The following questions about potential holiday mishaps and the subsequent insurance implications are hypothetical. They were written with insurance agents in mind, with hopes of arming these disaster-ready professionals with language and insight to smoothly guide clients into 2019. The answers were provided by our colleagues at FC&S Online, trusted policy analysis experts and the recognized authority on insurance coverage interpretation for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins.
Question: My client’s neighbor was attempting to fry a turkey on Thanksgiving Day. Unfortunately, the neighbor left his fryer unattended to watch football and a fire started that spread to my client’s backyard landscaping. Should the insured file a claim for these destroyed trees and plants as well as the expense of re-landscaping?
Answer: With most homeowners’ policies, trees, shrubs, plants or lawns require standard additional coverage, but fire is a covered peril. No more than $500 is paid for any one tree, shrub or plant, and the coverage limit is 5% of coverage A.
But you asked IF the insured should file a claim, and that’s a different question. Unlike auto policies, there is no fault component. So in most cases, each claim counts against the insured. The insured needs to weigh the amount of damage against the deductible and his claims history. If the damage isn’t too bad, he may not want to file a claim. Underwriting will reject policies for claims frequency, even if the claims are small. Frequency is as important as severity when you’re talking to underwriting.
Question: A ‘friend of the family’ claims that my client’s Thanksgiving meal made her so sick that she needed to go to the emergency room. We’re dubious, since none of the other guests became ill after the meal. Should my client be worried about any financial repercussions?
Answer: In short, no. The homeowners’ policy provides coverage for medical payments due to an accident causing bodily injury to a person on the premises with the insured’s permission. Unless the insured deliberately poisoned the guest, the insured has nothing to worry about.
Question: My client has a seasonal job at a Christmas tree lot. While carrying a customer’s tree to her car, he fell and broke his toe. Should my client file a workers’ compensation claim or pay for treatment using his own health insurance?
Answer: Employees, even seasonal employees, should always notify their employer of any work-related injury. This injury happened during the course of employment and therefore meets the qualification to apply for workers’ compensation benefits. The lot may or may not be required to provide coverage depending on the state and the number of employees. You can check with the state to verify whether an employer is required to carry workers’ compensation.
If an employer is not required to provide workers’ compensation, your client should turn to his own health insurance plan.
Question: A client has a part-time seasonal job dressing up as Santa Claus and visiting office parties. Some of these parties can get a rowdy. Who’s responsible if he’s injured while doing this job?
Answer: In this situation, if your client is injured at a company’s holiday party, he will need to file a general liability claim with the company’s insurance carrier. The company should carry Medical Payments (Coverage C) which provides a limited amount of medical payments coverage regardless of fault. If the company is negligent, the general liability coverage (Coverage A) will pay for any bodily injury sustained by your client while he was at the company’s holiday party.
Question: A holiday caroler slipped and fell on the snow outside the insured’s home. What conversations should my client and I have about potential liability?
Answer: The medical payments section of the policy will provide coverage for any medical expenses incurred by the caroler. As long as the caroler was on the insured’s property with permission, coverage for injuries is available.
Question: Roughly $800 worth of holiday gifts were stolen from my client’s car while she ran into the grocery store. Does her car insurance cover the loss?
Answer: Auto policies are designed to provide coverage for damage to the auto whether from an accident or act of nature such as hail, falling trees, etc. While other than collision provides coverage for theft of the vehicle, theft of personal property from a car is different, because the property is not automobile equipment attached to the auto.
If the vehicle was broken into and the radio was stolen, the auto policy would provide coverage for that.
For personal property such as gifts, however, the insured needs to look to the homeowners’ policy for coverage. Theft of personal property is covered anywhere in the world, including in the insured’s vehicle. However the insured should weigh the cost of the items against the deductible on the homeowners’ policy to determine whether it is worth filing a claim.
Question: My clients recently called feeling embarrassed. The couple were so busy during the holidays that they forgot to make a monthly car insurance payment. Then, the day after Christmas, they had a fender-bender. If they catch up with payments, will their insurer still cover the cost of car repairs?
Answer: The laws of cancellation notification vary by state. Most states require that the insured be given a certain number of days of notice before cancellation takes effect. If you make your payment within that time frame, your policy can be reinstated. If your payment is made beyond that date, your policy cannot be reinstated to cover the loss. Carriers are particular about such things.