Dog Owner Liability

Did you know that dog bites account for one-third of all homeowners insurance liability claims? And that half of all dog bites occur on the dog owner’s property?

When your dog bites a visitor to your home, many people’s first question is to ask whether it is covered under a home insurance policy. The answer is – it depends. Some homeowners’ policies include animal liability as standard, and others will allow you to add it by endorsement (usually for an extra premium of around $25 a year).

Another important factor is the breed of dog. If you have an animal that is deemed to be dangerous – from a fairly standard list including Pit Bull, German Shepherd, Rottweiler, and others – then you will usually find that your home insurance policy specifically excludes liability. Some carriers will decline to insure your home – period! – if a dangerous dog is present. Finally, even if your dog is a so-called “safe” breed, you may not be covered if it has a history of biting people.

That is why it is essential to disclose all information about animals in your home, when signing up for a new policy. And also, let your insurance agent know if you obtain a new pet, so they can assist you in understanding what coverage you need.

Tropical Storm Imelda

In the insurance world, there is a surefire way to tell when a major storm is coming – and you don’t even need to look at the weather forecast! What happens is that insurance carriers issue a moratorium on binding new business policies when a storm or hurricane is 24-48 hours away from making landfall.

Why do insurance companies do this? In the same way that health insurance carriers exclude pre-existing conditions, property insurance carriers decline to insure buildings (and sometimes cars too) if the risk of loss is suddenly increased. This is understandable – otherwise, some people would only buy insurance at the last minute, when property damage from a storm or hurricane seems inevitable.

At the time of writing, many insurance carriers are not binding coverage due to the threat from Tropical Storm Imelda, which is currently deluging coastal Texas with rainfall. Thankfully, at this point, it’s not looking like becoming a major wind event, so the chance of you having to make a homeowners insurance claim is small. Flood insurance is another matter, and we recommend that every homeowner in the greater Houston area invests in this sensible – and usually inexpensive – coverage.

Road Rage and Auto Insurance

Want to know why “road rage” is not covered by many auto insurance policies? The simple answer is that property damage or liability claims resulting from aggressive driving are not considered to be accidental, but rather, an avoidable consequence of risky behavior.

Even if you’re feeling calm, you don’t want to become part of someone else’s auto accident as a result of their bad driving choices. The following tips may save your bacon on Houston’s high-octane highways:

  1. Stay far away: Slow down or change lanes to leave as much space between you and the offending driver as possible. If you are being tailgated, move aside to reduce the chance of being run into from behind if you are forced to brake sharply.
  2. Note the vehicle details: Pull over and report the aggressive driver to the police. Remember – do not make a call on your cell phone while driving!
  3. Don’t use hand gestures: A middle-finger salute could quickly escalate the situation out of hand if the other driver is already feeling angry, aggressive, or upset.
  4. Don’t confront another driver: In a moment of madness, it may be tempting to follow the person who just cut you off, force them off the road, and teach them a lesson using a tire iron or firearm. Don’t do this.
  5. Practice empathy: Maybe the aggressive driver is running late for work, or just had an argument with his wife. Perhaps the slow driver is lost, or has a mechanical issue with his vehicle. At some point, everyone has been one of those drivers – try not to take the bad driving of others personally.

Stay safe on those crazy roads and if you need auto insurance advice, call your friends at Memorial Insurance Agency in Houston, Texas!

Depreciation Heartache! ACV vs Replacement Cost

When it comes to insurance, there are many common pitfalls for the unwary. Let’s examine one of these today: Actual Cash Value vs. Replacement Cost.

Actual Cash Value: In this case, if you have a claim, your insurance company will pay you the amount of your claim minus depreciation. Imagine that you have a 25-year composition roof on your home which you installed 10 years ago at a cost of $10,000. If your roof is destroyed and needs replacing, how much will you get from your insurance company? The short answer is: not enough! Your roof’s expected lifespan is 25 years, meaning it depreciates in value 4% each year, to end with a theoretical value of zero after 25 years. In this example, your 10 year old roof has therefore lost 40% of its value by the time the hurricane hits, meaning the maximum available payout under an ACV policy is $6,000. But your financial pain doesn’t end there – you also have to take into account your deductible. So if your home is insured for $200,000 and you have a 2% wind/hail deductible, you will be paying $4,000 out of pocket before your insurance company pays even one cent. Keeping up? Therefore the total payout you’ll get from the insurance company will be the $6,000 Actual Cash Value of your roof, minus your $4,000 deductible, making a grand total of $2,000 ……. just a fraction of what you will have to pay to replace your roof.

Replacement Cost: This is a much better option. Your insurance company will pay whatever it takes to REPLACE your roof to the same standard as the one that was destroyed. There is no depreciation – all you pay out of pocket is your deductible. So in this case, you would receive a lot more money from the insurance company.

Moral of the story? Now you can see why Memorial Insurance always offers Replacement Cost policies, and low deductibles! Whichever insurance agent you use, always make sure the magic words Replacement Cost are on your homeowners insurance policy! Replacement Cost is not limited to the structure of the house itself – it can apply to personal property too, usually as an optional endorsement for a small extra cost. Reputable agents should always offer Replacement Cost – for both the dwelling and the contents – as standard, but beware unscrupulous agents who may try and sell you an ACV policy to save a little premium. It’s just not worth it!