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Category: Umbrella Insurance

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.

Personal Insurance Risks You May Be Overlooking

Posted on by Ownby Insurance Service

When it comes to protecting ourselves and our families, most of us believe we have everything covered. A homeowner’s or renter’s policy, car insurance, perhaps even life insurance – these plans are essential, but are they enough? Too often, people overlook personal risks that fall “above” or outside traditional policies, leaving them exposed in ways they aren’t even aware they could be.

In this article, we’ll walk through three key personal insurance risks, provide examples to illustrate their potential impact, and highlight coverage options that can offer peace of mind.

Personal Liability Risks

The Risk

Accidents happen, and when they do, personal liability can result in serious financial repercussions. For instance, if someone is injured on your property or if your child accidentally damages someone else’s property, you could be held personally responsible for medical expenses, legal fees, and compensation.

Real-Life Example

Imagine hosting a cookout where a guest trips on your patio or deck, resulting in a severe injury requiring surgery. Without adequate liability coverage, you might have to shoulder tens of thousands of dollars in medical bills and potential legal claims.

Coverage Options

Most homeowners or renters insurance policies offer liability coverage, but the limits might not be sufficient, especially in severe cases. Consider adding an umbrella insurance policy. This provides an extra layer of protection, typically in increments of $1 million, beyond your standard policy limits. Umbrella insurance not only helps with legal fees but covers claims that may not be included in your original policy.

Personal Cyber Risks

The Risk

The digital world offers convenience but also new and evolving risks. From identity theft to online scams, cyber risks can lead to significant financial and emotional distress. Cybersecurity concerns are not just a corporate issue; individuals and families are prime targets for hackers and cybercriminals.

Real-Life Example

Picture this scenario – your email is hacked, revealing sensitive details about your bank accounts. Armed with this information, cybercriminals drain your accounts and commit identity fraud. Worse, they use your information to apply for credit in your name, leaving you with financial chaos to untangle.

Coverage Options

To address personal cyber risks, several insurers are now offering personal cyber liability endorsements or even standalone policies. These policies may include coverage for identity theft restoration, reimbursement for financial losses from cyber fraud, and assistance in dealing with ransomware attacks. It’s worth consulting your provider to understand what is offered and ensure your digital life is safeguarded.

Losses That Exceed Policy Limits

The Risk

Standard policies, such as homeowners or auto insurance, come with specific limits. What many fail to realize is that an incident could quickly exceed these limits, leaving you personally responsible for the difference.

Real-Life Example

You’re involved in a multi-car accident where you’re found at fault, leading to significant damage and multiple injuries. If your auto insurance liability limit is $100,000 and the total claims amount to $250,000, you’re personally liable for the $150,000 gap.

Coverage Options

Again, this is where umbrella insurance comes into play. While it’s often associated with personal liability, it may also step in when existing policy limits for other types of coverage aren’t enough. Umbrella insurance is an affordable way to protect your assets and ensure you’re safeguarded against catastrophic financial loss.

Taking the Next Step

While these risks may seem unlikely, the reality is they’re becoming more common in today’s world. Personal liability lawsuits, cyber threats, and insufficient policy limits can affect anyone. Proactively addressing these risks can help safeguard your financial well-being and give you peace of mind for the future.

Not sure where to begin? Contact Brandon Patterson on our team at 865.453.1414 brandon@ownbyinsurance.com for information on your options.

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!

Personal Umbrella Policies: Why You Absolutely Need One

Posted on by Ownby Insurance Service

We live in a world where personal risk exposures are higher than they’ve ever been. Whether you’re a homeowner or a renter, understanding the importance of a personal umbrella policy (PUP) can protect you from the unexpected.

The Growing Landscape of Personal Risks

Increased Lawsuits

The frequency of lawsuits has been steadily climbing, catching many off guard. Everyday situations like car accidents, slip-and-fall incidents, or even pet-related injuries can escalate into costly legal battles. Homeowners specifically face heightened risks as they balance the responsibilities of property ownership and increased exposures.

Higher Verdicts in Liability Cases

Courts are awarding higher verdicts, placing individuals’ finances at greater risk. In many cases, standard home or auto insurance policies may not provide sufficient coverage to protect personal assets. Imagine a scenario where an incident occurs on your property, leading to a lawsuit that results in a settlement exceeding your existing coverage limits. Without additional protection, your personal savings, investments, and future earnings could be at stake.

Increased Personal Risk Exposures

Today, personal risk exposures are everywhere, from social media interactions to hosting events at home. Homeowners, for instance, might host a neighborhood barbecue where an accident could lead to legal action. Parents, on the other hand, face unique risks associated with children’s activities, like sports or playdates, which can unexpectedly result in injuries or damages.

Benefits of a Personal Umbrella Insurance Policy

Given these risks, a personal umbrella insurance policy offers peace of mind through several key benefits:

Expanded Coverage Limits

A personal umbrella policy provides an additional layer of liability coverage beyond the limits of your existing home, auto, or other personal insurance policies. This means that if you face a situation where damages exceed your standard coverage, your umbrella policy steps in to cover the difference. This can prevent significant out-of-pocket expenses and protect your assets.

Cost-Effective Protection

One of the most appealing aspects of a personal umbrella policy is its cost-effectiveness. For a relatively small increase – often as low as a few hundred dollars – in your overall insurance premium, you gain substantial additional coverage, offering a high level of protection for life’s unpredictable outcomes.

With personal risks more prevalent than ever, having a PUP is not just a luxury – it’s a necessity. By providing extended coverage limits and protection against significant liability claims, an umbrella policy is an essential addition to any comprehensive insurance strategy.

Contact Brandon Patterson on our team at brandon@ownbyinsurance.com about your PUP options.