Saturday, November 23, 2013

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. The cat got into the desert.

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.

There are over 4,000 fires that occur nationwide on Thanksgiving day. Many of these were caused by carelessness and open flames. Some fires where minor, some not. "Touch" Football 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, fryers, 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 videos 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, October 17, 2013

Halloween is not the only scary day this month.

October is here and with it there are many changes in the insurance world. 

The National Flood Insurance Program, NFIP, is being overhauled. In 2012 Congress passed the Biggert-Waters Flood Insurance Reform and Modernization Act. This legislation is intended to help with flood map updating, reauthorized the the NFIP for 5 years instead of one year and it also updates rates to reflect the true risk of flooding based on flood maps. 

It's the last that is the biggest issue. Under the previous rules many areas had rates that where subsidized or grandfathered in by NFIP. These rates did not take into account the changes in construction and disaster relief costs. When Hurricane Katrina hit, the funds in the NFIP where exhausted or nearly exhausted. After Katrina, the Midwest and other parts of the country flooded and continue to flood annually. With these repeated losses the NFIP had to go before Congress annually and ask for more money to insure properties in flood prone areas and to provide disaster relief. BW12 is meant to put money back into the NFIP's reserves and to help keep it from going into insolvency again. 

What this means to you is that if you have flood insurance, you may see your rates increase depending on where you live. It's no surprise that those that live along the coast and near rivers will see the biggest change in rates, but those of us more inland in low lying areas and near foothill run off areas may also see a more modest increase. 

What triggers the increase for existing homeowners is if your policy was originally placed on or before July 6, 2012. If so and you have kept your renewals paid on time, then you will have the current rates applied. If you let your policy lapse (you pay late) or you sell the property then you or the new owner will be rated with the new rates. If you have a non-residential property, a waterfront home, or a repetitive loss property,  then you may see up to a 25% increase in your flood insurance rates. When you sell your home you or the buyer will have to purchase an elevation certificate from a licensed civil engineer in your area in order to get flood insurance, unless you have a complete one already. Sometimes they are recorded with your county,  city or town.  If you or the buyer do not get an elevation certificate, you can still get flood insurance for one year at the new higher rate, however you will not be able to renew or get a new policy until you get an elevation certificate. If you are non-renewed, your lender will force place coverage which based on the rate increase will most likely be much higher than what you could get insurance for on your own. Changes in the flood map could also trigger a rate change. 

Currently there are a few bills in congress to postpone the price increases to allow time to study the impact they will have. With recent battle of the Congress vs. The White House  over the budget and debt ceiling, it may be some time before Congress gets to these bills.  If you want to reach out and touch someone, go to the US House of Representatives and the US Senate, find your person and send them a note. 

Health Insurance is another big change in October. Some of the exchanges are run by the state you live in, others have opted to go with the feds exchange. You can find more info at and conveniently located near the bottom of the page is the spot where you can find your states health insurance exchange or if your state has opted to let the feds handle it. In California the site is and the plans are bronze, silver, gold and platinum. The higher the plan level, the more you pay monthly, but the less you pay for doctors visits, surgery, medications, etc. While the sites for many states and the Fed's have had trouble due to the volume of people using them, they are working out the kinks.  I mean who do you think designed these sites? Certainly not Amazon!

Yes, you can still have your employer sponsored plan if they have one, Yes, you can still buy your own insurance direct from a carrier or keep what you have, however some carriers are pulling out of the individual health insurance markets so you may have fewer options. There is a penalty if you do not have health insurance unless you meet certain conditions. Click here for more information on the penalty.  

I think I feel safer with the vampires, ghosts, werewolves and zombies than I do with the government. You know where you stand with a zombie. 

Saturday, July 6, 2013

Insurance Carriers Need to Adjust to Climate Change...That Could Mean Less Coverage, Higher Premiums

I just read an article at the San Bernardino Sun news paper that worries me. The article states that the California Insurance Commissioner is urging insurance carries to prepare for climate change.

Even if you don't believe in global warming, there is no doubt that there have been larger storms , large fires, floods and tornadoes each year. This is a huge problem not just for property owners and tenants, but for carriers too. They have had to make large payouts for these events. Add to that, carriers must also meet state solvency requirements and federal reserve requirements as well. That usually means that they have to be able to pay every policy they have placed, plus cover operating expenses (salaries, utilities, taxes, etc.) and have reserves. 

The California Insurance Commissioner, Dave Jones, sent out a survey to carriers asking about, among other things I'm sure, what carriers where doing to prepare for climate change. Of the 184 responses his department got back, only 23 had some kind of plan for dealing with climate change. You can read the article here

What worries me is that many carriers will stop writing policies in areas prone to wildfire, floods and other natural disasters, raise rates to incredible heights in those areas and that they will start placing more exclusions on coverage. Hopefully I am wrong. Only time will tell. 

Communities need to also prepare for climate change too. Increasing and maintaining flood control measures, enforcing brush clearing away from property, property owners keeping their buildings in good repair, and taking many other steps to prepare for natural disasters in their communities will all help. While it won't keep buildings and lives from being damaged or worse, it will make getting back to normal much less costly and time consuming. 

Sunday, June 30, 2013

Online Quotes - Some Points to Consider

It seems I can't watch anything on TV these days without at least 4 insurance commercials coming on. Some of them are pretty good, others offer you "anonymous" quotes from their websites or talk about all the discounts you can get by bundling everything with one carrier. I always thought bundling had more to do with rope than insurance.

While online quotes are great, they are quick, you can pick and choose your coverage, you can get several of them in a short time, there are some disadvantages to them that you, the customer, should watch out for.

First, they rely on you to put in accurate information. I'm not saying  that you don't pay attention to detail, just that what that information means to the carrier and to you could be different. I know that when I talk to many of my clients they will say "...the house is about 1800 square feet." For the carriers, there is no about, what is the exact square footage. If it's 1820 and you put 1800 this causes a little problem which the carrier may adjust and charge you for later, or when you go to rebuild you may have to pay out of pocket for 20 square feet of master bathroom.

Second, how well do you know insurance terms? There are some I even have to look up. While some websites are helpful, the industry still has some ways to go on using clear lingo. If you answer x to a question that should have been answered y and something happens, you may not be covered.

Last, many of these online quotes are designed to be fast and simple, not accurate. So you get a great quote back from generic insurance website for $300 when everyone else quoted you $500. You jump on it. You go through the online buying process or call their sales department to lock up this great rate. You complete the process and are asked if you would like to pay your $800 yearly premium by credit card, check, payment plan or sacrificial first born.

So what happened to $300?! Well, during the buying process you should have been asked some questions. Your answers to those questions changed your coverage.

While online quotes can be a good way to see whats out there, you should be prepared for coverage changes at the end. A half our on the phone or a site that sends the information you provide to a licensed insurance professional to work up your quote and respond by e-mail can help take the tease out of those online teaser quotes and make the whole process less stressful for you.

Friday, May 24, 2013

Do You Have A Dog? Do You Have Insurance? Are you sure?

Earlier this year Farmers Insurance changes their animal liability coverage to exclude breeds of dogs they had previously covered. What that means to you is that if your family pet is Akita, Alaskan Malamute, American Staffordshire Terriers, Boxer, Chow, Dalmatian, Doberman Pinscher, German Shepherd, Husky, Pit Bull, Presa Canario (Canary dog), Rottweiler, Staffordshire Terriers , Wolf-dogs and Wolf hybrids, you no longer have coverage with Farmers. Many carriers already exclude these breeds as well as others.  Check with your agent for carrier to be sure.

I know, Petunia the Pit Bull sleeps with the kids and would never harm a fly. It's not about your dog, trust me. I had a neighbor that had a Doberman  that would run up, lick my arm and expect to be petted whenever we where both out front.

What it is about is claims statistics. These breeds tend to have higher insurance claims associated with them than others. A German Sheppard has more bite claims than an English Hound. Dog bite claims cost insurance carriers close to $479 million in 2011 and the cost is rising. Whats more is that now some carriers are unwilling to insure a property where prohibited breed dog lives even if animal liability coverage is waived.

So why would they not insure me if I don't have coverage for my dog? If my dog bites somebody, I would have to pay for it myself, right? Sorta. Part of the problem is the way that many dog bite laws are written and interpreted and the other is that to get around the exclusion in civil court, lawyers are pointing to the fact that you are liable for what happens on the property and you do have liability coverage for that. Its a catch 22 for insurance carriers who don't what to cover high risk breeds, but still want your business. Again, check with your carrier or call your agent.

There are still a handful of carriers that will insure your property no matter what kind of dog you have. Some may still exclude coverage for any harm caused by the animal, other won't. You can also purchase a policy that will cover only your dog if they bite somebody. Sites like F.I.D.O will provide coverage for your pet and you can even put more than one dog on the policy and buy it all online.

In short, be honest with your agent about the type of  pets you have. Remember  an inspector will visit the property  and note the type of pet you have. If there is a claim, the claims adjuster will also note the type of dog you have and if it's excluded, your claim will be denied. Not a good time to find out that they kid that hopped the fence and got bit is now going to have your savings account too.

Thursday, April 18, 2013

A Family Emergency Plan and Why Everyone Should Have One

What would happen if a large earthquake hit next week and you were at work, your spouse was at work and the kids are at school? Would you be able to find one another? How? Or there is a large fire, your kids are across town at a friends house spending the night, you are at home and your wife is visiting friends 2 hours away? The cell towers in your area just burned, ditto the phone lines, assuming you still have a plug in the wall phone :) .

 Don't get the alchohol out yet, there is a way to deal with this and remain sober, I promise.

This is where an emergency plan would come in handy. Everyone would know where to meet if they could not communicate, who everyone could contact to get updates and see who checked in, etc.

Here is a simple 2 page fill in the blank plan that I like. I would skip putting in social security numbers since when a disaster hits, scam's come out of the woodwork to take advantage of people who are emotional, not thinking clearly, and looking to get their hands on all the disaster aid money they can. Keep important documents like social security cards, drivers licenses, bank statements and passports in a separate spot that you will keep on your person at all times, if it locks well that would be a plus.(See this post for Grab and Go Kit ideas)

Another thing I would add to the emergency plan is a list of family members doctors names and contact info and medications they are on. Call your children's school district or the school it's self and see what type of evacuation plan they have, where they are taking everyone and how they will try to contact you. If you have children that attend school at different locations, be sure of what each location is doing, it may not be the same. Also, plan alternate routes on how to get to and from the evacuation site.

Keep it short, don't get hung up in too much detail. Your family members are going to be just as emotional as you are. The last thing anyone will need is to dig through 10 pages of stuff to find out where the school is taking the kids to if they have to evacuate.

Make sure everyone knows the plan and carries with them  a small card or piece of paper with the phone numbers, meeting places, and one or two alternates if the first meeting place is not accessible.

Don't have  family members nearby? Get a group of friends, coworkers, club members, or neighbors together.

Thursday, March 28, 2013

So how many of you have read your insurance policy?

There is an ongoing debate on who's job it is to make sure that you, the insured, understand your coverage and your coverage options. The carriers like to say it's the insured's and their agents, the agents say the carriers have some responsibility in educating insureds, and most insured's say my agent and the carrier should make sure I'm covered, I don't have to read the policy.

Needless to say, what it boils down to is that you, the insured, our client, need to understand what you have. Only then can you ask questions of your agent and carrier about what gaps there are in coverage and what you need.

For example, do you have children that have had to move back home due to school and the economy? Their personal property (clothes, stereo, cd's, books, computer, etc.) may not be covered  under your homeowners policy. Your child may need to get a renters insurance policy to cover their stuff.

Another one to look out for is who is insured. When you look at your declarations page (the page that lists what coverage's you have and in what amounts) is everyone that should be on the policy listed? Is there a section (like in auto policies) for excluded persons? Are they correct? When your child gets a learners permit you need to make sure that they are added on to your policy.

Are the coverage amounts correct? Are they too little? Way, way too high? Be careful here. In California there are certain rules that carriers have to follow when calculating rebuild costs on property. This may seem high to you, but when you get into the costs of reconstructing and removing debris it adds up quick. A little more is better, but if you have insurance on a 1,500 sq.ft. house for $500,000 you had better have gold plated everything and imported marble.

How does your carrier define words? Look at the definitions page. Just because a word means something to you does not mean your carrier has the same meaning. This can get real confusing.

Included vs. excluded. Read the sections of what is covered and then what's not covered or excluded. Look for sub limits on jewelry, electronics, business property, etc. You may need to talk to your agent about adding coverage. Also look at the endorsements that are on your policy. This is another spot where coverage can be added, limited or excluded.

Yes, it can be confusing. but it's worth it to read it now and address any issues before you have a claim and find out you're not covered or that coverage is limited. Talk to your agent, ask questions, ask them to point out where in the policy your question is addressed.

Now go have a drink!

Thursday, March 14, 2013

You'd Better Watch Out!

Hackers are out there everywhere. Antivirus and firewall software can’t keep up. What should you do? Disconnect your life from the digital world? Well, not just yet. Here are some tips for keeping yourself safe online.
1. Do not use any word found in a dictionary. Say you like to use panhandle as your password. Change it to panndle for example.
2. Use at least 8, preferably 12, characters. That includes symbols and numbers.
3. Do not include any personal information. I know that using your birth year or that of your children or spouse is a good way to remember. Hackers know this too. Same with your name, identification numbers, etc.
4. Be creative. Use a license plate number that you see in traffic (not yours or anyone you know) and add symbols and a few letter and numbers. Or try using a phrase for example "The rain in Spain stays mainly in the plain" and then narrow it down, like "triSsmitp67!".
5. Change your password regularly. Experts say once every three months, some more practical folks say twice a year, sooner if you suspect something has happened.
I know, it seems nuts and that Amish, Hutterite or Eskimo settlement is looking really good. Keep in mind that it's part of living in the digital world we live in and come up with a method that works for you. There are also many sites and password programs out there that will help you generate passwords and create secure lists that you can reference. These are just a few ideas. Search the web for more things you can do and check out computer magazine sites like PC World.
I wonder how to hook up a plow?  

Thursday, February 21, 2013

Can you rebuild your home if you live in a flood zone?

With the expansion of flood zones by FEMA starting back around 2008 for some areas and continuing even today, you may get a rude surprise: You're now in a flood zone.

Yup. Lived in the house 30+ years, now it's in a flood zone. It's happen all over the country. Some people, cities, and counties have fought it. They have hired surveyors and had a full survey and elevation certificate done, got all the paperwork from FEMA and sent it all in. Some have gotten out of the flood zone, others have not but were able to get a reduction in their yearly insurance based on the elevation certificate. Sadly others had their insurance cost increased based on the elevation certificate.

Now to add insult to injury, there is a question if your home will be rebuilt if a flood happens. Several areas are looking at buying out homeowners that are in flood prone areas or requiring homeowners to raise their home higher above ground.

There are 2 issues at work here. One, FEMA seems to have figured out that we are having more severe weather patterns which leads to more severe flooding more often. There is no way they can charge enough money to keep disaster funds high enough to cover everyone affected. So the logical step is to start reducing the number of properties covered, aka don't pay to rebuild homes in certain high risk flood areas. (See NY Times article) Second, FEMA is changing how they define the "floor above ground level". This caused some grief for homeowners with basements in super storm Sandy's path. If we raise up the property so that all of the  "living area" is above ground level, we reduce the risk of it flooding.

If you live in a flood area, the best advice I can give is to check and make sure that your flood insurance is enough to rebuild your home currently, understanding that due to government action you may not be able to rebuild.

Thursday, February 14, 2013

Many Former Homeowners Are Choosing to Rent.

So you owned a home. For many reason's you have now decided to rent rather than buy another home. You are not alone. Surrey's show that many people are returning to renting. Some are not sure about their job situation and want to be able to move closer to a new job in another area. Others don't want the expense of repairs when something breaks.  Some want to be able to move fairly quickly because of problems with neighbors (you know, THOSE neighbors). There are many reasons.

When you owned your home, you had homeowners insurance which covered you for fire, theft, liability, water leaks and damage to your home. Now that you are renting, you may think you don't need coverage for those same things. The landlord has that responsibility, right? 

What if the dwelling you are renting, be it a house, apartment or condo, was destroyed or damage in a fire? What if there was a break in and your things were stolen? Would you have the money, right now, to replace your clothing, TV, plates, cookware, stereo, child's toys, furniture and all of your other belongings? Most of us would not. The landlords insurance policy does not cover any losses to your stuff, or liability claims against you. You get to pay that.

Would you have $1,000 in the bank or could you get a family member to loan it to you? Many of us could. Well, if you had renters insurance, you could pay your deductible with that $1,000 and begin replacing your stuff. Renters insurance would also help you with expenses while you find another place to rent, like paying for a hotel room. What if you had a claim filed against you because someone came to visit you and got hurt? Renters insurance could help you there to.

If you are renting, getting renters insurance is an affordable way to protect your things.

Tuesday, February 5, 2013

22 More States Considering Electronic Proof of Auto Insurance

Last year California, Arizona, Idaho, Louisiana and Minnesota among others put in regulations to allow you to display your proof of auto insurance on your smart phone, tablet or other electronic device. Other states are starting to follow this trend.

What shoud you do? Check with your carrier to see if they have an app or better still check with your decvices store (Apple Store, Google Play Store, etc.) and search for your carriers app. You will have to have your policy information to set up the app and you may have to set up an online access with the carrier.

Remember that you must have proof of insurance whenever requested by law enforcement. I would still keep a copy of the id card in your glove box or wallet just in case you loose your device.

You can read more here.

Thursday, January 10, 2013

Should You Really Argue About The Insured Value of Your Home?

I'm going to rant a little here. I have a few great folks I'm working with both in the past and a little more recent that say that the insured value of their home is way too high. "It's not worth that", "I don't have that much stuff!" and "My friends a builder and he says it should only cost....." are all cries I've heard before and am still hearing today.

The problem is that in insurance we are looking at it from a different point of view. Sure, you can get less coverage and I know you don't want to pay anything for insurance. But that nice cheap policy that figured your rebuild cost on your 2,000 sq.ft. home at $198,000 is really great right now. When your house burns down and the carrier says "OK, your deductible is $1,000 and oh, by the way, your co-insurance penalty is $122,000. Will you be paying by check, cash or credit card?", remember, you got an amazing deal on your insurance. Well done you.

While I know insurance is costly, it's also something you want to look at closely. In California the state felt that too many folks where under insured. Hey, we really like to regulate peoples lives in this state, so insurance carriers, agents and fellow citizens, here's a new list of regulations about how you need to figure rebuild cost for property and while you're taking into account these 30 items in your rebuild analyses  we're not going to give you a standard way to do it. Enjoy.

Many carriers collect data from Marshal & Swift, RCT Valluation Services, , 360 Value, and other services that collect data on rebuild costs around the country and in some cases around the globe. That data is then brought into the carriers systems and lined up with their underwriting calculations and policy.

We also have to rebuild to current building codes and standards with modern building materials. Many homes I write policies for do not have fire sprinklers in them. California started requiring them and some counties and cities in the state did so before the state made it law. Therefore, when we rebuild your 1980, 3 bedroom home we have to put sprinklers in it. Add that into the calculations along with all the other building code changes that have happened since 1980.

There are many other factors that go into your homes insurance value. One thing on the list is the impact of a large disaster on building costs. (i.e. cost of materials, labor, transportation, etc.) How do you calculate for that I wonder?

The bottom line is this: The cost your insurer comes up with to rebuild your home is going to vary some what from carrier to carrier, and it may seem high compared to real estate market value or tax assessors value, but in the end we have to take into account state regulations and if you house burns down would you rather have more insurance or not enough?