Sackrison Insurance Agency

If you have ever accepted money for people to stay in your home, the answer is yes, keep reading.

Sally and Bob (our fictional family) owned a second home. It was small and tucked away in the most beautiful hidden and perfect place. It was their little vacation getaway.

It also became a wonderful vacation getaway for others.

First, it started with just a few friends, and a “leave more beer in the fridge than when you arrived” kind of arrangement.

They didn’t charge their friends to stay. And they had a traditional homeowners insurance policy to cover the property.

But one day, they decided to advertise on several of those well-known short-term rental websites.

They thought that this could be a simple way to make a few dollars to help with the maintenance and upkeep of their vacation home. It seemed simple. It was. And it worked.

It worked well, until one day, it didn’t.

A paying tenant slipped and fell and got hurt.

An insurance claim was filed and it was rejected.

Like most homeowners policies, the insurance company considered this “business use” of the property, and it did not cover the claim. They also canceled coverage.

What should Sally and Bob have done differently? What should they have known?

Homeowners, landlords policies may leave you with no coverage

A homeowners policy may, in some rare cases, provide coverage if you rent to only a very occasional visitor.

However, each insurance company has different guidelines to define “occasional” renter. Often, these guidelines can be subjective. Often, you have no coverage at all. Not even for the one-off situation.

Homeowners policies were never designed to cover business activities, including rentals. You must check with your insurance agent before renting out your home.

I’ve also seen that people will purchase a “landlords policy” to cover their second home that is frequently rented out.

But this too is not the correct solution in most cases. Landlords policies are typically written for permanent rental scenarios, not short-term stays.

If you charge for home sharing, you are running a business

Pew Research says that 11 percent of Americans have used a home-sharing network at least once. That number is growing, and you may be tempted to cash in on this.

Please remember that the minute you advertise your home on Airbnb or a similar service, you are now running a business. If you have a paying guest in your home, your homeowners policy may not cover the following risks:

•  Your guest slips on the stairs and injures themselves. You may have to pay the entire claim out of pocket.
  
• Your guest goes to sleep with a candle burning. The room catches fire, and there is significant damage to your home. Imagine having to repair all the damage out of pocket.
  
• Your guest commits a criminal act. It can happen. They ransack your home while you are away. The theft of your personal belongings may not be covered.

These are just a few scenarios that can quickly go from hypothetical to real.

My advice:

If you accept money, even one time, for someone to stay in your home... call your insurance agent today. Right now. Explain the specifics of your rental, and make sure you get the proper coverage.

There are excellent and affordable solutions to home-sharing insurance needs.

If you don’t have a local agent, send me an email or call me to discuss your specific situation. You can have the peace of mind you need today.

Let’s talk about the insurance responsibilities that go along with these summer-fun things.

Attractive nuisance

Attractive nuisance may sound insulting, but it’s an important term to understand. It’s a legal doctrine that applies when you have something on your property that could attract children, and that thing is potentially dangerous.

Here’s an example: You have a rope swing in the backyard for your grandchildren to use. It can be seen by the neighbor kids.

Kids, being kids, just can’t help themselves, and they periodically sneak over to swing on it. It practically says, “hey kids, come swing on me!”

Because it attracts them, and they can get hurt by swinging on it, under the law it’s considered an attractive nuisance. And you can be held liable for their injuries, even if they trespassed to play on it.

Pools, tree houses, and trampolines are also considered attractive nuisances.

Pools

The first rule of swimming pools is to make sure you tell your insurance agent that you have one. You should preferably tell them before you get one. This applies to above-ground pools as well.

Second, you need to make the pool is as safe as possible. According to the Centers for Disease Control and Prevention, more than 3,000 people a year drown in pools in the United States.

Many more are injured. There are safety steps your insurance company expects you to take, which may include:

• Having proper safety equipment
  
• Having a pool cover
  
• Posting a sign
  
• Having a fence around the pool

Every insurance company will want to inspect the pool as well. They may have additional requirements before committing to covering the risk. Failure to be upfront with the insurer could nullify your policy.

Tree houses

We all remember how fun it was growing up and playing in someone’s tree house. It may have been just a sheet of plywood a few feet off the ground in a small tree, or something more elaborate.

But we also remember our parents yelling out... “Be careful up there!”

Tree houses are an additional risk, and something that should be discussed with your insurance agent. Do it before someone falls out of it.

Trampolines

It shouldn’t come as a surprise that trampolines can be an insurance problem. But it is a surprise for many homeowners... and often they find that out when a claim is denied, or a policy cancelled.

Never get a trampoline without first talking to your insurance agent.

Trampolines send over 100,000 people a year to the emergency room, and over 4,000 per year are hospitalized or killed by them, according to a famous study in 2006 by the Consumer Product Safety Review.

Many insurance companies (not all of them) will refuse coverage to you if you have a trampoline.

My advice:

First, if you have one of these attractive nuisances, please call your agent to discuss the unique risks, and solutions that may be offered.

Second, it’s possible that you will need higher liability coverage if you have one of these summer-fun experiences in your yard. You may be surprised at how affordable it is to increase your liability coverage.

Call your agent now. If you don’t have a local insurance agent, feel free to contact me.

Do you own or manage a restaurant? If so, I have three tips especially for you.

1. Think about your unique risks

Your place of business is a magical place. It’s special and amazing among all businesses.

There’s nothing quite like a well-run restaurant. People walk in the door hungry and thirsty. They leave with full stomachs and happy hearts. And you made that happen!

You make someone’s day, and you do it over and over every day. But making magic comes with special risks that are unique to your industry.

Part of the “job of insurance” is to help you assess the daily risks you face as you make magic in your restaurant. Sitting down and thinking about all the things that could go wrong doesn’t sound very fun, so many restaurant owners don’t do it. Maybe you haven’t done it in a long time, either.

Let me mention a few unique risks that you face every day:

Food spoilage:

It takes only a blown fuse in the middle of the night, or a lengthy power outage, to ruin thousands of dollars of food. Do you have enough insurance coverage if this were to happen to you?

Inebriated customers:

If you serve alcohol, you know that some customers have more to drink than grandma would approve of. You can be held responsible under California law, in certain situations, for damage an intoxicated person does. Do you have enough coverage for this?

Slips and falls:

According to the National Restaurant Association, more than 1 million customers slip and get hurt in restaurants each year. And more than 2 million employees have slip-and-fall injuries. Restaurants are slippery places with claims waiting to happen. Are you ready for that?

2. Learn about your unique solutions

Restaurants in the Napa Valley are known the world over as unique and special places. So, they deserve unique insurance solutions.

Beyond the basics of restaurant liability insurance, and beyond covering your building and property adequately, there are other coverages that you may need to consider. Here are just a few coverages that are sometimes overlooked:

• Flood
  
• Equipment breakdown
  
• Food spoilage
  
• Off-premises catering
  
• Liquor liability
  
• Employee theft
  
• Data breach
  
• Loss of business income

In addition to these oft-forgotten coverages, there is umbrella coverage. When you hear the words ‘Umbrella Coverage’, hopefully you don’t picture insuring your customers’ umbrellas.

Umbrella insurance is a way to add higher liability limits on top of all of your other coverage. It’s always much less expensive than people think, and it’s worth every dollar. Lawsuits happen to restaurants every day, and they often are for staggering amounts of money.

An umbrella policy can make sure you have enough to settle almost any claim.

3. Work with a specialist

Anyone can sell you a restaurant insurance policy. But not every agent has years of experience working with restaurant owners. The needs and solutions can be complex.

If at all possible, work with an agent who either has those years of experience or can partner with another agent who does. I’ve spent years specializing in restaurants. Feel free to call me if you have any questions.

You’re pulling the RV out of the driveway for the first time in months. Are you covered properly?

As you drive down the road to your first stop on the inaugural trip, you drive under an overpass that’s maybe four inches too short (or your RV is four inches too tall, as your spouse points out). You’re not sure... oh, sure... you’re sure... so you go for it.

You hear the TV antenna screech as it rips from the top of your RV.

The sound literally hurts.

You pull over, and realize the antenna is a goner. You ask yourself: “Will my insurance cover this?”

Well, will it?

Answers about coverage aren’t always easy.

To get the right answers, you need to ask the right questions. Let’s start with what type of RV you have.

There are several classifications of RV: Class B RVs are basically camper homes and will need different coverage than a Class A Recreational Vehicle, which is more like a house on wheels. A Class C is in between these. Think mini-motorhome.

So, the question is, are you towing a pop-up camper, driving a camper home, or living in a house on wheels?

Your insurance agent understands that the type of coverage must be matched to the type of RV. Another important question is, are you a full-time RV person, often called a full-timer or a part-time camper?

Another way to ask it is, do you live full time in your RV for much of the year? Or do you take an occasional long weekend to explore nearby campgrounds?

The type of RV you own, and the type of RVer you are will affect the type of coverage you need.

The R

The R in RV stands for recreational. As you travel, and stay at various campgrounds and RV parks, you face unique risks.

You have awnings, antennas, and satellite dishes to worry about. You also face increased risks of losing personal valuables like rings and laptops. These risks must be explored.

Finally, there may be unique liability exposures by living on the road. If you are living long-term on the road, even for part of the year, you need to make sure that there are not gaps between your homeowners liability and your auto liability.

Sometimes, what you don’t know can indeed hurt you.

The V

V in RV stands for vehicle, and traditional car insurance often covers a lot of RV insurance needs.

Comprehensive and Collision, of course, are covered; if you can drive it, auto insurance can cover it.

But what about full replacement value? How about pull-behind campers? What about fifth-wheels? How are they covered under auto insurance? Or are they?

These are questions unique to your RV, and areas that traditional auto insurance may need some additional help covering. These questions need to be explored with your insurance agent.

My advice

This particular article has been intentionally vague on what’s covered versus what’s not covered.

Why? Because each RV, and each over the road excursion, requires individually-crafted coverage solutions.

Don’t hit the road in your RV without first talking to your local insurance agent. As always, if you don’t have a local agent, feel free to contact me with any questions.

This week, I’ll talk about why permanent life insurance is a great solution for many people.

What is permanent life insurance?

A permanent life insurance plan is just that... permanent.

It’s not the policy you date for a while; it’s the policy that you marry.

It will provide a death benefit when you are 35 years old, and also guarantee that you still have that same death benefit at age 85.

How does it do this? Simple. It’s composed of two parts that work together:

First, it has a death benefit that has an increasing internal cost to it as you get older.

Second, it has an internal cash-value accumulation that grows each year.

That increasing cash value grows internally and automatically pays for the rising cost of your insurance as you get older. It offsets the cost of the death benefit, and it grows additional cash value as well.

So... premiums stay level, and you build cash value too!

What are some of the advantages of permanent life insurance?

Let me talk about just three of my favorite things that permanent life insurance can do for you.

There are more, but my editor won’t let me write 12,000 words (lol), so here we go:

1. You have a lifelong dependent child or grandchild.

How will they be cared for after you are gone? If you have a special-needs dependent, their financial needs are permanent.

So, your life insurance should be too. Term insurance is simply inadequate for this lifetime need.

You can create a special-needs life insurance trust that would be funded by your permanent life plan.

You’ll need to bring in a team to do this right; you’ll want your life insurance agent working with your accountant and attorney to make sure you’ve covered all the bases.

2. You own a business, or significant real estate and only one of your children wants to inherit it.

How do you make everything equal and fair?

Simple. You work with your life insurance agent to set up the beneficiaries properly so that the children who are not inheriting the business receive the equivalent of their fair share of the business.

There are many ways that your permanent life insurance plan can accomplish fairness in an inheritance situation. Make sure you explore all of your options with your life insurance agent.

3. You want to leave a financial legacy... no matter what.

A permanent life insurance plan guarantees that even if you spend and enjoy your retirement savings, and even if you live to a ripe old age, you’ll still be able to leave a financial legacy for people or causes that are dear to your heart.

Life insurance can fund college for the grandkids.

It can help family through tough times. It can advance a cause that you’ve devoted your life to. It can do amazing things.

But it can only leave a legacy if it’s in force no matter when you die.

This is why I love permanent life insurance so much. It will be there when you need it most.

And this is why permanent life insurance is here to stay.

How can I know which plan is right for me?

Talk to your trusted insurance agent. Find out if they have experience to walk you through the complex choices you have.

Permanent life insurance is a valuable tool, but it needs to be handled with care. It needs experience to do it right.

If you don’t have an agent to help with life insurance planning, I’d be glad to answer any questions you have. Call or email me.

Today, I’ll talk about why term life insurance can sometimes be the right answer.

What is term insurance?
Term insurance is life insurance, but not for your entire life. It’s only for a limited “term” of time.

Let’s say you have a term life policy for $300,000. That’s the face amount. The “term” is 20 years.

You pay premiums faithfully every month for all those years. If you die on the last day of the 19th year... the last day of the policy... your beneficiary receives the entire face amount of $300,000.

If you die two days later than that... one day after the policy term was over... your beneficiary receives nothing. Zilch. Nada.

You might say, “Wow, Bruce! Why would anyone want a policy like that?”

Here are five reasons why term life insurance could be an important part of your life insurance solution:

1. It funds big dreams.
Actually, this is the first benefit of all life insurance.

You have dreams. It takes time and planning for those dreams to grow into realities. But death can interrupt those dreams and plans.

If you die, term life insurance can provide an instant large check to fund those big dreams.

It can pay for college, replace an income, or save a home or business.

2. It’s really simple.
Term insurance is a simple solution for a “right-now” large risk.

A young family often has big dreams, but a tight budget. Savings is necessary, yes, but protection is even more important right now. A new business may face the same situation... a large need right now, and a limited budget.

Enter term life insurance.

There is no lifetime savings component to term insurance. This will pose a problem later, of course, when the cost of term insurance increases due to age. But sometimes there is an immediate need to cover a large risk today. Term insurance can be a simple and straightforward answer to that need.

3. It’s really affordable.
That bring us to the main reason many people choose term life insurance. It’s extremely affordable.

There’s nothing wrong with choosing term insurance for cost reasons. I’d rather see someone carry the correct amount of term life insurance rather than remain uninsured or under-insured.

Term insurance is a short-term solution to an immediate need. It can also be combined with a permanent life insurance plan that will slowly build a lifetime solution.

4. It’s very flexible.
Here is where term insurance can shine. It’s flexible. You can choose Yearly-Renewable Term (YRT), or a Decreasing-Term policy. You can also choose a Level Term policy that keeps your premium level for a longer length of time.

For instance, if you need a large death benefit while the children are young, you could choose a Level Term policy for 20 or 30 years. It’s affordable, and levels out premiums for a longer period of time.

During that term, you could be building a lifetime-legacy using permanent life insurance at the same time. It’s a common and wise strategy.

5. It’s the “most for the least.”
To sum up term life insurance... it’s the most amount of coverage for the least amount of money up front. And that can be an important part of an overall life insurance strategy.

My advice:
Term life insurance is not a permanent solution to a lifetime need. But it can be an important tool to meet specific and temporary needs, both business and personal.

You should meet every couple of years with your personal agent to review your life insurance strategies. If you don’t have a personal agent, feel free to contact me with any questions you may have.

This week, I tackle the meaning of life. Life insurance, I mean.

Like every great invention, life insurance has a history. I’ll highlight parts of that history I find interesting. Maybe you’ll find it interesting too.

The early Romans, plumbing and burial clubs
The Romans loved to perfect things they borrowed from others. Like plumbing. Many of the basics of modern plumbing date to the Romans’ love for a good hot bath.

The Romans loved life insurance too.

Roman burial clubs date to 100 years before Christ. They borrowed the idea from the early Greeks. If you were a member of the club, and you died, the other members of the club were obligated to care for your family.

It lasted for five centuries. But when Rome fell, so did life insurance. And plumbing.

The Brits and modern life insurance​
Life insurance as we know it today was invented in London, England, in 1706. (There’s a piece of trivia for the next family get-together.)

A group of 2,000 people formed a company called the Amicable Society for a Perpetual Assurance Office. The name didn’t roll off the tongue, but it worked.

They each bought shares with a contribution every year. When someone died, the total amount collected was divided up among the families of those who had passed away that year. The amount the family received was determined by the number of shares they had purchased. It was an amicable solution to poverty caused by death.

Mathematics, actuaries and mortality tables​
It didn’t take long for everyone to realize that they had to charge people of different ages different amounts for their shares. Which was fine, for a while, until James Dodson was refused admission to the Amicable Society because he was too old.

Dodson wouldn’t take that lying down.

So, in 1762, he and his disciple Edward Rowe Mores, founded the Society for Equitable Assurances on Lives and Survivorship. Another catchy name.

Mores coined the term “actuary” to mean the person who used mathematics to create mortality tables. These tables predicted someone’s likelihood of dying at a certain age. Actuarial tables became the basis of all modern life insurance.

America, ministers and Montgomery Ward​
Life insurance soon jumped the pond.

In 1759, the Presbyterians created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers (I love these long names!).

Not to be outdone, the Episcopalians did the same thing for their ministers 10 years later.

The life insurance industry grew, but it had a really rocky and unstable history through the 1800s.

Fortunately, by 1875, it had settled down and started being trusted by the “working man” because of the Widows and Orphans Friendly Society. You know them better by their later name... the Prudential.

In 1911, group life insurance had become all the rage, after the Equitable Life Assurance Society started insuring employees of large companies. One of the largest employers offering group life insurance was Montgomery Ward. For some of us, that name is a blast from the past!

The modern era
By 1930, more than 120 million life insurance policies were in force. You weren’t “with it” if you didn’t have a life policy.

Sadly, after the turn of our new century, we’ve seen the popularity of life insurance shrink. Fewer people carry life insurance now than in decades past.

The need is greater than ever. Families still need protection when a breadwinner passes away. Funding for college is more important than ever.

Talk to your local agent about life insurance soon. If you don’t have an agent, feel free to contact me with any questions.

Thanks for taking this stroll through history with me.​

​If you already have a local insurance agent, and you are happy with him or her, I’d encourage you to continue that relationship.

But you may have recently moved to the area or you’ve been purchasing insurance through anonymous representatives on the other end of toll-free numbers.

If that’s the case, I encourage everyone to have a trusted local agent for many reasons.

If you are looking for an agent, consider “interviewing” them.

After all, in a very real way, they are applying for a job to work for you. Anyone can sell you a policy. But not everyone is a perfect fit.

Here are five steps for interviewing a new agent:

1. Make sure you like the agent.
Personality matters. Not everyone “clicks” with everyone, right?

It’s important that you feel safe discussing your personal financial situation with your agent. If you don’t... if you feel “awkward” with your agent... you won’t feel comfortable giving them the information they need to properly advise you.

2. Make sure they listen and ask good questions.
Almost everyone hears. But not everyone listens well.

Listening well is a skill and can take years to perfect. A good agent can listen for the “between the lines” stuff and ask the right questions to get at real insurance needs. You need a pro at listening.

3. Make sure they work with reputable companies.
Ask the agent if they are an independent agent representing multiple companies, or if they are a captive agent, representing only one company.

Neither is necessarily better than the other. I used to be a captive agent; now I’m an independent agent.

The key is to make sure the companies they represent are sound and trustworthy. Make sure the agent is proud to represent them.

4. Make sure you ask about credentials and associations.
They say, “you are the friends you keep.” Ask the agent who they (professionally) hang out with.

What is their experience? Do their peers recognize them as trustworthy?

What type of continuing education do they attend (it’s a state of California requirement) and why? What insurance topics interest them, and why?

Finally, do they regularly associate with other agents who can serve as a resource for the difficult insurance questions that require peer consultation? A good agent knows they need a team.

5. Make sure you ask the hard questions.
A good agent will be happy to answer questions. A great agent looks forward to the really tough questions.

Let your imagination run wild.

What if your dog gets loose in the car, distracts you and the car runs into your neighbor’s garage?

Who pays? Is it your homeowners? Is it theirs? Is it your auto insurance? Or is the dog liable, and his pet insurance has to cover it? (OK, that last one was a joke.)

The best agents will never get tired of good questions. They won’t get annoyed.

If they don’t have the immediate answer, they’ll follow up with you later after they find out.
​
My advice: Stay with a good agent. Don’t let a little price difference once in a while send you on an annual hunt for the “best price.”

But if you don’t have an agent that meets these five criteria, get one.

​As always, if you have questions, I’m available by phone or email. Thanks for reading my blog.

It’s the age of the Internet. Are local agents obsolete? I don’t think so.

I’m an agent, so of course I’m biased. I’ll admit that up front. But keep reading. Here are five reasons why it’s always better to have a local insurance agent:

1. A local agent works for you, not the insurance company.
By license and law, an agent is required to put your needs first. They may be paid a commission by the company, but their advice always stands independent of the company. And speaking of advice...

2. A local agent is an adviser first, and a salesperson second.
I belong to a professional insurance agents association. I’ve known hundreds of insurance agents over many years in this business.

We share some things in common. One of those things is the belief that our first duty is to provide the best advice possible, even if it means losing a sale.

Local agents don’t look to fill sales quotas. Their first job is to provide the best advice for your situation.

3. A local agent lives in your area and will likely see you after a claim.
If you purchase insurance from a stranger on a toll-free number, and later, you have a claim, will that anonymous person be there to help you through the claim?

More importantly, will they be accountable for the advice they gave?

A local agent knows that they may run into you at the grocery store after you’ve had a claim.

They will want to be able to look you in the eye and know that they recommended the best insurance package for you before you had a claim. Which leads me to my next point...

4. A local agent is an added layer of protection.
How are agents an added layer of protection? In two ways.

First, you get an expert to help you choose the best insurance. They have years of experience, or they have access to “mentor-agents” with years of experience. That’s better than “do-it-yourself” any day.

Second, if you buy a policy through a local agent, they have insurance in case they make a mistake.

It’s rare that an agent makes a serious mistake when selling a policy.

But it can happen. That’s why they carry “errors and omissions” coverage.

If you “do-it-yourself” online, or through an impersonal “800 number” you’ve lost that extra layer of protection.

5. A local agent cares about protecting your money after the claim as much as before the claim.
Many people are enticed by a cheap price. They forget that a cheap policy today can be the most expensive thing that’s ever happened to them if there’s a claim.

Your local agent cares about “what if there’s a claim” more than they do about selling you a cheap policy.

My advice: A local agent lives in the community with your friends and neighbors. They know that bad things happen to good people, and they are ready to stand with them.
​
So, don’t abandon your trusted local agent. If you don’t have a local agent, feel free to call me. Everyone deserves a trusted agent in their corner.

​If Santa was especially generous this year, let’s get the right insurance for those gifts.

​The presents are opened. Hugs and smiles fill the room. And most of your presents don’t need more than a huge “thank you.” Maybe a kiss where appropriate.

​But some of these gifts need just a bit more.

​Understand your personal property coverage.

​Under your typical homeowners, renters, or condominium insurance in Napa, most of your new Christmas presents will be covered under the section in your policy that’s often called Coverage C.

​But there are three things to double-check in your policy after you received an expensive gift.

​First, is the face amount of coverage high enough to cover all of your possessions?

​Is the deductible appropriate? We often assume that everything is OK. Now is a good time to make sure.

​Most insurance is written with Replacement Cost Coverage. But that’s not always the case.

​Schedule extra coverage where necessary.

​Many policies limit coverage on expensive or fragile things. Here are just a few of those:

​

• Jewelry

​

• Furs

​

• Collectibles

​

• Fine art

​There are often low dollar limits of coverage on these items. There can also be limits on how the loss was incurred.

​For instance, if your diamond ring was stolen, there is usually some coverage. But if it was lost (rings do slip off fingers!) there is often no coverage.

​Even if the loss is covered, there can be a disagreement between you and the insurance company about the actual value of certain items.

​The solution is simple.

​

• Scheduled items often have an agreed-upon value ahead of time.

​My advice:

​First, have a relaxing holiday season. Take time to reflect on your blessings, especially family and friends.

​Then, take a few minutes and call your local agent to discuss your coverage. Make sure your new gifts are insured properly.

​If you don’t have a local agent, I’d be happy to answer any questions you have. Send me an email or call me. I’d be happy to answer your questions with no obligation.