I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!

I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.

So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”

I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.

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I was recently asked this question by one of our The Juris Agency clients, and thought I would share the answer here for our readers.

There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.

Some people have absolutely no idea that it’s used in the rate at all.

At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.

By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.

When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).

When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.

This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.

So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.

What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.

This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.

If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.

Why do my auto insurance rates keep going up even though my car is getting older?  At The Juris Agency, many of our clients ask this question so I would like to address it from a couple of angles.

First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.

It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.

The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.

A human life is not.

When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.

Bodily injury
Property damage
Un-insured motorist
Under-insured motorist
Medical Payments
Loss of Income
Funeral Expense
Loss of use
Rental Reimbursement

These are all things that you are covered for on your auto policy. How many of them have to do with your car?

None.

How many of them have a price next to them on your policy?

All of them.

Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.

Let me re-phrase that: your car insurance rate isn’t just based on your car.

You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.

Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.

This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.

That’s what insurance is though — sharing in the cost.

The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.

Hope this helps!  If you would like to know more about Car Insurance be sure to visit our page dedicated to it.

Smart Roads

The intersection between Technology and Legislation is one that always piques my interest.  Thankfully Insurance Journal shares this interest and recorded this podcast on the topic.

http://www.insurancejournal.tv/videos/14665/

Smart Roads are the counterpart to autonomous vehicles.  The Insurance Journal Podcast here paints a rosy picture of how roadway technology will allow vehicles to operate in tighter spaces.  But consider the more practical scenario as technological advancements occur.  Individuals will adopt technology at their own pace.  It is not realistic to assume that a roadway will become more narrow and for use only by autonomous vehicles, making old fashioned cars second class citizens who must travel on other roadways.  It reminds me of the joke that the UK was going to begin driving on the right.  Phase 1 was the trucks and phase 2 would be everyone else.

The guest in this podcast, Hilary Rowen from Sedgwick LLP outlines a number of other implementation issues that will need to be ironed out.  From the insurance perspective a lynchpin seems to be how to transfer risk for software updates.  If Windows fails to operate correctly because your updates did not load properly, you may not be able to save a document.  The apparent risk of a failed update on an autonomous car would be much more severe.  It will be interesting to see over the decades to come if our cars begin to have the longevity of our computers and what to do with those classic cars.

Check out the video and we will keep an eye on how this develops.

 

Each year, holiday season fires in the United States claim the lives of more than 500 people, injure 2,200 more, and cause more than $500 million in damage, according to the American Red Cross’s “Holiday Home Fires Fact Sheet.” And the top 3 days for home candle fires are Christmas Eve, Christmas Day, and New Year’s Day. Yet, there are simple lifesaving steps you can take to ensure a safe and happy holiday. By following some of these precautionary tips, you can greatly reduce your chances of becoming a holiday fire casualty.

Christmas trees. When buying a live tree, make sure the needles are green. The needles should not break if the tree is freshly cut. If you bounce the tree on the ground and needles fall off, the tree is too dry and should not be used. When you put the tree up in your home, be sure to keep it away from heat sources. Don’t put it up too early, and don’t leave it up for more than 2 weeks. Always be sure that it has plenty of water. When you take the tree down, do not burn it in the fireplace. Recycle it or have it hauled away by a community pickup service.

Holiday lights. Before using your lights, inspect them for bare spots or frayed wires, and use only lights that a testing lab has approved. Be sure not to overload your circuits; the best way to do this is to avoid stringing together more than three strands of lights. And never leave your holiday lights on when you are away from your home.

Holiday decorations. All holiday decorations should be flame resistant. Be sure to place them away from heat sources. You should not burn wrapping paper in your fireplace. Such a fire may throw off sparks or produce a chemical buildup that could cause an explosion.

Candles. Always place candles in steady holders where they cannot be easily knocked over, and do not go out of the house with candles burning inside. If you do use candles during the holidays, be sure to have a fire extinguisher nearby. And never use candles near a flammable source, such as paper or curtains.

Smoke alarms. December is an excellent time to change the batteries in your smoke alarm, which should be done annually. If your smoke alarm is hardwired into the home’s electrical system, be sure that it is working.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2016
International Risk Management Institute, Inc.

*****

Almost a century ago, the political image of prosperity was a “chicken in every pot and a car in every garage”.  Today some are more likely to have a chicken in their backyard, use their garage for a man cave and ride a bike or take the bus.  For the sake of this article, let’s focus on the auto insurance aspect when the licensed driver borrow someone else’s car for that rare drive.

Does insurance follow the driver or the car?

This is not quite the mystery of the insurance Sphinx but does have a couple of complexities which get trickier with a driver who does not have regular access to a car.  This article from Claim Journal lays out the specifics.  The summary is that the driver is responsible for liability claims and the owner is responsible for physical damage.  Advice for the owner of the car is to chose wisely when someone asks to drive your car.

What insurance do I need if I don’t own a car?

For those who do not own a car but have a valid driver’s license, the policy which should be in force is a non-owner policy.  This policy will provide liability only.  It will eliminate the need to purchase liability insurance if you are renting a car and make you legal if you are driving someone else’s car.

Driverless cars will certainly be a major change.  Whether it they will be good, bad or indifferent is speculation until these cars hit the road.  Here are a couple of thoughts to consider while we inch closer to that day.

Insurance

Naturally, as an insurance agent, my focus begins with this e question: of what What will happen if there is an accident and no one is driving? The expectation is that there will be fewer accidents. , However, it was found in a study by the University of Michigan that these autonomous vehicles (AV) were actually involved in accidents more frequently, but in every case were not at fault. The website, GovTech discusses this report further. While the small sampling size produced encouraging data, there will be cases where an AV collides with a vehicle that has cut it off or when a pedestrian that runs in front of a car causing an unavoidable accident. The question of liability will be raised. Should the owner be held responsible for this or is it a matter of product liability that should fall on the manufacturer? To illustrate this risk further, if the vehicle malfunctions and causes injury or damage, who is liable?

Insurance Journal published an interview with Hilary Rowan from the law firm Sedgwick LLP that has been analyzing the legal implications of California’s BMV regulations. According to Hilary Rowan, California has a much more detailed regimen in place, focusing primarily on safety, is in depth than other states who have adopted legislation for this issue, Self Driving Vehicle Legislation

Seems to me that when it comes to legislation, the best laws are those which are elegantly written or efficient. Preferably, the state houses will step back and allow the Insurance Industry to address the risks.

Parking
One aspect that presents an interesting opportunity is parking. If a car does not need a driver then could we see valet drops as the new norm? For real estate developers, this could present a major shift in how they move people through their buildings. Imagine a Cavs game or an office downtown. Your car drops you off at the door then drives itself to a parking garage. Of course, this raises another question of how a car would collect a ticket and pay? When you are ready to leave, you may hail your car to come to you.

Mass Transit
The notion of driverless cars will certainly change how we evaluate mass transit. This would eliminate the value proposition of being able to relax or do other things while riding the bus. It may also call into question, why the public is subsidizing 80% of the cost to operate the Cleveland Regional Transit Authority.

Sprawl and Commutes
While some may rail about how evil and insidious it is for citizens to move out of the city and into the suburbs, I would suspect that an autonomous car will only make the ex-burbs even more attractive. If your car is going to take on the stress of a commute then the driver could in theory spend that time reading or even working remotely from the passenger seat. Why not clock in at the office when you get into the car and begin being productive on the ride into work and wrap up some calls on the way home?

Living in Lakewood and having been involved in government, I can say that these are not the sort of things that will be welcome change for some. It will be interesting to see how this technology is integrated into our daily lives and how the consequences, both intended and unintended are addressed.

http://www.zdnet.com/article/could-driverless-cars-render-public-transit-obsolete/

Blog 2Insurance policies are contractual and include definitions that must be met in order for a claim to be paid.  Some situations become complex and may require interpretation of the contractual language.  As a Trusted Choice® agent, it is my responsibility to help explain coverages and options.
The risk of loss increases when a home is vacant for a long period of time.  If you’re going away on vacation, there’s no need to write a new insurance policy.  However, if you have purchased a new home before selling the old one, then it’s best to keep an eye on the clock.  A homeowner’s policy is written with the expectation that someone is living there.  If everything has been moved out of the property, then it is considered vacant.  This, however, raises questions about exceptions.  If a property is seasonally used and furnished then it could be considered a secondary dwelling.
It is important to write the correct policy, so if a loss occurs the claim will be accepted.
http://www.mynewmarkets.com/articles/182729/know-insuring-vacant-property

ABlogpartment insurance can be a challenging market.  The space that a landlord or property manager leases out can vary greatly from a single condo or half of a duplex to large-scale apartment complexes.  The Juris Agency can place your policy with one of several insurance carriers.  If you’re managing a well maintained property and have policies and procedures in place to manage your risk, then The Juris Agency would be happy to work with you.

The property must be well maintained and free of code violations.  Electrical updates must include modern wiring (knob and tube or aluminum are ineligible) and should include circuit breakers with at least 100 amp service.  The Juris Agency will also verify that best practices are in place which include: tenant screening (credit check, criminal background check, eviction search and/or skip search) and ensure tenant policies are on file.  Any additional risks such as a pool, a trampoline, or a dog on the premises must be disclosed.  The following pets are unacceptable; Akita, Chow, American Staffordshire Terrier, Pit Bull, Rottweiler, Doberman Pinscher, Wolf Hybrids, Presa Canarios, or a mix of any breed listed above. Any animal that has caused harm or has bitten is also unacceptable. Exotic pets are not permissible and include, but are not limited to: alligators, boa constrictors, venomous snakes, lions, tigers, bears (Oh my!), and wolves.

Additional documentation may also be required to issue the policy – photos, copy of the lease, current financial statements, and loss runs for the prior three (3) years.
Each has their own appetite for the types of business they seek out.  Below are a brief description of each carrier.

 

 

ForeI enjoy playing golf; well, I enjoy the idea of playing golf, particularly in the spring.  It’s a great game that can be played and enjoyed from younger children to seniors.  But this is an insurance blog, so let’s focus on the risk of losing more than a Titleist when that slice kicks in.

So what could possibly go wrong and what is your golf liability?  Generally, the argument could be made that having a house on a golf course or playing a round means that you assume some risk.  There’s also the possibility that the course would bear some responsibility to ensure the course is designed properly.  That’s all well and good and may factor in if you have taken a shot which breaks a window or hits someone.  But what if your shot goes well out of bounds and hits a car on an adjacent street causing an accident?

So what’s the good news? For many golfers, they have personal liability insurance through their homeowners policy (condo or renters as well).  If by some strange turn of events the lawyer of the injured party finds out who drove the golf ball and files a lawsuit against you, then you are not on your own.

Here’s where it could get tricky.  Let’s say that the course you are playing is outside the U.S.; then an umbrella policy with worldwide coverage would be necessary.  What if it’s your child who is away at college and living off campus?  Liability from mom and dad’s homeowners’ policy would not extend to this situation, and the child would need to have a renter’s policy of their own.

Below is a link from a Marquette Sports Law Review in which Robert D. Lang goes into far greater detail than I could ever hope to cover.  The accidents which he writes about should be much easier to prevent than hitting a perfect golf shot.  He references accidents involving golf carts.  As mentioned above, personal liability insurance could come into play in these cases.  The simple risk management strategy here is to drive carefully.  And while the cart girl may be more than happy to serve you the next round, be sure to keep your head clear.

https://senior.com/errant-golf-ball-damage-who-is-liable/

http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1600&context=sportslaw&sei-redir=1&referer=http%3A%2F%2Fwww.bing.com%2Fsearch%3Fq%3Dwhat%2520if%2520I%2520hit%2520someone%2520with%2520a%2520golf%2520cart%26qs%3Dn%26form%3DQBRE%26pq%3Dwhat%2520if%2520i%2520hit%2520someone%2520with%2520a%2520golf%2520cart%26sc%3D0-29%26sp%3D-1%26sk%3D%26cvid%3D83A6FD8DBFD24A869BC8544999FD5F10#search=%22what%20if%20hit%20someone%20golf%20cart%22