Thursday, December 30, 2010

Happy New Year!

With the New Year almost upon us I want to take this opportunity to wish you the very best for the coming year. I'm looking forward to sleeping in late and kicking back with the rose parade. Of course I'll be sleeping in late because, just like you, I'll start off the New Year at exactly midnight on New Year's Eve.

Just for fun, I looked up the song Auld Lang Syne online to find out its history. I learned that Auld Lang Syne is a traditional Scottish song. The version we know today was written (in part at least) by Robert Burns in the 1700s. The title refers to "old long ago," or the good old days, as we would say today. Have a great New Year's Day and don't forget to break a resolution or two!

Have a great and safe New Year's!

Jim

Auld Lang Syne

Should auld acquaintance be forgot and never brought to mind?
Should auld acquaintance be forgot and days of auld lang syne?
For auld lang syne, my dear, for auld lang syne,
We'll take a cup of kindness yet,

For auld lang syne.

Should auld acquaintance be forgot and never brought to mind?
Should auld acquaintance be forgot and days of auld lang syne?
And here's a hand, my trusty friend , and gie's a hand o' thine,
We'll tak' a cup o' kindness yet,

For auld lang syne.


Friday, December 17, 2010

Every Home, Every Year Part II - What do they look for?

If you read the first post, Every Home, Every Year, I touched on a couple of things your home inspector will look for like vicious dogs, bad roofs, etc.

So, what else do they look for?

Well, every underwriter has different types of things they want to look at. Most common are:

Remodels or renovation in progress - Many homes on the market today are bank repos. These types of homes sometimes require some work, replacing carpet, paint, tile, etc. To an inspector, this is a red flag. To the underwriter, it means additional exposure to claims. The house is a target for thieves since you are probably not able to live there with so much work going on at one time. There is a greater chance of someone getting hurt on the property, a worker, a nosy neighbor looking around, kids thinking it's a great place to play. You could get sued by the injured person since it happen on your property. That means you face the potential of a liability claim against your policy.

Debris - I know moving can be hectic. Were did we pack my clothes for tomorrow? Do we want the hutch on that wall, or this one? Did some one get beer? When an inspector shows up at a property, typically you are done moving in. But what about all the boxes on the back porch? Unwanted furniture still in the driveway, a car that has not run in years sitting in the back yard, broken refrigerator out front with the door off. All these things make it look to an underwriter that you are not going to take care of the home. Their logic is that if you won't take care of the outside of your home, that means a major claim, like that leaking pipe under the sink will get ignored until it floods the kitchen, causes mold and is a major repair job.

Overgrown landscaping - Many policies require you to have pride of ownership and maintain the property. Bushes covering windows, tree limbs hanging over the roof, your dog lays down in the yard and you have to make 'em get up to find 'em. To an underwriter it looks like you are not taking care of the property, with all the over growth you have an increased fire exposure and if the winds moved those branches over the roof, you could easily have a leak come rainy season.

Hazards on the property - So you work for the bomb squad and sometimes bring work home. Seriously though, welding tanks, construction materials,  landscaping supplies, large amounts of chemicals like fertilizer and solvents, etc. can all be potential claims, increase your fire risk and can cause injury to you and your neighbors. There are companies out there that will insure you, but you could end up paying more for a commercial policy. Keep it at work, stored properly of course.

Dogs - I know, I've already touched on this. Dogs are an issue since certain breeds do have a higher number of claims and tend to bite folks. This means a claim on your home owners because "Fluffy the pit bull"  bit Johnny when he walked too close to your fence and now Johnny's parents are suing you for medical bills. We all want good guard dogs, companions, a friend. If you have a pet or are going to get one, talk to you insurance agent or read your policy to find out which breeds they will not cover.

Remember, the carrier is not picking on you. They are not saying you are a bad house keeper, negligent dog owner or can't put in new tile. They want your business. If they did not, they would be out of business. They are trying to look out for you. If you can fix a few things yourself and maintain the property you can have your pick of carriers since your risk of a claim is lower. That means not having to settle for just one or two carriers that have really high rates because no one else will cover you after you filed 4 claims in 2 years. Insurance is there when you need it, but by doing your part, you will keep costs down and have more options.

Saturday, December 4, 2010

Every Home, Every Year

When you take out a new insurance policy on a home or rental property, the insurance company sends out an inspector who prepares a report about the property, takes pictures of the exterior and may even talk to you or whomever is home at the time. This information is then sent back to the insurance company and based on that report they decide if your property meets their requirements or if they should have you find another carrier. This inspection is usually done within the first 60 days of your new policy coming into effect. They also inspect again when you go to renew each year.

Since this inspection is only of the exterior, they are not going to come inside. If you are home, they may talk to you and ask you some questions. I have had an inspector interview a clients teenage son who told them about the pitbull puppy in the back yard. While their policy was not canceled (they removed animal liability coverage and later got rid of the dog), it did require a letter from them at renewal time stating that the dog was gone.

Insurance carriers do property inspections for a few reasons.

First, to make sure that the questions you answered during the application process are answered correctly and that the property meets their underwriting criteria.

Second, to make sure there are no hazards that may cause harm to you, your family, guests or to the structure. This could result in a claim from a condition on the property that could be easily fixed now for a few bucks at Home Depot.

Third, it's their check book. If you do have a claim, you have paid your yearly premium and your deductible. The carrier gets stuck with the lions share of the cost. If something shows on an inspection report that the carrier is concerned about, some carriers will give you time, normally 30 days, to correct the issue and respond back to them that it is corrected. Don't wait until the last moment to do this. Get it taken care of asap. If you wait until the last moment you could be canceled even though you have taken care of the issue. Call your agent and talk to them if you are not sure how to get information to the carrier.

I know inspections can be frustrating if something needs to be corrected and you just moved in. They are for us agents who have to explain to clients whats going on. We have no control over what the inspector or underwriting will do. You and your agent have to work within the rules set for us by the insurance carriers. That is not to say you don't have options. Insurance carriers are like people around a salad bar. Some want iceberg lettuce, some want corn on their salad, others don't. They may take a radish, or some ham. Or not.

There is someone out there that will take the property. The question is how much you want to pay. A few dollars now at home depot or a few hundred more a year?

Wednesday, November 24, 2010

Have a Safe and Happy Thanksgiving

Thanksgiving is for many a time to gather with family, friends and loved ones and enjoy each others company. Many reflect on what good things have happened in their lives over the last year and what they have to be thankful for.

We all have the humor of the holidays to share too. Like the time mom dropped the turkey on the floor and the dog took off with it. Or when the oven broke and you had to move everyone to another family members house on short notice.

As you celebrate this great time of year, please remember to be cautious too. We all know that traveling can be dangerous and to watch out on the road, know when to say when, and maybe preparing for a few overnight guests is a good idea.

From 2006 to 2008 there were on average 2,000 fires nationwide on Thanksgiving day. Many of these were caused by carelessness and open flames. Horsing around the Turkey deep fryer is not a good idea. Setting the deep fryer up in the garage is asking for trouble too. Here are a couple of ideas to make the holiday's a little safer:

Keep children and pets away from candles, fireplaces, stoves and ovens.

Make sure that smoke detectors are working properly. 20% of residential dwellings that caught fire did not have working smoke detectors.

If you are deep frying your bird, read the instructions or go on line to sites like Food Network to find video on how to deep fry a turkey and please, make sure it's thawed first!

Also, since it's getting colder now, make sure your heater is working properly. Change the filters, and if you have a space heater have it serviced. Malfunctioning space heaters are one of the top causes of fires in the winter time.

Check out the holiday safety tips at CAL FIRE. They also have a great video on you tube.

Remember, the holidays should be fun. A little caution may not avoid  Aunt Wilma renewing her feud with Cousin Mary, but it can help keep everyone safe.

Thursday, November 18, 2010

Do You Need Disaster Insurance For Your Home?


Your home is your greatest investment, and your family your greatest priority; making sure they are both protected should a natural disaster hit your home is important in keeping your loved ones and your home safe. Here are a few things to consider when determining if your home and family are protected, and how to determine what type of disaster insurance you need.

What Does Your Current Policy Cover?

Many homeowners are surprised to discover that their current home insurance policies do not cover natural disasters. There are some comprehensive home insurance policies that do cover occurrences such as flood and earthquake, but if you have a basic policy, odds are you are not covered. Separate disaster insurance can be costly, but in general there are three considerations to take into account when deciding whether disaster insurance is right for you-location, financial situation, and comfort level with the risk.

Location - Depending on where you live, there may be a large or a small chance of encountering any particular type of natural disaster. If you live in the Midwest you may not need to worry about earthquakes, but you may want to consider covering your home for tornado damage. Most areas of the country are at risk for some type of natural disaster, and covering your home for that particular type of disaster is a good idea.

Financial Situation - In most cases there are larger deductibles for disaster insurance, but considering the potential damage that a natural disaster can cause, what may seem like a high deductible can quickly be put into perspective when your entire home is destroyed.

Comfort With Risk - The actual chance that your home may be affected by any particular natural disaster may be rather low, but assessing the actual risk and whether you would be able to handle the worst, should it happen, is an important issue for your peace of mind. The point of insurance is really to create a more stress-free life, and if the risk associated with damage due to a natural disaster is high then insurance may definitely be worth the price.

Overall, determining whether you need disaster insurance will depend on a number of variables, and seeking the advice of an insurance expert can help make the decision easier and stress free.

Thursday, November 11, 2010

The Top Things You Didn't Know About Your Homeowner's Insurance


You know that you need homeowner's insurance to protect your home from catastrophic events and other perils, but there are some little-known facts about homeowner's insurance that can save you a lot of money and stress if you know how to use them. Take advantage of everything your homeowner's insurance has to offer with these common but not popularly known coverage tricks.

Your Liability Is Transferable

If you are hosting an event away from your home such as a party, wedding, or other gathering, you might be asked by the venue to provide liability insurance so that they won't be held responsible in the event of an injury or loss on the premises. Most insurance companies will let you transfer the liability coverage on your policy to another location for a one-time event. All you have to do is call your insurance agent or company and request that they issue proof of insurance to the venue in question. Remember that your insurance company must know about the event in advance for the coverage to apply.

Your Personal Property Is Covered Anywhere

If your car is broken into and a large quantity of personal property is stolen, your auto insurance probably has limited coverage for property in the vehicle. But your homeowner's insurance can pick up the slack. In fact, your homeowner's policy will cover all of your personal property anywhere in the world. That means if your expensive camera is stolen while you are on vacation, you are covered. If your bags are stolen at the airport, again, homeowner's will cover you. Everything that is covered under your homeowner's policy is covered anywhere you go. Just be sure you have a floater on your policy for valuable items like jewelry.

You Are Covered If Sued

If someone sues you and you don't believe you are at fault, your homeowner's insurance will help defend you in court. That is part of the reason you have liability insurance! Whether or not the particular lawsuit is one that homeowner's insurance will cover must first be determined. If the insurance company agrees that you were not negligent in the incident, they will make sure you can fight it in court.

Your Rent Is Covered

If you home is damaged and you cannot live there or if you are forced to evacuate due to a fire or other emergency situation, your homeowners policy can pay for your hotel or property rental while you are away.

Your homeowner's insurance does much more than protect your home. Be sure you get the most out of those monthly premiums you pay by taking advantage of all the perks of your policy.

Friday, November 5, 2010

Keeping Good Records For Insurance


You have homeowner's insurance to protect your home and everything in it from an accidental and unexpected incident that causes a major loss. If something catastrophic like a fire should occur, you will be called upon to provide a list of everything that was in the house, and in some cases, even proof. To protect the insurance company from paying out fraudulent claims, an insured may be asked for photographic or other evidence of valuable possessions. It's a good idea to document even if you rent. Here are some easy ways to be sure you keep good records of your home and its contents.

Documented Evidence

For expensive and valuable possessions, it's a good idea to keep purchase receipts and appraisals where appropriate. These things, being paper, won't survive something like a fire, so purchase a fireproof box in which to keep them or arrange for storage off-site. Ask a friend or relative to hold onto them for you, or place them in a safety deposit box if you have one. Some insurance companies will also scan these items for you and keep them in their computer system for future reference.

Photographic Evidence

One of the most popular ways to keep records of your personal property is to take photographs, and again, keep them somewhere safe. When taking photos of your items, bee sure they are clear and where possible get close-up shots of model and serial numbers, especially on electronics. Digital cameras have made it easier than ever to store large numbers of photographs, and you can back up your photos to a server where they can be kept safe in case they are needed and the original files have been lost or destroyed.
Photographs can also be used to document the features of your home so that should it need to be rebuilt, you can return it back to its original state.

Video Evidence

Video cameras are also a popular choice for documenting your home, as you don't need to snap a picture of each individual item, but can pan the room, zoom in where necessary, and just keep one file with all of the evidence you need. Again, digital video makes it easy to store the files in a safe place where even a total loss of your home won't damage it.

A good record of the things inside and outside of your home helps your insurance company to restore you to your position prior to the loss. The more information they have, the easier it will be to reconstruct your home and replace your possessions. It's up to you to create and store this evidence, so take the time to make sure the records are created and kept safe.

Thursday, October 28, 2010

Ensuring Your Homeowner's Policy Is Up To Date

When your insurance company calculated the cost to replace your home in the event of a claim, they based it on the available knowledge they were given regarding your home. Things like the square footage, the type of construction, the materials used inside and out, as well as any special features of the home were all included in the calculation. What many homeowners forget is that updates to your home need to be reflected in the replacement cost. Here are some key times when you should give your insurance company a call to provide updated information.

A Major Renovation

Whether you give your kitchen an overhaul or redo the master bath, these are high value areas of your home, and your insurance company needs to know you have improved them. Give them a call and let them know what type of materials you used and what features you may have added, such as a jetted tub or granite countertops. This will ensure that if insurance ever has to pay to replace your house, you will get those updates back.

An Addition To Your Home

If you add square footage to your home via an addition, it's important to let your insurance company know right away, as this has a large impact on your replacement cost. Remember that insurance will only cover permitted additions to your home, so be sure you have all the right permits on file and everything is up to code. Some additions, such as certain types of sunrooms, do not actually count toward the total square footage, so discuss the coverage for that type of addition with your insurance agent.

New Floors

Anything you replace or upgrade should be reported to your insurance company. Whether you replace your carpet with hardwood floors, or other features, all of these things are important to the reconstruction cost of your home.

If you aren't sure if a certain upgrade or change has any bearing on your insurance, it's always best to put in a call or e-mail to your agent just to be on the safe side. You don't want to make a claim down the road only to find out that the policy was outdated and you weren't covered for the improvements you have made to your home. Although most policies do have some protection built in for this, the safest bet is to be sure you keep your policy up to date. It's always worth a call to your agent or insurance company to let them know things have changed at your home.

Thursday, October 21, 2010

When a disaster strikes, watch out for scams!

You would think things are bad enough. Your home just caught fire and you are living at your sisters house with your kids while they repair the damage. You are at the house continuing to pull out your clothes and other valued possessions one day when a man shows up, says he is a general contractor and can repair the damage faster and cheaper than your insurance company. He implies that your carrier sent him and that they will pay for the work. No cost to you. What should you do?

Well thankfully you read this blog and you know that you should call your adjuster or your insurance agent right away and not sign anything. When your claims adjuster calls back, he tells you that they have a different contractor assigned to rebuild your home and if this man comes back, to have him call your adjuster directly. The adjuster checks the contractors license number that was on the card he gave you and finds out that he does not have workers compensation insurance and that his license expired recently. He is also not bonded. Wow. Things could have really gotten bad.

Sadly there are people who would do such a thing to an unsuspecting property owner. The get what cash they can, maybe even do some work and then leave before the job is completed. Often times these are just people looking to make a dishonest buck. You can check on a contractors license with the California State Licensing Board  by clicking here.

Thursday, October 14, 2010

So what has my insurance carrier done for me latley?

The insurance industry is protecting you from local government fees.

The Fire Surcharge Fee was blocked again due to the efforts of Insurance Brokers and Agents of the West and Liberty Mutual Insurance group. The Emergency Response Initiative would have imposed a 4.8% surcharge on homeowners and commercial property owners. This fee was being marketed by supporters as a way to offset the cost of fighting wildfires in California. However there was nothing in the bill restricting the use of the fee to pay for fire personnel and new equipment. This money would most likely be used to shore up the state budget deficit and would not provide any aid in fighting fires. Many insurance agents and insurance carriers opposed this fee.

With the current economic situation and the rising cost of living, many people are asking why they need insurance. There are several reasons:

1. It keeps you from getting wiped out financially in the event of a fire, accident or legal action.

2. Insurance may be required by your lender or another third party.

3. Insurance costs change, but you have some say in those costs.

If you had no insurance, you would have to pay the full costs of any repairs, bills and judgments in the event of something happening. With insurance you pay your deductible and the carrier takes care of the rest up to the policy limit which leads me to number 3 on my list, cost. (number 2 is really hard to do anything about. If a lender or someone else requires you to have insurance, you pretty much don't have a choice.)

Insurance carriers change their prices based on what is happening in the insurance market, what their loss experience has been, what they anticipate will happen in the coming months, etc. You may have been with XYZ underwriters for a year or more. Slowly your rebuild cost has gone up along with your bill. You call XYZ and they explain about the rebuild cost of your home increasing as it ages, building code upgrades, local ordinances, materials costs, and so on. All well and good, these factors affect the cost of rebuilding your home if it is destroyed. So you call PDQ underwriters. They can insure your property for less, but you also have a lot less coverage. You call XYZ again, tell the about the PDQ quote and ask if there is anything they can do. Well, do you really need $500,000 in liability coverage? Could you lower it to say $300,000 and still be comfortable? Depending on your situation, sure. Medical payments to others is $3,000. Can we go to $1,000. Sure. You have animal liability coverage. Your dog left with the kids. Save another $25. XYZ puts these lower coverages in and you are still a little above the PDQ quote, but you have more dwelling coverage and peace of mind. It's worth staying with them.

Don't be afraid to ask your agent if they can go lower on some coverages or eliminate them. Also, ask if they are charging a broker fee and can that be waived. Never be afraid to ask questions. If your agent tells you that's a dumb question, you may want to get a new agent.

Friday, October 1, 2010

California May Stop Paying Some Workers Compensation Benefits

Since the state still has not passed a budget, the funding for workers compensation insurance benefits, food programs, disability, medical care and many other programs is drying up.

With no idea as to when or how some of these programs will be funded, the state will be cutting back on the payments and services to those who use these programs.

With workers compensation, the employer pays into the fund to cover workers in the event of an on the job or job related injury. The state then handles the claims and payments. With record unemployment and more people filing workers comp claims, and no budget the fund is drying up fast. Since most workers comp payments made by employers is determined by their payroll numbers, this means less money coming into the fund when unemployment is high.

Also, with high unemployment, I wonder how many of these claims are really work related injury and not just an attempt to get more benefits or hold on to a job position that may be eliminated. Only time will tell.

To contact your state legislature, click http://www.legislature.ca.gov/port-zipsearch.html and type in your zip code. E-mail them and explain how their lack of action and party politics really affects the people they are supposed to serve. Tell them California needs a budget now.

Monday, September 27, 2010

When To File A Homeowner's Insurance Claim

In some cases it is very obvious when a homeowner's insurance claim should be filed. If there has been a fire, a burglary, or major vandalism, there is no doubt you should call your insurance company right away. But in other cases, some small claims might be best kept off your insurance records. It all depends on the cost of the damage, the amount of your deductible, and how it could affect your future premiums.

How Much Is Your Deductible?

If the amount of the damage or loss is less than or even right around the amount of your deductible, there is really no point in filing a claim. You won't really get anything out of it other than a claim on your record and a potential increase in your monthly premiums. Whenever something occurs such as damage to your home, get an estimate on the repair before you call in a claim. It might not be worth it to get the insurance company involved. It's a personal choice how far beyond the deductible amount the cost of repair or replacement needs to be before the claim is worth it. Remember that it can hurt you in the future if you make too many small claims.

Increases In Premiums And Worse

The more often you use your homeowner's insurance to make a claim, the more likely it is your rates will rise. Worse than that, if you have too many claims your insurance company may set your policy to non-renew. That means they have decided that you are too high a risk to insure any further and will not allow you to renew your policy when it expires. Although few people make enough claims for this to happen, a lot of small claims can get you there. In some cases, the insurance carrier can drop you if you make a claim with in the first 90 days of the policy period. This does not happen often, but it is up to the carrier.

Before you make a claim against your homeowner's insurance, make sure that it is worth it financially, that you will actually get something out of the claim, and that it won't hurt your future with the insurance company. Increases in rates are not unusual and will usually go back down again after a certain period claim-free. When you decide to make a claim, make sure that the increase in premium balances out against what the insurance company will pay out on the claim. If the loss is a small amount in relation to the deductible, consider paying it out of pocket rather than filing a claim.

Tuesday, September 14, 2010

I have not had a claim. Why did my insurance go up?

In the last few days I have spoken with clients that have had an increase in their yearly insurance costs. Some folks were mad, some shocked, and some where just concerned. Some of the increases where small, fifteen or twenty dollars compared to last year. Others where higher. Regardless of how much the increase was, all of them wanted to know why the increase in cost. And who can blame them? I work in this business and my insurance went up too. Add to the fact that the housing market has dropped and it can get rather aggravating.

So why the increase? First all insurance carriers change their rates during the year. They must file a rate request with the department of insurance and have it approved before they can increase rates. They have to show good data as to why the increase is justified. This is usually due to losses that the insurance carrier has experienced. They have to have money to pay out claims and meet state solvency requirements. That money has to come from the premiums they collect as well as investments that they make. Remember, a carrier is not considered solvent by the state if they can pay every policy they have out. They must have other reserves in addition to being able to pay all policy holders and operating expenses.

Second, carriers raise the amount of coverage you are getting each year just a little and that also raises your premium each year. They do this to keep pace with inflation, the cost of building materials, fees and labor. If a fire takes out your home and the homes around you for ten blocks, then there can be an increase in the cost of labor and materials to that area since the things needed to rebuild are now in high demand. Supply and demand economics in action.

Last, the rebuild cost of your home is different than the real estate value of your home. In real estate the sale of the home across town as well as the sale of the home down the street affect the value of your home. The land is part of the sale and the value of the land is included in the appraisal. In insurance we are only rebuilding the structure. The square footage, type of materials, location and other factors all influence what it will cost to rebuild your home. Carriers get this information from a variety of sources that collect rebuild data from all over the country. They look at the cost of materials, labor, type of construction, building code upgrades, county and city fees, fire department fees, type of construction and much more. The carrier then applies their formula to the information they receive from their data provider. They may add 20% for a two story home, subtract 5% for newer construction, add  3% due to crime statistics and losses in the area, etc.

The bottom line, if it is a minor increase for more coverage (i.e. $20 a year more for $45,000 more in coverage) I would not be too concerned. You can also change your deductible to lower your premium, but remember that you must have the money to pay the deductible at the time of the claim. Check to see if you are being charged a broker fee. Some of these fees can be over $100. If you have been with the same carrier for 3 years or more, see if switching carriers would help or if your agent can rewrite a new policy with the same carrier. Often times they can. This will cause the policy to be re-rated and the rebuild cost to be reset.

Remember, insurance carriers are like people in a grocery store. Some of them will buy potatoes, others carrots, some want beets, some would not buy a beet at any cost. It all depends on the carriers appetite for risk, in other words what types of customers and properties they want to insure and what type of property and claims history you have. You have options.

Friday, September 3, 2010

Have a safe and fun Labor Day Weekend!

Many people are going to travel this holiday weekend. Police are setting up DUI check points and will be on the look out. Stay safe on the roads by slowing down, giving yourself plenty of room between your vehicle and the one in front of you, and time to get to where you are going.

If you are bar-b-queuing, keep in mind that many house fires are started every year by a Bar-B-Que that suddenly flairs up due to grease, lighter fluid, cooking sprays and fat.
  • Keep children and pets away from the grilling area.
  • Keep your Bar-B-Que out from under trees.
  • Keep the Bar-B-Que away from deck rails and out from under patio roofs, awnings and roof overhangs.
  • Never leave the grill unattended.
  • Check hoses and connections on all propane and gas bar-b-ques. If you smell gas while cooking, turn off the Bar-B-Que, get everyone away form the area and call 911. Do not move or attempt to fix the grill.

Have a safe and happy holiday!

Friday, August 6, 2010

Time for school again. Are you ready?

With August upon us many families are getting ready to go back to school. Clothes, backpacks, pens, pencils, iPhone, laptop computer, luggage to hall it all around in. Check. Disaster plan. What?

When was the last time you talked with your family about what to do in an emergency? Would your children know what to do if you were not there? Would you know where to find them?


Disaster can strike at any time. Here in California we have to worry about earthquakes, brush fires and in some areas floods are a concern. Since no one can anticipate when these events might happen the best thing one can do is be prepared.

I remember once for about a month dad and mom would casually start dinner with "There has just been an earthquake. We are at work. You made it and got out of what is left of the house. What do you do now?"

Well, you can imagine how teenage boys would react to this. And we did. "Pass the gravy. I would beat Jim to the emergency kit, get the food out and start eating." " Can I have the mashed potatoes? I would start heading for the high school, but I'd stop at Del Taco first."

Mom or dad would some how bring us back around (usually without resorting to grounding us) and we would talk about first aid, what was in the emergency kit, how to use some of the things in it, where to get help if someone was trapped, where to meet at, how long to wait there before going to a shelter or the Red Cross area's in town.

I know it's a hard thing to talk about. You don't want to be afraid or scare your children, but you do want them to be able to seek help and know what to do if you are not able to be there. Most families don't discuss this, especially once your children have grown up and moved out. It is not pleasant to think about. Putting together a plan is the best way to face that fear.

FEMA has created a web page called Ready Kids.This is a great resource for tips on talking with your children, creating a kit, making a disaster plan and more. As part of the Ready.gov website, the goal is to help families and individuals prepare for the range of natural and man made disasters that can strike.

For more information on disaster planning, check out, Insurance Notes, Ready.gov,  the Red Cross, NFPA.org, and check with your local community center about disaster planning events in your area.

Talk with your family and friends about what you would do in a disaster. Plan ahead. If  anything happens, you will be able to cope better with it and not be immobilized by panic.

Thursday, July 29, 2010

Moving up? What about the house you are leaving?

In today's real estate market there are some good deals. Interest rates are still low. Many people are moving up to a bigger house or a better neighborhood or both. Some are downsizing, choosing to live in a smaller home with less stuff.  Either way you want to go, it can be a good time to buy depending on your situation.

So what about the home I have now? Should I sell it or keep it and become a landlord?

There are good arguments either way you want to go. I recommend you consult a real estate professional or property mangment firm in your area to help you decide. Every local market is different and a full time real estate agent or broker who knows the market is essential.

From an insurance standpoint, you need to tell your agent what you are up to, particularly if your insurance is with in  3 or 4 months of renewing. Why?

First, if you are selling your home, some carriers will not insure a home that is for sale. More people coming on to the property means more risk of a claim for injury, theft or whatever. Real estate agents are going to be showing the property to potential clients and their families, inspectors and tradespeople like plumbers and carpenters are going to have to have access to the property. For some carriers this is a problem. Remember that whenever you renew your insurance the insurance carrier sends out their inspector to verify the condition of the property. A for sale sign in the front yard might scare your carrier. Check with your insurance agent to make sure this will not be a problem if your home does not sell by the policy renewal date.

Second, if you decide to rent out your home, your homeowners policy will need to be changed to a landlords policy. Homeowners insurance is meant to cover owner occupied homes. Landlords policies are designed to cover properties that are rented or leased to others. Landlords policies offer different coverages which can vary some by carrier. For example, some carriers exclude theft coverage from landlords policies since the property that will probably be stolen will be the Tenant's, not the landlords. Also, personal property can be excluded entirely from the policy if you choose. Some landlords do not provide any furnishings for Tenant use. Some landlords feel that since all they are really providing is a stove and a dishwasher, they will just spend $600 at Home Depot should anything happen to them and forgo the claim.

You might also want to look at an umbrella policy. An umbrella policy is an excess liability policy that  kicks in should you exceed your other policy limits for liability coverage.

Remember to keep your insurance agent in the loop whenever you have a change like a marriage, birth, get a dog or your home loan changes. You should review your policies at once a year with your agent and look at changing carriers about every 3 years or at least have your policy re quoted to see if you can save.

Friday, July 16, 2010

Is It Raining? Do I Really Need An Umbrella?

With it being July you probably are not thinking too much about your umbrella that is in the back of the closet or someplace in your car. Once the first showers start though, you will probably dig through the closet or open the glove box and dig it out, preferably before you are soaked.

The same goes for an umbrella policy. You think you don't need the additional insurance because your homeowners / auto / renters / landlords policy already gives me liability coverage. I'm protected. It's summer, it won't rain.

Perhaps you are right. All will be dry, if you have a claim your policy might have enough liability coverage to take care of you.

All the sudden, the first real storm clouds show up. You are in a bad car accident or a guest at your home was seriously injured when they fell and they are coming after you for medical bills and loss of income. Is there enough liability coverage on your homeowners insurance to cover you? Are you sure?

Umbrella policies are liability policies that sit on top of your other policies like homeowners, auto, etc. and provide additional liability if the limits of a policy are exceeded.

Lets say the guest that fell at your home is suing you for $800,000 for lost wages and medical bills. Your homeowners insurance has $300,000 liability coverage. If they win in court, you now have a judgment of $800,000 you have to pay. Your homeowners insurance will only pay $300,000. You would have to come up with the remaining $500,000 out of your own pocket. 

Now lets say you have a $1 million umbrella policy. The injured guest wins and you have an $800,000 judgment against you. Your homeowners will pay $300,000. Your umbrella policy drops down and covers the remaining $500,000.  The judgment is paid.

You have paid out of your pocket your deductibles and legal fees. The insurance company has taken care of the rest. You can get on with your life with out having to take out a second mortgage or have your wages garnished for years to pay off this judgment.

Neat.

You may be wondering what the cost for such coverage is. While the cost does vary from carrier to carrier, in many cases the cost of a million or two million dollar umbrella policy is less than $500.00 a year. Think about that. You can have access to a million dollars for less than 500 dollars a year. Why so cheap? Because an umbrella policy is only for liability. It does not cover any structures, property damage, loss of use, etc. The coverage is only activated if you exceed the coverage limit on an underlying policy, like homeowners insurance.

What's even better is that it can provide this protection for all of your policies. Your home, auto, landlords, RV and other policies all would enjoy this same additional protection.

If you own a business this same protection may be available to you under a commercial umbrella policy.

It can't hurt to locate your umbrella now and have it ready for a rainy day. Thunderstorms happen even in summer.

Thursday, July 1, 2010

Flood Program is Back....Until September.

The Senate late last night reauthorized the funding for the National Flood Insurance Program. The authorization expires on September 30Th.

 If you have flood insurance that is up for renewal, your carrier should contact you shortly. If you have and an application in, it will be processed as soon as possible, but don't look for immediate results. The 4Th of July holiday and the back log of applications waiting to be submitted will add some processing time. Please be patient.

I can't help but notice that with a hurricane hitting Texas that the Senate finally quit the bickering and party politics and did something. I guess it takes and act of God to get an act of Congress!

Have a safe and happy 4Th of July!

Tuesday, June 22, 2010

Senate fails to reauthorize NFIP Flood Program, Again!

Earlier this year the Senate took Spring Break without reauthorizing the funding for the National Flood Insurance Program. Now, at the start of hurricane season, they failed to act again. This time is was the Memorial Day break.

The big problem is that so many other things that have nothing to do with flood insurance are getting tacked on to the bill. Extensions for unemployment benefits, tax breaks for businesses and Medicare payments to doctors are all added on to the bill to extended the funding for flood insurance. All of these things are important, but if you live in an area prone to flooding, you really need coverage.

Also, lets not forget the folks trying to buy a home out there that is in a FEMA designated flood zone. Making coverage impossible to get means that some lenders will not fund the loan without a flood policy, your loan docs could expire and your escrow may get extended or worse, canceled.

The House already passed it. The Senate, once again has held up this very important program.

To contact your Senator Click Here for their e-mail address.

I say we pass a new rule for Congress. If it has nothing to do with the bill, you can't add it on. Deal with it as a separate bill. Then maybe we would not have this very important program could be renewed for 5 years or more instead of being held up every other month by partisan bickering.

If you are one of the folks that is having a problem getting a loan due to flood, it may be possible for you to assume the sellers current policy. Check with the seller to see how long they have left on the policy and if their carrier will allow you to assume it. BEFORE YOU SIGN ANYTHING, check with your lender and see if this is acceptable. If the sellers flood policy is close to expiration, the lender may not accept it because policies are not being renewed at this time. Also, some lenders may require a certain number of months prior to expiration of the policy in order for them to accept it.

Another way you can go is to get a flood insurance quote, fill out the app, pay the premium and have your agent submit the policy to the carrier. If your lender will accept the paid application and the NFIP Hiatus Letter you can close escrow. As soon the NFIP is reauthorized and the flood program is put back in place the carrier will send the application and payment to the flood program and put coverage in force.

Thursday, May 6, 2010

Fire Season is approaching. Are you ready to grab and go?

With fire season starting up in California, its a good idea to dust off your grab and go bag and do a quick inventory in case you have to leave fast. You should leave your bag where it is easy to get to.

A grab and go bag should have a basic first aid kit, any medications you are on (make sure they are not expired!), flashlight, water, heavy duty gloves, protein bars, other non-perishable food, batteries, hand crank or battery powered radio, whistle to signal for help and trash bags. Check out get a kit at the Ready.gov website for a detailed list. You also should include copies of important documents like homeowners, auto, life and any other insurance policies, health insurance cards, your insurance carriers claims dept. number, your insurance agents number (if they are a local agent or may be affected by what is going, they may be in the same boat as you are, so get the claims department number for all of your policies and carriers ahead of time.), home inventory, contact phone numbers for family, friends, birth certificates and passports, drivers licenses, social security cards and bank account numbers or a recent statement.

Make sure your grab and go bag or box locks! There are lots of grab and go kits out there and for some a backpack might be easier than a duffel bag. What you need is something you can lock up and keep a key on your key ring and another in a safe place or with a family member or friend. If you go to a temporary shelter you don't want anyone to get into your stuff. Remember that you maybe in with some people who have lost everything. They could be desperate enough to steal. The advantage of a back pack or smaller bag is that you can take it with you wherever you go. Don't leave your grab and go kit unattended.

If you would like a guide to help you prepare a home inventory, you can download one from the Dept. of Insurance by clicking  here or if you would like to use a software program you can check out this free online program from Insurance Information Institute. There are many options to choose from. No matter what you do, print it out and put it in your grab and go bag, also in your safe or safety deposit box.

You might also want to think about an emergency plan for your and members of your family. You can go to the Ready.gov website and create one online. Just be sure to print it out! The site does not store your information, so if you close your browser or get timed out, you have to start over. There is also a quick share app on the site that will let you fill in a few basic things about where your meeting place for family and friends to find you, your emergency contact person and numbers, etc. A form is then generated that you can copy and paste into and e-mail and mass send it to your family, friends, co-workers or whomever you would like to share the information with. They also have some great tips for disaster preparedness.

And while your at it, don't forget to please check your smoke detector.

Friday, April 30, 2010

Watch out for Health Care Scams!

The passage of the new health care reform legislation is supposed to make it easier to get health insurance. Because the regulations are still new and some are being challenged in the courts, scam artist are having a ball with their efforts to rip us off.

This bulletin from the California Insurance Commissioner highlights the need to be cautious no matter where you live. Some folks are going door to door selling "Obama Care" polices and making false claims just to get you to enroll in a "health plan" now. Most of these scams use high pressure tactics like telling you there is a limited time frame to get coverage or that the coverage will cost more or be unavailable later.

Get their business card and check with the Dept. of Insurance in your state to see if they are licensed. In California and most states an insurance agent must display their license number on all materials, including advertisements and business cards. Check out http://www.healthreform.gov/reports/statehealthreform/california.html to find out what changes are coming to California and your state.

Also in the news, Anthem Blue Cross agreed to halt its planned rate increase in California after an investigation by the Dept. of Insurance found errors in the rate filling and inaccurate data that the rate filling was based on. Anthem has said that they will resubmit a new rate filling.

Thursday, April 22, 2010

You can leave your carrier and take your discount with you, almost.

Election time in California, the increasing bombardment of voters by candidates. Why the other candidate spells doom for California, and how I, the only candidate worth voting for, can save this great state. The stream of mailers that hearken the end of the world if a proposition is not passed, or conversely, if it does pass.

And on the list of propositions, Prop 17. This proposition would allow you to receive your continuous auto coverage discount even if you switch carriers. You would have to provide proof that you had no lapses in coverage for longer than 90 days during the last 5 years. However, if  the lapse was due to non-payment, you would not get the discount regardless of how brief the lapse.

Huh? What if I lose my job or am sick for an extended period of time and can't pay my auto insurance? Or if I have my car insured and go on vacation and forget to pay my auto insurance, my policy lapses and I lose my discount?  That's how it reads to me. Check out the voter guide, page 2 under proposal.

The other thing that gets me is that Mercury Insurance is the sole corporate sponsor. Why would they sponsor such a bill? Could it be to circumvent some of the current pricing protections?  Recently the Dept. of Insurance started an investigation into Mercury for overcharging customers and violating state regulations with regards to rating certain types of customers. See the LA Times article here.

Some consumer groups say that this is an attempt to get around the pricing protections that voters approved with Prop. 103 back in 1988. That may be.

For now though, I think Prop. 17 is not what we need. I'm voting no.

Friday, April 16, 2010

Flood Program is back in business, for now.

We'll, the Senate was all rested up from their spring break and finally got back to business. Yesterday they overcame the block that Sen. Coburn enacted before the Senate went on spring break. The President signed the bill last night and the National Flood Insurance Program (NFIP) is back in business.

They did cover the two gaps in the program retroactively, which means that policies that expired or were renewing during that time will not have a lapse in coverage.

The only down side is that we get to go through another round of funding approvals next month as the programs funding expires, again, on  May 21.

Why do they need funding from Congress? Well, the NFIP is a government program. They have had to pay out billions in losses for Katrina as well as the annual flooding in the Midwest. Charging higher premiums would be the only way to increase their revenues. Flood insurance is already pretty pricey. Also, the fact that not that many people are in areas that are required to have flood insurance means less revenue for the NFIP.

Remember that insurance is not an even exchange. You are paying a premium per year to have insurance, let say $700.00 a year, and if something happens you pay a deductible, say $1,000.00. Your out of pocket costs are $1,700.00 for the loss. The insurance company pays the rest up to the policy limit. This could be in the tens of thousands or more.

Lets say you have a flood. Big rain storm hits, the storm drain overflowed and you live down hill. You have paid for a flood policy. You have a $2,000 deductible. You paid $1,200 for the policy for the year. The damage to you home is $50,000. You have only paid $3,200 to have the insurance company pay the rest.

Now a regular insurance company, Fidelity, Farmers, State Farm, etc., has to meet state requirements for solvency. They have to have the ability at all times to pay out every policy they have issued and then they have to have additional reserves. They can have extra funds through re-insurance ( an insurance companies insurance policy) and thought investments in the stock and bond markets.

NFIP relies on congress for funding and premiums paid by existing policy holders.

Hopefully next month congress will act a bit faster. Or better still, approve funding for a much longer period than one month.

Friday, March 26, 2010

Flood Insurance Program Shut Down For Weeks by Congress

Congress failed to act today to extend the National Flood Insurance Program. What this means is that starting Sunday, March 28th at midnight, no new flood policies can be issued and no current policies will be renewed.

Congress adjourned until April 12th. Senator Tom Coburn, R-Oklahoma, blocked the Senate from voting on the bill.

If you have a property that is in a flood zone and the lender is requiring flood insurance, you will be out of luck until Congress returns from recess at which time they can vote to make the bill retroactive. Until that time, no new policies may be issued, no changes in coverage's can be made, and any policies expiring cannot be renewed. Claims will still be paid on existing and current polices.

What is it with Congress? The Senate seems to be wigged out on something. Don't they care or know how their actions affect the whole nation? How people lives are affected?

If you wish to write your Senator or Senator Tom Coburn, Click here and let them know how long your escrow period is going to be and what it cost you.

Monday, March 22, 2010

Auto Insurance - Why you should take a second look.

If you have not shopped for your auto insurance in a while, you may want to take another look.

I know that there is a certain comfort to staying with the same carrier you have always been with. And many carriers are giving some pretty good discounts. But is that worth an extra $50, $100, or more dollars a month?

Auto insurance carriers are dropping prices. Drive Insurance by Progressive just lowered their rates 8% for personal auto. They also offer a lot of other discounts depending on who you work for and what kind of industry you are in. If you have taken a defensive driving course, get the certificate to your carrier. You will get a discount in most cases.

You also will want to look at your homeowners and other insurances too. Many carriers adjust costs at your renewal to keep pace with inflation, increased county fire department fees, building costs and so on. Other carriers look at your replacement cost for a property and feel that it is lower. Also, due to changes in underwriting policies, you may be able to stay with the same carrier but write a new policy.

In legislative news, there is a proposition, prop. 17, which would allow a carrier to base your auto insurance premium on prior coverage. Let your coverage lapse, and you could be paying a lot more for your insurance once you reinstate it. The up side to this is that hopefully less people will cancel their auto coverage which will allow insurance companies to have more premiums to pay claims from. The cost that California drivers pay for uninsured motorists claims has gone up dramatically in these hard economic times. People are driving with out insurance to save money. This drives up the cost of insurance on everyone else so that carriers can pay claims for thier customers. If you drive without insurance and get pulled over or worse, have an accident, the fines are pretty steep and you could have your car impounded on the spot, not to mention the insured person you hit coming after you in court in addition to their carrier suing you from now til the end of time. Also, state law requires you to have insurance or your registration is voided by the DMV. On the down side, people who are driving without insurance are going to take a hit ( pardon the pun!) when they do decide to get coverage.

If you do not have auto insurance, get it now!

The California Low Cost Auto program is here to help. If you meet the income guidelines and other requirements, this is an affordable solution. Also, check out other carriers and compare prices. There is an affordable solution out there for almost everybody. With the variety of discounts, programs and carriers lowering their rates, you are bound to find something you can afford.

Thursday, February 25, 2010

Code Blue! What is Anthem Blue Cross thinking?!!

Many of you have heard of the astounding rate increase that Anthem Blue Cross, a division of WellPoint, is trying to charge customers in California. This 29% increase, Anthem says, is necessary to continue to provide coverage and pay claims.

Yesterday, the president of WellPoint, Angela Braly, was grilled, roasted and seared on Capitol Hill. When the committee asked about her salary she told them that she gets $1.1 Million per year, bonuses, and stock compensation of $8.5 Million. The company made 4.2 Billion last year. The company said its profit margin was reasonable, since it lagged behind drug companies, medical supply and equipment manufactures and was about the same profit as hospitals.

Today the California Dept. of Insurance charged Anthem with 700 state violations after reviewing some 3,000 complaints from consumers. Anthem is also being sued by a man who Anthem denied coverage for a life saving liver transplant operation.

You can read the Claims Journal article Here.

All this on the day of President’s Obama’s health care summit. I wonder if there will be any headway. Last year, I thought the Senate had a pretty good plan going. People would qualify for Medicare earlier; people could still have private insurance, the reforms placed on health insurers where good for the public. Then in the course of one night, they destroyed the whole plan!!

I think we should do this:

Dissolve the congressional health care plan. Make them go out and buy insurance like the rest of us. Then, perhaps, they might stop all the back room deals, all the arguing, all the Not In My State bickering, and pass a universal health care bill that makes sense.

For those of you who fear that health care would be rationed under such a plan, it’s being rationed now. If you are not flat broke, you don’t qualify for Medicare yet, and you have a health problem, you have few to zero workable options. You are the working poor. You have money taken out of your paycheck to pay for health care for other folks, but not you.

Universal health care may not be the best option. Congress and the President could commit to something unworkable. We might have to revise whatever they pass in 2 years. It will, I hope, get these insane costs under control and make health care accessible to all and affordable. Not to mention, reforming the medical industry and the medical insurance industry. You must curb the costs for hospitals, drug makers and equipment manufactures and insurance companies. Otherwise runaway business practices and their associated charges will doom our great nation to being unable to take care of its citizens.

Friday, January 22, 2010

It's snowing, hows your insurance?

It's snowing here in Yucaipa and that is pretty rare for us to have it stick.










So what about your insurance? If a tree, overburdened by snow, dropped a limb on your roof and damaged it you would be covered, even if it fell on a car parked in front of your home or on your neighbor’s property.


If you were in a car accident, you would be covered too.



What about when the snow melts? Do you live near a mountain side, a creek, or a low lying area? What if water, mud and other debris flow into your house?



You would most likely have little if any coverage.



Why? Because that is the definition a flood. Water flowing into your dwelling from outside, then receding or flowing back out. Homeowner’s policies do not cover flood and in California earthquake damage is also excluded. You have to buy these two policies separately in addition to your homeowners insurance.



But you are not worried. Your realtor would have told you if you were in a flood area, right? Certainly your lender would require flood insurance if you needed it, wouldn't they?



Ask the people of New Orleans. Many lenders did not require flood insurance on homes that were in a flood plain. Insurance carriers like State Farm and Allstate blamed as much damage as they could on flood waters so that they could avoid paying out.



Also, with revised flood maps, many homeowners are getting letters from their lenders saying they need flood insurance now when they have not required it in the last 5, 10 or 20 years. Adding to the anxiety is they very definition of a flood. Look at it again. It's says any water, debris, etc. flowing into a structure from outside. It does not define a cause. You could have a broken water main up the street, a fire hydrant get hit by a car, and you have a flood.



It's worth checking with your agent or your county flood control office to see what type of flood zone you are in and the decide if you want or need flood insurance. Many of us will be just fine with out it. But be aware of what your homeowner’s policy covers and what it does not.










Monday, January 4, 2010

New Flood Maps Causing Water on The Brain for some Homeowners and Realtors.

Since 2003, FEMA has been updating many of the nations flood maps. The maps for San Bernardino, Riverside, Los Angeles, Orange, and Ventura counties have all been updated in 2009.

The result of this is that some properties that were not in a flood area under the old maps are now in a flood zone.

Lenders are now starting to use the new maps and area notifying homeowners that they are now in a flood zone and need to purchase flood insurance or the lender will purchase it for them. This could change your monthly mortgage payment drastically since most of the loans that will require flood insurance are government insured (FHA, VA, Freddie Mac, Fannie Mae) and are required by the federal government to have flood insurance if they are in a flood zone.

If you are buying a home, flood insurance can make or break a deal. If you are buying a home and you are qualified by your lender for a certain amount of payment based on your income and other factors, the lender calculates your payment including insurance and taxes. Any changes in property taxes or insurance cost could disqualify you from getting the loan.

In some areas, local governments are stepping in and ordering detailed studies from local surveyors to challenge the maps. There are also private groups forming to protest the updated maps. In some areas and in some circumstances, the new maps may have been created based on inaccurate information. But just because the house next door is classified as no longer being in a flood zone, yours may still be in a flood zone according to the new maps.

Why would FEMA update their maps now? Well, the maps in some areas were at least 40 years old according to the LA Times. There has been construction of storm drain systems, flood control channels and dams in some areas along with the construction of new homes and shopping centers. All of these things affect the way water flows over the landscape of an area. Another troubling factor has been that in areas where there are levies, the levies are old, poorly maintained and have actually been de-certified since their effectiveness in a major storm is questionable and they could fail just as the levies in New Orleans failed in 2005.

Why didn’t your Realtor tell you about this? Most of them are not yet aware of the changes. Another thing is that when you bought the property, the old maps were in use and it may have shown as not being in a flood zone at that time.

To see the La Times article, go to http://www.latimes.com/news/local/la-me-flood-maps4-2010jan04,0,6016681.story

If you are affected by these changes, you can contact the County Flood Control office.

San Bernardino County Flood Control (909) 355-8800

Riverside County Flood Control (951) 955-1200

You can also check your flood zone at http:/msc.fema.gov or call us for a flood determination.