Waiver of Subrogation, What is it?

If after an insurance claim is paid out by your insurance company, it is deemed that another party was actually the negligent one, then your insurance company (via the insurance policy contract) has the right to go after the negligent party. This right is usually found in the "Conditions" section of your insurance policy. This conditional right can, however, be waived. This means that your insurance company would then not be allowed to go after the negligent party. The term for this waiving of rights is called Wavier of Subrogation.

Often you will see the Waiver of Subrogation in commercial leases. Landlords will require that tenants have this verbiage in their insurance policy so that if a claim occurs at the leased location that the tenant's insurance company cannot come back after them for damages. The landlord, however, would be less inclined to have this wording on their policy since it would mean they and their insurance company would not be allowed to go after their tenant after a claim. A building owner and their insurance company usually have more to lose (the building and its rental income) than the tenant does so they would be very interested in being able to go back after a negligent party.

There are two example of where a landlord may want the Waiver of Subrogation wording on their own insurance policy. The first is if they are renting to a family member or friend who they know doesn't either have enough assets or money to be able to cover them in case of a claim, they may not want their insurance company to be able to go after them to collect for damages. The second is if the landlord and tenant are owned by the same person or organization. In some cases, usually for legal or tax reasons, a person may have one company that owns the building and another company that owns the business that is the tenant. In those cases you would probably want both the landlord and tenant policy to have a Waiver of Subrogation clause in their policies so that you don't have your two insurance companies fighting over payout.

Another place where you will see Wavier of Subrogation is in situations where companies or organizations will subcontract work to other companies or organizations. Often, if a business is going to hire another business to do work on their behalf they will request that the subcontractor have Wavier of Subrogation on their policy. Similar to the Landlord/Tenant relationship, if the contractor requires the subcontractor to have Waiver of Subrogation on their policy it means the subcontractor, if a claim arises, is not able to go back after the contractor for money.

When entering into a lease or a business contract it is important to know if you are going to be required to have Waiver of Subrogation and if you have it or not in your insurance policy. It is best to have both your legal team and your insurance professionals review contracts to make sure you are adequately protected.

Own or Plan to Own a Classic Car? Protect Your Investment

Antique and classic cars are not only a treasure to their owners, but also can be a lucrative investment. Collector cars in mint condition can command many times their original value. But, whether you have one, are considering restoring one or are looking to buy, you need to consider a number of things before spending a lot of money on your "dream car".

Hurricane Sandy, which recently hit the East Coast, damaged thousands of collector cars. One insurance company specializing in classic and antique cars estimated that between 8,000 to 10,000 collector cars were damaged in the storm! Although it is impossible to protect these cars against a force of nature this devastating, it serves notice that classic car owners ensure that their car, whether a treasure or an investment, is as safe as possible. That starts with, but is not limited to, adequate insurance.

Adequate Insurance

Since collector cars don't depreciate like regular cars, coverage is based on an agreed value rather than a cash value. You and your insurance company agree on a value when the policy is purchased that takes into account everything you have invested in your collector car.

Antique or Classic?

Is your car an antique or a classic car? The general rule is that antique and classic stock vehicles were built from the turn of the century through 1972.

It used to be said that any vehicle 20-25 years old or older was considered collectible. That is no longer true. Automakers' production numbers significantly increased in the mid-1970's and quality standards fell. Because of this, there are some mid-1970's and 80's vehicles that are not collectible.

However, some still are because they have desirable amenities such as:

• Convertibles
• 2-door sports cars (few 4-door sedans are collectible)
• Unique body shapes
• Foreign sports cars
• Big block V8 engines

Safe Storage

A garage is a necessity for your collector car, and you need to make sure the building is solidly built. Is the foundation strong enough to withstand earthquakes or flooding? Is the roof in good condition, free of debris, and the gutters working properly? Make sure the siding and windows are in good shape and sealed from the elements. While there's little you can do if a hurricane or earthquake strikes, many collector cars are ruined by leaking roofs, excess moisture or minor flooding that could be prevented with a little building maintenance.

If your garage is like most, you probably also have garden tools, a lawnmower, paint and cleaning supplies stored there. All of these items can cause damage if they drop or fall against or into your classic car.

How to Reduce the Risk of Damage:

• Store rakes, shovels and other hanging tools in cabinets and secure them with hooks. If cabinets aren’t feasible, secure tools to their wall hooks with small bungee cords or rubber straps.
• Cover your car when it’s being stored to help protect it from flying debris.
• If you store your car elevated, be sure to support it on sturdy jack stands under the suspension, which should always be under tension. Never use concrete or cinder blocks.
• For long-term storage, always disconnect the battery. Also, if you know a storm is coming, be sure to pick up from the ground any battery tenders and extension cords to keep them out of floodwaters.
• Secure heavy objects, such as drills or toolboxes and appliances, with safety straps.
• Install safety latches (like childproof ones) in cabinet doors and drawers to prevent them from opening and spilling their contents.
• Fasten ceiling lights and other hanging equipment to supports by using safety cables.
• For framed pictures, car signs and neon signs, use long-shanked, open-eye hooks and picture wire to fasten them to walls. Make sure the hooks are anchored into the walls with studs. You can also try closed-eye hooks and securely screw them into the back of the frame.
•  Install flexible gas lines and automatic gas shutoff valves (if your garage is heated).
• Keep a multipurpose, dry-chemical fire extinguisher in your garage.
Even if disaster never strikes, following these tips may contribute to a garage that has less clutter and an environment in which your classic car is generally safer.

Sources: Progressive Insurance and Hagerty Classic Car Insurance