Landlord Insurance

Landlord Insurance  – Chapter 6
from book “Insure Your Peace of Mind”  

Peace of Mind

If you own or are looking to buy an apartment building, this chapter is for you. While many of the coverages are similar to a homeowners insurance policy, it’s important to know the increased potential hazards that exist when you are dealing with tenants.

Whether it’s a single family house or a multiple 8-unit (or more) building – you need to protect it by having a landlord insurance policy. Decisions need to be made whether you should purchase a replacement cost policy or an actual cash value policy. Certainly there is a price difference between these two, but you should be sure you understand what these valuations mean:
Replacement Cost Option – This is the dollar amount it will take to replace your property. There is no depreciation based on age or condition of the structure.
Actual Cash Value Option – the structure is depreciated.

True story – A tenant tossed a cigarette butt off the the front porch of the building. A short time later a fire ignited that quickly spread throughout the building all the way to the attic. The building was insured for $200,000 Actual Cash Value, but the estimates from the contractor to rebuild was over $300,000. The insurance company paid the policy limit and the landlord was responsible for the balance.
In addition, you also need to decide what “perils” you want to cover. A peril is something that causes loss or destruction. You are buying protection based on the type of peril you choose:

There is a choice between 3 types of coverages:

Basic form causes of loss: very limited insurance that pays for fire, lightning, hail and wind, as well as vandalism.
Broad form causes of loss: this is better coverage that covers up to 15 perils, including weight of ice and snow on a roof and frozen pipes.
Special form causes of loss: This is the best choice, with more comprehensive coverage that includes all unexpected losses (including theft), unless it is specifically excluded.

We urge you to consult the actual policy contract for complete descriptions of these options.

Liability Insurance

Certainly you should understand the importance of carrying high limits of liability insurance. Tenants and others who visit the property will seek recovery if they are injured as a result of a slip on ice, trip on a porch or sidewalk, or fall down a set of stairs.

You should also add your landlord insurance to your umbrella insurance policy. Remember an umbrella is an extra layer of protection ($1 million coverage or more). You want to protect yourself in the event of a lawsuit by having this valuable coverage.

Money Saving Ideas

  1. Understand your policy.  It’s important to note that the price – per thousand of insurance – is often less for a replacement cost policy that it is for an actual cash value policy.
  2. Maintain Property. Keep your property in very good condition. Eliminate potential hazards like loose porch railings. faulty steps, debris in the yard, as well as roof and siding deterioration. The better condition of the property, the better policy you may qualify for and obtain.
  3. Choose a higher deductible. A $1000 or $2500 deductible will cost quite a bit less than a $200 or $500 deductible.
  4. Combine locations. If you own more than one location, it may be wise to put them on one policy.

You should require require your tenants to carry renters insurance. I suggest you put this right in the lease that you execute. Communicate with your tenants that you are not responsible for their personal belongings.

When a renters insurance policy is in place, you may be able to subrogate (collect from them) if it is determined that the tenant is responsible for causing the claim (i.e. negligence with a cigarette butt).

 

For more information please contact my at Peter@WallinInsurance.com

For a FREE Copy of my entire Book: “Insure your Peace of Mind.”  Visit http://www.WallinInsurance.com

 

FIRE is America’s Biggest Disaster

The biggest disaster threat in the United States isn’t floods, hurricanes or tornadoes; it’s fire.

Yes, FIRE

In our community I have personally been at the scene for dozens of house fires. As an insurance agent, I am often the second person that the homeowner calls, after “911.” It’s incredibly sad to stand on the front lawn and witness first-hand the destruction of property. You feel defenseless. Fire moves fast, and often takes hours to extinguish.

This article is filled with statistics on purpose. I really want to show the devastating numbers. They are real.

According to the National Fire Protection Agency:

Home fires

  • Half of home fire deaths result from fires reported between 11 p.m. and 7 a.m. when most people are asleep. Only one in five home fires were reported during these hours.
  • One quarter of home fire deaths were caused by fires that started in the bedroom. Another quarter resulted from fires in the living room, family room or den.
  • 60% of home fire deaths happen from fires in homes with no smoke alarms or no working smoke alarms.
  • Cooking equipment is the leading cause of home fire injuries, followed by heating equipment.
  • Smoking materials are the leading cause of home fire deaths.
  • Roughly one of every 320 households had a reported home fire per year.
  • A fire is reported in the United States every 85 seconds.

Cooking

  • 40% of home fires started in the kitchen.
  • Unattended cooking was a factor in one-third of reported home cooking fires.
  • Failure to clean was a factor contributing to ignition in 17% of reported home fires involving ovens or rotisseries.

Heating

  • The leading factor contributing to heating equipment fires was failure to clean. This usually involved creosote build-up in chimneys.
  • Portable or fixed space heaters, including wood stoves, were involved in one-third (33%) of home heating fires and four out of five (81%) home heating deaths.
  • In most years, heating equipment is the second leading cause of home fires, fire deaths, and fire injuries.

Smoking Materials

  • Most deaths in home smoking-material fires were caused by fires that started in bedrooms (40%) or living rooms, family rooms or dens (35%).
  • Possible alcohol impairment was a factor in one in five (19%) of home smoking fire deaths.

Electrical

  • About half (48%) of home electrical fires involved electrical distribution or lighting equipment. Other leading types of equipment were washer or dryer, fan, portable or stationary space heater, air conditioning equipment water heater and range.

Candles

  • More than one-third of these fires (36%) started in the bedroom;
  • Falling asleep was a factor in 11% of the home candle fires and 37% of the associated deaths.

Smoke Alarms

  • 60% of home fire deaths are caused by fires in homes with no smoke alarms or no working smoke alarms.
  • Working smoke alarms cut the risk of dying in reported home fires in half.
  • In fires considered large enough to activate the smoke alarm, hardwired alarms operated 93% of the time, while battery powered alarms operated only 79% of the time.
  • When smoke alarms fail to operate, it is usually because batteries are missing, disconnected, or dead.

Wallin Insurance teams up with the American Red Cross.

As an insurance agency we wanted to do something to help this community. We chose this project “Home Fire Preparedness Campaign” where we evaluate and install smoke alarms in area homes. We also educate homeowners on having an escape plan in the event of a fire.

If we can make a difference to just one homeowner, we will feel good about our service to the community.

To date the agents and staff at Wallin Insurance have installed more than 50 smoke alarms in 15 homes in Chemung County. We are the only trained and certified volunteers performing this service.

For more information or if you’d like your home to be evaluated contact me, Peter Wallin at 607–734–8799 or Peter@WallinInsurance.com. We normally perform installations on Thursdays.

Get Renters Insurance for about $15 a month — it’s worth it!|

by Insurance Agent Peter Wallin

John lived in side-by-side duplex. A small kitchen fire occurred while he was cooking with hot grease. The smoke and water damage from the fire was so bad that he could not live there. All of his personal belongings — couches, chairs, area rugs, kids toys and clothing — were ruined. John had no insurance. Not only was he forced to evacuate, but he had no money to replace his stuff.

In another incident, kids playing with matches accidentally set a mattress on fire. An entire 8-unit building burned to the ground. Fortunately no one was injured, but all eight tenants had to fend for themselves. Some had insurance. Some did not.

Even if you you don’t own a home, it should be part of your financial plan to secure your property in the event of a fire or theft. Unfortunately, many people don’t think this is a serious issue. Only 43% of renters in the United States actually buy renters insurance (according to National Underwriter Magazine). That’s not good.

There is a growing trend that more and more young couples are not buying a home right away and prefer renting. This allows for faster career moves if there’s a job opening in another city. They won’t have to worry about selling a house; instead they can just move. Others may simply prefer to rent and not have to worry about yard maintenance, snow removal and expensive household improvements.

Renter’s (also called Tenant’s) Insurance protects your personal belongings. The landlord generally carries insurance on the building but is not responsible for your stuff. You are responsible for your stuff! While the chances of a fire starting in an apartment building are about the same as a home, apartment fires have potential to spread fire, heat and smoke throughout the building affecting the safety of all the occupants.

What can go wrong?

  • Fire
  • smoke damage ruins your clothing
  • broken water pipe ruins your furniture
  • personal items stolen from your car
  • you get sued if someone comes in your apartment and trips over an area rug

What’s covered in Renter’s (also called Tenant’s) Insurance? Here’s what you are protecting:

  • your furniture
  • your clothing
  • your televisions, computers and smartphones
  • your jewelry
  • items you may temporarily keep in your car — music, wallets or purses, camping equipment, etc.
  • personal liability and medical payments if someone gets hurt in your apartment and sues you

What does this cost? The annual premium is very inexpensive and well worth it. $15 per month should get you a decent $20,000 policy. You certainly can increase this amount if you desire.

Note to Landlords: It is important for you to have a requirement in your lease that your tenants carry their own renter’s insurance. If an accidental fire starts because of a tenant’s negligence, you may be able to sue them for damages to your building.

Note to Renters: See paragraph above. You could get sued for negligence.

MONEY SAVING TIPS

  • The price of a renter’s insurance policy is based on location, type of building (frame or brick construction) and how much insurance you need. Insurance policies always have a deductible. (A deductible is the amount of money you pay before the insurance takes over.)
  • If you can afford it, choose a policy that carries a $500 deductible. The annual price is less than if you have a $200 deductible.
  • Combine renter’s insurance and auto insurance with the same insurance company and you’ll get a nice discount — somewhere in the 10–15% range! — plus you’ll save money on your auto insurance!
www.WallinInsurance.com

For more information or to request a copy of my book “Insure Your Peace of Mind,” Contact me at Peter@WallinInsurance.com. You can also check out my website at www.WallinInsurance.com

5 Tips to Avoid Hitting a Deer

Each year there are over 1.6 million car accidents that are caused by deer. These incidents occur especially in the autumn months.

Deer accident are the most frequent type of claim we see this time of year (although we see deer accidents all year long!). Most accidents are relatively minor (for the car, that is), ranging in the $2,000–$3000 range to repair. But we have seen car damages as much as $10,000, or the car actually be considered a “total” damage.

Listed below are 5 tips to avoid hitting a deer:

  1. Watch for multiple Deer. They rarely travel alone. If a deer crosses in front of you, chances are there are others nearby. Slow down and keep an eye out for more deer darting across the road.
  2. Be ready. Deer are most active at dusk and dawn: periods when your vision is most compromised. To add to their terrible timing, deer are on the move during mating season (October & November) when you’re more likely to travel after the sun sets. Slow down and stay alert, especially after dark.
  3. Watch for key areas of your trip. Some areas of the road may be surrounded by dense trees and hills. Look for the road signs. The yellow diamonds with the deer on it are placed in high-traffic areas for deer.
  4. Stay the course. If you see a deer, brake firmly and calmly, and stay in your lane. Swerving could make you lose control of your vehicle and turn a bad situation much worse. Not to mention, deer are unpredictable, and you could swerve directly into their changed path. A deer accident is considered a “not-at-fault” accident, whereas if you hit a guardrail or a tree (trying to avoid the deer), it is often looked at as an “at-fault” incident.
  5. Hit your Horn! One long blast of the horn will scare deer out of the road. Do not rely on hood whistles or other devices designed to scare off deer — studies have shown them to be largely ineffective at minimizing accidents.

As fall approaches all of us at Wallin Insurance urge you to drive safely!

Carbon Monoxide Detectors are Required in NY State Homes

Carbon Monoxide Detectors are Required in NY State Homes

by Peter Wallin, Insurance Agent, Elmira NY

Amanda Hansen was a teenager whose life was tragically ended by a carbon monoxide leak from a defective boiler while she was sleeping at a friend’s house in a Buffalo Suburb in January 2009.When I heard about it I was heartbroken. I used to live in this neighborhood when Marilyn and I were first married.

Amanda’s Law, passed in the New York State Legislature, established a new requirement for installation of carbon monoxide detectors in ALL homes.

What is Carbon Dioxide?
It is known as the “silent killer” because it is odorless, tasteless and colorless. It’s also toxic, since the gas can prevent your body from properly transporting oxygen. If you are exposed to carbon monoxide you might feel headaches, confusion, drowsiness, dizziness, burning eyes and loss of consciousness.

Where does it come from?

Carbon monoxide is a natural by-product of many home appliances. If you use charcoal, gasoline, kerosene, wood, propane, natural gas or heating oil to create energy or heat — hot water heaters, grills, furnaces, fireplaces, stoves, room heaters, etc. — then there is potential for carbon monoxide in your home. You should be aware of these dangers and carefully monitor these hazardous areas.

Where should I place carbon monoxide detectors in my home?
* Bedrooms — since we are most vulnerable while we are sleeping
* Kitchen- especially if you use gas appliances
* Basement near the furnace
* Garage near your car
* Laundry room

As a result of Amanda’s Law, New York residents will live in a safer environment, and create a greater awareness of home safety issues that are intensified by seasonal heating issues prevalent in the Northeast.

Key Risks of Teenage Driving, by Peter Wallin

Key risks of teenage driving
by Peter Wallin,  Elmira NY Insurance Agency

According to California DMV Traffic crashes are the leading cause of death for teenagers across the United States. For both men and women, drivers aged 16 to 19 years of age have the highest average annual crash and traffic violation rates of any other age group

Teenage Driver Crash Risk Factors
The traffic accident rates for 16- to 19-year old drivers are higher than those for any other age group. What causes teenage drivers to be such risky drivers? The following is a list of their primary risk factors.

Poor hazard detection
The ability to detect hazards in the driving environment depends upon perceptual and information-gathering skills and involves properly identifying stimuli as potential threats. It takes time for young novice drivers to acquire this ability.

Low risk perception
Risk perception involves subjectively assessing the degree of threat posed by a hazard and one’s ability to deal with the threat. Young novice drivers tend to underestimate the crash risk in hazardous situations and overestimate their ability to avoid the threats they identify.

Risk Taking
Teenagers tend to take more risks while driving partly due to their overconfidence in their driving abilities. Young novice drivers are more likely to engage in risky behaviors like speeding, tailgating, running red lights, violating traffic signs and signals, making illegal turns, passing dangerously, and failure to yield to pedestrians.

Not wearing seat belts
Teenagers tend to wear safety belts less often than older drivers. Why?

Lack of skill
Novice teenage drivers have not yet completely mastered basic vehicle handling skills and safe-driving knowledge they need to drive safely.

Alcohol and drugs
Driving under the influence of alcohol and/or drugs is a common cause of serious crashes, especially fatal ones, involving teenage drivers. Teenagers who drink and drive are at much greater risk of serious crashes than are older drivers with equal concentrations of alcohol in their blood.

Carrying passengers
For teenagers, the risk of being in a crash increases when they transport passengers-the fatality risk of drivers aged 16-17 years is 3.6 times higher when they are driving with passengers than when they are driving alone, and the relative risk of a fatal crash increases as the number of passengers increases. Passengers who are age peers may distract the teen drivers and encourage them to take more risks, especially for young males riding with young male drivers.

Night driving
The per mile crash rate for teenaged drivers is 3 times higher after 9:00 pm during the day. This is because the task of driving at night is more difficult; they have less experience driving at night than during the day; they are more sleep deprived, and/or because teenage recreational driving, which often involves alcohol, is more likely to occur at night.

Peter Wallin
Elmira NY Insurance Agent
1364 College Ave
Elmira, NY 14901
877-310-7276
www.WallinInsurance.com

Auto Insurance Conversation

I recently held a session called “Coffee with Pete.”  Several of my current clients and even a few “tire-kickers” attended the event held at my office in Elmira, NY.
We had a very informational and even enlightening conversation.  While certainly there is always a discussion about price and money-saving ideas, our focus was on coverage.  We went line by line and discussed all the important definitions of the auto insurance policy (using a NY policy).

Outlined below is a description of all the definitions of the standard policy:

 

Bodily Injury Liability Coverage – required.  This coverage protects you in the event of a harmful accident where you (or anyone driving your car with your permission) are at fault and a claim is made against you. Your insurance company will pay for  injuries.

This coverage is broken into two numbers:  Per Person and Per Accident.  So, if you purchase $100,000/$300,000 that means:

  • up to $100,000 will be paid for each person injured in the accident.
  • up to $300,000 will be paid for the total accident, regardless of how many people are injured.

These figures represent how much your insurance company will pay. The minimum amount of liability you are required to buy is $25,000/$50,000 (per person/per accident).  In my experience, I honestly don’t think this is enough coverage for most drivers. You want to protect yourself against a lawsuit which could ultimately affect your possessions and assets, such as your home or bank account. I highly suggest you consider at least $300,000/$300,000.

True story – A woman driving a van pulled through an intersection and didn’t see the motorcycle crossing in front of her. The motorcyclist suffered severe leg injuries, eventually losing a leg.   A lawsuit followed asking for $300,000. The driver had a $100,000 liability policy. Her insurance carrier properly paid the $100,000.  But that was no where near enough.  She was on her own to pay damages above that $100,000.  She was forced to sell her home and work more hours at her job to pay this claim.

 

Having good coverages will give you a feeling of protection and peace of mind–and will help you at a time when you need it the most.

Property Damage Liability required. This is insurance that pays when you have an at-fault accident where you damage someone else’s vehicle or property.

These accidents happen every day, and thankfully most are minor. But even minor accidents can be expensive.  It’s good to know your insurance will provide support, where a claims adjustor will contact the other party and arrange for payment for damages.
The minimum coverage is $10,000 but I’d suggest you consider at least $100,000 coverage here.  In my experience I’ve seen repair costs exceed $60,000 (the cost if you happen to hit a Lexus!).  Cars are pricey these days and tend to crumble easily, unlike those big heavy cars our grandparents drove back in the day.  I’ve also seen chain-car collisions where several vehicles are involved. If it’s your fault you may be responsible to pay for repair to all of them.  It’s better to have good property damage coverage on your policy that will pay the claim in full.

Personal Injury Protection (also called PIP) – required.  This is your “No-Fault” coverage.  This pays  for injuries regardless of who is at fault in the accident.

In my opinion, this is a great benefit for you.  Regardless of who is at fault, your own insurance will pay for your medical costs and lost wages.  You don’t know how much insurance the driver of the other car carries (if any!), so with PIP you get to use your own insurance to cover your expenses and get the proper care you need.

No-Fault PIP pays medical expenses, lost wages, and other expenses (like an ambulance), for you as a driver or for your passenger, or even a pedestrian injured by your car.

True story – Mary was driving her late model Subaru at an off ramp of the local highway, close to her home.  As she slowed down for a red light, a large 18-wheel tractor trailer behind her did not slow down fast enough and struck her, hard!  Clearly, this was totally the fault of the truck driver.   Mary had severe back and neck injuries and had to be transported by ambulance to the hospital where she stayed for seven days.  Whose insurance company pays for these expenses?  Mary’s did.

Mary’s insurance helped her and paid her medical expenses.  She did not have to worry if she discovered that truck driver had no insurance or if this was a hit-and-run event where the driver may never be caught.  Bottom line: Mary’s insurance paid for Mary’s injuries.

The basic PIP coverage is $50,000.  This is required for all insurance policies.  All types of injuries are covered here – from serious car crashes, to a pedestrian or bicyclist accident or if you close the car door on your thumb.

PIP “No-Fault” auto insurance coverage includes:

  • medical and rehabilitation expenses
  • 80% of lost earnings from work, up to a maximum payment of $2,000
  • a $2,000 death benefit

 

Uninsured / Underinsured Motorist Coverage required. This is protection for you if you, your family or your passengers are involved in an accident where the other driver does not carry insurance or has low limits of insurance.
As I discussed with the PIP coverage, if you have medical costs your PIP or Medical Payments coverage will pay hospital expenses.  But what if these injuries are serious, or even permanent?  This is where your own insurance will step in and provide coverage for you.

Example – a 40-year old father is involved in a car accident.  It was not his fault.  The other driver was a 17-year old newly

licensed driver who had the state minimum limits of $25,000/$50,000.  Injuries were severe.  The 17-year-old’s insurance company immediately pays $25,000 and walks away. The 40-year old hires an attorney and sues, but there really is no money available from the young at-fault driver.  The 40-year old then uses his own insurance policy to collect.  

I believe, for peace of mind, you should carry as much coverage as you can.  You are truly buying insurance for yourself here, knowing that other drivers may only have minimal coverage.  You can feel assured that if you are injured in an accident you will be able to collect necessary money to help you recover and maintain a healthy lifestyle.

The majority of our clients select limits that equals their Bodily Injury Liability Coverage ($300,000/$300,000).  Protect yourself as much as you are protecting others!

Additional Personal Injury Protection (called APIP) – Optional.  Here you can purchase more coverage to protect yourself in the event of an accident where you are injured. Additional PIP also broadens your coverage in two ways:

  • provides increased coverage when an accident occurs out of  state
  • extends wage loss coverage and provides more coverage

The maximum amount you can purchase is $100,000.  Combined with PIP, this would give you a total of $150,000 ($50,000 PIP plus this APIP coverage).
Medical Payments Optional.   Your insurance will pay, regardless of fault for medical and funeral costs for you and your passengers up to the stated limit in your policy. Because you are required to carry Personal Injury Protection, some insurance companies may not offer this optional coverage.
In some cases medical payments will pay for expenses in alcohol related accidents (where PIP coverage may be denied as it may be considered an illegal act.)

Optional Basic Economic Loss (called OBEL) – Optional.   If you miss work because of a car accident, and all of your PIP and APIP is exhausted, you can collect from this part of your insurance. Lost wages, extra expenses to travel to medical appointments and other caretaking costs are provided here.

Spousal LiabilityOptional.  While your automobile liability insurance policy provides coverage for every passenger in your vehicle injured in an accident caused by the driver’s negligence, it will most likely not provide any liability coverage when the injured passenger is your spouse (although your spouse would be eligible for Personal Injury Protection).

This insurance covers your spouse up to the liability insurance limits provided under your policy. You may need to request this additional coverage from your insurance company and pay an additional premium for it unless it is provided at no charge.

Collision – Optional.  If you have a nice vehicle or a bank loan, it’s important to protect your asset. This coverage takes care of accidental damage that happens to your car.

  • If you slide on ice and hit a tree or a guardrail, collision coverage pays to fix your car.
  • If you hit another car and it’s deemed your fault, collision coverage pays to fix your car (your property damage liability pays to fix the other car).

There is a deductible associated with this coverage.  A deductible is the amount of repair costs you pay first before the insurance kicks in. You choose your deductible based on your affordability and comfort level.
For example, if you are involved in an accident and the body shop repair estimate is $5000 and you carry a $500 deductible you would be responsible to pay the $500 and your insurance would pay the $4500 balance.  Obviously, the higher deductible you choose means you will have to pay more for a claim, but the cost savings for the insurance may be beneficial if you don’t submit many claims.

Comprehensive Optional.  This coverage pays for damages to your car “Other than Collision.” Theft, fire, vandalism and glass coverage. Also, if something strikes your car, like a deer or other animal, or a flying object like a stone from the dump truck traveling ahead of you, Comprehensive pays.

For Example:  You’re driving down the road and you are hit by a deer, that’s comprehensive coverage.  If you swerve to avoid the deer and hit a guardrail, that’s collision.

Similar to Collision Coverage, there is a deductible associated with this coverage. There is often a No Deductible option for glass coverage on most personal (not commercial) policies. Check your own policy or ask your agent to be sure.

Rental Car CoverageOptional.  If there’s a situation where your regular car is at a repair shop as a result of an accident, you can obtain a rental car for temporary use.

Towing and Labor Coverage Optional.  If you have a roadside emergency like a flat tire or engine failure, your insurance carrier will pay for a tow truck or any labor that they might charge, such as like jump starting your car battery.


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