Roughly 900,000 Americans live in assisted living centers, according to the National Center for Assisted Living. And for residents and their families alike, these facilities mean an end to many worries -- but not all of them.
Residents of assisted living facilities still might face personal liability risks. What if a resident's dog bites a visitor? What if a visitor slips and falls inside a resident's room and sues?
Filling an insurance void
While some experts are skeptical of the seriousness of those risks, one specialty insurance product is providing liability coverage geared toward residents of assisted living centers. Called Asset Guard Endorsement, this insurance was created by insurance agent Eugene Solomon of El Segundo, Calif. Solomon insists that assisted living residents need personal liability insurance but have had little access to it.
Solomon developed the idea for Asset Guard Endorsement when a colleague asked him a hypothetical question about the colleague's mother, who was an assisted living resident. What would happen, he asked, if his mother ran into someone on her mobility scooter? At first, Solomon says, the two thought that the assisted living center's insurance would cover such an incident, but the center where his colleague's mother lived wouldn't give that information in writing.
The more they investigated the question, Solomon says, the more they found that liability coverage for assisted living residents was inadequate. Typically, residents had some liability protection through their home insurance or renter's insurance, which they were likely to have given up when they moved into assisted living, according to Solomon.
Often, he says, new residents are asked to take out a renter's insurance policy, but many don't actually do so. Additionally, Solomon found that many insurance carriers don't want to write a policy for somebody who shares a room, for somebody who lives in a unit for which someone else has keys, or for certain geographic areas that have a lot of senior care centers.
To fill that perceived gap, Solomon and partner James Karmin introduced Asset Guard Endorsement. The coverage, underwritten by Philadelphia Insurance Co., is designed to cover personal liability for those in assisted living centers. It covers damage caused by a resident's pets, protects personal property and safeguards against lawsuits.
A typical Asset Guard Endorsement policy costs $185 a year, Solomon says. Liability coverage options include $100,000, $300,000 and $500,000 limits. Coverage of personal belongings carries a $5,000 limit, with the ability to pay for a higher limit. The policy also covers lodging expenses if a resident's apartment is damaged by a covered loss, such as a fire.
Is this coverage really necessary?
Not everyone thinks this coverage is necessary, however.
"Given the frailty of these folks, both physically and cognitively, I can't in my lifetime remember a resident getting sued. … It just doesn't happen," says Rick Stephan, a veteran of the senior living industry and principal at Rick Stephan & Associates, a consulting firm for providers of senior living services.
The average assisted living resident is an 87-year-old woman who needs help with one or two basic daily activities, such as bathing or dressing. According to the National Center for Assisted Living, 87 percent need help with their meals, and 81 percent need help managing their medications.
Moreover, Stephan says, residents at such facilities aren't entirely unprotected. Most assisted living residencies carry liability policies.
"Typically, the liability insurance is the responsibility of the provider, not the renter," Stephan says.
Generally, public liability insurance (a type of insurance businesses buy to cover themselves if a member of the public is injured on the premises) will cover visitors' accidents. These days, Stephan says, such policies are fairly cheap -- about $100 per bed -- as competition in recent years has driven prices down.
Stephan also is skeptical of Asset Guard Endorsement's value when it comes to seniors in independent living centers, which provide less daily help than assisted living centers do. For these residents, a standard renter's insurance policy should be fine, according to Stephan. Unless residents are getting an especially good price on coverage, it holds little appeal for "the independent living resident who has been dealing with a trusted broker for many years."