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Owning and Insuring a Rowhouse

The Rowhouse: An East Coast Classic

For about as long as there have been colonies and states on the East Coast of North America, there have been rowhouses.  The rowhouse is a simple, elegant solution to family housing in cities where space is at a premium.  It should come as no surprise then that we find them in cities such as Philadelphia and New York City, cities built on peninsulas between two rivers.  Examples are also in Baltimore and Washington D.C., as the style helped to create a tight urban center close to their respective centers, built around the harbor in Baltimore and the federal buildings in D.C.

Rowhouse street in Philadelphia.

Rowhouses in Philadelphia.

The rowhouse comes with it’s own set of strengths and weaknesses, and differs in many ways from the typical single family home in the rest of the United States.  Some of the differences are obvious, while others are more subtle than one might think.  And these differences lend themselves to different kinds of risks, or at least greater chances of different risks, than their yard-and-picket-fenced neighbors in the suburbs.

Let’s look at what those differences are, and see how best to protect and insure against them.

Aged like a fine wine.

As a general rule, rowhouses are old – at least by American standards.  It is not uncommon to find an entire neighborhood of rowhomes that are at least one hundred years old.  In the Society Hill neighborhood of Philly, it is not uncommon to see little signs in the windows to show what famous American owned the home in the 1700-1800s – or even that it was an important stop on the Underground Railroad.  Not all rowhouses will have some historic designation, and not all were built in the fresh aftermath of colonization.  But, if you do have one, it is probably older than fifty years, and being one hundred years old is common.

Rowhouse and tree.

Old but sturdy.

There are some serious advantages to these older styles of construction.  Walls are typically sturdier than your average newly built house, and the foundations are more solid as well.  Many have brick-on-brick walls – and these often give you serious discounts to your homeowners insurance since they are more flame resistant than brick-on-frame or other mainly wood walls.  As a general rule of thumb, all construction materials were larger, more durable, and made to last.  These houses will stand the test of time.

They will also, however, often have issues depending on how well-kept and maintained they have been over the years.  It is not at all uncommon to find water leakage, mold, out of date plumbing and electrical, cracks in the roof and foundation, and even leaning walls.  Like any man-made object, if it is not given the proper repairs and upkeep it will deteriorate and eventually fall apart.  Also, note that none of these issues are covered under a homeowners policy.  These are problems due to wear and tear, and not a sudden event that has happened to your home.  Also, if you buy a home with issues of any cause whatsoever, you have little choice but to accept them.  You cannot buy a house and turn in a claim on your new homeowners policy, even if lightning struck before you bought it.  So be careful what you buy, and protect the valuable things in your life – especially if it is as old and special as a classic rowhome.

Leaning on each other.

Another of the major differences with rowhouses is that they lean on one another – literally.  Wall-sharing is a classic part of what makes a rowhome a rowhome; after all, being connected in a row is how they got the name.  Like townhouses, you are much closer to your neighbors than your friends in the suburbs or out in the country, but not quite as close as the apartment you used to live in.  Luckily, rowhouse walls are a little different.

Like we said before, older construction materials tend to be more durable and sturdier.  For your shared walls, this leads to less noise coming through and greater temperature retention.  Be thankful for that pile of bricks between you and your friendly but loud family next-door.  It can come in handy.

Of course, it can also be limiting.  You won’t be putting a new window in or expanding your kitchen through your neighbor’s house.  Any decision about changes to a rowhouse are either down, up or  back – as in the back patio, or yard, or I-can-barely-stand-here-and-not-fall-in-the-alley space, depending on your particular home and lot size.  Most people either put in finished basements, or roof decks, or even push their house into the back landing in order to maximize the lot that they have.

Speaking of home improvements.

Making changes to these lovely older homes with their charming but limited space can be daunting.  Replacing floors can be like performing an archaeological dig, with layers of previous families coming up with each level of carpet, undercarpet, linoleum, adhesive, and then the original pine – I mean, that’s probably the original and I’m tired of digging.  And don’t take my word for it –

No, strike that, absolutely take my word for it.

Man with mask redoing floors.

I think I just found a Sumerian coin.

In order to maintain the character of the home, special items or construction materials may be needed to keep the original feel and likeness of the rowhouse.  Remember, this goes for your insurance valuation too.  As I’ve said before in my blog on What Your Home Is Worth, homeowners insurance is based on replacement cost, not market value.  Having these older materials and construction features such as solid wood doors, brick-on-brick walls, old wood floors, plaster walls and thick floor beams means that your value will be higher than the newer built house across the street.  Insurance replaces like for like, so a company bases how much coverage you need on how much it would cost to return you to your original state.  In the case of older homes, that means replacing those original plaster walls or wood beams with as close to the original as possible.  And that can be expensive.

So don’t flinch when your insurance agent shows you a coverage amount that is $100,000 over market value.  Remember, if your home burns down and you build it back, you’ll want the money it would take to get it back the way you left it, and not some cheap imitation.  Look at it the same as you would scraping the old linoleum flooring by hand – difficult but worth it.

Living in an American treasure.

If you live and walk around in a city that has entire neighborhoods of rowhouses like Philly or D.C., it can be easy to miss the forest for the trees.  We tend to get used to whatever we see regularly, and when we live and walk past rowhouses daily, they can lose their charm.  It can be easy to forget that rowhomes are an American treasure.  They are as much a way of living communally with one another as they are an architectural style.  They create a cozy, walkable feel to a neighborhood without losing that city sense of closeness and convenience, but retain a friendly warmth that no apartment building can match.  Neighbors feel like neighbors, streets feel like an extension of your home, and a new person or family moving in on your block becomes much more intimate than getting a new flatmate, or even a new family on your cul-de-sac.

Woman walking dog in snow.

Cozy in the snow.

So treat your rowhouse right, and use the resources at your disposal to make sure you are giving it the care it deserves.  Check your local city for guides or books on how to own a rowhouse – in Philadelphia the city helpfully created this Rowhouse Manual.  Local publications may also have articles with helpful hints such as this gem from Philadelphia magazine.  And work with real estate agents and contractors who know and love rowhouses as much as you do, like the Pearce in Philly team or Hudson Hardwood Floors.

And, of course, insure your home the way it deserves to be insured.  Make sure your agent knows the difference between a rowhouse and a townhouse, that they understand the complexities of 100 year old houses, and that they appreciate how complicated a claim might be – such as if lightning strikes and your newly flipped rowhouse still has old electrical work.  Take the time to value your home correctly, making sure you have adequate protection for both the home and your personal belongings.  It also wouldn’t hurt to add extra liability protection, as you never know what you might need in a bustling metropolis with trial lawyers on every billboard.

Your rowhouse is a national treasure.  Yes, yours.  Let’s take care of it the way it deserves.

Any questions?  Reach out to us with the form below, or check out some of the amazing people and resources listed in this blog.

 

Why is my premium higher?

No one likes paying more premium.

This is it, the big question that we get asked all the time.  It comes in many forms, such as: “Why is my premium higher?” “Why did my bill go up?” “Why am I paying more for the same thing?”  No matter how you ask it, the question ultimately boils down to this – why am I paying more for the same insurance that I had before?  What has changed?

The answer is the most cliche breakup line ever: “It’s not you, it’s me.”  And by me I mean the world the agent represents, full of insurance companies, claims statistics, and state regulatory bodies.

Simple, right?  Well, let’s look into it a little deeper than that.

 

Woman pondering her premium.

But what even is premium, really?

First Reason: Claims change games.

We all know that if we get into an accident and file a claim, our premium will go up.  The reason for the rise is risk – if you get into a wreck and file a claim, you are more likely to file a claim in the future.  Most of us understand this, even if we don’t necessarily like it.  (If you want to know more about navigating claims, click THIS).

What most customers don’t understand is that OTHER PEOPLE’S CLAIMS can affect you, too.  At first glance, you may think that sounds crazy.  But I don’t mean that if your cousin Billy Ray hits a parked car while doing donuts in the Wal-Mart parking lot then your insurance will become more expensive.  Insurance is based on big, big numbers.  A few claims here and there will have little to no affect to the insurance market at large.  But if there is a sustained trend, and insurance companies are losing money to particular claims in an area, then that will make rates go up.  Are there a ton of vehicles thefts in a certain area?  Auto rates may rise.  Have more teens than usual been involved in bad accidents over the last year?  Expect coverage across the board to be more expensive, even if you don’t have an inexperienced driver on your policy.

Consider the recent wave of hurricane-related claims that have swept the southeast.  This is part of a larger trend, one that has seen weather related claims increase for nearly a decade across the country: fires in the West, flooding in the Midwest and Northeast, and hurricanes and flooding in the South.  All of these claims have caused insurance companies to pay millions in damages.  To mitigate risk and to balance their books, companies raise the premiums on similar risks in the same areas to off-set their losses.  Some companies won’t even sell homeowners insurance in certain areas, as coastal individuals and families are all too aware.

The bottom line is that if there are a lot of claims, insurance companies will raise premiums.

Dude contemplating premiums.

But, like, premiums seem so… complicated.

Second Reason: Companies change appetites.

It seems strange to refer to an insurance company’s likes and dislikes as an appetite, but that is the closest word that describes the situation, and is the word used in the industry.  A company’s appetite is best seen as the kind of risk that it prefers to insure, or prefers to avoid.  Some companies specialize in certain types of risks, such as newly constructed homes, or small mom-and-pop businesses (BOP policies if you’re curious).  It all depends on what the company is comfortable writing and where they write business.  Some are small, regional carriers that like the basic home and auto, some are countrywide but prefer only specialized policies like Workers Comp, while others are in every state in the country and will write just about anything they can.  But even those have preferences that change according to what they already have on the books and areas they want to see grow.

But how does this affect you?  For starters, if you are with a company that insures your one hundred year old house, and they decide that they don’t particularly like insuring old homes, they may begin to raise your rates.  Not because they don’t like you, or because they are punishing you, but simply because they are less comfortable insuring older homes and you are just in the wrong place at the wrong time.

The good news is that if your policy does creep up year after year, and it is due to something like an appetite change at your company, there is probably another carrier that would love to insure what you own.  So keep an open mind and have an honest conversation with your agent.

Fella thinking about premium.

Man, my premium has got me like, wow.

Reason Three: Regulators!  Mount up.

Like them or loathe them, politicians are tasked with overseeing the insurance industry in every state in the country.  The amount of regulation varies as wildly as the landscapes over which they preside – some states have barely any laws at all, while others dictate nearly everything that can happen.  Regardless of how much regulation there is, even the smallest change can affect rates – and some states can raise rates directly.

If the department or bureau (or whatever it’s called) of insurance in your state begins yanking on a loose thread, or tries to “correct” a portion of the industry by raising rates, then you can find a higher premium amount when it comes time for renewal.  This is a perfect example of why you should talk to your insurance agent during your review before your policy renews.  If you don’t, and you just think that your insurance is going up for no reason, you could make the rash decision to go to another company, or even with another agent.  If you do, you’ll find the same higher rates you just left, but in a different package.

Dude angsty about premium.

Dude.  My premium is getting bigger than my biceps.

Premiums are tricky, but manageable.

Let’s get this out of the way – no insurance agent worth their salt will raise your premium just to make a few cents.  In fact, they can’t, as you would notice the increased coverage or new limits on your policy.  If your premium has gone up and nothing has changed, the odds are that one of the three factors listed above is to blame.  And your agent can’t really affect any of them.

The good news is that an independent insurance agent can work with you to help keep your premium at a respectable level without sacrificing coverage.  And if all else fails and you have to go with a new carrier, you don’t even have to switch agents.  Switching carriers is really a last resort though, as long-term customer discounts and especially package policy discounts can usually offset any increase you get.  Staying loyal to a company and putting all of your policies with them is the real way to game the system, not shopping for new insurance every six months.

Still curious?  Shoot us a message or give us a call.  It’s kind of what we do for a living.

 

Do I Need Full Coverage?

Full Coverage: The Heart-Eyes Emoji of Insurance

When you think of what auto insurance is supposed to do, you’re thinking of full coverage.  The term “full coverage” refers to having both liability coverage and physical damage coverage on your vehicle.  While I’ll get more into what those are in a moment, the gist of it is this: your state requires you to have insurance that covers damage that you cause to others in an accident, or liability coverage, while coverage to your own vehicle is physical damage (you usually hear it referred to as “comp and collision”).

Let’s dig into Liability and see what it covers.

Woman posing with car that doesn't need full coverage.

And I was like, “Liability is so popular right now. Ugh.”

Liability is like an engine.  You can’t drive without it.

I mean, you could roll down a hill.  But it’s not really the same thing.

Everyone has to have liability.  That’s the law.  And the reason is simple – people need some guaranteed protections from accidents that aren’t their fault.  If someone hits you, and they don’t have liability insurance, you would have to take them to court if they refused to pay you damages that they caused.  With liability insurance, that drastic action isn’t needed.  Police statements and insurance adjusters determine fault and pay out damages depending on the limits of liability in the auto policy.  BUT, if you have low limits, and you refuse to pay the additional amount if damages are more than your limits, you can still be sued.  That’s why we always recommend higher limits, as I’ve said before in THIS BLOG.

So liability by itself is not “full coverage.”  That’s why we get asked for “liability only” insurance pretty regularly.  But it isn’t enough – in fact, you could call liability only “half coverage.”

Eddie Murphy saying, "HALF."

Comp and Collision Protection Rocks

And it covers rock damage, too!  (bad insurance joke)

Comprehensive coverage and collision coverage are the second part of full coverage.  They cover the damage done to your vehicle if you and not another party are responsible for the bill.  Put simply, if you hit it, comp and collision get it – if it’s your own vehicle.  The two are different, and they cover different situations, so let’s break it down further so we can tell the difference.

Collision is coverage for damage to your car caused by it colliding with another object, such as a car, phone pole, tree or a Starbucks – pretty much anything really.

Comprehensive is also called Other Than Collision, so that should give you a great hint for what it covers.  Basically, this coverage protects you from just about anything else that happens to your vehicle that isn’t from something hitting or being hit by your car: fire, water, wind, explosion, falling objects, vandalism, theft, and, especially, glass breakage.

These coverages protect you from a huge array of risks and dangers that each of us face daily.  Run into a concrete pylon while parking?  Collision’s got you.  Neighborhood teen spray paints your car because they’re in love with your daughter?  Comp will take care of it.  Knock off your side mirror on a wall while waving to someone after church?  Collision does that, too.  Wife catch you sneaking a smoke and you drop it in the backseat and later find your car on fire?    Comprehensive will come to your rescue (marriage counseling not included).  And for all the times a pesky rock gets kicked up and cracks your windshield – yes, comp is there for you again.

Neither comprehensive nor collision are mandated by law as must-haves.  That means you need to ask for them yourselves if you don’t already have them, or bring it up at your next insurance review and ask whether or not you need it.

SUV in the snow.

Yes my car was stolen.  They found it where?

Do I need Full Coverage?

So really, if you have comp and collision, you have full coverage.  After all, liability isn’t optional.  So when people say “full coverage,” they mean liability with comp and collision.  But when should you have both?

There are certain situations were you have to have comp and collision.  The most common is if your car is financed through a loan or a lease.  If it is, you are probably required by your financial institution to have full coverage.  They want to make sure that the vehicle is properly maintained and repaired in case of any damage.  They do this because they may end up owning the vehicle, and full coverage is the best way to help ensure the car or truck is given the best care possible.

If you have an older vehicle, however, that you own outright, then you may not need full coverage.  If the cost of an accident may exceed the value of the vehicle, you may want to save the money and only have liability only – with a healthy amount of coverage – to protect you on the road.  Put the money you save towards than new dream car you’re thinking of, or an investment, or a big bowl of ice cream for your adorable daughter.  Go (responsibly) nuts.

The reality, however, is that most of us aren’t required to have full coverage, but we should anyway.  One big accident could leave you financially exposed and hurting, and all from trying to save a few hundred bucks a year.  While some of us can go buy a new car after losing one completely, most of us would experience a massive financial burden from having a car stolen, burned, or totaled from running into a tree.

The real question is how can you justify not having full coverage?

Lego car that doesn't have full coverage.

I don’t have full coverage, but then again I’m made of Lego™.

Other coverages in Full Coverage.

Also included in full coverage is Medical Payments Coverage, usually called Med Pay, and Under/Uninsured Motorist Coverage.  Med pay covers those in an accident if they need medical care, while under and uninsured motorist coverage protects you if you are hit by someone with not enough insurance or no insurance at all.  While it is illegal to drive without liability insurance, it happens regularly.  Make sure the limits on both of these coverages are comfortable amounts for both you and your agent.

Full coverage policies also provide optional coverage for rental and towing expenses.  These vary, so make sure to check with your agent for more information.

So you’re going to tell me to get full coverage, right?

Pretty much.

While it isn’t necessary for everyone, the vast majority of us would be better off with full coverage.  If you’re not sure whether you are one of those people you are, or if you’d like to add the peace of mind that full coverage can bring, fill out the form below or call us to get started.

Deducing Deductibles: How They Work

Deductibles: Dastardly or Darling?

One of the words most of us know when it comes to insurance is deductible.  Despite this, one of the questions we hear on a regular basis is this: “What is a deductible?”  Or, at best, “How does my deductible work?”  While we are all familiar with the term, it is one of those words that seems to create confusion rather than clarity.  So let’s dig into what exactly a deductible is, and what it means for your auto and home policies.

Angry girl thinking about deductible.

You borrowed my car and did WHAT? I HAVE A CRAZY HIGH DEDUCTIBLE!

Money up front, party in the back.

A deductible is the money you pay when you have an accident before your insurance pays out anything for the claim.  At first this may seem strange.  After all, you pay good money for your insurance policy, so why wouldn’t it pay for all of the accident?  The answer is that, if you so choose, your policy will pay all of the claim. (up to the limits you have selected for coverage, of course).  But you will find yourself responsible for a larger premium as well.

A deductible is a way for a policyholder to share some of the burden of risk with the insurance company, rather than transferring all of the risk through the policy.  With a deductible you pay less in premium (the amount you pay for your policy) overall, but you agree to pay part of the damage to your home or vehicle.  It is a way for you to reduce your payment, and hope that you can avoid an accident.  If you do get into a wreck, or have something happen to your home, then you would have to pay money up front before anything is given back to you for coverage.

Nervous piggy bank.

An accident? Sigh. This is going to hurt…

What options do you have with deductibles?

Like most things in insurance, you have an option of how much or how little you want in a deductible.  For auto insurance, the deductibles can be pretty small, and usually range from $100 to $500.  Since houses are so much more expensive than vehicles, their deductibles are also higher, ranging from $500 to $5000.  The specifics will vary from state to state, and may change based on the company as well.

If you are debating whether or not to have a higher or lower deductible, there are two things you want to keep in mind.  First, take your driving record into account when trying to make this decision.  Are you prone to accidents, or, put another way, are you likely to use your insurance coverage?  If you do, and you have a high deductible, you are setting yourself up for out of pocket expenses – not to mention your premium going up due to having a claim or two.  That being said, if you are a fantastic driver, or have a very low-risk home, maybe a higher deductible makes sense.  Your chance of having to use your deductible would be fairly low, and you might save more money over the long run from having lower premiums.

The second thing to keep in mind is that large deductibles require a little bit of financial planning.  While most of us can come up with a $500 deductible after an auto claim, a $5000 up front payment after a homeowners claim might make some people hit the panic button.  If your budget is tight, and you think setting your deductible sky-high is a way to save money, you may be in for a rude awakening if you do have an accident.

Panic button.

Press in case of claim.
(Actually don’t and read THIS.)

Deductibles: Another way you are in control.

So use your deductibles wisely, as they are one of the ways you have control over how your policy operates.  And, as always, if you aren’t sure what a good deductible amount would be for a new policy, or if you are reevaluating your coverage during a review, just ask!  Talk to your agent about what the end goal is and work back from there.  Want to save money month-to-month and don’t mind paying out of pocket?  A higher deductible might do the trick (as well as paying EFT as we talk about here.).  Want to let insurance do the heavy lifting or don’t have money to spare in your budget?  A lower deductible might be right for you.  If you’re like most of us, you’re somewhere in the middle.  Let you agent help you fine tune your coverage amounts to make sure you have the best protection for the best price possible.

And that’s it!  Now you’re a deductible pro.  Go on, tell your friends.  They’ll be impressed.

And if you still have questions, about, well, anything, just ask.  Fill out the form below and let us know how we can help.

Common lawsuits employers face today.

No one thinks they will be in a lawsuit.

“It will never happen to me.”  That’s what so many business owners today think when they hear about employees taking their bosses to court.  The vast majority of small business owners, entrepreneurs, managers and leaders genuinely believe that the chances of being sued by an employee are slim to none.  Unfortunately, they are completely wrong.  If they weren’t, insurance companies wouldn’t offer Employment Practices Liability Insurance, or EPLI for short.  So let’s look at some common lawsuits employers face – and see how common they are.

Woman offended by boss and considering a variety of lawsuits.

What did you just say, boss?

One-in-four women have been sexually harassed at work.

Yes, you read that right.  25% of all women who work have reported being sexually harassed on the job.  If you have any female employees, chances are at least one has been sexually harassed during working hours, most commonly by people in positions of authority.  While in previous decades these actions were kept quiet or ignored, they now are being reported to the police, exposed to lawyers, and screamed out loud on social media.

And it may be even more common than that.  One recent study found that “38 percent of women said they experienced sexual harassment at the workplace. ”

But it isn’t just being reported – it’s being taken to court.  The EEOC, the government commission charged with handling these cases, reportedly collected “‘recovered $164.5 million for workers alleging harassment claims.’  And, as the article points out, this does NOT include legal fees.  Many small businesses won’t be able to survive a legal hit like this, which is why EPL insurance is more important than ever.

So make sure you don’t think your business is immune to this risk.  You don’t have to know about #MeToo to experience it.

Plastic dinosaurs.

Times have changed.  Don’t be one of these.

More than half of all businesses have faced wrongful termination lawsuits.

Yup.  According to our friends at CoverWallet, “60% of employers have faced an employee lawsuit in the previous five years...”  These lawsuits are from an employer firing an employee on what they believe are completely legal grounds, but the employee disagrees and takes the employer to court.  These lawsuits are incredibly common and can strike even when a business owner or manager feels there is no way that such a termination is beyond the scope of their authority.  Many states are considered to be “at-will” states, where employees may be terminated for any reason.  But some reason are illegal, no matter the circumstances.  The most common reasons are:

  • Discrimination.
  • Breach of Contract.
  • Retaliation

While many of you know what these risks represent, I’ll go over them just to clarify.  Discrimination is when you fire someone based on the following (but not limited to) factors: race, gender, age, religion, sexual orientation, ethnicity, disability, national origin and marital status.  Breach of Contract is when an employee is terminated despite language in a pre-existing employment contract that would protect the employees status or otherwise prevent the termination.  Retaliation is when an employer terminates (or a number of other activities such as cutting hours, verbally harassing, etc.) a worker as punishment for reporting unlawful behavior or otherwise cooperating with law or regulatory authorities, as well as other protected activities.

Keep in mind that this is not legal advice – if you are unsure if a situation with an employee may be the kind of thing that lands you in court, please talk to a lawyer.  All we can do is warn you of the kinds of risks you and your business may find in the modern world.  What happens in the courtroom is beyond our scope.

Whatever the case, know that there are lawyers out there right now who would love to talk to your employees about their situation at your business.  Websites like this one advice employees not just on how to determine if they have been harassed or wrongfully terminated, but how to win the case as well.

Woman managing construction.

And then my boss said, “This is no place for a lady.”

Your current business insurance policies don’t cover these risks.

That’s right – these risks are among the most common you will ever face, and yet your General Liability policy doesn’t protect you from a sexual harassment claim.  While business owners are required to have Workers Compensation insurance, another incredibly common risk, they are not required to be protected from employment practices trouble.

There is a coverage that does cover this: Employment Practices Liability Insurance.  If you do not have this vital protection, you are leaving yourself exposed to a danger that is only becoming more and more common in the current working world.  Fill out the form below and ask how you can get EPLI – before something happens.  At Alliance, we cannot stress this coverage enough, and think it should be a standard form of protection for everyone who employs other people.

It goes without saying that all businesses should treat their employees with the respect that they deserve.  And yet these events continue to find their way to court rooms across the country with lawsuits everywhere going to trial.  Take measures to treat your employees honorably and respectfully, but plan for the worst.  Just like in auto insurance, being a safe driver is the best thing you can do for your safety and your pocket.  But you still need auto insurance, because, as we all know, accidents happen.

If a Tree Falls on Your House, Can Your Agent Hear it?

What’s the sound of one tree falling?

In insurance cliche bingo, “A tree fell on my house,” comes right after, “Why does my insurance go up after a wreck?”  Both will get you a letter on your card (your bingo card… it’s from the metaphor… oh nevermind).  I won’t get into the second cliche right now (short answer is, well, because you got into a wreck and you’re more likely to get into another one), but I will get into the whole tree thing.  Especially because we’ve had some pretty bad weather, and trees falling are on everyone’s mind.

So, is it covered?  YES.  A tree falling on a house is covered under a homeowners policy.

But how?

Lightning in a neighborhood.

But that lightning started over the Johnson’s house.

When a Tree is Like Lightning

Let’s say you have a house – if you’re reading this then you probably do.  There is a tree in your neighbor’s yard, and a big gust of wind blows this ancient, deciduous beast over and onto your home.  You and your neighbor rush out, frantic, and the first thing your neighbor helpfully says is this: “That’s on your property.  It’s not my fault.”

Property lines are a tricky thing, and advice on how they work would be beyond the scope of this blog.  Check your deed or your local government for more information on that.  Also, talk to your neighbor, and work things out before something happens.  Cooperation is always preferable to finger-pointing.

But the point is this – you can try and blame your neighbor all you want.  But your neighbor is right.

Meme about fault.

When a tree falls, the confusion about coverage comes from the fact that a tree is attached to the ground.  “Duh,” you probably say.  But to an insurance company, where the tree is attached doesn’t matter.  A tree hitting your home is an occurrence that happens occasionally, and usually without fault or neglect.  So instead of thinking about where the tree came from, think of a tree the same way you think about lightning.  You don’t worry about who’s house the lightning formed above if it hits yours – lightning strikes, no matter where it appears, and there is nothing anyone can do about it.  Wind blows trees down, and they fall.  There is no fault involved.

Palm tree in front of a lovely Charleston home.

Bend, don’t break.

Does it matter how it fell?

YES.  As with all claims, how something happened is of paramount importance to if it is covered.  If wind blows a tree down in your yard and it hits your house, your homeowners insurance will cover it as wind is covered by your policy.  If you are excited about your new monster chainsaw and your way of showing off to your buddies is to go after that old oak in the corner of your lot, and you watch in horror as it slowly glides down onto your neighbors roof – that’s probably covered.  Like I said earlier, stuff happens.  But in the above instance, it’s a matter of negligence- especially criminal negligence.

Hey y’all watch ‘is.

If you have been drinking all afternoon when you cut down the tree, you leave yourself open to a lawsuit from your neighbor due to negligence.  Again, this is not legal advice, but anyone can sue you for anything, so be wary for putting yourselves in situations where you could be liable for damages.  But remember what we learned in Homeowners 101 – the liability part of your policy will still cover you, even if there are legal troubles.

The worst situation is when the negligence is criminal, or illegal.  If you cut down a tree purposefully, intentionally hitting your neighbor’s house, all because his dog tore up your prize rose bush, well, that’s a different story.  Insurance does not cover criminal acts, period.  Luckily for us, we almost never see intentional tree attacks.  They’re really heavy.

If you have questions, reach out and check with us – we’d be happy to walk you through your coverages.  And if you don’t have coverage on your home, call us ASAP and let us help you get the protection you deserve.

It’s Time to Get Real About Flood Insurance

You’re in denial about Flood Insurance.

There, I said it.  Flood insurance is the most overlooked policy for homeowners in the entire country.  It is the biggest gap in coverage that we deal with on a daily basis, and could easily be resolved with one simple, affordable, government-backed policy.  So why?  Why don’t more people have flood insurance?

The answer is that we really are in denial.  We have told ourselves that flooding is something we will never deal with, or that if we do have a substantial amount of water creep into our homes that our homeowners policy will cover it.

Neither are true.  So let’s take off the blindfolds and get into the realities of flood insurance in the modern world.  Because this is not just a problem for people near the coast.

Cars and homes in a flood without flood insurance.

Meanwhile, hundreds of miles inland.

Flooding is common – and becoming more so.

Water damage is the second most common type of claim for a home, beaten only by wind damage.  If the damage comes from water already inside the house, or if it comes while it is falling, then it is covered by your homeowners policy.  As soon as rain hits the ground, however, your homeowners coverage ends.  Ground water, be it from a build up of rain, an overflowing body of water, or storm surge, is always considered to be flood damage.  And it is not covered by your homeowners policy.

For those of us on the East Coast, we have seen over and over how hurricane damage is not limited to the coastline but can extend hundreds of miles inland, with flooding of roads, houses, and cars becoming a common occurrence.  Not only that, but secondary issues caused by flooding, such as power outages and accidents, increase as well.  But it doesn’t take a hurricane to cause a flood.  We have all seen how rainy it has been the last few years, and with warmer oceans, increased rainfall and stormy weather look to be the new normal rather than an abnormality.

Picnic tables in flood waters.

Picnic?  I’ll take a rain check.

Far too few of us have Flood insurance.

Only about 10% of North Carolinian’s have flood insurance.  That statistic plummets the farther away one gets from the coast.  All of this despite the fact that North Carolina is one of the most likely states to be hit by a hurricane, and that it receives more flood claims that most other states.  And, as we have seen, flood damage isn’t just from storm surge and rain collecting in flat lands.  Rainfall that collects on the ground runs down to escape, finding lower areas like creeks, rivers and, you guessed it, basements.  Another way that flooding hits inland communities is through local creeks and streams swelling well beyond their normal limits and finding their way into the yards, basements and even first floors of our ever expanding developments and cities.

Consider this: Winston-Salem, NC, with a population of just over 242,000, has fewer than 1,000 flood policies in force.  And there are high flood risk areas in every single county.  Using Winston-Salem again, huge areas around Peters Creek and Salem Creek are in high risk flood zones.  Another surprising area is Reynolda Road, with many homes along this famous street being in an area that could see flooding.  But even if you aren’t in a “high risk” area, flooding can happen with the right weather conditions, and in just about any season of the year – though it is much more likely in summer and early fall.

Check out the fantastic North Carolina Flood Risk Information System  to find out high risk flood zones in your area.  Most states have these maps, and even states that you wouldn’t expect have their fair share of resources.  Pennsylvania, as another example, has an excellent flood website.

Ball hitting water during flood.

Maybe we should switch to water polo.

Flood insurance is more affordable than you think.

How are flood policy premiums determined?  The basic breakdown is this: the What’s of the property (what size, what age, what type, what condition, etc) and the Where of the property (where is it, i.e. what flood zone is it in).  The usual result is anywhere from a couple hundred dollars a year for a low risk property to around a thousand for a high risk property – but keep in mind these are estimates.  Massive, oceanfront homes can be very pricey to cover, but in order to buy one you are usually required to have flood coverage.  The higher the risk, the higher the premium, but the more you need it.

The good news is that most of us live in lower risk areas and can afford to buy flood insurance for a very reasonable amount a year.  It really is a part of our risk portfolio that we can’t afford to ignore.

Children walking in flood waters near lighthouse.

Didn’t we have a yard before?

Let’s be real – you need Flood insurance.

Let’s stop kidding ourselves.  Flood insurance is something that any responsible homeowner needs in the modern world.  Fill out the form below to find out how affordable flood insurance might be for your home.  And if it keeps on raining, you’re going to need it.

Why Your Policy Doesn’t Cover Wear and Tear

Your Insurance Policy Does a Lot

Whether your policy covers your car, truck, house, apartment, boat, or motorcycle, it does a lot to protect you from a variety of bad things that can happen.  Most policies cover you from natural events like fire, lightning, wind, vandalism, theft, and other nasty surprises.  And that’s why we have insurance in the first place – if something does happen and your home catches on fire or your car is stolen, we don’t want to have to pay for the loss out of our own pocket.  There are something that your policy does not cover, however.  And one the we get asked about a lot is wear and tear.

 

The word "Yeah" on a blackboard.

Did you think this was covered?

What is wear and tear and why isn’t it covered?

According to Dictionary.com, wear and tear is, “damage or deterioration resulting from ordinary use; normal depreciation.”  In other words, if you have a refrigerator, and after ten years of steady use it suddenly breaks down, that is wear and tear.  Or if your eight year old vehicle needs the brake pads replaced after them becoming worn from use – that’s also wear and tear.  Basically, if time takes its toll on something, and it begins to wear and break, that is exactly what we are talking about.

So you, the savvy and practical consumer, must be asking – why?  Why isn’t that covered?  Isn’t it damage to my home or car?  Isn’t that why I have insurance in the first place?  And the answer is – well, not really.

Insurance covers things that can happen to you suddenly.  The phrase in the industry is “sudden and accidental,” and is usually referred to as pure risk or event risk.  The risk has to be a risk without the possibility of financial gain – for example, gambling is a risk with a potential financial gain, and is therefor non-insurable (sorry Vegas lovers).  It also must be something that happens in a single event, like a fire breaking out in your kitchen, a car hitting your vehicle at an intersection, or the loss of someone’s life.  Insurance protects against these kinds of pure risk by taking on the risk for you for a fee, your premium.  Essentially, you’re paying for someone to hold the risk for you if something bad happens.

Wear and tear is nothing like that.  It happens over time, without one specific event.  It is not a true risk because all mechanical devices and structures eventually erode and decay, especially without proper maintenance.  This is a beautiful world we live in, but also a tough one, and forces like friction, decay and time can wear just about anything down.

It happens, but it isn’t what your insurance policy does.

The word "cool" on a black board.

Well, there is something that covers wear and tear.

You can get wear and tear covered.  But it’s not insurance.

It’s called a Home Warranty.  Various companies (not insurance companies) will agree to cover the eventual breakdown of home appliances, important home systems like your HVAC and electrical system, and some add-ons like pools and well pumps.  These coverages are exactly for wear and tear, and not for the things your insurance policy covers.  If your dish washer has a part break and stops working, your home warranty would cover that.  If lightning strikes and shorts out your dishwasher, your insurance policy will cover it.

Also, keep in mind that your insurance agent usually does not sell home warranties.  For pricing and service options, do some searching online to find companies that are right for you.

But you’re a savvy consumer, so you already know how to do that!

If you do need insurance help, fill out the form below and we can walk you through the coverage you have – or help you get those missing gaps in coverage, well, covered.

A sign that reads, "Welcome," as in "You're welcome for helping me understand wear and tear."

Why yes, you are.

 

How to Perform an Insurance Review

An Insurance Review is Mandatory

But you probably already knew that.  You’ve heard it from your agent until you, or more probably she, is blue in the face – you NEED an annual insurance review.  But what does it cover?  And what if you have already had one, but things in your life have changed and it may no longer be accurate?  What is a responsible go-getter like yourself to do?

Why, perform your own insurance review, that’s what.  Doing this before your annual review with your agent will have you super prepared, and doing it just for yourself might help you find gaps in coverage that were missed earlier – all before an accident makes it too late.

Cat stretching after a relaxing insurance review.

Ah, that freshly reviewed feeling.

Dude, why do I need a review?

An insurance review helps you in many ways, but the most obvious way is that it can reveal what I referred to earlier as “gaps” in your coverage.  These are parts of your net worth that are not adequately protected from risk.  An example would be minimum limits of insurance on a brand new BMW – one accident that is your fault and you could lose the entire car, and be on the hook for additional expenses if the car you hit is worth more than your limits.  Another example is missing a coverage entirely, like an umbrella policy or life insurance.  If you have a family and you don’t have life insurance, you are missing out on a tremendous opportunity to provide for your loved ones if something terrible happens to you – and it usually doesn’t cost that much at all, especially if you’re healthy.

Now that you have a good idea of why you need an insurance review, let’s look into how you can go about doing one yourself.

Surfer looking at waves.

Life Insurance?  I don’t have any risks.

Find the Holes in Your Armor

The first thing to do when reviewing your protections is to cover the basics: auto and home.  You’d be amazed at how many people are underinsured when it comes to these necessary protections.

Start by checking your auto insurance, then compare that to the cost of your vehicles.  If you were in an at-fault accident, and your policy wouldn’t cover the cost of your car or truck, that’s a big gap in coverage.  Also check your liability coverage and compare that to the cost of a new luxury vehicle.  If your policy wouldn’t cover you totaling a new car that you hit in an at-fault accident, you’d better get more coverage.

For your home or renters policy, the most basic question is do you have one?  Shockingly, over 50% of all renters don’t even have coverage, meaning that they are one bad fire or break in away from losing everything.  If you’re a homeowner, chances are you do have coverage, and your insurance agent should have ran a Replacement Cost Estimator, or RCE, on your property to make sure that it is insured for the correct amount.  If you aren’t sure if they did, feel free to ask.  The big thing for homeowners is liability and personal property.  Check the amount of liability coverage you have and consider increasing it – ask your agent if you aren’t sure how much is enough.

And as for your personal property, make a list of what you own and find the high value items that may not be adequately covered under your homeowners or rental property.  Jewelry, fine art, silverware, furs, firearms, these are but a few of the things that have small limits of coverage under your policy.  Check with your agent to see if you need to add, or schedule, them to your homeowners or renters policy, of if they need a special policy all their own, called an inland marine policy.

And as for the rest…

Make a list of all of your other valuable possessions: motorcycles, boats, vacation properties, etc.  If you can lose it in an accident, you should probably have coverage to protect it.  And don’t forget the most valuable thing of all – your life and health.  If you don’t have Life and Health insurance, then you are gambling with the last thing you would ever want to lose.  Call and speak with an agent before your review and find out how reasonable these coverages can be and what they can do for you and your family.

Woman typing on laptop on bed.

Wow, I have more than I thought.

Now that you know, talk to your agent.

You’re probably surprised by what you’ve found.  We understand – we hear how people had no idea they had gaps in their coverage every day.  Now the only thing left to do is talk to your agent about what you’ve discovered.  If you’re not sure who to talk to, try us.  Helping people get adequate – no amazing – coverage for a reasonable price is literally what we do for a living.

Fill out the form below and ask us how we can help cover the gaps in your protection.  You may be shocked at how easy and painless it is to be guarded against life’s worst moments.

Beginner’s Guide: Cyber Liability Insurance

Cyber Liability: Insurance for the Modern World

Cyber is a word we hear all of the time in modern culture, but rarely in regards to insurance.  Phrases like “cyber security,” “cyber attack,” and “cyber stalk” are everyday terms at the workplace, at home and online.  The simple fact of the matter is that we live in a time when the digital is just as much a part of our lives as the physical.  So why would we only protect ourselves against physical risks, and not digital ones?  Let’s talk about the newest cyber phrase: Cyber Liability insurance.

Computers screen with word, "Security."

Got Protection?

How likely is a cyber attack?

Like most of us, you’re probably wondering just how likely it is that you or your business will be the victim of a cyber attack.  Why worry about cyber liability insurance if you never use it?  Unfortunately, the likelihood of you or someone you know experiencing an attack, or a hack, is very real.

According to Entrepreneur magazine and the FBI, there are over 4,000 ransomware attacks every day.  This is only one kind of attack, where the data in your computer is held for ransom until you pay the hacker to give it back – and they are under no obligation to do so.  Other types of attacks include malware, phishing, password attacks, DoS, MITM, Dive-By Downloads, Malvertising and Rogue Software.  These are only the most common attacks, not the only ones you are likely to face.

Check out these scary statistics:

  • There is a cyber attack every 39 seconds.
  • 43% of attacks hit small businesses.
  • Over 3,000,000 records are stolen from breaches every day.

Man smiling at computer doesn't have cyber liability insurance.

This is a funny email.  Sure, I’ll click the link.

How bad is it to be attacked?

There are varying degrees of severity when it comes to a cyber attack, some of which are no more annoying than running your virus scanner.  Others, however, can literally destroy your business.  According to one estimate, “the average cost of [a] cyber crime amounted to $21.22 million U.S. dollars in 2017.”  Another says that the “average cost of a data breach in 2020 will exceed $150 million.”  Regardless of what the actual amounts might be, even a small business might suffer over a million dollars worth of damages from loss of data, lawsuits from customers who’s personal information has been stolen, costs for helping customers or businesses recover stolen data and identities, and any direct damages your business might suffer from data loss – including funds that are stolen outright.

Computer screen with code.

But it said, “Download to speed up your computer.”

Cyber Liability: A Modern Necessity

In this climate of intense digital risk, a cyber liability policy is becoming an absolute necessity to be in business.  There is too much at stake to just assume that nothing will happen to you, and over-the-counter computer security can’t handle these new attacks – nor prevent an employee from having a careless moment that leaves you exposed.  Cyber liability coverage can help save you if an attack occurs, providing protection for:

  • Loss of Customers – Some customers may choose to not do business with you after an attack.  Cyber Liability covers the loss of these customers, helping you stay afloat until they come around or a new customer takes their place.
  • Business Disruption – Your regular business operations can be greatly disrupted after an attack, resulting in a loss.  This is covered under your cyber liability policy, making sure you can weather the storm.
  • Regulatory Fines – Depending on the attack, some regulatory bodies may decide to fine you for carelessness that lead to the attack.  These losses are covered under a cyber liability policy as a protected risk.
  • Legal Costs – It is not uncommon to face lawsuits from former customers and business partners after an attack, especially if their data was stolen. This is one of the primary reasons that Cyber Liability insurance was created.
  • Public Relations – Suffering an attack can leave a black mark on your image of your business.  Costs to have your good name restored is another great coverage under a Cyber Liability policy.
  • Direct Financial Loss – Theft of funds through digital means is often what most people think when they say cyber attack.  Losses from cyber theft are covered under Cyber Liability protection.

Woman buying cyber liability insurance online.

I always use the same password to save time.

How can I get Cyber Liability coverage?

If you’re curious about Cyber Liability and want to protect your business of cyber attacks, contact us here at Alliance Insurance.  This is one of the most important coverages that a business owner can ever have, and we are passionate about helping protect the men and women who keep our economy going.

Fill out the form below and we’ll be happy to walk you through a quote.  Or go to our contact page and ask us a question.  We’re all ears.

Winston-Salem

348 Summit Square Blvd.
Winston-Salem, NC 27105
Get directions
336-377-9003
mail@myallianceinsurance.com

Mount Airy

134 S Renfro St.
Mt Airy, NC 27030
Get directions
336-786-1133
mail@myallianceinsurance.com

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Walnut Cove

514 North Main Street
Walnut Cove, NC 27052
Get directions
336-591-3091
mail@myallianceinsurance.com
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