Insurance & Wildfires Part 2

PART2

Courtesy of iii.org.

Condo Insurance

Q. There is damage to my kitchen cabinets and my clothes as well as the roof and elevator of the building. Just who is responsible?

A. Usually, your own condominium insurance policy provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses.

There is also a “master policy” provided by the condo/co-op board which covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways.

Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or putting in a new bathtub. Sometimes this may include not only improvements you make, but also those made by previous owners.

In other situations, the condo association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc. Your association’s bylaws and/or property lease will determine who is responsible for what.

If you have unit assessment coverage, if will reimburse you for your share of an assessment charged to all unit owners as a result of windstorm damage. For instance, if there is windstorm damage in the lobby, all the unit owners are charged the cost of repairing the loss.

Business Insurance

Q. Will my business be covered for property damage?

A. The typical business owner’s policy covers damage due to wind, wind-driven rain and fire. So if your business has been damaged or destroyed by one of these perils, your insurance company will pay to have your business repaired or rebuilt. Flood damage is usually excluded or very limited unless you have purchased flood coverage from the NFIP or a private insurer.

Q. My business is shut down. Will my insurance cover lost revenue? If so, for how long?

A. Business income, or business interruption, insurance (BI) covers the profits a business would have earned, based on its own financial records, had the disaster not occurred. The policy covers additional operating expenses incurred as a result of the disaster such as the extra expense of operating out of a temporary location, even though business activities have come to a temporary halt.

Reimbursement under business interruption insurance is usually triggered by some kind of damage to the property where the business is conducted and only when the damage is the result of a covered peril such as fire. Evacuation orders do NOT trigger BI coverage. Acts of “civil authority” which preclude a business from reopening can trigger business interruption coverage if the declaration was the result of a covered peril. Generally, there is a deductible either in a flat dollar amount or a waiting time. If it is a waiting time, it is typically 24 to 72 hours, meaning that payments do not begin until the business has been disrupted for one to three days.

Most business interruption forms do not include coverage for perils such as emergency evacuation by civil authority or a major utility disruption, unless they were added by endorsement. Typically, when business interruption insurance is purchased, the timeframe for coverage is a year. The overall cost of BI is determined by the amount of coverage required during the period specified.

Q. How am I going to be able to rebuild my business and afford the cost of keeping the business going at another location?

A. If you have business income coverage, it will reimburse you for lost profits and continue fixed expenses during the time that the business must stay closed while the premises are being restored. If you have ordinance or law coverage it will help pay for the extra costs of tearing down the structure and rebuilding it.

Q. I’ve had so many extra expenses beyond my normal operating expenses. What am I going to do?

A. If you have extra expense insurance, it will reimburse your company for what it spends, over and above normal operating expenses, to relocate to avoid having to shut down during the restoration period. As with business income insurance, the price of extra expense insurance varies with the industry and the likelihood of disaster-related damage.

Life Insurance

Q. My wife was killed in the fires. There are so many expenses. Who is going to take care of my children when I go to work? A. Life insurance benefits can be used for any purpose, including paying funeral expenses and child care costs.

Q. I’ve been paying for years for life insurance that has a cash value. Can I borrow that cash value or surrender the contract to get at that money? Who can help me with this? A. Borrowing and policy surrender are available. Borrowing would be the preferred choice because the death benefit stays in effect (minus the amount borrowed), but this is a loan that must eventually be repaid. If repayment is unlikely, they’re probably better off surrendering the policy for the cash. Ideally, they should discuss this with the agent who sold them the policy, or with someone in the life insurer’s customer service division, to place this option in context with other cash-raising options.

Other Questions

Q. I don’t have a copy of my policy, a home inventory or any documentation. What should I do?

A. Contact your insurance professional as soon as you are able. Your insurance company may send you a claim form known as a “proof of loss form” to complete. Or an adjuster may visit your home first. (An adjuster is a person professionally trained to assess the damage.) In either case, the more information you have about your damaged possessions—a description of the item, approximate date of purchase and what it would cost to replace or repair—the faster your claim generally can be settled.

Q. Will I need to obtain estimates for the repairs or will the adjuster do this for me?

A. Ask your insurance agent professional about requirements.

Q. Is there a time limit for filing a claim?

A. Insurance policies general place a time limit on filing claims which vary from state to state and company to company. Check with your insurer to see what the time limits are.

Q. What can I do if I am having trouble settling my claim?

A. If you are dissatisfied with how your insurance company is handling your claim, you have several options: talk to the agent or company representative who sold you the policy and let the agent know you are dissatisfied; contact the company claims manager and provide a written explanation of your problem with copies of supporting documentation; contact your state insurance department; consider mediation if you cannot reach an agreement with the company directly.

FAQ Wildfires Part 1

Courtesy of iii.org. After a wildfire, people may have questions about their insurance coverage. The Insurance Information Institute offers answers to some of these basic questions.

Homeowners Coverage

Q. If my house burns down, will my insurance company pay to have it rebuilt?

A. The typical homeowners policy covers damage due to wind, fire and lightning. So if your home has been completely destroyed by a fire or if the roof has been burned, your insurance company will pay to have your home rebuilt or the roof replaced. It will also pay if flames and smoke have damaged any other part of your home.

Q. I know my homeowners policy covers my house. Does it cover the contents of my home and my garage?

A. Yes. In addition to paying for damage to the dwelling, homeowners policies cover other structures on the premises, such as a garage or tool shed, as well as damage to your furniture, clothes, appliances and other personal possessions up to the limits of your policy.

Q. My home has been so severely damaged that it is no longer fit to live in. We can live with friends for a week or two, but after that, I don’t know where we’ll live. How am I going to pay for all these extra expenses?

A. Your homeowners insurance policy will pay the extra expense of living elsewhere — reasonable costs to maintain your household — until your home has been repaired or rebuilt. That would include the cost staying in a hotel for a while, and even clothing. Be sure to keep your receipts.

Q. Most of my personal possessions are ruined. Is there a limit on how much my insurance company will pay for my clothes, furniture and appliances?

A. The contents of your home–your personal possessions–are covered up to the limit set out in the policy, often 50 percent or 75 percent of the amount of coverage you have on your home, depending on the type of policy.

Q. Why do I need a home inventory, won’t my insurance company trust that I know what I have in my home?

A. A home inventory is valuable because it can be very difficult to remember everything that was in the home. A good inventory, if supplemented with photos, video, receipts, model numbers and appraisals, can help the homeowner get a more accurate settlement in less time, in most cases. A copy of the inventory should be kept in a safe, or in a location away from the home. To make creating your inventory as easy as possible, the I.I.I. has a free home inventory tool, Know Your Stuff®, which includes secure online storage so you can access your inventory anywhere, anytime.

Q. Much of my furniture and possessions were badly damaged, can I get rid of them if I have a home inventory?

A. A homeowner should not throw things away until an insurance company representative has had a chance to assess the damage and make a claim report.

Q. My home was vandalized after the fire and my new television was stolen, am I covered?

A. Homeowners insurance policies cover theft and vandalism, so any losses due to looting in the wake of the fire would be paid.

Q. Are there many different kinds of personal coverage policies?

A. There are two basic kinds of coverage for contents–replacement cost and actual cash value. Replacement cost coverage pays for the damaged item to be replaced with a new item of similar quality. Actual cash value coverage, which is less expensive to buy, pays an amount equal to the replacement cost, less depreciation. So if a 20-year-old washing machine is damaged and you have replacement coverage, the insurance company would pay for a new washing machine. If you have an actual cash value policy, the insurance company would pay only a small portion of the cost of buying a new machine, because that machine has already been used for 20 years and would only be worth a fraction of its original cost. Replacement cost policies usually have higher limits for personal possessions than actual cash value policies because the cost of replacing all the damaged items is higher.

Q. What about the house itself? Is the structure insured on a replacement cost basis or will I have to pay for a portion of the cost of replacing my seven-year old roof myself?

A. The typical homeowners policy pays for repairs to the dwelling on a replacement cost basis so that regardless of the age of your roof, the insurance company would pay the entire bill, minus your deductible.

Q. If your home is old, has not been modernized, and is only worth a fraction of the cost of replacing it, would the insurance company pay to rebuild it?

A. People who own such homes usually have a special older home insurance policy. This policy will pay for basic repairs. If the dwelling is not rebuilt, the insurance company will pay the lesser of two amounts: the cost of repairs or the market value of the house, minus the land.

Q. Does my insurance pay for the loss of any trees, shrubs or other plants I lost from the fire?

A. The typical homeowners policy covers trees, shrubs, plants or lawns on the residence for loss caused by fire. Usually insurers will pay up to 5 percent of the limit of liability that applies to the dwelling for all trees, shrubs, plants or lawns. No more than $500 will be paid for any one tree, shrub or plant. Insurance, however, does not cover property grown for business purposes.

Q. Does my insurance company pay for the portion of my home that I rent?

A. A homeowners insurance policy covers the fair rental value of premises less any expenses that do not continue while it is not fit to live in.

Auto Coverage

Q. If my car is destroyed or damaged from the fire, is it covered?

A. If you have comprehensive insurance, your vehicle will be covered for damage or destruction.

Q. My vehicle was vandalized after the fire?my windshield was smashed?and my golf clubs were stolen from the trunk. Am I covered?

A. If you have comprehensive insurance, your vehicle will be covered for theft or vandalism. So any damage or destruction of the vehicle due to looting in the wake of the fire would be paid. If you have homeowners or renters insurance, your golf clubs would be covered under the personal possessions portion of that policy.

Renters Insurance

Q. Will my landlord’s insurance pay for the damage to my personal possessions?

A. No. Your landlord is only responsible for the damage done to the structure of the building. Damage to your personal possessions is covered only if you have a renters insurance policy.

Q. Who knows how long it will take for the apartment building to be rebuilt. What do I do in the meantime? How can I afford to stay in a hotel?

A. Renters insurance will pay for any additional living expenses you may incur before you are able to return to your apartment. Most policies will reimburse you the difference between your additional living expenses and your normal living expenses but still may set limits on the total amount they will pay.

Renters Insurance

Q. Will my landlord’s insurance pay for the damage to my personal possessions?

A. No. Your landlord is only responsible for the damage done to the structure of the building. Damage to your personal possessions is covered only if you have a renters insurance policy.

Q. Who knows how long it will take for the apartment building to be rebuilt. What do I do in the meantime? How can I afford to stay in a hotel?

A. Renters insurance will pay for any additional living expenses you may incur before you are able to return to your apartment. Most policies will reimburse you the difference between your additional living expenses and your normal living expenses but still may set limits on the total amount they will pay. To be continued…

Tornado Fact Review

Courtesy of iii.org

A tornado is a violently rotating column of air that extends from a thunderstorm and comes into contact with the ground, according to the National Oceanic and Atmospheric Administration (NOAA). In an average year about 1,000 tornadoes are reported nationwide, according to NOAA. Tornado intensity is measured by the enhanced Fujita (EF) scale. The scale rates tornadoes on a scale of 0 through 5, based on the amount and type of wind damage. It incorporates 28 different damage indicators, based on damage to a wide variety of structures ranging from trees to shopping malls.

The U.S. experiences more tornadoes than any other country in the world, according to a 2013 report by Lloyd?s of London. (See Executive Summary, page 4 of Tornadoes a Rising Risk? for additional findings and statistics.)

The Fujita Scale For Tornadoes

Original F scale (1) Enhanced F scale (2)
Category Damage Wind speed (mph) 3-second
gust (mph)
F-0 Light 40-72 65-85
F-1 Moderate 73-112 86-110
F-2 Considerable 113-157 111-135
F-3 Severe 158-207 136-165
F-4 Devastating 208-260 166-200
F-5 Incredible 261-318 Over 200

(1) Original scale: wind speeds represent fastest estimated speeds over one quarter of a mile.
(2) Enhanced scale: wind speeds represent maximum 3-second gusts.

Source: U.S. Department of Commerce, National Oceanic and Atmospheric Administration.

INSURED LOSSES

The United States experiences more tornadoes than any other country. Tornadoes accounted for 40.2 percent of insured catastrophe losses from 1996 to 2015, according to Verisk?s Property Claim Services (PCS). In 2015 insured losses from U.S. tornadoes/thunderstorms totaled $9.6 billion, down from $12.3 billion in 2014. The National Oceanic and Atmospheric Administration notes that tornadoes can happen any time of year. The costliest U.S. catastrophe involving tornadoes, based on insured losses, occurred in April 2011. It hit Tuscaloosa, Alabama, and other areas, and cost $7.8 billion in insured damages (in 2015 dollars). That event was the 10th costliest U.S. catastrophe, based on insured losses, according to PCS. The second costliest catastrophe involving tornadoes, based on insured losses, struck Joplin, Missouri, and other locations in May 2011. The catastrophe cost $7.3 billion in insured losses in 2015 dollars. (See chart below.) The National Weather Service posts updated information on tornadoes.

THE 2014-2016 TORNADO SEASONS

Preliminary NOAA data show that there were 1,059 tornadoes in 2016, compared with 1,177 in 2015. On January 17, tornadoes developed in Florida with two fatalities. On February 23 and 24 tornadoes formed in Louisiana, Mississippi and Virginia resulting in two fatalities in Louisiana, one in Mississippi and four in Virginia. February 23 was the most active tornado day in 2016, when 52 storms formed. On April 27, one fatality resulted from a tornado in Texas and on May 9 tornadoes in Oklahoma killed two people.

The number of tornadoes rose to 1,177 in 2015 from 886 in 2014, according to the National Oceanic and Atmospheric Administration (NOAA). There were 36 direct fatalities from tornadoes in 2015, down from 47 in 2014, according to NOAA. May was the top month for tornadoes in 2015, with 381 tornadoes. There were 17 tornado-related fatalities in Texas in 2015, followed by 11 in Mississippi and two each in Arkansas, Illinois, Oklahoma and Tennessee.

NOAA data show that there were 886 tornadoes in 2014, compared with 906 in 2013. On April 27, 30 tornadoes formed in seven states (Arkansas, Iowa, Nebraska, Kansas, Oklahoma, Mississippi and Louisiana). Nineteen fatalities were reported. Many homes and buildings were damaged or destroyed in Arkansas, Oklahoma and Kansas, according to the Federal Emergency Management Agency. On April 28, tornadoes in five states (Alabama, Georgia, Kentucky, Mississippi and Tennessee) resulted in 15 fatalities. There were 47 direct fatalities from tornadoes in 2014, down from 55 in 2013, according to NOAA. June was the top month for tornadoes in 2014, with 287 tornadoes.

Florida’s Worst Cities for Pedestrian Safety

Courtesy of iii.org

Walking is definitely good for your health. But it may be dangerous to your life in busy cities, particularly in Florida. A study by Smart Growth America ranked eight Florida metros in the top 10 after analyzing pedestrian deaths over a 10-year period.

The group created a Pedestrian Danger Index to compare pedestrian safety in cities of different size, density, and rates of walking. So, it’s not only a factor of big cities with more cars and more walking. The study contends it is also due to “poor pedestrian infrastructure,” meaning roads are designed to move cars along with little thought to people traveling on foot. There is an interactive map on the group’s website that pinpoints dangerous roads near you.

Statistics on auto crashes show that about 20 percent of pedestrian fatalities are caused by hit-and-run drivers. Did you know that uninsured motorist coverage on your auto insurance policy can provide protection if you are hit as a pedestrian? Well, now you know.

Here is the ranking of the 10 most dangerous cities for walkers:

  1. Cape Coral-Ft. Myers
  2. Palm Bay-Melbourne-Titusville
  3. Orlando-Kissimmee-Sanford
  4. Jacksonville
  5. Deltona-Daytona Beach-Ormond Beach
  6. Lakeland-Winter Haven
  7. Tampa-St. Petersburg-Clearwater
  8. Jackson, Miss.
  9. Memphis, Tenn.
  10. North Port-Sarasota-Bradenton

It Does Get Cold in Florida

Courtesy of iii.org

It doesn?t dip below freezing very often in Florida (which is just the way we like it!). When it does, a refresher is in order on what precautions to take so cold temperatures don?t put a freeze on your budget due to costly repairs that could have been avoided. Check out our cold weather survival tips.

Most homeowners insurance policies cover damage from freezing conditions. It?s always best to prevent the damage in the first place, of course. Parts of the Florida Panhandle dipped below freezing over the weekend, and that could occur again in the coming weeks. Cold-weather warnings prompted me to buy all my outdoor faucets a hoodie (see photo above). For about $3 a faucet, it?s a good investment in preparedness, especially since you have to disconnect the hose to slip it on. Freezing temps can cause water locked inside garden hoses to expand and burst ? and the cost of those hoses is not covered by insurance.

Frost on the ground in the morning, and in the mid-50s by mid afternoon. Gotta love it!

Nice Gifts-Be Sure to Protect Them Today!

Courtesy of iii.org

The holidays are a time of giving and receiving gifts, but would you be able to replace those gifts if they were destroyed in a fire or other disaster? A home inventory is the best way to protect your personal possessions, yet only 50 percent of homeowners said they had an inventory in a 2016 Insurance Information Institute (I.I.I.) survey. That’s where Know Your Stuff®, the free, award-winning home inventory app can help.

The I.I.I.’s Know Your Stuff® home inventory app allows you to enter information on mobile or desktop and syncs across all your devices so you can access it anywhere, at any time. It can help you:

  • Purchase enough insurance to replace the items you own, if they are stolen or damaged.
  • Get insurance claims settled faster.
  • Substantiate losses or charitable donations for tax purposes.
  • Keep track of items that require maintenance or repair.
  • Declutter and organize your home.

“With the average property damage and liability claim costing more than $9,000 and about one in 15 insured homes having a claim each year, it’s important for homeowners to protect their assets,” said Loretta Worters, a vice president with the I.I.I. “Renters should also consider taking a home inventory.”

To simplify the task of creating an inventory, the Know Your Stuff® app allows you to take photographs of your possessions and organize them according to the room in which the items are located.

With the Know Your Stuff® Home Inventory app, you get:

  • Secure free cloud storage of your inventory data. You can also store and manage all your insurance policy information, including contact information for your insurance professional and your policy numbers.
  • Downloadable reports for easy recordkeeping and claims filing.
  • A tool that is backed by the expertise of the I.I.I., a leading independent insurance research and communications organization.

Know Your Stuff® also allows you to keep track of multiple properties and insurance policies. An opt-in service provides integrated weather alerts for your area as well as updates and tips on how to prepare your home against severe weather.

Did Your Hurricane Insurance Claim Get Paid?

Courtesy of iii.org

The 2016 hurricane season is a wrap, and you are probably seeing a few news stories detailing the number of insurance claims from Hurricane Matthew, as well as the insurance claims from Hurricane Hermine. More than 87 percent of claims from Hermine are closed; almost 78 percent of claims from Matthew are closed. But the news headlines do not focus on that positive note. Instead, they point out that about a third of claims from the storm are unpaid. You have to read down six paragraphs in the newspaper story to find out why. I’ll tell you in the second paragraph below.

There are two primary reasons claims are closed without being paid:

Storm damage was minor and under the amount of the hurricane deductible, or
The damage was not covered by the policy.

Everyone knows headlines don’t tell the whole story. They are designed to attract attention and are not written by the reporter, but by someone looking to grab the reader. To be truly informed, we have to look beyond the headline, true?

Insurers have encouraged policyholders to report storm damage even if it is minor because Florida has a calendar year hurricane deductible. That means storm damage from more than one storm in a season counts toward the deductible amount.

Damage not covered from the storms would include falling trees that do not damage an insured property, such as your house or fence.

Now you know rest of the story.

Happy New Year and a Great 2017 to You!

Be a Safe Host

Courtesy of iii.org

Whether you are hosting a Super Bowl party or greeting the New Year with friends in your home, if you are planning to serve alcohol at any type of party it is important to take steps to limit your liquor liability and make sure you have the proper insurance.

Social host liability, the legal term for the criminal and civil responsibility of a person who furnishes liquor to a guest, can have a serious impact on party throwers. Social host liability, also known as “Dram Shop Liability” laws vary widely from state to state, but 43 states have them on the books. Most of these laws also offer an injured person, such as the victim of a drunk driver, a method to sue the person who served the alcohol. There are circumstances under these laws where criminal charges may also apply.

While a social host is not liable for injuries sustained by a drunken guest (as they are also negligent), the host can be held liable for third parties, and may even be liable for passengers of the guest who have been injured in their car.

Before planning a party in your home, it is important to speak with your insurance agent or company representative about your homeowners coverage and any exclusions, conditions or limitations your policy might have for this kind of risk. Homeowners insurance usually provides some liquor liability coverage, but it is typically limited to $100,000 to $300,000, depending on the policy, which might not be enough.

Most importantly, whether you are hanging out with a small group of friends for cocktails or throwing a big family bash, remember that a good host is a responsible host, and takes steps to ensure guests get home safely if they have been drinking.

How to Protect Yourself and Your Guests

If you plan to serve alcohol at a party the I.I.I. offers the following tips to promote safe alcohol consumption and reduce your social host liability exposure:

  • Make sure you understand your state laws. Before sending out party invitations, familiarize yourself with your state’s social host liability laws. These laws vary widely from state to state. Some states do not impose any liability on social hosts. Others limit liability to injuries that occur on the host’s premises. Some extend the host’s liability to injuries that occur anywhere a guest who has consumed alcohol goes. Many states have laws that pertain specifically to furnishing alcohol to minors.
  • Consider venues other than your home for the party. Hosting your party at a restaurant or bar with a liquor license, rather than at your home, will help minimize liquor liability risks.
  • Hire a professional bartender. Most bartenders are trained to recognize signs of intoxication and are better able to limit consumption by partygoers.
  • Encourage guests to pick a designated driver who will refrain from drinking alcoholic beverages so that he or she can drive other guests home.
  • Be a responsible host/hostess. Limit your own alcohol intake so that you will be better able to judge your guests’ sobriety.
  • Offer non-alcoholic beverages and always serve food. Eating and drinking plenty of water, or other non-alcoholic beverages, can help counter the effects of alcohol.
  • Do not pressure guests to drink or rush to refill their glasses when empty. And never serve alcohol to guests who are visibly intoxicated.
  • Stop serving liquor toward the end of the evening. Switch to coffee, tea and soft drinks.
  • If guests drink too much or seem too tired to drive home, call a cab, arrange a ride with a sober guest or have them sleep at your home.
  • Encourage all your guests to wear seatbelts as they drive home. Studies show that seatbelts save lives.

Happy Holidays and a Great 2016 to You!

christmas-1