AccidentsMost of us know that each individual state requires that you carry auto liability insurance. In the state of Arizona, you are required to carry at the least 15/30/10. To break it down, what this means is that you have up to $15k (per person) and $30k maximum (per accident) for BI (bodily injury) should you cause injury to someone during an accident for which you are at fault. The $10k is the maximum coverage for PD (property damage) that was caused by you. Although your premiums for this type of coverage are very cheap and may be within your tight budget, there are several things to consider before making a quick, impulsive decision that might end up haunting you for the rest of your life.

The average cost of a vehicle these days is a little over $30k. Sure, you wouldn’t be responsible for the cost of a brand new vehicle if you caused an accident because we all know that the value of a car depreciates immediately after you drive it off of the lot. In fact, the average cost of an accident in which there is ONLY property damage was $9078 in 2011, according the AZ Motor Vehicle Department. You have $10k in coverage, no big deal, it’s just under your limit right? Keep in mind that this is an average figure only! This doesn’t guarantee that any damages caused by you won’t be over $10k. You should also consider that property damage is not just limited to someone else’s vehicle. You can damage a number of things…a lamp post, a yard, or even a house. PD coverage also pays for your legal defense costs if you are sued as a result of these damages and you don’t need to be an expert to guess how much that could run you.

Now it’s time to get serious and address bodily injury. If you have the required state liability limits in the state of Arizona, then you are covered up to $15k (per person) which maxes out at $30k (per accident). We all know that accidents happen and according to the AZ Motor Vehicle Department, the average cost per incident in 2011 in regards to BI was $22,746 and this was just for Non-incapacitating injuries. The average cost per incident for incapacitating injuries jumps to $70,854 and the average cost per incident for accidents that involved fatalities was $1,438,200. I don’t think anyone is in disagreement that 15/30 is definitely not enough BI coverage for anyone.

What can you expect if your insurance coverage comes up short? It’s simple really. If the amount of BI and/or PD exceeds the limits of your coverage, you are at risk of being sued. Depending on the amount in which you are sued for, you can potentially have your wages garnished for the rest of your life. Think for a moment of the victims as well. Not only have you disrupted your own life financially, mentally, and possibly physically, you have also disrupted someone else’s life in the same manner. Think of it in terms of your family and if the tables were turned. It’s not something we are necessarily comfortable thinking about, but what would the implications be if someone caused an accident involving you or your family members and they did not have the coverage to make you whole again? It’s a disturbing scenario.

We choose not to write state limits for any of our clients. It’s something that we feel strongly about and believe it is in the best interest of our clientele to carry liability limits of at least 100/300/100. If you currently have state liability limits, ask yourself “How much am I really saving in the long run?” There is no better time than now to get with your agent or insurance carrier to discuss increasing your auto insurance limits. Be safe, but most importantly, be protected! Call our office for a free quote today at 480-288-5900!

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Are you liable if your tree falls on your neighbor’s car? (image via flickr)

Everyone knows that if you rear-end the car in front of you or start a fist fight in a bar, you are liable for the damage your actions cause.  Liability in these cases is pretty clear cut because your direct action was the cause of another’s injury.  But there are many circumstances where fault is not necessarily the determining factor in liability and where there is no direct link between your actions and the resulting injury.  In order to adequately protect yourself from damage and injury claims you need to have insurance policies that offer the coverage you need.  The key to being protected is to understand both the obvious risks you face and those that are not so obvious.  To help you identify where you may have some hidden risks, here are some common questions about who is liable for indirect injury.

Am I Liable…..If My Child Causes a Car Accident in My Car?

While there are state specific laws that govern liability and insurance, in this case the answer is most likely yes.  If your son or daughter is driving a car that lists you as the registered owner, it is very likely that you could be sued for damages if your child causes an accident.  In order to protect yourself, you need to have a solid insurance policy that lists your child as a driver on any car they may drive.  You may also need an umbrella policy which can protect your assets in the event you are sued.  Check with your insurance agent if you are concerned that allowing your child to drive your car opens you to a liability risk you are not protected against.

Am I Liable……If My Dog Bites Someone on My Property?

This is another case where state law dictates certain rules about liability, but it is a good bet that if your dog bites someone, regardless of where you are at the time, you may be found liable for any injury.   Here in Arizona, unlike other states, there is no “one-free-bite” law which means that pet owners can be held liable for a dog bite even if there was no reasonable expectation that the dog might bite someone.  This means the first bite could land you with a lawsuit.  The law doesn’t only apply to humans either; it also applies to if your dog bites another animal.  If you are unclear about your rights as a property owner, ask your local police department.  If you are concerned about potential liability from a dog bite, talk through your concerns with your insurance agent to ensure you have the coverage you need to protect yourself and your assets as some policies include exclusions regarding animals.

Am I Liable…..If My Tree Falls on My Neighbor’s Car?

Like the other scenarios, this one is not as cut and dry as it may seem. In most cases like this, in order to prove negligence on your part, which is what would be required in order for you to be liable for the damage, your neighbor would have to prove you had a reasonable expectation that the tree might fall and damage his property.  If there is no reason that you would believe that the tree posed a real danger to your neighbor, it is unlikely you will be found liable for the damage.  It is still a good idea to talk to your insurance agent to determine if you would be protected from this type of liability claim.  They can also offer advice on steps you can take to decrease your liability risk.

 

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Are your belongings insured while they’re stored in a storage unit? (image via google)

Being able to rent storage space can be a godsend in certain situations.  You might be downsizing to a smaller home but want to keep family heirlooms for your children.  You may be moving from one place to another and need a temporary place to keep your stuff safe and secure.  You might have outgrown the house you have now and need the extra room while you search for a house that better meets your needs.  No matter the reason you need it, having the option to store your things in a rented space can be the difference between keeping things you love and being forced to sell, giveaway, or toss things you would really rather keep.

When it comes to solving these problems, self-storage units and even those storage solutions that offer amenities like climate control and added security provide an easy solution.  This is why so many of us, nearly 1 in 10 according to the Self Storage Association, have rented storage space separate from our primary housing.  When looking for the right storage space, many of us consider things like location, cost, security, and the reputation of the company managing the storage units.  We often go to great lengths to ensure we are storing our belongings in a safe, secure location without ever asking the most obvious security-related question: “If there is a fire and the items I store in my storage unit are damaged, will my loss be covered by insurance?”

The answer is… it depends.

1.     Storage Company

Start with the storage company where you are planning to store your possessions.  It is important to ask the right questions because the answers provided may be true but may lead you to believe you are protected when you are not.  First, ask about if the company is insured.  You are trying to determine if the company is covered by basic insurance policies any business should have like liability and property.  Once you have established that they are insured, ask if their policy provides any protection for your property in the event that fire, nature, or theft damages or destroys your property.  If the answer is yes, verify how much coverage your personal property is provided under their policy and check that against what you plan to store to ensure it is enough to cover any potential losses.

2.     Homeowner’s and Renter’s Policies

If the storage company does not have insurance that covers your property, this is your next stop.  Any items that you store off your property may be covered by your homeowner/renter policy which makes that a good starting point.  Talk to your agent to find out if offsite storage is covered by your policy.  If it isn’t, you will need to secure this coverage somewhere else.  If it is, you aren’t out of the woods yet.  Some insurance companies limit the value of property that can be stored offsite and still covered.  In order to determine if you have the insurance protection you need, you will need to know if your policy includes this provision and what that maximum value is.  You also want to make sure that there aren’t any other provisions in your policy specific to stored property like higher deductibles.

It isn’t difficult to protect all of your property, regardless of where it is kept.  You just need to make sure you have proper coverage or take the steps to get the coverage you need.

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Do you know what questions to ask when buying your auto insurance policy? (image via public domain image)

Whether you are buying car insurance for the first time or shopping around for the best possible renewal price, understanding the basics of purchasing auto insurance is the key to getting the right coverage at the right price.  Here are some of the factors to consider when you are buying car insurance.

State Requirements

Unless you live in New Hampshire, you are required to have car insurance or prove your ability to cover a certain amount of liability losses in order to drive a car.  However, each state has different requirements around how much insurance drivers must carry.  Make sure you understand your state’s requirements before you start shopping around.

Your Needs

The amount of insurance the state requires is one thing, but it may not be enough insurance to meet your needs.  The liability coverage within your auto policy is there to protect you from losses incurred if you are at fault in an accident.  If you have liability coverage that is 50,000/100,000/50,000, the policy will cover a maximum of $50,000 per person who is injured in the other vehicle up to $100,000 total.  It will also cover up to $50,000 in property damage to the other vehicle.

What most people don’t consider is that any liability over that limit is your responsibility.  If you cause an accident that results moderately serious injuries to 4 people, you may not have enough coverage to pay for their losses.  If someone is seriously injured, it is very unlikely that $100,000 will be enough to pay for medical expenses, lost wages, long term disability, etc.  If the accident involves two other cars that are worth $30,000 each, you won’t have enough coverage to take care of those losses.

In the event that you are responsible for damages over and above what your policy will cover, your assets can be seized and your wages can be garnished in order to pay off the difference.  For this reason alone, it is important to understand your policy limits and purchase a policy that protects you now and in the future.

Rate Factors

Insurance rates are based on actuarial analysis and statistics and every company does this kind of pricing differently using different models.  This means prices can vary dramatically between companies.  It also means that your individual rate depends on many factors that change how you fit into the insurance company’s model.  Things like your age and the age of the other driver’s on your policy, where you park the car on the policy, the type of car, and the experience level of all drivers can cause big differences in your rates.  Your driving record also plays an important role in determining the amount you will pay for coverage.

Coverage’s

The cost of your policy will also be largely dependent on the coverage you choose.  Most states require a certain amount of liability coverage because it protects other people, but collision and comprehensive coverage’s are not usually mandated.  These types of coverage protect you from loss to your own property and will increase the cost of your policy.  The same is true for uninsured/underinsured motorist coverage.

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Liquor

Does your business need Liquor Liability Coverage? (Image via AjDele Photography on Flickr)

Liquor liability coverage is a unique type of insurance that is only needed when a business has some involvement with alcohol.  While it is extremely important that those businesses that need liquor liability coverage have it in place, many who need it don’t have it.  Some business owners forgo coverage because of the expense, but in many cases, businesses do not have coverage because they don’t know they need it, think it is already provided as part of another policy, or don’t understand the implications of not having it.

What is Liquor Liability Coverage?

This is a type of insurance purchased by businesses that offers protection from loss or damage resulting from the actions of a customer that is intoxicated.  It covers property damage and liability claims for injuries to others and for self-inflicted injuries by the drunken customer.  It can be sold as add-on coverage to a commercial general liability policy or as a separate policy all together.

One of the most common misconceptions that open business owners to huge losses is that they are not responsible for the actions of their customers including those who are intoxicated.  Unfortunately, this is not the case.  Another common misconception is that this type of liability is covered under a general liability policy.  Most business liability insurance policies specifically exclude any liability resulting from this kind of loss.

Who Needs It?

Any business that is involved in the manufacture, sale, or service of alcohol or who assists in the purchase or use of alcohol generally needs this kind of coverage.  If there is a possibility that a customer, client, or patron could become intoxicated using alcohol that a business made it possible for them to obtain, that business needs this kind of coverage.  Courts have ruled time and again that purveyors of alcohol can be held liable for the actions of their intoxicated customers which means the only way to protect the business is to have the right coverage.

What Does it Cover?

A Liquor Liability policy will generally offer the following types of coverage:

  • Liability – This coverage protects the business from losses resulting from a lawsuit filed by someone injured by the intoxicated customer.  A common example is a lawsuit resulting from a drunk driving accident.  This also covers lawsuits filed by the customer for injuries or damage they caused to themselves while they were intoxicated.
  • Property – This covers property damage caused by the intoxicated customer.
  • Assault and Battery – This covers your liability to injuries and damages caused by intoxicated patrons fighting.

What to Look for in a Policy?

When purchasing this type of coverage, make sure it includes the following:

  • Defense Costs – Make sure the policy you purchase doesn’t exclude this or decrease your limit to cover legal defense costs.
  • Employees – Make sure the policy does not exclude employees.
  • Mental Damages – Make sure that mental damages like mental anguish and stress are included in your policy.

Businesses that are involved in the creation, sale, and distribution of liquor and alcohol need to take steps to protect themselves from liability claims resulting from intoxicated patrons.  Purchasing a liquor liability policy is one of the best steps a business can take to secure this kind of protection.

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Motorcycle Insurance

Are you properly insured while you’re riding your motorcycle? (image via gullevek on Flickr)

Beautiful weather just begs for an afternoon spent on a motorcycle, enjoying the open road and the gorgeous scenery.   There is nothing quite like a long ride in the desert; few things can rival the feeling of freedom offered by the wind on your face and the wide open spaces of the Southwest.  Protecting that freedom and your future requires the right kind of insurance.  Motorcycle insurance will protect you and your bike.

What Kinds of Bikes are Covered?

Most major insurers cover any factory-built motorcycle that can be licensed for use on public roadways.  This includes custom bikes, classic motorcycles, motor scooters, minibikes and trail/dirt bikes.

How is Motorcycle Coverage Different than Auto Insurance

Generally speaking, insurance is insurance. Where things differ is in the types of coverage a specific policy provides.  There are many similarities between an auto policy and a motorcycle policy, but there are some coverage’s available for bikes that you don’t need for cars, like safety apparel coverage.

Types of Coverage

Like the insurance policies you may have in place for your home and car, motorcycle insurance comes with different kinds of coverage.  The key to putting the right policy in place is finding one that offers the coverage you need.  The following types of coverage are commonly included or available for motorcycle policies:

  • Liability Coverage – Similar to the liability coverage you carry on your car, this coverage protects you if you are in an accident or cause damage for which you are found liable. It covers bodily injury and property damage to someone else’s person or property.  It may also include a small amount of coverage to pay medical payments for yourself or a passenger.  Depending on your state, you may be required to carry liability insurance for your motorcycle just like you would for a car.  Policies come with a variety of liability limits.
  • Collision Coverage – Just like an auto policy, collision coverage pays for damage to your motorcycle that is caused by you colliding with something or by someone or something else colliding with your motorcycle.
  • Comprehensive Coverage – This fills the gaps left if you only have collision coverage and pays for damages caused to your motorcycle by things other than collisions like fire, theft, or vandalism.
  • Uninsured/Underinsured Motorist Coverage – This type of coverage pays for those things that the other driver’s insurance would pay for if you are in an accident caused by another driver who does not have their own insurance.
  • Accessory Coverage/Safety Apparel Coverage – This covers customized parts, special equipment, paint, helmets and safety apparel, and may provide coverage for travel interruptions.  Damage to these items is generally covered but loss resulting from theft may not be so check with your carrier to make sure.
  • Towing and Roadside Assistance – This provides access to roadside assistance resources if your motorcycle breaks down and provides for a specific amount of towing.
  • Gap Coverage – This type of coverage only makes sense if you have a loan on your motorcycle.  If you are in an accident or experience a loss that totals your bike, gap coverage will pay the difference between the amount you owe on your bike and the actual value provided by the insurance company.  Purchasing this coverage insures you won’t ever owe on a bike that is totaled.

Most auto policies don’t cover motorcycles without a special endorsement that adds motorcycle coverage.  Don’t assume yours does. Check with your agent and make sure you have the coverage you need.

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