Prepare Kansas

Category: Insurance

Insurance Considerations for Farm Families and Small Business Owners

September is National Preparedness Month. It is also our annual Prepare Kansas online challenge. Prepare Kansas 2017 will provide tips on getting financially prepared ahead of disasters and emergencies. This year’s program will be conducted through the K-State Research and Extension Facebook page. No registration is required, so Kansans and anyone interested in planning ahead for emergencies can follow on Facebook and this blog at any time during September, pick up handy information and interact with K-State extension specialists and agents. Today’s post is written by Debra Wood,CFP®  K-State Research and Extension – Central Kansas District Family Resource Management Agent.

Most of the focus of #PrepareKansas has been around preparing yourself and your family ahead of a disaster.

Photo credit: Reed Koop

Farm families and other small business owners have another element they should consider when preparing that inventory and reviewing insurance coverage.

My story

Our home and farm was hit by an EF4 tornado on May 25, 2016. Everything was totally destroyed. Ten buildings were wiped out down to the concrete slabs. Machinery was ground up into little pieces. In addition to coming up with a list of household contents, we had to think through what was in all the sheds, the office and the shop.

Photo credit: Linda Roskens

The machinery was scheduled on an insurance policy. We did not have some items insured, such as trailers and older equipment deciding to retain that risk, knowing we could cover that expense if something happened to them. We never thought it would all disappear at once, in an instant. One or two items, though, we discovered had not been added to the policy. This demonstrated to us the importance of having an emergency fund for the household, and also for the business to cover deductibles and things you decide to self-insure.

One thing we had underinsured was shop contents. We had coverage, but it was not nearly enough to cover the cost of all that was lost. Think of how much you have accumulated over the years of your farming or business operation. Has the value on your policy kept up with the value of the buildings, equipment and contents? Reviewing insurance coverage annually is as important for your business as it is your home and auto, to make sure you have adequate coverage in case something happens.

Take a look in each shed and make a list of contents. Do the same for your shop, store, or office contents. List each item, along with the date purchased and cost, if known. Don’t forget items you have stored in a different location. Make sure if you are not insuring an item that it is an intentional decision and not an oversight.

Business considerations

When reviewing your insurance coverage, compare your list of machinery, equipment, and inventory to the list of items you have scheduled on your policy. Is there anything you have forgotten? Are all buildings adequately insured? It may not be economically feasible to insure everything without spending all your profits on risk management. You may have to strike a balance. Decide which risks you want to transfer to insurance, and which you want to retain. Cover those items you can’t afford to lose, and those which are leveraged.

In addition to property coverage for buildings, contents and machinery or equipment, some business owners may want to consider business interruption insurance coverage. For those experiencing something the magnitude of the hurricanes in Texas and Florida, this coverage can help provide funds to make up the difference between your business’ normal income and its income during and immediately after a forced shutdown. These funds can be used to pay regular bills such as rent or mortgage, employee wages, and moving and storage expenses.

Another insurance business owners should review each year is the amount of liability insurance coverage they have. Limits can be increased if needed, and umbrella policies are available to cover the business and owners at a higher level than standard property insurance will cover.

Thanks Deb for sharing your story!

#PrepareKansas – Week 1 Challenge, Preparing a Household Inventory

September is National Preparedness Month. It is also our annual Prepare Kansas online challenge. Prepare Kansas 2017 will provide tips on getting financially prepared ahead of disasters and emergencies. This year’s program will be conducted through the K-State Research and Extension Facebook page. No registration is required, so Kansans and anyone interested in planning ahead for emergencies can follow on Facebook and this blog at any time during September, pick up handy information and interact with K-State extension specialists and agents. Today’s post is written by Elizabeth Kiss, Family Resource Management Specialist.

Disasters don’t plan ahead. You can. Prepare Kansas this year will help you take steps to be more financially prepared to weather any challenges, plus it’s a good way to stay organized.

You don’t know where to get back to if you don’t know where you started, right? This week’s challenge takes you step by step through preparing a household inventory. Why does this matter?

Emergencies and disasters may result in insurance claims. Your insurance company will likely require a listing of items lost or destroyed in order to document the claim. A household inventory is an itemized list of the contents of your home, including basement, attic, and garage. If you have sheds or storage areas on your property or if you rent a storage unit somewhere else, be sure to include a list of the contents of those too.

While it is true that there is an initial investment of time and effort in preparing the inventory from scratch, once completed it will be useful into the future with regular updating. Your challenge this week is to prepare, or update, a household inventory, include storage areas. Here are some tips to get started:

  • Household inventories can take many forms. Use the format that best suits your needs. Don’t get hung up on being perfect, if you are starting from scratch focus on the big ticket and hard to replace items.
  • When describing furnishing and equipment, be as specific and accurate as possible.
    • Include the original cost, date purchased, any alternations or repairs done on the item, and corresponding cost.
    • Photograph or videotape every wall in each room of your home and storage areas.
    • Include open closets, cabinets, cupboards, and drawers.
    • Take close-ups of unique or expensive items to document their condition
    • Date photographs; when videotaping verbally describe the contents as you move around the room
  • Don’t forget to include personal items that might not always be stored at home and items that are in your vehicles.
  • Save copies in more than format and more than one place. For example, keep a paper copy and store copies of the document, video inventory and pictures to a flash drive and the cloud.

Here are links to two examples of household inventory forms.

Personal Home Inventory (Kansas Insurance Department) http://www.ksinsurance.org/documents/department/publications/personal-home-inventory.pdf

Household Inventory (eXtension.org Financial Security for All) http://articles.extension.org/pages/11274/household-inventory

Want to learn more? Download this fact sheet from the K-State Research and Extension bookstore https://www.bookstore.ksre.k-state.edu/pubs/MF3055.pdf

Kansas Commissioner of Insurance provides checklist of storm season insurance precautions and preparations

In light of recent and anticipated severe storm activity in Kansas, Kansas Commissioner of Insurance, Ken Selzer, CPA, provides the following checklist of storm season insurance precautions and preparations:

·         Check your homeowner and vehicle policies to make sure you have proper coverage for hail and windstorm damage.  Review your homeowner’s policy with your insurance agent to check for current coverage and adequate protection.

·         Take inventory of your personal property, including model and serial numbers when available. The Kansas Insurance Department has a good Personal Home Inventory booklet that can be downloaded at www.ksinsurance.org.

·         If possible, take photos or make a videotape of personal items to give to insurance adjusters in the event of loss. Store this information, along with receipts, in a safe deposit box or somewhere other than in your house.

·         See that trees or branches are not in danger of falling on your house. Closely inspect your trees, and remove weak branches that could fall in high winds.

·         Check your roof for leaks or damage to gutters.

·         Be sure to use a generator wisely if your power goes off. Make sure it is connected properly, and ventilation is adequate.

·         Have plenty of fresh batteries for radios and flashlights, as well as a supply of bottled water, blankets, dried foods and canned goods, in case of a power outage. Also, regarding food spoiling in your refrigerator or freezer, a homeowners or renters policy often allows for compensation for food losses, but only up to a certain (usually fairly low) dollar amount.

·         Be aware of the latest forecasts from television or radio news and smartphone applications.  Severe weather warnings are activated to protect you and your property.

·         If you have time to act in a severe storm warning, move vehicles into a safe structure.

For questions or assistance, contact the Consumer Assistance Hotline (for Kansas residents) at 800-432-2484. You can also go online to their website, www.ksinsurance.org, to use the live chat line feature from 9 a.m. to 4 p.m. Monday-Friday.

Blog Extra! Homeowners or renters insurance may cover spoiled food

September is National Preparedness Month. It is also the month of the K-State Research and Extension annual Prepare Kansas online challenge. Prepare Kansas 2016 focuses on keeping food safe in emergency situations. This year’s program will be conducted through the K-State Research and Extension Facebook page. No registration is required, so Kansans and anyone interested in planning ahead for emergencies can follow on Facebook and this blog at any time during September, pick up handy information and interact with K-State extension specialists and agents.

insurance

 

As with any type of insurance claim, it is important to understand the details of your specific policy and coverages when considering making a claim for food spoiled as a result of a power outage. Check your policy or contact your insurance agent to ask about the following.

Cause of the power outage. While many homeowners and renters policies provide coverage for spoiled food as a result of a power outage, the cause of the power outage may determine whether or not you are covered.

Policy limits and deductibles. There may be limits on how much your policy will pay per occurrence of food spoilage.  There may also be a deductible. That means, if your loss was $500 and the deductible was $250, your policy would pay $250 for the loss of food. Depending on the situation, filing a claim for spoiled food might be combined with a larger claim from the same event.

Document your losses. If you routinely have a full freezer, it is important to know how you will be expected to document your loss if you make a claim. You probably don’t need to save the spoiled food but taking pictures is a good idea. Ask your insurance company for details.

It is important to note that food spoilage resulting from malefunctions of an old or faulty refrigerator or freezer is probably not covered.