3 Misconceptions That May Threaten Your Business

You know what they say about assumptions – never make them, particularly if you’re a business owner, and particularly when it comes to insurance.

Too many business owners mistakenly believe commercial insurance policies provide blanket coverage for just about everything. Unfortunately, that’s not the case, and there are a few things you definitely shouldn’t assume about commercial insurance coverage.

Here are three of the biggest misconceptions you need to be aware of:

Misconception 1: Damage from floods is covered.

Similar to homeowners insurance policies, commercial property insurance policies do not cover flood damage at all…ever. Coverage has to be purchased through the National Flood Insurance Program (NFIP).

Too many business owners found this out the hard way during Hurricane Katrina; they assumed their destroyed businesses would be covered under commercial property insurance coverage. In fact, they weren’t and aren’t, and the result was that many businesses never re-opened after Katrina.

Misconception 2: Commercial auto insurance covers any vehicle you drive.

Unfortunately, if you’re driving a rented car or one borrowed from an employee and have an accident, your commercial policy would not pay for any damages – not for the car you were driving nor for another person’s property damage or bodily injury expenses. Note that it doesn’t matter why you were driving the vehicle.

Since commercial auto insurance won’t cover losses arising from accidents you’re involved in when driving a vehicle you don’t own, hired vehicles also won’t be covered. If you rent a car to make a long business trip and have an accident, and have not opted for insurance through the rental car company, you may have been driving uninsured.

If you frequently rent cars or other vehicles for business purposes, add an endorsement for hired or non-owned cars.

Misconception 3: You’re covered worldwide.

So you’re off to Europe on business. Whether or not your commercial insurance policy is folded up in your carry-on bag, you aren’t automatically covered for any losses relating to your business that occur while you’re in Europe. Many people believe they’re covered worldwide under commercial insurance, because they know that in most cases, your homeowners insurance follows you worldwide; if your valuables are stolen while you are away from home, your homeowners insurance would cover your losses.

Typically, commercial policies only extend coverage through all of the U.S., U.S. territories and Canada. Have no fear, though; you can usually get a worldwide coverage endorsement added to most commercial insurance policies. It will mean paying a little more in premiums, but you’ll undoubtedly enjoy your business in the City of Lights or the home of Buckingham Palace more, knowing that you’re covered should you incur any losses.

In summary:

It likely won’t be the favorite part of your job, but understanding your commercial insurance policy and its coverage is essential for business owners. Without it, you stand to lose everything, including your business. You know what your business needs, so talk to your insurance agent about your options and find the protection that best suits you.

How to Minimize Your Company’s Insurance Premiums

Commercial property owners know that insurance is worth it, despite its cost. However, there are ways to keep insurance costs low, depending on business type and possible discounts. To manage this in a savvy way, here are a few ways to minimize the potential for losses:

  • Hire and train quality employees: Employee theft is a leading cause of loss for most retailers. Dead bolts and alarms won’t stop it, but screening potential employees thoroughly may help minimize losses. Also, train your employees and ensure they have appropriate safety gear and a healthy, safe work environment.
  • Thoroughly inspect grounds and buildings daily, and identify and correct new hazards immediately. Insurers may deny claims if they believe losses occurred because of unaddressed, ongoing hazards. Always be on the look out for possible hazards such as leaky pipes and unsecured hazardous materials, as well as compromised security measures such as broken locks, and anything that poses a risk of injury to employees or customers.
  • Add security features. Monitored alarm systems with video are preferable, but adding any security measures to reduce or avoid theft usually results in an insurance discount. Install dead bolts at every entrance and on additional buildings or storage. Attach tracking or alarm tags to easily stolen or high-value items, and consider keeping them in locked, break-resistant display cases.

For more loss-prevention ideas and discounts, contact your insurance agent to help you minimize your risks and your insurance premiums.

What You Need to Know About Insuring Your Vacation Home

The process of finding insurance for vacation homes is much more complicated than for city homes. Insurers seldom jump at the chance to insure these “risky” investments. So, why are vacation homes so difficult and expensive to insure?

Many vacation homes are located in areas which are particularly at risk for what is known as, “acts of God,” such as hurricanes, wind, and flood damage.

As well, many vacation homes, which aren’t rented out, are left vacant for long periods of time – meaning they are at greater risk from thieves and vandals. At the same time, vacation homes, which are rented when the owners aren’t using them, also present problems of theft and vandalism, plus liability claims.

So how do you get the protection you need for your vacation home? In this case, it’s even more important to compare insurance options. Vacation homes will cost more to insure than your average similarly constructed inland house because of the risks.

However, like other insurance products, companies have different ways of measuring risk proportionate to premium. Talk with your insurance agent. He or she may be able to suggest options you wouldn’t have thought of and suggest how to reduce risks.

For example, you’ll probably find more affordable rates if you don’t rent the property. Do the math; if the cost of your income from renting out the home exceeds the costs of insurance and upkeep, go for it. Otherwise, keeping it as your private sanctuary may be your best – and cheapest – option.

How to Spring Clean Your Insurance Policies

Warmer weather is finally here, and you’ve probably already started – if not completed – everything on your spring cleaning list. Or so you thought. In actuality, you need to do some “spring cleaning” of your insurance policies. It’s one set of chores that could save you from losing everything you own – something you won’t risk if you fail to power wash your home.

So put a hold on the other kind of spring cleaning: Here are three essential steps to spring cleaning your insurance policies.

Step 1: Read your policy

It may not be exciting reading, but you may be surprised at how much you don’t know. And you also may discover a coverage exclusion that you now need; for example, perhaps you’ve always assumed that homeowners insurance covers flood damage, and you live in a high-risk flood zone. Upon reading your policy, you’ll discover it’s not covered. Be glad you spotted it; being in a high-risk area means you should buy flood insurance from the National Flood Insurance Program (NFIP) immediately.

Step 2: Ask about discounts

This is something you should do annually, because your insurer may have just added a new discount and…good news: You may be eligible for it. Also, if you’ve recently experienced a big life change, such as getting married, having children, or moving to a new city or state, ask about discounts.

Step 3: Understand what each coverage means

While reading your policies, note anything you don’t understand. Ask your agent about these so you’ll be able to identify any holes in your coverage or changes that need to be made. For example, many assume that having full-coverage auto insurance includes towing and labor, rental cars, and medical expenses. However, “full coverage” actually means you carry only comprehensive and collision coverage – which pays for damage to your vehicle – as well as your liability coverage.

Your Health Insurance May Not Cross State Lines

How would you feel if you traveled from one state to another and then discovered that your healthcare insurance plan doesn’t cover you once you’ve crossed state lines? It’s an understandably upsetting discovery, since you then would have to pay for healthcare costs yourself or purchase a new plan, likely with a higher premium.

Transferability

Unfortunately, health insurance transferability across states is still an issue that affects many Americans. According to the U.S. Census Bureau, more than 36 million people moved in 2012, and many of them moved from one state to another. That’s a large number of Americans concerned about this issue.

The majority of U.S. border-crossers are affected by red tape and legislation that can make transferring health insurance from one state to another virtually impossible. Residents of other countries entering the U.S. may have equal difficulty transferring their health insurance plans.

According to a statement by Steven B. Larsen, J.D., Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight with the Centers For Medicare and Medicaid Services, “The Affordable Care Act (ACA) allows health care to be sold across state lines when both states agree and consumer protections are maintained.”

The ACA would allow states to form interstate compacts to sell health insurance across state lines, and private insurers to create multistate plans to offer through state exchanges. However, there is confusion over the issue of each state maintaining its own consumer protections, plus concerns that selling health insurance across state lines would cause premiums to increase.

The best way for policyholders to avoid this confusion and minimize worries? Despite recently created state health insurance exchanges and a barrage of insurers offering health insurance policies online, the wisest and most effective course of action is to work with an agent you know and trust to help you navigate these tricky waters.

How to Reduce Healthcare Expenses…And Get Healthier

Yes, healthcare costs are rising; however, there are ways to reduce these expenses.

From lifestyle changes to becoming more budget conscious, here are suggestions for saving money on health costs.

Hunt for group policies: Group plans aren’t just for employees; many trade groups and associations offer group health insurance plans for members. Even if you’re covered under an employer’s plan, it’s worth looking at some group plans, providing you’re eligible (that is, you’re a member of the sponsoring organization.)

Dig deeper into your pocket: Like most forms of insurance, you want your health insurance to pay your big medical bills; so when you’re able, pay for smaller health insurance costs out of your pocket. The more you elect to pay out of pocket, the lower your premiums.

Lose weight and quit smoking: Studies indicate that obese people spend approximately 36 percent more on premiums than their thinner counterparts. In fact, obese patients spend more on healthcare than people who smoke – who also account for a large portion of healthcare costs. If you can make these lifestyle changes, you’ll not only save money, but also be healthier.

Buy generic medications: Always ask your doctor to prescribe less costly generic versions of your medications wherever possible. In cases where you’re prescribed recently listed medications, without generic substitutes, physicians may suggest alternative drugs with generic versions. You may pay less buying online but “buyer beware;” there have been problems with purchasing medications online. Research your virtual pharmacy before buying.

Switch Up Your Life Policy For L-T-C Insurance

Some time ago, when you were newly married and your children were young, you may have purchased life insurance. And you may still have that insurance today. But do you need it? As we age and our circumstances change, it may be a good idea to consider replacing life insurance with long-term care insurance.

We usually purchase life insurance as a backup plan to support a spouse, child or other dependent should we die early. You might, for example, have purchased life insurance to cover a child’s college education if you weren’t around to pay the bills.

However, when you become an empty nester, and providing your spouse is independent, you may want to consider cancelling your life insurance; the money you’d spend on life insurance premiums can be reallocated to long-term care insurance.

Long-term care insurance protects you from an enormous financial drain: the cost of home-health care and/or a nursing home. Most people over age 65 will need long-term care at some time in their lives, and it’s expensive.

Costs vary by state. In Illinois, according to studies conducted by Genworth, the annual cost of a home health aide is $46,904; for a private one-bedroom unit in an assisted-living facility it’s $48,600, and for a private room in a nursing home, the cost is $70,445.

Despite that price tag, around a third of nursing home residents pay all of their nursing home costs from their own funds, according to AARP.

Even if you plan to stay active and healthy, and keep working longer than your parents did, there’s good reason to take on this expense now: Long-term care insurance will cost you less when you’re younger and in good health than if you wait until you’re older.

While you probably don’t need long-term care insurance now, don’t wait too long to buy it. It may be too late.

Your Health Insurance May Not Cross State Lines

How would you feel if you traveled from one state to another and then discovered that your healthcare insurance plan doesn’t cover you once you’ve crossed state lines? It’s an understandably upsetting discovery, since you then would have to pay for healthcare costs yourself or purchase a new plan, likely with a higher premium.

Transferability

Unfortunately, health insurance transferability across states is still an issue that affects many Americans. According to the U.S. Census Bureau, more than 36 million people moved in 2012, and many of them moved from one state to another. That’s a large number of Americans concerned about this issue.

The majority of U.S. border-crossers are affected by red tape and legislation that can make transferring health insurance from one state to another virtually impossible. Residents of other countries entering the U.S. may have equal difficulty transferring their health insurance plans.

According to a statement by Steven B. Larsen, J.D., Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight with the Centers For Medicare and Medicaid Services, “The Affordable Care Act (ACA) allows health care to be sold across state lines when both states agree and consumer protections are maintained.”

The ACA would allow states to form interstate compacts to sell health insurance across state lines, and private insurers to create multistate plans to offer through state exchanges. However, there is confusion over the issue of each state maintaining its own consumer protections, plus concerns that selling health insurance across state lines would cause premiums to increase.

The best way for policyholders to avoid this confusion and minimize worries? Despite recently created state health insurance exchanges and a barrage of insurers offering health insurance policies online, the wisest and most effective course of action is to work with an agent you know and trust to help you navigate these tricky waters.