Currently, the new location is handling all new Bond business which will be staffed by Barry Herring, Tedford Insurance Specialist in Construction Bonds and Bond Insurance.  However, there are plans in place to soon expand other Lines of Business including Commercial Lines and Life & Health Coverage as the year advances.

                Tedford Insurance knows how important growth is, especially in the current state of the economy. “We are so excited to bring our insurance expertise to Oklahoma City. It’s a great city and a great fit for our company.” says Mike Tedford.

                Since opening its doors in 1978, the mission of Tedford Insurance is to provide  freedom and peace of mind by embracing the uncertainty that life can bring.

Cellphone use while driving contributes to roughly 100,000 accidents and thousands of fatalities each year. Though many states have banned cellphone use while driving, distracted driving continues to be a widespread issue. April is National Distracted Driving Month, the perfect time to recognize the dangers of distracted driving, and to make a pledge to stop!

 On average, texting causes drivers to look away from the road for 4.6 seconds. When traveling at 55 mph, a car travels the length of a football field without the driver looking at the road.

 If you need to make a phone call or send a text, pull over to a safe location and put your car in park.

There are many types of leases…simple occupancy leases, percentage leases often used with retail properties, and net leases, the latter of which is addressed here. Black’s Law Dictionary defines a “net lease” to be a “Lease in which provision is made for the lessee to pay, in addition to rent, such additional expenses as the taxes, insurance and maintenance charges.”

Under a single net lease, the lessee pays (in addition to the rent itself) the maintenance and operating costs associated with the property. A double net lease adds property taxes to rent and maintenance/operating costs. A triple net lease, in addition to the rental payment, includes maintenance/operating costs, taxes, and insurance…and that’s where WE come in.

Historically, triple net leases have been used for long-term leasing of larger properties because of there alleged positive impact on taxes, cash flow, and other factors. Increasingly, however, agents are seeing this form of lease being used in properties rented by relatively small occupants, many of which are insured by BOP policies. In addition, we’re seeing a wide variety of triple net lease requirements…some effectively require the lessee to pay the landlord’s mortgage interest payments, while others include requirements to insured some of the real property in the structure. For example, here’s a question recently received by our “Ask an Expert” service:

“Question:  When a tenant signs a lease and is responsible for heating, air conditioning, plumbing, and kitchen fixtures (excluding removable appliances like a refrigerator), wouldn’t all of the items in the building that they are responsible for (carpeting that is glued to a slab, furnaces, glass, water heaters, air conditioners, sinks, toilets, etc.) be considered Personal Property under Tenants Improvements and Betterments????? If not, how do we insure?”

Unfortunately, Tenants I&B won’t help much in this situation. Tenant’s I&B refers to real property “you acquired or made at your expense.” Since the tenant didn’t “acquire” the property (it was already a part of the building), Tenant’s I&B would not respond. So, what can you do?

First, it is essential that the lease be carefully reviewed and it’s probably advisable that the insured have an attorney do this and identify what specific real property the lessee (your client) is contractually required to insure. Agents like reviewing leases about as much as they enjoy rating flood insurance, but this is a critical need. Since few agents are skilled in contract analysis, it is important that the insured and his/her attorney carefully review these legal documents to determine what exposures and risks are being incurred.

If possible, delete onerous insurance requirements during the lease negotiation. Explain to the landlord, even if there is a perceived tax or other financial advantage, why it is in his or her best interest to procure his/her own insurance and not rely on that of a tenant. Now, back to the real world, what are the lessee’s insurance options?

Depending on the lease requirements, a BOP may not be the best way to insure the property. The ISO BOP, for example, includes only Fire Legal liability for damage to rented property, which is far short of the requirements of most triple net leases. However, many company-specific BOP’s have Tenant Legal Liability coverage instead of Fire Legal Liability coverage included in the form. The forms that include this coverage usually refer back to the property coverage section for the perils insured against. Some BOP’s include additional coverages or coverage extensions (for special sublimits) for real property the insured/lessee is responsible for.

Risk management guru Jim Mahurin (who has seen his fill of triple net leases) suggests the following:

“Contractual assumptions to replace improvements to rented space create risk very poorly addressed under a BOP. The Damage & Destruction clause of the lease usually states that the Landlord is responsible to rebuild the facility to an unfinished floor, with utility services stubbed at the outer wall. The tenant may be responsible for damage to occupied space, and responsible for loss of space they did not damage.

“The first task is to identify risk. What is the tenant’s responsibility for damage to leased space? This is usually not addressed in the Insurance section, but found in the Damage & Destruction section of the lease.

“Second, Improvements & Betterments coverage as an extension under contents is often inadequate. This part insures improvements made by the insured or acquired by the insured. It does not address contractual obligations. Further, coverage for I & B under contents will include a theft loading, a cost you should not pay.

“Third, the CGL excludes care, custody and control (CCC) claims, and usually won’t pay for damage to space occupied by the insured (other than fire if FDLL is selected).

“One suggestion is to add a building component for the value of I & B for the leased space. The cost is lower than contents rates, and the risk is clearly identified, valued and insured. In addition, add Legal Liability coverage form CP 00 40 to remove the CCC exclusion (though there are some downsides to this approach…see below). This will provide coverage for damage to mechanical systems that may not be a part of the I & B, but are responsibilities of the tenant in the event of loss.

“This exposure is very serious. Tenants sign leases as officers of their corporation, and then personally. Landlords pursue these contractual obligations. The landlords’ insurance carriers subrogate as well. Major losses in leased facilities are not pretty to watch.

“I’m currently examining a couple of leases. One requires removal of the CCC exclusion, and both impose liability for damage to the improvements and mechanicals. The D & D clauses require the tenant to rebuild from a bare floor, stubbed utility to finished Class A rental space unless the loss occurs during the last 90 days of a ten year lease.

“The risk in both locations is very serious. The improvements are serious six to approaching seven figure exposures. Damage to mechanicals could be a staggering sum. Take out the HVAC in July in a 45-story building full of attorneys, and see what the incidental expenses total.

“Relying on BOP’s for this magnitude of risk is not wise. (But guess what policy is being used on one of the accounts above.)”

As indicated above, the CP 00 40 – Legal Liability Coverage Form may be used to insure such property, but it has one significant drawback found in the special exclusions of the Causes of Loss forms:

(a)  Contractual Liability
We will not defend any claim or “suit”, or pay damages that you are legally liable to pay, solely by reason of your assumption of liability in a contract or agreement. But this exclusion does not apply to a written lease agreement in which you have assumed liability for building damage resulting from an actual or attempted burglary or robbery, provided that:
(i)   Your assumption of liability was executed prior to the accident; and
(ii)  The building is Covered Property under this Coverage Form.

As you can see, this form does not cover any liability that exists exclusively by contract except for burglary or robbery damage under a lease. By and large, the insured must be negligent for the damages and they must be caused by a covered peril before the policy will respond.

So, what to do? Unless the BOP adequately and properly addresses the exposure (which the ISO BOP does not), the lessee/insured is compelled to purchase specific property coverage for these items at adequate limits. In addition, consideration should be given for business income and extra expense exposures the insured may contractually incur not otherwise covered by property or liability forms, along with any necessary boiler and machinery coverages.

Source: Daily Oklahoman (Oklahoma City)

 March 13–Catastrophic, insured property losses have topped $1 billion in Oklahoma in recent years mainly due to the state’s destructive weather, and the pain insurance companies experience eventually is shared with consumers.

“Here’s the stark reality for Oklahoma: This marketplace over the last five years had the most historic amount of loss in the history of all organizations — not just one individual insurance company,” said John Wiscaver, vice president of public affairs for Oklahoma Farm Bureau Insurance. 

Tornadoes, hailstorms, wildfires, ice and earthquakes have inflicted major property damage in Oklahoma over the past five years, Wiscaver said. 

“We’re talking catastrophic stuff in both in numbers of claims and the severity of those claims, which is really a key piece in trying to help manage homeowner’s insurance,” Wiscaver said. “When you have both great excess in frequency and severity, that’s a big challenge for us.”

Insurance companies have declined to renew coverage for some Oklahoma homeowners who have filed multiple claims, have raised rates, and have created new, limited forms of coverage, while some small insurance companies have fled the state. 

Oklahoma Insurance Commissioner John D. Doak said the insurance industry in the state is strong and competitive, despite the challenges.

“My belief on that is those few smaller carriers that may insure 500 homes or 1,000 homes in our state, I would rather them leave now while they’re financially strong and give those consumers a chance to shop around rather than leave them while they’re becoming bankrupt and not able to pay a claim after a disaster,” Doak said.

Doak said consumers need to understand what their policy does and does not cover, and their options. “A lot of consumers in Oklahoma think, ‘I get a free roof every three or four years,’” he said.

Many consumers aren’t aware that insurance companies operating in the state use reinsurance to cover their catastrophic losses, said Doak, who is hoping to recruit new firms that would issue insurance to the state.

“If we could find other markets that want to come into Oklahoma, that’s going to help all consumers,” he said.

Some say few make profit

Oklahomans pay the fifth-highest average premium in the nation for homeowner’s insurance, according to the National Association of Insurance Commissioners. In 2009, Oklahoma homeowners paid an average of $1,123 for a year’s coverage.

While investments can help companies offset insured losses, Kim Decker, of Farmers Insurance, said that also has been a tough market for insurance companies.

“I don’t think anyone has been making a lot of money in Oklahoma over the past few years,” said Decker, Farmers manager of government and industry affairs.

Allstate last year launched a new form of homeowner’s insurance in Oklahoma that no longer pays full replacement value for older roofs, and which uses auto insurance claims experience to help set homeowner’s insurance rates.

Jim Turner, Allstate Insurance Co. territorial distribution leader, said his company has experienced more than $300 million in catastrophic losses in Oklahoma in the past three years. Allstate issues about 8 percent of homeowner’s policies in Oklahoma.

The new policy, called House and Home, “begins to address how we basically do some forward thinking to look at a product that will sustain itself over the long haul so that we don’t incur the big spikes in having to take rates all the time,” Turner said.

The House and Home policy will be for new customers, Turner said. Current Allstate customers would be able to keep their current coverage.

Doak said roof depreciation is a concept that has been used previously by insurance companies, which must be able to deal with the losses they incur in the state.

“There’s a tipping point there,” Doak said. “How much can they afford and still stay in the market? Because if they begin to look at Oklahoma and say I can’t be successful here, they are going to withdraw.”

The representatives of all the companies interviewed for this story — Farmers, Allstate and Farm Bureau — vowed their firms will remain in the Oklahoma market.

New insurance won’t give consumers what they want

By P.J. LASSEK World Staff Writer
Published: 2/16/2012  2:10 AM
Last Modified: 2/16/2012  7:42 AM

Mayor Dewey Bartlett is proposing an ordinance amendment that would allow Tulsa police officers to use municipal law to impound uninsured vehicles involved in traffic violations, ranging from expired tags to collisions.

The council is set to discuss the amendment, which would codify state law, during its 1 p.m. Thursday committee meeting.

Councilor Karen Gilbert said she agreed to carry the measure for the city administration. The amendment is subject to council approval.

“This is a public safety issue since it is a state law that you have to have insurance to drive a car,” she told the Tulsa World.

Gilbert said the amendment is “pretty much a no-brainer,” noting that not every car would be towed because the ordinance has a discretionary element.

She said she views the amendment as another “tool for police officers to keep in their tool box.”

Tulsa Police Capt. Jonathan Brooks said the amendment was requested by the city prosecutor, the Police Department and the Mayor’s Office after a change in state law last summer allowing uninsured vehicles to be towed.

Brooks said that every city ordinance that pertains to a police officer’s actions mirrors state law, which allows offenses to be processed through Municipal Court as opposed to going through state court.

“We’re hopeful that this amendment will encourage people to have insurance. Meanwhile, it gives us a little more enforcement leverage if they don’t have it,” Brooks said.

He said the most common complaint of residents is that “it’s cheaper for the uninsured motorist to just pay the fine and continue to drive. This would give us legal standing to seize the vehicle.”

Motorists who can prove to the court that their vehicles were insured at the time of the citation would be able to have that citation dismissed or voided at no cost.

Mayoral Chief of Staff Jarred Brejcha said this is an important issue for the mayor, who announced late last year that he planned to seek council approval for such an amendment.

Brejcha said the only automatic impoundment would occur if a vehicle were involved in a traffic incident or collision. Otherwise, the officer would have discretion as to whether to have a vehicle towed.

The officer could not stop a car on speculation that there is no automobile insurance, Brejcha said. A motorist would have to violate a traffic law before a determination could be made that there is no insurance, he said.

Brooks said having a discretionary element would allow the officers to better serve public safety.

He said it does not serve the public’s interest to put an elderly person or young children in jeopardy by taking a vehicle under certain circumstances.

“We’re not going to leave somebody standing in the middle of the night out on an abandoned road,” he said.

But if the vehicle is involved in an incident, the officer would lose the discretionary element. The vehicle would be required to be impounded, and “we would then have to make accommodations in terms of personal safety for the driver and passengers,” Brooks said.

Uninsured vehicle citations
Issued by Tulsa Police Department

Year                                           Citations issued                          Dismissed or voided
2009                                                16,773                                                 6,624
2010                                                17,841                                                  7,351
2011                                                 19,994                                                  5,653

Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=334&articleid=20120216_11_A5_CUTLIN238153

If the worst happens, insurance can cover your losses. But what’s covered and not covered varies, depending on your policy type. Also, what you do after the damage happens can help or hurt the chances of your home insurance claim being approved.

Keep in mind that insurers view water damage in two broad categories:

1. Water from above (rainstorm, ice storm or leaking pipe).

2. Water from below (floodwater).

Your homeowner’s insurance will cover a sudden, accidental pipe break, but not a slow leak that’s gone undetected for months or years.

Rainstorms and pipe leaks

Water damage is a common reason for filing an insurance claim. Winter storms caused an average of $1.25 billion in annual losses during the past decade, the Insurance Information Institute reports. The average homeowner’s insurance claim for water damage or freezing is nearly $5,900.

Will your water damage be covered? It depends on your policy type, says Rick Kinney, a licensed claims adjuster and owner of the advice site PropertyClaimTips.com.

Some policies cover little besides fire damage. Others include water damage only if it’s cited in the policy. Still others cover water damage as long as it is not specifically excluded in the policy. Read your policy carefully to know what’s covered.

If you experience damage from water or frozen water, you still may not be covered if your insurance company considers you negligent. For instance, if you had a summer home and forgot to drain the pipes when you left, or your pipes are improperly insulated, you may not be covered.

“If you ran out of heating oil or propane, and then your pipes freeze, your insurance will deny your claim,” Kinney says.

One important thing to note if you’re filing a claim for water damage: You’ll need to prove the damage was not caused by a slow leak that’s gone undetected for months or years, says Jeff Reinig, senior vice president for home policies at Farmers Insurance.

Flood insurance is available only through the National Flood Insurance Program.

“Water damage is covered from a sudden, accidental pipe break, for instance,” Reinig says.

Mold damage is even trickier. Coverage parameters vary by state. As with water damage, the mold must have been caused by sudden water damage, not a gradual buildup.

Flood insurance

If you think your property is in danger of flooding, there’s only one resource for insurance – the federal government. Since 1968, all U.S. flood insurance has been offered through the National Flood Insurance Program, according to Farmers’ Reinig. If you’re in an area prone to flooding, you may be required to obtain flood insurance to secure a home mortgage.

If you’re at risk, it is well worth obtaining coverage. Last year, the National Weather Service reports, coastal storms, flash floods and river flooding caused more than $1 billion worth of combined property damage.

But keep in mind that federal flood insurance has its limits. You can obtain up to $250,000 of building-damage coverage. Meanwhile, coverage for your belongings is capped at $100,000.

Beyond there, you’re out of luck unless your flood is declared a federal disaster, in which case you may be eligible for additional aid from the Federal Emergency Management Agency.

Claim tips

For your best chance at getting your water damage claim paid by your insurance, act quickly. Call your insurance agent immediately — many will dispatch a team right away to help minimize damage, Farmers’ Reinig says. If no help is imminent, take photos to document your damage, then take action yourself to stop the problem and begin cleaning up.

“Keep all the evidence, even if you have to pile sopping-wet insulation in the backyard and cover it with a tarp,” Reinig says.

Your home insurer will send an adjuster to estimate the damage and present you with a settlement offer, PropertyClaimTips.com’s Kinney says. If you think your insurer’s estimate is too low, you can hire your own adjuster to do another estimate. The two estimates then go to binding arbitration, and an “umpire” appointed by the two estimators will make a final decision on the payment amount.

An ounce of prevention

The best way to cope with winter water hazards is to take steps to prevent damage. Here are some tips from State Farm Insurance:

The average homeowner’s claim for water damage and freezing during the winter totals nearly $6,000.

Water

• Check for leaks in hoses on your dishwasher, washing machine and refrigerator.

• Watch for evidence of a slow leak, such as warped, discolored or soft flooring, wet spots on the floor or water-damaged cabinets.

• Check pipes under sinks for drips.

• Check bathtubs and showers for failing grout and re-caulk as needed.

• Check for hidden leaks by stopping all water use and recording the meter reading. If the meter reading keeps going up, there may be an undetected leak.

• Make sure all family members know where the water shutoff valve is and how to use it.

Freeze

• If you’re going to be away from your permanent home or summer getaway, ask someone to stop by to check the property.

• Be sure to drain pipes or keep the thermostat on to avoid freezing.

• In extreme cold, keep a small trickle of water running through the faucet.

• Close exterior doors for unheated spaces.

• Install a household water-leak detection system.

NEW RELATIONSHIP BRINGS AFFORDABLE CUSTOMIZED INSURANCE PROTECTION TO RESIDENTS OF SENIOR LIVING COMMUNITIES

A.G.E. Liability Insurance fills coverage gap against accidents & third party claims Bala Cynwyd, PA, – After a lifetime of saving, seniors and their families enjoy the benefits of careful retirement planning including living life on their terms in a senior living community. But, in moments, an unforeseen accident can threaten the financial health of a senior and result in a loss of their hard earned assets. Fires, slip and falls, scooter accidents and even dog bites are all incidents where seniors in senior living communities can be held personally liable. The largest advocate for professionally-managed, consumer driven senior living communities in the country, the Assisted Living Federation of America (ALFA), is educating both senior communities and the residents they serve, to help them avoid financial hardship due to accidents and third party claims. ALFA is highlighting an innovative product called Asset Guard Endorsement (A.G.E.) liability insurance, which closes the gap to help protect seniors’ finances and reduce costs and risk for the communities where they live. “Seniors deserve the opportunity to protect their financial assets if an accident occurs and third parties file claims, the A.G.E. liability insurance program can help,” said Jamison Gosselin, SVP of Marketing at ALFA. “A.G.E. liability insurance is no ordinary renters’ insurance program. It is a renters insurance option that has been crafted to serve seniors choosing a senior living community and families who want to protect their loved ones’ assets.” A.G.E. provides seniors with coverage to protect their assets and lifestyle against third party claims resulting from bodily injury or damage to their property. It also helps senior care communities by decreasing risk and keeping their residents safe. “The fastest growing segment of our population is seniors 65 and older. During a challenging transition to a new home or environment, seniors might not realize or think about potential accidents where they can be held personally liable,” said Chuck Pedone, Regional Vice President of Marketing for Philadelphia Insurance Companies (PHLY) which underwrites this coverage. “Accidents can and do happen. This coverage is designed to provide the very best protection to both seniors and the communities where they live.”