Connecticut Commissioner Offers Advice on Preparing for Winter Storm

As the Northeast and New England states brace for a major blizzard, Connecticut Insurance Commissioner Thomas Leonardi is offering policyholders tips on preparing for the storm and filing claims if there is property loss.

“One of the most important things consumers can do right now is take stock of what they have. Take the time now to make a home inventory or update an existing one,” Commissioner Leonardi said. “This will be extremely helpful should the need arise to file a claim. Do not hesitate to contact the insurance department if you have questions or complaints.”

Commissioner Leonardi offered the following advice on what types of damages may or may not be covered. The commissioner said, however, that policies may vary in coverage. He recommended that consumers contact their insurance agent or the state insurance department with questions about the specifics of their policies.

• Snow removal: Homeowners insurance does not cover injuries to the homeowner during snow removal. However, snow removal professionals should be covered under their own liability policies.

• Ice dams: Interior or exterior damage caused by an ice dam on a roof is generally covered. However, many policies do not pay for ice dam removal.

• Frozen pipes: Most policies cover pipe replacement and water damage. However, coverage may not apply if the homeowner turned off the furnace for the winter without winterizing the home.

• Tree Damage: In general, the policyholder of the property that is damaged by a falling tree – not the tree owner – should file the claim with his or her insurance company. The insurance policy covers the cost to remove the tree from the damaged property and the resulting damage, minus the deductible. If the tree damaged a covered structure, the claim would be made on the homeowner’s policy. If the tree damaged a vehicle, the claim would be made on the auto insurance policy.

• Storm power outages: An all-risk policy generally pays for damage caused by loss of power and appliances damaged by the outage. Check the policy to see if it covers spoiled food. Most policies will not pay for shelter when the homeowner loses power for extended periods of time unless there is damage to the home that causes it to be uninhabitable.

• Renters: Landlord’s insurance will pay for winter damage to building. It will not pay for damage to personal contents, which must be covered by the renter’s own insurance.

Before the storm, the commissioner recommends the following steps for consumers:

• Keep the policy and other important documents together in a safe place.

• Review the policy to understand the coverage – call the company or agent with questions.

• Create or update the home inventory. Take photos of the possessions and Note model and serial numbers. Assemble original sales receipts and/or appraisal documents.

After the storm, consumers are advised to take following steps if damages have been sustained:

• Call the insurance company’s 24-hour claims phone number as soon as possible; provide policy number and other relevant information and documents.

• Take photographs/video of the damage. Make repairs necessary to prevent further damage, but do not make permanent repairs until the insurance company inspects the damage.

• Save all receipts from temporary repairs.

• Keep a diary of all conversations, e-mails and other correspondence with the company.

Knowing How Much Coverage Is Right For You

When deciding how much insurance to buy, think about what assets you're protecting. When you purchased auto insurance, did you put a lot of thought into the limits you chose, or did you go with the minimum limits available without thinking beyond that? While choosing to purchase the minimum limits allowed in your state is perfectly legal, you should take a few minutes to determine whether those limits are enough. What is your financial situation? Can you afford to buy more than the minimum limits? How much can you afford to pay out of pocket if the need arises?

It's also important to consider your assets when deciding how much coverage is right for you. Your assets may include your house, vehicles, bank accounts, investments — even your wages. All of these can be fair game in a lawsuit if you don't have cash on hand to pay for damages you're liable for.

By definition, auto insurance protects you from accidents, theft and other unforeseen and unplanned circumstances. When you choose insurance, you're choosing protection so you don't have to pay for those damages out of pocket. That's why you should consider your assets to determine how much protection you need.

Why Do Your Assets Matter in Auto Insurance?

Though it doesn't happen often, if your auto insurance limits are exhausted in a covered loss, you personally could be responsible for any remaining bills that aren't paid by your insurance. If you don't have the money on hand to pay these bills, your assets could be at risk.

If your insurance limits are not sufficient to cover damage to property or personal injuries you're liable for, people involved in a claim with you can pursue you personally by filing a lawsuit for payment of their injuries and damages beyond what your insurance limits cover. If you lose the lawsuit, your assets could be at risk.

A lawsuit also can affect you in the long run if you're required to disclose it on a job or credit application, not to mention the possibility of garnished wages until you pay off the judgment.

What Events Can Exhaust Your Insurance Limits?

Several types of situations could exhaust your insurance limits — especially if you have the minimum required amounts. For instance, multiple-vehicle collisions or damage to several pieces of property can add up fast, and minimum limits may not cut it.

Consider the type of vehicle you may collide with in an accident, too. If you damage a luxury or high-end vehicle and you only have $10,000 in Property Damage coverage, your limits could be exhausted quicker.

Also, while Bodily Injury limits of $20,000/$40,000 may seem like a lot, they could be too little in accidents that involve multiple injuries. Medical bills, lost wages and other damages you're liable for can amount to more than those limits— and fast.

Higher Insurance Limits Can Lower Financial Fears

To protect yourself from heavy financial burdens, the best thing to do is consider your assets, your budget and your personal needs to determine the right amount of auto insurance for you. If you choose higher-than-minimum limits, you may spend slightly more up front, but this cost can pay off if you ever actually have to use your insurance coverage.

Actual-Cash Value vs. Replacement Cost

Standard replacement-cost provisions on Commercial Property forms often offer the insured the option to accept settlement on an actual-cash-value (ACV) basis, but the insured can later opt to receive the replacement-cost amount.

 

This can cause some confusion.

 

The policy usually provides a time period for notifying the carrier that the insured intends to make a claim for the replacement cost. The insured must actually make the repairs before the replacement-cost amount is paid. But the amount of time given to make the repairs is generally some variation on “as soon as reasonably possible” after the loss or damage.

 

How soon is that?

 

There is no absolute answer to how long it should take to make the repairs. The only set time limit is how long the insured has to notify the insurer of the replacement-cost claim. “Couch on Insurance 3d” states that the reasonable time “turns upon the circumstances of the case and is ordinarily a question for the jury.” So, the answer is a subjective one.

 

Sometimes what seems like a straightforward answer to a question leads to more complex issues. For example, an insured recently asked us the following regarding a claim on a Businessowners form:

“Our insured is considering accepting an ACV settlement on some of the soft-metal hail-damaged fascia and gutters on his building. If the policy continues as written with replacement cost and the building sustains damage that necessitates replacement of these same items, will the company, under the language of the policy, still be required to pay for the full replacement cost of the materials that have already been paid for under this prior loss?”

 

Our immediate response was that if the insured experiences a subsequent, separate loss, then the full replacement cost of the damaged property should be paid.

 

As we continued discussing the scenario, though, another issue arose that threatened to make the solution a little more complicated. The ISO Businessowners form contains the following language in the loss-payment section:

“You may make a claim for loss or damage covered by this insurance on an actual-cash-value basis instead of on a replacement-cost basis. In the event you elect to have loss or damage settled on an actual-cash-value basis, you may still make a claim on a replacement-cost basis if you notify us of your intent to do so within 180 days after the loss or damage.”

 

It seems pretty clear that, in the situation that our client presented, a separate loss the insured wants to adjust on a replacement-cost basis after the 180-day time limit outlined in the loss-payment section would receive the full replacement cost.

 

But what if the insured suffers hail damage and accepts an ACV settlement and thirty days later suffers hail damage again to the same property? If the insured submits a claim for replacement-cost coverage at that point, would the carrier consider it within the 180-day period and pay only the difference between the ACV settlement already received and the replacement cost?

 

Our first reaction is that our original answer to the question stands, regardless of the 180-day time period. However, we are curious if anyone has run into this situation—and if so, how it was handled? The fact that our client was concerned that the insured would not receive full replacement-cost coverage for a different loss implies that someone may have experienced similar situations before.

Letting Your Child Drive Someone Else's Car

Consider several factors before you allow your kids to get behind the wheel of someone else's car — or before someone gets behind the wheel of your car.

 

With school back in session, more students will be driving to and from school during the morning and afternoon hours. Parents know they can't monitor their kids at all times, but they can work with their kids to set ground rules before young drivers hit the road. One of these rules: What cars your kids can drive. Before you let your child drive someone else's car, or before someone outside the family drives your car, consider these factors.

 

Whose Insurance Applies?

If your child's friend drives your car and wrecks it, whose insurance covers the damages? The answer varies depending on the state you live in. In most states, insurance coverage follows the car— not the person driving it — in the event of an accident. However, if damages resulting from the accident exceed the amount allowed by your policy, then the driver's insurance may be considered as secondary or supplemental insurance to the insurance on the car.

 

For instance, let's say your policy has $10,000 in property damage liability coverage. Your daughter lets her friend drive your car to her mom's house 30 miles away. In the process, she causes a three-car collision, which results in $20,000 of damage to the other vehicles and property.

 

In most states, the insurance you have on your car will cover the damage, but since you only have $10,000 of coverage, the friend's insurance policy may kick in and pay for the remaining $10,000 of damage. However, in some states, you could personally be held responsible for any remaining damages beyond your insurance limits if your child's friend doesn't have car insurance, even though you or your child weren't driving at the time of the accident.

 

It's also possible that if your insurance company pays for damage in an accident, they may pursue the friend's insurance company to pay back the damage. They won't attempt to recover any money that you pay out of pocket, though. Again, this is both situational and based on your state's laws, so there's no single answer to the question. Your best option is to check with your insurance company to find out how insurance works in your state.

 

Before your child's friend drives your car, make sure you and your child think about the following:

· Whose insurance will pay for the damage?

· Who will ultimately be responsible for paying any out-of-pocket expenses?

· If your insurance pays, are you willin  to take the risk, including possibly paying more for insurance when your policy renews? If not, you may want to rethink letting anyone outside of your family drive your car.

Should You Update Your Policy?

If you know your child's friend drives your car regularly, it may be best to add that person to your auto insurance policy. Similarly, if your child regularly drives a roommate's vehicle, it may be best to add your child to the roommate's policy.

 

Often, insurance companies may require that you add a driver or car to your policy if the person or car isn't already on it. This helps ensure that proper coverage is afforded in most situations.

See What Auto Insurance Covers - and What it Doesn't

If you've ever been the victim of a vehicle break-in, you know how troubling it can be. Someone has invaded your privacy and stolen your belongings, then left you to pick up the pieces.

You can make a claim on your auto insurance policy to fix the damage as soon as possible, but do you know what items your auto insurance actually covers in these unfortunate situations?

Common Items Stolen From Vehicles
Break-ins often happen when a burglar spots valuable items inside a vehicle. Common items that are stolen include:

· Car stereos

· Cell phones

· CDs

· Laptops

· Small electronics

· Wallets or purses

Of these items, do you know which ones are covered by your insurance policy?

What Auto Insurance Covers
Under most auto insurance policies, damages due to theft will be covered under Comprehensive coverage. If you're the victim of a break-in, first check your auto policy to see if you have Comprehensive coverage. If you do, you can see what items are covered in the event of a theft.

Of the goods listed above, typically only car stereos would be covered by your auto insurance policy — and even those aren't guaranteed to be covered.

All of the other items — cell phones, CDs, electronics, purses, wallets, etc.— would probably be covered by your homeowners (or renters or condo) insurance policy, if you have one.

Some insurance companies will cover sudden, direct and accidental loss to your vehicle and its custom parts or equipment. Custom parts or equipment are items that are permanently attached or installed to your vehicle. The operative word here is "permanently."

Going back to the statement that your stereo may not be covered, here's why: If you have a stereo that's made so the entire unit (not just the face) can be detached from your vehicle, the stereo would not be considered part of the vehicle, nor would it be considered custom parts or equipment. This is also why the other loose items that are not permanently attached to your vehicle likely would fall under your homeowners policy instead of your auto policy.

If a burglar breaks a window, scratches your door, breaks the lock or does other damage to the vehicle itself, that damage would be covered by Comprehensive coverage if you have it on your policy. With Comprehensive coverage, you would pay a deductible that you chose when you purchased your policy, and your insurance company would pay for the remaining related damage.

Deter Thieves From Breaking Into Your Vehicle
You can take specific measures to prevent someone from burglarizing your vehicle, such as installing an alarm system, keeping the doors locked, and closing the windows. But you also can take these preventive steps to deter thieves:

    · Make sure you don't leave valuable items, such as your purse, cell phone, keys, etc., in plain sight — even if you're just running inside to drop off some groceries.

    · Avoid advertising your CD collection by keeping jewel cases hidden or at home or by foregoing the use of a CD case that straps to your sun visor.

· Detach your stereo face if your car is equipped with one.

Following these simple steps can keep your car from catching a burglar's eye in the first place — and keep your possessions in your possession.