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

Your Car Needs Care to Keep Healthy

Just like your regular health checkup at the doctor, your car needs a good checkup to see how healthy it is.

To keep your car running smoothly and getting optimum gas mileage, it needs to be properly maintained all year, but especially as the weather turns colder. Windshield wipers, as well as antifreeze and oil levels need to be checked to make sure they’re adequate. Tires need to be checked for wear and proper inflation, and headlights checked for alignment and adequate luminosity. Batteries, which are forced to work much harder in cold weather, need to be fully charged and able to hold the charge. With long, cold, dark nights ahead for the next few months, your safety and the safety of your passengers will rely on your vehicle being in good condition.

While most of the simple maintenance can be done at home, it’s best to have a certified auto repair facility give your car a complete checkup. With their sophisticated diagnostic equipment, they can discover potential problems before they strand you on the road. A weak battery that is adequate in the warmer months, can suddenly give out when you need it most because of the added strain of turning over a car’s engine in the cold. Suddenly the battery won’t start the car and you’re stuck.

Engine oil is another factor. Not only is the oil level important, but the weight of the oil plays a crucial role, too. 30- or 40-weight oil in the summer is fine, but it’s necessary to have a multi-viscosity oil (10-30 or 10-40 weight) in your car for colder weather. 10-weight viscosity is thinner, which helps keep the oil from turning to sludge in the cold, whereas straight 30-weight oil remains thicker, making it difficult to turn the engine over to start it.

It’s also a very good time to have your belts, hoses and fluids tested. While the belts may not be making noise or the hoses leaking, they may be getting worn to the point that they will break at any time. The harsher temperatures put an added strain on them, and can result in a breakdown.

Tires need to be checked for wear, and replaced if worn out. Wet, slippery or icy roads will test a tire’s ability to ‘hold the road’, and worn-out tire treads are dangerous in these conditions. State law also mandates a minimum tread depth, and anything below that can result in a ticket. Additionally, if you are involved in an accident with illegally worn tires, you can be held liable for the damages, depending on the situation.

Why take chances with your car’s health or yours? It can also affect you and the passengers in the car if your car breaks down or is involved in an accident due to being poorly maintained. It can end up costing you much more than the checkup.

Thanksgiving Safety Tips from NFPA

Here is an article from the National Fire Protection Association (NFPA) on Thanksgiving Safety Tips.  From our family here at Fey Insurance Services to yours, have a wonderful and safe Thanksgiving! 

THANKSGIVING SAFETY TIPS
The kitchen is the heart of the home, especially at Thanksgiving. Kids love to be involved in holiday preparations. Safety in the kitchen is important, especially on Thanksgiving Day when there is a lot of activity and people at home.

Safety tips:


•Stay in the kitchen when you are cooking on the stovetop so you can keep an eye on the food.

•Stay in the home when cooking your turkey and check on it frequently.

•Keep children away from the stove. The stove will be hot and kids should stay 3 feet away.

•Make sure kids stay away from hot food and liquids. The steam or splash from vegetables, gravy or coffee could cause serious burns.

•Keep the floor clear so you don’t trip over kids, toys, pocketbooks or bags.

•Keep knives out of the reach of children.

•Be sure electric cords from an electric knife, coffee maker, plate warmer or mixer are not dangling off the counter within easy reach of a child.

•Keep matches and utility lighters out of the reach of children — up high in a locked cabinet.

•Never leave children alone in room with a lit a candle.

•Make sure your smoke alarms are working. Test them by pushing the test button

Flood Insurance Facts (Re post from 11/23/09)

With all the flooding that has occurred as a result of Sandy we thought this might be a good time to re post an old flood insurance blog article that gives a few facts about flood insurance.

Posted November 23, 2009 on www.feyinsuranceblog.com:

Flood insurance had its fifteen minutes of fame after the Hurricane Katrina disaster in 2005. During this time period the media was making everyone well aware that flood insurance is not part of your typical homeowner policy. Today that is still the case and with this post I would like to point out a few more facts about flood insurance.

Flood insurance is run through a government program called FEMA (Federal Emergency Management Agency). You can purchase it through insurance agency such as Fey Insurance Services but the backing is from FEMA. Typically it takes 30 days for a new flood insurance policy to go into effect. The one exception would be for a mortgage closing where flood insurance is required. So you need to plan ahead. Hearing about a big rain on the nightly news and calling your agent the next day will not work. Many people think of flood insurance when they think about what is stored in their basement. Flood insurance will only cover things such as furnaces, water heaters, washers, dryers, air conditioners, freezers, pumps and utility connections. Everything else you store down there (old cloths, furniture, carpet, TV, etc) is not covered unless those items are on the first floor of your house and the flood reaches that level.

In some cases flood insurance is required in order to get a loan. If your home or a home you are about to purchase is in a 100 year flood plain (meaning at least once every 100 years your location is under several feet of water) you will be required to purchase a flood insurance policy to close on your loan.

Damage to Rented Premises

Any time a business rents or leases a space to operate from they sign a contract. In that contract are insurance requirements stating that the tenant will carry certain liability limits. Normally they will ask the tenant to carry a commercial general liability policy, and more often than not they ask for at least $1,000,000 per occurrence limit. The reason they ask for this is that if the tenant is the cause of a fire or other type of damage to the rented building, the landlord wants to make sure that the tenant’s insurance will pay for the damages, and not their own insurance.

Commercial General Liability takes care of a lease contract with two different types of coverages. The first is the coverage I mentioned above of $1,000,000 per occurrence limit. This coverage, however, only gets the tenant half way there. The per occurrence limit doesn’t cover for actual areas of a building that the tenant rents or leases. It will pay for only the part of the building that is not rented by the tenant. An example might help explain this better.

Example:

Let’s say that business XYZ, Inc rents unit A of a four unit office building. If XYZ, Inc causes a fire that extends damages to both unit A and unit B, the per occurrence portion of their insurance policy will only cover damages to unit B. It will not pay for damages to unit A because it is leased or rented by them.

Damage to Rented Premises (sometimes called Fire Legal Liability) is the other coverage a tenant needs when they rent space. This coverage is often included in a general liability policy as well but many times is not specifically mentioned in lease contracts. In the example above, Damage to Rented Premises would be the coverage that would pay for unit A that XYZ, Inc. rented.

The reason I bring this up as a blog article topic is because the Damage to Rented Premises is often overlooked. Since it is left out of many lease contracts, businesses don’t think to check with their insurance carrier about the coverage. Your typical commercial general liability policy will only include $100,000 to $500,000. If company XYZ, Inc. in the above example rented a large space, this may not be enough coverage, and they could pay for some of the damages out of pocket.

So next time you rent a space for your business be sure to have Fey Insurance Services review the lease and double check your commercial general liability insurance limits to make sure you are covered in case of a large fire.

How Safe are the Airbags in Your Car?

U.S. Department of Transportation Issues Warning

Since their invention in the 1950s, through their development during the 1970s and added as a required feature in the 1980s, airbags have become an important factor in decreasing injuries of those involved in automotive accidents. Airbags function as supplemental safety devices designed to work with seat belts to minimize injuries in car accidents. In theory, airbags reduce the chance that the occupant of a vehicle's upper body or head will strike the vehicle's interior or windshield during a crash, thus decreasing the severity of injury.

But, are the air bags in your car really safe? Will they deploy in the event of a collision, or will they actually cause further injury? That question has been raised due to the increase in faulty air bag deployment caused by improper installation of airbags in a number of independent auto repair shops in the past few years.

The U.S. Department of Transportation recently warned the public that they have a concern involving the purchase and installation of a significant number of potentially faulty air bags by these smaller repair shops. Soon the DOT will announce a process for the public to follow to determine if their vehicle may be at risk. That process may involve questions for insurers who paid claims for air bag replacements. 

The DOT estimates less than one tenth of one percent of all vehicles may be affected, and they have determined that this problem is limited to within the last three years.


In addition, the National Highway Traffic Safety Association (NHTSA) has determined that air bags must be used correctly or injury or death can result. Children are especially vulnerable to injury or death from airbags. The NHTSA estimates that about 300 people, including 180 children, have been killed because of air bags. Countless others have sustained injuries.
 
NHTSA Findings:

• Passenger-side air bags, as they are currently designed, are not acceptable as a protective device for children positioned in front of them and can kill or critically injure these children in accidents that would have been survivable had the air bag not deployed.
   
 • The number of children killed and critically injured in accidents similar to those investigated for the Board’s study will continue to increase unless immediate action is first taken to determine the benefits of passenger-side air bags, as currently designed.

• Air bags are being designed, because of certification testing requirements, primarily to protect unbelted rather than belted vehicle occupants even though the air bags are promoted as supplemental restraint systems and the majority of motor vehicle occupants now use seatbelts.
   
• In 9 of the 13 accidents investigated for this study in which there were collisions with other vehicles and passenger-side air bag deployment, the change in velocity was less than 20 mph, yet 5 of the 9 children in the right front passenger seats in these accidents sustained serious, critical, or fatal injuries from contact with the passenger-side air bag (2 of the 5 children were in rear-facing child restraint systems).

If you have had repairs done on your vehicle in the last three years that involved the installation or repair of airbags, it is imperative that you have the devices checked out to make sure they will work properly in the event of an accident. 

You can find more information at http://www.nhtsa.gov/