Three Axioms of Insurance Many consumers approach purchasing insurance as a commoditized activity.  They reach out to a broker or two, look at a few options based on price and high level coverage outlines, and then make as intelligent of a decision as possible. The COVID-19 event is a sobering reminder of 3 key axioms in purchasing insurance: Consumers are purchasing “contracts.”  Insurance are legal styled documents with very precise wording that often include many endorsements which modify coverage.  Remember, at the end of the day, you are buying a contract.  Most brokers are not attorneys and not qualified to provide legal advice.  Good ones offer insight and will read through the contract provisions with you.  They often bring years of experience in insurance – but they are not attorneys and not typically qualified to give legal advice on the specific wording in the contract you have purchased. Insurance contracts are not commodities. Contracts can vary greatly from carrier to carrier and the exact same claim might trigger coverage with one carrier, but not another, depending on the wording. When I discuss insurance with clients, I always discuss it in two big categories – 1st party and 3rd party, defined based on who a claim check is cut to. 1st party, often referred to as “Property” coverage reimburses the client for something they’ve lost.  It could be a building, property, a stream of income, or frankly anything that reduces their net worth.  The check is cut to the client to reimburse them for what they lost.  3rd party, often generally called liability insurance (though not entirely proper terminology to use), cuts the check to someone else.  Based on what the client did, someone else is due money and the insurance pays that person instead of the policy holder. Although there are clearly COVID-19 implications for both 1st and 3rd party coverage, most clients are focused on 1st party right now, and are not thinking of the liability lawsuits that will inevitably follow for  “exposing” others to the virus.   Business Income (aka Interruption) Coverage Clients are often encouraged by brokers to purchase business interruption (aka income) coverage.  This is a 1st party coverage that is geared to plug interruptions in income streams to keep businesses going.  On the surface, this sounds like a natural fit for COVID-19 related claims that have impacted many insureds.  Remembering axiom #3 above, different carrier contracts will likely react differently to this type of claim.  However, let’s explore the most common contract wording. Trigger Underlying all of insurance claims is the concept of a “trigger.”  The trigger is an event that elicits coverage.  The trigger is evaluated before we even look at exclusions.  As an extreme example:  John Doe gets in a car accident and passes away while on his way to eat at your restaurant.  That is certainly an “event” that occurred and impacted your income—but does that event trigger an insurance contract to do anything?  Obviously not.  It was an extreme example to prove a point.  Just because “something” happens, doesn’t mean insurance policies respond. In fact, I recently had a client contact me and say “I assumed that COVID-19 is a natural disaster and is therefore covered.”  The existence of

Mt. Franklin’s Perspective on COVID-19

Three Axioms of Insurance Many consumers approach purchasing insurance as a commoditized activity.  They reach out to a broker or two, look at a few options based on price and high level coverage outlines, and then make as intelligent of a decision as possible. The COVID-19 event is a sobering reminder of 3 key axioms in … Read more

April 14, 2020

How to Get Affordable Auto Insurance

If you’re like most drivers, you want to get the best auto insurance possible at the lowest price. Fortunately, finding a good and low-priced insurance plan doesn’t have to be difficult. Read this article to learn about how to get affordable car insurance.   1. Claim Your Discounts One of the most effective ways that … Read more

April 9, 2020

Do Entrepreneurs Need Business Insurance?

Being an entrepreneur is no piece of cake. You are going out on your own, venturing into a new industry and the future is unknown. Many factors will contribute to whether your new business will be a success or not. One of those factors is whether you purchase comprehensive business insurance from the get-go. Below, … Read more

April 7, 2020

Are High Value Items Covered by Home Insurance?

High value items will be covered under a typical home insurance policy, but not past a certain dollar amount, unless your policy includes special provisions.     Different insurance companies may have different limits, but generally it breaks down something like this: $1,500 per item $3,000 for combined value If the value of any item … Read more

April 2, 2020

Why El Paso businesses impacted by the pandemic should consider filing a claim

Why El Paso businesses impacted by the pandemic should consider filing a claim even if the chances of an award seem slim Insurers say policies may cover; YMCA head hopes By David Crowder / El Paso Inc. staff writer   Our principal, Shane Lipson, was interviewed by El Paso Inc. about how business owners can address losses … Read more

March 31, 2020

Should you consider home insurance rates when buying a home?

When you buy a new home, you want to make sure it’s within your budget. That includes not just the purchase price but also other ongoing expenses such as home insurance.    What’s the average cost of home insurance? The average cost of home insurance ranges from $598 in Delaware to $2,559 in Oklahoma. Actual rates, of course, vary … Read more

March 26, 2020

When is it legal and illegal to pass someone??

If you get a ticket for illegal passing, it could be a moving violation that puts points on your license and could lead to your auto insurance rate to increase. You know to follow the law, but when exactly is it legal and illegal to pass someone?   Passing on the left The rules for … Read more

March 24, 2020

What to do about home insurance when you live in your home part-time

If you don’t live in your home the entire year because it’s your vacation home, you’re a snowbird or you just like to take long vacations, you need to pay close attention to your home insurance. Living in your home part-time creates extra insurance risks, so you may need extra coverage.   Why is there more … Read more

March 19, 2020

COVID -19 (Coronavirus) Update from Mt. Franklin Insurance

With the precautions of COVID-19 (Coronavirus), Mt. Franklin offers many automated and remote capabilities to assist you:   Online electronic signature – no more “in person” ink signature required. Online computer meetings that allow us to review documents with you from the comfort of your home. Robust conference capabilities to allow group meetings via telephone. … Read more

March 17, 2020

Does your auto insurance cover your camper trailer?

When you tow a camper trailer, you want to know that your car insurance protects you. It typically will give you some protection, but there are a few things you need to know.   Liability coverage When you tow a camper trailer or other trailer, the most common rule is that your liability protection will extend to … Read more

March 12, 2020

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