A person can be legally intoxicated even if not impaired. In Massachusetts, for example, the legal limit for blood alcohol is 0.08 for an adult; but for persons under 21, it is 0.02. Even one beer is enough for a teen to be classified as legally intoxicated in Massachusetts.

Underage drinking in your home or on your premises can create a legal liability for you – as a parent and as a homeowner – if the minor hurts himself or herself or someone else after drinking, or if he or she causes property damage or harm. It is irrelevant whether the minor is your child or someone else’s child. Minors who are under the influence of alcohol have a greatly enhanced probability of injuring someone or themselves.

Twenty-one is the legal age for drinking alcoholic beverages in all fifty states. In most states it is illegal to serve a minor, in a commercial establishment or in your home. Persons who serve minors, or allow minors to be served, can be prosecuted under criminal laws in those states.

Homeowners’ or renters’ insurance may cover the cost of a legal defense, expenses, settlements or judgments, and interest. The liability section of the policy does not explicitly state that it provides social host liability coverage; it provides such coverage by not having a liquor liability exclusion to the policy’s liability insuring agreement. Typically the policy will not pay a claim if there are criminal charges. In some states this exclusion may disqualify a claim arising from the serving of alcoholic beverages to a minor.

The liability limits on your homeowners’ or renters’ policies could be insufficient to cover the costs associated with social host liquor liability, especially if there is substantial injury, a death, or extensive property damage. Civil damages can and sometimes do exceed $5 million, and most primary homeowners’ policies have a liability limit of $300,000 or less.

State statutes and common law define criminality and legal liability, and these vary from jurisdiction to jurisdiction. At least thirty-five states have a statutory or common law basis for holding a social host liable as a third-party for an accident caused by an intoxicated person to whom they served alcoholic beverages. Insurance policies vary by state, but the differences are generally minor or technical. To clarify what coverage applies to you, contact your insurance agent. For specific information on the liquor laws in your state, ask your lawyer or a specialist in your police department. As this is the season for graduation parties and weddings, now would be a good time to make those inquiries – before you serve alcohol in your home, neighborhood community center, or clubhouse.

In most states it is illegal to serve alcohol to anyone under the age of 21. There may be statutory exceptions. In Massachusetts, for example, it is legal to serve a minor in your home, but only if the minor is your own child or grandchild. That is criminal law; common law is different. If your youngster drinks and injures someone or causes property damage, you and the youthful drinker can be held liable for the loss. If you serve someone other than your child or grandchild an alcoholic beverage, or permit someone else on your property to do so, you can be prosecuted under Massachusetts’s criminal law and held liable under common law.

New York has a Social Host Liability Act, which imposes on social hosts responsibilities similar to those in the typical state dram shop act. New York law also provides for criminal liability when minors are served liquor in a private home at a for-profit party. Other parts of the state’s Penal Law provide the basis for criminal liability of a parent who sponsors a party or permits his or her minor child to conduct a party where alcohol is served to minors. New York law permits a parent to serve alcohol to his or her own children, but the law does not protect the parent if the minor causes third-party damage or injures a third-party.

In Minnesota a court may impose punitive damages against an individual for causing an accident while driving intoxicated. Punitive damages are not a covered expense in the typical homeowners’ policy. Minnesota law also prohibits an intoxicated-while-driving defendant from escaping his or her liability by filing for bankruptcy. In Arizona a social host can be liable if the host serves alcohol to a minor who subsequently causes an injury or death as a result of driving while intoxicated; interestingly, the host is not responsible if the intoxicated driver is an adult.

Some hosts rent a community facility, such as a social club, to hold a special event where liquor and minors will be present. Many states require a liquor license before the club can serve alcohol to anyone. Renting such a facility does not necessarily free the host of liability. For example, in Illinois, the state’s dram shop statute says, in part:

“Any person at least 21 years of age who pays for a … facility knowing that the … facility is to be used by any person under 21 years of age for the unlawful consumption of alcoholic liquor and such consumption causes the intoxication of the person under 21 years of age, shall be liable to any person who is injured in person or property by the intoxicated person under 21 years of age.”

Some courts in Illinois, including some appellate courts, have found that social hosts can be held liable for injuries or damage even though such persons fall outside the state’s dram shop law; but the Illinois Supreme Court has not supported broad social host liability. Social host liability in Illinois appears to be in flux at this time. For the average social host, being free of liability is not the same as being financially risk free. The costs of investigation, defense, and appeals can be financially devastating for the homeowner or renter.

Many parents know that their minor son or daughter drinks or is likely to drink socially. There is much peer pressure to do so. Parents often allow a youth party at their home so that they can enforce a no-drinking rule or take control of the drinking and prevent the minor and his or her guests from hurting themselves or others. A parent, attempting to act responsibly, may hold the car keys for their minors and guests, or require their minor and their guests to stay over-night, so that they do not leave the premises while under the influence of alcohol. Other social hosts make prearrangements with the parents of their minor guests to come for them when the party is over so that no minor who has been drinking has a need to drive home.

Regardless of parental good intentions, allowing minors to drink at a home party is illegal (exceptions noted) even though many parent-hosts think they are doing the best they can, under the circumstances, to protect everyone. They believe that they are being responsible parents. If you allow minors to drink on your property, rules or no rules, you may be in violation of statutory or common law and could be held liable in court. Even if you refuse to serve liquor, including beer, or prohibit alcohol to be served on your property, it is almost impossible to prevent every guest from bringing alcoholic beverages to the party without your knowledge. Your alcohol-related rules may entice your loved one to go elsewhere to party, defeating your controls and purpose entirely. In some jurisdictions, if your underage offspring drinks off your premises and injures someone or causes property damage, you could be held financially liable under various theories of common law, such as failure to supervise your child. Worse, your son or daughter could fatally injure himself or herself or someone else while driving intoxicated. It’s a “Catch-22” situation.

Some parents think that they cannot be held liable if they are not home when liquor is served or consumed on the property. Some courts may agree; others may not. In most jurisdictions parents may be held liable if they have reason to believe that minors will be consuming alcohol while the parents are away from the premises. A parent has to do everything he or she can to prevent the consumption of liquor by minors.

Courts, in rendering judgment in a liability case, may consider the history of the minor. Is he or she known to drink or to have served liquor to minors? The courts will consider other relevant facts. Was liquor available in the home and was it under lock and key? Were there rules prohibiting illegal drinking? Were the rules enforced? Were guests who were known to imbibe allowed to attend the party? Was there a parent present or an adult chaperone? Did the parents have contingency plans in case alcoholic beverages did appear at the party? Were alternative transportation arrangements made ahead of time, such as designated drivers, or provisions for a cab company or parent to take home any minor who had been drinking? These considerations and others may have mitigating effects on the verdict, judgment, and award.

Often teenagers tell their parents that no one will be drinking at a proposed party and that there will be no liquor present. Three hours later the signs of drinking are everywhere. Kids bring their own liquor or beer. Keg parties are common, sometimes stored on the property well ahead of the party. These parties often get out of hand and bring noise and nuisance complaints from neighbors. Once called to a party, police often have no choice but to observe, investigate, and usually issue a complaint or summons or make an arrest. Reputations are damaged.

The combination of drinking and driving can lead to accidents – about forty percent of all vehicular accidents in this country involve driving while under the influence of alcohol. Drinking can cause other incidents, such as malicious mischief, unwanted sexual activities, assault and battery, and clinical toxicity.

Underage drinking is not the only use/abuse problem faced by parents. The use of illegal drugs, sniffing household chemicals, and other forms of youthful “recreation” are prevalent everywhere. Legal and liability issues arising from drugs often parallel those of liquor. In most communities, liquor and marijuana are the drugs of choice for minors. Often they are used together.

Because accidents and incidents may involve substantial liability, social hosts should have a personal umbrella liability policy that adds a layer of financial protection on top of their primary homeowners’ or renters’ insurance policy. More than three-fourths of homeowners who serve liquor at parties in their home do not have this added protection.

What can parents do to stop alcoholic beverages from being served to minors in their home? First, if the party is only for minors, remove all alcohol from the home before the party begins; or safely lock it up out of sight if that is the only viable option. Second, make sure that you or a trusted adult will be present and monitoring the party – in the house and elsewhere on the property. Third, make the no-alcohol rule clear to your children and their guests. Fourth, make it known to everyone that the party stops immediately if anyone has an alcoholic beverage. Fifth, provide appetizing alternatives, such as soft drinks, unspiked punch or lemonade, and snacks. Sixth, if alcohol is brought to the home by a guest, the recommended best practice is to call the minor’s parents to come and take the minor home, immediately, before an incident occurs. If that does not work, let the police take them home or into protective custody.

If the party is a mixed affair of adults and minors, the trick is to keep the minors away from the bar while allowing the adults to drink in moderation. This might be a proper occasion to hire a professional bartender who would have a good eye for who is underage and who may already have had enough to drink. A responsible family member or co-host would be a second choice. To be effective, the bartender would have to have all of the alcoholic beverages under his or her immediate supervision; no separate keg of beer in the garage for the barbeque.

Responsible adults will not let a minor who has been drinking stay in their home, even to sober up. Notify the parents or the police.

If the minor gets very sick, that person could die from alcoholic toxicity, a situation that is sure to bring on a civil suit and criminal charges. Some parents think it is all right if the minor has passed out and is not vomiting; that is one of the worst scenarios and a sign of severe alcohol-related toxicity. Anyone who has consumed a lot of alcohol and is not actively vomiting is at considerable risk of imminent death and needs to be hospitalized immediately.

What are some of the signs that a minor may exhibit if using alcohol or illegal drugs?

Poor performance in school
Lack of concentration, fuzzy thinking, lapses in memory
Aggression or hostility
Frequent borrowing of money
A change in their group of friends
Communication problems with parents and teachers
Lack of motivation
Inability to perform multiple tasks
Restlessness, difficulty sleeping, shaky hands
Unexplained weight loss
Physical signs of self-abuse, loss of interest in personal appearance
Red eyes, chills and sweating
Thoughts of suicide

Parents have a lot to worry about, and insurance is unlikely to solve the difficulties their minor’s risky behavior may cause. Prevention is the gold standard. Among the steps that parents can take to preclude substance abuse and mitigate risky behavior in their young family members is to start educating them as early as possible on the harm that alcohol and drugs can do, and to keep the lines of trust and communication open throughout their formative years. Establish a “no-use” policy and consistently enforce it.

Check with the hosts before your teenager attends any house parties, and get assurances that there will be chaperones present and that drugs and alcohol will be prohibited. Always create an atmosphere that makes the minor feel comfortable about calling home for a ride if there is drinking or drug use at a party. Insist that the minor not ride with anyone who has been drinking or is drug-impaired.

Other effective measures include knowing with whom your son or daughter associates and helping them select or deselect their friends, working with other parents with like-minded goals, and setting a good example at home and elsewhere (practice what you preach). Provide the minor with safe ways to relieve stress, such as exercise, music, participation in school-sponsored or church-sponsored activities and clubs, and part-time after-school jobs. Monitor their activities.

Respect your son or daughter’s opinions; always listen to him or her. Let them tell you what is bothering them. Do not be too judgmental or opinionated. Explain to them that your concern is for their safety and welfare. Hold healthy debates and be responsive to their fears and concerns. Set a positive example. Foremost, do not be afraid to be a parent first and a pal second. Importantly, support their positive lifestyle choices. Be firm but fair and compassionate. And if all else fails, seek professional help for them.

Misconception:  I have homeowners insurance and don’t live in a flood zone, so I don’t need a flood policy.

Fact:  Last year in early summer, home and business owners across the southern United States suffered terrible flooding and many were miles from the nearest river or body of water.

“Flooding can happen anywhere,” says David Manstad, of the Federal Emergency Management Agency, which runs the National Flood Insurance Program.

Homeowner’s policies do not cover flooding.  A separate policy is needed and can be purchased from an insurance agent or directly through NFIP, which administers the program.  The pricing is the same regardless of where you buy the policy.  More than 20,300 communities nationwide participate in NFIP so most homeowners qualify for flood insurance.  Check the “Community Status Book” at www.fema.gov to find out whether your area participates.  Then, go to www.floodsmart.gov and click on “What’s your flood risk?” to determine your flood risk or call your local independent agent.

Misconception:  Flood Insurance is too pricey.

Fact:  For moderate to low risk areas, lower cost “preferred risk” coverage can start as low as $119 annually.  Full coverage, including $250,000 for dwelling and $100,000 for personal property, is $355 per year.  The nationwide coverage for flood insurance coverage is less than $500 annually.  That is often less than the interest on a federal disaster loan, plus you don’t have to repay the money.

Misconception:  Federal Disaster Assistance will cover flood damage.

Fact:  Don’t count on it.

The website of the Independent Insurance Agents and Brokers of America states that a community must be declared a federal disaster area before it is eligible for disaster assistance.  The fact is that Federal Disaster Assistance declarations are awarded in less than 50% of flooding incidents.

Misconception:  My lender didn’t require flood insurance so I don’t think I need it.

Fact:  Lenders should notify borrowers in special flood hazard areas that they’re eligible for flood insurance.

The fact is floodwaters don’t magically stop at a predetermined line on some map.  David Warston of the Army Corp of Engineers states that in the Gulf Coast areas storm surges can play havoc with drainage patterns and cause areas to flood that would not under normal conditions.

Over the years I have helped friends clean up after a flood has destroyed their home, and tried to help them salvage things that could be cleaned and saved.  I’ve witnessed the amazingly destructive powers of swirling muddy waters.  Flood victims lose shoes, pantry items, appliances and furniture.  I’ve listened while clients wept, telling me their subdivision had never taken on water before so they didn’t think there were at risk.  Unless your home is situated high on a hill, you likely have a chance that your home could suffer major damage from rising water.  So check with your agent and see about this vital piece of protection for your home and furnishings.  Or you can call me and I would be happy to give you an estimate on a flood policy for your residence.

If you have a specific question for me, email me at:  hpreddy@texaschoiceins.com or call me at (936) 447-2447.  You may see your answer in a future Dockline article.  I am an Independent Agent and my agency, Texas Choice Insurance Group, is located upstairs in Suite 360-A of the Executive Suites of the Waterpoint Center at 15260 Hwy 105 West.

For example, Allstate is dropping replacement cost for roofs in Kansas and Oklahoma. This change will  replace roofs on age / pro-rata basis, offering a higher cost roof replacement. The bottom line is, you will pay additional premium for less coverage. In Texas, we are also seeing coverage for sewer back-up, plumbing leaks, and foundations being reduced or watered down by many companies.

Wind damage and hail coverage in coastal or tornado-prone areas are being dropped or deductibles raised to as much as 5% of total homeowners dwelling coverage amount. State Farm just dropped wind and hail coverage for 29,000 residents in Louisiana.

Sinkholes have been a problem in Florida for some time. They are caused by limestone erosion underground, sometimes leading to foundation problems. Some Florida insurers have modified their policies to limit coverage for sinkholes. This problem is also happening in Texas, so insurers may soon be making similar changes here.

It’s important to note that not all insurers are reducing coverage and simultaneously raising prices. As always, it pays to shop around.

Give us a call today for a review of your coverage or a quote on a new policy!

The summer of 2011 concluded with Hurricane Irene and Tropical Storm Lee causing widespread flooding up and down the Eastern seaboard, damaging not only homes and businesses but cars as well. Unfortunately, some flood-damaged vehicles—after being sold to salvage operators and dealers—will be cleaned up and then re-sold, with the vehicle’s flood-damage history illegally hidden, according to the Insurance Information Institute (I.I.I.).

“Unscrupulous salvage operators and dealers often try to conceal the fact that the vehicles they are selling have been damaged by a natural disaster,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “It is not illegal to sell or buy a flood-damaged car, however, it is against the law to sell a water-damaged car without letting the buyer know that the car had been damaged by a flood.”

To prevent this type of fraudulent resale of cars to unsuspecting consumers around the country, the National Insurance Crime Bureau (NICB) has been helping law enforcement groups and insurance companies identify and catalogue water-damaged vehicles.  (go to https://www.nicb.org//)

"By creating VINCheck, the NICB helps protect consumers, and we’ve reduced the potential for this type of fraud to occur," said NICB president Joe Wehrle.

To help used-car buyers learn more about the history of a specific car and whether it has been declared as salvage by a participating NICB member insurance company, the NICB created VINCheck, which provides consumers a free search of a car’s vehicle identification number (VIN). This service can be accessed from the NICB home page, which can be accessed here.

"To avoid inadvertently purchasing a flood-damaged car, it is important that you only buy a used car from a reputable dealer, have a certified mechanic look for flood damage and check the car’s VIN number by using a credible industry database," noted Salvatore.

The I.I.I. suggests you be on the lookout for the following indicators that a car may have been flooded:

Mildew, debris and silt in places where it wouldn’t normally be found, such as under the carpeting in the trunk, or around the engine compartment
Rust on screws and other metal parts
Waterstains or faded upholstery; discoloration of seatbelts and door panels
Dampness in the floor and carpeting; moisture on the inside of the instrument panel
A moldy odor or an intense smell of Lysol or deodorizer; this is a tactic frequently used by dealers to cover up an odor problem

If you suspect that your local car dealer is committing fraud by knowingly selling flooded cars as regular used cars, contact your insurance company, local law enforcement agency or the NICB at 800-TEL-NICB.

The NICB is the nation’s premier nonprofit organization exclusively dedicated to fighting insurance fraud and vehicle theft for the benefit of its member companies and the public through information analysis, criminal investigation support, training and public awareness.

© Copyright 2011, Insurance Information Institute, Inc. – ALL RIGHTS RESERVED

Yourself…

Your Buyer…

Your Lender…

Your Appraiser…

And…

Your County Tax Assessor…

State Farm is looking to raise rates and change its homeowners insurance deductibles in Texas.

The insurer’s Texas unit, State Farm Lloyds, has filed for an average statewide rate increase of 9.6 percent, says spokesman Kevin Davis.

The state has a file-and-use-system, meaning State Farm can use the rate while the filing is reviewed by regulators.

As part of the filing, State Farm says it is eliminating flat deductibles in favor of a minimum of a 1 percent deductible.

This means a home previously insured for $200,000 with a $1,000 flat deductible now has a $2,000 deductible. The only exception is for homes insured for less than $100,000, because the $1,000 minimum deductible would not be met. The median home price in Texas is $145,000.

Davis says the insurer has also filed to improve discounts for newer homes and multi-line policyholders. The multi-line discounts increase to 25 percent from 20 percent, which affects 85 percent of customers, Davis says.

Because of the increases to discounts and other factors, Davis says 43 percent of customers will see no change or decreases to their policies.

Davis adds that 97 percent of new customers already take a 1 percent deductible.

The new rates and deductibles take effect Oct. 15 for new policies and Dec. 1 for renewals. The insurer’s last rate change was a 4.5 percent increase in May 2010.

Contact me today if you want to lower your rates.