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Category: Insurance Tips

Flood Damage vs. Water Damage: What Homeowners Must Know

Posted on by Jon Blankenship

Article Overview: Unsure about your coverage? Learn the key differences between flood and water damage to ensure your home is fully protected against unexpected water issues.

Discovering unwanted water in your house ranks among the most stressful experiences a homeowner can face. Whether it stems from a burst pipe or a heavy storm, the immediate focus is always on stopping the flow and mitigating the damage. However, once the water clears, a critical question emerges: will your insurance cover the repairs?

The answer depends entirely on the source of the water. The insurance industry draws a strict line between water damage and flood damage. Understanding this distinction is not just a matter of semantics; it determines how your policy responds to a claim and whether you face significant out-of-pocket expenses.

What is Water Damage? You May be Surprised…

In the context of homeowners insurance, water damage typically refers to water that originates from inside the home or from a sudden, accidental structural failure. It generally involves clean water that escapes from plumbing, appliances, or a sudden breach in your home’s exterior that lets rain inside. The defining characteristic of covered water damage is that the event is sudden, accidental, and originates from a localized source.

Common Water Damage Scenarios

Several everyday incidents fall under the umbrella of standard water damage. Understanding these scenarios helps clarify what a standard policy is designed to protect against.

  • Burst Pipes: A frozen pipe that bursts during winter and damages your drywall and flooring.
  • Appliance Failures: A washing machine hose that ruptures, or a water heater that suddenly fails and leaks across the basement floor.
  • Roof Leaks: A storm blows shingles off your roof, allowing heavy rain to enter the attic and ceiling.
  • Accidental Overflows: A bathtub left running that overflows and damages the ceiling of the room below.

How Standard Homeowners Insurance Responds

Most standard homeowners insurance policies cover sudden and accidental water damage. If a pipe bursts and ruins your hardwood floors, your policy will likely pay to repair the floors and fix the resulting damage.

However, insurance relies on the premise of sudden accidents. If a slow, hidden leak causes mold and rot over several months due to neglected maintenance, your claim will likely be denied. Insurance companies expect homeowners to perform routine upkeep. Gradual damage resulting from wear and tear or lack of maintenance falls outside standard coverage parameters.

What is Flood Damage? It’s Specific…

Flood damage is defined by the source and the behavior of the water. The Federal Emergency Management Agency (FEMA) and the insurance industry define a flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties.

Crucially, floodwater originates from the outside and flows indoors. It is an external event driven by nature or the failure of external infrastructure, affecting multiple areas simultaneously.

Common Flood Damage Scenarios

Flood damage events are typically tied to severe weather or large-scale geographical issues. Examples include:

  • Overflowing Bodies of Water: A river, lake, or stream breaches its banks after heavy rainfall and enters your home.
  • Storm Surges: Coastal flooding driven inland by hurricanes or severe tropical storms.
  • Surface Water Runoff: Heavy, localized rain that the ground cannot absorb, causing water to pool and flow into your ground floor or basement.
  • Mudflows: A river of liquid and flowing mud on the surfaces of normally dry land areas, often following heavy rain.

The Necessity of Flood Insurance

Here is the most critical fact regarding flood damage: a standard homeowners insurance policy almost never covers it. If an overflowing river destroys your basement, your standard policy will not provide compensation.

To protect against this specific peril, you must purchase a separate flood insurance policy. You can secure this coverage through the National Flood Insurance Program (NFIP), which is managed by FEMA, or through private flood insurance providers. Because standard policies exclude flood damage, failing to carry a separate flood policy leaves you entirely vulnerable to the devastating financial impact of natural flooding.

Key Differences Between Flood and Water Damage

To navigate your insurance coverage effectively, you must recognize the dividing lines between these two categories. Insurance adjusters evaluate claims based on these specific parameters.

The Rule of the Source

The primary differentiator is the source of the water. If the water originates from inside the home’s plumbing or appliances, it is generally classified as water damage. If the water touches the ground outside before entering your home, the insurance industry classifies it as a flood.

For instance, if heavy rain enters through a wind-damaged window, it is water damage. If that same heavy rain pools in your yard and flows under your front door, it is a flood.

Widespread vs. Localized Impact

Flood damage usually affects a wide area, impacting multiple homes, entire neighborhoods, or two or more acres of land. Water damage is typically localized to your specific property. A burst pipe ruins your living room; an overflowing river floods your entire street. This distinction of scale is a central component of FEMA’s official flood definition.

Practical Tips for Homeowners

Securing your home against water-related perils requires proactive planning. Waiting until you find standing water in your home is too late to review your insurance policy. Follow these practical steps to ensure you maintain robust coverage.

Review Your Policy Limits Thoroughly

Examine your current homeowners insurance policy to understand exactly what is covered and what is excluded. Look specifically for clauses related to water backup. Many standard policies do not automatically cover water that backs up through sewers or drains. You often need to add an inexpensive endorsement to your policy to secure this specific protection.

Assess Your Flood Risk

Do not assume you are safe from flooding just because you live far from the coast. A significant percentage of flood claims originate from moderate-to-low risk areas. Utilize FEMA’s online flood maps to determine your property’s specific flood zone. Even if your mortgage lender does not require you to carry flood insurance, purchasing a policy is a smart, forward-thinking strategy to protect your primary asset.

Install Smart Water Leak Detectors

Embrace modern technology to mitigate risk. Smart water leak detectors can alert your smartphone the moment they sense moisture near water heaters, washing machines, or under sinks. Some advanced systems can even automatically shut off your home’s main water valve if they detect a massive pressure drop, preventing thousands of dollars in sudden water damage.

Secure Your Water Damage Protection

Understanding the critical differences between flood damage and water damage empowers you to make informed decisions about your insurance strategy.

Contact Brandon Patterson from our team at brandon@ownbyinsurance.com to review your current water damage limits, inquire about sewer backup endorsements, and seriously evaluate the benefits of adding a standalone flood insurance policy to your portfolio.

The NEMT Provider’s Guide to Navigating Insurance

Posted on by Jon Blankenship

Insurance isn’t just a monthly expense for Non-Emergency Medical Transportation (NEMT) providers; it is the foundation of a sustainable operation. In an industry where you transport vulnerable passengers to critical appointments, the margin for error is slim. One accident or liability claim without adequate coverage can shutter a business permanently.

Understanding insurance requirements goes beyond ticking a box for compliance. It involves safeguarding your assets, your employees, and the people you serve. This guide breaks down the complex landscape of NEMT insurance, helping you secure the protection your business needs to thrive.

Why Specialized NEMT Insurance Matters

Standard commercial auto policies often fall short for medical transportation. NEMT vehicles carry higher risks because they transport passengers who may have mobility issues, chronic conditions, or disabilities.

If a passenger is injured while being lifted into a van, a standard auto policy likely won’t cover it. That specific risk falls under “loading and unloading” clauses unique to NEMT policies. Without specialized coverage, you expose your company to massive out-of-pocket legal and medical costs.

Furthermore, brokers and contracting agencies – like Modivcare or Veyo – require proof of specific coverage limits before they will send you a single trip. The right insurance is your ticket to better contracts and steady revenue.

Essential Policies for Every NEMT Provider

Building a robust insurance shield requires layering different types of policies. Here are the core coverages every provider must evaluate.

  1. Commercial Auto LiabilityThis is the most critical and expensive component of your insurance portfolio. It covers bodily injury and property damage if your vehicle is involved in an accident.

    Given the nature of the passengers you transport, minimum state limits are rarely sufficient. Most NEMT brokers and state regulations require limits of at least $1,000,000 combined single limit (CSL). This ensures that if a severe accident occurs, there is enough coverage for multiple injured parties.

  2. General Liability Insurance
    Many providers mistake auto liability for total coverage. However, auto insurance only applies when the vehicle is in motion or actively involved in an incident.General Liability covers what happens outside the vehicle. For example:

    • A passenger trips over a curb while you are escorting them to the clinic door.
    • Someone slips on a wet floor in your office.
    • You are sued for slander or false advertising.
  3. Professional Liability and Malpractice
    NEMT drivers do more than drive; they care for patients. If a driver fails to secure a wheelchair properly, or if they administer first aid incorrectly during transit, you could face a malpractice suit. Professional liability insurance covers these “failure to perform” incidents.
  4. Workers’ Compensation
    If you have employees, Workers’ Compensation is likely mandatory under state law. It pays for medical care and lost wages if a driver gets injured on the job.Consider the physical nature of NEMT work. Drivers frequently lift passengers, push wheelchairs up ramps, and secure heavy equipment. Back injuries and strains are common. Workers’ Comp protects your business from lawsuits filed by injured employees while ensuring they get the care they need.
  5. Sexual Abuse and Molestation Coverage
    While uncomfortable to discuss, this coverage is increasingly required by major brokers and Medicaid programs. It protects your company against claims of misconduct by your drivers. Allegations alone can be financially devastating due to legal defense costs, even if the claim is unfounded.

Navigating Compliance and Regulation

NEMT is a heavily regulated industry. Insurance requirements vary significantly depending on where you operate and who pays for the rides.

State and Federal Requirements

  • Medicaid/Medicare: Federal guidelines set baseline standards, but individual states administer the programs. Your state’s Department of Health and Human Services will have specific insurance minimums for Medicaid providers.
  • Department of Transportation (DOT): If you cross state lines, you must comply with Federal Motor Carrier Safety Administration (FMCSA) insurance requirements, which can be stricter than state laws.

Broker Contract Requirements

Private transportation brokers often set the highest bar. Before you sign a contract, request their insurance checklist. Common requirements include:

  • Adding the broker as an “Additional Insured” on your policy.
  • Providing a “Waiver of Subrogation,” which prevents your insurer from suing the broker to recover losses.
  • Carrying high limits (often $1M+) for auto and general liability.

Failure to maintain these specific endorsements can lead to immediate contract termination.

Insurance in the NEMT space is complex, but it is manageable with the right approach. Does your coverage match your current risk? If you aren’t sure, it’s time to contact Brandon Patterson on our team at brandon@ownbyinsurance.com and get started on a new approach.

How to Plan for New Risk and Insurance Needs in 2026

Posted on by Jon Blankenship

Starting a new year often brings along resolutions for personal growth, business goals, and financial health but it should also include a plan for new risk and insurance needs. As we look toward 2026, it’s essential to extend this forward-thinking approach to how we manage risk. The world is changing at an unprecedented pace, bringing new challenges that can impact our families, homes, and businesses. Being proactive about your insurance planning is no longer just good practice – it’s a fundamental part of securing your future.

Identifying Emerging Risks in 2026

A solid insurance plan starts with a clear understanding of the risks you face. While traditional risks like fire, theft, and auto accidents remain, the landscape is expanding. To properly prepare for 2026, you need to look beyond the obvious and consider the evolving threats that could affect you.

Changing Weather Patterns and Extreme Events

Changes to weather patterns are becoming more apparent each year. An increase in the frequency and severity of extreme weather events – such as tornadoes, wildfires, floods, and droughts – poses a significant threat to properties and businesses. Homeowners may find their properties are now in high-risk flood or fire zones, even if they weren’t previously.

For businesses, the risks are just as severe. Supply chain disruptions caused by a hurricane on the other side of the country can halt operations. A severe drought could impact agricultural outputs and resource availability. It’s crucial to assess your geographical vulnerability and understand how these large-scale environmental shifts could directly or indirectly affect your financial stability.

The Evolving Cybersecurity Battlefield

Digital risks are no longer a concern limited to large corporations. With our increasing reliance on technology, everyone is a potential target. In 2026, cyber threats are expected to be more sophisticated than ever. Phishing scams, ransomware attacks, and data breaches can lead to devastating financial loss and identity theft for individuals.

For businesses, the stakes are even higher. A single data breach can result in massive financial penalties, reputational damage, and loss of customer trust. Remote work arrangements, while offering flexibility, have also expanded the potential entry points for cybercriminals. Every organization, regardless of size, must treat cybersecurity as a primary operational risk.

Economic and Geopolitical Shifts

Global economic uncertainty continues to shape our financial realities. Inflation, interest rate fluctuations, and market volatility can impact everything from your investment portfolio to the cost of rebuilding your home after a loss. Geopolitical instability can create ripple effects across industries, leading to supply chain breakdowns and unpredictable market conditions.

These macroeconomic trends can influence your insurance needs. For example, high inflation may mean your current coverage limits are no longer sufficient to cover replacement costs. Business interruption insurance becomes even more critical when supply chains are fragile and dependent on global stability.

Evaluating Your Current Insurance Coverage

Once you have identified potential new risks, the next step is to review your existing insurance portfolio. An insurance policy that was perfect five years ago might have significant gaps today. A thorough review helps ensure your protection aligns with your current reality.

The Annual Insurance Check-Up

Treat your insurance review like an annual health check-up. Set aside time to go through each of your policies, including home, auto, life, health, and any business-related coverage. Don’t just look at the premium; dive into the details.

Pay close attention to:

  • Coverage Limits: Is your dwelling coverage on your homeowner’s policy high enough to rebuild your home at today’s construction costs? Has the value of your business assets increased?
  • Deductibles: Are your deductibles at a level you can comfortably afford to pay out-of-pocket in an emergency?
  • Exclusions: What does your policy not cover? Standard homeowner’s policies, for instance, typically exclude damage from floods and earthquakes. You may need separate policies for these risks.

Mind the Gaps in Your Protection

As you review your policies, compare them against the list of emerging risks you identified. You may discover significant gaps.

For individuals, a common gap is the lack of flood insurance. Many people mistakenly believe their standard home policy covers flooding. Another is personal cyber insurance, which can help you recover from identity theft or online fraud.

For businesses, gaps often appear in business interruption coverage. Does your policy cover interruptions caused by a supplier’s failure or a utility outage? Is your cyber liability insurance robust enough to handle the costs of a major data breach, including notification costs, credit monitoring, and legal fees?

Exploring Innovative Insurance Solutions

The insurance industry is adapting to meet the demands of our changing world. As you plan for 2026, explore some of the innovative products and riders that can provide more tailored protection.

Parametric Insurance

Unlike traditional insurance that pays out based on the actual loss incurred, parametric insurance pays a pre-agreed amount when a specific trigger event occurs. For example, a policy might pay out a set sum if a hurricane of a certain category makes landfall in your area or if an earthquake of a specific magnitude is recorded.

This model allows for faster, more straightforward payouts, providing immediate liquidity to help you start the recovery process without waiting for a lengthy claims adjustment. It can be an excellent supplement to traditional property insurance, especially for businesses concerned with cash flow after a natural disaster.

Usage-Based and Telematics Insurance

For auto insurance, telematics programs continue to gain popularity. These usage-based insurance (UBI) policies use data from your smartphone or a device installed in your car to track your driving habits. Safer drivers can earn significant discounts on their premiums. This not only saves you money but also incentivizes safer driving behaviors. As technology improves, UBI is becoming more accurate and personalized.

Specialized Cyber Insurance

Cyber insurance is evolving beyond basic liability coverage. Modern policies can be customized to cover a wide range of risks. For individuals, this might include coverage for cyberbullying, online extortion, and recovering a stolen digital identity. For businesses, policies now often include access to a breach response team, public relations services to manage reputational damage, and coverage for regulatory fines.

Your Next Steps for a Secure 2026

Navigating the complexities of risk and insurance in a changing world can feel overwhelming. However, taking deliberate, proactive steps now will provide you with peace of mind and financial security for the years to come. The goal is not to predict the future with perfect accuracy but to build a resilient financial foundation that can withstand unexpected events.

But you’re not alone! Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to support your 2026 planning.

Holiday Parties and Hidden Risks: Are You Covered for Potential Liabilities?

Posted on by Jon Blankenship

The holiday season is a time for festive cheer, warm gatherings, and creating lasting memories with friends and family. But as a host, holiday parties and hidden risks can ruin a good time. You are responsible for more than just the playlist and appetizers. Behind the celebration is a layer of personal liability risks that many people overlook.

Understanding these potential risks is the first step toward protecting yourself, your home, and your guests. This blog will walk you through common liabilities associated with holiday parties, offer practical tips for safe hosting, and explain how insurance can provide a crucial safety net.

The Uninvited Guest: Understanding Host Liability

When you open your doors to guests, you assume a degree of responsibility for their safety and well-being. This concept, often called “social host liability,” can have significant financial and legal consequences if something goes wrong. The risks are not just theoretical; a simple slip or an over-served guest can lead to serious problems.

Let’s explore the most common liability risks you face when hosting a holiday get-together.

Slips, Trips, and Falls

Your home can become an obstacle course during a busy party. Wet floors from snowy boots, a misplaced rug, a stray extension cord for holiday lights, or a poorly lit staircase can easily cause a guest to slip and fall. If a guest is injured on your property due to what could be considered a hazardous condition, you could be held liable for their medical bills and other damages.

Property Damage

More people in your home means a higher chance of accidental damage. A guest might knock over an expensive vase, a child could draw on your new sofa, or a fire could start from a candle left too close to the curtains. While some damage is minor, significant incidents could leave you with a hefty bill for repairs or replacement. Your liability extends to your guests’ property as well; if someone’s coat is stolen from the coat rack, you might be considered responsible.

Alcohol-Related Incidents

This is one of the most significant areas of risk for party hosts. In many states, social host liability laws hold you responsible for accidents caused by guests who became intoxicated at your party. If an over-served guest gets into a car accident after leaving your home, you could be sued for injuries or damages they cause. This includes DUIs, property damage, and even tragic fatalities. The liability doesn’t stop at the driveway.

How to Be a Safe and Savvy Holiday Host

Mitigating risk doesn’t mean canceling your party. It means being proactive and thoughtful. By implementing a few simple strategies, you can create a safer environment for everyone and reduce your personal liability.

Prepare Your Home for Guests

  • Clear the Way: Shovel and salt your walkways, driveway, and porch. Inside, secure rugs, tape down electrical cords, and ensure all areas are well-lit.
  • Create Safe Zones: If you have pets that are nervous around crowds, secure them in a separate room. Designate off-limit areas, especially if you have delicate items or potential hazards.
  • Fire Safety First: Check your smoke detectors. Use flameless candles when possible, and keep any real flames far from flammable materials like curtains, wrapping paper, and your Christmas tree.

Serve Alcohol Responsibly

  • Food is Your Friend: Always serve plenty of food, especially high-protein snacks. This helps slow the absorption of alcohol.
  • Offer Alternatives: Provide a fun and festive selection of non-alcoholic beverages like mocktails, sparkling cider, and flavored seltzers. Make sure water is readily available.
  • Don’t Play Bartender: Avoid pre-mixing drinks to be extremely strong. Consider hiring a professional bartender who is trained to recognize signs of intoxication and can politely cut off guests.
  • Set a Last Call: Stop serving alcohol at least one hour before you expect the party to end. Switch to coffee, tea, and water.

Plan for Safe Departures

  • Arrange Transportation: Encourage guests to use ride-sharing services or designate a sober driver. Keep the numbers for local taxi services handy.
  • Offer a Place to Stay: If a guest has had too much to drink, do not let them drive. Offer them your guest room or a couch for the night.
  • Be Firm: Be prepared to take away a guest’s keys if you believe they are unfit to drive. Their temporary frustration is far better than a potential accident.

Your Financial Safety Net: Insurance Coverage

Even with the best precautions, accidents can happen. This is where your insurance policies become your most important defense. Having the right coverage ensures that a holiday mishap doesn’t turn into a long-term financial disaster.

Homeowners or Renters Insurance

Your standard homeowners or renters insurance policy is your first line of defense. It typically includes personal liability coverage, which can help pay for legal fees, medical bills, and other damages if someone is injured on your property and you are found legally responsible. Check your policy to understand your coverage limits. Most standard policies offer between $100,000 and $300,000 in liability protection.

Personal Umbrella Policy

For an extra layer of protection, consider a personal umbrella policy. This is supplemental liability insurance that kicks in when the liability limits on your home or auto insurance are exhausted. For a relatively low annual cost, an umbrella policy can provide an additional $1 million or more in coverage. This can be invaluable in a major lawsuit, such as one resulting from a serious car accident caused by an intoxicated guest.

Event-Specific Insurance

If you are hosting a very large event, especially at a rented venue, you might need to purchase special event insurance. This type of policy can cover liabilities associated with the specific event, including alcohol-related incidents (liquor liability) and potential property damage to the venue. Some venues may even require you to have this coverage.

Host with Peace of Mind

The holidays should be about celebration, not stress. By taking practical steps to ensure your guests’ safety and verifying you have the right insurance coverage, you can protect yourself from unexpected liabilities. Before you send out the invitations, take a moment to review your insurance policies and speak with your agent. A quick conversation now can give you the peace of mind to enjoy the season and host a party that’s memorable for all the right reasons.

Still have questions? Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the answers you need.

Why Your Business Needs Employment Practices Liability Insurance (EPLI)

Posted on by Jon Blankenship

If you’re a business owner, manager, or HR leader, you focus on building a great team and a positive culture. Yet, even with the best intentions, employee-related claims can arise unexpectedly. Defending against allegations of wrongful termination, discrimination, or harassment can be financially crippling, even if the claims are baseless. This is where Employment Practices Liability Insurance (EPLI) becomes a critical part of your risk management strategy.

What is EPLI?

EPLI is a specialized type of management liability insurance that protects businesses against claims made by employees, former employees, or even job applicants. These claims allege that their legal rights as employees have been violated. Unlike more common policies like general liability, which covers bodily injury or property damage, EPLI specifically addresses a wide range of employment-related risks.

The Growing Risk Landscape for Employers

The modern workplace is more complex than ever, and the legal landscape is constantly shifting. Several factors are increasing the frequency and cost of employment claims.

  • Rising Claim Frequency: Employees are more aware of their rights than ever before. This awareness, combined with a more litigious social climate, has led to a steady rise in employment-related lawsuits filed against companies of all sizes.
  • Remote and Hybrid Work Dynamics: The shift to remote and hybrid work models has introduced new complexities. Issues like digital communication, perceived inequities in opportunities, and challenges in monitoring performance can easily lead to claims of discrimination, harassment, or unfair treatment.
  • Evolving Laws and Regulations: Federal, state, and even local employment laws are in a constant state of flux. New legislation related to pay equity, family leave, and discrimination protections creates new compliance burdens and potential liabilities for employers who fail to keep up.

What Does EPLI Typically Cover?

An EPLI policy is designed to cover the costs associated with employment-related lawsuits, including legal defense fees, settlements, and judgments. While policies vary, most provide coverage for the following types of claims:

  • Wrongful Termination: Allegations that an employee was fired in violation of the law or their employment contract.
  • Discrimination: Claims that an employer made decisions based on protected characteristics like age, race, gender, religion, disability, or national origin.
  • Harassment: Includes claims of sexual harassment as well as harassment based on other protected categories, creating a hostile work environment.
  • Retaliation: Allegations that an employer punished an employee for legally protected activities, such as reporting harassment, acting as a whistleblower, or requesting accommodation for a disability.
  • Wage-and-Hour Claims: Some policies offer a sub-limit (a smaller amount of coverage) for the defense costs associated with claims alleging violations of wage and hour laws, such as unpaid overtime or misclassification of employees. Note that coverage for the actual unpaid wages is typically excluded.
  • Third-Party Claims: This valuable extension provides coverage for harassment or discrimination claims brought by non-employees, such as customers, clients, or vendors. This is especially important for businesses with significant public interaction.

Real-World Claim Scenarios

It’s easy to think “this won’t happen to us,” but employment claims can stem from everyday situations.

  • The Small Business Scenario: A small business with 15 employees lets go of a team member for performance issues. The team member, who is over 50, files an age discrimination lawsuit, claiming younger, less-experienced colleagues were retained. The startup must now pay tens of thousands in legal fees to defend itself, even though its decision was performance-based.
  • The Mid-Size Business Scenario: A mid-sized manufacturing company receives a complaint that a manager is making inappropriate jokes, creating a hostile work environment. Before HR can complete its investigation, the employee quits and sues for constructive discharge and sexual harassment. EPLI would cover the defense costs and any potential settlement.
  • The Miscommunication Scenario: During a friendly chat, a manager tells a pregnant employee, “You’ll have your hands full with the new baby! We can scale back your duties when you return.” Though well-intentioned, the employee interprets this as a demotion and files a pregnancy discrimination claim.

The key takeaway is that you don’t have to be wrong to be sued. The cost of defending a claim alone can be devastating for a business without proper insurance coverage.

Who Needs EPLI the Most?

While every business with employees has exposure, some face a higher degree of risk.

  • Startups and Fast-Growing Companies: Rapid hiring and evolving internal processes can lead to inconsistencies and HR oversights.
  • Businesses with High Turnover: Industries with frequent hiring and firing naturally see more claims related to termination.
  • Multi-State Employers: Navigating a patchwork of different state and local employment laws significantly increases compliance risk.
  • Customer-Facing Industries: Restaurants, retail stores, and hospitality businesses have higher exposure to third-party claims from the public.
  • Nonprofits: Board members and the organization itself can be targets of employment lawsuits, and limited budgets make defending these claims particularly challenging.

What EPLI Doesn’t Cover

It’s equally important to understand what is typically excluded from an EPLI policy. Common exclusions include:

  • Claims related to the Employee Retirement Income Security Act (ERISA).
  • Workers’ compensation claims (these are covered by a separate workers’ comp policy).
  • Bodily injury or property damage (covered by general liability).
  • Penalties and fines imposed by law.
  • Claims arising from deliberate fraud or intentional wrongdoing.

Proactive Risk Management Can Reduce Your Premiums

Insurers reward businesses that take proactive steps to minimize their employment risks. Implementing strong HR practices not only protects your company but can also lead to more favorable EPLI premiums.

  • Employee Handbook: Maintain a comprehensive, up-to-date employee handbook that clearly outlines company policies, procedures, and expectations. Have every employee sign an acknowledgment of receipt.
  • Regular Training: Conduct mandatory anti-harassment, anti-discrimination, and diversity training for all employees and managers.
  • Clear Documentation: Document everything—performance reviews, disciplinary actions, and termination reasoning. Consistent documentation is your best defense.
  • Complaint Hotline: Establish a formal, confidential process for employees to report concerns without fear of retaliation.
  • Consistent Processes: Apply all HR policies and procedures consistently across all employees to avoid any appearance of favoritism or discrimination.

Understanding Your Policy: Limits, Pricing, and Coordination

When purchasing EPLI, you’ll need to decide on coverage limits and a retention (deductible). These are influenced by several factors:

  • Industry: Certain industries (like hospitality or healthcare) are considered higher risk.
  • Claim History: A history of prior employment claims will increase your premium.
  • Employee Count & Turnover: More employees and higher turnover mean greater exposure.
  • Location: Operating in states with employee-friendly laws can impact pricing.

Finally, it’s important to see how EPLI fits with your other management liability policies. Claims can sometimes trigger coverage under multiple policies. For instance, a lawsuit against a company executive for an employment-related decision could potentially involve both your EPLI and your Directors & Officers (D&O) policy. Coordinating these policies ensures there are no gaps in your coverage.

Review Current Coverage

Ready to learn more about the EPLI risks and options for your business? Contact Brandon Patterson on our team at brandon@ownbyinsurance.com and the options you can choose from to get covered.

Fall Flood Insurance Risks: Why the Right Coverage Matters Most This Season

Posted on by Jon Blankenship

As autumn arrives and leaves begin their colorful transformation, many homeowners focus on seasonal preparations like winterizing their homes and clearing gutters. However, one critical aspect often gets overlooked: flood insurance risks coverage.

Fall presents unique flooding challenges that can catch property owners off guard, making this season particularly important for evaluating your flood protection. The first thing to note is that most Home Insurance policies exclude coverage for flooding. So, what else do you need to know, and how can you get covered?

Why Fall Creates Perfect Flooding Conditions

Increased Precipitation Patterns

Fall weather systems bring distinct flooding challenges. As warm air masses collide with cooler temperatures, atmospheric conditions create more intense precipitation events. The National Weather Service reports that autumn accounts for approximately 25% of annual flood-related insurance claims, despite representing just three months of the year.

Rainfall patterns become less predictable during fall months. Unlike summer’s brief afternoon thunderstorms or winter’s steady precipitation, autumn storms often arrive as prolonged systems that saturate soil and overwhelm drainage systems. These extended weather events create cumulative flooding effects that can persist for days or weeks.

Hurricane Season Overlap

Hurricane season officially runs from June through November, with peak activity occurring between August and October. Fall hurricanes present unique risks because they often combine with existing weather fronts, creating compound flooding scenarios.

Recent data from the National Hurricane Center shows that 40% of hurricane-related flood damage occurs during September and October storms. These late-season hurricanes frequently interact with cooling air masses, producing extraordinary rainfall amounts over wide geographic areas.

Hurricane Florence in 2018 exemplifies this pattern. Despite weakening to a tropical storm, Florence dumped over 30 inches of rain across North Carolina during September, causing catastrophic inland flooding far from coastal areas. Many affected properties had never experienced flooding and lacked adequate insurance coverage.

Ground Conditions and Drainage Challenges

Autumn’s changing landscape creates additional flood vulnerabilities. Fallen leaves clog storm drains, gutters, and natural waterways, reducing their capacity to handle normal water flow. A single heavy rainfall event can quickly overwhelm compromised drainage systems.

Soil conditions also shift during fall. As vegetation dies back and root systems become less active, soil loses its natural water absorption capacity. Compacted ground from summer drought conditions may struggle to absorb autumn precipitation, leading to increased surface runoff.

Geographic Risks Beyond Traditional Flood Zones

Inland Flooding Patterns

Many people associate flood insurance with coastal properties or homes near major rivers. However, fall flooding frequently affects inland areas through flash floods and urban flooding scenarios. The Federal Emergency Management Agency (FEMA) reports that 20% of flood claims come from properties outside high-risk flood zones.

Inland communities face particular vulnerability during fall because they often lack robust flood preparedness infrastructure. Mountain regions experience sudden snowmelt combined with rainfall, creating flash flood conditions. Urban areas struggle with overwhelmed storm water systems as autumn precipitation exceeds summer design capacities.

The Insurance Coverage Gap

Standard Homeowners Policies Don’t Cover Floods

One of the most critical misconceptions about property insurance involves flood coverage. Standard homeowners and renters insurance policies specifically exclude flood damage. This exclusion applies regardless of flood cause – whether from hurricane storm surge, river overflow, or urban drainage failure.

Insurance industry surveys reveal that 85% of homeowners incorrectly believe their standard policies include flood protection. This knowledge gap leaves millions of properties financially vulnerable to fall flooding events.

National Flood Insurance Program Basics

The National Flood Insurance Program (NFIP) provides the primary source of flood coverage for American properties. Administered by FEMA, the NFIP offers standardized policies available through licensed insurance agents nationwide.

NFIP coverage includes two main components:

  • Building coverage protects the structure and permanently installed items
  • Contents coverage protects personal belongings and movable property

However, NFIP policies require a 30-day waiting period before coverage becomes effective. This timing requirement makes fall preparation particularly important, as you cannot purchase coverage when severe weather threatens your area.

Private Market Alternatives

Private flood insurance has expanded significantly over the past decade, offering alternatives to NFIP coverage. Private insurers often provide higher coverage limits, additional protection options, and sometimes more competitive pricing.

Companies like Neptune, Palomar, and Wright National offer private flood policies with features like:

  • Coverage amounts exceeding NFIP limits
  • Replacement cost coverage for personal property
  • Additional living expenses during displacement
  • Business interruption coverage for commercial properties

Review Current Coverage

Start by examining your existing insurance policies. Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to clarify exactly what flood-related coverage you currently have – or don’t have – and the options you can choose from to get covered.

Property Insurance: Understanding Exclusions Like Earthquakes, Floods, and Sinkholes

Posted on by Ownby Insurance Service

When it comes to protecting your property, having a solid insurance policy is essential. But what if we told you that some natural events that could damage your property – floods, earthquakes, and sinkholes – are often not covered by standard property insurance? This is a reality that every property owner should be aware of to avoid costly surprises down the road.

Here’s what you need to know about these common but critical coverage gaps and how to protect your property from the unexpected.

What’s Missing from Your Property Insurance Policy?

It’s easy to assume that once you’ve got a property insurance policy, you’re safeguarded against every possible disaster. Unfortunately, that’s not the case. Standard property insurance often names “perils” for coverage and will exclude the following risks:

1. Floods

Flooding can occur from extreme weather events or even a water control malfunction in your area. Yet, damage caused by floods is typically excluded from property insurance policies. If your property is located in a flood-prone area, this poses an even greater risk.

  • Key Tip: Check what flood zone your property falls in by consulting local government resources and/or FEMA maps.
  • Solution: Consider purchasing a flood insurance policy, either as an endorsement to your property policy, through standalone “private” flood insurance, or through the National Flood Insurance Program (NFIP). This coverage can protect you from financial devastation if your property is inundated.

2. Earthquakes

While earthquakes might not seem like an everyday concern, damage caused by seismic activity is not covered under the vast majority of standard property insurance policies. Even minor tremors could lead to costly structural repairs.

  • Key Tip: If you live in or own property in an region with a fault line or in an earthquake-prone area, review your vulnerability carefully.
  • Solution: Purchase a standalone earthquake insurance policy or add an earthquake endorsement to your current policy. Be aware that earthquake insurance deductibles are calculated as a percentage of your coverage rather than a fixed dollar amount, so review this closely before purchasing.

3. Sinkholes

Sinkholes might seem like a rare occurrence, but they can have catastrophic effects if they occur beneath your property. Most standard property insurance policies exclude coverage for sinkhole damage.

  • Key Tip: Research whether your area is susceptible to sinkholes by consulting geological surveys or local zoning information.
  • Solution: Opt for specific coverage for sinkholes by exploring endorsements or policies tailored to this risk.

What Can You Do to Protect Yourself?

To safeguard your property and financial stability, it’s crucial to take proactive measures:

Review Your Insurance Policy

Start by reading through your existing property insurance policy in detail. Identify the exclusions to understand where your coverage gaps lie.

  • Assess Your Property’s Risk
    • Use local resources, such as flood zone maps, seismic activity probabilities, and geological surveys, to evaluate the likelihood of floods, earthquakes, or sinkholes affecting your property.
  • Speak to an Agent
    • Insurance policies can be complex, especially when navigating specialized endorsements or standalone coverage. Contact an experienced insurance professional who can walk you through the process and recommend the best options tailored to your property’s unique needs.

Get Information on Your Options

These exclusions don’t have to leave you vulnerable. With the right endorsements or standalone policies, you can ensure that your property is comprehensively covered against risks like floods, earthquakes, and sinkholes.

Reach out to Brandon Patterson on our team today at brandon@ownbyinsurance.com and discuss your options today.

How Claims Impact Your Insurance Premiums

Posted on by Ownby Insurance Service

Your insurance premium is based on many factors, from the type of coverage you choose to your overall risk profile. But one aspect that often surprises policyholders is the impact of claims on their premiums. Whether you’ve recently filed a claim or you’re thinking about it, it’s important to understand how claims can influence the cost of your coverage.

Loss History: A Snapshot of Your Risk

Your loss history, or claims history, is a critical factor insurers use to determine your premium. This is essentially a record of all the claims you’ve filed in the past. Insurers view this as a representation of your risk level – policyholders who have filed multiple claims are generally seen as more likely to file additional claims in the future.

Each insurer has its own thresholds for how claims history impacts your premiums, but generally, past claims can lead to higher premiums.

Why Does Your Loss History Matter Impact Your Insurance Premiums?

Your loss history paints a picture for your insurer. For example:

  • If you’ve experienced multiple incidents, it could indicate a higher likelihood of future claims.
  • A long history of claims, even if they’re for relatively small amounts, can label you as a higher-risk policyholder.

While you can’t change your past claims, being aware of how your loss history is assessed can influence your approach to future claims.

Claim Frequency and Size Matter

Number of Claims

In insurance, the old saying “the fewer, the better” rings true. Filing multiple claims within a short time – even for small amounts – can signal a higher risk level to your insurer. Insurers often see frequent claims as an indicator of risk-prone behavior, even if the claims themselves are low-cost.

To manage your premium effectively:

  • Avoid filing claims for minor damages that fall close to or just above your deductible.
  • Consider whether the cost of repairing or replacing an item out-of-pocket is more affordable in the long run.

Claim Size

The size of the claim matters just as much as the number. Large claims require significant payouts from the insurer. When an insurer has to pay a big settlement for a loss, the chances are your premium will move upward to reflect the cost.

For instance, a single high-value claim – such as a major accident or property damage – might have a bigger impact on premiums than several smaller claims.

The Impact of Your Deductible Choice

Your insurance deductible – the amount you agree to pay out-of-pocket before your insurance kicks in – also plays a major role in claims and premiums. Filing claims for damages that barely exceed your deductible can lead to higher premiums in the future, meaning you’re left paying more overall.

The Value of a Claims-Free Credit

Insurance providers often reward policyholders who don’t file any claims over a certain period. This is commonly known as a claims-free discount or credit. Maintaining a claims-free record demonstrates a lower risk level, which insurers may reward with a reduced premium or special discounts.

Filing a claim could result in the loss of this credit, which can significantly increase your premiums in the long term. Depending on your provider, the impact of losing a claims-free credit can sometimes outweigh the benefit of filing a minor claim.

“Then Why Do I Even Have Insurance?”

All this doesn’t mean you should avoid filing claims entirely. Insurance exists to protect you in situations where the losses are too great to bear out-of-pocket. However, carefully evaluating the situation and considering the long-term implications can help you balance coverage with premium stability.

Smart Tips to Manage Insurance Claims and Premiums:

  1. Review Your Policy Carefully
    Understand your deductible amount, what types of incidents are covered, and how claims may impact things like claims-free discounts.
  2. Weigh Filing a Claim Against Out-of-Pocket Costs
    If the repair or replacement cost is close to your deductible, it may save you money long-term to pay out-of-pocket rather than file a claim.
  3. Keep Your Loss History in Mind
    Evaluate how additional claims could impact your overall risk profile and premiums.
  4. Focus on Preventative Measures
    Take steps to avoid future incidents, such as securing your home, maintaining your property, or installing safety features. Proactively reducing risks can help keep your premiums manageable over time.
  5. Bundle Your Insurance Policies
    Many insurers offer discounts for bundling, which can offset increased premiums due to claims.
  6. Ask About Claims Forgiveness
    Some insurers offer “claims forgiveness” features, where your first claim won’t impact your premium. Consider whether this add-on is available and worth adding to your policy.

When to File

Ultimately, balancing the cost of a claim versus the long-term implications for your premium is key. By thinking strategically and being proactive, you can ensure your insurance remains both effective and affordable. If you’re unsure, discuss the deductibles and potential impacts of filing the claim with our team and we’ll help you understand your options – but we won’t make the choice for you. That’s your decision!

Steps Property Owners Can Take to Mitigate Natural Disaster Risks

Posted on by Ownby Insurance Service

Natural disasters can strike without warning, causing immense damage and disruption. For homeowners, commercial building owners, property managers, and real estate investors, understanding how to reduce risks and prepare for potential impacts is not only important for your investment – it’s important for safety. And while they can’t be completely prevented, the impacts from disasters may be lessened with the right measures.

Fire Prevention and Protection

Regular maintenance plays a crucial role in fire prevention. Ensure that electrical systems, heating equipment, and other potential fire hazards (e.g., fireplaces and chimneys) are routinely inspected by qualified professionals. Clear your property of debris, dead vegetation, and any flammable materials.

Your smoke alarms are your first line of defense in detecting a fire. Test them frequently to ensure they work properly and replace batteries at least once a year. Consider installing interconnected smoke alarms for enhanced safety.

Fire extinguishers should be accessible, fully charged, and inspected annually. Make sure everyone on the property knows how to use them effectively. Choose extinguishers that are suitable for different types of fires (e.g., electrical, grease) and placed in the spaces where these issues would be more likely to occur.

For commercial buildings, understand where sprinklers are required – but also where they could do the most good. A sprinkler protection system could mean the difference between fire damage and a total loss in a fire. Have them regularly inspected and tested by professionals. You might even save on your insurance premium if these measures are in place.

Understand Your Risks

Identify the specific natural disasters that could impact your property. Are you in a flood plain? The Federal Emergency Management Agency (FEMA) has flood maps available that identify zones of flood risk. Are you in a higher risk area for wildfires? FEMA has risk zone maps for that as well. What about earthquakes? Check out the info from the U.S. Geological Survey for that risk information.

Know Your Coverage

Ensure your insurance policies cover the natural disasters that pose the greatest risk to your property. Typically, property insurance policies do not include coverage for floods, earthquakes, or sinkholes, so additional policies might be necessary. Work with our agents to tailor your coverage to the specific risks associated with your property. Regularly review your policies to ensure they align with any changes in risk or property value.

Taking proactive steps to mitigate disaster risks can save property owners significant time, money, and stress. Implementing fire prevention measures, understanding specific risks, and ensuring adequate insurance coverage are key strategies for safeguarding your investments. By staying informed and prepared, you can strengthen your property’s resilience against natural disasters.

Contact Brandon Patterson on our team at brandon@ownbyinsurance.com for more information on risk reduction for your property.

Why Aren’t all Insurance Policies the Same?

Posted on by Ownby Insurance Service

It’s a reasonable question to ask. If I am looking at a home insurance policy with insurance company A versus one with company B – shouldn’t they offer the same coverage? Isn’t cost the determining factor in the difference? The answer, however, is much more complicated.

Insurance companies in Tennessee file policies and rates with the Department of Insurance. These policies contain the specifics of what they’re going to offer, and the rate schedule for what they intend to charge. They are based on specific calculations for each company, and are often very different. While many use “forms” from the Insurance Service Office (ISO) that are the same, changes and even proprietary forms are use across the industry. So, what do you need to know about how and why they’re different? Let’s review it.

The Key Policy Differences You Should Know

1. Limits on Amounts of Coverage

One of the fundamental differences between insurance policies is the limit on the amounts of coverage they provide. Coverage limits dictate the maximum amount an insurer will pay for a covered loss. For example, a homeowners’ policy may have different limits for dwelling, personal property, and liability coverages. It’s essential to review these limits and ensure they align with your needs and financial situation. Insufficient coverage can leave you vulnerable, while excessive coverage might result in higher premiums than necessary.

2. Policy Exclusions

Policy exclusions are specific conditions or circumstances under which the insurance company will not provide coverage. These exclusions vary widely between policies and can significantly impact the protection you receive. Common exclusions include natural disasters, acts of war, and certain high-risk activities. Understanding these exclusions is critical, as they can affect your claims process and financial recovery in the event of a loss.

3. Named Perils vs. “Open” Perils Coverage

Insurance policies generally fall into two categories regarding covered perils:

  • Named Perils: This type of policy only covers losses caused by perils explicitly listed in the policy, such as fire, theft, or vandalism. If a peril is not named, it is not covered.
  • Open Perils (or All-Risk): These policies provide broader coverage, protecting against all perils unless specifically excluded in the policy. While typically more expensive, all-risk policies offer broader protection.

Choosing between named perils and all-risk coverage depends on your specific needs, risk exposure, and budget considerations.

4. Options for Endorsements

Endorsements, also known as riders or add-ons, allow policyholders to customize their insurance policies by adding specific coverages or modifying existing ones. These options enable you to tailor your policy to better fit your unique circumstances. Common endorsements include:

  • Extended Replacement Cost: Provides additional coverage for rebuilding costs that exceed the policy’s stated limits.
  • Personal Property Replacement Cost: Ensures that lost or damaged personal property is replaced at current market value rather than depreciated value.
  • Water Backup Coverage: Covers damage caused by water backing up through sewers or drains.

Reviewing available endorsements and selecting those that address your particular needs can enhance your overall protection and peace of mind.

Why Do These Policies Change Over Time?

Insurance companies continually adapt their policies to address evolving risks and limit their exposure. These changes are often based on extensive data analysis, loss history, and actuarial studies. For instance, following a surge in natural disasters, insurers may revise coverage terms, exclusions, or premium rates to reflect the increased risk. Staying informed about these adaptations is essential, as they can impact your coverage and the affordability of your policy.

Navigating the world of insurance can be complex, but understanding the key differences between policies is crucial for making informed decisions. By considering coverage limits, policy exclusions, types of coverage, and available endorsements, you can select a policy that provides the protection you need. An agent can help you understand the coverages and options available to you. Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the support you need today!