Homeowners Insurance Lowdown

Battling Floods With No Insurance

With areas in the North-east part of the country being plagued by continuous torrential rain, home and property owners who are not covered by flood insurance are in a quandary. Most of them do not have flood insurance since flooding is relatively uncommon in the region. Homeowners’ insurance covers only damage that is caused by water that comes in from the top or side of house, in other words, water that comes in due to heavy storms and hurricanes. They are not insured against flooded basements. Moreover, people who have flood insurance generally let the policies lapse if there are no incidents of flooding in a year or two, according to Edward Pasterick, a senior adviser at the Federal Emergency Management Agency, which oversees the flood-insurance program. USA Today reports:

Federal flood policies pay for up to $250,000 in damage to the home's structure and $100,000 worth of damage to the contents. Those who have the government's policy, but whose homes cost more than this amount to replace, can buy additional coverage from a handful of insurance companies. To do so, a homeowners' policy with that company is often required.

Florida Losing Appeal

Florida is losing its appeal as the ideal retirement destination for the elderly after repeated battering from hurricanes and tropical storms. Adding insult to injury is the fact that home owners are unable to find suitable insurance options with most of the private insurance companies closing shop, unable to hold their heads above water in the wake of hurricanes Katrina and Rita.

Home owners in the area are left with no alternative but to depend on Citizens Property Insurance Corporation, the state insurer, which, according to the law is mandated to charge more in order to stay noncompetitive. While Citizens also went into the red, it was bailed out by state surpluses from the Legislature. The insurer, which was the second-largest pre-Katrina and Rita, is all set to become the biggest insurance agency in Florida, with a total of 1.2 million policies and counting.

Private insurers are also hiking their rates, according to the Florida Office of Insurance Regulation, which said that State Farm, a privately owned insurance agency, had sought an increase of 74 percent on its insurance rates.

Politicians have promised to address the issue of homeowners’ insurance in their campaign promises, the Legislature has put aside $250 million for property owners to strengthen their homes, but these measures are not enough to stop the exodus from Florida.

Florida Hurricane Catastrophe Fund gears up for hurricane season!

As the new hurricane season arrives, the Florida Hurricane Catastrophe Fund has been seen facing a severe shortfall and in need of a rapid cash infusion. This cash infusion is required to ensure that there is enough money for insurers to pay property damage claims not only from last year's storms but also to replenish the account for next hurricane season.

It is important that the Florida Hurricane Catastrophe fund has adequate funds. The Advisory board members stated that this would avoid the need for the fund to raise money by selling bonds to enable insurers to pay claims. The catastrophe fund has the provision to sell bonds if the fund is depleted. But if this is done, the state can force all insurers statewide to replenish the fund. The insurers then would have to pass that cost on to policyholders. All insurers except medical malpractice and workers compensation carriers would come under this replenishment drive.

The faithful are covered...

Who would’ve thought being a faithful churchgoer could get you homeowners policy especially in an insurance crisis like now? Iowa churchgoers can get homeowners and auto insurance with special benefits from GuideOne Insurance, one of America's largest insurers of churches, which launched its new FaithGuard policy. And yes the policy is selling like hot cakes at a rate of more than 160 per day.

Faith Guard policy is unique with its special discounts given to churchgoers.

1. Medical payments for an injury will be doubled if you host an activity at your home on behalf of your church and an attendee is injured during the activity.
2. Your mortgage payments will be made, up to $7,500, if you suffer a loss of income from a disability caused by an accident at your residence.
3.  Church tithing or donations, up to $750, will be paid if you suffer a loss of income from a disability caused by any accident at your residence.
4. Your insurance deductible is waived if there is a loss to your personal property while it is in the possession of your church.
5. A five percent discount is available to non-smokers.
6. FaithGuard also pays for any existing auto loan payments on your covered auto, up to $3,000, if you suffer a loss of income from a disability caused by an accident in your auto while you're driving directly to or from a church service or other scheduled worship or religious activity.
7. A memorial gift of $1,000 will be made to your church if your auto is involved in any car accident that results in your death, or in the death of an immediate household family member.

Faithful homeowners in states reeling under insurance crisis can look out for this unique policy in 19 states, including Alabama, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Missouri, Nebraska, Ohio, Oklahoma, Oregon, Tennessee, Washington and Wisconsin. 

Choose the type of insurance for your home

You may be on the look out to buy or rent a home and it goes without saying that you need homeowners insurance to get coverage for unforeseen things that may happen to your home and its contents. So, what types of homeowners insurance are available?

A traditional homeowners policy includes four types of coverage - 1) Coverage for the structure of your home 2) coverage for your personal belongings 3) additional living expenses in the event of disaster and 4) liability protection. This means that your home is usually covered for fire or lightning; windstorm or hail; explosions; riot or civil commotion; aircraft; vehicles; smoke; theft or vandalism; falling objects; weight of ice, snow, or sleet; and freezing of a plumbing, heating, air conditioning, or other system.

Renters insurance provides the same kind of general personal property coverage and liability protection as a homeowners policy. A renters policy will also protect you in the event you damage or destroy the landlord's building. Without renters insurance, you could be held liable for the total loss. Renters insurance is a must if you want to protect your belongings in your rented apartment or home.

A condominium owners policy protects the inside of the condominium unit as well as what is inside the unit. The building and common area is protected by structural insurance taken by the condominium association and this should suffice ample coverage for common property.

Disaster insurance should be taken separately as standard homeowners insurance does not cover floods, earthquakes, and some other natural disasters. If you live in a designated flood zone, you will be required to purchase flood insurance. You can purchase flood insurance directly from your insurance agent, but the policy is actually provided by the Federal Flood Insurance Program. You can purchase earthquake insurance either as a separate policy or as an endorsement to your standard homeowners or renters policy.

Title Insurance could be your life line.

Imagine getting a notice from the bank saying you may be losing your home and of really no fault of yours! This is exactly what happened to homeowners in a quiet Caledonia subdivision where dozens of homeowners got a 100-page stack of documents naming them in a lawsuit filed on June 12 by Irwin Union Bank.

The bank is seeking foreclosure, alleging over $3 million was never paid by the property owners and the builder GBW. The homeowners contend they have done everything correctly from closing to paying their mortgages on time, not knowing until now the bank never got the money. Rob Wardrop, an attorney for GBW builders says the case stems from the misappropriation of funds by broker Prime Title and one of GBW's owners. Prime Title is now out of business and the GBW executive in question is somewhere in Florida.

The good news is that these homeowners should be protected if they have title insurance and it's industry standard that lenders require it. Most of the homeowners 24 Hour News 8 talked to say they have it. In that case, the Title insurance company is obligated to fight the court battle.

So, what really is title insurance? Title insurance is protection against loss arising from problems connected to the title to your property. Before you purchased your home, it may have gone through several ownership changes or problems like forgery/fraud in the past. This may crop up later as law suits and could lead you to foreclosure. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.

Title insurance is mandatory if you need mortgage or refinance your mortgage and lenders require such protection for an amount equal to the loan.  It lasts until the loan is repaid.  As with mortgage insurance, it protects the lender but you pay the premium, which is a single-payment made upfront. Title insurance insures against past risks that may have impacted the property whereas homeowner’s insurance insures against future/unknown risks.

Poe Financial Group resists the state's takeover of third insurance business

Florida Preferred Insurance Co, an insurance company owned by insurance Tampa based Poe Financial Group, is in trouble after the Department of Financial Services filed court papers in a Leon County Circuit Court to take control of it.

The call comes shortly after the state took over Southern Family Insurance Co which is the third insurance company owned by Poe. Poe Financial Group which is one of the largest property insurers in South Florida however is fighting tooth and nail to prevent the state from taking control of its other two prime insurance companies - Florida Preferred Insurance Co and Atlantic Preferred Insurance Co.

Tom Gallagher, Florida Chief Financial Officer argued the importance of the state’s move in a statement recently. He said that it was necessary that the policy holders of Poe had insurance coverage for their homes before hurricane season. It may be noted that the three Poe insurance companies have more than 300,000 home and condo policies in Florida

Cut Back on Those Premiums

You don’t have to shell out an exorbitant amount on your home insurance if you know a few tricks of the trade. For those in need of help, here are a few pointers:

• Don’t consider the insurance cost alone when choosing a provider. Select someone who has a strong reputation and who will deliver quality service.
• Use the same company for both your automobile and home policies. You may succeed in reducing your premiums this way.
• Do not insure the land on which your house stands. It is not susceptible to destruction by any natural disaster except an earthquake.
• Step up your security measures. This reduces your premiums drastically.
• Some insurers offer smaller premiums for houses that do not have any smokers. Smoking increases the risk of your house going up in flames.
• Loyalty pays - you can reduce your premiums by sticking with the same provider for more than 5 years.
• Before you buy a home, consider factors that will help you reduce your insurance value. Newer houses are a safer bet, so are those that are close to fire stations.

Insurance Amount for Your Home

How do you decide on the insurance amount for your house? Well, for starters, you can settle on the amount it would cost you to rebuild your home if it were torn down during a flood, cyclone, earthquake, fire or any other natural calamity. You can choose to insure in terms of:

• The Replacement Cost: This will pay you the amount to replace the damaged property without reducing the depreciation amount. This payment is limited to a maximum dollar limit.
• The Guaranteed Replacement Cost: This will pay you the full cost of replacing the damaged property without deduction for depreciation, but without a dollar limit.
• The Actual Cash Value: This will get you cash equivalent to the amount needed to rebuild your home, after an amount has been deducted for depreciation.

Consider factors such as land value, construction costs, the number of rooms your house has, the materials used to build the house, and other aspects while calculating the monetary value of your house.

Airline to Offer Home Insurance

Airline company Ryanair has added to the number of services it provides by offering car and home insurance from Equity Insurance Group. Europe’s largest budget airline is looking for new avenues to augment its revenues from the sale of airline seats. The company’s proceeds from its secondary businesses has grown over 35 percent this year, notwithstanding losses from some of its initiatives like the introduction of hand-held video devices as in-flight entertainment, after poor response from its passengers. But a few schemes like the introduction of online gambling and on-board mobile services have taken off, and have propelled its ancillary revenues to grow at a faster rate than its number of passengers. Reuters reports:

British travellers using Ryanair's website to book flights, reserve hotel rooms and rent cars will now also be able to get quotes on home and car insurance from Equity Insurance Group.

Poll Results Against State-Run Agency

With most privately-owned insurance agencies closing shop after the high payouts following hurricanes Katrina and Rita, the state-run Citizens Property Insurance Corp. is all set to become the largest property insurance provider in Florida. At a time when most insurers are hiking premiums to exorbitant levels in order to keep their heads above water, Citizens is adding 40,000 new customers every month to its already wide base of more than 850,000 policyholders.

But the insurer seems to be winning no prizes in the popularity department; according to a survey conducted by the Orlando Business Journal Business Pulse, 73 percent of the 238 respondents surveyed said that the company should not be run by the state, while only 20 percent were in favor of it. Participants offered suggestions to create incentives like high premiums that would bring back insurance companies to the state.

Cost Estimation Software For Insurers

Insurers often find that there is a large discrepancy between their estimation of damage and that of the policy holder. Technology, like the property claims calculator from SkyeTec, can help in such situations. The indoor environmental consulting company is all set to launch its web-based application for cost estimation that will help insurers review claims for drying structures that are water-damaged, on July 1. Users will have to pay a flat fee of $75 per review, and adjusters can enter data online themselves, thus eliminating the need for staff to evaluate claims. The calculator determines the equipment that is needed, how it should be deployed, how long it should be operated, the cost incurred in running the equipment, and the cost of labor involved, all calculated based on standards and scientific formulae developed by the Institute of Inspection, Cleaning and Restoration Certification (IICRC). MSNBC reports:

SkyeTec executives say the company's property claims calculator can reduce or mitigate the rise in property-insurance premiums based on the company's experience performing manually the kind of review the new program is designed to accomplish. SkyeTec's claims calculator is the next step in its evolution in the sciences of mold and water damage and its growing comfort with software technology and the Internet.

Homeowners' insurance crisis looms in Florida

There was a public hearing in Lake Buena Vista on June 5 to object to State Farm's proposed increase in premiums for homeowners' insurance. And only five people are supposed to have objected to the increase – something doesn’t sound right here.

It seems that few people took the time from work to drive several hours to object to the increases. The problem is that they probably consider the hike inevitable. But those who did take the time and effort to get to the venue, managed to vent out their frustration and anger at this unprecedented rise. The problem is that state officials largely have come up empty in a search for solutions to the insurance crisis that's put a serious pinch on homeowners' budgets. Ocala.com reports:

As costs continue to soar, the state's image as a magnet for a wide range of newcomers, including desperately needed skilled workers, could decline rapidly. Retirees on fixed incomes can't keep pace with double- and triple-digit increases on essential services such as homeowners insurance. Neither can young professionals and families, who already struggle to find affordable housing.

Read more: Homeowners' insurance crisis looms larger than storms

Hurricane season’s here! Are you prepared?

As per official figures, flooding causes more than $2 billion in property damage in the United States each year. And yet, only 14 percent Americans are supposed to have purchased flood insurance. For some reason, people tend to believe that flooding occurs in only certain areas and that other areas are safe. The reality for the many Americans who experience flooding is that it's potentially very costly and disruptive to their lives.

Damage can be caused by numerous flood exposures, including surface water run-off from a paved surface into the home; overflow or backup from a sewer or drain outside the home; or flood water entering the home through basement windows. Basements are the most vulnerable area in many houses, and homeowners are increasingly turning them into entertainment centers and game rooms, filling them with expensive electronics and furniture. So, what can you do about it right now? While the season is almost upon us, you could try to call your insurance agent and try to find out what you can do to avoid problems.

Check your hurricane-planning list against these items

Hurricane season’s almost begun and predictions are not good – it could be an active season with 17 named storms, nine of which will become hurricanes. So, do you have your insurance in place? If not, please check these items against your hurricane-planning list:

• Review: Know what your policy covers and review your insurance coverage with your insurance agent. If necessary, write down your basic insurance information.
• Know deductible type: This is an important one – you must understand the type of deductible you have. For this, read your insurance policy or call your agent or company. Some companies allow policyholders an opportunity to "buy down" to a flat deductible.
• Take precautions: There are certain measures you can take to reduce the severity of loss in case of a hurricane. For instance, you can install hurricane shutters and other things that can help make your home stronger. Ask your agent or company for information on how to protect your home and valuable personal belongings. You can also find out if your insurance company offers a discount or credit for retrofitting your home to prevent hurricane damage.
• Make a list: I’ve said this before but since it is important, it requires repeating. Update your household inventory. Make a list, take photographs or videotape your personal belongings and store the inventory in a safe place outside your home.
• Ensure renovations are on the list: Sometimes, we keep making renovations and tend to forget that every new addition should be on the inventory list. In case you’ve made the renovations or purchases after taking your policy, speak with your insurance representative to make sure your coverage is still adequate.
• One’s not always enough: If you live in the coastal areas, you should know that one homeowner’s insurance policy may not cover everything. You may need as many as five or six separate insurance policies including a homeowner’s insurance policy, a wind and hail policy, a flood insurance policy, earthquake insurance policy and excess coverage such as a personal-articles policy.

Insurance check list for wildfire

Did you know that loss from fire is one event that is by and large protected by your homeowners insurance? This is of course if you have not torched your home yourself accidentally or otherwise. You can also expect that your premiums are going to increase after a wildfire and even though the west coast of the US is more susceptible to wildfires you cannot assume that you are not at risk.

Home improvement should be followed by insurance upgrade: You may have made home improvements and if you have not upgraded your insurance in the event of a fire your claim may not be enough to replace these recent renovations. The costs of building materials are also increasing and this could again leave you short if updates are not made on an annual basis. This also means that if after a fire the neighborhood’s real estate rates nosedive your homeowners insurance does not cover this loss.

But, did you know that you could claim for replacing trees and shrubbery lost by fire. Typically, policies will pay up to 5 percent of the value of the structure to replace landscaping though there is a limit of $500 per plant. A policy with $500,000 worth of insurance on the structure would pay $25,000 to replace the trees and shrubs around the house, though there usually is a limit of $500 per plant.

You can get coverage even if your home was damaged by smoke or soot even though an actual fire did not touch your house so check with your agent.

Reduce premiums...

1. If you use fire-resistant material to build your home
2. If you live near the Fire Department
3. If you upgrade the electric wiring in your home
4. If you install fire alarms that alerts an outside service
5. If you have fire extinguishers and smoke detectors and
6. If you stop smoking

Additional living costs: After a fire you may need to stay at a hotel and eat out as your home is unlivable and you may need to buy clothes too. Most homeowner’s policy in the west coast may provide these additional living expenses but it is always wise to check again.

Wildfire - insurance, information and tips

The Arizona wildfire recently displaced a lot of people and panic spread among homeowners living in  wildfire zones everywhere. News reports  said that the late-afternoon wildfire on the western edge of Flagstaff forced mass evacuations of two private campgrounds and hundreds of homes. The Woody Fire, apparently sparked by humans, started about 4 p.m. near Route 66 and Interstate 40, about two miles from downtown Flagstaff.

It is when an incident like a wildfire occurs that homeowners think about their insurance for their homes and yes this is a good time to review your homeowners policy. Insurance experts will tell you that the single most important factor when it comes to insuring your home is to make sure your homeowners policy insures the replacement cost of the home and not actual cash value.

Replacement costs will cover the rebuilding or repairing cost of the home and your possessions without a deduction for depreciation and this is often overlooked. Check if your policy is on the replacement cost of your home and if not talk to your insurance agent or find a new insurance provider. Did you know that most homeowners don’t realize that their home is worth much more than the cost price of the home? It is realized when it is too late like after a wildfire devours your home.

Ensure that a 30 foot radius of vegetation free area is around the house. If there is a wildfire, this is where the firefighters will be while trying to save your home from a fire. Vegetation near the house can also be a fire hazard in wildfire zones and the general rule is: If wildfire risk is low to moderate a minimum of 30 feet of space must be established around your home and if your wildfire risk is high or extreme, surrounding space should be 100 feet and the use of more fire resistive building materials should be considered. Have you checked this yet?

Insurers make hay while skies threaten storms

Insurers in Washington are raising wind-insurance rates or canceling coverage at a time when forecasters are predicting severe storms like the hurricanes that hit the Gulf Coast last year and state governments are wondering if they should intervene to keep rates affordable. Meanwhile in Virginia, Allstate Insurance Co. and Nationwide Property & Casualty Insurance Co. are raising the minimum deductible for coastal homeowners from 2 percent to 5 percent of the claim amount. Washtimes.com reports:

"The companies explained to the Bureau of Insurance that the reason for the change in the deductibles was so that they could remain in the market," said Katha Trainor, spokeswoman for the Virginia Bureau of Insurance.

Read more:Wind coverage changed for storms

Insurance tips to protect your home

Coastal property is the first to be hit in case of a hurricane and since hurricane season is just two weeks away, you probably need to do something to protect your property and yourself. If you live along the coastal belt, here are a few tips that can help you get prepared for the worst if it comes to that. Myrtlebeachonline.com reports:

Read your insurance policy or call your agent or company to make sure you understand the type of deductible you have. Some companies allow policyholders an opportunity to "buy down" to a flat deductible. A customer may obtain a policy through the South Carolina Wind and Hail Underwriting Association in the event coverage is unavailable through admitted carriers.

Read more: Insurance tips for storm season

Florida business owners facing hurricanes with no insurance

The Florida insurance crisis has many reeling under the shock of having no insurance this hurricane season but reading this article you realize it’s not just the homeowners who are in the eye of the insurance storm.

While the Florida homeowners are realizing that homeowners insurance and flood insurance are hard to come by. Business owners looking for commercial property insurance are now wishing for even a Citizens Property Insurance Corp. policy if it were available for them in the hurricane months.  Business owners are now realizing the angst of homeowners in the coastal areas and it is a scramble as to who will get a policy now. 

Even the insurer of last resorts the state backed Citizen Property Insurance Corp. is stopping from giving out fresh policies and is canceling insurance to people as it is reeling from paying the claims of the two hurricanes last year. Insurance companies that write commercial policies for everything from strip malls to restaurants are raising premiums as much as 400 percent, dropping policies as they come up for renewal, or both.

Experts say the net effect of huge premium increases coupled with a shrinking insurance market can range from higher costs passed on to consumers to a slowdown of economic growth. Even though the business community was bracing for some increases in property insurance this year because of the past two hurricane seasons, the smaller businesses especially are finding it very difficult.

Businesses also don’t have the insurer of last resort option available unlike some lucky homeowners who have managed to renew their policies and the media shower tones of attention on homeowners and business owners are finding themselves sold short. Obviously the human-interest angle to a retired couple realizing they cannot renew their policy is much more a sensitive issue than a small business owner who is without any insurance in the hurricane season.

Fumbling FEMA pays man $2,000 for damaged property… in a cemetery

This was one story that just couldn’t be missed. I don’t know if you guys know about this already, but boy, was I shocked when I heard this. These guys went on a shopping spree and their shopping list included diamonds, fireworks, a $200 bottle of champagne at Hooters, $300 worth of "Girls Gone Wild" videos, more than two months at a hotel in Hawaii, an all-inclusive, one-week Caribbean vacation and five season tickets to New Orleans Saints football! Are we talking about some rich, spoilt brat? No, about the people who were supposed to be displaced by hurricanes Katrina and Rita!

A recent audit by the Government Accountability Office (GAO)shows that the debit cards that were given to people displaced by the storms were used to buy all of the above. And one person even used the card for… a sex-change operation! And guess how much this disaster relief cost the government. The GAO found that up to $1.4 billion in disaster relief payments (nearly a quarter of the total amount paid out) by the Federal Emergency Management Agency (FEMA) were improper and potentially fraudulent.

The main reason for this was that the recipients provided incomplete or incorrect information when they registered for assistance. So far, FEMA said it has found more than 1,500 cases of potential fraud after the hurricanes. And a GAO study that was provided to CNN showed that it only got worse – FEMA provided housing assistance to people who were not displaced, including at least 1,000 prison inmates.

According to investigators, over 15 percent of the disaster relief payments that were made by FEMA, went to people who submitted invalid registrations. According to the CNN report, in one case FEMA paid nearly $2,360 to a man whose allegedly damaged property was in a cemetery.

Certainly Not a Case of Love Me, Love My Dog

You may believe that a dog is man’s best friend, but your home insurer may beg to differ – insurance companies are legally entitled to demand higher premiums or even reject police renewal applications if you own certain breeds of dogs. It doesn’t matter that you are established clients, and that your dog is the friendliest in the neighborhood, home insurance providers usually stand their ground in such situations.

You can try to work your way out of this fix if you find an insurance company that is sympathetic to your cause. In some cases, different agents within the same company may have different policies. So check with someone in charge before you reach a decision. Additionally, you can get information on home insurers from fellow dog-lovers who have been successful in taking out a policy with a reasonable premium.

NY homeowners get a raw deal from insurers

In a recent survey of its member agents, the Professional Insurance Agents of New York State Inc. (PIANY) found that homeowners insurance companies have taken steps to reduce their exposure in downstate areas of New York since the beginning of 2006. The survey also laid bare the fact that some companies are adopting stricter guidelines regarding a home's distance to water and/or requiring more or larger deductibles for windstorm losses. Insurancejournal.com reports:

The survey was conducted following the announcement by one of the state's largest homeowners insurers, Allstate and its affiliates, that they would cease insuring new homeowners and would begin nonrenewing some policyholders in eight downstate counties, including Nassau, Suffolk, Westchester and the five boroughs of New York City.

Read more: N.Y. Agents Report on Home Insurers' Restrictions Downstate

British Homes and High Theft Risk

Insurance companies know how much your home and its valuables are worth. And so do thieves, says UK-based insurer Norwich Union. The insurance company conducted a survey of homes to check if houses were prone to burglary. Not your ordinary breaking and entering, but walking in through the door with a legitimate key or entering through a window left open, and walking out with all you own.

The study, “Cash for Keys”, only emphasized the fact that as long as there are morons around, there will be thieves and conmen. Norwich Union says that over £750-million worth of household valuables is up for grabs, simply because Britons are not careful with their keys. 

Over 80 percent of the English have at least five sets of keys, and most put all their eggs in one basket; in other words, they keep them all in one place. They label keys according to the doors they open, thus making life simpler for burglars in a hurry by giving them directions to steal. Most people are very trusting – they give spare keys to tradesmen and household help and never get them back – or just plain stupid – they hide their keys under the doormat or under the potted plant, the most obvious places for a thief to look!

Car thieves have also taken to robbing homes, simply because it’s easier to do so. As an added bonus, they get to steal the vehicle keys from the house in question, and drive off with the booty in the trunk.

The study urged people to be more careful with their keys, to lock valuables in safes, and ensure that even if you misplace your keys, they don’t leave a highlighted trail that the burglar can follow to your house – in other words, don’t put your address on the keys.

Regulators Seek Calamity Fund

Besides the fact that insurers are reluctant to cough up what they owe to home owners who lost their houses to Hurricane Katrina, they are also turning down insurance renewal applications from numerous coastal homeowners in Florida, New York, Texas, and Massachusetts. Insurance premiums for windstorm insurance coverage have increased exponentially since hurricanes Katrina and Rita. In the wake of these developments, insurance regulators are asking Congress to step in and offer suggestions for states, insurers, and homeowners to cope with natural disasters. The Natural Association of Insurance Commissioners, state officials who regulate the property insurance industry, has recently adopted a resolution proposing a Federal Natural Catastrophe Preparedness Commission. They seek a national fund that will encourage insurers to stay in the market by lending financial support to private insurance companies in times of hurricanes, earthquakes, floods, and tornadoes. USA Today reports:

State regulators worry that a shortage of private insurance and the lack of an overall federal catastrophe strategy will put more pressure on individual states and their taxpayers when disaster strikes. Because of the huge storm losses last year, private insurance companies are also paying more for reinsurance, the insurance they buy to protect themselves from unexpectedly high claims.

Empty Homes, More Insurance

If you own more than one home, you will probably leave one empty for most of the year. More often than not, the second home is a vacation home or an asset that you may wish to sell at a later date. What do home insurers charge for unoccupied houses? Here are a few nuggets of information on paying home insurance for houses that do not have human occupancy:

• If you leave your house empty for more than 30 days without informing your insurer, your policy is likely to lapse.
• Houses that remain empty for up to three months do get an insurance extension, providing you notify the insurer.
• Specialist brokers charge more than the going rate for houses left unattended for longer than three months.
• They also demand that security devices are in place and utilities turned off.
• A few insurers insist that the property be inspected every week. These visits should be properly recorded.
• Houses that are empty for long periods of time are usually insured for a minimum period of one year even if they are occupied before the year is up.

Katrina Troubles Continue

The woes of those who lost their homes and livelihoods in the wake of the destruction wrought by Hurricane Katrina are not yet over. Most of the people who had insured their homes for substantial amounts have been paid mere pittances that will not cover repair and rebuilding costs. While the insurance industry claims that it has settled over 90 percent of its Katrina claims, consumer advocates allege that they have settled only a small portion of the actual damages, wriggling out of paying more by using various exclusions. According to the state Department of Insurance, only $12.5 billion has been paid out as insurance in Louisiana till the end of April, when it is estimated by insurance modeling firm ISO that the state has $24.3 in insured losses. Homeowners in the area are thus caught between the devil and the deep sea – they can either give up and leave, or use their savings to pay for labor and materials.

Read more about this.

Why is FEMA desperate for more flood cover?

“Flooding is the nation's #1 natural disaster. And the best, most cost-effective way to financially protect your property from a flood is to purchase flood insurance. With flood insurance protection, you will be reimbursed for covered costs if you experience a flood. In the meantime, you gain peace of mind, knowing you have one less thing to worry about,” says the FEMA web site. 

The more you read of FEMA’s plea to homeowners to get flood insurance, the more you get the feeling of desperation on the agency’s part. The Federal Emergency Management Agency is crying hoarse that hurricane season’s here at homeowners and yes the storms are bringing in rains as this post is being made and many homeowners still don't have flood insurance.

But, people are wondering why FEMA is so worried about people who don’t live near water bodies. The other issue is the costs of homeowners insurance along with flood insurance will be double – a fact that is keeping homeowners from acting on this advice. The question then would be why is FEMA egging homeowners who do not own waterfront properties to get flood insurance?   

The agency has sold flood insurance almost exclusively to those homeowners whose first-floor elevation is within a 100-year flood plain. The 100-year flood plain is the area deemed likely to be flooded in a once-in-a-century storm. Such areas also have mortgage lenders insisting on flood insurance before they extend the mortgage.

FEMA is being targeted for not making updates on the flood maps and obviously the developments have made the geography here very different. The water levels have increased and probably that is now a worry for FEMA and it could also be that they need funds from fresh flood insurance to recover from the claims paid from the last year’s hurricanes.

All said and done it’s better to be safe than sorry and find out how flood prone you are irrespective of however far your home may be from any water body. Don’t you think?

Do you REALLY need flood insurance?

The hurricane season is finally here. Now all we can do is wait for it to end without any major disasters like last time. But if a hurricane does strike, are we prepared? The Federal Emergency Management Agency (FEMA) doesn’t seem to think so and wants just about everyone to purchase its homeowners' flood insurance.

FEMA has been warning consumers for quite some time now and in a recent news release targeted at New Jersey residents – only 6 percent of whom have flood insurance – it repeated its message. With memories of Katrina and Rita still fresh, and with weather experts predicting four to six major storms this year, it's no surprise if homeowners are feeling the urge to protect themselves against a worst-case scenario. But in all this hysteria, what most people don’t stop to ask is does flood insurance really make sense for all homeowners? Bergen.com reports:

After all, a typical flood policy would nearly double the $600 average annual cost of homeowners' insurance in New Jersey. And most people don't live near a flood-prone body of water. Consumer advocates say FEMA's hard sell is a little over the top.

Read more: FEMA campaigns hard to sell flood insurance

Condominiums and the elusive insurance drama

As hyperactive hurricane seasons become more of a norm than an exception, condominium associations in Florida now find that their single biggest expense is not the cost of operating and maintaining their facilities. It is hurricane insurance! And the worst part is that it is becoming increasingly difficult to find an insurance carrier willing to write a policy even if you haven’t been hit by a hurricane.

Many such associations are now forced to turn to Citizens Property Insurance, Florida's insurance of last resort. And the worst part is that the size and value of these properties usually make finding insurance difficult. Of course, there are still a few insurers who are willing to insure such properties. The only hitch here is that they charge exorbitant rates and sometimes, their rates even exceed that of Citizens.

Small private insurers offer flood insurance to the wealthy

Just when you thought you couldn’t get flood insurance you realize that there are private insurers providing flood insurance. But, before you perk up and look for a link... They are available to you only if you have a lot and I mean a lot of money stashed away.

While AIG has been doing this for the past two years, as a wealthier homeowner now you have others offering flood insurance to a limited number of homeowners with fancy pads in relatively not the riskiest flood areas. So, if you have a lot of money and an expensive house you CAN get very good flood coverage. Read more: here

This interest in flood coverage has been instigated by the devastating hurricanes Wilma and Katrina which have popularized the need for flood insurance. However, it looks like it is how rich you are that dictates the availability of flood insurance.

Private insurers are hoping to do big business by cashing in on the worries of rich homeowners in the not so risky flood prone areas. This is also to be seen as a major step on the part of the private insurers when it comes to flood insurance. Traditionally flood insurance are provided by government insurers and don’t cost that much and private insurers shy away from giving flood insurance and usually offer it only after the government insurance policy has kicked in.

But, these flood insurance policies for the rich have more coverage than the government ones and includes benefits for lot more eventualities that can occur during a flood. For example, these private policies cover such expenses as food and hotel stays for displaced homeowners. Keep in mind that these companies are not big insurers and are not claiming to be trailblazers in the homeowners flood coverage scene.

So, while the big homeowners insurance companies are busy denying even windstorm coverage you cannot expect them to take up flood coverage, right?

Are insurers deserting the Gulf Coast?

The hurricanes were over nine months ago and yet the homes are still sagging and decrepit, awaiting the repair that may never come. Even New Orleans' affluent homeowners, who thought they had done the right thing by properly insuring their investment, are finding that technicalities are keeping them from securing enough from their insurers to rebuild. Seattletimes.nwsource.com reports:

The insurance industry says it has settled more than 90 percent of its Hurricane Katrina claims, proving it's meeting its obligations to policyholders. But consumer advocates say insurers settled numerous claims for only a fraction of the actual damage, using numerous exclusions to reduce payouts.

Read more: Insurance limbo delays rebuilding of Gulf Coast

Wind storm or flood? Alberto's here!

The first storm Alberto is here and here is going to be a lot of rain in South Florida and sure enough this time no one wants to take a chance with nature anymore. Tourists are reported to be evacuating their hotel and are homeward bound as the first storm news broke.

As it is going to be intermittent blasts of rain and wind, it is only more worry and fears for thousands of Florida residents still living under roofs damaged by last year's Hurricane Wilma. Some areas could receive up to four inches of rain by Tuesday according to experts.

While firefighters are happy that the rains are going to decrease fire hazards throughout the area, how many people are really geared for the onslaught of rains this hurricane season? Although meteorologists have been saying that as the Atlantic is not as warm as last year and this translates into lesser punch for storms predicted this year it is still a problem for residents with roof problems incurred during the last season.

Rain entering through wind-damaged windows, doors or a hole in a wall or the roof, resulting in standing water or puddles, is considered windstorm and not flood and hence you should get coverage for this from your regular homeowners insurance policy. As floods occur after a windstorm there is always a debate as to which to claim and it is usually a case-by-case study that determines this. National Flood Insurance Program (NFIP) guidelines are resorted to in apportioning losses between a flood insurance policy and a homeowners insurance policy.

So, if you are in the hurricane zone it is imperative that you get both flood insurance and homeowners insurance. During a storm the first thing you need to is to protect your doors and windows the glass especially can be shattered at the wind speed of 120 to 175 mph. Read for tips on window protection: Here

Haven’t storm insured your home? Do it now!

For some people, storms are a way of life. One moment they have a roof over their heads and the next instant, their home is blown away in a tornado. If you live along the coastline, you’ve probably experienced or know someone who’s gone through such a tragedy. Most people living along the coastline have seen the devastating effect storms can have on their homes and consequently, on their resources. If you live along the coastline, one of the first things you ought to do is take a storm insurance on your home. So, even if a storm strikes, you have most of your stuff insured.

While this is something most people know and do, there is something about the storm insurance taken by most people that is worrying insurers. According to insurance agents, a large number of people forget to update their insurance policy with everything inside the home, like the new TV or refrigerator… So, while almost all homeowners have the same insurance policy, the difference lies in keeping the policy up to date. And here’s where problems can crop up. According to insurance agents, your basic homeowners policy will rebuild your home. However, unless you’ve documented all your belongings within the house, your policy won't replace what was inside.

And how are you supposed to document your stuff. Agents say the best way is to either take a picture of it or videotape it in your home. Follow this up with a written list of all the items. Once you’ve done this, meet your insurance agent who will now be able to help you get everything important added to your policy.

Live along the beach? Want to pay more for your insurance?

A recent report by the Brookings Institution states that seven of the 12 most costly natural disasters in American history happened in the last two hurricane seasons. Now, there is an increasing number of people who believe that people who live along beaches should be made to pay more for their homeowners insurance. Delawareonline.com reports:

Global warming or not, the region is in another decades-long cycle of powerful hurricanes. Unlike the last such cycle more than 25 years ago, the beaches along the Atlantic and Gulf of Mexico are thoroughly built up. A hurricane that might have just kicked up sand decades ago now means widespread death and destruction.

Read more: Beach property owners should pay a bigger share for insurance

Tips to lower your homeowners insurance costs

Did you know that the price you pay for your homeowners insurance could vary by hundreds of dollars? Different insurance companies charge differently and that is where the price difference arises. But there are some things you can do to lower your costs. So, before you go out to get yourself a homeowner’s insurance policy, it is best to consider certain things that will help you lower your costs.

One of the simplest things you can do to reduce your insurance cost is to make your home disaster resistant. Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. The simple act of adding storm shutters can actually help you save on your premiums! Reinforcing your roof or buying stronger roofing materials, also give the same benefits. Pueblo.gsa.gov reports:

Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

Read more: 12 Ways to Lower Your Homeowners Insurance Costs

State Farm customers oppose rate hike

The Florida Office of Insurance Regulation recently held a hearing to get public input on State Farm Florida's rate filing. State Farm customers and quite a few others opposed a proposed major increase in homeowners' insurance rates by the insurance company. Floridatoday.com reports:

State Farm, which covers about one in five Florida homes, says the proposed increase is largely due to higher costs of reinsurance -- coverage bought in case insurers face enormous claims. A smaller portion of the request covers the higher cost of doing business in Florida after two storm seasons and dire predictions of future catastrophe, the company says.

Read more: State Farm customers speak out

Are homeowners insurance rates unfair?

As forecasters predict a more active Atlantic hurricane season this year, insurance companies have lost no time to up their charges. Consequently, consumers in some areas may notice a rise in insurance premiums. Some people are refusing to take this arbitrary hike lying down. Massachusetts’s state Attorney General Tom Reilly is one such person.

According to Reilly, the insurance industry is using an unexplained model for determining future hurricanes. This allows them to overcharge for expenses, and inflate its numbers to justify a proposed 12.9 percent statewide rate hike. This includes a 25 percent increase in the cost of homeowner insurance on Cape Cod. Reilly filed his final brief with the Division of Insurance, as part of the rate setting case for the FAIR Plan, Reilly is recommending no overall rate increase statewide in 2006 - including rate decreases for homeowners in many communities - and a slight increase, 1.2 percent, for Cape Cod homeowners.

Hurricane news and tips

Deadly hurricane names of last year to be retired and rightly so - for no one wants another Katrina, Wilma or Rita anymore. A total of five names are getting the axe and they are; "Dennis", "Stan", "Katrina", "Rita" and "Wilma". Read, "Five deadly names retired", for more details on the practice of naming and retiring hurricane names. Also get the stats on all five that caused catastrophic damage in 2005.

We all know that the cost of construction and labor has  gone up and as the cost of reinsurance (the insurance that insurance companies purchase for their own coverage) has doubled for some companies rebuilding and insurance is only shooting further up in costs. With hurricanes season here and predictions of increased storm frequency and severity, homeowners need to take steps to protect their property from damage.

1. Find out what your insurance policy says about your deductible and the more you can increase this the lesser premium you pay.
2. Record any improvements made to lessen hurricane damage to your insurance company to get discounts
3. Make an inventory of your household belongings with video clips and pictures and keep this list safe and away from your house.

If you are living in the coastal areas you may need a total of five or six separate insurance policies to protect your home from a disaster like a hurricane. A basic homeowners insurance policy, a wind and hail policy (if your basic homeowners insurance policy does not already cover wind and hail), a flood insurance policy, excess flood coverage, earthquake insurance policy and excess coverage such as a personal-articles policy.

You have to make sure your homeowners insurance includes wind/hail coverage, if you don’t have this covered you will need to purchase separate coverage. A waiting period of 15 days is required before coverage becomes effective.

Reinsuring insurers face the music

The Houston Chronicle reported on how insurance providers are resorting to reinsurance to protect themselves from huge losses that can arise out of a hurricane – Here the aim for them is to make sure they don’t go under the deluge of claims that comes after a catastrophic hurricane like Katrina or Rita.

The reinsurers of the insurers are also hiking their reinsurance rates for the insurance providers, which are directly affecting the individual homeowners rate for a policy. So as huge losses happened in the east coast homeowner insurance rates are quadrupling in the east and rising steadily elsewhere to make it easier on the hurricane ravaged people in the east.

The surges in rate hikes, particularly for coastal homeowners, come after re-insurers were hit with $25 billion in losses in 2005 from damage done by Hurricanes Rita and Katrina. Insurance companies are reportedly investing more in re-insurance -- the coverage companies buy for themselves in case of catastrophic losses like storm damage. When primary insurers receive rate hikes, consumers get hit as well.

Soaring homeowner rates are also occurring in coastal areas that have no recent history of hurricanes and bad weather, according to the newspaper which also said that construction costs and the prediction of more expensive claims are often the answers to rate hikes. The Chronicle also reported that now the insurance providers themselves are worried for themselves as their re-insurance rates are also going sky high.

While it is cathartic for some to know that insurance providers themselves are getting a dose of their own medicine it will do nothing to actually address the issue of homeowners insurance rates. However, I have appeased my fears of wondering if insurance providers were really fleecing us homeowners in the non hurricane prone areas. And that’s a relief don’t you think?

Allstate stops earthquake insurance

We all know of insurance as directly affected by risk so with hurricane season here and volcanoes erupting and quakes in Asia. Mother earth is really having her say insurance companies are really not in the mood to take on her fury and if you have realized you are in the quake zone you may be heading for trouble.

Here I mean insurance trouble as Allstate Insurance Co. says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses. According to the Insurance Information Institute earthquakes have caused damage in all 50 states since 1900 and hence not good news for anyone.

You can find out if you are in the earthquake zone by going to Google earth and check the map. Allstate is required to give earthquake insurance to Kentucky, Connecticut, Rhode Island and Florida but are now holding talks with insurance regulators in these states about the possibility of changing this scenario.

Allstate is also reports that it has recently purchased $2 billion in reinsurance to help cover future losses from named storms, earthquakes and fires-after-earthquakes. While it is the west coast that is most prone to quakes it has been seen that all states have had quakes at some time or the other. Californians are not be affected by this Allstate decision as most of the quake insurance is covered there by the California Earthquake Authority which has about 750,000 policies in force covering about 13.5 percent of the state's homeowners.

Earthquake insurance if you remember covers any damages by earthquakes and also includes landslide, mudslide, mudflow, sinkhole or any other movement that involves the sinking, rising or shifting of earth. So this Allstate announcement can have several other damage covers also on shaky grounds.

‘Homeowners Insurance Rates Unfair’

As forecasters predict a more active Atlantic hurricane season this year, insurance companies have lost no time to up their charges. Consequently, consumers in some areas may notice a rise in insurance premiums. Some people are refusing to take this arbitrary hike lying down. Massachusetts’s state Attorney General Tom Reilly is one such person.

According to Reilly, the insurance industry is using an unexplained model for determining future hurricanes. This allows them to overcharge for expenses, and inflate its numbers to justify a proposed 12.9 percent statewide rate hike. This includes a 25 percent increase in the cost of homeowner insurance on Cape Cod. Reilly filed his final brief with the Division of Insurance, as part of the rate setting case for the FAIR Plan, operated by the Massachusetts Property Insurance Underwriting Association (MPIUA). Consumeraffairs.com reports:

Reilly is recommending no overall rate increase statewide in 2006 - including rate decreases for homeowners in many communities - and a slight increase, 1.2 percent, for Cape Cod homeowners.

Read more: Homeowners Insurance Rates Unfair, Massachusetts Charges

Hawaii homeowners scramble for new insurance

Thousands of homeowners in Hawaii are now scrambling to find new homeowners and hurricane insurance coverage. The main reason for this is a refusal by mortgage holders to accept the homeowners' insurance coverage from Hawaiian Insurance and Guaranty, one of the state's largest carriers. Thehawaiichannel.com reports:

That's because VESTA, HIG's parent company, has been downgraded from a B to a C ++ financial rating by A.M. Best. "That down rating caused a series of unfortunate events to occur," state Insurance Commissioner J.P. Schmidt said.

Read more: Change Has Homeowners Scrambling For New Insurance