David Thompson, CPCU, AAI aka “Dream Team 2” Jay Williams, CIC, AAI aka “Dream Team 1”

1. “Nightmares on Insurance Street” Presented by:The self proclaimed “FAIA Dream Team” David Thompson, CPCU, AAI aka “Dream Team 2” Jay Williams, CIC, AAI aka “Dream Team 1”

2. Housekeeping • Class times • 1:30 p.m. to 4:30 p.m. • Break • One break – 13 minutes • DFS rules • Phones, newspapers, etc

3. Unauthorized Entity Issues • Verify with the DFS: • www.myfloridacfo.com • 1-800-342-2762 / 1-877-MY-FL-CFO

4. The Important Stuff

5. The Dream Team Dilemma • Is our greatest asset… • Our intelligence • Our fantastic teaching ability • Our amazing good looks • Or…. • Our humility!

6. Our Web Site

10. Stump the Nerds

11. BAP Temporary Substitutes

12. BAP Temporary Substitutes • BAP works just like a PAP • All the same coverages follow over to a temporary substitute • Symbol used isn’t a factor

13. BAP Temporary Substitutes • Symbol 1 Any Auto • Symbol 2 Owned Autos • Symbol 7 Specifically Described Autos • Symbol 8 Hired Autos • Symbol 9 Non-owned autos

14. From the Policy (Liability)

15. Regardless of symbol, liability coverage for temporary substitutes is provided in the form.

16. From the Policy (Physical Damage) • SECTION III – PHYSICAL DAMAGE COVERAGE • A. Coverage • 1. We will pay for "loss" to a covered "auto" or its equipment…

18. Temporary Substitute • Problem: • Liability coverage automatically provided • Physical damage coverage not provided • Solution?

19. Symbol 8 • Always add it to every BAP • Is there a limit per vehicle? • Solution for: • Temporary substitutes • “Regular” business rentals for traveling employees • Also add CA 20 54 – Employee Hired Autos

21. Temporary Substitutes

22. Coverage B - Homeowners • Short version: • 10% of Coverage A • Covers structures worldwide • The 10% is part of Coverage A, and is not additional insurance

23. Coverage B - Homeowners • What is an “Other Structure”? • Set apart by clear space • On “residence premises” • Limit is 10% of Coverage A

26. Coverage B - Homeowners • Important definition: • "Residence premises" means: • a. The one family dwelling where you reside; • b. The two, three or four family dwelling where you reside in at least one of the family units; or • c. That part of any other building where you reside; • and which is shown as the "residence premises" in the Declarations. • "Residence premises" also includes other structures and grounds at that location.

27. Coverage B - Homeowners • Important exclusions: • We do not cover: • a. Land, including land on which the other structures are located; • b. Other structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage; • c. Other structures from which any "business" is conducted; or • d. Other structures used to store "business" property. However, we do cover a structure that contains "business" property solely owned by an "insured" or a tenant of the dwelling provided that "business" property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure.

28. Coverage B - Homeowners • Endorsements: • HO 04 40 Structures Rented to Others • Used as a private residence • Extends liability and med pay

29. Coverage B - Homeowners • Endorsements: • HO 04 42 Permitted Incidental Occupancies • Limit applies separately from Coverage B • Contents that are described are now covered under Coverage C

30. Coverage B - Homeowners • Endorsements: • HO 04 48 Other Structures – Increased Limits • Increases the Coverage B limit • Applies only to the structure described in the endorsement

31. Coverage B - Homeowners • Endorsements: • H0 04 91: • Extends coverage to other structures not located on the “residence premises” • Cannot be used for a dwelling, rental, business, or business property storage

32. Coverage B - Homeowners • Endorsements: • H0 04 92: • Similar to HO 04 91 but allows for location schedule/amount of coverage • Cannot be used for a dwelling, rental, business, or business property storage

33. Coverage B – Swimming Pools

34. Coverage A or B?

35. Coverage A or B?

36. Coverage A or B?

37. Coverage A or B?

38. Coverage B - Homeowners • Flood Insurance Issues: • Coverage for detached garages only • 10% of coverage limit (not an additional amount) • Separate policy needed for other structures

39. Coverage B - Homeowners • Questions?

40. Kid’s Cars • Best advice: • Title car to kid • Put on kid’s PAP • That way, parents can’t be sued • Saves everyone money

41. “The insurance went up HOW much?” “It’s party time!”

42. QUESTION Who is This?

43. Kid’s Cars • No matter how you slice the banana, it’s going to cost you a ton to insure kids. • To quote a student: • “When my customers complain about the cost to insure kids I tell them they should have considered that in the heat of passion 16 years earlier.” Before we go any further, how will this affect our insurance in 16 years?

44. Kid’s Cars – The Cost • Pre-kid, two cars, high limits: • $750 • Kid turns 16: • $1,250 • Kid gets boring car: • $1,850

45. Situation • Parents: • Assets to protect • PAP with high limits and umbrella • Kid: • Excited to drive • Cool car • Low limits • Tragedy: Kid hits car, serious injuries

46. Avenues To Mom/Dad’s Wallet • 1. Car registered to Mom/Dad • 2. Child under age (Statutory, state specific) • 3. Vicarious … “On a mission”

47. Avenues To Mom/Dad’s Wallet • 1. Car registered to Mom/Dad If your name is here… You’re gonna get sued!

48. 2. Child Under Age -Statutory

49. FS 322.09 (1)(a) The application of any person under the age of 18 years for a driver's license must be signed and verified before a person authorized to administer oaths by the father, mother, or guardian….

50. (2) Any negligence or willful misconduct of a minor under the age of 18 years when driving a motor vehicle upon a highway shall be imputed to the person who has signed the application of such minor for a permit or license, which person shall be jointly and severally liable with such minor for any damages caused by such negligence or willful misconduct.