Safety

Workplace safety and health are such critical issues that the Government has a whole department and numerous laws devoted specifically to the subject. And, although it legal terms it makes a difference whether you’re the employer or employee, in practical terms both groups share a responsibility to safeguard their wellbeing in the factory, the office, the farm, the field, of wherever they work.

The main legislation covering these workplace safety issues is the Occupational Safety & Health Act (OSHA). It’s been around for decades – since 1970 in fact – but still forms the backbone of rules that govern a safe working environment and conditions. It’s worth taking the time to get to know it; fortunately, there’s a summary that you’ll find at http://tinyurl.com/OccSafety.

OSHA also stands for the Government’s Occupational Safety & Health Administration, of which most states also have their own divisional offices. In addition, state Attorney General offices and Departments of Business Affairs (or similar names) also have information and responsibilities connected with workplace safety.

Even without the benefit of laws, a number of commonsense guidelines can make a big difference to everyone’s workplace safety. That should start with having a written health and safety code or policy, which is publicly posted and given to every employee.

Let’s review some of the workplace safety guidelines 

Cleanliness And Tidiness: 

Many workplace accidents are caused by falls and trips over misplaced or neglected objects. People just leave stuff lying around, without thinking – until someone falls over it. Make it a policy to return these objects to their “home” even if you weren’t the person who left it out in the first place. Dangerous materials, of course, should always be stored securely. Similarly, poor hygiene in workplace bathrooms and kitchens are a key source of contagious infection. Washing hands and/or using anti-bacterial wipes, and keeping sinks and other work surfaces clean will eliminate much of the risk.

Heating And Ventilation: 

A comfortable temperature and a supply of good, fresh air, not only makes for a pleasant work environment but also contributes significantly to productivity. People work better when they feel right. Obviously, certain types of jobs – such as working in a furnace area or refrigerated plant – operate in extremes of temperature, in which clothing and hydration are key considerations. For the rest of us, temperatures in the 68 to 76 degree range, and humidity of 20 to 60%, are best.

First Aid Skills And Equipment: 

A first aid kit is an essential component of any workplace. So too should be fire extinguishers (regularly checked and serviced) and alarms. A safety-conscious work environment might also have a portable defibrillator for emergency resuscitations, a first aid room, and trained first-aiders, of whom there should be at least one in every workplace. Whether employer or employee, make it your business to know who your first aiders are. If there isn’t one, get one or become one.

Wearing The Right Clothes & Using Equipment Correctly: 

Certain jobs demand the use of special safety equipment – steel-capped shoes, hard hats, protective suiting, ear-muffs and protective eyewear for example. There’s a reason for each one, so make sure you wear the right clothes for you job. Naturally, you should not wear loose clothes when operating machinery. Treat workplace equipment with respect – whether it’s a robot or a stapling machine and you’re less likely to be injured or cause injury to others.

Emergency Plans & Drills: 

Everyone should know what to do in case of emergency. Companies should have an emergency plan – OSHA requires it in some cases – mainly to deal with evacuation, responding to a catastrophe or dealing with specific risks associated with the nature of the business. As an employee, make it your priority to find out about and read these plans. If there isn’t one, request it and be prepared to help put it together. Emergency plans need to be put to the test regularly – there’s no substitute for practice, except the real thing.

One of the best sources for information about disaster planning is the National Safety Council (www.nsc.org) offers members a huge library of resources including a template you can download and follow that covers all the planning essentials.

Stress In The Workplace 

If you suffer frequent headaches, sleep disturbances, difficulty with concentrating, short temper, poor digestion and feel low in spirits, you may be experiencing the symptoms of stress. Naturally, if this happens, you should see a physician. But there are things you and your employer can do to prevent it from happening in the first place. For instance:

  • Finding a job that you enjoy that’s in line with your skills and experience. If you find yourself struggling, you need to alert your supervisor and seek either a change or appropriate training.
  • Poor time management is a key contributor to a feeling of generally being out of control. If you can’t get formal training at work, consider a college class or even a good training manual, of which there are plenty.
  • Make sure you clearly understand what is expected of you. Employers are responsible for clearly defining roles and responsibilities.
  • If you feel you are being victimized or bullied, sometimes by your own colleagues – a not uncommon problem these days – take action: speak to your supervisor and/or seek a transfer.
  • Be comfortable with your work schedule and work within it. Take the breaks, days owing and vacations you’re entitled to. And if you’re sick, take sick leave – you help others as well as yourself if you have something contagious.
  • Outside of the workplace, try to exercise regularly and have a hobby or pastime that takes your mind away from job-related issues. Looking after yourself with the correct diet and right amount of sleep also helps.

 A Safer, Cleaner Environment 

Thankfully, smoking is now banned in most workplaces and in the vicinity of entrances. If you must smoke, please think of those who don’t and stay well clear of them while you indulge your habit.

Another key element in workplace safety is what specialists these days refer to as “ergonomics”. This is about having a physically comfortable working environment. Most commonly it refers to seating and desk arrangement in offices but we can broaden that to embrace the whole of your workspace. You spend probably around 8 hours a day in this location so you need to ensure it meets reasonable standards of comfort and usability.

Whether you’re an employee or an employer, you should also be aware of other potential environmental hazards in today’s workplaces. These include asbestos (mainly in older buildings), which has to be removed by a specialist and lead found in paint, dust, food, water and even in the air.

Allergies seem to be an increasing issue. Many people suffer seasonal allergies – rhinitis or “hay fever” as it’s sometimes called. It used to be that pollen was regarded as the main cause but these days we also recognize dust as a culprit – and that’s inescapable, especially at work. Talk to your specialist physician about non-drowsy antihistamines and long term inoculations.

Of course, if you do take a medication that causes drowsiness, you shouldn’t operate machinery and you should certainly tell your employer. It’s worth noting that pollen filters for air conditioning systems are relatively inexpensive and it might be possible to install one in the workplace.

Other personal issues that might impinge on your ability to work might include latex allergy, fear of confined spaces or other phobia. You need to be upfront about this with your employer and your colleagues, thereby reducing the likelihood of an incident.

Tackling Issues 

As an employee, it’s not the easiest thing in the world to complain to your boss or supervisor about some element of the job you’re unhappy with.

You worry about being seen as a whiner or even about the security of your job. The way to go about this is to seek a meeting, prepare carefully (and in writing) in advance, maintain your calm and an aura of reasonableness during a meeting, supporting your claims with hard facts.

If your request is reasonable and you don’t get what you want, you’re working in the wrong place!

Huff Insurance is Here to Help 

If you’d like to discuss insurance issues connected with this or any other area of activity, we’re only an email or phone call away.   Proper workplace safety protocols can reduce workers compensation insurance claims.  Call us at 410-647-1111

 

Condo Insurance from Huff Insurance in Pasadena, Maryland

What is so tricky about insuring a condo?

Things to know when insuring a condo

Insuring a condo is simple right?  Well, it may not be as simple as you may thing.

The first thing to understand is that condominiums can take on many shapes and sizes.  Below are photos of 4 types of condo buildings.

Hi Rise Condo Building | Huff Insurance | Pasadena, MD
Hi Rise Condo Building
Townhouse Condo Building
Townhouse Condo Building

 

 

 

 

 

 

Warehouse Complex Condo Building
Warehouse Complex Condo Building
Commercial Store Front Condo Building
Commercial Store Front Condo Building

 

 

 

 

 

 


So the question arises; How do you insure a condo?

When someone buys a condo, they go to their insurance agent to get what they think is a “standard” condo insurance policy.  They’ll Get $25,000 building coverage, $50,000 contents coverage and $300,000 liability coverage and think that they are OK.  But to let you in on a secret.  When insuring a condo, there is no such thing as a standard condominium insurance policy.

The building coverage limit needs can vary in a wide range depending on the condo association’s master condo policy declarations.

Here are some terms that a condo owner needs to understand in order to get the right condo insurance policy for their unit.

4 real property definitions apply to a condo property:

    • Common Elements: Property owned by and/or benefiting ALL members of the association.  These could be playground equipment, clubhouse, property fencing, etc.
    • Limited Common Elements: Property elements beneficial to more than one, but less than all unit owners.  These could include building stairwells, building laundry rooms, etc.
    • Unit Property: Property elements that benefit none but the unit owner.  These could include unit plumbing fixtures, unit cabinetry, unit light fixtures, etc.
    • Unit Improvements and betterments: These are the alterations or changes to the real property defined as unit property that increases the value of that property within an individual unit.  These would include things that the unit owner added or changed inside of the condo unit.  Examples include: New cabinets and countertops, new light fixtures, new hardwood flooring, etc.

What is the condo unit responsible for when insuring a condo?

Condo Insurance responsibility is defined in one of 3 ways:

  1. “All in” or All Inclusive”: When the association specifies this type of coverage, the association is responsible for all 4 types of real property.  The unit owner only has to insure their personal property.  Standard condo insurance policies (HO6) usually has $1,000 automatic building coverage which would be sufficient for All In.
  2. “Bare Walls”: This is the opposite of all in.  The association is only responsible for insuring the common elements and limited common elements.  The unit owner is responsible for unit property and any unit betterments and improvements.  The standard building coverage on the HO6 would not be enough for the unit owner.
  3. “Original Specifications”: This is the middle ground between the two above.  The association is responsible for the common elements, limited common elements and “original” unit property (what the builder put in at time of construction).  The unit owner is responsible for unit betterments and improvements (upgrades to counters, cabinets, fixtures, etc.) or any additions to the unit (enclosed porch).  Again, the automatic HO6 coverage will not likely be enough for this type.  It is also important to know what the original specifications are for the condo unit.  This can be tricky if the condo has been sold one or more times over the years.  But this information should be available from the condo association or property managers.

Items to think about for condo insurance

    • The standard HO6 condo insurance is a named peril insurance policy.  This means that only the perils (causes of loss) listed in the policy will be covered should there be a loss on the condo.
    • There is a broadening endorsement available when insuring a condo on an HO6 insurance policy.  This endorsement will change the policy from a named peril policy, to an open peril policy.  This means that all perils are covered UNLESS they are specifically excluded on the policy.  Huff Insurance recommends this broadening endorsement for all of our HO6 insurance policies.
    • Is the building coverage on the condo insurance (coverage A)  enough?  We find the answer is no when we review most competitor’s policies.  Most have $10K, $25K or $50K in coverage a because that is what considered industry standard.   With walls in or original specifications as defined above, these building  limits can be exhausted quickly.
    • If the bylaws or declarations do not specify the coverage responsibility above, state laws dictate the responsibilities.

Things the insurance agent needs know to properly insure a condo:

  1. What is the coverage responsibility per the association bylaws or declarations?
  2. What is the replacement cost for each structural item that the unit owner is responsible for? – If the responsibility is original specifications, make sure the unit owner has a copy of the original specifications so they can identify any betterments and improvements that they need to insure.  This gets tougher as the condo get sold multiple times.
  3. How much personal property does the unit owner going to have?
  4. What is the loss assessment limits set in the master policy or by laws?

Things the condo unit owner needs to understand, besides previous agent items:

    • Regardless of what you may hear, there is no “standard” condo insurance policy (HO6).   Cookie cutter policies with pre set limits should not exist.
    • Some lenders may not require an HO6 as a condition of the loan.  Especially if the master policy is an “All In” form.  But that does not mean that the unit owner does not “Need” an HO6.  There are other very important insurance coverages – like liability insurance , personal property insurance, loss of use insurance, etc.
    • If the unit owner is renting out the condo, they still may be able to get an HO6 with a rented to others endorsement.  Which is different than other homeowners products where they would need to get a dwelling fire insurance policy.
    • Short term rentals may be ineligible for certain companies.  For example, weekly vacation rentals, VRBO, or Airbnb.  So if the use changes from owner occupied or long term rental to short term rental, the unit owner needs to talk to their insurance agent.

Insuring a condo is not as easy as some people think.  So you need to have an insurance professional on your side to make sure that you are properly covered.  Unless there is a claim, most unit owners do not know that they are improperly covered.  Finding out after a claim is not how someone wants to find out that they are vastly under insured.

Call Huff Insurance at 410-647-1111 to talk about your condo insurance needs.

Blog by Jerry Nicklow of Huff Insurance in Pasadena Maryland

Don’t fall for COVID-19 vaccination scams

COVID-19 vaccination scams are on the rise

As coronavirus vaccines are being rolled out, COVID-19 vaccination scams are unfortunately emerging alongside them.
Covid-19 vaccine scam in Maryland

These scams are just the latest in a series of fraudulent schemes circulating right now. Check our our other blog titled:

Don’t fall victim to one of today’s scams

One of the most common Covid-19 vaccine scams is shown in the picture here.  Someone will send a text that states that you are now eligible to get the vaccine.  Or they will send you an email from what looks like a legitimate government email address.  They will even provide a convenient link for you to make your appointment.

This covid-19 vaccine scam can go a couple of ways:

  • They will ask for your personal information to set the appointment, then proceed to steal your identity or sell your information.
  • They will ask for a payment to secure your appointment.
  • They tell you that you can purchase your vaccine to get quicker access.
  • They will ask you for your insurance or Medicare information, then proceed to commit Medicare fraud.
  • They will ask for your personal information, insurance information, and a payment of some form.

Scammers often go to great lengths, even creating fake websites that look almost identical to legitimate appointment sites.

Former Maryland Governor Larry Hogan even held a press conference when in office to talk about these scams.

He pointed out several things to keep in mind when setting up your vaccine appointment

  • COVID-19 vaccines are free.  You cannot buy a vaccine at this point in time.
  • You will not have to give your social security number to get the vaccine.
  • No insurance information or verification is needed to get the vaccine.

Unfortunately, scams like these often target vulnerable seniors, preying on their fears. Scammers create a sense of urgency and then offer a quick, easy solution to ease those fears, ultimately stealing their money or identity.

If you know someone trying to get the COVID-19 vaccine, make sure to discuss these scams with them. You don’t want a family member or friend falling victim to a vaccination scam.

Scammers are always finding new ways to separate you from your hard-earned money. Take steps to protect yourself and your loved ones.

If you have any questions about your insurance, call Huff Insurance at 410-647-1111. We’re here to help!

Blog by Nancy Nicklow, Huff Insurance

Shopping your insurance every year is not always best for you

Why is shopping your insurance every year is not always in your best interest?

Insurance rates, along with everything else in my life, are increasing every year.  So, it’s only natural to think about shopping your insurance rates.

A good rule of thumb is to shop your insurance at a 3- or 5-year time.  But not every year.

Why?

Well there are renewal discounts that you lose out on by shopping every year.  Those discounts are generally not seen till the 3rd or 5th renewal.

When you are shopping for the new carrier, you’ll be rated based on the length of time that you were with your previous carrier.   So being with your previous carrier for 5 years or longer will allow you to get a better rate from the carriers you are shopping with then if you had only been with them a year or less.

In addition, there maybe something that you qualify for such as accident forgiveness or diminished deductible.  These are not available when you have a new policy but they are earned the longer the policy is in effect.

For commercial accounts, a lot of the pricing is determined by the underwriter.  Therefore, when they are reviewing an account and that account has been submitted to them for numerous years but never written with them, they tend not to give their best rate or any rate on the account.

Also, by shopping your insurance annually, the carrier is afraid that if they write the account they will only keep it 1 year.  So they would not be able to make a profit on the account in that time.    There is a cost to the carrier to pull the consumer reports, underwrite the policy, prepare proposals and to mail and issue the policies.  They do not want to spend the money to do that work knowing that there is a good probability they will only keep the account for a year.

How do you know if you have a fair insurance rate?

By working with an independent insurance agent like Huff Insurance.   W work with several different carriers.  So this let’s us get a handle on the marketplace.

We can tell if a rate is out of line.  Or if the carrier is on the front end or the back end of  rate increases. We will share what we are seeing in the marketplace.

Sometimes insurance carriers have filed for rate changes, but they are not in effect yet.  So we might know that shopping your insurance may save you 5% now.  But if they have filed for a 25% rate increase, your renewal will be much more than where you are now.

You need to have a relationship with an agent that you trust.   An agent that you feel is looking out for you best interest.   No two policies are identical. So, moving from company to company you may lose a little and gain a little.

Remember the true cost of the insurance is not just the premium you pay but also the cost of deductibles and uncovered losses.  Shopping your insurance every year may reduce the price. But you may have increased the cost of insurance.  So keep an eye on your coverage and deductibles.

If you are looking for this type of relationship with your agent.  Then give us a call.  We will be happy to discuss the insurance program for your business or personal insurance needs.

Blog by Nancy Nicklow, Huff Insurance

What is the total cost of insurance?

What is meant by “Total Cost Of Insurance?”

When most people think of insurance cost, they think of just the premiums being paid.  Very rarely does anyone truly think about the real total cost of insurance.

I have never heard- “That premium seems fair; the insurance company is getting adequate premium to cover its exposure and I’m getting the protection I need.”

But I have heard, more times than I can count, “I can’t believe I have to pay all this money.  The insurance company is killing me.  Can’t we get this premium down?”

Everywhere you look, insurance carriers are offering low, low rates.  This leads the consumer to believe that insurance is all the same, the only difference is the cost I pay.

However, the premium (the price) is only part and sometimes the smallest part of your “Total Cost of Risk”

The true cost of risk is 6 items:

  1. Deductibles or Self-Insured Retention
  2. The cost of uninsured or self-insured losses (intentional or unintentional)
  3. Legal Costs
  4. Loss control and safety courses
  5. Claims management cost
  6. Opportunity cost

Let’s talk about the deductible

Premium savings can be accomplished by increasing the deductible.  However, you need to compare the premium savings to the total cost of insurance.

Let me illustrate       

Decuctible $1,000 $5,000
Premium $20,000 $18,000
Property Loss $65,000 $65,000
Amount Paid By Carrier $64,000 $60,000
Total Cost Of Insurance
(Premium +Deductible) $21,000 $23,000

This examply is for a single claim.  Just imagine if there are multiple claims that happen during the year?

Premium savings can be eaten away by the cost of deductibles.

The cost of uninsured or self-insured losses

Now let us say in a way to reduce the premium you decide to not have coverage for a particular cause of loss.   Depending on the frequency, how often the loss occurs, or the severity, how expensive is the loss, this could be a huge out of-pocket expense related to the self-insurance cost of risk.

Internal Claims Management costs are mostly associated with claims that are under the deductible or a re not covered.  These losses and claims must be managed by someone, this someone may be an internal employee or a third party.

Legal Costs flow out of claims management 

Defending uninsured or claims under your deductible can be expensive.   The cost of defense counsel at $400-800 an hour will devour any premium savings that you enjoyed.

Loss control and safety control

To avoid or reduce loss, you may invest in an alarm system or safety equipment.   Some of these systems maybe required by regulation.  There are some that are needed due the inherent risk of the operation.  These loss and safety controls are considered in the total cost of risk

Opportunity Costs

Opportunity costs are subjective in the total cost of risk.  In order to manage a non-traditional insurance program requires resources to be used from somewhere else.  Payroll and time costs are factored in the total cost of risk

Ask yourself again, is the Price too high? Or is the the Total Cost Of Insurance too high?

You can always find a lower price, but at what cost.   Understanding the total cost of risk is important.

You should contact us at Huff Insurance to discuss your coverage. 

We will work with you to make sure that you fully understand the coverage that you have in place.   We will discuss the price is what it is and what you may give up to find a lower price.  After discussing the total cost of insurance, we will find a plan that works for you.