Home Based Businesses
The Small Business Administration's most recent numbers estimate nearly 16 million home businesses exist in the United States today, a number that has tripled over the past 25 years. Interestingly, 70% of these businesses survive past 3 years compared to the average of all new businesses which have only a 30% average survival rate.
The insurance industry has done a decent job in keeping up with demand by offering new and affordable ways to protect these businesses, but an unendorsed homeowners policy just won't cut it! If you have a home-based business, talk to us today about how this affects your homeowners insurance and what solutions are available.
Did you know: the standard homeowners policy EXCLUDES coverage for detached structures used for business? So if your she-shed is also your home office, studio, shop, lab, whatever, you have no coverage!
Startling Statistics
According to the CDC, approximately 9 people are killed and more than 1,000 people are injured every day in the United States in crashes that involve a distracted driver. Put down your phones!
The Fraud Files
The Lesters were a well-known family in southern West Virginia. Patriarch Windel Lester, who sat on the board of the local bank, owned a hardware store and sold mobile homes.
But when the family turned to buying cheap homes and torching them for over $500,000 in inflated claims, it spelled the end for their role in the community.
Windel had it all figured out: Buy vacant, decrepit homes for next to nothing. Install straw owners to hide his involvement. Pack the homes with worthless furniture bought at flea markets or yard sales, then burn them down and file bloated claims for expensive possessions he never owned. Easy.
The plan was first set in motion when one of the two Lester sons, James Edward Lester, helped a crony buy a house for just $38,000, with Windel fronting the money. They took out a $196,000 policy on the dwelling and $147,000 for the junky possessions. After a blaze destroyed the house, the straw owner told the insurer it was a kitchen fire and received nearly $300,000.
On another property, the conspirators divided $100,000 of insurance money. Another doomed house was bought for $100,000 and netted $280,000 of insurance money.
But the whiff of fraud was too strong for investigators to ignore.
Windel's hardware store sold unscented candle oil - a fire starter he figured would be untraceable. Instead, it led authorities straight to him. Windel had also forged receipts for home possessions to support the series of inflated claims, and laundered insurance money through the bank he helped run.
The Lester clan and fake owners were convicted for or pled guilty to volumes of federal charges. They are all awaiting sentencing and face dozens of years in federal prison.
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