Umbrella Insurance

Purchasing Personal Umbrella Insurance

Umbrella insurance insures for bodily injury and property damage arising out of personal activity of the insured anywhere in the world.

Are you an individual who travels around the globe, owns property in the United States, volunteers within the community, schools system or serves as director on not-for profit organization? An umbrella insurance policy would respond to protect you in all these areas where your personal insurance may not cover you. For example your auto plan coverage from ICBC coverage is limited to North America.

Another area being covered is excess liability, if you are found negligent and required to pay compensatory damages in a law suit, the amount of damages are not limited to your limits of insurance. More and more courts are awarding higher compensatory damage awards; an umbrella policy would protect you assets if the liability exceeds your auto or home owner’s policy. The policy even covers libel, slander and defamation of character areas not covered under basic home owners policies.

A client can purchase a personal umbrella policy anywhere between 2 and 10 million. Some people think they could declare bankruptcy to avoid paying damages, this is simply not true. A successful law suit can use all legal means to collect the debt including liquidating assets, garnishing wages until the debt is fully paid. One last point the policy does not cover exemplary or punitive damages assigned but the court. Those cost associated with a civil wrong when the courts wants to make an example or punish you beyond the current standards for your negligence. If you have any questions about purchasing and Umbrella policy contact your local broker or reply to this entry.

 

Buying a new vehicle?

If you are planning to buy a new vehicle you should be aware of new vehicle protection coverage that covers you against the depreciation your car will experience in its life time as well the inflation you may be faced with when purchasing a new a car.

 

When does this coverage apply? The answer is only when your vehicle is damaged beyond repair, or as they say a “write off”. Your Car depreciates the moment you drive it off the lot some cars as much as 20% in the first year and to 50% in the first three years. It would be a disappointment if your newer model car was written off in an accident and the market value was 10’s of thousands of dollars less than what you paid for it.

 

There are three types of coverages available from ICBC and additional coverage through private insurers. ICBC offers New Vehicle Replacement Plus (NVR+) only brand new vehicles are eligible and the coverage is good for one year. Replacement Cost Coverage (RCC) serves the same purpose but is extended to models 3 years old or newer and can be purchased up to 3 years. Limited Depreciation is available if you don’t qualify for NVR+ or RCC as you must receive a minimum discount of 20% and be a level -4 to qualify for those first two programs.

 

If you are leasing a vehicle or buying a vehicle worth more than $30,000 you should definitely consider purchasing the coverage. Ask your local insurance broker for more details on each program as this is just an introduction, also ask if they have private insurance program. Usually private insurance programs are less expensive but require the entire policy premium in years one two. If you don’t have a local broker leave a comment here and we can answer any of your questions.

 

Principal operator part 2

Principal Operator (PO) Part 2
Yesterday I wrote about my client Calvin, his son and having the correct principal operator declared on the vehicle. The out-come of the story was by declaring his son as the principal operator Calvin had to pay more for the insurance coverage, this is a common sense reality. Neville has less driving experience and therefore is more likely to have an accident than Calvin who has been driving safely for 30 years, therefore a higher insurance premium.
Insurance companies want to know who is driving the vehicle the majority of the time so they know what premium to charge. The majority of the time equates to 51%, so who will drive the vehicle 51% of the time or more. Here’s where it can be tricky Husbands and Wife’s.
I quite often hear the scenario from women of “when I am in the car with my husband he always drives so how do I know who the principal operator is?” Maybe look at the scenario in terms of days. If 5 days a week you drive to work or use your car and then on weekends your husband uses the car. I would say the wife is the principal operator. If you share vehicles throughout the week you really have to think about who drives which car more.
Here’s the catch it would be ill advised to have one spouse declared as the principal operator on both cars, especially if there is significant savings. ICBC will investigate that situation in an accident claim and may limit or deny coverage if the undeclared principal operator was driving the car at the time of accident & was found out to be driving the vehicle more than 50% of the time.
In our next blog post we will write about having your car insured for the correct use.

 

Principal Operator

Principal Operator (PO) Part 1

About 6 months ago a client of mine {Calvin} brought me his son’s truck insurance. During a review of the coverages I realized that Calvin was both the owner and the principal operator (PO) of the vehicle, even though his son drove the truck exclusively. This is an important breach in the coverage that needed to be remedied.
If Calvin’s son had an accident while driving the truck it would effect Calvin and his son going forward. Further if ICBC investigated the crash and discovered that the son was driving the vehicle more than 51% they may even decline coverage. This could have opened both Calvin and his son to a huge liability claim.
By setting the insurance correctly it was going to cost Calvin and his son an extra $600 a year to insure the vehicle properly; that is declaring Neville the son as the principal operator. Last November Neville lost his job and decided to go travelling the truck has been parked since. Just last week Calvin came into the office to change the insurance back to him being the Principal operator. ICBC allows us to declare the PO once a year at renewal, because of this we had to cancel the current insurance a $30 fee and reissue new insurance with Calvin as the PO and $18 new plate fee. Or Calvin could have waited 3 more months to declare a new PO but the cost difference was $100 saving to do the change now.
Yes it cost him $48 to cancel but that was one month of insurance savings for him, ove rthe next two months he would save an additional $100 so it was worth doing. He will use the truck on weekends for dump runs and picking up groceries etc, so we were able to change the use from to and from work to pleasure saving him a few more $$. Lastly the truck is insured correctly still as Calvin is the only operator, so it makes sense that he is the PO.
In Part 2 we will explain why the principal operator is so important to ICBC.

 

Excess Under Insured Motorist Protection

A little known policy from ICBC is called Excess Underinsured Motorist Protection or as we brokers refer to it as UMP. An UMP policy will respond if you are in a vehicle accident and the other driver is at fault, but does not carry enough 3^rd Party Liability Insurance to pay the amount of the settlement. The UMP policy is will pay up to two million dollars, in liability coverage for lost wages, medical expenses and care costs. The entire policy can be purchased at any autoplan agent for $25 a year.

There are several incidents where an ump policy would respond, the obvious ones are if the other driver carries only basic insurance $200,000 or $1 million 3^rd party liability. Or perhaps the other driver was doing something illegal that causes the crash, thus voiding their insurance. UMP also covers you when driving in the United States in some states in the US it is still not a requirement to carry auto insurance. If you were hit by and uninsured motorist the policy would respond.

Now here is the really good part, the policy not only covers you but your passengers to (children) up to a limit of $2 million dollars per person. It covers you when you are on public transit, riding a bike or even just walking down the street. The other day I was following a vehicle who was displaying an expired insurance decal on their plate. Maybe they had forgotten to put their new decal on or maybe they had not renewed their insurance and they were driving without insurance. If it was the latter I was glad to know I had my ump policy to protect me from Under Insured Motorists

 

Locking up

This morning I am going to meet my friend Todd for coffee, Todd is a locksmith. Todd and I are in the same networking group and we exchange referrals from time to time, he is very handy guy to know here’s why.
Todd’s business is really security and in my world of insurance having a strategy to protect one’s valuables aside from insuring them is wise thing to do. Nobody wants to make an insurance claim and then have to waste time dealing with an adjuster and then going out and buying new items. The best line of defence is good security system, and a good starting point is locks.

We always recommend to our clients when they buy a new home or have renovations done to change the locks on the home. Who knows who has been in the home during the time when it was open to the public? This is especially true when it comes to renovations, you hired a contractor who you trust he has hired sub trades to help out they may hire out part time workers to help finish jobs now all of sudden you have complete strangers working in your house, change the locks.

Todd was telling me the other day that locking systems do not need to always be changed sometimes they can be altered and new keys be cut saving both time and money. This is good for homes with tweens, children who may carry carries but may not be responsible enough to take care of them. A lost key may just result in the locks being altered. This system is particularly good if you run a business and one of your key holder’s leave that is also an important time to change the locks and the alarm.

Alarms are whole new story we will review them next week. For now remember, new house or business, renovations, lost or stolen keys? Change the locks for more information on how inexpensive a lock change can be check out http://www.popalock.ca/ ask for my buddy Todd maybe he’ll answer the phone.

 

Professional Liability

Professional Liability
I had a chance to sit down with a woman who runs a graphic design business last week. I wanted to learn a little bit more about her business and she wanted me to have a look over her insurance policy. Of course she had a standard commercial liability policy that would protect her business from people making claims against her for property & bodily damage and or personal Injury. However her real exposure is her professional liability.

Professional Liability or what is more commonly known as errors and omission insurance would cover this Graphic Designer for mistakes that could happen such misrepresentation in some content on a website, negligence in providing services in the contract or issuing incorrect advise. The insurance would pay for legal defense costs and respond to pay for any damages that maybe awarded by a court of law.

She explained to that she was careful in selecting clients and she double checked all the work so she didn’t think she would need this type of coverage. I explained the annual cost of this policy was equal to about 3 to 4 hours of legal work should a claim arise. Then I asked her what is more likely a client tries to launch a claim because they have lost business due to a malfunctioning website or a client slipping and falling in their office. She just looked at me and asked for the professional liability application.