Category Archives: Property Insurance

How to Shop for Home-Based Business Insurance

By – Last updated: By May 1, 2009

Anyone who runs a business out of their home, no matter how small, faces the same risks as any other company. You need insurance to protect yourself against those risks, whether your home business is incorporated or you run it as a sole proprietor. Here are some insurance options for home-based business owners:

Home-based business insurance checklist

  • Business property
  • Professional liability
  • Business liability
  • Personal and advertising injury
  • Loss of business data
  • Workers compensation
  • Computer
  • Life
  • Loss of income
  • Health
  • Crime and theft
  • Disability
  • Commercial auto


Source: Insurance Information Institute

A standard home insurance policy does not cover home businesses. If that is all you have, there is a lot you could lose.

Home insurance policies do not cover structures used for business purposes. So if you are operating your business out of a renovated carriage house on the back of your property, you might be out of luck if it burns down.

Business personal property coverage in home insurance policies usually is limited to $2,500 for on-premise protection and $250 away from your home. So, if you take your laptop to a client’s office, make sure it does not get lost or damaged.

Most home insurance policies provide no coverage for business data. That means if there is a fire and you lose all your books, files and software, there’s no insurance compensation.

You are not covered if someone visits your house for business reasons and sustains an injury. Likewise, you are not covered if you cause the injury of someone else during the course of doing business.

If you write something, such as a press release or a business report, that causes economic damage to someone else, you are not covered.

To find out what insurance you need, take the time to sit down with your agent and talk. List your risk factors and prioritize them. There is loss-of-income insurance, business personal property insurance, personal and advertising injury insurance, on-premise liability, and off-premise liability to consider. If you give advice or write software, you should consider errors and omission (E&O) insurance, which will cover you if you are sued over an error.

Questions to ask when selecting an insurance policy

  • What property is owned by my business?
  • Where do I conduct my business?
  • Do I have business vehicles?
  • Do I have employees?
  • Do I perform a professional service?
  • Can someone sue me for providing incorrect information or making a mistake?
  • If a fire occurs, will it shut down my business?
  • Am I making a product?
  • Do people come into my home?
  • Will I be doing work off-site?
  • Do I use my personal auto for business?
  • If I’m injured while I’m working, what will happen to my business?
  • How much is my equipment worth?

There are three basic types of insurance policies available to home-based business owners. Which policy you choose depends on a variety of factors, including how large your business is, the type of business you conduct, how much off-site work you do, the extent of your potential for liability — a fiction writer vs. a financial planner, for example — and how frequently you have business visitors to your home.

Option 1: Home insurance endorsements

You can increase protection from your homeowners policy by adding an endorsement, or rider, to it. This is the least expensive option for protecting your business assets, but it also offers the least coverage and could leave you with a great deal of risk. A typical endorsement can cost you as little as $25 per year and you can increase the policy limits from the standard $2,500 to $5,000. Some insurers allow you to raise the limit to as much as $10,000.

If you are sued when the homemade cookies you sold make someone ill, you could be financially devastated. The homeowners endorsement will not cover these costs. The endorsements also don’t generally cover loss of income, workers compensation (which you must provide if you have employees) or other commercial coverage.

Still, some experts say an endorsement on a home insurance policy would be suitable for a small home business with minimal equipment and no business visitors or business deliveries to the home. For example, someone who telecommutes part-time using a home computer and fax might find an endorsement a reasonable option.

Option 2: Home office policy/in-home business policy

An in-home business owner’s policy is a step up from a homeowners endorsement. It is essentially home insurance and a business policy rolled into a single policy designed specifically for home-based businesses, eliminating gaps and duplications in coverage. These policies offer coverage such as business liability and replacement of lost income, and homeowners coverages such as fire, theft and personal liability.

An in-home business owner’s policy will also cover lost income and ongoing expenses, such as payroll, for up to one year if your business is unable to operate because of damage to your home. It provides coverage for loss of valuable papers and records, accounts receivable, off-site business property and use of equipment. And it often has higher limits for off-premises business property and equipment-breakdown protection, as well as supplemental theft coverage. Some allow coverage for businesses that have up to three full-time workers.

They can also provide broader coverage such as protection against lawsuits for injuries caused by the products and services the company offers.

You can find these policies through home insurance companies and companies that specialize in stand-alone, in-home business policies.

A possible downside: Sometimes the insurers that offer these policies will also require you to purchase other policies through them.

This type of policy might be appropriate for a mid-level, growing company with several business visitors a week and high-end computer equipment. It wouldn’t be suitable for people who conduct a large amount of their business away from the home.

Option 3: Business owners policy

A business owners policy (BOP) provides the most comprehensive coverage for your home business. Many insurance companies have created specialized BOPs that are just as comprehensive as larger commercial policies but with prices suited to the home-office market.

Who might need a BOP? Businesses that stock inventory or manufacture products, those that conduct business out of a freestanding location and those at high risk for professional liability. BOPs can include:

  • Structures used for business purposes, including any outbuildings, such as a renovated garage, carriage house or barn.
  • Business personal property such as office furniture and electronic equipment.
  • Business data, including printed material and software.
  • Loss of income, which would cover income interruption in case you had a fire and had to move the business.
  • Loss due to crime, such as theft.
  • Premises liability, which would cover you if someone has an accident on your property during the course of your doing business with them.
  • Off-premises liability, which would cover you in case you were on someone elses property and caused an injury or damage to property during the course of doing business.
  • Personal and advertising injury, which would cover you in case you wrote or produced work that caused someone harm. This would include libel or slander.

A BOP policy does not include workers compensation, health or disability insurance, professional liability exposures and commercial automobile coverage. You will need separate policies for these.


Keep up with your changing insurance needs

When deciding what type of policy to choose, consider the amount of financial risk you’re willing to shoulder, as one major loss could mean the end of your business.

The Insurance Information Institute offers these tips for saving money on home-based business insurance:

Shop around.

Not all policies are created equal. Collect the names of companies and brokers who specialize in your type of business and compare prices.

Get a higher deductible.

It is often cheaper to purchase a policy such as BOP rather than separate policies.

Get acquainted with your agent or broker.

These are the people who give valuable advice when it comes to insurance, so use their knowledge to your advantage.

Ask about ways to prevent losses in order to lower your premium.

This could include recommendations such as workplace safety and liability prevention.

Regardless of the type of policy you settle on, your insurance needs will change as your business grows. That means you should periodically review your policy — at least once a year — to make sure you still have the appropriate coverages and limits. And don’t forget to go over any exclusions with your agent.

The Most and Least Expensive States for Car Insurance in 2013

By Barbara Marquand, – Last updated: Mar. 14, 2013

Louisiana is No. 1 — but not in a desirable way.  It has the highest average car insurance rates in the nation, followed by Michigan and Georgia, according to’s annual state-by-state comparison of insurance premiums.

Maine enjoys the least expensive car insurance rates, followed by Iowa.

state car insurance rankings

2013 state rankings of car insurance rates

Rank State Avg. annual premium*
1 Louisiana  $  2,699
2 Michigan  $  2,520
3 Georgia  $  2,155
4 Oklahoma  $  2,074
5 Washington, D.C.  $  2,006
6 Montana  $  1,914
7 California  $  1,819
8 West Virginia  $  1,816
9 Rhode Island  $  1,735
10 Kentucky  $  1,725
11 Connecticut  $  1,723
12 New Jersey  $  1,697
13 Alabama  $  1,667
14 Missouri  $  1,638
15 Massachusetts  $  1,625
16 Pennsylvania  $  1,604
17 Delaware  $  1,586
18 Hawaii  $  1,583
19 Texas  $  1,545
20 Arkansas  $  1,545
21 Maryland  $  1,528
National average  $  1,510
22 North Dakota  $  1,501
23 Wyoming  $  1,496
24 Alaska  $  1,455
25 Utah  $  1,438
26 Kansas  $  1,435
27 Minnesota  $  1,432
28 New Mexico  $  1,431
29 Tennessee  $  1,408
30 South Dakota  $  1,397
31 Oregon  $  1,387
32 Nebraska  $  1,384
33 New York  $  1,369
34 Florida  $  1,364
35 Mississippi  $  1,345
36 Nevada  $  1,341
37 Virginia  $  1,322
38 Illinois  $  1,322
39 South Carolina  $  1,288
40 Colorado  $  1,271
41 Wisconsin  $  1,228
42 Arizona  $  1,227
43 Washington  $  1,226
44 Indiana  $  1,183
45 Vermont  $  1,176
46 Idaho  $  1,133
47 New Hampshire  $  1,112
48 Ohio  $  1,106
49 North Carolina  $  1,085
50 Iowa  $  1,028
51 Maine  $     934
* Dollar figures shown are an average of insurance rates for more than 750 vehicles in the 2013 model year.

Louisiana and Michigan have held one of the top three positions since began its annual survey in 2010. Georgia rose from the No. 10 position in 2012 to this year’s third-place spot, bumping Oklahoma to fourth place.

Maine and Iowa held the bottom two spots on the list last year and have been in the bottom 10 since 2010.

A variety of factors make car insurance rates more painful in some states than others — the number of insurers competing for business, driving conditions, the portion of drivers who are uninsured, and the way state insurance systems are set up.

No. 1: Louisiana

Compared to the rest of the country, Louisiana drivers who get in accidents file more bodily injury claims than drivers in other states.

Louisiana also has a high rate of comprehensive claims, which include damage from natural disasters, says R. Parke Ellis, president-elect of the Independent Insurance Agents & Brokers of Louisiana and chairman of Gillis, Ellis & Baker Inc. in New Orleans.

In addition, a greater portion of people filing insurance claims hire attorneys, says Barry Blumberg, president of the Independent Insurance Agents & Brokers of Louisiana and president and CEO of Blumberg and Associates Inc. in Baton Rouge.

Louisiana’s judicial system may also be to blame for high rates. Lawsuits involving claims under $50,000 go before judges instead of juries. Some observers say elected judges are more likely to side with local people than insurance companies.

No. 2: Michigan

Michigan is the only state in the country that guarantees unlimited, lifetime personal injury protection (PIP) benefits for treatment of injuries from a car accident.

Other states don’t even come close, observes Jeremy MacDonald, vice president of the Michigan Association of Professional Insurance Agents and president of the Mid-Michigan Agency Inc. in Alma. Florida caps PIP benefits at $10,000, for instance, and New York at $50,000.

MacDonald says an instructor at an insurance course for agents once quipped, “‘I tell my wife if I have a heart attack, put me in the car and roll it into a tree.’”

Car insurance customers must buy PIP as part of the policy. PIP pays the medical bills for car accident injuries of the policyholder, family members in the household and any passengers who do not have PIP coverage. The injured person’s car insurance company pays out the first $500,000 for medical treatment. Any expenses above that threshold are reimbursed by a state-created nonprofit called the Michigan Catastrophic Claims Association.

A portion of everyone’s premium includes an assessment from the association, which this year is $175 per vehicle.

Last year a bill to set limits on PIP benefits failed, but legislators are expected to introduce another reform bill backed by Gov. Rick Snyder in March.

In addition to setting a cap on benefits, reform proponents have called for capping payments for medical services. Reimbursement costs for PIP claims are about three times the reimbursement costs for workers’ compensation and four times the reimbursement costs for Medicare — for the same procedures, according to the Insurance Institute of Michigan. The average PIP medical claim more than tripled to $44,138 in 2012 from $13,617 in 2000, the institute says.

Still, efforts to change the system face a tough fight from hospitals, patient advocates and some elected officials, such as Oakland County Executive L. Brooks Patterson, who was critically injured in a car crash in August. In an open letter to the public, Patterson vigorously defended the state’s current auto insurance system.

The political fight is often portrayed as the “big, bad insurance companies” being stingy versus accident victims who rely on the money for survival, says Jason Verlinde, treasurer of the Michigan Association of Professional Insurance Agents and vice president of the Verlinde Insurance Agency in Richmond.

“But the people who are getting lost in the story are the ones who can’t afford it,” he says.

He tells of a single mom who recently scraped enough money together to buy a used car and came to see him to buy auto insurance.

“It was a great day for her because she was finally able to get transportation to change her life,” he says. “But the premium was $2,600 a year for the bare-minimum coverage. That includes no collision or comprehensive, and she can’t afford it.”

No. 3: Georgia

Victor Hamby, president of the Professional Insurance Agents of Georgia, says the market in the Atlanta metropolitan area was “ultra competitive” from about 2003 to 2010.

Then things took a turn.

“The carriers underpriced the market, and claims caught up with them,” he says. “We’re seeing carriers increasing rates on auto insurance for the first time in seven or eight years, anywhere from 2 to 12 percent. We’re seeing some hardening in the market.”

But plenty of companies are still competing in Georgia, says Hamby, personal lines and bonds manager at Hamby & Aloisio Inc. in Atlanta.

“And that’s a great thing,” he says. “The regulatory environment is conducive to insurance companies writing car insurance. We’re working hard to keep the marketplace in Georgia vibrant and competitive.”

Donna Marcus-Doughten, president-elect of the Professional Insurance Agents of Georgia, agrees that Georgia has a healthy, competitive market. But she says traffic is terrible in the Atlanta area, which may lead to more fender-benders.

“It’s bumper to bumper across six lanes,” says Marcus-Doughten, vice president of Phoenix Associates in Marietta.

No. 50: Iowa

Iowa’s rural sensibilities help keep rates down in the Hawkeye State, insurance agents say. The population of Des Moines, the largest city, is about 200,000.

“I don’t think we’re as rushed to do things,” observes Paul Pohlson, president of the Independent Insurance Agents of Iowa and vice president of Ramsey Weeks in Grinnell.

“I look at other cities I travel to, and I just think we have fewer accidents because people seem to slow down here. Maybe we don’t have as much road rage.”

In small towns like Grinnell, where Pohlson works, “I’m probably going to know the person that I hit or who hits me in an accident.”

People aren’t quick to sue one another over car accidents in Iowa, and the culture is fairly conservative, says Terry McDonald, president-elect of the Independent Insurance Agents of Iowa and executive vice president of A.W. Welt Ambrisco Insurance Inc. in Iowa City.

“It’s not as easy to win over a jury as it can be in another state,” he says.

No. 51: Maine

“I do think Maine being so rural is a factor in low rates,” says Sheila Sawyer, president of the Maine Insurance Agents Association and an agent with Carl M.P. Larrabee Agency Inc. in Wiscasset. “We just don’t have much city driving, and people learn to drive in all types of weather.”

Maine’s tight restrictions on young drivers and its graduated licensing program for new drivers also likely help keep accidents (and rates) down, Sawyer says.

Teens have to complete a state-approved driver education course before they can apply for a learner’s permit, and they go through a three-step graduated licensing system which lets them get driving experience under lower-risk conditions. A driver under 18 with an “intermediate license,” for instance, can’t carry passengers other than immediate family members or drive between midnight and 5 a.m.

Survey methodology commissioned Quadrant Information Services to provide auto insurance rates for more than 750 car models from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Rates were compiled in December 2012.

We then averaged rates for all vehicles in each state to create the rankings. Rates are for comparative purposes within the same model year.

Rates are based on insurance for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Actual rates will depend on individual driver factors.

The Most and Least Expensive 2013 Vehicles to Insure

By Amy Danise, – Last updated: Jan. 10, 2013

In a remarkable upset this year, minivans are no longer the go-to vehicles for the best car insurance rates. In the past, minivans have dominated our annual rankings of “the least expensive vehicles to insure,” but in the 2013 model year, crossovers and SUVs have taken control of the top 20, including models from Ford, Jeep, Kia and Hyundai.

The tool at the right lets you search average auto insurance rates for more than 750 vehicles in the 2013 model year.

Minivans have been “Edged” out: The Ford Edge SE is the first crossover to snag the best position on our list. (See rankings and methodology below.)

“The SUV is the new minivan,” says Russ Rader, spokesperson for the Insurance Institute for Highway Safety, which performs crash tests on vehicles. “These are vehicles used largely by families. They’re going to the mall, taking kids to school and driving to sports practices on the weekends. They’re not getting into a lot of crashes.”

Their lack of crashes and their low repair costs keep insurance rates down.

Ford Edge 2013The 2013 vehicle with the lowest insurance rates: The Ford Edge SE
Photo credit: Ford Motor Co.

Also notable is the appearance of a small car in the rankings of least expensive vehicles to insure: The Honda Fit squeaks in at No. 19.

Mercedes-Benz drivers must have worked hard in the past year to increase insurance claims costs and thus their auto insurance rates. Mercedes models control half the list of the 20 “most expensive vehicles to insure” for 2013 models.

The 12-cylinder Mercedes-Benz CL600 coupe earns the unenviable top spot for the highest national average car insurance rates. notes the car’s “blistering acceleration.” The next sounds you hear may be squealing brakes and cracking metal: Expensive claims have propelled the CL600’s rates.

With an MSRP of about $160,000 and an annual average insurance bill of $3,357 (and that’s for a good driver), the CL600 is expensive driveway candy.

Mercedes-Benz CL600The 2013 vehicle with the highest insurance rates: The Mercedes-Benz CL600
Photo credit: Mercedes-Benz

It could be worse.  When we look at state-specific auto insurance rates, we see that insuring an Audi R8 5.2 Quattro in Washington, D.C., costs an average of $6,009.

Yet most drivers shop for cars without any consideration for insurance costs

“People just don’t think about it,” says Michelle Rupp, an independent agent with NRG Insurance in Seattle. She estimates that only about 20 percent of car buyers will research the auto insurance rates of a vehicle before they buy it. “If they’re really watching dollars and cents, they need to do that,” she says.

But over her 30 years of experience as an agent, “it gets worse,” laments Rupp. Consumers who diligently research invoice price, fuel efficiency and how to negotiate at a dealership will overlook auto insurance costs.

The least expensive 2013 vehicles to insure

Rank Make & model Cyl. Avg. annual premium
1 Ford Edge SE 4  $     1,128
2 Jeep Grand Cherokee Laredo 6  $     1,148
3 Subaru Outback 2.5i Premium 4  $     1,150
4 Kia Sportage 4  $     1,157
5 Jeep Patriot Sport 4  $     1,160
6 Chevrolet Express 1500 8  $     1,171
7 Subaru Outback 3.6R 6  $     1,180
8 Hyundai Tucson GLS 4  $     1,189
9 Ford Explorer 6  $     1,197
10 Hyundai Tucson GL 4  $     1,204
11 Dodge Grand Caravan SXT 6  $     1,206
12 Ford Transit Connect XLT Premium 4  $     1,210
13 Chevrolet Equinox 1LT 4  $     1,210
14 Honda Odyssey EX-L 6  $     1,217
15 Jeep Compass Sport 4  $     1,217
16 Kia Sorento LX (2 WD) 6  $     1,222
17 Nissan Pathfinder S 6  $     1,224
18 Chevrolet Equinox 2LT 6  $     1,235
19 Honda Fit 4  $     1,235
20 Kia Sorento LX (4 WD) 4  $     1,237

The most expensive 2013 vehicles to insure

Rank Make & model Cyl. Avg. annual premium
1 Mercedes-Benz CL600 12  $     3,357
2 Mercedes-Benz CL65 AMG 12  $     3,330
3 Mercedes-Benz S65 AMG 8  $     3,221
4 Mercedes-Benz SL65 AMG 12  $     3,207
5 Mercedes-Benz CL63 AMG 8  $     3,184
6 Mercedes-Benz S600 12  $     3,158
7 Mercedes-Benz SL63 AMG 8  $     3,075
8 Mercedes-Benz S63 AMG 8  $     2,978
9 Porsche 911 Turbo 6  $     2,958
10 Porsche 911 Turbo S 6  $     2,925
11 Porsche Panamera Turbo 8  $     2,912
12 Mercedes-Benz CL550 4Matic 8  $     2,897
13 Jaguar XKR (convertible) 8  $     2,822
14 Jaguar XKR (coupe) 8  $     2,756
15 Jaguar XK 8  $     2,684
16 BMW 650i 8  $     2,681
17 Mercedes-Benz SL550 8  $     2,671
18 Porsche 911 Carrera 4S 6  $     2,642
19 Mercedes-Benz S550 8  $     2,640
20 Porsche 911 Carrera S 6  $     2,626

Methodology commissioned Quadrant Information Services to provide average auto insurance rates for 2013 models. Averages were calculated using data from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Not all models were available, especially exotic cars.

Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on personal factors.