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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...
The Peril of the Attractive Nuisance

The Peril of the Attractive Nuisance

The pretty fountain you installed to make your property more attractive. The old car you’ve been meaning to have towed away. The swimming pool you worked hard to afford for your family to enjoy.  All of these may be considered “attractive nuisances”. If you think that sounds like a bad thing, you would be right. So what is an attractive nuisance, what are the consequences of having one, and what can you do about it? What Determines An Attractive Nuisance An attractive nuisance is something that may exist on your personal or business property. It is usually an artificial object, and may have gone unnoticed by you because it has become part of the landscape. Children can always spot an attractive nuisance. They look at the world with different eyes, and a hole in the fence may become the gateway to a different world. An abandoned chest freezer may become a rocket ship. A swimming pool looks inviting on a hot day. As a legal definition, the Attractive Nuisance Doctrine has 5 parts: You know there are children around who might trespass on your property. You know children may be at risk of injury if they enter your property. The children are too young to recognize the risks posed by being on your property. You can fix the problem for a reasonable cost. You have done nothing to fix the problem. When these 5 conditions exist, the landowner is considered legally liable for the injury or death of a child on their premises. The state of California did away with the Attractive Nuisance Doctrine in 1970, but replaced it...
5 Things You Need to Know About Insuring Your Business

5 Things You Need to Know About Insuring Your Business

Just about the last thing on anyone’s mind when starting a new business is insurance. When you do think about it, the words “expensive” and “complicated” probably come to mind. Who needs that hassle? In short: you do. Protecting yourself and your investors should be at the top of your list! Here is some handy, yet simple information that will help you understand what insurance is and why you need it. Premises Liability Any time anyone steps out of their vehicle in your parking lot or walks through the doors of your establishment, you run the risk of being sued. Slips and falls can occur on the most well-kept of premises. Injured patrons of your establishment might consult a lawyer to determine how much they can get for their medical bills, pain and suffering. Personal injury claims are expensive: from the legal fees (their and yours) to the awards (if any). A premises liability policy offers compensation for legal expenses and awards that might otherwise come out of your own pocket. If you are leasing the premises, your landlord will most likely require that you have this coverage before you can even move in. He might even require that your policy name him as additional insured. This will provide coverage to the landlord in the event someone is injured on the property that you occupy and are required to maintain. Another good reason to purchase this coverage is that your landlord’s insurance policy, if he has one, isn’t going to cover you. Contents/Property Coverage Property insurance is something you are probably considering, if only for the coverage it provides...
The ABCs of Homeowners Insurance

The ABCs of Homeowners Insurance

When you think of homeowners insurance, you probably think of a policy that responds when your house burns down, or if someone breaks in. Those things are typically covered under a homeowners insurance policy, but these policies cover those instances and so much more. There are many types of insurance policies for personal insurance coverage, but the three basics are: Homeowners Insurance. This is a policy that most people who own homes do or should have to protect their home and their belongings. Renters Insurance. This is the policy that most people who rent homes do or should have to protect their belongings. Dwelling insurance. This is the type of policy that a homeowner should have on a house that they rent to others, or that is insured at another location such as a summer or vacation home. This article will be focusing on just homeowners coverage. The sections of a homeowners insurance policy are denoted by a coverage letter, and they start with the property coverage. Coverage A: Your House. If you own a home, whether detached, semi-attached (a townhome or similar) or attached (a condominium) you should have coverage for the entire structure or the part of the structure you occupy. The amount of coverage is typically determined by an insurance (not market-value) appraisal, and may be written on a replacement cost or actual cash value basis depending on the age and construction of the dwelling. Replacement cost coverage is preferred, since you will want to replace your home should it be damaged or destroyed. Coverage B: Other Structures. In some cases, there may be another structure...
Commercial Property Insurance 101

Commercial Property Insurance 101

Insurance coverage for the things you own goes by a few names: hazard insurance, fire insurance, and most commonly, property insurance. You may have it but do you know what it covers? Is your policy covering everything you need?  Let’s take a look inside your property policy and find out. The Basics Most property insurance policies cover the items below, if requested. Limits are selected by the policyholder and may be subject to coinsurance penalties.  Your insurance broker can help you select appropriate limits of coverage. Your building. The structure on your premises that you own where you reside or conduct business. This may also be a structure that you rent or lease to others. Other buildings. Unlike on a homeowners policy, business policies require other structures on the premises to be scheduled in order to provide coverage for those structures. Business Personal Property. Also known as Contents coverage, this includes both furnishings and fixtures, items that your business owns that are not part of the building. Business Income. If you select this coverage and the damage to your business location causes financial harm to your business income, coverage would be paid out under this provision. There is usually a waiting period of 24-72 hours, but the payments allow you to pay key staff, vendors and utilities while repairs are being made. There may also be an Extra Expense limit under this provision that covers those items you wouldn’t normally need to pay if the business was up and running. Digging A Little Deeper These are property coverage items that you may need, but didn’t know you could insure:...