Insurance cancelled because gun business doesn't meet their eligibility requirements!

[DHFirearms]

I was just informed my home owners insurance is being cancelled because I own/run my gun business from my home and my wife has a daycare business on the premises. Keep in mind I only sell 4 - 6 guns a month its a hobby type business for now, I also work full time. I don't stock mass quantities of guns in my house for sale, all of the parents whom my wife baby sits for know and are ok with it, hell two of the parents are local cops.

Anyhow, I was wondering if its worth fighting with the insurance company over this or just telling the agent to stick it and move on?

Their cancellation notice quoted word for word...

" Your ERIE HomeProtector policy is being cancelled due to a material increase in risk. It has recently come to our attention that a home day care is being run on the premises. It was also brought to our attention that you are in the business of selling guns. Because the gun business does not meet our eligibility requirements for a home business, we are canceling your policy."

It really doesn't matter to me in the long run, their kind of screwing themselves. They paid me over $31,000 in damages from a tornado that hit here in late Febuary and I've only been with them for 4 years paying about $2000 total in premiums over the 4 years.

Either way just a heads up ERIE INSURANCE doesn't think a gun business is an eligible business to run from you home.

 

[jeepmor]

Look elsewhere

You may be able to put everything in the garage and work that way. I recently purchased a shotgun from a Gunbroker.com vendor in the local area and went and picked it up from his premises. His wife was obviously running a daycare or had many, many grandchildren. I can't be sure. However, he had a detached garage and all the gun business very obviously was conducted exclusively in this garage for that is where we conducted the transfer/sale and it housed his office and gun safes.

It being a detached garage may have been the key, not sure, but worth looking into. There are tons of insurance companies, let the dork sign off on your policy as a loss and just move on is my opinion.

 

[MillCreek]

I work in the insurance and liability areas. This doesn't surprise me at all. Just about any homeowner's policy has exclusions for conducting business activity, such as a homebased or consulting business. Over the years, my homeowners coverage has been with Safeco, North Pacific and Liberty Mutual, and every such policy has an exclusion for business activities. Some 'incidental' or 'intermittent' business actitivities may be covered by some policies, but you would need to read the policy definitions to see what is covered. You need to purchase an actual business policy, such as a businessowners' policy (BOP) or commercial general liability (CGL) to provide coverage for your business activities.

And from the liability perspective, the daycare poses a far greater risk to the insurance company: illness, injury or abuse occurring to the children. As a consequence of this, insurance for any type of child care operation can be difficult to find and extremely expensive when available at all.

 

[jnojr]

I would get "homeowners insurancce" from one company, insurance for my gun business from another, and insurance for the daycare from a third.

 

[Pat McCoy]

Be sure to work with an agent and be honest about what risks you have on your premises. These days companies are looking for any reason not to pay a claim, and having an "ineligible" business on the premises could casue you to not have coverage on any part of the home or contents. After 31 years as an agent, this is about as bad as it has been for companies to be so restrictive.

You may be able to purchase a rider on your homeowner's policy for the child care exposure, but will probably need to find a company that can write both the home and business policies on the same location.

 

[DHFirearms]

Thanks for the advice, I'll look into it.

 

[mrClen]

Sometimes insurance companies (i.e. Geico, Progressive) that insure you over the phone will give you an INITIAL quote, which sounds pretty good. But then they'll look up your record and that quote will change. So be sure the prices you're getting are the exact price you're paying when you sign on that dotted line. Another way is to get a quote from insurance brokers like http://www.oneshopinsurance.com They can surely help you decide which insurance company is best for your insurance needs.

 

[LAK]

I would post this on every gunboard/forum you can, see if you can drum up some support by posting the insurance company's phone number and address. Gun owners having a policy with the company concerned can call them up, cancel their policies and tell them why - and switch to another.

Enough calls, letters and cancellations and they might reconsider their position.

--------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

 

[Double Naught Spy]

Its your home, a daycare, and a gun business? How do you keep your FFL without a proper storefront address?

I see all sorts of advertising potential here...

"Targets and Tykes," your one stop family center
"Homeland Security Daycare"

I am rather surprised that Illinois, of all states, would allow you to run a childcare facility and a gun business on the same premises.

It is rather hard to blame the homeowner's insurance company. 2/3 of the operation, even if 1/3 is a "hobby" are businesses. You need business insurance that will include a residence...is what you need.

 

[Lone_Gunman]

How do you keep your FFL without a proper storefront address?

As long as there are no zoning issues, I think you can still get an FFL for a home-operated business. They won't issue an FFL if there are local zoning restrictions, however.

 

[dfaugh]

Talk to an independent agent...e.g. one that handles all kinds of insurance from a variety of companies. I had a problem with my homeowners, simply because I owned German Shepherds (which are on the "blacklist" with many insurance companies). While I DO breed them, I only do it occasionally, and I don't sell them, they are donated to police and Search and Rescue groups. But, it didn't matter to most insurance companies. I found (through an independant agency) a company (Farmers) that didn't have any restrictions on dog breeds.

I suspect, what you'll have to do, in this case is, have a basic homeowners policy, plus either "riders" to that policy for the daycare and FFL, or seperate policies for each of the businesses.

NOTE: ANY type of business insurance.has gotten to be VERY expensive. The insurance companies seem to be looking for ways to "jack people up". I ran a computer consulting business (pretty low risk, you would think) out of my house, and every year for the past few years the premium went up 25%.)

P.S. Both the day care, and the FFL should be set up as corporations. If they are corporations, and someone sues you, for whatever reason, the worst that can happen is that they can take the assets of the corporation. If you are doing it "on the side" as a DBA, for example, they can take your house your cars, all your assets, and even future wages! Additionally, any expenses incurred by the business (including insurance for example) can be written off more easily. For example, If you "need" a truck (or a seperate workshop, or whatever) for the FFL you can write off $18,000 a year(this may have increased)---straight up, no depreciation or other stuff. Or if you lease a vehicle, for example, you can write off the payments 100% (I'm SURE you need this to go to various gunshows and other FFLs, right?). These are some of the things I've learned from my accountants, but they've always given me good advice. You might want to talk to a GOOD accountant.

 

[XDKingslayer]

In today's day and age you have a gun business and a daycare under the same roof and it actually suprises you your insurance company cancelled?