If you run your business from your home — which is becoming more common as the COVID-19 pandemic forces more and more people to work remotely — you may be wondering if your homeowner’s insurance will cover your business. According to the Insurance Information Institute, a standard policy usually only offers coverage for about $2,500 of your business equipment, which may not be enough coverage, depending on your specific business.

Depending on your business type, you will likely need some sort of liability insurance, and if you make food products or personal care products, you may need a special policy. There are three basic choices for insuring a business from your home, depending on your specific business type and your insurance company.

Homeowners Policy Endorsement

This is an endorsement that you add to your existing policy to cover your standard equipment. It usually covers about $2,500 for a business, which is perfect if your business does not need anything beyond a couch and a laptop. You may also have the option to increase the coverage amount to $10,000.

You may also add liability to this coverage, which you will need if you have people visiting your business. If someone slips on the icy stairs entering your home business, they can sue you, and that is where the liability comes in handy.

In-Home Business Policy/Program

If your business is much more than a couch and laptop, and you need more comprehensive coverage, this is the ideal policy for you. If you are trying to decide if you need more coverage than a homeowners policy endorsement, there are some questions you can ask yourself to help make the decision:

•         “Do customers or clients come to my home?
•         “Do I keep inventory or supplies in my home or at off-site job locations?
•         “Would I lose income if I had to close my business because of damage to my home?
•         “Do I have employees working in or outside of my home?
•         “Do I maintain client or employee records on my computer?”

If you answered yes to these questions, you may want to consider this type of insurance instead of relying on the homeowner’s insurance.

This type of policy will vary depending on your insurance company and your specific business. The liability coverage is usually broader in these policies, to offer you better protection. This policy also usually covers business materials stored in another structure on the property, like a shed or garage.

Some will cover business interruption if your home becomes damaged in a natural disaster or a fire, as well as extra operating expenses in a temporary location. Some will also cover up to three full-time employees.

Businessowners Policy

This is for a small or mid-sized business that will cover your business property and equipment, loss of income, and liability. Coverage may even extend to your business property outside of the home if you open a small office or rent a storage unit for backstock.

It does not include worker’s compensation or insurance for health or disability. You will need separate policies for these if you have employees.

References

“Home Based Business Insurance.” The Hartford, www.thehartford.com/home-based-business-insurance.

Insuring Your Home-Based Business. Insurance Information Institute, www.iii.org/article/insuring-your-home-based-business.

After your home has sustained damages, large or small, you are going to contact your homeowner’s insurance company and file a claim so that you can get the money you need to move on with your life. You need to make repairs and replace things that were damaged, so you may be willing to take the first check your insurance company offers you, but there are some reasons why you should not do that.

Hidden Damages

Depending on exactly what type of loss you suffered, there could be damages that were not instantly visible, so the independent adjuster could not factor them into your settlement. Until the work begins, you may be unaware of damages inside the floors or walls, or mold and mildew popping up from water damage. These can be expensive to repair, and you will not be able to get your insurance company to give you more money from the claim since you already cashed the check.

They Start Low

Insurance companies are in the business to make a profit, and to do this they do not want to pay out the maximum amount you are owed right away. Instead, your insurance company will try to lowball you, in hopes that you will just be happy they are giving you anything and walk away. The amount offered may not even be enough to complete the repairs you need. The first offer is always much lower than you are owed.

You Do Not Have the Full Costs Yet

Your insurance provider will be offering you money based on their independent adjuster’s assessment, which does not take into account the full costs yet. Their assessment of the costs may differ greatly from the costs your contractor is quoting you. Sometimes an insurance company will offer you a contractor who can do the work at their price, but this is a huge risk. Oftentimes, you end up with a poorly done job and the damage will happen again as a result. A big example of this is roof leaks. If they are not fixed properly, you may find out the next time it rains.

Appraisals Are Opinions

After the independent adjuster has evaluated your damages, your insurance company will give you a settlement offer. The offer is based entirely upon the opinion of the adjuster. This means that there is a chance that a different adjuster can get you a different number, and possibly better results. You can challenge this opinion and reject that first offer, fighting to get the amount you deserve for your settlement.

Conclusion

If you find yourself in need of help with your insurance claim, a public adjuster is here to help you. They will negotiate on your behalf with your insurance company to help you get the settlement you deserve, which is often significantly higher than their original offer. Public adjusters can be your best ally when you are fighting your insurance for an appropriate claim amount that will actually cover everything. 

When disaster strikes and you suddenly lose all or part of your home, you are probably feeling overwhelmed and devastated. You have made your payments faithfully over the years, so they should cover everything with no hassle, right? Unfortunately, that is rarely the case with an insurance company. They will try to give you less than the maximum payment you deserve for your losses, and you may not be certain how to fight them. That is where public adjusters come in. There are many benefits to hiring a public adjuster for your insurance claim though these are the top few…

They are Trained Professionals

Insurance policies can be confusing if you do not have a deep understanding of the industry, making filing your claim difficult sometimes. Public adjusters have to go through training before they can become licensed to ensure they fully understand the complex insurance industry. They are well trained and will fight for you against your insurance to help you get what you are owed. Having a public adjuster working on your claim also means you will have a witness if your insurance company is acting in bad faith and a more drastic measure is needed to get your claim paid.

Your Insurance is Lowballing You

You already filed your insurance claim and they are offering you an amount that will not cover even a fraction of your losses. If you want to fight your insurance company, a public adjuster can step in and negotiate on your behalf. They will work hard to get your insurance to pay you what you deserve. Studies have shown that a public adjuster often increases an insurance claim payment by 747 percent.

Time Savers

An insurance policy is complex and can be confusing, and you may not be sure what exactly your insurance company wants from you. A public adjuster can go over your policy with you and help you organize everything you need for your claim. You can work on moving forward while your public adjuster keeps your claim moving with your insurance company.

They Only Get Paid if You Do

Most public adjusters are paid a percentage of the payout you receive from your insurance company, so you are not paying them hourly and losing money while you wait for your insurance payment. Since they do not get paid if you do not, they will work even harder to help maximize your claim and see the claim through to the end.

Some may suggest using a lawyer, but that should be your last resort. A skilled Public Adjuster can navigate the claims process and typically obtain an excellent settlement for you without an attorney. 

They Have Your Interest at Heart

A public adjuster cares about their clients and wants to make sure they receive what their insurance company owes them. Public adjusters will handle your claims as efficiently as possible and work diligently to make sure you have a positive experience and the outcome you deserve for your claim. 

References

Public Adjuster Representation in Citizens Property Insurance Corporation Claims Extends the Time to Reach a Settlement and Also Increases Payments to Citizens’ Policyholders.  Jan. 2010, https://www.oppaga.state.fl.us/MonitorDocs/Reports/pdf/1006rpt.pdf.

When you receive your insurance policy renewal information, you may discover your premium has gone up and be wondering why, especially if you have not filed any claims recently. There are a number of reasons why your rate may have gone up, which may is usually never explained in your renewal information.

Actuaries assess the risks of insurance policies, using math, financial theory, and statistics to forecast the probability and costs of an event. “In the insurance industry, actuaries spend a lot of time trying to predict how likely customers are to file a claim. The higher the probability, the more they can justify charging you higher insurance premiums.” This is one of the reasons your insurance premium might be going up.

Recent Claims

Have you filed any claims lately with your insurance company? Depending on the type of claim and its cost, your insurance premium may have gone up because of this. Your rate may eventually go back down if you do not have to file another claim within a certain period of time. This is one of the most common reasons for an insurance premium to go up. You should know, however, that most increases because of claim history primarily relate to liability losses. 

Weather Events

The number of hurricanes, storms, wildfires, and tornadoes — along with other extreme weather events — has been rising over the last few years. As these become more frequent, insurance companies may increase their rates too, so they can keep up with the insurance claims for a large and damaging disaster. This is something that the actuaries help calculate.

Increase in Property Value

If you have done any renovations or updates to your home since your last policy renewal, they may have increased your property value enough to where you need to increase your insurance coverage limits. This will, of course, increase your insurance premium as well.

Crime Rate Increase

Another thing actuaries will calculate is if there have been increases in your local crime rate, as well as the likeliness of becoming the victim of a burglar or vandal. If they determine that it is likely enough, your insurance premium will go up to reflect the higher risk for insuring you.

New Big Purchases

If you have made any new expensive purchases that you need to add to your coverage, like new furniture, gym equipment, an expensive new TV, or a computer. This kind of thing may increase your premium so that it will be adequately covered if you suffer a loss and need your new, expensive equipment replaced.

Life Changes

Other things that may increase your premium include merging households with a significant other and updating your insurance to make sure the new belongings are covered.

Having a new baby may also increase your premium since you will likely be making some measures to increase safety in the house.

Conclusion

These are just some of the things that could impact your insurance premium. If you are not aware of any of the things listed here occurring in your area, you can contact your insurance company to ask for more information. Sometimes, the insurance company will simply cite inflation as the reason for the increase, if nothing else can be applied.

When you need to file an insurance claim, a public adjuster is one of your best allies and they can be your greatest advocate. A study showed that there was a 747 percent increase in insurance payouts when someone hired a public adjuster to help negotiate their claim.

There are some cases though, where in order to help you collect the maximum amount your insurance company owes you, where a public adjuster and a lawyer need to work together to take your claim to court. Most of the time, the case can be settled without going to trial, but there is always that stubborn exception that will not budge on their offer. If your insurance claim has escalated to this point, you will need to be prepared to defend your claim in front of a jury.

I Filed in State Court, Why is it Now in Federal?

Even if you file your case with a state court, your insurance company still may choose to request the case is seen by a federal court instead. There are several reasons the insurance company may wish to do this: “First, federal courts often have greater resources to move a case to completion. For example, most federal judges have a full staff of law clerks—lawyers that help the judge research legal issues, delve into the evidence, and draft opinions. Second, federal courts frequently decide cases without oral argument, relying solely on the litigant’s written work product. Third, the civil procedure rules in federal court are well-established and lead to predictable results on important pretrial issues. Finally, some insurance defense lawyers may think that federal court gives them an advantage to win the case.”

Insurance Companies Responses

When the insurance company receives the formal complaint attached to the lawsuit, they have a few ways to respond to it. The insurance company can answer it and say if the allegations against them are true or false; more often than not, they will say the allegations are false and they did not act wrongfully.

They can file a motion to dismiss the allegations, usually citing that “the complaint failed to state a claim upon which relief can be granted. This motion argues that even when taking the complaint’s allegations as true, the insured did not adequately plead that the insurer violated the policy or the law.”

If your insurance policy has the appraisal or arbitration provision, they can invoke that in response to you filing a suit against them, which will cause the court to stop the proceedings and send the case to a panel to make a decision on what is owed. This is becoming a common provision in insurance policies, so it is a good idea to check and see if yours has this so you will not be blindsided by them invoking it.

Before Trial

Often the court will ask the policyholder’s and insurer’s lawyers to meet one last time before a case goes to trial and try one last time to reach a settlement. If a settlement still cannot be reached, the case will move forward into a trial with a jury; if you reach this point, your attorney and your public adjuster can work together to help prepare you to fight for your claim.

If you have suffered a total loss, thinking about how much you have really lost can seem like a daunting task that you would rather avoid and put off to keep you from dwelling on what you lost. This is a stressful and time-consuming task that has to be filled out accurately to ensure you get the amount you are owed by your insurance company. These are some tips to help you get through this challenging paperwork.

Make a Diagram

Start by making a diagram of the house and draw in things like your furniture as you go. This can help get you thinking about exactly what you had in each room. It does not need to be to scale or anything, just draw the basic shapes of the rooms and add in details as you go.

Do it One Room at a Time

Focus on a single room at a time; if you try to split up your focus too much, you will get overwhelmed. Pick a corner of the room and start there. Select only a few things at a time and put them on a flat surface, like a table or counter, and take your photos. Make sure everything is clearly visible in the photos. Repeat this until you finish the room; then move onto the next and the next, until you are finished.

Inventory Calculator

This can be one of the most difficult and time-consuming parts of this process. You now have to list off all of your items from the photos, writing down the brand, age, condition, cost, and quantity if you have more than one. Family and friends can help jog your memory about items in your home, things that may not have been recognizable in the damages. They also might have photos from the inside of your home to help prove ownership.

If you saved your receipts from your bigger purchases, you are in luck; you have the exact amount you paid for things and how old they are since the date is on the receipt too. If you are someone who does a lot of online shopping, there are plenty of receipts in your inbox or online accounts to help. Your credit card and bank statements can also help you construct a list of the lost items, what you paid, and when.

If you do not have receipts, you will need to find the value online, of it or similar items. One way you can do this is to go onto a wedding registry tool and finding the items you lost, or ones like it. This can help give you a detailed list to provide to your insurance. Make sure you note the replacement costs for your items too, so your insurance knows what you may need.

For things like books, clothing, movies, and video games, that you may have a ton of, it is hard to pinpoint what you should go off of for your replacement costs.

If Overwhelmed, Ask for Help

If you are feeling overwhelmed by all of this, which is a common response to this kind of situation, hiring a public adjuster can be greatly beneficial for you. A public adjuster can help you organize everything in your loss inventory and make the process a lot smoother overall. Public adjusters are licensed experts who can advocate for your behalf with your insurance company, and make sure you get the maximum amount your insurance carrier owes you.

When heavy rains roll in, you may discover that they have taken with them some of your land. This can be a small amount of your yard, or it can shift your entire house, meaning you will have to make repairs to it. If you find yourself losing your yard to erosion, you may assume your insurance policy will cover you, but unfortunately, “earth movements” are usually excluded from homeowner’s insurance policies.

Most insurance policies have exclusions they will not cover, which usually includes earthquakes, sinkholes, landslides, and mudslides — all of which are considered earth movements.

The U.S. Geological Survey estimated that the annual losses for landslides in the country is between $2 billion and $4 billion per year, so if you are hit with one, you may be looking at an expensive bill.

Retaining Walls

If your home is in a location that is susceptible to landslides or erosion, you can — and probably should — put up a retaining wall to help keep the ground where it belongs. Home insurance policies often cover detached structures like garages, sheds, fences, and retaining walls. So, if you have a retaining wall that gets damaged by a covered loss like wind, fire, or lighting, you may be able to use your insurance coverage to repair your retaining wall.

If you have a retaining wall and it collapses during an event, your insurance still may not cover you, since it is still an earth movement. However, you might be able to purchase an earthquake insurance policy that — depending on your insurance company — may cover at least part of the landslide. Even if it does not cover the landslide itself, the earthquake policy might help cover damages to your home and detached structures.

Flood Insurance

Areas that have a high risk for erosion often have frequent flooding problems, so you might be eligible for the National Flood Insurance Program (NFIP). This is run by the federal government and provides price-controlled flood insurance. Many NFIP policies cover erosion if it is caused by flooding.

DIC Insurance

Difference in Conditions (DIC) Insurance is an insurance policy that covers some of the perils that are excluded from a standard policy. DIC insurance can provide you with coverage for a landslide or mudslide, along with some other perils that are excluded. If you live in an area where you think your backyard could literally be washed away when a storm rolls in, it is worthwhile to look into getting DIC insurance. These policies are a little easier to customize than a standard insurance policy is, since you only need specific parts of it.

DIC policies can be expensive, with a deductible that is based on a percentage of the replacement cost of your home, instead of a fixed amount like other insurance companies do. It is most often between five and 20 percent of the total replacement cost of your home.

Everyone hopes that nothing will go wrong with their home, but unfortunately for most people, something does at some point. This is why it is important to have homeowner’s insurance to help cover the financial hardships you may be facing if something happens. Travelers released an eight-year study of homeowner’s insurance claims between 2009 and 2016 to determine what the most common forms of damage are and to help people better protect themselves from those risks. They also included information about the most expensive claims overall. Here are the top damage types they identified in the report.

Wind

The report says that 24 percent of claims are from damages sustained by wind. Wind can damage roofs and collapse walls; it can send your patio furniture flying and knock down your trees. The reason wind is the most common is because it encompasses both tornadoes and hurricanes; two highly destructive disasters that can occur frequently. Couple this with other types of storms, and wind is a common factor in a great number of claims.  it accounts for 17 percent of the overall claim costs.

Water

The report split water damage between non-weather related and weather-related water damage. Non-weather-related damage was the cause of 20 percent of claims; weather-related was the cause of 11 percent of claims. Overall, water damage accounts for 31 percent of insurance claims.

The non-weather-related claims include leaks of different types, including plumbing and appliance failures. Your dishwasher, washing machine, and kitchen sink are more likely to lead to water damages in your home than rain or snow.

The weather-related water damage includes frozen pipes bursting, leaky roofs, ice dams, snow and ice melting or causing your roof to cave in, and more. While water damages that are not linked to the weather are the most common, heavy rainfall is still a huge factor in weather-related damages. Weather-related water damage accounts for only 7 percent of total claim costs. Flooding is another issue, but not many insurance plans will cover those damages.

Water damages can lead to mold, which is hard to get rid of once it sets in. It can also make the wood in your home rot, which is harder to detect than mold.

Hail

Hail accounts for 16 percent of the damages. A hailstorm can damage your roof, break windows, and damage the siding of your home. Hail is also the second most expensive damage to repair, at 20 percent of the total claim costs.

Theft

According to the FBI, there is a burglary every 20 seconds. With such frequency, it is no wonder that break-ins account for 6 percent of claims, for both damage and losses on a property.

Most Expensive Claim

While fire may not be the most common homeowner’s insurance claim, Travelers ranked it as the most expensive claim; it alone accounts for 25 percent of total claim costs.

As the Coronavirus continues spreading, many businesses large and small have shut their doors to help with the quarantine. Those that have not closed their doors may still be looking at considerable losses from the outbreak since supply chains are being affected and the way some businesses are running is also being impacted. Approximately 75 percent of US businesses are reporting disruptions in their supply chains as a direct result of the Coronavirus; this can be easily seen simply by entering your local supermarket and seeing entire aisles with nothing but empty shelves.

Restaurants are limited to takeout only, schools are closed, and public gatherings are either prohibited or discouraged. Even the NBA has suspended its season for this year after a player tested positive for the virus.

Business owners may be expecting their business disruption insurance to cover this, but that may not be the case for everyone.

What Business Disruption Insurance Covers

Business disruption insurance is supposed to help cover a business’ losses in the event of some kind of disruption, like a fire or natural disaster. Usually, the types of things that will trigger this insurance coverage are things that cause some sort of damage to the premises or in its vicinity, or damage to the supplier’s location. Where this can get complicated is if your insurance policy covers disruption in your supply chain, you might be able to get your insurance company to cover your disruption case, but it depends on the specific language of your insurance policy.

SARS Changed the Game

In 2003, following the SARS outbreak, there was an insurance case where Mandarin Oriental International Ltd., a hotel chain, received $16 million from its insurance for losses suffered during the outbreak. The hotels lost all of their business because of the outbreak, and their food and beverage sales also dropped, losing them additional money. The claim was taken to court, and the court ruled that if the insurance covers a notifiable disease, it should cover the losses suffered from SARS.

After SARS and that insurance case, insurance companies everywhere began excluding business disruption losses from a communicable disease. Some insurance companies will allow communicable diseases to be covered, but they must be negotiated into the policy, and even then, they may have a limit to how much they are willing to cover in losses from a disease.

Business Disruption Lawsuit

A restaurant in the New Orleans French Quarter, the biggest tourist area in New Orleans, has filed a lawsuit against their insurance company to attempt to have their losses from the government ordered closure covered. The Oceana Grill’s attorney, John Houghtaling, is attempting to prove there is property damage in this shutdown that should be covered. “Because the coronavirus contaminates surfaces, it’s property damage,” he said. “The coronavirus can stay on substances for many days, so it’s clearly affecting property, it’s clearly contaminating property and that is the trigger for business interruption coverage.”

The emergency declaration filed by the New Orleans mayor this week says that the coronavirus “caus(es) property loss and damage in certain circumstances.” This wording may be a boon in not just this lawsuit, but others that are likely to come as a result of the virus. Time will tell if this lawsuit succeeds.

Homeowner’s insurance covers many different perils that life may throw at your home, but it often excludes some disasters like hurricanes, earthquakes, wildfires, volcanos, and floods, as well as disasters created by humans, like a riot or terrorist attack. Catastrophe insurance exists to help give you coverage if there is a disaster that your normal insurance will not cover.

Catastrophe insurance is not just available for homeowners as renters and business owners can also get catastrophe insurance.

What is Considered a Catastrophe?

The insurance industry designates something a catastrophe “when claims are expected to reach a certain dollar threshold, currently set at $25 million, and more than a certain number of policyholders and insurance companies are affected.”

According to the Insurance Information Institute, between 1997 and 2016, 39.9 percent of insured losses were from wind, hail, and flood losses, including tornadoes. The losses from hurricanes and tropical storms made up another 38.2 percent or losses. According to Aon, in 2019 there were 409 natural disasters in the world; the total of insured losses from these events was $71 billion, and the economic losses totaled $232 billion. About 51 percent of the insured losses were in the United States.

Is the Insurance Worth It?

If you live in an area that has a high risk of having a certain type of catastrophe — like hurricanes in Florida — you may want to consider getting catastrophe insurance as it may help cover more if a disaster strikes. In Florida, some insurance companies will let you add on hurricane coverage to your existing policy, though you may have a separate deductible for hurricane damages.

Homeowner’s insurance usually does not cover damage from floods or earth movements, like earthquakes, landslides, and mudslide. Even if you have a policy that covers “all perils”, it may not cover everything, and it can still have some exclusions. This is where catastrophe insurance comes in, it can help cover what your normal insurance does not.

In some cases, you will have combined coverage from your regular insurance and your catastrophe insurance, especially in cases like hurricanes, where the damage comes from multiple sources and one policy only covers certain parts of the damages, but the other policy fills in those gaps. To help relieve some of the confusion and headache for you, you can hire a public adjuster to negotiate with both insurance companies on your behalf and help get sorted out which policy covers what. They are experts who will work hard to make sure you get the maximum amount you are owed from your insurance policies.

Waiting Periods

These policies usually take a little bit of time to kick in, so this is not something you can get three days before the hurricane strikes. For example, the national flood insurance has a 30-day waiting period before it kicks in; if you have a flood before you reach 30 days, it will not cover the incident. Usually, with hurricane insurance, you have to have the policy before the storm is officially named.