Seniors in Assisted Living Facilities Lack Personal Liability Insurance

New Product Offers Coverage for Dogs, Scooters and More

Senior citizens have a lot to worry about but perhaps one of the most stressful worries they face is the loss of independence. For some seniors, transitioning from living independently to living in an assisted living or long term care facility can be a daunting, but inevitable reality. And with the assisted living transition comes questions about personal liability coverage.

As homeowners, seniors held personal liability coverage under their homeowners’ policies. But moving into an assisted living facility means not only the loss of their homeowners insurance but the loss of their personal liability coverage, a reality that many do not understand, says Eugene Solomon, president of AGE Insurance.

That loss of personal liability coverage motivated Solomon and others to create a new insurance product designed for seniors transitioning into assisted living facilities.

“The population that is aging is not old, they are still active,” says Solomon. “They are still out and about on golf courses, taking walks, and utilizing mobility scooters.” With such activities comes liability exposure, he says.

In response to this gap in personal liability coverage, AGE Insurance, located in El Segundo, Calif., created the Asset Guard Endorsement (A.G.E.), which is underwritten by Philadelphia Insurance Co. A.G.E. protects people if they should have a liability claim while living in long term care or assisted living facilities.

Pet Liability

Solomon says that pet liability coverage is another gap seniors face when moving into assisted living facilities. Many seniors move with a family pet or opt to get a pet as a companion while in assisted living. Some facilities even encourage pets for therapy.

“Studies show seniors who have pets have better overall health,” says Solomon.

However, having a pet in a facility can be a huge liability if it were to bite or injure someone. According to Solomon, a dog owner is strictly liable for a dog bite and subsequent injury in 36 states. What many residents of these facilities don’t realize is that means they would have to pay out of pocket for any lawsuits as well as medical bills that could arise.

As an option to the A.G.E. endorsement, AGE Insurance created a pet liability endorsement for assisted living facility residents who own pets. Solomon says the coverage can pay for the defense and indemnity of a liability claim.

“A lot of facilities allow small pets to reside with the tenant and that is a huge liability,” Solomon says. “The pet owner residents’ assets are exposed. [If the dog bites] the resident may have to defend a lawsuit, pay damages and may be moved out of the facility.”

The company also has an endorsement to cover to any accidents as a result of motor scooters or other injury incidents that a homeowners’ policy would typically cover, Solomon adds.

A Perfect Fit

Chuck Pedone, regional vice president for Philadelphia Insurance Co., says the idea for the insurance came about from a conversation with someone who was placing their mother into a facility and wanted to know what her insurance options were. Solomon and his colleague James Karmin had also been discussing the need for insurance like this, so the company and Philadelphia began working together on the policy.

“Philadelphia has been writing group homes and senior housing in general for many years, so A.G.E. was a nice fit for us,” says Pedone.

One unique feature in the policy, Pedone says, is that it names the facility as an additional insured. “This is a key component,” he says. “It fills in the gaps of coverage that the resident had and protects their assets. It can eliminate people having to move out after suffering an ‘out of pocket’ claim payment.”

Solomon says the fact that the policy can be bought and issued online has been a big motivator for insureds.

Pedone and Solomon have targeted state assisted living and long term care associations. So far, the program has gained interest in Arizona, California and Florida.

The biggest challenge has been getting the word out that assisted living residents might have a liability gap, says Solomon. Educating residents that an insurance product exists to close the gap is key, he says.

Pedone says agents working in this field should talk with their facility owner clients about the product because the business opportunities are huge.

“When residents purchase A.G.E., facility owners can approach their primary general liability carrier for a credit based on the number of seniors in the facility that have purchased the policy,” says Pedone. “Agents use it as a differentiator to open doors on new prospects.”