September 2011 - CH Edwards, Inc.

How much building insurance is enough?

As a New York small business owner, you know the importance of preserving

your assets. For many business owners, the largest single asset they possess

is their building. Whether you occupy the building or operate as a landlord

(or both), consider key exposures in your risk-management and insurance planning.

Your New York business may be ill-prepared to afford damages to your building

that lead to major repairs and renovations. Your solution? Adequate property

insurance written for the full insurable value of the building.

Policies take many shapes and forms, with coverage ranging from basics such as fire,

windstorm and vandalism; to the broadest forms, which cover any loss not

specifically limited or excluded.

Talk with your independent insurance agent about what policies your business

is eligible for and decide what amount of coverage and price best meets your

business needs.

Common Penalties for Driving Without Insurance

As stated above, penalties for driving without New York automobile insurance vary from state to state; however, a few of the most common penalties include:

· Having your driver’s license suspended.

· Having your vehicle registration suspended.

· Receiving a traffic ticket for a no insurance violation. This is in addition to the traffic ticket(s) you receive for the original reason you were pulled over. Depending on the officer and where you receive the ticket, you might be able to have the ticket dismissed if you can show proof of New York automobile insurance within a certain time period following the date of the citation; however, this generally only applies if you really did have coverage at the time of the traffic stop and just happened―for whatever reason―to not have your insurance card with you.

· Meeting SR-22 requirements. Some states might only impose this if you cause an accident while driving without insurance; others may impose it simply for driving uninsured.

· Hefty fines. In addition to meeting other requirements, you’ll have to pay to have your license and registration reinstated. Plus, you’ll have to cover the traffic ticket fines.

Keep in mind, that these are just a few of the most common penalties. Check with your state’s DMV for specific details.

Call us at C.H. Edwards for a fast, free and easy New York automobile insurance quote!

Landlords, Beware

Experienced landlords will agree that there is nothing quite as comforting as a good tenant; especially if the tenant spends his own money making improvements to your building during the lease term.

But if a tenant plans to spend big bucks on improving your property, you’ll want to consult your Trusted Choice^® insurance professional first. That’s because improvements that become part of the building are calculated into the building owner’s property insurance limit for the purposes of determining adequate insurance. So a building owner must amend his insurance to reflect the value of the improvements or he could be in for an unpleasant surprise at claim time.

Business insurance policies determine how much of a loss is paid by using the value of “covered property” at the time of the loss, not when the policy was purchased. The building insurance limit must at least equal a certain percentage of value, typically 80%, 90%, or 100%.

Consider this example: A landlord leases his retail building to a tenant who sells custom floor coverings. The current value of this building is $2 million and the landlord’s insurance policy has a limit equal to 100% of that amount, as required by his policy. With the landlord’s permission, the tenant installs a new floor in the showroom valued at $1 million. A fire damages part of the building. The showroom and custom flooring are not directly damaged. However, while processing the claim, the insurance adjuster determines that at the time of the fire, the value of the building includes the new floor, thus bringing it to $3 million: $1 million greater than the limit on the landlord’s policy. The landlord is severely underinsured and therefore will not receive the full amount of the loss.

So what if the lease makes the tenant responsible for providing insurance for the betterment? Realty laws in most states say that once an improvement is made to a building it becomes part of the building and is therefore included in that building’s overall value. While it is common for landlords to require that tenants insure the betterment itself that may not be sufficient. In this example, it was not the damage to the floor that caused his problem, but rather that the value of the new floor increased the overall value of his building and the landlord did not amend his insurance for the spike.

Claim time is no time to discover that you are underinsured. You have already suffered a loss, so the last thing you want is an insurance adjuster explaining why a larger portion of the claim cost will come from your own pocket. If improvements are being considered for your building, call your Trusted Choice^® insurance professional immediately. The good news is that most insurance policies can be easily amended to reflect the change in value. Such a change will ensure that your building’s new value does what it’s supposed to do: Put money in your pocket.

What Type of Insurance Do I Need for a Co-op or Condo?

If you have purchased a New York condo or New York co-op, the bank will require insurance to protect its investment in your home. You may, however, need more insurance to cover your personal items, liability or fees that may be charged to you regarding shared areas of the building like the lobby.

You will need two separate policies to protect your investment:

Your own insurance policy.
This provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. You also get liability protection.
A “master policy” provided by the condo/co-op board.
This covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.

To adequately insure your New York apartment, it is important to know which structural parts of your home are covered by the condo/co-op association and which are not. You can do this by reading your association’s bylaws and/or proprietary lease. If you have questions, talk to your condo association, insurance professional or family attorney.

Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or bathtub. Sometimes this includes not only improvements you make, but those made by previous owners.

In other situations, the condo/co-op association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc.

Also ask your insurance professional about the following additional coverages:

Unit assessment
This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss.
Water back-up
This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.
Umbrella liability
This is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.
Flood or earthquake
If you live in an area prone to these disasters, you will need to purchase seperate flood and earthquake policies. Flood insurance is available through FEMA’s National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.
Floater or endorsement
If you own expensive jewelry, furs or collectibles, you might consider getting additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.

When purchasing New York home insurance, it is important to find an agent or company that specializes in condominiums or co-ops. Also don’t forget to ask about all available discounts. You can reduce your rates by raising your deductibles and by installing a smoke and fire alarm system that rings at an outside service. If you insure your unit with the same company that underwrites your building’s insurance policy, you might also get an additional reduction in premiums.

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