xt7ffb4wjq08 https://exploreuk.uky.edu/dips/xt7ffb4wjq08/data/mets.xml   Kentucky Agricultural Experiment Station.  journals kaes_circulars_004_610 English Lexington : The Service, 1913-1958. Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Circular (Kentucky Agricultural Experiment Station) n. 610 text Circular (Kentucky Agricultural Experiment Station) n. 610  2014 true xt7ffb4wjq08 section xt7ffb4wjq08  Li`-; ' K_) I
HOME • AUTO • LIABILITY
. Circular 6IO
UNIVERSITY OF KENTUCKY
COOPERATIVE EXTENSION SERVICE
Acnrcuuunz AND Hom: zcouomcs

 (.\d.1pt<·d hy I’r;1ne¢·s Staillurd, with permission, from zi publication of this same
title hy Bnrlmrii Higgins, University of Massachusetts Cooperative Extension
Serine. Suggestions on matters pertinent to Kentucky were given by Thos. D.
Boyd, Lexington, Ky.)
  -

 Your Property Insurance
Home—Auto——LiabiIity
Today’s standard of living has brought greater comfort and well-
A being to modern families than ever before. It has also brought certain
threats and dangers our grandfathers never knew. Insurance plans
» have been developed to help meet some of the financial consequences
of these hazards, many of which are accidents and injuries to persons
and property. Insurance—whatever kind it may be—operates on the
principle of “spreading the risk.”
Large groups of people pool and transfer their risks by making
regular payments to an insurance company. The individual pays a
specified amount, called his insurance premium, instead of running
the chance of taking a larger financial loss. The company then assumes
certain risks under the terms and conditions of an insurance contract.
\Vhen buying property insurance, one pays for protection only. lf
. you do not have a loss, you do not collect anything. Most people, how-
ever, can not afford to take the insurance necessary to cover all finan-
cial risks, but few can afford not to insure against occurrences which
would cause a major setback or wipe them out financially.
Inflation and changing values have affected property values and
also the court awards given as a result of liability suits. Therefore, it
is very important to have the right kinds and the right amounts of
insurance if you are to get the most value from your insurance dollar.
Your Insurance Policy
Your insu1·ance policy is a legal contract which states the rights
and obligations of the policyholder and the insurance company. It
` cannot be transferred to another individual without the consent of
the insurance company and an endorsement in writing.
The policy must describe what property is insured and where it is
located and state what risks are being covered. Both time and money
limits are also specified in the policy.
Types of Insurance Companies
The two main types of insurance companies are stock and mutual.
Stock companies are corporations. They obtain their capital by the
sale of shares of stock, and the stockholders are entitled to the profit
from the business.
3

 In mutual companies, the policyholders are the owners. They are
entitled to share in the profits of the company and may or may not be
assessed an extra premium, depending on whether their policies con-
tain a non-assessable clause. V
HOME INSURANCE ,
Premium rates vary according to the location of the property and
the type of materials used in the construction of the property. If pre-
miums are paid in advance for a 3-year period, you will be given a
10 per cent reduction.
Most insurance agents will arrange for an evaluation of your real
estate for insurance purposes. There is no charge for this service.
Insurance on real estate can be written:
1. On an actual cash value basis, which is the replacement cost of
the buildings, with allowances for depreciation and certain uninsur-
able items. (
2. ()n a replacement cost basis, which is the actual cost of replace-
ment, with allowances only for uninsurable items. (It is recommended
that most families have their property insured for at least 80 percent
of the value of the property.)
If the premium for either type of replacement seems to put too
great a strain on the family budget, you will want to make your de-
cision on the following basis:
Amount of Insurance I . . ` Types of Risks
You Can Afford _—m relation WT. in Your Situation `
Adjustments should be made periodically in the amount and kind of
protection you have. If improvements are made, new furnishings
added, and your property increases in value, you will want to increase
the amount of insurance. Likewise. as your property depreciates in
value, you need less insurance.
Fire Insurance
Fire insurance covers direct loss and damage by fire and lightning.
The policy on a home covers the dwelling and other privately owned
structures, such as a garage. Household and personal effects are not _
covered unless the policy specifically states that they are covered.
4

 Endorsements
Endorsements (or riders), which are actually additions to the
policy, can be added to the standard policy at an additional cost and
· can cover almost any kind of loss.
Extended coverage is for damage from windstorm, hail, explosion,
I smoke, riot, riot during the time of a strike or civil commotion, aircraft,
- and vehicles.
Additional extended coverage is for damage from such things as
vandalism, malicious mischief, damage to your own property by your
own vehicles, water escapage, rupture of steam and hot water heating
systems, falling trees, collapse, and glass breakage. (Some of the fore-
going coverages are sold on a $50 deductible basis.)
Contents insurance covers household furnishings and personal be-
longings. The rates are somewhat higher than they are for the standard
fire policy on a house, but the chances of loss or damage to your fur-
niture, clothing, and personal effects are as great as or perhaps even
I greater than they are to your dwelling itself.
Theft Insurance
This type of insurance covers losses by theft of personal property,
either at home or away from home.
Theft insurance is automatically included in all packaged policies.
Many theft policies, including llome—owners’ Policies, exclude coverage
of personal property in an automobile unless the vehicle is locked and
there is evidence of forceful entry.
Comprehensive Liability Insurance On Your Property
Ownership or occupancy of property involves liability for injury to I
those who have occasion to come on the property. The property owner
usually must be proved liable, and a court judgement must be rendered
against him before a claim is paid. Court costs and legal fees are also
furnished by this type of insurance.
Liability for property damage, as well as personal injury, caused
by the activities of the insured, his wife, minor children, employees, or
animals are covered under this type of insurance. Medical expense
coverage for injuries to visitors or domestic employees is included.
Package Policies
In a package policy, combinations of the foregoing insurance have
been put together at a reduced cost. Package policies provide broader
l coverage at a lower cost. They cost less than the same protection in
_ 5

 separate policies. Even for the most expensive package policy, the
premium cost would be less than that for single policies giving the
same coverage.
Protection in package policies includes: one- and two-family dwell-
ings and other private buildings on the premises; your personal prop-
erty at home and away from home; additional living expenses in the A
event you cannot live in your home as a result of damage from the
insured perils; comprehensive personal liability, medical payments, ·
and property damage; and theft insurance at home and away from
home. Your insurance is then combined into a single contract and will
cost. on the average, less than it would in separate policies.
N Package policies are available for
  P"? tenants as well as for h0me—owners.
7 fb, ‘ { For tenants, the policy offers protec-
  tion to personal property—home fur-
  / nishings, clothing, and personal be-
, T ll   { longings. Liability for your responsi-
L_ , — bility to others is also included. -
/ ._ A package policy is known as a
/ l R PlO1U€O\V1]GI"S Policy. Families insur-
    ing their property should learn what
M " · \ the package policy covers before pur-
¤_ chasing it, so that they will know
\ \ exactly what insurable needs are cov-
9% \ __ ered in their contract. A brief outline
  - ` li of the more common types of package
' .?;   policies follows.
4 .......-   i’.;·;/“
[I0}I1COlL`l2CI"S Policy - Sirmclard Form. is the simplest and cheapest
policy, and it protects you against: h
Fire and lightning
Extended coverage perils (explained under Fire Insurance)
Theft at home and away from home
Comprehensive personal liability and medical payments
Physical damage to personal and real property
:\dditional living expenses and rental value protection.
IIomcou`ncr`s Policy-Broad Form costs slightly more than the
Standard Form policy and includes:
The coverage listed under Standard Form ‘
Additional extended coverage
(described under section on Endorsements)
6

 The F arniownefs Policy is available to farm families as protection
against hazards that affect them. These policies 1nay be written to
cover:
Dwellings
Private structures
A Personal property
Additional living expenses
T Farm barns and other buildings
This package policy covers the main farm dwelling, appurtenant
private structures, personal property on and away from the premises,
additional living expenses, comprehensive personal liability with med-
ical payments, and physical damage to both personal and real property.
Farm personal property, barns, buildings, and structures may be
added.
Superior farm dwellings and barns may qualify for lower rates.
Credit is allowed for approved wiring, plumbing, heating, good repair,
approved lightning rods, and a solid foundation for dwellings. Barns
f and outbuildings may qualify for lower rates if they are not over one
story, have a solid foundation and incombustible floors, and do not
have open sheds or hay storage.
The hazards that may be covered are: fire, extended coverage, van-
dalism, limited glass breakage and theft in the standard form and
additional perils in the broad form policy. Employer’s liability for
hazards to farm employees may be included.
How To Muke ¤ Clcim
Notify your agent or your company in writing. Arrange to have an
inventory of the damaged property ready for the adjuster. Do not hes-
- itate to sign a 'iproof of loss" form if a satisfactory figure to cover the
damage has been reached.
When You Are Moving
When a person moves, special coverage should be secured from the
mover or from an agent which would provide adequate protection
while the property is in the process of being moved. Furthermore, it
is necessary to change your regular policy to show the new location
of the property.
AUTOMOBILE INSURANCE
Premium rates for liability insurance vary according to the locality
and are based on accident frequency and awards for claims in that
7

 locality. (The trend toward higher property damage and bodily injury `
claims has made many car owners realize that more than the minimum
coverage may be desirable.)
The miles you drive in going to work and your total mileage also
determine the premium rate. A car driven by a person under 25 years l
of age carries a much higher rate because of the claim experience for
this class of drivers. However, satisfactory completion of an approved
driver’s training course usually brings a reduction of 10 per cent in the J
rate for teenagers. Persons over 65 may find their rates higher unless
they have a good claim record and are in good physical condition.
The multiple car family usually receives a reduction in premium
on their cars; however, this may not apply to the car usually driven by
teenagers.
Your accident record is made a part of the insurance company’s
overall claim record and helps to determine the premium you pay
for your automobile insurance. Too many claims may increase the
cost of your insurance. You may also be placed in a higher bracket or
the company may refuse to renew your insurance. .
A 7   .
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Liubilityxlnsurunce For The Owner or Operator
Ownership of a car involves financial responsibility. Not only may —
the car be wrecked, but it may cause damage to property or injury
to persons, or both, for which you are liable. Liability insurance pro-
tects the car owner no matter who is driving his car, as long as the
driver is legally entitled to drive and is using the car with the owner’s
permission. It also gives you coverage when you are driving another
person’s car, if you are legally entitled to drive it.
The cost of automobile insurance is reduced for teenage boys who
have passed the driver`s training education program. Regardless of
cost. this program is highly recommended. A
BODILY INJURY LIABILITY AND PROPERTY DAMAGE
You can purchase liability insurance in varying amounts. It is
frequently spoken of as “lO-20-5,” "25·50—10,” etc. The first two Hgures
8

 — refer to personal injury, the last figure to property damage. For in-
stance, with the “25-50-10” policy, you are protected up to $25,000 for
injury to one person, up to $50,000 for injury to two or more persons
per accident, and up to $10,000 for property damage per accident.
The larger amounts are recommended.
Comprehensive Insurance-Fire and Theft
l This type of insurance includes protection for your automobile
against fire, theft, flood, windstorms, glass breakage, and many other
hazards, except collision and ordinary wear. If the entire automobile
is stolen, there is a theft coverage up to $100 on wearing apparel and
luggage.
Medical Payments
This type of insurance covers necessary medical, hospital, profes-
sional nursing, or funeral expenses resulting from an accident in which
your car is involved. This applies whether you are liable or not.
It covers all persons, including the car owner and can be purchased
i in amounts from $500 per person and up.
Collision Insurance
This type of insurance covers damage to your car by collision or
upset. The cost of complete coverage for all damage is very expensive.
Most people buy $50, $100, or even $250 deductible. This means the
car owner pays the first $50, $100, or $250 of damage to his car, and
the company pays any costs above that. The larger the share of
damage assumed by the car owner, the lower the premium.
As a rule, adequate liability coverage should take precedence over
collision coverage. The potential amount of a claim for personal
_ injury for which you may be liable is much greater than the value
of your own car.
Uninsured Motorist
Uninsured motorist insurance covers injuries to occupants of a
ear (up to the amounts required by the Kentucky Financial Responsi-
bility Law), if the ear is struck by a hit-and-run driver, an uninsured
motorist, or a financially irresponsible driver. (ln Kentucky, the limits
of liability for this coverage are $10,000 for each person, $20,000 for
each accident.)
It should be noted that this is only a bodily injury coverage and
» does not apply to any property damage done by an uninsured auto-
mobile. (Property damage is covered if the motorist involved in the
accident has collision insurance.)
9

 IF YOU HAVE AN ACCIDENT WITH A MOTOR VEHICLE
Protect the injured. Call a doctor or ambulance for assistance.
Call a law enforcement ofHcer to the scene of the accident. (For
the Kentucky State Police, dial the operator.)
Cet police ofHcers’ names and badge numbers (note if county, city,
or state).
Write down the full names and addresses of all persons involved,
including witnesses. A
Note damage to your car and other cars or to other property. If
possible, get pictures of damage to cars and property.
Note the date, hour, weather, exact location of the accident, which
side of the street, and condition of highway, and if your headlights
were on or off.
There are many factors involved in determining who is legally at
fault. Admit nothing. If you say, "it’s my fault,” you may make it
diflicult for your insurance company to settle any claims, but do make
known your name, address, and car registration number.
Contact your insurance company regardless of whose fault the ,
accident was.
Obtain from any State Police Post, State Police Trooper, or law
enforcement officer an individual accident report form (SP-74),
which you must complete and mail within 10 days to the Division of
Driver Licensing, Frankfort, Ky. 40601, if $100 property damage is
sustained, or if anyone is injured or killed.
\xVithin 60 days following the accident, you must comply with the
Kentucky Financial Responsibility Law, if $100 property damage is
sustained, or if anyone is injured or killed in the accident. Proof of
financial responsibility may be shown in one of the following ways:
1. You present evidence (within 60 days) of having automobile
liability insurance sufficient to cover from $10,000 to $:20,000 for per- ·
sonal injury and $5.000 property damage, or .
2. You can deposit a sum set by the Motor Vehicle Department to
give evidence of your financial ability to pay damages of the accident.
CHOOSING YOUR AGENT
Choose an insurance agent who is acquainted with local conditions
and is associated with an established agency.
Select an agency small enough to give you individual attention, but
large enough to give you complete and thorough service. i
Decide if your agent is well-informed, reliable, eflicient. accurate,
and courteous. Does he know the insurance business?
Find out what others think about his ability, his business record,
10

 · and the service and assistance he has given to his customers, especially
when settling a claim.
Observe the attention given t0 your particular situation. Does he
recognize the hazards you have, suggest the types of insurance to fit
your situation, and consider cost advantages to you without using
high pressure salesmanship?
After choosing an agent in whom you have confidence, it is usually
wise to let him handle all of your insurance.
UNDERSTAND YOUR POLICY AND MAKE AN INVENTORY
Read your policy and endorsements. If you do not understand
them, ask your insurance agent to explain them to you.
Make an inventory of the property you have insured, including
the date purchased, cost, and present value. Keep this record in a
safe place—if not in a safe deposit box, at least away from the property
that the policy covers. The inventory serves two purposes: (1) it
indicates the value of what you own, hence the amount of insurance
. needed; (2) it serves as reliable evidence if you have a loss.
Your inventory will be invaluable if you ever need to make a
claim, because it will be necessary for you to prove the value of the
property which has been destroyed or damaged. ln the event of a
loss, notify your insurance agent as soon as possible. VVhen a satisfac-
tory settlement has been reached, you will usually be asked to sign
a “proof—of-loss" form. However, many small claims are now being
settled without the filing of this form.
11

 Cuoperzntxvv Extensmn Work in Agriculture and Home Economics: Cullege 0f Agrxculture
and Home Ecmmmxcs. Umvcrsxty of Kentucky, Lexinuton. and the United States Depart- ·
mont of :\}.YI"1CLl1!U!'L‘t ccmperuting. Wilhum A. Sony. Dczm and Dnrectm'. Issued in further-
ance of the Acts of May 8 und June 30. 1914.
Issued 8-59, IOM as HE 5-133-A; Rev. 4-67 as Circ. G10, 7.5M