Is Santa an Insurance Nightmare?

Happy Holidays to you! 

I know that sometimes insurance companies seem ask incessant questions and may appear to be overly picky when they make recommendations for safety improvements, however, they are just trying to ensure that your home, auto, or business is in the best position to withstand and hopefully avoid any loss or damage. Sometimes insurance companies have to worry about loss exposures that are quite hazardous and unique. With this in mind, I wanted to share the following with you that I received from a insurance company colleague of mine.

The scenario is that an insurance agent has submitted an application for insurance coverage on Santa's Workshop:

Dear Insurance Agent,

We have reviewed your application sent to us last October for a package policy covering a toy manufacturing and delivery company and we have a number of concerns:

Property Coverage. Regarding the property coverage, we believe there is a serious fire hazard here, considering the paint, woodworking, etc., but worse yet, the location is so remote that protection class 10 hardly defines it. There is to our knowledge no fire department that will respond to a location at the North Pole and if you think that we're going to believe that cock and bull story about a fire suppression system using "Elf Magic," you are more confused than we already believe you to be. The weight of ice and snow is also a considerable hazard especially when you consider the reindeer training problem. Why does he want to train them on the roof anyway?

Liability Coverage. The liability situation has a few difficulties as well. "Toy sales" is the correct way to write the sales aspect, but classifying the delivery system under "chimney sweeps" may seem like creative underwriting to you, but we were not amused. The rating basis for this risk is "Sales" and you have listed his receipts as $0. Considering the amount of stock passing through his operation, you might want to employ a polygraph expert and see if you can't get some better answers. We assume you understand the term "auditable risk." If this, by some weird chance, is true, then we wouldn't want this risk anyway, because the owner is going broke in the near future. Tromping around on a customer's roof seems to us to be a property damage liability hazard, especially on a tar and gravel roof in the winter. If the insured is as hefty as shown in the picture you sent us, this guy could be punching holes in the roof with every footstep. Also, we don't look too favorably on a whole herd of reindeer wandering around on the roof of his clients' homes. Not only are there the roof damage claims, but the possible pollution exposure from all that reindeer poo-poo must be considered. We still need some explanation of how he gets them on the roof in the first place; how exactly does he "drive them up there;" these reindeer are trained in mountain climbing maybe?

Inland Marine Coverage. The cargo coverage is out of the question, simply because hauling all those goods in an "open sleigh" with no more protection than a cloth bag on a transcontinental flight is ludicrous. He would have toys scattered all over the world. You also failed to answer our question concerning the type of propulsion system and manufacturer (Boeing, Airbus, Lockheed, etc) of this sleigh.

Workers Compensation Coverage. Workers compensation may be written upon receipt of a copy of the insured's pilot's license, medical report ("Jolly and quick" doesn't qualify as a medical report, and a belly "like a bowl full of jelly" wouldn't exactly qualify the guy for that Arnold Schwartznegger award), and a report regarding his training in handling animals. We can tell you right now that there will be recommendations from engineering requiring that he have some sort of safety line and wear crampons on all deliveries. No, we won't cover the reindeer.

Fidelity Bond Coverage. Your application for a fidelity bond was a bit sketchy. If we understand this correctly, this insured goes wandering around people's living rooms one night a year. Is this with the owners' permission? In spite of the fact that he may be delivering his product directly into the home, we feel that the temptation presented herewith, not withstanding his years of loss free experience, would require a surcharged premium.

Aircraft liability. You're kidding, of course. Under "Description of Aircraft" you put "miniature sleigh and eight tiny reindeer." Who does this guy think he is, Santa Claus?

We appreciate your submission, but looking at the risk as a whole, we would like to pass on this one.


Your underwriter

Although our agency does not insure Santa's workshop (hmmm, now that's an idea!) we have been able to help protect our other clients from a wide variety of losses which could cause financial distress. Call us at 308-436-4202 or click: to see how we might help you today! (And we won't even care if YOUR belly is "like a bowl full of jelly"!)

What did Santa bring you this Christmas?
During this season of gift giving and getting, it is especially important to protect your "stuff".... even if and especially if, you don't own your own home. Jeff Orloff, a blogger for has asked to serve as a "guest blogger" on my blog in order to provide you with the following information:

Renter’s Insurance Basics

While just about anyone who has a mortgage is required to have a homeowner’s insurance policy, those who rent – whether it be a house, apartment, or condo – often forgo insurance under the assumption that their landlord’s policy will cover them in case of disaster. Unfortunately this isn’t the case.

Insurance policies held by a building’s owner protects the building’s structure, but any thing inside of the building, your possessions, are not covered. Should they be lost or damaged it is up to you to replace them out of your own pocket, unless you have renter’s insurance.

What does renter’s insurance cover?

Homeowners and renters face the same types of risks but each need a different type of insurance to protect what they have worked for all their lives. Renter’s insurance will reimburse you for damage done to your belongings in the event of:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• An accident caused by aircraft
• An accident caused by a vehicle
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
• Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
• Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance
• Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)

What renter’s insurance does not cover is damage done to your stuff in the event of a flood, earthquake, or hurricane. Some policies do offer supplemental insurance to cover these types of catastrophes. People in areas prone to these types of disasters should inquire about adding these on if possible.

What else you need to know about renter’s insurance

Renter’s insurance generally falls under two different types when it comes to how you are paid in the event of a loss. The first type is Actual Cash Value, or ACV, which pays you only what your belongings are worth at the time of the loss. For instance, if you paid $1000 for a computer two years ago and it is damaged in a fire your ACV policy will pay you what it is worth, which could be around $500 dollars when you factor in all of the variables.

Replacement cost coverage, on the other hand, will pay out the amount it costs to replace the item. The same computer that was damaged in the fire would be replaced without accounting for depreciation or wear and tear.

Of course, replacement cost insurance will have a higher premium cost but it is because it has a higher payout value.

So when you are putting together money for a security deposit, electrical, phone, and other utilities and you are budgeting for rent, make sure to include enough to cover a renter insurance policy to protect the things you have worked so hard to acquire over the years.

If you have additional questions about renters insurance or any other insurance related topic, feel free to contact us at The Writer Agency, LLC. Call or click: 308-436-4202