At Pine Country Insurance, we are proud to sponsor Loop the Lake again this year. This is fun, family-friendly activity consists of riding your bike around Lake Bemidji, with fun stops for food, music and more along the way.
The ride starts with a rolling start between 7:30 and 9:30am at the Sanford Center, where there is food and beverages, music, bike tune up assistance and much more. From there, bike over the Mississippi and along the Lakeside Trail past Paul and Babe and the BSU neighborhood and through Diamond Point Park. From there, you bike along lakeside roads around the northwest corner of the lake and into Lake Bemidji State Park. The last leg of the ride is on beautiful bike trails, through the scenic park and down the east side of Lake Bemidji.
Online registration is open through Wednesday, June 14 or at the event for an additional fee. Your registration includes all the food, music, beverages and fun!
One nice thing about this event is it is not a race, and you are free to ride at whatever speed you wish.
Whether you bring your family, a spouse or significant other, a friend or just yourself, plan to participate in this fun event coming up!
For more information and/or online registration, click here.
As a father of two teens currently learning to drive, I can personally attest that this process can be a little scary. But it is also quite rewarding to guide your children through the process of yet another step towards adulthood.
It probably won’t come as a surprise for me to tell you that adding a teenage driver is guaranteed to raise your rates. Insurance companies base their rates on statistical averages, and teenage drivers statistically have more accidents than older drivers. So your rates are going up; the only questions are how much and what can be done to lessen the impact on your pocketbook.
First, an idea that sounds plausible but doesn’t work. Sometimes parents ask me if it would be better to put Junior on his own policy when he gets his license. That way, they reason, Junior won’t increase the rates on their other vehicles. Unfortunately, this idea for “beating the system” usually won’t work. Insurance companies base their rates based on prior loss trends and statistics – and apparently, there are a lot more claims on young-driver-only-policies than there are on family policies. By insuring your new driver along with you, you also take advantage of many discounts that may not be available to them separately, such discounts for multiple vehicles, multiple policies, etc.
There are some things that can be done to keep your rates low, however. For example, most insurance companies provide a discount if your student is averaging a 3.0 GPA or better or is ranked in the top twenty percent of his or her class. The thinking is that good grades are a sign of responsibility that may translate over to how carefully a teen perform behind the wheel. If you have a child approaching driving age that is not quite making the GPA cut, now is the time to work with them to see if they can get over the hump, so to speak. The good news is that most carriers are willing to use either your last term GPA or your cumulative GPA, so working to qualify for that discount may not be as difficult as you may think.
Another thing that will affect your rates is the household vehicle situation. If your teen doesn’t have full-time access to a vehicle because there are fewer vehicles than drivers to drive them, you may be able to classify them under the “occasional driver” rate, which should be less expensive.
If you do plan to give your child their own vehicle to drive, you could consider an older vehicle with a value low enough that you feel comfortable not fully insuring it. The savings for assigning them to a “Liability only” vehicle are sometimes considerable and sometimes not, depending on how your carrier prices the policy. But this savings method does have its own downside: As mentioned above, your young driver is statistically more likely to get in an accident than you are, meaning the odds are higher that you might have to foot the bill for repairs or for a replacement vehicle if their car wasn’t fully insured.
So at what point in the licensing process will your insurance rates go up? The good news is that most carriers don’t raise rates when your child gets their permit. (This rule is not universal, you should confirm this with your insurance agent.) But when your child does get their license, they will have to be added to your policy immediately. Sometimes I hear from a parent that their child is getting a license now but they don’t want to insure them yet, because the plan is to wait for a few months before they are allowed to drive. If that is the plan, then I also suggest waiting before you sign off on their license, because if the state says your child is a driver, your insurance company is going to consider them to be a driver as well. Be sure to keep your insurance agent in the loop regarding the licensing progress and to let your agent know when the big day occurs.
I’m often asked whether a teenager’s vehicle should be titled to them or their parent(s). Some parents give their child a car as a graduation present, while some other teens save up and buy their own. If your child is old enough to take legal title (in Minnesota, usually 18, but 17 in some cases), the inclination may be to title the car in their name instead of yours. However, you need to understand that this could have insurance implications. Many insurance companies will only allow you to insure vehicles that are actually titled to you, based on the insurance principle of “insurable interest”. Titling the vehicle to only your teenager could result in having to buy them a separate policy, which could be up double or triple the cost of insuring them under your own policy. These rules and rates do vary from carrier to carrier; so be sure to check with your agent before you finalize the purchase of the vehicle. (Here’s an idea: Consider “co-titling” the car to both you and your child; this can be a great solution in many of these cases.)
Many parents ask how long their child can stay on the family policy. This often comes down to two issues: vehicle ownership and residency. As discussed above, your name may need to stay on the title of their car in order to keep them on your policy. But once your child moves out and onto their own, they are probably going to need their own policy. (Many carriers will require this, and even if not, it is advisable so that they keep well-rounded coverage in place, and you may wish to get off their title for liability reasons anyway.) Keep in mind, however, that going off to college is not usually the same as moving out. As long as your child doesn’t establish a permanent residence, if they lived with you before moving into temporary student housing, they are still considered a resident of your household.
Before I close out this post, I’d like to take a moment to talk “big picture”. The big picture is that your teenager learning to drive is another milestone in their journey towards the responsibilities of adulthood. As parents, it is our role to teach them what these responsibilities mean. When I started driving, my parents required that I first have a job and reimburse them for their increased insurance costs. I knew that if I got in an accident or received a ticket, I’d have to pay even more. Conversely, if I kept my grades up, I knew I’d pay less. I suppose that this approach might seem harsh to some, but for me it was an important lesson in learning how life works. While you’ll need to personalize your own game plan with your teen driver, I encourage you look for opportunities to weave the valuable lessons of responsibility into it.
If you are a first-time home buyer, you may be hearing the term “escrow account” for the first time and wonder what it means. An escrow account is bank account held in your name and for your benefit by your mortgage company. Every month when you make your mortgage payment, part of that payment is deposited into your escrow account. The escrow account is then used to pay your Homeowners insurance and your property taxes when each become due.
An escrow account is first established when you close on your mortgage. At this point, part of your closing costs will be to pay for the first year of insurance, unless you pre-paid that premium. Added to closing costs will also be a reserve that is deposited into your escrow account, partially for the next property tax payment that is due and partially to provide a buffer in case taxes or insurance rates rise.
Starting with your first mortgage payment on your new home, you will be paying one-twelfth of your annual insurance premium, which will then sit in your escrow account until your policy renews a year later. In this manner, basically you are always paying your Homeowners insurance one year ahead. Similarly, your monthly payment also includes one-twelfth of your annual property tax bill, which will also be held in your escrow account until the next tax due date.
It is very important to understand that while your monthly principal and interest payment may be fixed for the life of your loan (as long as you continue to pay on time), the additional amount going to your escrow account is very likely to change down the road. This is because property taxes and Homeowners insurance rates do change over time – unfortunately going up more often than they go down. If amount due changes for either, your mortgage company will have to also adjust the monthly amount they collect from you. This means that your total monthly mortgage payment will not always stay the same as time goes on.
While an escrow account is not required for every mortgage, many special mortgage programs do require it, including programs often utilized by first time homebuyers. If you are not using a special mortgage program then your relative level of risk will determine if the escrow account is mandatory. For example, an escrow account is usually required when paying less than twenty percent down.
Why do mortgage companies want an escrow account? It’s because your home is the collateral for the loan they make you. Meaning that if you don’t continue paying they can recoup their loss by foreclosing and then selling your home. But if they had to foreclose and then found that that the home was damaged and you didn’t have insurance in force - or they found a tax lien against your home because you didn’t pay your property taxes when due - this would affect their ability to recoup their loss after foreclosure.
If an escrow account is not required by your mortgage company, you may have the choice to opt in or opt out. Many people do voluntarily opt in as a matter of convenience, to avoid having to come up with large chunks of money two or three times a year when taxes and/or insurance become due. (While most Homeowners policies do provide a monthly payment option, property taxes are typically due in the two installments in the spring and fall.)
Never forget that the funds in the escrow account belong to you. If you pay off your mortgage, any balance in the account will be refunded to you.
One final word: Although your mortgage company may stay in control of paying for your insurance, you are still in control of selecting insurance; you get to choose your carrier, coverages and deductible, subject to their basic requirements. You also have the right to change your insurance provider down the road if you so choose.
If you own a boat, four wheeler, ice house, motorcycle, camper, snowmobile, motorhome or jet ski, I hope that you have purchased insurance to cover your investment. But how well is your vehicle actually covered if there is a total loss?
There are basically four types of total loss settlement options offered in the insurance industry for specialty vehicles. Keep in mind that some of these options may be offered for some types of vehicles and not others. I’m presenting these options from most coverage to least coverage:
1. Replacement Coverage.
This is typically the best option, if you can get it. There are a number of variations of this coverage, but the basic premise is that if your vehicle suffers a total loss, your insurance carrier will pay to replace it with a brand new, current model year vehicle that resembles what you had as closely as possible. This means that you may receive more than what you originally paid for your vehicle. This option is typically only offered when buying the vehicle new, and it will usually age off your policy after a few years. In many cases, you may be asked for documentation for how much you paid new for your vehicle, which is then used to determine your physical damage premium.
2. Agreed Value
It may not be as good as a replacement guarantee, but Agreed Value still protects you from future depreciation, and this feature provides you the confidence of not having to wonder how much you would receive in a total loss. In some cases, you may be asked for documentation such as a bill of sale. In other situations, you may simply specify a value and if the insurance company agrees by issuing the coverage at that amount, then you are good to go. This agreed value is normally used to determine your physical damage premium. Depending on the type of vehicle and the carrier, Agreed Value may be available on vehicles of any age, vehicles up to a certain age or not at all. In some cases, it may age off (or require you to reset the value) after a certain number of years.
3. Actual Cash Value
With pure Actual Cash Value coverage, there is no discussion of the value at all when insuring the vehicle. Instead, if there is a total loss, the insurance company will complete their own valuation or appraisal of what your vehicle was worth immediately prior to the loss. This involves looking at its age, condition and features and comparing it to what other similar models have sold for or been offered for sale for in your region. This is the same method used to insure nearly all personal autos. Since no value has been mentioned, your physical damage premium will be based either on the cost new of the vehicle or simply on the insurance company’s knowledge of what claim payments for this kind of vehicle average.
4. Stated Value
If Stated Value sounds better to you than Actual Cash Value, then read this paragraph closely. Stated Value will never pay more than Actual Cash Value, but it may pay less. With Stated Value, you normally tell the insurance company what desired physical damage limit you wish to carry. In a total loss, you will be paid the LESSOR of the Actual Cash Value (as appraised by the insurance company) and the limit you set. Your physical damage premium is based on this limit, this stated value. So all the risk rests on you: if you state a value too high, you are paying for a level of coverage you won’t receive; if you state the value too low to save premium, you may be underpaid in a total loss. While it may not sound overly attractive compared to the options further above, Stated Value is often a practical way to easily and inexpensively establish coverage for many vehicles; the important thing is that you understand that Stated Value is not the same as Agreed Value. You may also wish to periodically review the stated value and adjust it as your vehicle depreciates.
Which of these valuation methods apply on the policy insuring your specialty vehicle? I can tell you that if you added your vehicle to either your Auto or Homeowners policy, it’s almost never going to be insured for Replacement or Agreed Value. In addition, I know several of the largest insurance carriers rarely (if ever) offer these options on any of their policies.
If you want Replacement or Agreed Value, you’ll normally only find it on specialty vehicle policy, and often you may need to go to an independent agent like us to get one with these options. A specialty vehicle policy may cost more than adding the vehicle to your Homeowners or Auto insurance, but in many cases it actually costs less. It will almost always provide more and/or better-fitted coverages, and it also may protect your Homeowners or Auto policy from going up or being non-renewed due to claims you file for your specialty vehicle. A specialty vehicle policy may not offer Replacement or Agreed Value in all cases, however; so you’ll still need to talk to your agent about the options available to you.
Have questions? I look forward to hearing from you so I can answer them.
Having water in your home is great when it stays in its proper spots – within your pipes, toilet, sink or tub. But water can quickly create a lot of damage and cleanup expense in your home if it gets let loose. My clients often ask me if their Homeowners policy covers water damage. The answer is that it all depends on where the water came from.
Water damage could come from a leak in a water line (usually covered) or from a leak in your roof (usually covered) or from seepage in through basement walls (hardly ever covered) or from flooding of normally dry ground (virtually never covered without separate Flood insurance). It can also come from water that backs up from sewers or drains or overflows from a sump pump, and that is what we want to discuss in today’s post.
Most standard Homeowners policies do not cover water backup or sump pump overflow automatically. Typically, this is an option that you can add for additional premium. Most carriers will allow you to specify how large of a limit you’d like for this coverage, often in $5000 increments. Depending on your insurance company, the first $5000 in coverage may cost $25 to $100 per year, with higher limits going up from there. (Some carries only offer up to $5000 to $10,000 in coverage, while others offer maximum limits significantly higher.)
Many people in our area live in the country and rely on septic systems. We all know that septic systems sometimes freeze, especially in years where there is not sufficient snowfall to build up a good layer of insulation on top of the ground. If your septic freezes, your sewage may have no direction to go but back into your house, coming out through a toilet or other drain opening.
If you live in town, there could be a blockage that results in your sewage (along with the sewage of all your neighbors) backing up into your house as well. It has been my observation that the city may not be willing to pay for your cleanup or water damage, and you may be on your own if you don’t have the Water Backup option.
If you have a sump pump in your basement, this identifies another possible risk. The job of that pump is to remove ground water that has found its way into your basement. If the pump fails mechanically, loses power or is overwhelmed by extra water during a rainstorm or wet season, you could have quite the mess in your basement. If you have finished basement flooring or walls, your loss could easily be in the thousands of dollars for the repairs.
If you have a water or sewer backup or overflow in your home, the first step is to get everything dry and clean. Many homeowners will try to this themselves – maybe with a shop vac combined with household-grade fans. Unfortunately, this method is often insufficient to dry out flooring or walls, but sometimes homeowners aren’t aware of that until later when mold develops. The best thing to do in this situation is to call in a water restoration company, who can check for moisture content in walls and floors and has the proper equipment to get things dried out right. If dollars is tight, having insurance coverage to pay for this professional assistance can be huge.
Once you do get things properly dried out, there may be flooring, sheetrock and more that needs to be removed and replaced. Again, this can get quite expensive if you didn’t have Water Backup coverage on your policy.
The Water Backup coverage option can vary somewhat from carrier to carrier, but usually it will cover water damage from both the backup of sewers or drains and the failure of your sump pump if you have one. We encourage you to consider adding this valuable protection to your Homeowners insurance policy.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.