This is my first shot at blogging. I am probably more comfortable bloviating than I am blogging. However, there are a number of technical insurance issues that have cropped up over the last several months that I would serve up for comment or discussion.
The first is the question of ownership of the autos that you are being asked to insure on both personal and commercial auto policies. There is a federal court case where the owner of a business allowed the auto owned by a family member not active in the business to be insured on the Business Auto Policy. When the auto in question was involved in an accident, the insurer of the business auto policy sought to deny coverage since the auto was not owned by the business. The court upheld the insurer’s position in excess of the Financial Responsibility Act. So this raises the question if insurance agents should get some form of confirmation as to the way the auto is titled before the insurance is written.
A second issue that continually crops up is the problem of condos. Who owns what? And how much insurance should the unit owner buy? These are complex and difficult issues. It is difficult to determine who owns what unless an agent has a copy of the NC Condominium Act and copies of the bylaws and declarations of the individual condo association. Out of these documents one can begin to form an opinion as to what constitutes a unit. Additionally, the insurance provisions of the bylaws and declarations can often extend the insurance provided by the association to cover real property within the unit.
In some cases, the NC Condominium Act requires the condo association to be written on an “all-in” basis where the association must insure all real property regardless of the ownership. The second and more difficult problem is the amount of Coverage A insurance the unit owner should purchase to cover their own interest in the condo. This determination can be affected by the description of the unit, the operation of the NC Condominium Act, and the size of deductibles chosen by the association - just to name a few considerations. While we cannot adequately discuss this problem in just one blog post, it is important to say that it is better to have too much insurance rather than too little.
I’m interested in hearing your thoughts or opinions on either of these issues. Have you experienced trouble with either of the situations described above?
Also, leave a comment and let me know if there are other technical issues you would like discussed in a future post.