Webinar Recap: Spotlight on Personal Insurance Issues for Business Owners and High-Net-Worth Individuals

In our November webinar, we invited Ron Vanderschaaf​ of Accent Insurance Agency, to advise business owners and high-net-worth individuals on personal insurance issues.

Homeowners Policies

With all the activity in the local residential market, many of you are buying a new home or changing insurers. Most policies cover damage from wind and burst water pipes. Some policies offer very limited coverage for mold. Impacts from earthquakes, landslides and floods are typically not included in standard homeowners policies but may be covered as an endorsement or on a separate policy. Check the language of your policy regarding coverage for jewelry, camera equipment, silverware and collections (stamps, trading cards, coins and comics).

Insurers focus on these factors when determining your coverage and premium:

• Age and condition of your home and its systems

• Frequency and type of claims, especially those related to water (leaking washing machines and water heaters, seepage or accidental damage), which stay on your record for 5 years

Auto Insurance

Collision insurance covers damage you do to your car. Everything else is covered under the comprehensive policy. Remember that the insurance follows the car, not the driver. Here are some considerations to minimize your exposure to a claim that exceeds the limits of your coverage:

• Investigate registering the car in the business’ name if you visit clients or job sites, which constitutes business use. Be sure to tell your insurer so you get a different rating. However, using your car livery and delivery services like Uber or DoorDash is generally not considered a business use and is not covered.

• Call 9-1-1 when you have an accident, particularly if you’re not at fault. Documentation is critical, so even if the police won’t come out, take pictures and get contact information, including for anyone who witnessed the accident. For collisions in parking lots, it may be cheaper to cover the cost of repair yourself than have the claim on your record for 5 years, which affects your premium.  

• Be careful lending your car because any accident it’s involved in, regardless of who’s driving, counts on your policy. This also applies to all household members of driving age.

Umbrella Policies

These supplemental policies extend liability coverage beyond your personal home, rental property and vehicle (including watercraft and motorcycles) limits. It protects you from lawsuits, garnishments and judgments. The minimum cost for this coverage is $1 million and it's most cost-effective to purchase an umbrella policy from the same company that provides your home and auto. Determining how much coverage you need depends on your financial assets, employment status, income and real property ownership. The property ownership structure is a key consideration, so consult your attorney for guidance before buying a policy.

Trends to Watch

Several trends are impacting coverage, premiums and availability, including: 

• Auto insurance: Insurers have some underwriting concerns about electric and autonomous cars that push premiums for these vehicles higher.  

• Homeowners insurance: Because of the increase in severe wildfires in Eastern Washington, many insurers won’t offer homeowners coverage for secondary residences. Check with your agent before buying a vacation or rental home in the area.

• Long-term care insurance: To help residents pay for certain long-term care expenses, the State of Washington recently enacted a mandatory payroll tax of 58 cents for every $100 earned. You can opt out of the tax by purchasing private insurance, but the deadline for 2022 has passed. However, several state lawmakers are asking that implementation be delayed. Check with your agent. 

• Tiered coverage: Many insurers are stratifying their coverages to offer a range of options at different price points. When your policy is up for renewal, be sure to investigate the options to find the most appropriate and affordable product.

• Insurance scoring: The State Attorney General has put an end to the common practice of insurers factoring credit scores into their rates. This has caused some increases in premiums of up to 10-45%. If your rate is increased but you haven't had any claims, contact your agent to discuss potential ways of mitigating the cost.

Get more details by tuning into the full session below.

This information doesn’t constitute financial or legal advice. Always check with an attorney, real estate investment or financial expert before making decisions.

As always, reach out if you have any questions.