Keeping you educated and updated on how homeowners insurance works.
Holiday mishaps: Am I covered by insurance?
Sometimes the holiday season is not always merry and bright. When calamity ensues, it's wise to know if your insurance provides coverage.
One cautionary note: You want to think twice before you phone your agent and put in a claim if your deductible is, for instance, $500 or $1,000 and any damage is likely to be valued at less than that. It wouldn't be worth it to you financially, and there's always the possibility that your insurance company could hike your rates if you do put in a claim.
If gifts are stolen from right underneath your Christmas tree while you are out, you can file a claim with your home insurer. If presents are stolen from your car, your homeowners insurance would cover that, too, though you may be required to show receipts when you file a claim.
A holiday decoration causes dings and dents
If an outdoor holiday ornament breaks loose from your house and rolls down the street crashing into your car causing a dent, your collision car insurance would cover the damage. However, if a holiday decoration gets loose due to wild winds, becomes a flying object, and falls on your car causing damage, that would be a comprehensive claim, says Penny Gusner, consumer analyst for CarInsurance.com.
Be careful looking at holiday lights
What happens if you're driving down the street one evening admiring the houses that are beautifully lit up with holiday decorations and you rear-end the car in front of you? Would this be covered by your auto insurance? You bet, says Pete Moraga, spokesman for The Insurance Information Network of California. "Collision insurance would cover your own vehicle, and comprehensive insurance would cover any damage to your vehicle not caused by an accident," Moraga says.
That darn remote!
One of your kids is playing a video game you gave him for Christmas and the gaming remote accidentally slips from his hand, smashing your television screen. Is this covered by your home insurance policy? The damage would be covered, but you want to consider if the value of the TV exceeds the threshold of the deductible. "Keep in mind that many homeowners keep a deductible of $1,000 and more. Thus, if the TV is worth close to $1,000, it would not be prudent to file a claim. However, if the homeowner's TV is worth a lot more, a claim could be filed and it would be paid out, minus the deductible, if the remote accidentally flies out of someone's hand and breaks it," says Moraga.
Faulty wiring on outside lights
If you hang holiday lights on the outside of your house and a fire starts because you have faulty wiring, you can make a claim on your homeowners insurance, Moraga says.
Say your Christmas tree gets knocked over and all your decorations are damaged. Does homeowners insurance cover this incident? Yes. But, again, you'd want to be sure the value exceeds your deductible before filing a claim.
Homeowners insurance: Bountiful coverage for bad cooking
Thanksgiving Day is typically a chance to carve out some quality time to eat, drink and be merry with family and friends, but if your feast goes foul, knowing what you're liable for and what your home insurance covers will help.
"All hosts should be aware that if someone drives drunk or becomes sick after consuming food at a holiday party, the host could actually be liable," Robert Rusbuldt, CEO of Independent Insurance Agents & Brokers of America (IIABA), said in a written statement.
For protection, the Insurance Information Institute advises taking common-sense steps such as practicing perfect kitchen hygiene, and the IIABA says you should be aware of your state's "social host liability laws."
On the banquet front, keep in mind that the Centers for Disease Control and Prevention say food-borne illnesses are responsible for about 128,000 hospitalizations and 3,000 deaths each year.
If a guest gets food poisoning, a typical homeowners insurance policy would likely cover the cost for a trip to an emergency room. If medical expenses incurred go beyond that, the guest could sue.
Your homeowners insurance policy will generally protect you up to a minimum of $100,000 in liability coverage if anyone decides to take legal action, says Loretta Worters, III spokeswoman. "If your guest gets sick and sues you for damages, your insurer will pay for your legal expenses for a resulting lawsuit, even if the suit is groundless," she says.
Worters adds that you can buy extra coverage -- most agents suggest looking into carrying at least $300,000 to $500,000 of liability protection, depending on the value of your assets. The III also advises another $1 million in umbrella insurance coverage.
Worters explains that an umbrella policy takes effect when you've reached the limit on the underlying liability coverage in a homeowners, condo, renters or auto policy. "It will also cover you for things such as libel and slander," she says, adding that a $1 million umbrella policy can usually be bought for about $150 to $300 a year.
Beyond home insurance -- practical steps to take
A recent IIABA survey of 760 families found that about 75 percent admit serving food prepared by others, outside their home, during the holidays. Here's the IIABA's safety advice on various potential holiday pitfalls:
Take the turkey's temperature: "Make sure that you check food and don't put anything out that you suspect may be undercooked, spoiled or contaminated," says the IIABA. "Use only reputable food purveyors (caterers, delis, the local pizza joint and family or friends). When in doubt, throw it out." Check the bird's temperature before serving -- it has to be cooked to an internal 165 degrees.
Put a cap on cocktails: If you want a party atmosphere, plan activities that don't center on drinking. Also, provide "safe, filling food" to counteract the alcohol and provide non-alcoholic beverages. Also, know who the designated drivers are before time. Stop serving liquor, wine and beer an hour before the party is expected to end. And cut off any guests who are clearly drunk or getting there.
Party elsewhere: To lower your liability, have the holiday dinner at a restaurant or bar that has a liquor license instead of a home or office. And call a cab for anyone who has had too much. Or get them a hotel room or let them sleep it off at your place.
Know the law -- and your policy: Finally, the IIABA suggests learning just what the "social host liability" statutes are in your state to see exactly what you could be sued for. Reviewing your homeowners policy each year is also a good idea, especially if you've increased the value of your home and assets, according to the IIABA.
A cornucopia of Thanksgiving stats compiled by the CDC:
2.6 billion pounds --The total weight of sweet potatoes — another popular Thanksgiving side dish — grown by major sweet potato producing states in 2012. North Carolina (1.2 billion pounds) produced more sweet potatoes than any other state, followed by California, Mississippi and Louisiana.
768 million pounds -- The forecast for U.S. cranberry production in 2012. Wisconsin was estimated to lead all states in the production of cranberries, with 450 million pounds, followed by Massachusetts (estimated at 210 million).New Jersey, Oregon and Washington were also estimated to have substantial production, ranging from 14 to 54 million pounds.
242 million --The number of turkeys forecasted to be raised in the United States in 2013. That is down 5 percent from the number raised during 2012.
45 million -- The forecast for the number of turkeys Minnesota will raise in 2013. The Gopher State was tops in turkey production, followed by North Carolina (35 million), Arkansas (29 million), Indiana (17 million), Missouri (17 million), and Virginia (16 million).
6,500 -- Number of members of the Wampanoag American Indian tribal grouping, as of 2010, roughly half of whom reside in Massachusetts. The Wampanoag, the American Indians in attendance, played a lead role in this historic encounter, and they had been essential to the survival of the colonists during the newcomers' first year. The Wampanoag are a people with a sophisticated society who have occupied the region for thousands of years. They have their own government, their own religious and philosophical beliefs, their own knowledge system, and their own culture. They are also a people for whom giving thanks was a part of daily life.
98.3 percent -- Percentage of households with a television in 2011. No doubt, many guests either before, after, or perhaps even during the feast will settle in front of their TVs to watch some football.
32 -- Number of counties, places and townships in the United States named Plymouth, as in Plymouth Rock, the landing site of the first Pilgrims. The two counties, both named Plymouth, are in Massachusetts (2012 population of 499,759) and Iowa (24,907 in 2012). Plymouth, Minn., is the most populous place, with 72,928 residents in 2012; Plymouth, Mass., had 57,463 that year.
7 -- Number of places and townships in the United States that are named Cranberry or some spelling variation of the acidic red berry (e.g., Cranbury, N.J.), a popular side dish at Thanksgiving. Cranberry Township (Butler County), Pa., was the most populous of these places in 2012, with 28,832 residents. Cranberry township (Venango County), Pa., was next (6,608).
4 -- Number of places in the United States named after the holiday's traditional main course. Turkey Creek, La., was the most populous in 2012, with 440 residents, followed by Turkey, Texas (415), Turkey, N.C. (295) and Turkey Creek, Ariz. (294). There are also two townships in Pennsylvania with "Turkey" in the name: Upper Turkeyfoot and Lower Turkeyfoot.
When lightning strikes
Lightning can be interesting to watch from afar, but it can be costly and dangerous when it strikes close to home. Lightning cost almost $1 billion in insured losses nationwide in 2012, according to figures recently released by the Insurance Information Institute (III).
The III looked at its own homeowners insurance statistics and those provided by State Farm and found there were 151,000 insurer-paid lightning claims last year. While substantial, that's a 19 percent drop from 2011. The III says the average paid claim in 2012 was about $6,400 -- a 25 percent increase from the previous year.
"Taken together, these two factors resulted in $969 million in total paid lightning claims, up 1.7 percent from 2011," according to the III.
On a better note, the 2012 lightning claims number continues a multi-year downward trend.Paid claims have declined an average of about 7.5 percent each year -- that amounts to a 46 percent drop over the eight-year period through 2012, according to the III analysis. What's causing the fall? More homeowners are protecting their property with lightning protection systems.
Despite the decline, the average cost for claims climbed by 142 percent during the eight-year period. The III contrasts that with the consumer price index, which rose by 21.5 percent during this time.
"The average cost per claim continues to rise, in part because of the huge increase in the number and value of consumer electronics in homes," Loretta Worters, spokeswoman for III, said in a statement.
Insurance coverage for lightning damage
The III says that damage caused by a lightning strike (fire is common) is covered by standard homeowners and business insurance policies. Further, some home and business coverage protects you for power surges that can come when lightning touches ground. The III also notes that consumers can protect their cars from lightning damage by buying optional comprehensive coverage.
The institute also suggests installing a lightning protection system, which is "designed to protect a structure and provide a specified path to harness and safely ground the super-charged current of the lightning bolt." These systems, the III further explains, "receive the strike and route it harmlessly into the earth, thus discharging the dangerous electrical event."
If you opt for the safeguard, the III and the Insurance Institute for Business & Home Safety advises that:
- The system is designed and installed based on industry standards and meets National Fire Protection Association, Lightning Protection Institute and UL requirements.
- The protection includes electrical, telephone, cable or satellite TV lines entering the structure.
- All equipment is UL-listed and properly labeled.
Send me the Housefax!
No one wants to have buyer's remorse after purchasing a new house, and with a new home history report service, you may decrease the chances of that happening.
Housefax.com delivers reports, available online for $59, that include records of past building permits, mortgage information, fire, flood, sink hole data and other residential property records, according to a company statement.
"Though we're in the midst of a housing rebound, many homes have been neglected, rented, foreclosed or left vacant, and today's buyers are far more cautious," Eddy Lang, Housefax founder and CEO, said in a statement. "When finalizing a contract on a home, inspection reports often threaten closings too late in the process, and can miss hidden red flags like mold, fire and flood damage, or even meth labs, sink holes, earthquake fault lines and other hazards. It's important to do your own residential diligence before making an offer on any home."
The idea for Housefax came to Lang more than a decade ago when he saw how the late Ed McMahon and his wife were sickened by toxic mold in their Beverly Hills home – which killed their dog. After their multimillion-dollar settlement, insurance companies began excluding water damage and mold from coverage.
Lang said he wanted to create a service for residential property buyers prevent them going through the process of making an offer on a house, getting a loan, and only later finding out that they couldn't get insurance.
Michelle Megna has worked as a reporter and editor for many daily newspapers, magazines and websites covering government, education, technology and lifestyles during her 20 years as a journalist. She joined Insurance.com as managing editor in October 2011.