Comparative Negliglence

In many states, the damages awarded in an auto accident are based on the comparative fault of the drivers involved.  When a driver is legally parked or rear-ended in traffic, the other driver is usually found to be 100% at fault and responsible for all the damages.  In other accidents, both drivers are partially at fault and a driver’s ability to recover damages depends on the degree of fault that is determined.

Assume Fred is driving straight ahead on a main thoroughfare when Sally runs a stop sign and broadsides Fred’s car.  Fred may be assigned 10% responsibility for the accident because he could have mitigated the damages if he had been more alert and been driving defensively.  In this case, Sally and the company that insures her will pay only 90% of Fred’s damages.  Fred will be responsible for the balance.

Who determines the proper percentage of fault?  In the above case, the company that insures Sally’s car will off to pay Fred 90% of his damages.  If Fred does not accept this offer, he has the option of going to court to ask a judge to determine the comparative negligence in the case.

Fred may have on other option.  If he carries collision coverage on his vehicle, he can choose to collect under his own insurance policy for the damages.  In this case he will have to pay the deductible under his policy.  After his insurance company has paid the damages, it will look to Sally’s insurance company for reimbursement.  It will also ask for Fred’s deductible back.  If his insurance company collects 90% from Sally’s company, Fred will eventually get 90% of his deductible back.  That reimbursement process takes months, sometimes years

If You Get Sued

We live in an increasingly litigious society.  People are suing for incidents that used to be settled with a simple apology.  And, the amount they are asking in damages continues to escalate.  Getting sued for a significant amount is a real possibility in modern society; the risk has increased.

Fortunately, an individual can transfer a large portion of that risk to an insurance company where it can be pooled with other individuals who face similar risk.  The insurance that offers this transfer opportunity is liability coverage.  There is liability coverage on an auto policy, a homeowner’s policy and a policy covering a recreational vehicle.  Today, many individuals and families also purchase a Personal Umbrella liability policy, which provides excess limits.

What does it cover?

Liability insurance is designed to respond when you are legally liable for someone’s injuries or damage to their property.  For example:

·         Premises Liability:  A neighbor slips and falls on the ice on your sidewalk; you are liable for their damages

·         Motor or Recreation Vehicle Liability:  Your teenaged son loses control of your boat and collides with another; you are liable for the damages

·         Liability for Personal Activities:  Your over-active, eight-year old propels a loaded shopping cart down the grocery aisle, hitting a little old lady and sending her flying; you are liable for the damages

What is paid?

A liability policy will pay “damages” to the injured party for a covered loss due to bodily injury or property damage.  In addition, it pays for all attorney fees and defense costs, claim expenses, and the cost of investigation.  Liability coverage is designed to pay the financial costs of a covered claim

Peace of Mind Coverage

Liability insurance provides peace of mind in today’s litigious society.  Purchasing the appropriate types of liability coverage in adequate amounts allows you to transfer the risk of being sued to an insurance company.  Then you can focus on those things that give your life meaning

When Your Home is Vacant

When a home is unoccupied or vacant, there are two primary problems.  The house can become a target for vandalism and theft; in addition, a water loss will often go undetected for a longer period of time causing more extensive damage.  The insurance industry experiences more frequent and sever losses on dwellings that are vacant or unoccupied.

Impact on Coverage

Your Homeowners policy will respond differently if your home is vacant at the time of loss.  Most Homeowners policies exclude vandalism coverage after a home is vacant for longer than 60 days.  The policy also does not cover frozen pipes if you have not maintained the heat or drained the pipes.

Coverage Denial

Even worse, some insurance companies deny a claim entirely when a home is unoccupied or vacant.  The policy states, “We cover the dwelling where you reside.”  The insurance company may contend that coverage ceased the day you stopped living there on a regular basis.  Many courts have upheld such a denial of coverage when the policyholder is no longer living in the home, even if belongings were left there.

Seasonal Dwellings

Increased loss exposures also exist on seasonal dwellings, but the insurance industry looks at those homes differently.  A company is usually willing to insure the summer cottage up north as long as they know you have someone checking on the building when you are not there.  However at the time of loss with a seasonal dwelling, your insurance company may ask for documentations as to the number of days you have spent there over the past few years to determine whether the dwelling is actually used as a seasonal residence or is actually an unoccupied dwelling that is not used.  In the latter case, the company may deny coverage on the basis that you no longer reside there.

If your home is vacant or unoccupied, notify your agent promptly, disclosing all details.  Some companies may permit the situation for a short period of time; most will send out direct notice of cancellation.  Your agent can offer you a specialty policy covering a vacant dwelling; unfortunately, the terms of that policy are never as good as those of the Homeowners policy.  When discussing the occupancy of your home, you should be totally candid about the circumstances.  If an insurance company denies a claim, you may end up paying for an attorney to challenge their decision.  That can be expensive and time consuming and you may lose.  It is much better to simply have the proper coverage.

Coinsurance

Imagine your limit of insurance on your building is $500,000 at the time you have a $50,000 fire but you can only collect $25,000.  The problem?  The Coinsurance Clause in your property policy; it is one of the simplest but most misunderstood concepts in modern insurance.  Here is how it works:

·         In exchange for lower rates…

The industry has a number of actuarial reasons for adding a coinsurance clause to a policy, but there is also a benefit to the consumer.  With most policies, rates are less when the policy contains a coinsurance clause.

·         You agree to be insured for at least 80% of the replacement cost at the time of loss.

The only thing the coinsurance clause requires of a policyholder is that the property be insured to value.  Contracts vary and some require 80% of the value, others require 90% or even 100%.  (Although we are using “replacement cost” in this discussion, if your property is insured on an “actual cash value” basis and you have an 80% coinsurance clause, you will be required to insure for 80% of the actual cash value)

·         If you do not keep your promise, you become a coinsurer and share in any partial loss

At the time of loss, the claims adjuster will determine if you have kept the coinsurance promise; he will simply compare the policy limit with an estimated value of the property.  If your limit of insurance is not adequate, you will only be compensated for a portion of your loss; you will pay the balance.  You are a coinsurer.

·         There is a formula in the policy that determines your share.

The industry calls this formula “Did over Should.”  It simply means that if you only did have half of what you should have had at the time of loss, the insurance company will pay for half of the $50,000 fire and you will pay the rest.

The Bottom Line:  The minimum amount of insurance you should carry on property is the limit that will satisfy the coinsurance clause.  If you are insured for that amount at the time of loss, the coinsurance clause will not be activated.  However, if you are only insured for 80% of the value of the property and you have a total loss, you will have a different problem.  You will not be able to rebuild everything you lost.  Consider the coinsurance clause when setting your property limits, but also consider how you would respond to a total loss.  Then set property limits accordingly.

Water Back-up Endorsement

Insurance carriers provides comprehensive homeowners insurance products to meet your needs and that may help protect your customers from the potentially disastrous effects of water backup.  Water backup is one of the most common causes of loss for homeowners but also one of the most misunderstood.

That is the importance of knowing what is covered by the base homeowners policy, what is covered by the optional endorsement, and what is not covered under any circumstances.

What's covered, what's not?

Homeowners policies provides coverage for water that backs up through sewers or drains as long as it originates on premises.  As this chart shows, the optional endorsement expands the coverage to provide better protection.

Not Covered by Homeowners Policy

• Sewer line in the street backs up and causes the overflow
• Water that excapes, overflows or discharges from a sump pump, sump well or any other system designed to remove water which is drained from the foundation area

 Covered by the Optional Endorsement

• Coverage is expanded to include backup or overflow from causes originating off premises as long as the backup or overflow itself occurs on the premises
• Coverage is provided when water escapes, overflows or discharges from a sump pump or other similar system

What's never covered?

• Flooding is the most common excluded coverage.  Whether the result of a river overflowing its banks or a dam breaking, water damage caused by surface water entering the house is not covered
• Overflow originating off-premises is not covered.  This would include a sewer line breaking in the street and causing water to flow over the surface in to the house
• Sub-surface water is excluded.  For example, if a swimming pool or sprinkler system leaks underground and causes water to seep through the foundation, there is no coverage under either the base policy or the optional endorsement.

Note:  All statements made are subjecto to provisions, exclusions, conditions and limitations of the applicable insurance company and policy.  If the information in these materials conflicts with the policy language that it describes, the policy language prevails

Holiday Travel Tip

Over the river and through the woods in Wisconsin …

Millions of Americans will do some traveling this holiday season - the majority of it by car. Of course, winter weather creates a unique set of challenges on the roadways, whether you’re simply driving around in Chippewa Falls or headed to Eau Claire or Madison.

At Mower Insurance, we’d like to help you not only enjoy your holiday season, but help ensure you’ll be around for future holidays, too! So please take these winter-travel safety tips to heart.

Prepare your car for winter

Before leaving on your trip in Wisconsin, give your car a thorough check-up. Do wipers need to be replaced? Are your fluid levels where they should be? Your tires need to be in good shape for driving on wet or snowy roads, and be sure your radiator and cooling systems are up to snuff. And - we know you’ve heard this before, but bear with us - your car should have an emergency kit. Pack it with jumper cables, blankets, a first-aid kit, flares, food and water, a flashlight and other safety gear. A shovel and cat litter or sand (to provide traction should you get stuck in snow or ice) are good ideas as well.

Before you leave

Know exactly where you’re going, with printed maps, and check weather conditions along your planned route. Let someone know your itinerary, so if you don’t arrive on time, officials know where to look for you. If your car has snow or ice on it, make sure it is completely cleared off before you depart. Don’t forget to clear your headlights and other lights, along with the roof - ice and snow blowing from your car could create a hazard for other drivers.

When you’re on the road

Are roads snowy or icy? Take it slow. Take it slow. Take it slow. Sorry for repeating ourselves, but it’s absolutely vital to, yes, take it slow. Give yourself extra time to get to your destination, and make sure you leave extra room between your vehicle and others on the road. Watch for ice patches on bridges, overpasses and shady spots. Remember, having four-wheel or all-wheel drive does not mean your car will stop or steer better on ice.

If you’re caught in a storm that seems like it’s too much for you to handle, seek refuge as soon as you can. Of course, sometimes it’s best not to drive in snow and ice at all - stay home if you can.

If your vehicle becomes disabled

Nobody wants to think about being stranded on the side of the road in a storm, but it happens to thousands of people every year. If your vehicle is disabled, be sure to stay with it. Run your engine and heater for short intervals, and open one of your windows slightly to prevent carbon monoxide build-up. Light two flares (remember that vehicle emergency kit? Now’s the time to use it) and place one a safe distance from both the front and rear of your vehicle. Note your location with mileposts, exit numbers or cross-streets and call the authorities or a tow truck.

We hope you enjoy your holidays with friends and family, and we look forward to serving you in the New Year!

Vacation Travel Smarts

Make your vacation a great one

Whether you’re planning a trip to a local attraction in Wisconsin this summer, or headed all the way across the country, you want your vacation to be relaxing. It’s a getaway from work, not to mention your day-to-day life. So we’ve got some tips - from packing smart to protecting yourself from pickpockets - to make your trip the best it can be.

Before you go

Even if you’re only headed across the state up North to your cabin, a packing list is a must. How many times have you left Chippewa Falls and arrived at your destination, only to find that you forgot your most comfortable walking shoes? Or your swimsuit? Put everything on this list, even if you think you would never forget it. A toothbrush is easy to replace when you get there - your prescription medication isn’t.

Be sure that you have printed itineraries for everyone in your party, and make color copies of important ID documents as well. Keep the copies in your bag, separate from your passport and other IDs. It’s also a great idea for each person to have a list of emergency numbers, either for them to call or for someone else providing assistance.

Of course, packing light can make travel a lot more enjoyable. Who wants to lug 100 pounds of luggage through the airport? Not us. Here are some ideas to help you lighten the load:

·         Do laundry at your destination. Nobody wants to do laundry on vacation, but if you’re willing to sacrifice a little time, you can pack far fewer items of clothing. If you won’t have access to facilities, you can wash clothes in the hotel sink and hang them up to dry.

·         Easy on the shoes. If you can, pack only one or two pairs of shoes. It’s best to wear the heavier pair during travel if possible, and pack the lighter one.

·         Ditch the books. Consider using an e-reader instead of packing actual books - that way you can carry hundreds of books on your trip! If you don’t own or want an e-reader, you can buy books once you reach your destination. Thrift shops are great places to find inexpensive books.

·         If flying, don’t check your bag. This will not only force you to take smaller pieces of luggage, but with most airlines charging checked-baggage fees, it will save you money! It saves you the hassle of baggage claim, too.

When you’re there

Once you arrive at your destination, it’s time to relax! But don’t let your guard down completely. After all, tourists often are targets for those looking to separate you from your money. We’re talking mainly about thieves, but don’t forget, you also lose money when you spend more than needed. Here are some ways to protect your wallet from criminals and other money traps:

·         Don’t carry much cash. Most places accept credit cards, and those that don’t often have ATMs on site.

·         If you carry a wallet, keep it in your front pocket. For a purse, hang it across your body. Both will make it more difficult for a thief. You could also consider carrying a money belt, which is a good way to conceal cash and cards.

·         Staying at a hotel? Check to see if they have “resort fees.” More and more hotels are charging these, which often provide things that used to be included in your room rate (such as access to the fitness center). Some will waive it if you complain — and it can be worth complaining because the fee can be $10 – $25 each day.

·         Eating out too much? If your hotel room has a refrigerator, you can easily purchase and store sandwich ingredients for a cheap lunch or dinner. Many people find it more economical to rent a condominium or house for their vacation and cook most of their own meals. The money saved on restaurants can make up for any cost difference between a condo and hotel.

·         Think about travel insurance. Yes, this costs money up front. But if you have a long and expensive vacation planned, travel insurance can end up saving you a lot of money if something goes wrong and you need to come home early or even cancel your entire trip. Depending on the coverage you purchase, you could receive reimbursement for additional airfare, hotel charges and more.

Finally, remember that you’re on vacation to relax and escape everyday life. So when you get there, get out there! Meet some locals, do some things off the beaten path. In fact, the locals usually have the best recommendations. And you just might make some new friends, too!