Episode #95: How Much Liability Are You Hosting This Weekend?

Memorial Day weekend has a way of turning “just one quick favor” into a full-blown claim file. We start with a simple scenario: you borrow a friend’s car to grab ice and something goes wrong. From there, we unpack permissive use, when auto insurance follows the car versus the person, and why household access to keys can quietly expand who counts as an insured under the policy definition.

Then we shift into uninsured motorist and underinsured motorist coverage, where your own carrier can end up acting like the at-fault carrier. That odd setup creates real claim-handling tension, and we talk through how adjusters can avoid treating their own insured like an opponent. We also cover the practical math of UIM limits, why state minimums can disappear fast after a serious injury, and how made whole rules and deductibles should shape subrogation expectations.

Finally, we hit the holiday exposures we see every year: delivery driving side hustles that trigger business-use exclusions on personal auto policies, Airbnb and Vrbo “other insurance” conflicts, fundraiser and lemonade stand liability questions under homeowners business pursuit language, and the messy world of boats, jet skis, ATVs, and alcohol. We bring it back to adjuster fundamentals: ask precise questions, verify use and ownership, confirm motor size and policy thresholds, and document the timeline.

If this helped you think differently about coverage traps, subscribe, share the show with an adjuster friend, and leave a review so more people can find it. What’s the most surprising coverage dispute you’ve seen from a holiday weekend?

For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.

To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.

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Transcript

Welcome And Memorial Day Risks

William Auten 0:06

Hello, I'm Bill Auten of Auten Claims Management.

Chantal Roberts 0:09

I'm Chantal Roberts of CMR Consulting, and welcome to the Art of Adjusting Podcast.

William Auten 0:14

Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster. Hey Chantal, how are you?

Chantal Roberts 0:32

I'm doing well. Thank you. How are you, Bill?

William Auten 0:35

I'm good. I'm a little beat up and wore out from all the yard work we've been doing since the weather's finally changed here.

Chantal Roberts 0:41

Yes. And you know, that leads, of course, right on into our topic, which is Memorial Day weekend and everything that goes on with Memorial Day weekend, such as yard work. We I believe we talked a little bit about lawnmowers last time.

William Auten 1:01

Yeah.

Chantal Roberts 1:01

So we won't necessarily get into it uh this time, but excuse me, uh, you know, we all think that it is cool. You know, it's Memorial Day weekend, we're having parties, we're out on the boat and blah, blah, blah. But nobody actually recognizes the hazards that are coming up with Memorial Day weekend until we get back into the office uh on Tuesday and we have a claim.

William Auten 1:29

And we know all about that.

Chantal Roberts 1:31

Yes. And so we're gonna be talking about, you know, borrowing vehicles, um, our side hustles that we do, fireworks, like I said, boats. And uh one thing that I'm always really um conscious of is the host liability, social host liabilities. So want to talk about that. Be sure to like, comment, subscribe, share, all of that, because it helps the algorithm pick us up and um share us with other people.

Borrowed Cars And Permissive Use

Chantal Roberts 2:04

So with that being said, I thought we'd um start off with maybe borrowed vehicles, because I know I hate it when someone borrows my vehicle. And of course, I think I told you my brother-in-law is staying with us right now, and he is always borrowing Aaron's vehicle. And, you know, of course, we do have that share, like, hey, go at the Memorial Day party, go down to the Quickie Mart and get a bag of ice or whatever.

William Auten 2:36

Right.

Chantal Roberts 2:37

You know. Um, so we need to talk about that.

William Auten 2:40

Sure.

Chantal Roberts 2:41

Who who has coverage? Is that does the coverage follow the car? Does it follow the person? I always get confused.

William Auten 2:48

I know, I know. I and I don't do enough auto to be um anything close to an expert on this anymore.

Chantal Roberts 2:54

But um you know that has never stopped us in the past, though.

William Auten 2:57

Right. I mean so all right, so let's lay out a scenario and talk it out.

Chantal Roberts 3:02

Yeah.

William Auten 3:03

All right, so I'm over at your house and uh you say, Hey, take my car and go get some a bag of ice, and I get an an accident that I cause. Um, my auto policy certainly would come into play, I believe. Um yours would as well, I believe. But which would be primary?

Chantal Roberts 3:26

Okay, so usually auto or insurance follows the car. And then if I give you permission to use my car, then you're a permissive user. So you would be like a permissive insured or something like that. Um, so that's good. And then your auto insurance would like be over that.

William Auten 3:49

So excess over yours.

Chantal Roberts 3:51

Yeah, yeah, yeah.

William Auten 3:52

Okay, that makes sense. I think that's right too.

Chantal Roberts 3:55

Yeah.

William Auten 3:55

Um again, I I would have to have a policy or two in front of me to be able to read this. I've it's been a while.

Chantal Roberts 4:03

And of course, you know, that's that's true too, is that it's always going to be something that is we have to look at the policy always. So um the the the main thing is that we think about is the injuries. Um, and one of the things that I tend to point out to people uh, both as an agent, looking at it from an agent point of view of an accident, and both from an adjuster point of view, is that I know a lot of um agents who have told parents, like, hey, you've got a 16-year-old who can drive now. We need to put them on their own policy because if we don't, that's really gonna spike your policy way through the roof. Because of course, you know, 16-year-olds can't drive.

William Auten 4:55

And well, they can, they just can't do it.

Chantal Roberts 4:58

They can. Um, I guess they're able to drive. Now, whether they drive well or not is a whole different issue. Uh and that could be a whole different podcast. But the the uh thing is is that we're going to talk, like I said, about permissive use. If I sit there and say, yeah, go ahead and and take my car while you run down to the quickie mart and grab some ice or a bottle of wine or whatever, you have permissive use. If and and you do have your own insurance policy, great, good. The issue is though, that um what we have, like if I have children living in my house, or since my brother-in-law lives in my house and he has regular access to the keys, we need to be looking at that policy language as well. Because if the child has regular access to the keys, they're still an insured on the parent's policy by the definition of the policy, even if they're not named on the policy. So, because a lot of times that are named insured is the name that's like listed on the policy, but there's also an insured by definition, such as your spouse or your employee, if it's a commercial policy or someone who lives with you, or something to that effect.

William Auten 6:24

So that is something question for you. If uh in the scenario we laid out, I cause an accident and um I injure somebody else, but I also get injured myself. Um, I believe where you are that the you have a no-fault kind of coverage for people who are injured in the insured vehicle, correct? So that would apply to me.

Chantal Roberts 6:47

Right. Yes.

William Auten 6:48

Um would any similar coverage on my policy kick in afterwards or supplement in any way?

Chantal Roberts 6:57

I think it would depend again on the policy, but my knee-jerk reaction is yes, it it would. Uh I've I've really never seen it though, for the for the most part. It for the most part, when the driver of the vehicle is injured, you give them the med pay, right? And a lot of times med pay isn't necessarily uh a lot. So uh they would then continue to file on their health insurance because they can't file liability on the the car, like their insurance, right? They can't file against themselves. Now, now your wife could file against you and my policy if she was in the car.

William Auten 7:47

Right, right, right.

Chantal Roberts 7:48

Uh but how about we know that you're infamous infamously a bad

Uninsured Motorist Coverage Pitfalls

Chantal Roberts 7:52

driver.

William Auten 7:52

So yeah, if you knew that, then you would have uh negligent entrustment to deal with. Anyway, um, what about underinsured motors coverage? Uninsured, underinsured motors coverage.

Chantal Roberts 8:06

Yeah, that's a great question. And you know, I think as adjusters, we don't treat that with the respect that we should. And I'm not quite sure why. I think maybe it has to do with a lack of education, maybe uh because let's think about this. Uninsured, underinsured. What we're basically talking about is we as the insured's automobile carrier, we step in the place of that at fault carrier. Either they didn't have insurance.

William Auten 8:44

I I have to change my story for this conversation to work, though, because my initial premise was my I was at fault, but for underinsured motorist coverage to kick in, it's got to be somebody else's fault, and they have to be either uh without insurance or with very low limits. Exactly. So let's change our story. Now it's not my fault. I'm driver of the year, except somebody else ran the red light, which is also true. And wrecked wrecked your car.

Chantal Roberts 9:12

Right. So you're still driving, let's say my car, right? And this other car that hits you, no fault of your own, doesn't have insurance. So that's uninsured motorist.

William Auten 9:27

Right. Okay, so then I can make a claim against your carrier.

Chantal Roberts 9:31

You can in that instance, and my carrier would step forward and say, Hey, you know, we we're here, we're here to help you. And they would step in the shoes of the atfault carrier. And I think this is where a lot of adjusters at fault driver. Well, yes, andor they're a their carrier that they're supposed to have. Right. Because we're all supposed to have at least liability. Um, so I think this is where most adjusters get messed up, is because when we're acting like a third-party carrier with uninsured motorists, I think we begin treating our insureds like claimants. And I think that may be a little bit dangerous. Yes, they are claimants, like third quote unquote third-party claimants, because we're supposed to be acting like the third party carrier. But on the flip side, we're also the first party carrier, and this is our client. So do we really want to jerk them around and you start requesting a lot of documentation repeatedly, and low-balling estimates and bodily injury settlements? And I have seen this on underinsured and uninsured. We'll talk about uninsured in just a minute. But I think we forget that this is our client and we have a fiduciary duty to our client.

William Auten 11:07

Be I think we forget it's because we're stepping in the shoes of it's a it's a confounding uh way to provide uh uh coverage to something because uh your insurance company who's supposed to be on your side is um actually adverse in that scenario because they're they're not they're not insuring that other party, but they kind of are. I mean, they're like you say, stepping into the shoes, so it it creates a strange dynamic. Um, I've never handled one of those claims. Again, we don't do much in the way of auto, um, but God bless the folks who handle those claims. Oh my gosh.

Chantal Roberts 11:55

Yeah, yeah. Uh so let's talk about underinsured motorists.

Underinsured Motorist Math And Made Whole

Chantal Roberts 12:00

So underinsured is when you're driving along with the missus in my car and someone hits you and they have state limits. And I wanna say Kansas is 25,000. I'm don't quote me on that, but I want to say it's 25,000. 25,000 does not go a long way these days uh for a medium to severe injury uh kind of deal. So, anywho, what we would be looking at in this particular instance is the atfault driver and their carrier would pay up to their limits, right? And that would be 25,000 in property damage or liability, both who knows what they have, but I'm just gonna say 25,000. Then you've got additional, let's say, medical bills. And then so you turn around and you would file a claim with my insurance company. And again, my insurance company would step in and for example, let's say both of you and the missus injuries are 75,000. We take off that 25,000 and that would leave us 50 that my company would pay. So um that is the the the difference there. Uh when adjusters, you so you would take credit for whatever got paid. Adjusters, when you are thinking or looking at this and who's at fault and and that sort of thing, you need to also think about the made whole statutes or rules, because a lot of times when we're pursuing subrogation, we can't get full recovery for the amounts that we've paid because our insured has to be made whole. So for example, uh let's say it's just a regular everyday, like I get into a car accident, they're underinsured, right? Um, so I get the $50,000, whatever. My insurance company wouldn't be able to subrogate against that other carrier.

William Auten 14:21

Because their limits are exhausted.

Chantal Roberts 14:23

Well, their limits are exhausted. Um let me give you another example because because yeah, we're sitting there going, okay, whatever. Let's say limits are $100,000. My damages are 75, but I have some things that aren't covered. I don't know what. We'll figure something out.

William Auten 14:39

Just we'll say you were carrying an antique something in your car and it got destroyed and it's worth $25,000.

Chantal Roberts 14:48

Right. Okay, whatever. Yeah, that's it. Okay. So I've got a $25,000 property damage claim that wouldn't be covered under my auto for some reason. Uh, and so auto pays everything. And because the auto adjuster is like stepping forward for me, they're like, okay, look, I need the thousand dollar deductibles that Chantel paid. I need um, you know, the 75 for me, and then um the 25 for the antique, which would also go to Chantel because um, you know, I don't pay for it. And the limits for the at fault carrier is 50. Well, obviously, my damage at 75 and 25 for that antique are gonna breach the limits. So the most that that carrier would be able to pay would be the limits, but my insurance carrier would have to take a pro rata because the at fault carrier must pay me whole total 100% before the insurance, my insurance carrier can get money from their subrogation. I I hope that I've made that sense because I know there's math and we've I've been trying to use small numbers, but you know, it gets it does get complicated. And basically what I'm saying is pay attention to making your your insured whole.

William Auten 16:27

Yes.

Chantal Roberts 16:27

Ask for the deductible at least.

William Auten 16:30

Yeah, yep.

Chantal Roberts 16:32

To be sent back to the to the insured. Okay. And yeah, I think we've uh, you know, like multiple carriers involved, I think we've talked about all of that. Um yeah.

William Auten 16:44

Uh so you've got here side hustle exposures.

Side Hustles And Auto Coverage Gaps

William Auten 16:48

Um when you talk about a side hustle, are you talking about something you do for an income, like you've got an Etsy shop in your basement or you're mowing lawns for people, or what's uh yeah, and also I'm thinking like the Uber Eats or the Door Dashing or whatever, because what we need to be remembering is that our personal auto only covers us for when we're driving our car for personal issues.

Chantal Roberts 17:18

Uh business issues are not covered, and for that, you would need to have the either a commercial auto policy or a um endorsement. I know some some carriers offer an endorsement now for light use of the auto for a side hustle. So um, and and and what the insured should be doing, hopefully, is keeping mileage logs or at least time logs when they're logged on to Uber or DoorDash or Lyft or whatever.

William Auten 17:58

I think that's pretty automated in their apps systems. Um, but um are is it an assumption of mine that's correct that these that carriers are offering endorsements on a personal auto policy for um DoorDash and things like that?

Chantal Roberts 18:15

I have seen a few of them. Yeah, they're very, very limited uh for for liability. And it's mostly liability. I don't think I've ever seen coverage for for collision in that particular instance, but it's very limited. Like, I don't know. I don't I don't even want to guess at the at the type of thing.

William Auten 18:38

Um well another uh a similar topic that we could probably do a whole episode on is um the uh Airbnb and Verbo uh

Airbnb Policies And Other Insurance Fights

William Auten 18:50

rentals. So those companies actually set up additional liability coverage for their customers to protect the owner of the property um in addition to whatever liability insurance they may ever already have. Do you know if DoorDash or Uber Eats um offer another coverage protection? They do, okay.

Chantal Roberts 19:12

Yeah, yeah, they do. I have never seen one of their policies, and by the way, you know that Bill and I are coverage nerds. So if you have, uh redact the information. I don't need to know who it is, but send me the policy. I'd love to see it. I I I read insurance policies for fun. Sad, sad state of affairs.

William Auten 19:35

Anyway, um, yeah, so we've seen the we've seen the Airbnb and and verbo policies that are issued by uh a national carrier. Um, and we actually deal with them all the time.

Chantal Roberts 19:50

Um how are those done? Who who's primary? I guess the the whoever like the Airbnb or the Verbo or whatever is the primary.

William Auten 20:05

Yeah, so there's two different versions depending on who the the depending on what the rental vendor, if you want to, whatever you call them, um, is and uh one is uh one functions as primary. And it will say that your homeowner's policy is excess only. Uh we're primary, and that makes it easy.

Chantal Roberts 20:33

Yeah.

William Auten 20:34

The other form that they have contains a really complex um language about other insurance and what generally happens because most uh most policies will say that they're excess over any other uh policy. This one does too, but it also says some other things just in case for different coverage scenarios. But basically, you've got two forms that are mutually repugnant, so you wind up um doing like a pro rata would be pro rata equal share kind of kind of deal. Um but it's but the language in their policy I think it says they'll only revert to 50-50.

Chantal Roberts 21:27

Okay.

William Auten 21:28

Yeah. So so if the if the rental policy is a million dollars and you have five hundred thousand dollars in coverage, you would think that they would pay two-thirds of the loss and you'd pay a third. But I think the way the language in that policy is written is that they share. That they're both co primary, I think is the way it's written.

Chantal Roberts 21:49

Oh, interesting. Interesting, yeah. Um, that is kind of like what I thought it would be uh is that I I know. For DoorDash and Uber and Lyft, they do have their own policies that would cover you strictly when you are driving for them. So that is the another reason why the adjusters need to obtain a recorded statement because we need to find out exactly when that loss happened. Were you on the clock? Were you not on the clock? Um, was the house being rented? Was it not being rented? That sort of deal. So we know which policy would respond.

William Auten 22:35

And yeah. Well, like I said, that's that's worthy of an entire entire episode.

Chantal Roberts 22:41

Absolutely.

Fundraisers Lemonade Stands And Liability

Chantal Roberts 22:42

Um, the other thing that I see is when we're out um with now that it's getting warmer, you know, you've got baseball and and all of that. So you've got these pop-up, you know, maybe the the parents are selling something or not necessarily what like I'm not talking about the food trucks per se, because again, those would have their own insurance. And I'm not talking necessarily about the concession stands, because again, at those should should have their own insurance. I'm talking about maybe someone setting up a barbecue grill and selling plates and charging for drinks or you know, uh like a lemonade stand kind of thing.

William Auten 23:29

Yeah.

Chantal Roberts 23:30

Yeah, yeah, yeah.

William Auten 23:31

Uh brownies at you know, cookies and brownies for nickel or whatever.

Chantal Roberts 23:35

Exactly, because you're fundraising for for the the team. And gosh knows I've done it before too, and never thought about the insurance implications. When when my stepsons were going through basketball, you know, we were always having to fundraise. And I'm not talking about selling the candy bars or whatever, but I am talking about setting up outside of the uh basketball court and bringing a grill and flipping some burgers and selling those for a dollar as fundraisers or, you know, whatever. Uh we would say, okay, you know, it's it's for charitable cause, we're just doing this for whatever. Um, but if we're repeatedly doing it and we do have some kind of profit motive, which is even if we're donating it to this group for our kids to fundraise or go to states or nationals, or if it's some kind of organized setup, we need to realize that that may be a business venture.

William Auten 24:43

Right.

Chantal Roberts 24:45

And so maybe our homeowners would not cover it.

William Auten 24:50

Maybe. That's interesting. So let's take it to the extreme. You're uh you're because you know, why not? Why not? Your 10-year-old decides they want to have a lemonade stand, so you have a lemonade stand and they're selling it there. Is that a business adventure, a business venture? And I I know I've seen this topic come up in the in the in the realm of taxes, and um, and I think, you know, technically, like I think that's a business and the pro any profit made has they have to pay taxes, but it's below threshold.

Chantal Roberts 25:26

Yeah, yeah, yeah, yeah. And I and and so let's let's take our 10-year-old who has uh who's an entrepreneur, and I don't again don't quote me because this is why I have an accountant because I can't even do my own taxes. I mean, the IRS scares me. And so I believe it's like $500, $1,000, somewhere around there. Like if you make under $500 or under a thousand or something to that effect, um, you wouldn't have to report it, you wouldn't have to pay taxes on it. So is our 10-year-old going to sell $500? Let's just say it's $500, $500 of lemonade in a weekend. I doubt it.

William Auten 26:09

Well, tax implications aside, the the bigger question is if you if someone comes onto the property to buy some lemonade and trips and falls and breaks their ankle.

Chantal Roberts 26:20

Okay, so yeah, let's get on to that.

William Auten 26:24

Okay. So is is that is it so the carrier's gotta decide, is this a business venture? And um is there a problem with coverage? I gotta pull up a CGL now.

Chantal Roberts 26:39

Well, I don't I personally, and this is why I started off with the with the tax issue, is I don't think if a 10-year-old sold lemonade, let's just say every Saturday for the month of July. That's four Saturdays, maybe five, right? I don't think that would constitute a business pursuit.

William Auten 27:07

So here's what the HO3 says.

Chantal Roberts 27:09

Okay.

William Auten 27:10

A business means a trade, profession, or occupation engaged in on a full-time, part-time, or occasional basis. Okay, it's not that.

Chantal Roberts 27:18

Well, it is occasional.

William Auten 27:20

I know, but it's not a trade. Well, it's an occupation.

Chantal Roberts 27:24

It is an occupation, maybe. I mean, I'm sure occupation isn't defined, and we know what that means.

William Auten 27:30

So uh no, it's not.

Chantal Roberts 27:32

Yeah.

William Auten 27:33

So um B, any other activity engaged in for money or other compensation except one of the more one or more activities not described in two through far below, for which no insured receives more than $2,000 total compensation for the 12 months before the beginning of the policy period.

Chantal Roberts 27:54

Okay.

William Auten 27:56

Uh volunteer activities for which no money is received other than payment for expenses incurred to perform the activity. That makes sense. Providing home daycare services for which no compensation is received other than the mutual exchange of such services.

Chantal Roberts 28:14

So you can trade.

William Auten 28:15

Yeah. The rendering of home daycare services to a relative of an insured. So none of those qualify. Wait, any other except so those four items do not qualify as a business.

Chantal Roberts 28:31

So I'm sticking to uh your 10-year-old, even if they did it for let's say the summer, June through August on Saturdays.

William Auten 28:42

If they made $2,500, there'd be no coverage.

Chantal Roberts 28:46

Or less. Oh, yeah, yeah, yeah, yeah, yeah, yeah. If they made over $2,000. So if they made $2,000 and one dollar, there would be no coverage.

William Auten 28:56

Right. So carriers got, you know, the that's the letter of the policy. Okay. So look at that. And then you got to decide, are you are you really going to deny coverage for this claim where this person broke their leg and they're now going to sue?

Chantal Roberts 29:14

So the issue is, adjusters, you need to get your 10-year-old insured's uh bank account and see the profit and loss statements. Um, because I guarantee you, uh mom and dad are probably buying the lemonade uh and and donating it so the kid can make a profit.

William Auten 29:32

Um, it says total compensation, so it sounds like it's a gross sales figure.

Chantal Roberts 29:39

I mean, we're we're being tongue in cheek, but these things happen. Honest to goodness, I think that it would just be a homeowner's claim. And you know, we would offer that med pay to the the person who tripped and fell and broke their leg and then offer liability. But that's just me. I don't think that there's a business pursuit here, unless you go over $2,000.

William Auten 30:03

I don't know if that's been litigated anywhere yet. Um if anybody knows of a case where um but I mean if you could if you could prove that the kid made $2,001 according to this, um that would be a trade profession or occupation engaged in yeah.

Chantal Roberts 30:29

Yeah. So yeah.

William Auten 30:31

Devil's in the details, I guess.

Chantal Roberts 30:33

It it it is, and and that's something that I know that we've repeatedly mentioned a lot of times. Uh so this would be something again that you would want to bring up in your recorded statements, both with the parents and with the child, because FYI, if the child's a minor, you can't be doing a recorded statement without one of the parents or guardian being there.

William Auten 30:56

So yeah.

Chantal Roberts 30:57

FYI.

Boats Jet Skis And Homeowners Limits

William Auten 30:58

Let's move on to boats and ATVs.

Chantal Roberts 31:00

Oh, yeah, those are so much fun. No, not really. Um, you know, boats and ATVs. Boats I have always gotten confused on because boats are covered under your homeowners policy up to a certain point. And it seems really weird to me. I always thought, okay, why don't we just exclude boats, period? It would just make things so much easier. But um, boat size matters for and and and I'm looking at the homeowner's policy 03 specialized 0511, even though there is a that's what I have up here now. Uh, even though there is a newer one, I think it's 0322 is the next edition date. But I think most of us still use the 0511 or we'll use a manuscript policy. And so if you look under coverage C, which is property contents, we're looking at small non-motorized boats. So like our canoes, kayaks, and rowboats, they're considered to be personal property.

William Auten 32:09

And I would think special limit.

Chantal Roberts 32:11

Yeah, and uh, I think 1,500 total. Yep. Um, so there's there's that. Now you've got coverage E as well, because remember, our HO policies are those lovely packaged policies, unlike our commercial policies, our packaged policies. So coverage E is a liability. And again, for non-motorized watercraft and certain small motorized boats, we've got up to a general horsepower. It says inboard or inboard outdrive boats with 50 horsepower or less, or outboard motors with 25 horsepower or less. Um and then anything above those thresholds, which would be excluded.

William Auten 33:01

Right.

Chantal Roberts 33:02

So your yacht, you would need yacht coverage, which is of course what I have. I've I've got that big super duper yacht um with all of the money that I get from being an adjuster.

William Auten 33:14

Uh I think uh the general idea here is if you own a boat, chances are you're gonna want a separate policy for your boat, unless it's a little rowboat or something like that, or if it has an engine that meets these these uh requirements here, but who wants to go reading their policy and risk that they're understanding it correctly?

Chantal Roberts 33:36

Um and and and I think that this is what we need to be explaining to our insureds if your agents uh especially if if you're near a lake or something like that. For example, Arkansas is very outdoor-oriented, and so a lot of people had um, you know, pontoons or not really houseboats, because that would give the wrong connotation, but they did have boats, fishing boats, they had jet skis. Jet skis are excluded. So you would need to have a specific policy for uh, you know, maybe liability of hitting someone or causing someone to flip over, or they get injured on your jet ski that they're using, not to mention maybe your jet ski being damaged somehow.

William Auten 34:27

Yeah, uh lots of coverage um uh time bombs here with with watercraft. Yes. And of course your next when you buy a uh boat of any kind used, new, whatever, your next call needs to be to your insurance agent. Absolutely. Yes, and find out what they what they cover.

Chantal Roberts 34:46

And again, as a and as an adjuster, your devils are gonna be in your details. Uh, you know, you're gonna be looking maybe um, and and honest to goodness, I don't know if there are any endorsements for jet skis or something to that effect. I have I've never seen them. So I would not think that, but as an adjuster, you need to be reading all of the policy and again asking these very specific questions like what size is the motor on your boat? If there is coverage. Uh and you know, you're going to have different layers of coverage for who owns the boat. If you've got passengers and they've they're injured, the stakes can be really high.

William Auten 35:32

Yes, because you can somebody can get injured very badly in a boat accident. And it's happening. If and if there's um if there are coverage questions like this, it's gonna be super important. Not you you're gonna have to ask the insured in a statement what the size of the the motor is, but you're also gonna have to go look at it yourself and just verify what that is and um and really do a deep dive investigation because there's a lot at stake.

Chantal Roberts 36:03

And people die.

William Auten 36:05

If there's a half a million dollar policy on the table here and um and you might owe it, it would be a shame if um you lost coverage because of one of these conditions, or worse yet, that you lied about one of these things.

Chantal Roberts 36:23

Right, you know, yeah, and and you know, people die as a result of boating accidents, uh, they fall off, they drown, and and so there are going to be claims and and they will be expensive because now we're looking at what is the value of a life. And when we get liquor involved, that puts in a whole nother layer. And of course, everybody is drinking on the lake or on the river, or or is that just an Arkansas? Yeah, it might be just an Arkansas, I don't know.

William Auten 36:58

But we have, you know, no, it's it's it's in New York too. I'm pretty sure.

Chantal Roberts 37:02

Okay, okay, good. Um, yeah, so we all go drinking when we're on our fishing boats or we're on, you know, Lake Hamilton or something like that in hot springs.

Social Host Liability And Alcohol

Chantal Roberts 37:13

So that's a whole nother thing, because then you have our social host liability. And like I said, that is a very big issue for me because I don't think our consumers know about it. And if our consumers don't know about it, I wonder if our adjusters necessarily know about it. Because we all know about liquor liability when it comes to a restaurant or a bar. Like we can't overserve. Okay, great. But we have that same duty as a host when people are coming to our house and having a barbecue, or they're on our boat and they're drinking, or whatever. And what makes it even worse is when a guest over imbides and they leave and they cause an auto accident. And I've actually worked those kinds of claims from a liquor liability standpoint. Um, it was very salacious. It was a uh strip club and the patron had killed someone. And it was it was a big deal. Like, did we over imbibe that person? Right. And it was an ugly, ugly, ugly claim. So we see that we we we see that when we see liquor liability, but we have that issue at our house too, and I don't think a lot of people know that.

William Auten 38:53

Right. Yeah, serious issue. Um, but uh and and that applies to boats, but also ATVs. And ATVs can be you know used for recreation, and when they are, sometimes alcohol is involved, unfortunately.

Chantal Roberts 39:10

And um

ATVs UTVs And Home Service Use

Chantal Roberts 39:11

let's talk about the ATVs because those we call them four-wheelers again in in Arkansas. We go mudding, uh just driving around the deer camp or whatever. Uh, and that can flip over, break a neck, cause paralysis. Those are big deals. And again, we've talked a little bit about lawn mowers last week, but what are some of the coverage issues for ATVs on our homeowners?

William Auten 39:44

Uh well, the homeowners policy, first of all, um excludes coverage for motor vehicles. And the main reason for that is they they don't want the coverage triggered if you're in an auto accident. So the policy does a really good job of making sure they don't have to ever pay uh for an automobile claim. Um but the the waters get a little muddy when you talk about UTVs and ATVs and lawnmowers riding lawnmowers. Um so the policy, without reading ad nauseum, the the language, because it's there's a lot of it, but um basically what it does is kind of defines the difference between um a motorized, like a registered motor vehicle uh that's designed for use on the roads, that wouldn't be covered. Um a motorized vehicle used for recreation is generally not you're not gonna have coverage for that either. If all you use it for is fun on the property or taking it to dunes and you know that kind of thing. Um generally they want to make sure they're insuring for vehicles that are uh uh used to service the property. So if you've got a side-by-side or UTV and that thing has a dump bed in it and it's got a governor that only allows it to go 20 miles an hour. Um and that that gets in an accident and hurts somebody, chances are there's gonna be coverage there. If it's uh set up like a racing machine with no storage capacity whatsoever, except for maybe a spare tire or something, um that's probably not gonna have coverage because it's not primarily used to service the property. So that's kind of the lines to think about. So if you've got one of these things, definitely ask your agent whether or not you need to have a separate policy on that. Chances are for most of them you do. Uh chances are it makes sense. Even if you say, all right, I have this, I have this thing and I use it to haul firewood.

Chantal Roberts 42:01

Right.

William Auten 42:02

But every once in a while, you know, you take it up at the top of the hill to watch the sunset, or you take the kids for a ride around the the property or whatever. Um, now all of a sudden that changes the use of that vehicle. And if you get enough people familiar with your property who will raise their hand and say, Oh yeah, I remember they were using that to, you know, pull the kids around in the winter or whatever. Um, so err on the side of caution, get the thing insured. Those those policies are not that expensive.

Chantal Roberts 42:34

And this brings up a very good issue. We talked a couple of episodes ago about maybe having off, or maybe we didn't, maybe I'm confusing this with my class, but uh I didn't use the word aggregment, I know that, but but we've talked about maybe hail bay rides, hail uh not hail, hay rides, excuse me, hay rides, uh uh these sorts of things, pumpkin patches, where we're hauling people around on our farm, or we have these farm to table kinds of deals. It if we're using the ATV for for those kinds of things, there that is not in service of the the property.

unknown 43:19

Right.

Chantal Roberts 43:19

That's

Farm Risks And Agritainment Exclusions

Chantal Roberts 43:20

a whole different thing. That's going to be a business pursuit. You may the the insured may think that it's in service of the property because hey, I'm paying uh or people are paying me so that I can pay rent or you know, make a business or whatever, but it's to make a business, you know, to make money so that I can pay rent or do whatever, uh, pay the mortgage.

William Auten 43:42

Farm owners policies are really um strange animals because they they mix a lot of commercial exposures with your homeowner, uh homeowners policy. And uh, you know, people look at farms and they look idyllic and you know, the pastures and everything and the old barns and the the livestock um beautiful right pretty but farms are dangerous places and they have uh some really industrial equipment that um this stuff is huge and uh the injuries that happen on farms are are catastrophic and um when you mix the public with in that environment um you've got to take extra special uh precautions but uh not only that but carriers need to understand that risk you know um it's a very specialized kind of deal yeah we work for a lot of uh small mutuals that made their way in this business by insuring farms only back in the 1800s that's what they were initially designed to do and um they evolved over the years and created homeowners policies to get that kind of market um and what they did is they combined the homeowners with these add-on endorsements for farming and um what they wound up with today is that they've got this baby little homeowners policy ensuring this great big old farm with you know all kinds of equipment and hazards and risks and stuff and uh uh and that can be tricky and there's a weird thing going on in agriculture now where the smaller farms are just kind of disappearing.

Chantal Roberts 45:31

Yeah they're being bought up or they can't make it so they're going bankrupt and that sort of thing. Yeah.

William Auten 45:37

Unfortunately it's kind of a problem that's sorting itself out um just because these farms are not functioning like they used to they still have that same coverage maybe don't really need all of it but it's not a full blown commercial policy like some of the big commercial outfits are anyway that's my that's my farming rant yeah no but it's it's a very important part to understand that if if we're going to a farm to table kind of dinner or pumpkin patch, Christmas tree farm um the hay rice hay rides huge huge deal.

Chantal Roberts 46:15

Oh yeah uh we have the sunflowers uh here of course in Kansas so we go to sunflower farms and you they let us walk around when the sunflowers are all up right before they start harvesting them you know you trip and falls whatever and then those insureds are selling jelly and jam and those sorts of things and again that's all business even though their house is sitting less than a hundred feet away so that's not going to be covered under their homeowners they're gonna be needing a farm policy and by the way agrittainment is usually not covered under the farm policy. So that's something that's going to need to be taken a look at and of course there's usually definitions for agritment and what that is uh of course what it sounds like is a combination of agriculture and entertainment such as a farm to table such as a hayride or a sunflower farm where we get to go walk around and have pictures taken in the sunflowers and and that sort of thing.

Craft Products And Unexpected Product Liability

William Auten 47:23

So um we had an interesting uh scenario a few years ago where we have um we had insured a lot of crafters people that would make wicker baskets and needlepoint whatever they would sell it at the at these craft fairs and um the one risk came through and they were doing soap and um the reinsurer was with small mutuals they rely heavily on reinsurance and um you know most of their like many of the large claims are mostly paid by reinsurance. They have a really small retention in the big scheme of things. So the reinsurer really dictate dictates what they can and can't write and the reinsurer came back and said no we we're not doing soap. And the underwriter was really taken aback and kind of annoyed and and um and I said well you know um soap has a lot of stuff in it and they're mixing all these scents and chemicals in there to make them pretty or make them smell nice or whatever. And um you get somebody who has an unknown allergy yeah that could go south pretty quick. Yeah because soap isn't just something that you just touch with your fingers you're supposed to at least you're supposed to right um but so I understood it it from a risk standpoint.

Chantal Roberts 48:49

She did not but that's okay we butted heads a lot but uh love you Amy um the um uh another one that came up was um lip balm they were making like uh some sort of I forget lip balm with honey or something like that um but yeah it's very easy to to have that is also with the cream like the buttercream and all that kind of stuff so I would say when you're an adjuster some of the the takeaways that you need to be looking at is is identifying who owned what uh identifying who controlled what who was using what track our money flows track how big a motor is or um what the object was used for like the ATV versus a boat versus I don't know um our lawn mower which we talked about right a couple weeks ago um a dirt bike is almost never gonna be covered with oh yeah liability or uh personal property you're gonna need

Drunk Driving Myths About Coverage

Chantal Roberts 50:00

something different uh was alcohol involved yeah that's gonna be a the fun one right there uh well here's the thing though um which people may not realize is that driving one of these things while you're intoxicated doesn't eliminate coverage no um but what it what what it can do is lead to something that's so bad that your policy limits are ex exceeded right and that's where things could get ugly and and that's make a makes a good point even about our auto claims which we're not necessarily talking about but if you as the insured are driving drunk and you have an accident adjusters just because the insured was driving drunk does not eliminate coverage. Yeah uh unless there's a specific endorsement that says if you're drunk we don't cover liability for that but I have never seen that.

William Auten 50:56

Yeah pip coverage no fault coverage here in New York um I want to say for motorcycles it could be caught see I don't do enough auto anymore. But I think if you're if you're drive if you're um arrested for drunk driving you don't get any no fault benefits your PIP med pay benefits. I think that's the way it works we need a troll to get on our comments and really really torture me to death on this.

Chantal Roberts 51:31

I mean or or just a fan that wants to make sure that we're always correct about things because you know we do make things up as we go along.

Next Topic Bad Faith And Closing

Chantal Roberts 51:40

We do we do yeah um and if you comment you could become famous yes you could with all of our 10 viewers right and listeners. Uh so memorial day happy memorial day everybody happy memorial day and our next episode is going to be June 4th we're gonna talk about bad faith allegations. Now usually you and I do the Unfair Trade Practices act or unfair claims settlement handling claims handling settlement act and at the beginning of the year because I always want to put myself out of business. But what I thought we would specifically concentrate on this time is maybe the things that I see adjusters doing that maybe I can go ah that's that right there that's where we took a left turn which is actually that way on left turn. So yeah I thought maybe that would be a good thing. So when you see yourself doing that you're like oh hey self I need to back up off of that so this is an episode on the the mistakes adjusters make yeah yeah not necessarily how to avoid them but maybe these are the mistakes that I see and and so let's avoid them and put me out of that one's gonna give me agita oh why is that oh I'm I'd be put I'll be putting myself under a microscope ah okay but you always do everything correctly so that's true that's true there's there's no no worries there.

William Auten 53:12

Yeah no worries there okay well we will see you in two weeks then yeah yes ma'am okay bye bye bye thanks for joining us on the Art of Adjusting podcast where we talk about life as an insurance adjuster hit that subscribe button real quick and tell all of your adjuster friends to check this out as well for independent adjusting services go to www.autin.claims and for anyone interested in working as an independent liability adjuster go to the contact us tab to join our roster.

Chantal Roberts 53:43

So this wraps up another Art of Adjusting podcast if you enjoyed this podcast or this episode please give us five stars and a review it does help the algorithm pick us up in the meantime you can contact me at theartofadjusting dot com for consulting and training purposes