Thursday, February 17, 2011

Go shopping, have an accident, pay for your rescue?

We all know that having a car accident can raise your insurance quicker than congress can vote to raise their benefit package. While the economy showing signs of recovering is debatable, one thing that is certain is that local governments are strapped for cash. Governor Brown in his budget proposal for California plans on raiding city and county redevelopment funds to help close the states budget gap and the race is on to prevent that.

A few weeks ago the Sacramento City Council passed an ordinance that charges out of town drivers who are involved in traffic accidents for the cost of emergency response fees. Cities have to pay for fire, police and other services. This is done through the cities share of local taxes paid by property owners, businesses, and other local sources. When someone lives out side the community and uses emergency services, the city does not get that money back. The Sacramento City Council did allow a waiver for business owners who live outside the city and commute to work, but their employees did not seem to get that waiver.

The fee, called the "fire recovery charge",  would be billed through the drivers insurance company and would only be imposed on non-resident drivers if insurers found them at fault.

So basically I could go to a nearby town to do some shopping or coming or going to work and get involved in an accident. Because I don't live in the city, I could be fined a "fire recover charge" if my or the other parties insurance carrier decided I'm at fault.

This could get ugly. And because this is a city ordinance, the only way to stop it is to get out to your local city council meetings and get heard. Many cities in fact already have such a charge against out of town motorists.

You can read about the Sacramento fire recovery charge HERE.

Thursday, February 10, 2011

What Most Homeowner's Insurance Doesn't Cover

Your homeowner's insurance protects you from what are known as perils-the things that might cause damage or loss. A good homeowner's policy is set up to provide coverage for the most likely perils that affect homeowners, such as fire, theft, and vandalism. However, there are some perils that are specifically excluded from the average homeowner's policy, and depending on where you live, these exclusions could be serious.

Earthquake Coverage

Most homeowner's policies do not provide coverage for damage caused by an earthquake. If you live in an area where earthquakes are common and a serious earthquake is a real risk, you should consider taking out a separate earthquake insurance policy. Your homeowner's insurance agent can point you in the right direction.

Flood And Water Damage

Water damage is a tricky area when it comes to homeowner's insurance. Some types are covered, while others are not. The most commonly excluded type of water damage is from a flood. This usually means a natural flood, from rain or rising water. For anyone who lives near a river or other body of water where flooding is a possibility, flood insurance is a good idea. Flood is typically defined as water and or debris coming in from outside the home.

Water damage that is caused by negligence is also usually excluded. If you knew your pipes were leaking and did nothing to repair them, the resulting water damage will likely be excluded and not covered. On the other hand, if a pipe suddenly bursts with no forewarning, your homeowner's insurance should kick in and take care of the damage.

Mold Exclusions

Many insurance companies do not provide coverage for mold, because it is considered to be the result of negligence. This is another grey area where some types of mold may be covered and others may not. Many carriers will cover mold, but will limit the dollar amount they will cover. Again, this is a good one to discuss with your insurance company.

Special Types of Personal Property

Usually your personal property is covered up to the policy limit. However some items, like computers and electronics have sub limits placed on them. Other items like musical instruments, art work and jewelry may require a personal property rider added to the policy. This is an area you should discuss with your insurance agent and make sure that the policy and endorsements will meet your needs.

Maintenance Issues

Homeowner's insurance is there to get you back to normal after a loss or damage. It doesn't provide you with free maintenance on your home! Any damage to your home caused by your failure to properly maintain it will not be covered by homeowner's. Thus, roof repair for wind damage is covered, but a roof that has simply gotten old will not be. If that were the case, homeowner's insurance would be very expensive indeed, with everyone getting repairs done to their home every time something wore out!

It's important to know what your policy covers and doesn't cover, so that you are not stuck paying big bills for a catastrophic event. Ask your agent or read your policy, and obtain extra coverage when you can.