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Does a Homeowners Insurance Policy Cover a Home Business?
With the Internet and technology expanding every day, more and more people are building home businesses. However, a homeowners policy will not cover the risks of these businesses in most cases.
The only hope homeowners have of receiving any compensation is if their policies have special endorsements. For example, a homeowner who has a policy to cover a home daycare facility would be covered when filing a claim for that type of business. Also, some policies have very limited coverage for items such as computers or other business property. For these reasons, it is important to have business coverage instead of making the mistake of believing homeowners insurance will suffice.
Since few people set foot on their premises, many home business owners may not think they need coverage. Liability claims typically do not happen on the premises with home businesses, so this creates a problem. For example, a person may misinterpret a message and take action based on an Internet site's information. If that person is injured because of it, he or she could file a claim. Another common problem with Internet businesses is when customers are injured by products the business sells.
Business insurance policies typically include coverage for personal injuries, so a person taking legal action for slander or libel would fall under this category. Both customers and competitors can sue a business. An off-premises injury would be covered. It would also cover property that causes injuries in the line of work. For example, a person running a cleaning business who takes a vacuum to a home where a resident trips over the cord would be covered if that person files an injury claim. It also covers trade shows and typically meets the standards some of those events require.
When it comes to property, anything a homeowner has is usually excluded. Many people spend a considerable amount of money on a computer and accessories to make the business run more efficiently. If anything were to happen to these items and they were not covered, it would be a considerable loss for most new business owners who had to replace them. Business coverage will also protect inventory. For example, a person who runs a home cosmetics business who has to keep a decent stock of items around would be devastated if there were a fire and all of those cosmetics were not covered. Damage of others' property, insurance for valuable papers and several other bonuses are included with business insurance.
Business coverage is designed to protect both property and interests, which is why it is so comprehensive. People who are providing advice or non-tangible services and products will also need a professional liability insurance policy. This will cover claims based on accusations of bad advice. Another common term for this insurance is errors and omissions coverage. If there are employees, business owners are also required to obtain workers' compensation coverage. There may also be other insurance needs based on the size and type of business being run.
Simply hoping that a homeowners policy will cover a person if a claim is filed will result in frustration if the business sustains a loss. Businesses have higher risk rates than homeowners, so always count on claims being denied if they are related to business but filed against a homeowners policy. To learn more about business insurance and what options are best for individual needs, discuss concerns with a HALO insurance agent, 314-351-HALO (4256).
9 Reasons Why You Need Life Insurance
It is common to hear unfortunate stories every day about people dying from heart attacks, car accidents or in other unexpected but sudden ways. This usually makes people think about what would happen if they were the ones in such situations. For people who have family members they would leave behind, the biggest concern is usually what would happen to them. Unless a person has life insurance, survivors could be left in a difficult position. There are nine very good reasons for purchasing life insurance
Nearly every person has at least one or two debts. For those who have considerable amounts of debt, it is important to think about who will pay these debts after death. Surviving family members would otherwise be left to pick up the tab. With the loss of one income, they will already face difficulties, but debts only worsen those problems. Many surviving family members lose their homes or vehicles after the death of a main earner without life insurance.
Many families have traditions and hobbies, but these lifestyle activities may be sacrificed if a main wage earner dies without life insurance. For example, vacations, holiday trips, memberships to sporting clubs and funds for other hobbies will be eliminated or severely limited.
When most people think about life insurance, they forget topics such as college. Losing the only income or even a supporting income can affect how much is saved toward college funds. Life insurance can provide enough to fill those gaps.
Surviving family members will likely have sleepless nights, stress and may even experience depression. Many people have a difficult enough time overcoming their depression that they require counseling or medication, and these needs cost both time and money.
There are several legal issues to consider after death. A person's estate is often subject to probate proceedings, which will leave assets tied up or at risk. Life insurance will provide tax-free money to survivors to handle expenses and live on during this difficult period.
As parents or other family members age, it is important to think about who will care for them. Retirement benefits are disappearing, and nursing home care is not always the best option. People who are planning for life insurance should also plan to provide for their aging parents if applicable.
Child care expenses are an issue for both working and non-working spouses. If a non-working spouse dies, the working spouse will either have to take time away from work or hire someone to take care of the children. If a working spouse dies, his or her income will need to be replaced to provide for the children. Medications, medical care, clothing and everyday supervision are all important expenses to consider.
Everyone wants to be remembered after death. For every person, this is something that will be different. Whether a person wants to leave a sizable donation to a charity or just provide sufficiently for his or her family, life insurance is the best way to do that.
Life insurance is important for both spouses in a family. One may buy life insurance and think the other will take care of surviving children. However, if the other spouse also dies shortly afterward, this could leave children and next of kin with major problems.
Any person who is eligible for life insurance should buy it. It is better to buy it at a younger age or while a person is still in good health. Premiums are small in comparison with the high costs survivors will pay for an untimely death of a main income earner. Since nobody is guaranteed tomorrow, the best time to start shopping is now. To learn more, discuss concerns with a HALO insurance agent, 314-351-HALO (4256).
How Much Umbrella Coverage Do I Need?
Any person who has assets or even earning potential alone should consider buying umbrella coverage. Experts suggest a minimum of $2 million in coverage.
The minimum amount of coverage for umbrella policies is $1 million. Policies are typically offered in larger amounts, but the amounts umbrella policies come in are always in increments of millions. Companies targeting individuals with a high net worth may offer policies that cover as much as $50 million or more. The majority of individuals who purchase umbrella policies pick the standard amount of $1 million, but there is a growing number of people choosing at least $2 million or more. For a policy of just $1 million, the annual premium is between $200 and $250. However, that amount may be higher if the insured has young drivers on the policy, more than two cars or points on a driving record. Each amount more than $1 millions costs slightly less to insure, but the increments become significantly more expensive after the $10 million threshold.
If a person is liable for a serious accident, a higher amount of coverage ensures much better protection and less likely you will have to pay a significant amount yourself. One of the biggest advantages of umbrella coverage is that it is very cheap in comparison with what it would cost to pay for medical bills and property damage out of pocket. Never take shortcuts when assets such as a home, investments and belongings are at stake. Some people mistakenly think they only need to be insured for their net worth, but this is far from true. Judgments and medical bills can easily reach into the millions in a short amount of time. Since damage awards are never capped off at a person's net worth, they may exceed the value of a person's entire assets and still leave the person owing money.
Protecting future wages from garnishment is also an important issue to consider. A person who does not have adequate coverage can easily be jeopardized. If the injured person has a considerable income, that individual is more likely to gain the attention of personal injury attorneys. They are typically successful at helping injured parties receive maximum judgments. While $1 million may seem like adequate coverage, the total amount of a serious injury or death can be in the millions.
In a litigious society, $1 million is a risky choice for an umbrella coverage amount. It is common to see settlements totaling over $5 million. Also, keep in mind that there are often multiple parties injured in an accident. If all of them are injured and need extensive medical care because of permanent injuries, the at-fault party will be in financial trouble. It is important for all people to think about how much they would seek if they were injured or paralyzed in an accident, and use that amount to consider how much umbrella coverage to buy.
However the more you get, the less likely you will have to pay out any out-of-pocket fortune. This type of insurance is essential for everyone, but the only issue at hand is to choose an optimal coverage amount. To learn more, discuss concerns with a HALO insurance agent, 314-351-HALO (4256).
Condo and Townhome Owners are Not Covered by Their Homeowners Association
If you live in a Condo, your Homeowners Association (HOA) almost always just covers the HOA property-not your own property or liability. The HOA property is basically just the building. Anything inside your unit is probably not covered by your HOA. The HOA has liability if the entity was sued; however, this does not cover you personally. In most cases, this is also applicable to townhome owners, but in some cases, the HOA requires each townhome to get their own separate exterior building coverage. Let's review exactly what a separate Condo owner policy covers and why every homeowner in an HOA needs their own coverage.
Interior Building Property
This covers things like your interior walls, floor coverings, cabinets, countertops or anything that your HOA policy does not specifically cover. Your HOA policy might cover some components of your interior space, such as your cabinets. However, if you replace your cabinets and countertops, the higher-cost custom improvement will not be covered. Another example of what is not covered is your window coverings, e.g., if you installed shutters. Basically, any additional features and alterations are almost never covered. Most Condo policies come with a minimal amount of interior building coverage; this is often not enough. This is why it's best to add up what it would cost to replace your interior. It's not unusual for this amount to come out to 40k or more. Your insurance can be increased to meet the coverage amount you need. If you live in a townhome and your HOA does not cover your building, you will need to get a homeowners-type policy. However, in most cases, the HOA will cover the building. If this is the case, then a Condo type policy is all you would need.
This covers all your interior property, such as clothes, furniture and electronics. Basically this is anything that is not attached to the building. There are special limitations for things like Jewelry, Collectables, Computers and Firearms. If you have any special item you are concerned about and want more coverage for, you may be able to increase the coverage sub-limit, or you may be able to purchase a floater. A floater enhances the coverage on these special items and covers it for a greater amount than what your policy would. Also, the good news about personal property is that this will also cover your property off the premises, such as in your car or while you are on vacation. As with anything, special limitations may apply and all items should be discussed in detail with your agent.
If you are displaced from your condo due to a covered loss, then your additional living expenses will be picked up in your policy, subject to the coverage limitations. For a short-term situation, an adjuster may put you up in a hotel. For a longer-term situation, the adjuster may attempt to find another condo as temporary housing. Some policies cover up to a year, and others may cover up to two years. Some policies have maximum coverage limits, while others have wording that is called "actual loss sustained." If you have a cover limitation and the cost for short-term rentals is significantly more, this coverage should be increased beyond the default amount included. If you have a policy that states "Actual Loss Sustained," then there is really no cover limitation; however, you would be placed in a similar-sized condo and any living expense beyond what you normally pay will be covered. This is also the case if you have a coverage amount, but you are no longer covered if you reach the coverage limit.
It's a misconception that as a unit owner, you may be covered under your HOA's liability policy. This is only the case if the HOA is faced with a covered lawsuit. If you are personally name in a lawsuit, the HOA policy will not cover you or provide any legal defense. For example, let's say a fire started on your property that spreads to your neighbors' property. In that case, you may be responsible for covering their personal belongings and repairs. This is just one example. Even if there is an injury in the common area, they can still name you. The advantage of a having liability is that it covers legal defense, even if you are ultimately found not to be liable. Those who have a net worth they want to protect should get an umbrella policy.
This is an extremely important coverage for those who live in an HOA. This would cover an HOA assessment due to an insurance shortfall. The HOA may not have enough coverage to cover a claim; if they levy a special insurance assessment, your policy will cover it up to the amount stated. In some cases, you may have to ask for this coverage, as it may not be automatically built into the policy. Even if it is, typically this is a minimal amount. This coverage can and should be increased to the maximum amount of coverage that they will allow-often the maximum amount is 50k.
A Condo policy is a package that includes most or all of these coverages. However, the minimum amounts are bare bones, and that is why it's important to both add and increase coverage. If an incident occurs that affects your unit, in most cases the HOA policy will not cover you. Then you will be forced to pay out of pocket to cover a claim; in some cases it can be over 10k or even 100k. The cost of these policies in most cases is a fraction of what a homeowner's policy costs, and it covers so much-from property to liability to HOA insurance assessments. To learn more, discuss concerns with a HALO insurance agent, 314-351-HALO (4256).