Myths of Renter's Insurance

Only 14% of renters are insured in the United States. Renter’s insurance is often overlooked, due to untrue assumptions. Being insured as a renter is a vital personal risk management tool, and typically only costs approximately $12 a month. It is a safeguard for your future, and can benefit both you and your neighbors! This article debunks insurance myths about apartment/multiple-occupancy style living.

Why do so few people have renter’s insurance?

The typical renter does not know the danger they are in. Most believe that if a fire starts, someone breaks in, or if someone gets hurt on the property, the landlord will be responsible. These are all completely untrue and can have terrible consequences. In fact, we’d argue that renters need insurance even more than the typical homeowner! Let’s discuss this further by discussing a few myths:

‘If a fire burns down my apartment, my landlord will replace my property.’

This could not be further from the truth. In event of a random fire, you are solely responsible to replace your property. The landlord has no contractual obligation to pay for your items, nor is there any law requiring your landlord to. It is solely on you. There are a few other ways a fire loss could go, so let’s illustrate those with a few more fire examples.

‘If my neighbor starts my building on fire and it destroys my property, the neighbor and the landlord will take care of me.’

Once again, it is not required that the landlord replaces or reimburses you for that property. In this case, if your neighbor can be proven negligible in starting the fire, that neighbor is the one responsible for replacing your property, and any damages to the building. The problem with this is the fact that so few renters have insurance! Without insurance, the negligent neighbor will only be able to pay you whatever they have on hand, which is most likely going to be next to nothing, especially since they'll have to pay the landlord and the other neighbors as well.

‘If I start a fire that damages the building and other people’s property, I won’t be held responsible for it.’

No, if you negligibly started that fire, your landlord is going to sue you for the damage you caused to the building. Your neighbors will then sue you for the damages you caused them. If you don’t have insurance, this will be all out of pocket, and will most likely leave you penniless, and will also leave your neighbors’ damages unpaid.

‘If a disaster makes it so I can’t live in my apartment, my landlord will furnish a new place to live.’

If some disaster makes your apartment uninhabitable, you landlord is not required to pay for a new place to live. The landlord isn't even required to help you find a new place! The time you have to spend in a hotel before you can find a new place to live will be up to you to pay for. As for the previous myth, if you were to make another person’s unit uninhabitable, you would be held responsible for any extra costs they faced because they had to find a new place to live. Each of these could be easily covered by a Renter’s policy, but won’t be easily covered out-of-pocket.

‘My roommate has insurance, so I have insurance.’

This isn't necessarily true, unless you are legally married to your roommate, or your roommate is part of your immediate family (even extended-family-roommates might not be covered, so make sure to ask your agent!). Otherwise, your roommate’s policy covers only his/her property and liability. So if you were to start a fire, you would still be held liable for everything, and your roommate’s policy would only cover his/her property that you destroyed, though his/her insurance will try to collect the damages from you.

'What's the big deal--I'll just claim bankruptcy'

This can be a misconception, depending on the situation. If you were to be liable only for financial damages, your bank accounts would be depleted and your belongings would be sold off. Anything after that could possibly be written-off with a bankruptcy. However, the problem is if someone were to be injured or killed. The damages you owe to someone when it involves bodily harm or death cannot be written-off with a bankruptcy. What you owe to the victims will be taken as a lien on you, garnished wages, or both. This same concept applies for those without/with too little auto liability insurance.

The Bottom Line:

Many renters believe that they don’t need insurance, but in truth, renters should have MORE liability insurance than homeowners! This is especially true when you’re part of a very large apartment building—just think of what it could cost you to take care of all the people living in the units adjacent to yours, coupled with the costs to repair the building after you started a fire or flood! On the other hand, even if you don’t cause the disaster, think of how likely it is for someone else around you to flood the place or start a fire! Having all of those neighbors only increases the chances of something going wrong!  

As I mentioned, renter’s insurance is cheap, and will pay you in the event of someone else not having insurance. It is a very worthwhile investment, and can make all the difference when tragedy strikes. That $10 a month can be paid off by skipping fast food for a single meal! Renter’s insurance is a small, but worthwhile safeguard for your future, and can protect both you and your neighbors.

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 Independent Agent—America’s Best Kept Secret

What makes someone an independent insurance agent? What does it matter to individuals and businesses? What are the benefits? Are there any drawbacks?

An Independent Agent, or in our case, an Independent Agency, is an agency that is not bound to a single company. For example, Copple Insurance Agency has contracts with many companies, including but not limited to: the Cincinnati Insurance Companies, CNA, General Casualty, Bituminous, Progressive, Met Life, and so on.

Having a multitude of companies to choose from is a huge benefit for our customers! We are not forced to sell from only one company. This allows us to choose the right company for each situation.  By giving us a few pieces of information, we can give multiple quotes on each line of insurance, and select the policy that has the right coverage at the best value.

Being an Independent Agency, we strive to provide stellar customer service. Our clients know that when they need us, we’ll be there. They also know that when they call in, they will be talking with a real person that cares about them.  We also strive to create a lasting relationship with our clients. In fact, we would rather call them our friends and partners. So, our friends know that they can count on us to be honest, dependable, and caring for them. You don’t have to take our word for it though, click HERE to see what they are saying about us online!

We are a one-stop-shop; we can take care of your Homeowner’s, Automobile, Personal Umbrella, Boats, Aircraft, and Valuable Property insurance. We can also take care of all of your business’s insurance too: Property, General Liability, Commercial Umbrella, Worker’s Compensation, Commercial Auto, Inland Marine, Professional Liability, Bonds, and more! Just think about how convenient it could be having all your insurance with the same agency you know and trust!

As Independent Agents, we take a consultative approach to insurance. We believe insurance is not a commodity, and needs to be respected for the intricate creature it is. That’s why we explain what we're selling, because an informed buyer is the best buyer. We are committed to selling you only what you need, and have years of experience in finding coverage gaps and other potential pitfalls. We also offer risk management through the companies we represent and in-house methods. Everything we do is to create a better experience for our friends and partners.

If you've never heard of an independent agent, that’s because we don’t have multitudes of television, radio, online, billboard, and print advertisements constantly reminding you.The independent agent typically relies heavily on word-of-mouth to find him or her new clients. 

So if you’re not already with an independent agency, consider giving one a chance the next time you’re looking for insurance. You might just be pleasantly surprised what your hometown-agency can offer. If you are already with one, tell a friend—let them know what they've been missing!

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.

How to Make a Winter Emergency Kit

Winter weather is already here for most of us, and with it comes a host of additional risks while driving. With Christmas and New Year's just around the corner, you should consider keeping some extra emergency items in your car for winter emergencies. The following list was compiled to be an ideal emergency kit that can keep you prepared for almost any winter-related problem:

• Rock salt (to melt ice)
• Sand or kitty-litter (for traction)
• Snow shovel
• Ice scrapers
• A blanket
• An extra, warm outfit 
• Battery-powered radio (so you don't have to waste your car's battery/gas for the radio)
• Non-perishable snack foods 
• LED Flashlight (very bright with low-energy consumption)
• Extra batteries
• Water
• Booster/jumper cables
• Tow rope
• Emergency flares
• Matches
• Pocket knife/Swiss Army knife
• First-Aid kit
• Solar-Powered USB charger (it can rest on your car's dash and recharge your phone for emergency calls) 

We recommend finding an old backpack or duffle bag to keep all of these items in. While we hope you don't ever have to use it, we know these things will come in handy if you do! Stay safe out there!

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.

Those Sneaky Sublimits

The property in your home is insured for a set amount of personal property. However, did you know that just because you have X amount of dollars of insurance on that property, other limits apply in the event of a loss? Find out what sublimits are, and how they can affect your settlement come claim time!

Sublimits are in all standard homeowners' policies, and are applied by category.  These sublimits come into play when there is a loss on personal property. There is a sublimit assigned to different categories of items (see below), and they limit coverage of that category to the amount selected for the sublimit. 

The following is a non-exclusive list containing many of the probable coverages that may be subject to a sublimit:

• Money, Bank Notes, Gold, Silver, Platinum

• Securities, Deeds, Passports, Tickets, Stamps

• Watercraft & Equipment

• Musical Instruments

• Trailers (non-watercraft)

• Jewelry, Watches, and Furs

• Firearms & Equipment

• Silverware & Goldware

• Trees, Shrubs, & Other Plants (subject to a % of Coverage A, and a per-item limit)

• Fire Department Service Charge

• Grave Markers

• Land Stabilization

• Ordinance or Law

• Refrigerated Products

• Electronic Media

• Fire Extinguisher Recharge/Replacement

• Increased Day Care Expense

• Computer Records

• Fungi/Wet Rot/Dry Rot/Bacteria Coverage

• Damage to Property of Others

The total sublimit of each category ranges from insurer to insurer. Some insurers will allow you to change the sublimits, some will not. The typical range of the sublimit is from $500-$5000, but there are exceptions, and ways to increase the amount past that. Depending on the insurer, some of the aforementioned coverages might be simply excluded altogether. 

Example Claim-Scenarios Involving Sublimits

Let's say (tragically) your house and all of your belongings burnt down. Let's also say you had a fine watch collection worth $50K. Almost all policies have a sublimit on jewelry/watches, and your policy (for this example) had a sublimit of $5K. You probably have other jewelry and your spouse or children may have watches and jewelry as well. That's an unpaid loss of over $45K.

Another example (and this one is a more intricate one) is the sublimit for your trees, plants, and shrubs. This coverage has a total limit of (typically) 10% of your Coverage A (the total value of your home). So if you have your home insured for $150K, you have a total coverage of $15K. Another sublimit is typically applied as a per-item limit, so for this example, your per-item limit is $500. Now if a fire engulfs your yard, replacing any of your rare plants/shrubs or re-planting your 20+ year old trees can get expensive, very fast. For example, a four-foot tall blue spruce can cost over $600 a piece! So you're looking at only being able to afford to replant saplings, and only up to the $15K total limit.

How Do I Make Sure I'm Properly Covered?

As I mentioned above, some insurers will allow you to increase the amount of the sublimit. Unless you have a large collection, or one or many high-value pieces, simply increasing the sublimit for that category will adequately cover you. If your insurer won't allow you to increase the sublimit to an adequate level, (which is often the case if you have a sizable amount) you can schedule your property. By scheduling your property, you can individually insure your high-valued items to properly cover them.

Another caveat to being properly covered is knowing whether or not your personal property is insured for Replacement Cost or Actual Cash Value. The difference between Replacement Cost and Actual Cash Value valuations can be the difference of hundreds or thousands of dollars. 

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.

Ordinance or Law Coverage--Properly Protecting Your Buildings

There’s a provision that most standard insurers don't cover: Ordinance or Law. Many insurers give the option to insure for Ordinance or Law losses, but most don't come standard. But what is Ordinance or Law coverage for? What happens without it?

Every community has building and zoning ordinances, and these ordinances are constantly being modified and reinvented as new technology and information comes out. Easy examples would be the banning the use of asbestos and the requirement of egress windows being used for basement bedrooms. These and many other ordinances and laws come into play when a certain percentage of your building is destroyed (the exact percentage depends on your current city code, but is typically 50%), or when certain things need to be replaced. The coverage comes into play because the basic insurance policy itself often only covers you to replace to the exact same condition to what was lost, instead of up to the new code standards. Let me show a few examples.

For my first example, let's say you have a $200K home built in 1910, and (for simplicity’s sake) a storm destroys exactly half of your home. Being half destroyed, the city ordinance requires you to rebuild the whole home up to current standards. In this case, the standing part of your home must be demolished and rebuilt, even though it is technically undamaged. With Ordinance or Law coverage, the cost to demolish the standing portion would be covered, along with any increased costs of construction from building up-to-code. Without Ordinance or Law coverage, you would be held responsible for all of the demolishing and extra rebuilding expenses.

The next example pertains more to commercial property owners. Let’s say your building was completely destroyed. The insurance company is going to pay to rebuild, but the problem is that the city has rezoned, or new land use ordinances have been created. These new laws may require you to move your building elsewhere. The extra cost of the new land would not be covered without Ordinance or Law coverage. Also, you may be required to rebuild in a completely different fashion. Due to the Americans With Disabilities Act of 1990, you may be required to rebuild with the building being accessible to those who are physically disabled. That may require elevators, entryway-ramps, widened doors, raised toilet seats, etc, that weren't there previously. These increased costs would not be covered without Ordinance or Law coverage.

Laws and ordinances are being changed all the time. If your home or commercial building is fairly old and hasn't been remodeled or changed much since it was built, you’re at even more risk in the event of a loss. Remember that undamaged parts of your building may have to be remodeled or completely rebuilt to satisfy the new codes. Also, the new materials and structures that are needed can drive up costs as well. Don’t worry if you can’t keep up with all the new laws, just make sure you are properly insured to cover anything in the event of a loss. Please contact your agent to see what it would take to properly cover you! 

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.

Understanding Uninsured & Underinsured Motorist Coverage

This article will explain the significance of these coverages by discussing their functions, using likely scenarios for examples, and providing possible consequences of having too little coverage. It will discuss minimum state limits and how to avoid being an Underinsured Motorist yourself. It will also discuss what to look for when buying these coverages.

What is the Difference Between an Uninsured Motorist (UM) and an Underinsured Motorist (UIM)?

An Uninsured Motorist is just that: someone with no auto insurance. Statistics show that 1 out of every 7 drivers (14% of drivers) in the US does not have any insurance. That’s over 45 million uninsured drivers. Alarming as this is, your Uninsured Motorist coverage will step in and act like the other party’s insurer in the event of a collision with someone uninsured. So if the other party was at fault, your insurer will pay you, up to your Uninsured Motorist coverage limit, as if they were the other party’s insurer.

An Underinsured Motorist is someone driving with insufficient levels of liability/property coverage. The Underinsured Motorist coverage comes into play when the other party is at-fault for the accident, and their insurance policy limit isn't high enough to cover everything they’re liable for. Like the Uninsured Motorist coverage, Underinsured Motorist coverage then steps in to act like the other party's insurer to pay for the damages that the other party can't cover, up to your Underinsured Motorist coverage limit. 

While an Uninsured Motorist is easily defined, determining whether you are an Underinsured Motorist or not is a hard thing to do until you cause an accident. Determining if you have a sufficient amount of coverage is entirely dependent on the severity of the accident you cause. For example, if you cause a simple fender bender, you might only be liable for a few hundred dollars. That's to fix the bumper and for a chiropractic session for the person you hit. However, a serious accident involving multiple people could easily add up to be hundreds of thousands of dollars!

The Problem with Minimum State Limits

The state of Nebraska has a minimum limit of liability every driver must have to be considered an 'insured driver'. That requirement is a split limit of $25,000 of bodily injury per person, $50,000 total bodily injury, and $25,000 property damage liability (often notated as "25,000/50,000/25,000" or "25/50/25"). While those limits are all you need to be a state-approved 'insured driver', think of the risk you're taking with those low limits:

• You hit a Lexus: luxury cars take luxury parts, along with costly import or dealer service. Even a relatively minor accident might not be covered by the $25,000 for property damage.

• You hit a car with three people in it: Let’s say each one of the other car’s occupants receives $20,000 of medical care. That still leaves you with $10,000 out-of-pocket. ($50K of total body injury insured, with 3 people x $20K = $60K, leaving $10K uncovered) Now imagine a more severe accident with a small sedan that has five people stuffed into it!

• You get in a serious wreck with a sports car with only one person in it: You destroy their new Corvette, which leaves you out-of-pocket roughly $25,000 for the property. Their spinal surgery and physical therapy adds up to $150,000. That’s $125,000 of bodily injury that you’re still liable for. 

What Happens if I Do Not Have Enough Liability?

In the minimum state limit examples, the amounts not covered by your insurance would be completely up to you to cover. In most cases, you can expect a court date to determine negligence and how much you owe the other party. The amount you owe will most likely be taken in the form of garnished wages or other means until things are evened out.

But What If They Have Underinsured Motorist coverage?

If they do, their insurance company is going to step in and take care of all of their immediate bills on your behalf, since you were driving without proper coverage (at least, 'improper' for the accident you caused). The other party's insurance company will come back and sue you for everything you rightfully owe (this is called Subrogation), so refer to the previous section. (Note that in the opposite situation where you're not the one at fault, if your insurer pays you through UM or UIM, your insurer will sue the other party to make them pay for what they owe [Subrogate them])

What Should I Look for When Buying UM/UIM Coverage?

To protect yourself from a hit-and-run or not-at-fault accidents where the other driver doesn't have/doesn't have enough insurance, you'll need UM/UIM coverage. Typically, UM/UIM is sold as a single coverage, however, it often only covers your bodily injury. If you do not have Comprehensive and Collision coverage on your car, make sure UM/UIM for property damage is covered, or see if it can be endorsed to the basic UM/UIM coverage.  

How Do I Avoid Being an Underinsured Driver?

Accidents are accidents; they’re statistically going to happen to everyone. You never know if the accident is going to be a simple scuff in the parking lot, or a catastrophic event. Moreover, there is technically no way to know that you will or won't be an Underinsured Driver. However, you can take a few simple precautions that will severely limit your chances of being Underinsured: through higher limits on your auto policy, safe and defensive driving, and an umbrella policy covering excess damages, you can drive knowing you're protected for almost anything.  

What are These Precautions Going to Cost Me?

Defensive driving is free, saving you from accidents and maybe even traffic tickets along the way. Insurance wise, to bump up the liability limits from minimum level (25/50/25) to $300,000 across the board (300/300/300) is typically not very much, often costing and extra $100 or so per year. Likewise, a $1,000,000 Umbrella policy usually costs around $200 per year, and the Umbrella policy will give you additional liability coverage to your auto policy and your Home/Renter's policy! Excess liability is extremely cheap, especially when you consider what could happen without it!

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.

A Debate: Replacement Cost vs Actual Cash Value

These two loss settlement options are given on almost every property-covering policy you’ll see. What’s the difference between Actual Cash Value and Replacement Cost though? How does it apply to your home or commercial building? How does it apply to your personal property? 

What are Actual Cash Value (ACV) and Replacement Cost (RC)?

There is a huge difference between ACV and RC. Starting with Actual Cash Value, it is commonly defined as the ‘fair market value’ of your property. With ACV, a rough estimate of what you will receive after a claim will be what the property could be sold for at auction/online. However,the actual insurance definition for ACV is: "Replacement Cost minus depreciation of the property." To work with the exact definition, we need to know what Replacement Cost is, and how it works.

Replacement Cost is the full cost to replace your property with like-kind and quality, without any deduction for depreciation. Here’s an example. You have a flat screen TV that you bought for $3,000 in 2010 and a fire completely destroys it. If you had it insured for RC, you would receive a brand new model of the exact same flat screen (if one could be found), or the modern equivalent of it, even if it costs more. If it were ACV insured, you would only get the current market value of the TV, which might be less than $1,000 now.

How Does Replacement Cost & Actual Cash Value Apply to My Home/Buildings?

An example of RC would be if your home was insured for replacement cost and suffered a total loss. For this example, (and for simplicity’s sake), let’s assume your house is worth $100K on the market. However, the cost of rebuilding a home, or any structure, is typically more expensive than the market value of the home (after a building is originally built, its market value and the value of the inputs have all changed. These changes in value are caused by inflation, increased costs of labor, increased costs of materials, different types of materials needed, new technology, shifts in housing market, different laws and ordinances governed on the erection of a building, etc.). So if you had a total loss, replacing the $100K home to its former condition might cost $200K. That’s $200K to rebuild your home in the exact same fashion it was before the loss. In this scenario, you would receive a completely new house, built for $200K, even though it was only worth $100K on the market.

Conversely, let’s say we had the same loss on the same house, but this time, it was insured for ACV. In the ACV example, you would only receive $100K (or $200K minus the depreciation). If you wanted your house repaired to what it formerly was, you would have to come up with $100K on your own, or you could have a smaller/less luxurious house built. 

The difference between ACV and RC is substantial come claim time, but is often overlooked because RC costs more. Make sure to discuss the true value of your home with your agent, and have them help you decide what the best option is for your situation.

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.