Northern Michigan has been a summer getaway for many years. Back in the early days trains, passenger ships and carferries brought vacationers from Chicago, St. Louis and Detroit to our doorstep. Rooming houses and hotels, like the grand Frontenanc Hotel were built to hold the visitors and local entrepreneurs began renting out their homes in downtown Frankfort for the summer. As the area around Crystal Lake became developed simple cottages sprung up and those former visitors put down seasonal roots. The vacation paradise we now know was born.

Now, many decades later, the homes in town and cottages around the lake have been remodeled, rebuilt and expanded. Many of these properties have been passed down through the family or have grown to be jointly owned by many relatives. As back in the early years families are renting their homes or cottages to visitors on a short term basis.

What does this history lesson have to do with insurance? It's the intro to a scary insurance issue that is hiding just below the surface of Northern Michigan. The insurance polices that these families have to protect their properties actually provides no protection for rental!!

Most homes or cottages in Northern Michigan are protected by a homeowners policy. These insurance contracts are specifically designed for owner occupied homes. In the event of a major claim, such as a fatal fire, the fact that the home is occupied by a short-term renter would most likely negate the policy coverage in full! Not only would there be no coverage to repair or rebuild the home but there would be no liability coverage to protect the owners from a lawsuit over the fatality in their home.

A scenario such as this could destroy an individual family financially, permanently fracture the extended family and end in the loss of and extremely valuable and cherished family asset.

Don't allow your family history to be put in jeopardy. If you ever rent out your home or cottage you need to discuss this fact with your agent immediately and put into place coverage specifically designed to protect your family. Your ancestors had the foresight to put down roots here, be sure this generation has the foresight to strengthen those roots rather then to allow them to disappear.

Author: Andrew Johnson, Frankfort Insurance

In February the Insurance Bureau of Canada conducted a survey of homeowners on their perception of the chances of having a home claim. When asked if they thought their home was at risk of suffering damage from wind, hail, earthquake or water/sewer back-up, more than 65% of the homeowners felt that their home was not at risk.   In reality, these four events damage millions of homes every year.

The study went on to say that only 8% of the homeowners were concerned about a back-up of a sewer or drain. In fact 81% of these homeowners thought that their policy automatically included coverage for water/sewer back-up, however that's not the case!

So lets backup (no pun intended) and briefly define what we're talking about. “Back-up of water and/or sewer” is when water or sewage comes back up through a drain, such as a floor drain, sink, toilet, etc., and causes damage to your property which requires cleanup and/or repair.

Damage like this, as you can imagine, can be pretty ugly and require careful cleanup to protect against potential mold growth and illness. In the case of sewer backup this is definitely a job for a professional cleaning company!

What can be worse than the mess, as the Canadian study showed, was that many homeowners believe this type of damage is automatically covered in their home policy. On the contrary it is actually specifically excluded. However this lack of coverage can be changed by purchasing an endorsement (addition to the policy) that provides coverage for this type of damage. Coverage amounts for this endorsement usually start at $5,000 and can help with cleanup and repair of the damage and can be increased in $5,000 increments.

So, lets pose the question from the title of this article again. What do you know about water & sewer backup? Hopefully you now know enough to consider the potential risk of damage like this and understand enough to make an informed decision regarding your need for additional coverage.

Author: Andrew Johnson, Sources: Insurance Bureau of Canada
http://www.newswire.ca/en/story/1339225/home-insurance-a-loss-doesn-t-only-happen-to-others

This is the very first post on our insurance agency blog. We're not quite sure what we're going to write about here, but the plan is to create helpful content for customers and prospective clients about information that is relevant to you.

Here are a few of the topics we plan to be writing about:

• Answers to clients' frequently asked questions.
• Helpful information about insurance shopping.
  
• Safety and Health Tips and Ideas.
  
• Local Community Information.

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