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What Happens If You Don’t Rebuild / Replace

What Happens If You Don’t Rebuild / Replace

Every so often, a catastrophe occurs that wipes out entire homes and commercial buildings. It may be something localized, like a fire, or something widespread, such as a hurricane, earthquake, mudslide, or explosion. How your insurance policy pays on your claim is determined by a few factors: your deductible, how the policy was written (actual cash value or replacement cost), the coinsurance penalty (if any) and whether the home or business owner plans to rebuild. In most cases, policyholders rebuild. But what if you choose not to rebuild? What happens then? Should You Rebuild Your Home? A homeowner may choose not to rebuild his home after a total loss for many reasons. Perhaps he is tired of the location, or the cost to rebuild has become too expensive. Maybe it is the wrong school district, taxes in the area are too high, or the neighbors host too many loud parties. Can you choose not to rebuild your home? Certainly, but you should check the terms of your policy before the unthinkable happens, as some policies may have different ideas about how to pay if you choose not to rebuild. The Homeowners 3 – Special Form (HO3) has a section entitled Loss Settlement that addresses this issue in a unique way. If coverage is written on a replacement cost basis, then payment will initially be made at actual cash value (replacement cost less depreciation). Once rebuilding is in process or completed, the remainder of the policy face value (less deductible and coinsurance penalties) will be reimbursed. If the structure is not replaced, then no additional money will be paid on...
Business Owners Package Insurance

Business Owners Package Insurance

As the owner of a small or medium sized business, you want to concentrate on growing your business. What you don’t want to worry about is insurance. For many main street type businesses, Hayes Brokers has one insurance policy to cover your two main concerns: property and liability. It is called a Business Owners Package (BOP) and it includes the property (hazard) and liability (casualty) that you know you need, plus a few extras that you may not know you need until it’s too late. Advantages of a Business Owners Package When you purchase most or all of you insurance coverage through one insurance company, you often get discounts. A BOP combines two of your main policies at a lower price than two separate policies. This means there are less policies to worry about, and only one premium payment to make. Some advantages of BOPS are: Less expensive that stand-alone policies. Include coverage you may not have considered. Include additional sublimits not contemplated under a monoline policy. One insurance company, one payment. BOP Bells & Whistles Some BOP policies include coverage that is more broad in scope or not as readily available on a monoline policy. These may include: Business Income & Extra Expense: Actual Loss Sustained (instead of a stated limit) Equipment Breakdown Ordinance or Law Property Under Your Care, Custody and Control Employee Benefits Liability Hired & Non-Owned Auto Liability Blanket Additional Insured Blanket Waiver of Subrogation Built In Umbrella Coverage Some insurance companies even have special BOP packages for certain types of business such as pool contractors or beauty salons. These policies include coverage specific to...
Home-Based Businesses

Home-Based Businesses

You’ve no doubt heard the stories of big businesses that were started in someone’s garage. Windows, Apple, Hewlett Packard, Disney and many other companies began with an idea and started out as a home-based business. Could the next big idea come from your garage or dedicated home office space? It’s possible. While you’re building that dream, sometimes things happen along the way, and your home office or workspace could be damaged. Will your homeowners or renters insurance respond? The short answer is: no.  Here is the lowdown on what your homeowners policy won’t cover, and how to protect yourself if you have a home-based business, or even if you just work from home. Your Homeowners Policy Won’t Cover You The Insurance Services Office (ISO) standard policy Homeowners 3 – Special Form (HO3) is used as the basis for most homeowners coverage. Not all insurance companies use this exact form, so it is best to read your policy and talk to your broker. The HO3 defines business as “a trade, profession or occupation engaged in on a full-time, part-time or occasional basis” or “any other activity engaged in for money or other compensation”. Your homeowners insurance policy is designed to cover your home, your personal items and your personal liability. It was not designed to cover business pursuits, and in fact excludes operations out of the home related to business. Other Structures: Coverage is excluded for other structures “from which business is conducted”. If you run your business out of the shed or garage, there is no coverage. Business Property: There may be some very limited coverage for business items...