December 8, 2019

IMA1025.jpgThings you should know Q& A

Question:Doesn’t my condominium association provide insurance for the contents of my unit (my furniture, clothes, and appliances)?

The condominium association purchases property insurance for the association’s property such as the building, service equipment they may own, and common areas like gazebos and storage buildings. They do not provide insurance for unit-owners’ personal property

Question:If the basement sewer drain backs-up, causing damage to carpet, furniture and drywall, doesn’t a standard homeowner’s (HO-3) policy pay to repair and replace these items?

A standard homeowner’s policy provides coverage for anything that happens to your structure and personal property except what is specifically excluded or limited. Water damage, including water or water-borne material which backs up through sewers or drains, is one of those exclusions.

Question:If I pay my workers on a 1099 basis and call them independent contractors, doesn’t that mean that I don’t have to buy workers’ compensation insurance for them?

Answer:No. The general rule under the Colorado Workers’ Compensation Act is that a person is an employee unless the person is:

  • free from control and direction of the employer
  • engaged in an independent trade, occupation, profession, or business related to the service performed.
    Practically speaking, a worker is presumed to be an employee unless they meet certain criteria for independent contractor status. The 1099 and referencing them as independent contractors alone is not sufficient.

Question:If my wedding ring or other jewelry was stolen, wouldn’t my homeowner’s (HO-3) policy pay for a replacement?

A standard homeowner’s policy provides coverage for jewelry, watches, furs, and precious/semi-precious stones, but the coverage for theft is limited to only $1,500. Most insured’s have jewelry and/or watches that are worth more than this limitation. Thus, if you possess items of this description worth $2,700, you would be responsible for the deductible (for example $500), and then the balance of the claim amount above the $1,500 limit. Your out-of-pocket costs for this claim would total approximately $1,200.

Question:How long do I have coverage for a new vehicle before I have to specifically add it to my business auto policy?

It depends. If you have a symbol #1 on your auto policy, you automatically have coverage for the duration of the policy period. But if you have a symbol #7, then it only applies to your new car if the insurance company already covers all autos that you own OR the new car replaces an existing vehicle with coverage. Otherwise, you would have 30 days before having to report the newly acquired auto.