Introduction to Sump Pumps

Diagram provided by sump-pumps-online.com

What is a Sump Pump? Where can it be found? Do I need a Sump Pump? How do Sump Pumps relate to insurance?

A Sump Pump gets rid of the water that collects around your basement’s walls. It is needed because water pressure on your basement walls can lead to big problems. The water to be Sump-Pumped is collected by perforated piping that runs around the outside edges of your basement. The water is sent to the Sump Pit, which is a basin for the water to accumulate in. The Sump Pump will be found in the Sump Pit, and will most likely be found in the unfinished part of your basement. When the water level in the Sump Pit reaches a certain point, the Sump Pump will automatically turn on and pump the water through another pipe that will displace the water properly.

In Nebraska, not all homes will have the need for a Sump Pump. Those that do, have one for one or a combination of the following reasons:

• The water table below your home is high enough to reach your basement when it rains
• Your home was built in a valley/in a flood-prone area
• The land is improperly graded away from your house
• Your decks, patios, driveway, etc. is improperly graded away from your house
• Your gutters are not adequate/are malfunctioning

These scenarios allow for water accumulation along the sides of your basement, which will eventually lead to seepage, with a possibility of collapsing the basement wall(s) entirely. Seepage alone creates issues of mold and mildew, and will ruin your insulation and drywall.

If your home is built on top of a hill, has properly graded land, pavement, decks, etc. and has properly functioning gutters, you may have no need for a Sump Pump. However, for those who do have one, most insurance companies offer a Sump Pump coverage endorsement that will protect you if your Sump Pump were to fail. Some of these endorsements include coverage for collapse because of a malfunctioning Sump Pump as well. Note that no Homeowner’s insurance policy comes with Sump Pump coverage as a standard coverage.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

The Ins and Outs of Other Structure Coverage

Your Homeowner's policy has Other Structure coverage automatically included. It covers the various buildings on your property that are detached from the house, but is it enough? How is Other Structures coverage determined? Are there any exceptions to the coverage?

Other Structure coverage, like most insurance terms, is very unimaginative in its name. It covers most Other Structures or buildings on your property, most likely being a detached garage or shed(s).  It is an extension of your main building coverage (Coverage A). The amount of Other Structure coverage you have is almost never calculated as a set amount. Instead, your insurer will typically use 10% of your main dwelling coverage (Coverage A) to find the amount for it (Coverage B). So, if you home is covered at $150,000, you would have an automatic $15,000 of coverage for Other Structures. The amount of Other Structure coverage can typically be increased (for a fee), and the coverage covers all the buildings on your property that are separate from you home, up to the designated amount for Other Structures.

The caveat to Other Structure coverage is in the use of the building. If the main use of the shed/detached garage/etc. is for business purposes, then the Homeowner’s policy will not cover it. A standard Homeowner’s policy will typically cover approximately $1,000 of Business Personal Property you have on the premises of your home, but it will not cover a building that is used primarily for business purposes.

To illustrate this, an easy example would be a contractor: the contractor uses his detached garage exclusively to store his work truck and tools. To have these properly covered, the auto would need to be on a Commercial Auto policy, and the detached garage and tools would need to be insured as business property on a Commercial Property policy. (Note: come claim time, if there was a mix of business and personal items in a separate building from the home, it would take debating by the insurer and adjuster to determine what is and isn’t covered. Please talk to your agent if a situation like this is currently occurring, especially if you are running any type of business out of your home.)

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

Riders & Endorsements: Modifying Your Coverage

Two insurance-jargon staples for Homeowner's insurance are Endorsements and Riders, but what do they mean? What does it mean to have a ‘standard’ or ‘non-Endorsed’ policy? What does an 'Endorsed' policy mean?

The ‘standard’ or ‘non-Endorsed’ Homeowner’s policy is the basic, unchanged Homeowner’s policy. This ‘standard’ policy generally is set by the Insurance Services Office (ISO) who makes template policy language for all types of insurance (Homeowner’s, Auto, Commercial, etc). These template policies are then used by actual insurance companies. Some companies use them verbatim, while other companies add or subtract things to change the ‘base’ coverage. However, there are some things that are never included in the ‘base’ form, such as water damages and earthquakes. These and other perils can be insured by separate policies or policy Riders/Endorsements.

Endorsements and Riders are related insurance terms, as both change your standard policy. The difference is that a Rider typically refers to an added coverage to your policy, while an endorsement can be made to add or subtract coverage, or just to change an address or add/subtract a mortgage holder. Either way, if a policy has been changed from its original form, it will then be referred to as an 'Endorsed' policy, and if your policy is referred to as an ‘Endorsed' policy, that typically means that it has added coverages that the ‘base’ policy doesn’t have. An example could be a policy that has Sump Pump Backup coverage added to it. In this case, the Sump Pump Backup coverage would be an example of a Rider, but the policy would be referred to as an 'Endorsed' policy. 

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

Personal Injury, the Internet, and You

Everyone knows that if you hurt someone or destroy someone’s property, you’ll be responsible for all the damages that occur. But what if you harm someone in a way that only impacts them mentally or financially? Is that something that can be covered by insurance? What does that have to do with the internet?

There is a category of offenses where there are damages, but neither physical damage nor bodily injury has occurred. These types of scenarios are considered to be Personal Injury offenses. This ‘grey-area’ encompasses many different scenarios, most of which are insurable by your Homeowner’s policy. Examples of insurable Personal Injury offenses, from the International Risk Management Institute (IRMI), would be false arrest, slander, libel, and invasion of privacy. In any one of these situations, you could be sued for any damages that resulted.

These offenses are insurable, but most would wonder when you would actually need that protection. As it turns out, our society’s extensive use of Twitter, Facebook, and other social media sites greatly increases our chances of invading privacy and making libelous statements. How simple would it be to give away personal information or unknowingly and incorrectly-discredit a business? While most of these offenses would be made completely accidentally, the damages are real, and it probably wouldn’t matter much to the plaintiff.  

Even more concerning, is the vicarious liability parents have for their minor-aged children. In Nebraska, your child is a minor until nineteen years of age, and as their legal guardian, you are responsible for the things they do, such as the things they say and do online. While you may never slip-up and create a personal injury scenario, you need to make sure your children won’t create one as well. Controlling your child’s actions and behaviors is fairly easy to do with most day-to-day tasks, but watching everything they do online is a lot harder. Keeping strict controls on your child’s internet access can keep you out of the courtroom.

Tips for Safe Child-Internet Use:

• Discuss what acceptable online-behavior is.
• Establish safe and trusted sites that they can visit.
• Monitor their computer's internet history.
• Demand usernames and passwords for all online accounts.
• Be ‘friends’ or ‘followers’ with your children that are on social networks.
• If your child has a ‘smartphone’, internet use can be found on your monthly statements.
• All devices store internet history, even tablets and small gadgets, so they can be monitored as well.
• Turn off the Wi-Fi or change the password at the child’s bedtime.

   Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.

IRMI Tip of the Month: Questions to Consider for Insurance Checkup

One recent insurance survey suggests that over 30 million U.S. households own insurance policies that are seriously out-of-date. To check your coverage, you should ask yourself the following questions. If the answer to one or more of these questions is yes, then you should contact your insurance agent as soon as possible so your insurance policies can be appropriately updated.

The following list is a good starting-point for an insurance self-examination:

●       Has your house undergone major renovations or improvements? If so, your home may be underinsured.

●       Have you changed your job? Most insurers use occupation as part of their rating process.

●       Has your marital status changed? If you have married, for example, you may now qualify for a multi-car discount on your auto insurance.

●       Have you purchased new valuables or collectibles? If so, you may be seriously underinsured for these items. Specialty policies or endorsements can properly cover them.

●       Are you now participating in a carpool? If so, your exposure to injuring passengers has grown and your liability limits may need to be increased.

●       Are you now retired? If so, your auto insurance premium will likely drop since your annual mileage should decrease.

●       Have you added a burglar alarm with central station reporting for your home? If so, you could qualify for a homeowner’s premium discount.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2008, International Risk Management Institute, Inc.

Note from the Author (Nov. 14, 2014): After two years of work, we've entirely redesigned our website! Using SquareSpace, we were able to import this blog and we are continuing our blog there. To find the current version of this article and our new articles, click HERE.