When is a diner not a diner?
By Kurt Thoennessen, CAPI
Personal Insurance Specialty Case Study:
Current Premium = $15,000
New Premium – $6,000
Advisor value = $9,000 per year savings and better coverage
Summary: Joanne is a successful entrepreneur who lives on a large property in a beautiful section of Massachusetts. Her property consists of a main residence, and a large barn. On the main level of the barn Joanne spent considerable time and money recreating a 1950s style diner that was authentic all the way down to the juke box and milk shake machine. The only thing that wasn’t authentic about it was the customer base. Basically, there was no customer base. It’s purpose was to hold family gatherings and to be a place where Joanne could entertain guests.
Coverage Conundrum: Joanne has lived on this property for 20 years with her family and relied on the same insurance agent to cover her during that time. The agent’s strategy to cover Joanne was to place a homeowners policy to cover the residence and a commercial property and separate general liability policy to cover the diner. The total cost for all the coverage related to Joanne’s home and barn with the diner was over $15,000.
Coverage Solution: Joanne never agreed with the strategy to insure the diner commercially, but was always too busy to get involved with trying to convince her agent to change it. Eventually she engaged a Personal Risk Advisor from Ericson Insurance Advisors who quickly recognized that the diner was just a very nice collection of person property and not a business enterprise. This understanding led to the elimination of the commercial property and liability policies and a reduction in cost of $9,000 per year. All the coverage Joanne needed was on the homeowners policy and with a few adjustments to her coverage limits she was able to get broader/better coverage overall and reduce her insurance costs dramatically.
Lesson Learned: Understanding a risk is critical to ensuring the insurance program that is put in place is the best one for you. Joanne would have been covered by the original agent’s insurance program if there was a disaster, but she ended up paying significantly more for the coverage than she needed to. The solution for Joanne was to work with a personal insurance specialist at Ericson Insurance Advisors who specializes in protecting high value homes and understands the unique needs and lifestyles of successful individuals.
Kurt is a Senior Advisor with Ericson Insurance Advisors and a Certified Advisor of Personal Insurance (CAPI). He works with high net worth individuals and families to design and implement risk management and insurance programs.