Deductibles & You

Courtesy of iii.org

This should NOT be a surprise: Your home insurance policy has a separate deductible for hurricane damage. It should be common knowledge because it’s been in Florida statutes on insurance contracts at least since 1997. Yet, when the next hurricane hits, there will be some people shocked to find this out when it has been in plain sight for more than 20 years.

Truthfully, it’s in plain sight if you were actually to READ your insurance policy. You’ll find it in two places. On the front of your policy pages, there is this blaring headline in all capital letters:

“THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.”

This sentence above is in 18-point, bold type not because I’m yelling, but because that is what the legislation requires. Big, bold and rather in-your-face.

The second place homeowners are informed of their hurricane deductible is on the declarations page. This is a one-page summary of what you are paying for insurance, and the hurricane deductible amount is spelled out to the penny. For example, if your dwelling is insured for $325,000, and you have a 2 percent hurricane deductible, the amount is $6,500. That is your share of the repair bill from hurricane damage.

And, the logical next question would be?WHY? Here’s why: Without a hurricane deductible, you would be paying more every year for property insurance. Remember, a hurricane can hit any year, and the threat of hurricanes hangs for 6 full months. Having these higher deductibles means you share in the cost to repair any damage in exchange for lower premiums every year that hurricanes don’t hit. With deductibles in place, insurers are more likely to want to offer coverage. Why? Because if the cost of catastrophic claims is shared, then more insurers will consider entering the marketplace, giving customers more choices.

Florida property insurance policies have had a hurricane deductible since shortly after Hurricane Andrew hit in 1992. Andrew was a game-changer, an eye-opener and a truth teller about the risks associated with living in Florida. We shouldn’t be surprised.

Saving Money on Auto Insurance

Courtesy of iii.org

  • Before You Buy a Car, Compare Insurance Costs

  • Higher Deductibles Could Mean Lower Premiums

  • Reduce Coverage on Older Cars

  • Buy Your Homeowners and Auto Insurance from the Same Company

  • Maintain a Good Credit History

  • Take Advantage of Low Mileage Discounts

  • Ask About Group Insurance

  • Seek Out Other Discounts

Boats, Insurance & You

Insurance can provide limited coverage for property damage for small boats such as canoes and small sail boats or small power boats with less than 25 mile per hour horse power under a homeowners or renters insurance policy. Coverage is usually about $1,000 or 10 percent of the home’s insured value and generally includes the boat, motor and trailer combined. Liability coverage is typically not included?but it can be added as an endorsement to a homeowners policy. Check with your insurance representative to find out if your boat is covered and what the limits are.

Larger and faster boats such as yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.

For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis. These policies also provide broader liability protection than a homeowners policy. But there are distinct differences between the two types of policies.

Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.

Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.

Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.

Boat insurance also covers:

  • Bodily injury?for injuries caused to another person
  • Property damage?for damage caused to someone else’s property
  • Guest passenger liability?for any legal expenses incurred by someone using the boat with the owner’s permission
  • Medical payments?for injuries to the boat owner and other passengers
  • Theft

Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.

Boat owners should also inquire about discounts for the following:

  • Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
  • Coast Guard approved fire extinguishers
  • Ship-to-shore radios
  • Two years of claims-free experience
  • Multi-policies with the same insurer, such as a car, home or umbrella policy
  • Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.

Boat Safety

There are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.

To prevent boating accidents, we offer these safety suggestions:

Care and protection of vessel

  1. Check weather forecasts before heading out.
  2. Let someone know where you’re going and when you expect to return.
  3. Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
  4. Carry one or more fire extinguishers, matched to the size and type of boat. Keep them readily accessible and in condition for immediate use.
  5. Equip the vessel with required navigation lights and with a whistle, horn or bell.
  6. Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.

Care and protection of crew and guests

  1. Make sure that every person on board the boat wears a life-jacket.
  2. Know and obey marine traffic laws, the “Rules-of-the-Road.” Learn various distress signals.
  3. Keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
  4. Pay attention to loading. Don’t overload; distribute the load evenly; don’t stand up or shift weight suddenly in a small boat; and don’t permit riding on the bow, seatbacks or gunwales.
  5. Don’t operate a boat while under the influence of alcohol or drugs.

Skippers can obtain free advice and boating-safety courses from the U.S. Coast Guard Auxiliary. Upon request, the auxiliary will conduct a Courtesy Marine Examination (CME) on your boat, checking electrical and safety equipment and fuel hoses. Boats meeting safety standards are awarded the CME decal “Seal of Safety.”

Business Income & Severe Weather Events

Courtesy of iii.org

With predictions of an above-average hurricane season issued by Colorado State University this week, businesses need to take measures to prepare and increase their chance of surviving, according to the Insurance Information Institute (I.I.I.).

Forty percent of businesses do not reopen after a disaster and another 25 percent fail within one year, according to the Federal Emergency Management Agency (FEMA). But by taking action now to prepare, businesses can increase their chance of getting back on their feet financially and keeping their doors open.

The I.I.I. and the Insurance Institute for Business & Home Safety (IBHS) recommend the following steps:

Develop a Business Continuity Plan

Having a business continuity plan is vital for companies to prepare for, survive and recover from a hurricane. Use IBHS? free OFB-EZ® (Open for Business) business continuity planning tool to create a plan that focuses on recovering after the initial emergency response. Share your plan with employees, assign responsibilities and offer training so your workforce can collaborate in the recovery of your business. Conduct regular drills to assess and improve response.

Maintain Key Information Offsite

To get your business up and operating as quickly as possible after a disaster, you?ll need to be able to access critical business information. In addition to backing up computer data, keep other critical information offsite such as your insurance policies, banking information and phone numbers of employees, key customers, vendors and suppliers, your insurance professional and others. If you have a back-up site, make sure it?s sufficiently far away so as not to be affected by the same risks that threaten the primary location. Use IBHS? free EZ-PREPTM severe weather emergency preparedness and response planning toolkit with checklists that can be customized for your company to be sure you have a well-organized plan and are ready to respond when disasters occur.

Create a Business Inventory

Include all business equipment, supplies and merchandise?and don?t forget commercial vehicles.

Review Your Insurance Coverage

The time to review your insurance policy is before disaster strikes and you have to file a claim. It is important that your business have both the right amount and type of insurance for its needs and risk profile. There are two types of policies you can buy as a business owner:

A Business Owner Policy (BOP) is commonly used by small businesses. BOP policies combine property and liability coverage in one policy and are usually less comprehensive than a commercial policy.

A Commercial Multi-peril (CMP) policy combines several coverages?such as commercial property, liability, inland marine and commercial auto?into a single policy. It is typically less expensive to buy a CMP policy than to buy the coverages individually.

Opt for Replacement Cost Coverage

Most commercial property policies provide either replacement cost coverage, actual cash value coverage, or a combination of both. Replacement cost coverage will pay to rebuild or repair property, based on current construction costs. Actual cash value coverage will pay to rebuild or replace the property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your business is destroyed and you only have actual cash value coverage, you may not be in a position to completely rebuild.

Consider Tenant Coverage

If you rent or lease a building, consider tenant coverage, which will insure your on-premises property, including machinery, furniture and merchandise. The building owner?s policy will not cover your contents.

Don?t Forget About Flood Insurance

Flooding is not covered by standard commercial insurance policies, so consider buying a separate flood policy. If you?re located in a high- to moderate-risk flood zone, you could be protecting your business from devastating financial loss. Commercial flood coverage is available from the National Flood Insurance Program (NFIP) and provides up to $500,000 in building coverage and $500,000 for contents. You can also get coverage through private insurers.

Visit the Business Insurance section of the I.I.I. website for more information.

RELATED LINKS

Facts and Statistics: Catastrophes

Articles: When Disaster Strikes: Preparation, Response and Recovery; Does My Business Need Flood Insurance?

SOURCES:

Colorado State University

Insurance Institute for Business & Home Safety

National Flood Insurance Program

National Hurricane Center

Seasonal Hurricane Predictions

Small Business Administration

Florida & Lightning

Courtesy of iii.org

Greased lightning, fast as lightning, lightning in a bottle, lightning-bolt ideas. So many positive images of lightning exist that we may forget that lightning is deadly. Especially in Florida. This time of year, almost every locale is subject to a summer thunderstorm. And, we may get so used to them that we forget that thunder is the sound lightning makes. If you hear thunder, go for cover.

A construction worker was killed by lightning this week at a job site in Pembroke Pines, a victim of a direct lightning strike. Another worker at the same job was injured. Earlier this month, lightning caused an apartment fire in Orlando, and eight people had to find a new place to live and deal with replacing their charred belongings. Not all of them had renters insurance.

This should be no surprise then: Florida has the highest number of lightning-related fatalities. Lightning fires in non-residential properties caused an average of $108 million in direct property damage each year from 2007 to 2011 in the U.S. There are many things you can do to protect your home and your business from lightning damage – and the go-to resource is the Lightning Protection Institute. And, there is one very important thing to do to protect yourself: If thunder roars, go indoors.

Another important point: Those so-called myths about staying off the phone and out of the shower when a thunderstorm is raging are NOT myths. Get the facts on lightning safety

Stay Safe When Grilling

Courtesy of iii.org Every year, millions of Americans safely enjoy outdoor barbecues, but accidents do happen. According to the U.S. Fire Administration, about 5,700 grill fires take place on residential property every year, causing an annual average of $37 million in damage, 100 injuries and 10 deaths. The majority of grill fires are caused by malfunctioning gas grills. In addition, thousands of people visit emergency rooms every year because they have burned themselves while barbecuing. In the rare instance of a grill fire spreading to your property, your homeowners insurance would provide financial protection as fire is a covered peril. A homeowners policy covers the following:

  • Damage to the house itself.
  • Damage to personal possessions such as lawn furniture.
  • Damage to insured structures on your property, such as a shed or gazebo.
  • Injuries to a guest, under the liability portion of the policy.

Keep in mind you?ll have to pay your deductible before your insurance kicks in, so if damage is minimal and your deductible is high, it may not make sense to file an insurance claim. However, the best way to enjoy a summer of outdoor barbecues is to take steps to prevent accidents, including maintaining your grill and using it safely.

Grill Maintenance and Storage

Gas grills are generally safe if they are properly maintained and checked for leaks. In some instances, grills are unsafe due to faulty design or construction. (You can search the website of the Consumer Product Safety Commission to see if there has been a recall on your grill.) When setting up at the start of each grilling season, the following tips can help ensure everybody?s safety:

  • Check grill hoses for cracks, holes and brittleness. Look for blockages as well, especially in the Venturi tube that runs to the burners. Clear blockages?caused by food drippings, spiders or insects?with a wire or pipe cleaner.
  • Run a soap solution (one part liquid soap, one part water) along hoses and at connections, then open the valve at your tank and check to make sure that gas isn?t escaping, which will be indicated by bubbles at the leaking points.
  • Adjust hoses as needed away from hot areas or where grease might drip on them.
  • Store propane tanks outside, away from your house. Always check to make sure valves are firmly turned off.

Safe Barbecuing Practices

When barbecuing, use common sense and follow these guidelines:

  • Operate your barbecue on a level surface, away from your house, garage and landscaping. Don?t move the grill once it is lit.
  • Keep children and pets away from ther grill.
  • Protect yourself?or whoever is doing the grilling?with a heavy apron and oven mitts that reach high on the forearm.
  • For charcoal grills, use only lighter fluid designed for grilling. Never use gasoline or other flammable liquids, and never add more lighter fluid once the fire has started.
  • Never grill indoors or in enclosed areas. Charcoal grills produce carbon monoxide (CO) fumes, which can be fatal in unventilated areas.
  • Keep a fire extinguisher nearby.
  • When you?re done with your cooking, remember that the grill will remain hot for a while. Don?t cover or store your grill until it has cooled, and soak coals with water before throwing them away.

In Case of an Accident

If a grill accident?or any kind of accident?does occur, injuries should be addressed immediately. Run cool water over minor burns, but do not cover injured areas with bandages, butter or salve. In the case of more serious burns, victims should visit the emergency room or an urgent care facility. If needed or when in doubt, call 911. Once you have dealt with any injuries, assess your property damage and, if the situation calls for it, contact your insurance professional to discuss filing a claim.

Lightning Quiz

Courtesy of iii.org

With 1,800 thunderstorms in progress at any given time on Earth, it’s important to be able to sort out the myths from the facts when it comes to lightning safety. And keep in mind that the best lightning safety plan of all is to take shelter in a house or other structure, or a hard-topped fully enclosed vehicle during a storm: “When thunder roars, go indoors!”

MYTH 1 ? LIGHTNING NEVER STRIKES THE SAME PLACE TWICE Fact: Lightning often strikes the same place repeatedly, especially if it’s a tall, pointy, isolated object. The Empire State Building was once used as a lightning laboratory, because it’s hit nearly 25 times per year, and has been known to have been hit up to a dozen times during a single storm.

MYTH 2 ? LIGHTNING ONLY STRIKES THE TALLEST OBJECTS Fact: Lightning is indiscriminate and it can find you anywhere. Lightning hits the ground instead of trees, cars instead of nearby telephone poles, and parking lots instead of buildings.

MYTH 3 ? IN A THUNDERSTORM, IT’S OK TO GO UNDER A TREE TO STAY DRY Fact: Sheltering under a tree is just about the worst thing you can do. If lightning does hit the tree, there’s the chance that a “ground charge” will spread out from the tree in all directions. Being underneath a tree is the second leading cause of lightning casualties.

MYTH 4 ? IF YOU DON’T SEE CLOUDS OR RAIN, YOU’RE SAFE Fact: Lightning can often strike more than three miles from the thunderstorm, far outside the rain or even the thunderstorm cloud. “Bolts from the Blue,” though infrequent, can strike 10?15 miles from the thunderstorm. Anvil lightning can strike the ground over 50 miles from the thunderstorm, under extreme conditions.

MYTH 5 ? A CAR WITH RUBBER TIRES WILL PROTECT YOU FROM LIGHTNING Fact: Most vehicles are safe because the metal roof and sides divert lightning around you. The rubber tires have little to do with protecting you. Keep in mind that convertibles, motorcycles, bikes, open shelled outdoor recreation vehicles, and cars with plastic or fiberglass shells offer no lightning protection at all.

MYTH 6 ? IF YOU’RE OUTSIDE IN A STORM, LIE FLAT ON THE GROUND Fact: Lying flat on the ground makes you more vulnerable to electrocution, not less. Lightning generates potentially deadly electrical currents along the ground in all directions, which are more likely to reach you if you’re lying down.

MYTH 7 ? IF YOU TOUCH A LIGHTNING VICTIM, YOU’LL BE ELECTROCUTED Fact: The human body doesn’t store electricity. It is perfectly safe to touch a lightning victim to give them first aid.

MYTH 8 ? WEARING METAL ON YOUR BODY ATTRACTS LIGHTNING Fact: The presence of metal makes virtually no difference in determining where lightning will strike; height, pointy shape and isolation are the dominant factors. However, touching or being near long metal objects, such as a fence, can be unsafe when thunderstorms are nearby?if lightning does happen to hit one area of the fence, for example, the metal can conduct the electricity and electrocute you, even at a fairly long distance

MYTH 9 ? A HOUSE WILL ALWAYS KEEP YOU SAFE FROM LIGHTNING Fact: While a house is the safest place you can be during a storm, just going inside isn’t enough. You must avoid any conducting path leading outside, such as corded telephones, electrical appliances, wires, TV cables, plumbing, metal doors or window frames, etc. Don’t stand near a window to watch the lightning. An inside room is generally safe, but a home equipped with a professionally installed lightning protection system is the safest shelter available.

MYTH 10 ? SURGE SUPPRESSORS CAN PROTECT A HOME AGAINST LIGHTNING Fact: Surge arresters and suppressors are important components of a complete lightning protection system, but can do nothing to protect a structure against a direct lightning strike. These items must be installed in conjunction with a lightning protection system to provide

In the Face of Threat, How Do You React?

Courtesy of insuringflorida.org

The biggest threat to recovery after a natural disaster is the mass of people who are unprepared for it. After every single tornado, hurricane or flood, the media easily find people who have been impacted by the event, and they invariable say nearly the same thing: “I never saw it get this bad before.” Sure, seeing is believing. But even then it’s not enough. Those who’ve been through a devastating event think it can never happen to them twice. Until it does.

Is there a cure for complacency? Yes, there is ? and it is to take action. At an insurance industry meeting this week, a weather expert from the National Oceanic and Atmospheric Association (NOAA) mentioned an odd-sounding term: “Reasonable Worst-Case Scenario.” A first impression is that seems like two extremes. Is it reasonable, or is it the worst? But think about it as the weather experts and disaster-planning experts do: It’s what could reasonably happen with a direct hit from a powerful storm. And, don’t think about it too hard. DO something to fight the complacency that makes you think it won’t happen to you.

Here’s how to approach it: Think about your particular situation if a powerful storm were to hit your area two months from now. That’s a reasonable timeframe because peak hurricane season starts in mid-August. Think through what would happen if your house was a pile of rubble, your belongings were strewn down the block and the neighborhood leveled with an expectation that things would not be back to normal for months. Pretend that happened ? and work backward to what you wished you would have done NOW to make THAT somewhat easier to survive physically and financially.

We’ve got the tools to help you. But only one person can make you do it ? and it’s the person reading this article. Be resilient, Florida.

Insurance and Older Americans

Courtesy of Insuring Florida

According to the U.S. Census data, in 2010 there were 22 people over the age of 65 for every 100 people. By 2030, that number will rise steeply ? with 35 of every 100 Americans being over 65 years old. That’s 19 percent of the population. No surprise that Florida ranks #1 with the most households with senior citizens. Obviously, the need for long-term care insurance will increase.

Most people buy long-term care insurance around age 60, says the U.S. Dept. of Health and Human Services. The younger you are when you buy it, the more likely you are to be accepted for coverage. If you apply in your 50s, there’s a one in 10 chance you’ll be rejected. If you apply in your 60s, the chance of rejection is two in 10, and the odds against you double if you wait to apply for coverage until you hit your 70s. Of course, the younger you are, the lower the premium will be for a given set of benefits and features. Once the premium is set, it stays at that amount for the life of the policy, unless the claims for the group of people who have bought that type of policy require rates for the group be raised to cover claim payments.

You’ve got lots of options in planning for the silver and golden (and platinum) years. Some people think they should invest what they would have paid in long-term care, rather than buying an insurance policy. But that may leave you vulnerable if you need the benefits earlier than planned. Like most things in life, do your homework on long-term care. And, celebrate your years ? since this is Older Americans Month, and the theme is “Never Too Old to Play.” I like the sound of that!

Prepare Now for the Summer Storms

Courtesy of iii.org

It?s 2017 ? and another hurricane season is about to be breathing down our necks. Maybe you?ve grown immune or indifferent after seasons of weather threats proved wrong. A word of advice: Never let your guard down.

Did recent reminders of the need for storm vigilance get your attention in 2016? Hurricane Hermine and Hurricane Matthew hit Florida last fall. If neither storm affected you, it might be easy to ignore them. The weather is wild and, despite all the scientific tools available, it?s hard to predict where the winds will go and how powerful they will be.

What you don?t know about preparing for bad weather can hurt you. For example, did you know that Hurricane Matthew last October blew up to be a Category 5 hurricane within a 24-hour time frame? If you are surprised, so were weather experts; they said no other storm had intensified that quickly. Read the report about Matthew defying weather forecast models, and then thank our lucky stars that it landed as a Category 1.

What if you prepared for a Category 1 (wind speed up to 95 miles an hour), but a Cat 5 with winds of 165 mph arrived instead? We don?t like to think about it, but thinking on it and acting on it ? in advance ? is storm-defying behavior. It?s time to review our Hurricane Season Insurance Checklist.

You may also like to up your awareness for the upcoming season by listening in to a couple of hurricane season awareness webinars from the National Hurricane Center. The NHC will be talking about new capabilities to issue advisories and warnings and also has a topic on inland flooding, which is an overlooked, yet deadly, threat.