7 Insurance red flags when shopping for a new home

Red-flagWhether it’s juicy Pinterest images of fashion forward quartz kitchen countertops, or creative cork flooring that catches the eye in Dwell Magazine, the latest must-haves saturate the minds of home buyers. But what many home shoppers don’t realize is that insurers are evaluating homes with a very different set of criteria.

When it comes to homeowner’s insurance, you want your home to be “preferred.” There are carriers who will cover “non-preferred” homes but that route is costly and time consuming, to the point of potentially upending a closing.

Your dream home may have granite and bamboo, but if it also has any of these insurance red flags, it may be difficult, expensive, or impossible to secure homeowner’s coverage.

Safety hazards — First, your insurance inspector will train a very keen eye on the basics of the property, looking for anything that might pose a safety risk. Are there stairs with loose or missing railings? A broken step? What is the condition of the roof, the plumbing, the electrical system? Is there evidence of water damage? A “yes” to any of these will warrant further investigation at least and likely a full remedy before you can get a policy. 

Underground oil tanks — You do NOT want to “strike oil” in the form of a tank under the ground of your new home. Most carriers will not insure a property with an underground oil tank. Those that will may specifically refuse to provide any liability or environmental coverage for them, placing risk squarely on your shoulders. We strongly advise against this! Rather than pay higher premiums and accept the risk, it’s a better, much less expensive option to have the tank removed.

Swimming pools without a fence — Swimming pools are not an insurance deal breaker (though they can command higher premiums), so long as they are adequately protected with a fence and lockable gate. Some insurers will not cover a pool that has a diving board or a slide, even with a fence. 

Trampolines — The number of injuries sustained from using trampolines is astonishing: more than one million in the 10-year period of 2002 to 2011, according to the Journal of Pediatric Orthopaedics. Consequently, most insurers simply will not cover a home that has one. If you plan to purchase a home with a trampoline, ask the seller to remove it before you buy.

High-risk animals — Most insurers will not cover homes with a “high-risk breed” dog. Each carrier has its own list of prohibited breeds. Common ones include Pit Bulls, Akitas, Chows, and Rottweilers. Certain other animals make insurers skittish as well, including horses and farm animals. Ownership of these animals will not necessarily prevent coverage, but they do tend to make it more expensive.

Being in a fire safety “desert” — Generally speaking, your insurance costs will rise with the distance your home is from a fire station or fire hydrant: the farther away, the higher your “PC” or Fire Protection Class. If a home is more than 5 miles from a fire station or more than 1,000 feet from a fire hydrant, it is a PC 10, the point at which most insurers will either not cover the property or charge a correspondingly high premium.

Day care business — Some carriers will insure a home with a day care business via an additional endorsement (for an additional premium), but others will not cover any home that houses a business with substantial foot traffic. Home offices and businesses that have incidental traffic are usually not a problem.

If you’re home shopping and curious about other potential insurance red flags, call me today and I’ll be happy to help.

Stephen Davis

sdavis@srfm.com

Sinclair Risk& Financial Management

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Sinclair Risk And Financial Management Chosen To Offer New Program For Home Healthcare

Sinclair Risk and Financial Management was chosen by The Hanover Insurance Group to offer Hanover Home Healthcare Advantage, which provides industry specific insurance solutions for home healthcare.

“It’s often difficult for home healthcare providers to find insurance that will appropriately cover their unique risks and exposures. This enhanced program from The Hanover addresses potential coverage gaps that home healthcare customers may have,” said Heather Sinclair with Sinclair Risk and Financial Management.

Because Sinclair Risk and Financial Management and The Hanover have expertise insuring home healthcare, Sinclair can customize a program that will fit each customer’s individual needs.

The Hanover Home Healthcare Advantage program offers:

  • Unique coverages for the home healthcare industry, featuring industry-leading Professional Liability, General Liability and Property coverage options
  • Flexibility to provide protection for the various home healthcare needs, such as Independent Medical and Non-Medical Contractors Coverage, Professional Liability, Medical Director’s Coverage, and Data Breach Coverage. These comprehensive products can be tailored to fit unique needs or needs that evolve or become more complex.

In business since 1971, Sinclair Risk and Financial Management is one of the largest independent insurance agencies in Connecticut and one of the largest nationwide with its headquarters in Wallingford, CT and hub offices in Norwalk, CT, Springfield, MA, Naples, FL, and Pawtucket, RI. Sinclair Risk and Financial Management has significant experience providing solutions for home healthcare providers. Sinclair Risk and Financial Management represents only leading carriers, including The Hanover. Sinclair Risk and Financial Management is located at 35 Thorpe Ave, Suite 200, Wallingford, CT.

The Hanover works with a select group of independent agents and is ranked among the leading property and casualty insurers in the United States. The company has been meeting its obligations to its agent partners and their customers for over 160 years. The Hanover maintains excellent financial strength ratings from A.M. Best, Standard & Poor’s and Moody’s, three key rating agencies.

For more information, contact Heather Sinclair at Sinclair Risk and Financial Management at 203-284-3213 or hsinclair@srfm.com.

Article taken from PRNewswire

Sinclair Risk And Financial Management Chosen To Offer New Program For Home Healthcare

FLSA Overtime Rule Change

FLSA Overtime Rule Change On March 14th, the new Final Regulations on the Fair Labor Standards Act were sent to the Office of Management and Budget for final review.  The proposed U.S. Department of Labor (DOL) changes to the “white-collar exemption” in the Fair Labor Standards Act (FLSA) could make more than 5 million individuals eligible for overtime pay—individuals who currently aren’t eligible. This could have a significant impact on employers who may face increased labor costs and compliance efforts.

To qualify for the white-collar exemption, an employee must satisfy a variety of tests, including a duties test, a salary basis test and a salary level test. Currently, under the salary level test, only white-collar workers making less than $23,660 a year are automatically eligible for overtime pay. Under the proposed rule, the salary threshold would increase to a projected $50,440 per year in 2016 and would be updated automatically each year in order to keep up with rising costs.

On Feb. 9, 2016, 108 bipartisan members of Congress signed a congressional support letter, addressed to DOL Secretary Tom Perez, expressing concerns about the proposed rule. Lawmakers are concerned about the unintended consequences for both employers and employees.

One of these concerns is the unclear explanation of the duties test, which is one of the main components used in determining whether employees are exempt from the FLSA provisions. In the proposed rule, the language is posed in question format instead of in a concrete way that employers can easily understand.

Another concern mentioned in the letter is that increasing the salary threshold by such a significant amount—113 percent—disregards the geographic diversity of the country. It states that since the purchasing power of a dollar is different in various parts of the United States, the DOL is ignoring the differences that exist between rural and urban areas.

If the rule is passed as drafted, its most negative impact could be on individuals entering the workforce and mid-level managers. Many small businesses cannot afford to increase their employees’ salaries and would be forced to take actions that could include reducing employees’ hours or shifting salaried employees to hourly status. This could mean a reduction in benefits and could be perceived by salaried employees as a demotion.

In addition, employers would need to re-examine employees’ exemption statuses, review and revise overtime policies, notify employees of changes and adjust payroll systems. Employers may also incur additional managerial costs because they might need to spend more time tracking when employees clock in and out.

The DOL, on the other hand, projects that the higher salary level requirements could actually simplify the process of employee classification because employers would not be required to perform a duties test for employees making less than $50,440 per year, which, in turn, could result in fewer lawsuits and lower legal costs for employers.

The DOL invited the general public to comment on the new rule from June 3 to Sept. 4, 2015, during which it received more than 200,000 comments. The comment period is now closed and a final rule is expected in the summer of 2016. The time between the date the final rule is announced and the date it goes into effect could be short—giving employers little time to make changes.

The Final Regulations could be released as early as May or June, but likely no later than July 7th, with an effective date likely on or before Labor Day, September 5th.  Employers should consider the impact these regulations will have on their current workforce classifications in advance of the effective date.

Matt Bauer
President
mbauer@srfm.com

FLSA Overtime Rule Change

Creating a Healthy Workplace Challenge

Blueberries

Still trying to figure out how to kick off an employee wellness program? The latest trend is to come up with fun and highly motivating group wellness challenges that are not only a great way to increase morale, but that actually promote lifestyle and behavioral change through active participation in wellness goals or competitions over a multi-week period. A challenge can be a great way to kick off a new wellness campaign or create momentum towards long term initiatives.

These challenges can focus on exercise, healthy eating, weight management, increasing steps or all of the above combined into a lifestyle challenge. “There are many wellness challenges on the market but creating one that fits your employees’ needs and interests would bode well for increased engagement” says Wendy Pernerewski, CEO & Founder of Employee Health Management. “We take a close look at what the existing culture is, ask what the employees want and review existing health data to create a program that best suits the environment and to increase employee buy in”.

One way to get employees to participate at this time of year is to create a challenge around healthier eating.  Winter pounds may have accumulated and thoughts of summer are on the horizon. A 30-Day Nutrition Challenge would fit perfectly.  You could simply set up a points based system where individuals are given specific goals to achieve throughout the month.

Here are a few to include:

    • Eat 5 servings per day of fruits and/or vegetables –get one point for each serving of fruit or vegetables.
    • Eat healthy snacks –get one point each day that you only eat fruits and/or vegetables for snacks.
    • Avoid eating junk food –get one point each day that you do not eat any junk food.
    • Eat breakfast –get one point each day that you eat a healthy breakfast.
    • Reduce calorie intake by 100 calories each day –eliminate 100 calories (use a mobile phone app like My Fitness Pal for calorie counting) from your diet each day by eating smaller portions or avoiding certain foods or beverages that you normally consume.  Get one point for each day that you succeed.
    • Keep track of your calorie count –use a calorie counter to count the calories in everything you eat and drink.  Try it for a week at a time.  Receive one point for each day that you successfully account for everything you eat and drink.
    • Prepare healthy meals –earn one point for each healthy meal that you eat.
    • Share healthy meal recipes that can contribute to a company Healthy Cook Book –receive one point for every healthy recipe contributed.

Before jumping in, designate a Challenge Leader or hire a wellness expert to help design challenge parameters and rules that need to include specific start and end dates, goals and measurements, as well as prizes to offer.  Review your challenge with human resources and legal counsel.  There are many new wellness rules that need to be followed or there may be legal implications.  Communicate the challenge to employees. Have a group meeting to explain the contest and solicit feedback and questions. Provide ongoing promotion of the challenge to keep employees motivated.

Lori Porter

lporter@srfm.com

Sinclair Risk & Financial Management

 

Lori Porter

2016 Federal Budget Delays ACA’s Cadillac Tax & Suspends Two Other Taxes

On Dec. 18, 2015, President Barack Obama signed a federal budget bill for 2016 into law, which makes significant changes to three tax provisions under the Affordable Care Act (ACA). This new law:

  • Delays implementation of the ACA’s Cadillac tax on high-cost group health coverage for two years, until 2020
  • Imposes a one-year moratorium on the collection of the ACA’s health insurance providers fee,for 2017
  • Imposes a two-year moratorium on the ACA’s medical device excise tax, for 2016 and 2017

The provisions affecting these ACA taxes took effect immediately, once the bill was enacted.

Cadillac Tax Delayed

The ACA imposes a 40 percent excise tax on high-cost group health coverage, also known as the “Cadillac tax.” This tax is intended to encourage companies to choose lower-cost health plans for their employees, but also to raise revenue to fund other ACA provisions.

This provision taxes the amount, if any, by which the monthly cost of an employee’s applicable employer-sponsored health coverage exceeds the annual limitation (called the employee’s excess benefit). The tax amount for each employee’s coverage will be calculated by the employer and paid by the coverage provider who provided the coverage.

Although originally intended to take effect in 2013, the Cadillac tax was immediately delayed until 2018 following the ACA’s enactment. The new 2016 federal budget further delays implementation of this tax for an additional two years, until 2020.

The new law also:

  • Removes a provision prohibiting the Cadillac tax from being deducted as a business expense
  • Requires a study to be conducted on the age and gender adjustment to the annual limit.

There is some indication that this additional delay will lead to an eventual repeal of the Cadillac tax provision altogether. However, while several bills have been introduced into Congress to repeal this tax, President Obama has indicated that he will veto legislation repealing any ACA provision.

Moratorium on the Providers Fee

Beginning in 2014, the ACA imposes an annual, non-deductible fee on the health insurance sector, allocated across the industry according to market share. This health insurance providers fee, which is treated as an excise tax, is required to be paid by Sept. 30 of each calendar year. Thus, the first fees were due Sept. 30, 2014.

The new 2016 federal budget suspends collection of the health insurance providers fee for the 2017 calendar year. Thus, health insurance issuers are not required to pay these fees for 2017.

Employers are not directly subject to the health insurance providers fee. However, in many instances, providers of insured plans have been passing the cost of the fee on to the employers sponsoring that coverage. As a result, this one-year moratorium may result in significant savings for some employers on their health insurance rates.

Moratorium on the Medical Devices Tax

The ACA also imposes a 2.3 percent excise tax on the sales price of certain medical devices, effective beginning in 2013. Generally, the manufacturer or importer of a taxable medical device is responsible for reporting and paying this tax to the IRS.

The new 2016 federal budget suspends collection of the medical devices tax for two years, in 2016 and 2017. As a result, this tax will not apply to sales made between Jan. 1, 2016, and Dec. 31, 2017.

The Effect on Other ACA Provisions

Although this new federal budget makes significant changes to these three ACA taxes, it does not affect any other ACA provision. Therefore, all other aspects of the ACA continue to apply as they did prior to this law’s enactment, with no changes or delays.

Matt Bauer

President

mbauer@srfm.com

2016 Federal Budget Delays ACA’s Cadillac Tax & Suspends Two Other Taxes

Are You Protecting Your Invaluable Collections?

How to Insure Valuables Fine Art, Wine, Jewelry & MoreOver the years, you may have developed a knowledge and love of wine and picked up a few special bottles, which turned into a few more and, before you knew it, you had an extensive – and expensive – wine collection.  What would happen if there was a flood in your home or you experienced a power outage that impacted your temperature-controlled cedar wine cellar? 

From wine to art to fine jewelry to exotic cars and yachts, many people fail to recognize these items that they enjoy for their aesthetic or leisurely qualities as the valuable investments they truly are and therefore, don’t properly protect them.   

Additionally, as people do estate planning, they also often overlook outlining their plans for these non-traditional valuables, like an antique jewelry collection or Bentley.

Here are five tips to ensure you properly protect your collections:

  • Secure Specialized and Periodic Appraisals: Make sure the person appraising your items has   expertise in your type of collectible so you get the most accurate appraisalRe-appraise your collectibles every two to three years and make sure you share them with your financial advisor, insurance company, tax attorney and estate planner so they can understand the value of your collection and the potential risks and benefits within your overall portfolio as well as any implications to your charitable giving wishes or estate planning.
  • Keep a Detailed Inventory: Document your collectibles, where and when they were purchased and for how much.  Update every time a new item is added to the collection and ensure there’s a complete, properly appraised inventory at all times as well as information on where certificates of authenticity are housed.
  • Assemble a Smart and Specialized Advisory Team Early: Work with an insurance firm, financial planner, tax attorney and estate planner who have expertise protecting and planning for the issues associated with these non-traditional investments.  It’s important to do this early, as your collection could have implications on your overall wealth, taxes and estate plans as it grows or diminishes in value.
  • Properly Insure your Collectibles: Make sure you choose an insurance company with expertise in providing coverage for your unique collection and coverage options that would truly account for their value.   These prized collections often mistakenly get tacked onto an existing homeowner’s insurance policy with very limited coverage that would never provide the value they truly hold if they needed to be replaced.
  • Make an Early Succession Plan: Whether you want to hand down your fine art collection to your son, donate it to a museum or have it auctioned off for charity, be sure to work with your team to detail your plans and to get their input on how to properly include them in your estate planning. 

By treating your collectibles like your other assets, you can enjoy your passions and ensure their potential returns and risks are managed and that they’re properly protected.  This will allow you – and your loved ones –to enjoy your collections now and in the future.

Mary McGrath

mmcgrath@srfm.com

Sinclair Risk & Financial Management

Mary McGrath