Homeowners Insurance Hurricane Coverage

Alabama Opens Field Offices to Aid Tornado Victims in Getting New ID

The Alabama Department of Public Safety announced earlier this week that it would be opening offices in Birmingham and Tuscaloosa in order to help residents whose driver’s licenses and state ID cards were lost in the tornadoes that struck the state at the end of April.

The offices opened on Tuesday at the Boutwell Auditorium in Birmingham and the Coleman Coliseum in Tuscaloosa, and are open from 7:00 AM – 6:00 PM every day through Saturday, May 14, for people to obtain temporary documents.

Two forms of ID will be required, including school ID’s or certified records, military ID cards, passports, marriage certificates, Social Security cards, and birth certificates.

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Tornadoes Mean Higher Insurance for NC

Last month’s tornadoes in North Carolina will probably mean a state-wide increase in the cost of homeowners insurance because of the extent of the damage, say insurance industry analysts. That’s the bad news.

The good news (sort of), at least according to the North Carolina Rate Bureau, is that the increase probably won’t even be as much as five percent, and isn’t likely to take effect until 2013.

But the increase probably would be less than 5 percent, and it wouldn’t take affect until at least 2013, according to the North Carolina Rate Bureau.

The other good news – at least for residents of places like Beaver Dam or Fayetteville, where devastation was extensive – is that tornado-related rate increases are calculated on a fifty-year average likelihood of risk, and are NOT location-specific, but spread across the state so instead of some rates going incredibly high, everyone’s rates will get increased just a little bit.

Kerry Hall, a spokesperson for the North Carolina Department of Insurance, the regulating agency for insurance rates, told the press, “We feel that people should not be worried that there will be a huge homeowner’s insurance rate increase because of the tornadoes.”

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Social Networkers Beware, Your Premiums Could be Headed Up

If you’re on Facebook, Twitter, using services like Foursquare — checking in here, checking in there — beware. You may be elevating your homeowners insurance premiums because you are engaging in a risky behavior. Yup. Social networking is firmly on insurers’ radar screens and they are not smiling or clicking the “like” button.

A British firm, AA Home Insurance, did a survey and turned up some startling numbers:

– 43 percent of those who responded said they check into social networking sites with their location.

– 10 percent admit they disclose their travel plans online; 8 percent say someone else in the house yaks about future trips.

– 14 percent of woman and 7 percent of males divulge their travel plans.

Hello! Why don’t you just invite the burglars in and serve them tea? The trend in the industry is toward asking about social networking participation. Higher rates may well be in store for customers who use location-based services and especially for those who are robbed and admit in the aftermath that they told everyone on Facebook they were headed out of town for a week.

If you are on social networking services, don’t put your mobile phone and home address in your profile and never “check in” at home. Don’t accept friend requests from people you don’t know and lock your security down to “friends only.” This is a security issue that homeowners are not going to be able to contest. If you tell people you’re not home, you are engaging in a high risk behavior, and insurers are in the business of assessing risk. Bottom line. Don’t do it and make sure your kids aren’t doing it.

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Wine with your insurance?

My suspicion is that most people reading this blog don’t have wine cellars, but an article from Reuters about insuring vino did catch my eye. I have friends who have been bitten by the grape bug and increasingly consider themselves collectors. I don’t really understand it all, but at some point a bottle is dubbed right to be consumed and a special meal or gathering is planned, the cork removed, and much incomprehensible talk about the quality of the stuff ensues. There’s generally something about over and undertones and some mention of “bouquet.”

My friends are not in the class of collector discussed in the article, but I was stunned to read that 12 bottles of 1982 Lafite auction for $45,000 and the price for the Bordeaux was $60,000. Of course, this probably jumped out at me because I was watching an episode of Antiques Roadshow while I was poking around on the net and the appraiser had just looked at a baseball and two letters from one of the guys who signed it and said the whole “collection” was worth north of $15,000.

Yes, a baseball and two letters is a “collection.” One of the saddest stories I can relate in this genre is that of an elderly woman who had three fine pieces of jewelry. The time came in her financial life when she needed to sell the pieces and they were nowhere to be found, apparently lifted by a less than scrupulous housekeeper. The items, which were set in platinum had never been appraised, photographed or . . . and here’s the kicker . . . put on the lady’s homeowners policy. Granted, she would likely have required a rider to the existing policy to get the coverage, but she would still have had something when the stuff turned up missing.

When was the last time you did an inventory of your possessions and made sure your homeowners policy accurately reflects what you own — or do not own. Are you still paying for coverage on something that’s no longer in the house? Did you just inherit Aunt Ethel’s prized necklace? Is it worth anything? Are you sure? Returning to the analogy of my wine drinking friends. For the time that expensive bottle of wine is in their possession it is, arguably, an asset. And, if they plan to wait a year or two to drink it, and in that year the house burns down, their investment in the bottle of wine goes with it.

All of these reasons point to the necessity of an annual audit of your homeowners policy. Your life and possessions change and your coverage should change with them.

Homeowners Insurance

Time to Review Your Degree of Protection Against Fire

This year’s wildfire season is shaping up to be scary and very active. There have already been 97 fires in Colorado that have consumed 37,000 acres and the outbreaks in West Texas in the last week and a half scorched 103,000 acres threatening both Fort Davis and Midland while claiming 100 homes.

While it is true that fire protection is a standard clause in almost all homeowners policies, it’s a good idea to review the coverage annually and make sure it’s adequate for full replacement value. Wildfires leave nothing in their wake. It’s very much rebuilding from the ground up.

If you want additional fire coverage and live in a high risk area, be prepared to have to take some mitigation measures to qualify. This can mean anything from maintaining what’s called a “defensible space” around your home, or making improvements to the road leading into your property to ensure emergency vehicles can gain access.

At the same time that you’re reviewing the degree to which you’re covered against fire, take a look at the rest of the policy. Make sure you’re not paying to insure items you no longer own and that things you have recently acquired are included on your policy. The time to review your coverage is now, not when you see smoke on the horizon.

Homeowners Insurance

Read Your Homeowners Policy!

A news item out of South Carolina caught my eye this morning. Over this past weekend, a hailstorm in the area around Columbia caused about $45 million in property damage. By Monday morning, insurance companies already had some 18,000 claims in the works.

This is the first spring that I’ve actually been praying for hail because I am guilty of the most fundamental mistake any insurance customer can make. I didn’t read my policy.

I live in a townhouse community of six adjoined units. Everyone else had new roofs put on two years ago and I elected not to. Now, due to the manner in which the roofer handled the seam between the two houses, my roof, which is in need of replacement, caused a leak in the neighbor’s unit.

I cannot, however, file on my insurance until we have a significant hail or windstorm. Why? Because we have not had a major weather event within the past three months. There is, in essence, a statute of limitations on my ability to claim weather damage.

We’re in North Texas, so the hail and wind will come, I’m not concerned about that, and minor repairs have been affected in the short term, but this is a real lesson in practicing what I preach. I didn’t read the policy and when an issue came up with a neighbor — who, thankfully was understanding — this homeowners policy I’ve paid for all these years wasn’t going to help me in the slightest.

Bottom line. Your insurance is of no earthly good to you if you don’t take the time to read the terms of the policy.

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Homeowners Insurance in Hard Times

Writing for, Jennie L. Phipps offers good advice to homeowners in the article, “Reassess Your Homeowners Policy in Down Market.” Her article strikes right at the heart of the most nagging point of “non-recovery” in the recession — home prices have declined by as much as half in some markets and they’re not coming back. And then Phipps asks the obvious question, “Why are you still paying the same amount for your homeowners insurance?”

What many homeowners fail to understand is that their insurance premiums are not based on the property’s market value, but rather on the cost of rebuilding. That includes not just materials, but also labor — and in the event of a real catastrophe, demolition and the removal and disposal of hazardous materials.

This does not mean, however, that there are not ways to lower the cost of your homeowners insurance while remaining fully covered. Many people are restricted by the fact that their mortgage requires them to pay for a 100% guaranteed replacement policy. If, however, your mortgage is paid off, you may be forced in these tough times to forego what Phipps calls the “holy grail of homeowners insurance” and opt for replacement cost coverage, which will paid an agreed upon amount only. No one, however, is recommending that you drop your coverage altogether.

With this and any insurance topic, education is the key. If you’ve never even given a thought to your homeowners policy — simply signed on the dotted line — now is the time to learn the ins and outs of the coverage, make sure that the contents of the house are accurately represented (in other words don’t pay for insurance on things you no longer own), and get penny wise with your policy.

(Our own article base on homeowners insurance has a wealth of information on understanding your coverage and trimming its cost.)

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Government Site for Safer Products

On Friday, March 11 the government launched a new website, that is under the auspices of the Consumer Product Safety Commission. Its basic function is to let consumers report and search safety complaints about products. You probably won’t be surprised to find out that manufacturers really did not want to see this thing become a reality and a lot of Republican congressmen, who have close relationships with industry, tried to block it.

In an interview with The Associated Press, the chairman of the consumer safety agency, Inez Tenenbaum, said, “Through, consumers will have open access to product safety information that they have never seen before and the information will empower them to make safer choices.”

We’re talking about all kinds of household products, stuff for babies, you name it. Manufacturers didn’t want it because just about anyone can make a report and their lobbyists painted a doomsday scenario of hearsay information.

In an insurance context, here’s the plain truth. You have probably had to raise your deductibles to afford to keep your homeowners insurance — I know I have. You want that insurance there for catastrophes, but if the TV catches fire and smokes up the living room, your deductible may be so high, you’re on your own. It simply makes sense to do better, more in-depth product research. It is, in essence, free insurance. This website takes some of the effort out of the process.

And it is pretty simple. When you hit the site, there’s an obvious large, green button for “Report an Unsafe Product” and just under that a box to search recalls and reports. I typed in “television” and discovered a recall on a 32-inch Sharp LCD TV as well as a recall of a particular television wall mount.

Just poking around, I also found a Sunbeam wine opener that slices and dices fingers, a QVC spinning candle holder that causes fires (duh, spinning candle?), and some cast iron skillets that create a “burn hazard.” Basically this is a site where you’re going to get information without even really trying. Thumbs up. Excellent consumer resource.

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Are you insured against “the big one?”

Right now it’s difficult not to talk about and think about what’s going on in Japan. Reuters is reporting that in the 1.8 mile band along the coast that was most affected by the earthquake and tsunami, there’s about $24 billion in insured property. In the four prefectures hardest hit, the total is about $300 billion.

Unfortunately it will likely be weeks before an accurate estimate can be achieved and who knows how long to repair the damage. Some of the risk modeling firms interviewed for the Reuters piece said getting an accurate damage figure may be impossible because no one anticipated an earthquake of that magnitude in that location. The last one in that area was 30 years ago and it was eight times weaker.

The economic losses are estimated to be in excess of $100 billion, but that figure is likely to fluctuate as damages radiate outward in the weeks to come — for instance a contracture of available auto parts to assembly plants in the United States and a likely shortage of consumer electronics made in Japan.

In the context of what we discuss here, you have to ask yourself, am I insured against the most likely disasters in my area? People who live in regions with an earthquake risk (think California) already know you have to carry special earthquake insurance. Homeowners, did you know your homeowners policy won’t cover flood? Or that if you live on the Gulf Coast you have to have a separate wind policy? If you survived Katrina you know that insurance game. No wind coverage? Oh, your home wasn’t destroyed by flooding, it was the wind. No flood policy? Oh. The wind’s to blame.

With no desire whatsoever to in any way “capitalize” on the misery of others, take away an insurance lesson from the catastrophe in Japan. Are you adequately covered in the event the unthinkable occurs?

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Video Wednesday: Bike Insurance You Didn’t Know You Have

Okay, here’s one I bet you didn’t know. You have bicycle insurance. Well. If you have homeowners insurance, you have bicycle insurance. Seriously. Watch the video.