Sackrison Insurance Agency

Sometimes, the simplest things get overlooked when we think about insurance. I’ll talk about a couple of them today.

There are two basic auto insurance coverages that almost everyone has, yet few give any thought to.

Larry’s Lousy Day and Low Liability

Larry was always switching insurance policies. He loved the lizard that told him 15 minutes could save him... oh, he forgets the rest of it. He just loves shopping for the cheapest policy.

Price was everything, so Larry always got the cheapest quote, which included the state -mandated minimum liability limits. He assumed that since the state required it, it would be enough.

Wrong. Oh, how very wrong he painfully discovered.

One day, as Larry was driving, he had the top down on his convertible, and the tunes cranked up on the radio. He remembers the song was “California Dreamin.’”

That’s about all he remembers. He must have been dreaming when he rear-ended that car at the green light that hadn’t started moving yet.

It was a frightening crash.

The other driver ended up in the hospital for weeks, and sued for damages, including pain and suffering. The jury was not allowed to hear if there was insurance coverage, but to simply rule on the merits of the case. So, how much was the other driver entitled to?

The sympathetic jury awarded the other driver $500,000. Half a million dollars.

Larry’s state-mandated minimum liability coverage was $30,000. Yes. That’s all the state of California required.

After liquidating his considerable assets, Larry still owed $150,000, which would be paid to the other driver by way of a garnished paycheck for years to come.

Larry lost everything. All for a cheap premium and low liability coverage.

Ursula’s Unusual Uninsured/Underinsured Motorist Coverage

Ursula was always careful. Unlike Larry, she always prepared for the “what-ifs” of life. One evening, she and her friends were driving to dinner.

As they drove through an intersection on a green light, they were struck broadside by a drunk driver.

Everyone was injured. Some badly.

After the paperwork dust settled, Ursula realized that the drunk driver did not have insurance. He was similar to over 25 percent of California drivers... uninsured.

Fortunately, Ursula had reviewed her insurance coverage with her local agent just a few months before and decided to raise her limits on Uninsured Motorist Coverage (UMC) and Underinsured Motorist Coverage (UIM).

These coverages, as her agent explained, covered bodily injury for her and her passengers if the other driver didn’t have coverage (or not enough coverage).

The injuries took weeks to heal, and the costs were high. But her coverage took care of almost all of it. Her passengers, who were also her friends, were glad she had planned ahead.

My advice

Don’t let price be the first consideration when shopping for insurance. Instead, meet with a trusted local agent to help you consider coverage needs.

Then remember: the coverage you’ll wish you had if there is an accident tomorrow, is the coverage you should purchase today.

As always, if you don’t have a local insurance agent, please feel free to contact me for advice.

As we celebrate America and summer, let’s remember to be insurance-smart too.

I want everyone to have a marvelous Fourth of July with friends and family. But remember that three specific risks increase on this particular holiday. So, let’s talk about them, and how you can be prepared.

1. Increased traffic enforcement

First, we all know that beer, wine coolers and other adult beverages are flowing a little more freely on the Fourth of July.

Because of that, law enforcement will be extra diligent to keep us all safe on the road.

So have a designated driver ready after the party or a cab lined up to get you home. A mistake can cost you thousands, including much higher insurance premiums for years to come.

Second, because of the increased enforcement on the roads, you have a much higher chance of hearing those dreaded words... “license, registration, and proof of insurance, please.”

Fortunately, California is one of about a dozen states that allows for digital proof of insurance (like an app on your phone).

But since many of these traffic stops will occur at night, and you’ll be nervous, I’d recommend also having a paper copy of your proof of insurance easily accessible.

2. Increased fireworks risks

California has a “Safe and Sane” fireworks law. However, our local laws in Napa don’t allow for any fireworks.

But that may not stop your friends from buying sparklers in another community and bringing them to your backyard. And it’s hard to tell them to not light ‘em up. But maybe it’s worth the risk to be a party-pooper.

The National Fire Protection Association says that fireworks cause more than 15,000 fires each year.

As much as your insurance agent wants help you if you have a loss due to fire... we’d much rather that you never experience a fire.

Fireworks are fire hazards. So just say ‘no’. It’s the law in Napa, and it’s a safety issue.

3. Increased accidents and injuries

Speaking of fireworks, did you know that “harmless” sparklers are Emergency Room Enemy Number One? Turns out they aren’t so harmless.

Over one-quarter of all fireworks-related ER visits on the Fourth of July are caused by sparklers. That’s more than any other type of fireworks-related injury.

The Fourth of July is a fun time. But it’s also a time of accidents and injuries. As the sergeant used to say on Hill Street Blues: “let’s be careful out there.” None of us want to find out how good our insurance is.

My advice:

In addition to the advice I’ve given above, I’d recommend making a phone call to your local agent to make sure your homeowners insurance has enough liability coverage, including “guest medical” coverage.

As always, if you don’t have a local agent, I’d be happy to answer any questions you have.

It’s almost time to hitch up the boat and head for the lake. Before you do, here are four questions to ask your insurance agent:

1. Am I covered if someone else is using my boat?

That depends. If they are paying you to borrow your boat, your boat policy will almost certainly not cover any losses or liability.

So, don’t rent your boat out without first talking to your agent.

However, many policies cover use of your boat with your permission by friends or family members. But not all of them do.

So, you need to read your policy, especially the exclusions section. You may need to specify by name everyone who may use your boat this season.

One way that may extend coverage to others using your boat could be through an umbrella policy. Talk to your agent about additional coverage that may be provided through an umbrella policy.

2. If I’m in an accident on the way to the lake, who pays for damage to my boat?

This one’s a tricky question. So, let’s look at a few scenarios:

First, you are towing your boat to the lake. You are in a car accident that’s your fault. Your boat and trailer cause damage to another vehicle.

Who pays? Your auto insurance pays, not your boat insurance.

Second, you are towing your boat to the lake. Your trailer detaches from your truck and the unattached boat and trailer hit the car behind you.

Who pays? Your boat insurance pays this time.

Finally, you are towing your empty trailer to a designated parking place after launching your boat. You make a mistake and damage your trailer.

Who pays? Your boat insurance, if you have optional coverage for your trailer.

3. If my boat is wrecked, will I get a new boat to replace it?

Again, that depends.

Many people have an “Actual Cash Value” policy, often called a “Market Value” policy. The reason is that these policies cost less.

But Actual Cash Value policies pay only what the boat was worth at the time of loss.

This means that depreciation takes a huge bite out of the final payment by the insurance company. If your boat is totaled, you likely won’t get enough to purchase a new one to replace it.

However, if you have an Agreed Amount Value policy, you are more likely to get enough money to replace your old boat with a new one at claim time.

4. Are there additional coverages I should consider?

Yes. There are optional coverages available under most boat policies. That’s why talking with your local insurance agent can make a huge difference at claim time.

You may need additional coverage, like an umbrella policy, and not even know it.

Schedule a time right now to meet with an experienced local agent and discuss how you will be using your boat this season.

Your assets will be better protected, and you’ll boating with more peace of mind.

Kids are home from college. So are their cars. What do you need to know?

According to Pew Research Center, a third of 25-29 year-olds live at home with mom and dad, or grandpa and grandma.

So, you aren’t alone.

A lot of kids are also returning home from college, and their length of stay at home is questionable. Maybe they just need a few months to “get it together” and then they’ll be on their way. Maybe they’ll stick around for a while.

Let’s talk about a few of the car insurance implications of adult kids at home.

Graduate Greg

Greg is 25 and has been away at college out of state for the academic year. He’s home now, newly graduated. Greg’s dad removed him as a listed driver last fall, at the recommendation of his local agent. He could do that because Greg was more than 100 miles away at school, full-time, and did not have his own car. Greg’s dad saved a lot of money on his car insurance by dropping Greg from his policy.

Now Greg is home. Maybe to stay a while.

Greg’s dad needs to add Greg back onto his auto policy as a listed driver.

Doing this will, of course, raise the premium, but it’s required by most auto insurers in this situation. If he isn’t added back to the policy, and there’s an accident, the policy could be canceled.

Dormitory Daisy

Daisy is 19 and home for the summer. She is enrolled to go back to college next fall. Mom and dad want to buy her a used car for her sophomore year. It will make her life easier, and she’s earned it.

Daisy’s parents should consider titling the car in their name or co-titling the car with Daisy.

Why?

Because it will be far less expensive to cover Daisy’s car under mom and dad’s policy, and that can usually only be done when mom and dad are owner’s (or co-owners) of the car.

Things to consider

When it comes to adult children and car insurance, there are a few things to remember. Important things.

First, insurance companies care, a lot, about who is living at home with access to your car. They could cancel a policy if they find out after the fact that someone who should have been listed as a potential driver was not.

Second, there is a thing called “insurance interest” that usually applies to car insurance. It means that normally, you cannot insure what you do not own.

Finally, the upside for you to add you adult kid’s car to your policy is saving on premium. But downsides exist too. If they have an accident, your rates will go up. Significantly. Also, the car will need to be at least co-titled to you, and they cannot make decisions on their own about what type of coverage to carry. It will be your car and your policy.

My advice

An adult child living at home creates a unique insurance situation that requires a unique solution. Don’t assume that your insurance is adequate. Always check with your local agent.

As always, if you don’t have a local agent to run this by, please feel free to call or email me.

Business interruption insurance is like the “lost and found” of business insurance. I’ll explain why.

The sad story of Bill and Gary’s Famous Bookstore.

Bill and Gary had a local bookstore that did exceptionally well. Major bookstores had closed right and left. But their customers were loyal and bought enough books to provide for Bill and Gary and five full-time employees, as well as 10 part-time employees.

The bookstore had a lost-and-found. Bill and Gary joked that people were always leaving things behind.

One day, a major fire started in the adjoining building. Smoke and water and fire damage made their store unusable for months. It was devastating.

That’s when Bill and Gary discovered they needed their own lost and found.

Their bookstore lost income immediately. They couldn’t sell smoke-damaged books in a ruined building.

Bill and Gary also lost a place to sell the replacement books that were being shipped to them. Books were no good in boxes. They needed to be on shelves. They needed a temporary location.

Finally, and more painfully, with the lost sales, they had to let their trained employees go. These employees were almost like family.

To hire new employees months later, train them, and create the same environment that made their store so special... well... it seemed impossible.

Bill and Gary’s Famous Bookstore needed cash flow. Without it, they went out of business.

They needed business interruption insurance. They didn’t have it.

What is business interruption insurance?

Think of business interruption insurance as a paycheck for your business when it can’t operate because of a covered loss.

In other words, it’s disability insurance for your business.

Your basic business insurance policy covers two major things: liability and property. But without business interruption insurance, there is no cash flow to keep the doors open.

Here are just a few ways that business interruption insurance can be the “found” to your “lost.”

1. Lost profits.

When you are shut down due to a covered loss, you aren’t making money. Business interruption insurance can keep the profits coming into the till.

2. Cost to relocate.

You may need a new place (like Bill and Gary) to temporarily operate your business. Business interruption insurance can pay the movers to get that done.

3. Rent.

After you move, you’ll need to make new rent payments. Business interruption insurance can write that check until you are back in your normal location.

4. Loan payments.

Your business may be disabled, but your creditors still expect payment.

5. Payroll.

This could be the most important benefit. You have trained and loyal employees. They can’t be expected to wait weeks or months for your business to reopen. Business interruption insurance can make payroll while you get up and running again.

My advice:

Often, business interruption insurance is automatically included in your commercial insurance policy. But not always.

It’s also possible that even with it included, it’s not enough. Most business owners don’t know how much coverage they have.

I recommend getting an annual business insurance checkup with your local agent. And if you don’t have a local insurance agent, call or email me. I’d be happy to answer any questions you may have.

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.