Homeowners Insurance Lowdown

Rent a Home? Take Renters Insurance

Not all of us live in our own homes. So, what happens if you have rented a home, or an apartment? Are you exempt from taking insurance? Sadly, no, you still need to take renter insurance. This insurance will provide coverage to you, in the event that your belongings are lost. And guess what, it will also cover your ass in case you do something naughty like damage your landlord’s property.

What do you need to consider before taking insurance? First, create an inventory. Take stock of your dwelling. Make note of all items of value, and especially of those items with high value/high replacement cost. You could catalog all your possessions for easy reference in future. Decide your deductibles. Remember, the higher the deductible, the lower your premium will be. If you’ve taken a basic policy, it will begin with coverage for the actual cash values of your covered belongings.

Homeowner Red Alert

Here’s a very important notice to all you homeowners. In case you haven’t checked your homeowners insurance policy yet, please do so immediately. This appeal has been issued by the Homeowners Consumer Center after it came across some appalling facts. According to a recent survey of over 1000 US homeowners, nearly 90 percent don’t understand their policy or the areas of insurance coverage they need to have!

The Center has created a list of do's & dont's for homeowners. Let me give you a brief detail of the list. In case you need more information, you can check their website.

• If you live in a state on or close to the Gulf of Mexico, the Atlantic Coast, Hawaii, a river, stream or an area that is affected by floods, you must get flood insurance cover. Ensure that you get the maximum insurance coverage, which is about $250,000. Also try to get the $100,000 supplemental flood coverage. This will help you cover any personal property loss due to flooding.
• If you have expensive jewelry, art, antiques, collectibles, guns, etc call your insurance agent & get them listed on your homeowners policy. Don’t forget to document them separately.
• Take pictures of every area of your home including the furniture. This will help ensure the legitimacy of your claim.
• Keep receipts or proof of the new or upgraded appliances and furniture in your home.
• Never keep important records like insurance policies, an inventory of your home contents, pictures of your home (exterior & interior), financial documents, and receipts in your home. A bank safety deposit box is always safer.

Finally, NEVER do business with an insurance company you have never heard of before.

Lessons Learnt, Preparations Made

In Florida, tropical Storms no longer create the kind of storm they did last year. Lessons learned from devastating hurricanes in recent years have led major insurers to rethink their exposure to catastrophe prone areas such as Florida. Marketwatch.com reports:

After this hurricane season, Allstate, which received an 18.2% insurance rate increase in Florida in October, says it will no longer renew its smaller property lines such as landlord package policies, residential fire policies, and manufactured home policies.

Read More: Insurers Better Prepared To Weather Major Storms In 2006

Homeowners Insurance Shopping Tips

Shopping for homeowners insurance is not high up on anybody's to do list, but since it is such an absolute necessity, most people do it grudgingly. However, since 2004, this unpleasant task got even more difficult in Florida. Eight hurricanes and three tropical storms have battered the state since August 2004, resulting in insured losses of about $30.5 billion, according to the Florida Department of Financial Services. News-press.com reports:

Reeling from those losses, several insurance companies have either stopped writing new policies, have told homeowners they will not renew their policies or have pulled up stakes and left the state altogether. "There is not a lot of good news at this point to share," said Tami Torres, spokeswoman for the financial services department. "We are hearing from consumers who are struggling to find coverage."

Read more: Obtaining insurance requires diligence

Competition Drives Insurer to Foreign Shores

With home-grown competition eating into its profits, Australia’s biggest auto and home insurer is looking to expand its operations across the ocean in Asia. Insurance Australia Group Ltd. reported a 13 percent decrease in its second-half profit; the company was forced to reduce policy prices with Promina Group Ltd. taking a major chunk of its clientele.

Promina announced that its first-half policy sales were up by 3.7 percent while Insurance Australia reported a 3.7 percent drop in premium revenue for the same period. Michael Hawker, CEO of Insurance Australia, has added to the company’s Asian assets with the acquisition of 24.9 percent of China Pacific Property Insurance. The Chinese insurance outfit serves 12 percent of China’s property and casualty insurance market.

Antitrust laws do not permit Hawker to expand in Australia. Insurance Australia has more than 40 percent of the auto and home insurance market down under. With units in Thailand, Malaysia, and Singapore, the company is looking to secure at least 40 percent of its premium revenues outside Australia and New Zealand. 

Hike, Hike, Hike – Florida Homeowners Face more Hikes

Insurance companies in Florida are chomping at the bit to increase their rates, and the Florida Office of Insurance Regulation is giving them a fair hearing before deciding one way or the other. The insurance regulator has turned down one filing, with three more to go. First Home Insurance Company, which sought a hike of 73.4 percent across the state for its homeowners policies and an increase of 43.8 percent for its dwelling/fire lines, had its request shot down.

Hearings are also scheduled for rate filings submitted by Metropolitan Casualty Insurance Company, Southern Fidelity Insurance Company, and First Community Insurance Company. Metropolitan is looking to raise homeowners’ rates state-wide by 95.7 percent, while First Community has filed for an increase of 64.6 percent for its dwelling/fire insurance lines in Florida. Southern Fidelity is hoping to raise homeowners’ rates by as much as 57.3 percent and dwelling/fire lines by 40.4 percent.

The hearings, which are open to the public, are to be held on August 31. Besides this, they will also be available as taped versions here.

Antique Home Protection

Did you know that there was a specific policy designed for older homes with historic value? Most people don’t, and that’s where the problem lies. Most of us don’t know that we need home insurance and even if we do, we think that the general policy is enough to cover all our requirements. The insurance market today is a very sophisticated one and offers different types of coverage to suit almost all kinds of requirements. Getting back to the historic home, if you live in such a house, don’t go in for a regular kind of cover and find out if your insurer offers this policy.

Coverage includes protection from basic disasters like aircraft, wind/hail, explosion, riots/civil unrest, fire/lightning, vehicles, volcano eruptions, vandalism, theft, smoke, and self-damaging instances. Insurancefinder.com reports:

Under this plan, coverage is limited to repairs or cash values of the items involved. The rebuilding/replacement cost is not covered in this, because some aspects of the home (historic significance) can make these costs higher than current market value.

Read more: Types of Home Insurance

Save Some Money With These Tips

While I have always given tips on to reduce your insurance premiums, here are some more tips I found recently. One of the most obvious methods of reducing insurance premium is by ensuring that your home has the latest protective gadgets to alert you to a problem immediately. Having home has smoke alarms, fire extinguishers, deadbolts on all exterior doors, and central burglar and fire alarms can help you save up to a maximum of 15 percent.

Build fire resistance by constructing your house with fireproof construction material and earn yourself a 15 percent discount. Houses that are less than 10 years old or those that have been completely renovated by a licensed contractor within the past 10 years also stand to gain. You can save up to 25% depending on the age of your house. And if you are 55 or older, retired and your house is your principle residence, then you may be eligible for a discount. These are typical discount rates, but the figures may vary with companies. It is also possible that your insurance company doesn’t offer certain discounts. So do check with your insurers to know the kind of discounts you can avail of.

Unhappy Anniversary For Katrina Victims

The results from the first anti-insurance company lawsuit are still hurting the people who’ve lost their homes and much else. But is the media overdoing it when it paints insurance companies as the villain? Businessandmedia.org reports:

Since the first suit was filed, the media have ignored or downplayed the flood exclusion in private contracts, even though the government’s NFIP has offered flood insurance since 1968. Private insurers can’t compete in price with the federally subsidized program…. Insurance companies have been cast as Big Business out to stick it to already-traumatized homeowners.

Read more: Unhappy Anniversary: Katrina Insurance Battle Continues

Know Your Homeowners Insurance Policy

Do you know what your homeowners insurance policy covers – especially when it comes to flooding? Experts suggest checking your insurance to make sure it's up to date. Ktre.com reports:

Also, have an evacuation plan so your family knows where to go if there's a hurricane. Take steps now to improve your property to protect it against a storm, and do a home inventory of all your possessions.

Read more: Make Sure You Know Your Homeowners Insurance Policy

Insurance Flies Out Open Windows

A careless act could leave you minus valuable property without the umbrella of insurance covering you. Confused.com, the online insurance search engine, reports that 71 percent of consumers are in danger of invalidating their insurance by simple acts such as leaving windows open and failing to fit doors with proper locks.

A survey conducted across a sample of 1,000 homeowners revealed these startling statistics:

• As much as 81 percent confessed that they failed to inform insurers of construction work being undertaken in their homes. Accidents occurring in such cases will not be covered under your policy.
• Over 70 percent were guilty of leaving windows open in unoccupied rooms.
• A quarter of those surveyed said they hid keys for friends and family to use.
• Around 20 percent left valuable accessories lying about in their gardens.
• As much as 12 percent did not report burglary and theft to the police.
• Three percent used their residences as places of business without informing their insurers.
• And another three percent left their homes vacant for more than 30 days in a row. This means an automatic invalidation of your policy.

Lessons to Be Learnt

The ruling in the Leonards’ case should serve as an eye-opener, not only for consumers but also for insurance agencies. The debate of what came first, wind or water, rages on, and will never get solved just as we’re not able to resolve if the chicken or egg came first.

Rather than crying over spilt milk after the hurricane has come and gone, consumers should ensure that they are getting exactly what they are paying for. Reading between the lines and asking questions relating to the kinds of damage that their policies cover are a must. And most important, in the light of what has happened, it is imperative to purchase separate flood polices.

Insurance agencies should be responsible enough to educate consumers on what a policy covers, and more specifically, on what it doesn’t insure. The best option would be to lay all the cards on the table, face up, and let consumers choose what they do and don’t need.

Citizens Rate Hike Turned Down

An appeal by Citizens Property Insurance Corporation to hike insurance rates in Monroe County in Florida has been turned down by the Insurance Commissioner of Florida. Rubbing salt in the wound already inflicted, Kevin McCarty also ordered the state insurer to reduce rates for homeowners in the area.

Citizens, by virtue of being a state-run unit, is allowed to charge higher rates than private outfits. But with the lack of competition in Monroe County, the Commissioner did not see it necessary to justify the rate increase. The insurance agency had asked to raise rates by 25.9 percent for homeowners’ policies; instead it found the tables turned on itself with the Office of Insurance Regulation ordering it to reduce rates by as much as 32.2 percent. Mobile home owners will also benefit from a reduction by 15.2 in their policies, according to a decree from Commissioner McCarty.
Citizens has been asked to refund the excess amounts it has already collected in anticipation of the hike approval. McCarty said that the revised rates issued to the insurer were based on data derived from Florida’s public hurricane model.   

Citizens’ management was in the firing line of questions thrown at them from members of the Office of Insurance Regulation and the advocacy group Fair Insurance Rates for Monroe County, and representatives of Monroe County, at a televised public hearing held on August 1 to discuss the rate filing.

Insurance For The Mobile

While the percentage of people living in mobile homes is not very high, there are people who do not prefer the comfort of a brick and mortar home. The fact that such people may not be able to avail of regular homeowners insurance doesn’t mean they have to do without any form of insurance. For such people, there’s mobile home insurance. Mobile home insurance can vary from location to location, and from company to company. Basic policies generally involve general protection, theft protection, replacement cost, personal property protection and some others.

General coverage covers most calamities, including fire, and water damage. You can cover your property against quite a few losses by getting a personal property protection. This policy will cover even the perils in your general mobile home coverage. You can check for specifics in your policy detail. Then there is theft protection coverage that as the name suggests, will cover your personal property from burglary. It also protects you in the event of loss of financial items like credit cards, checks, and cash. This is one type of insurance that I would recommend to people with mobile homes. You could be more susceptible to theft than people living in regular homes. There is also a loss of use coverage that pays for expenses you may incur when you are unable to live in your mobile home. In essence, it will cover your food and lodging for the time that you are away from your home.

Floods have become a reality today and you need to insure yourself for protection against floods. Here, an emergency removal policy will help you. For example, if your area becomes extremely flooded, and transport is necessary to save the home, you can rely on this policy to tide you through.

Auto Insurer Offers Home Insurance Too

Homeowners in Ohio, Pennsylvania, and Oregon can now purchase insurance from Progressive Corp. The company, which is the eighth-largest direct writer of property and casualty insurance in the United States, will distribute homeowners’, renters’ and condominium insurance policies written by the Homesite Insurance Group. The three-state deal has the potential for expansion next year depending on the success of the trial. The company’s net income for July increased 3 percent. Reuters Today reports:

The venture could help Progressive attract customers looking to buy auto and homeowners' insurance in a single step, Meyer Shields, an analyst with Stifel Nicolaus said, although he did not expect it to add materially to Progressive's premium growth through the end of next year. 

Florida Homeowners Get New Option

A new entrant to the Florida insurance market as of August 15, Northern Capital Insurance Co. will have its hands full with the insurance problems plaguing the state. The company will use its financial clout to initially insure a few thousand homes and properties while it builds a surplus that will allow it to expand operations at a future date. Wayne Fletcher, the president of the firm, said that Northern Capital will start out by providing insurance in 10 counties in the state. Insurance Journal reports:

According to Fletcher, Northern Capital has put together a reinsurance program comprised of U.S. and Lloyd's of London reinsurers, in addition to the protection provided by the Florida Hurricane Catastrophe Fund.

Musings On the Katrina Judgment

So why did the federal judge side with the home insurance companies and rule that they did not have to pay for the flooding that destroyed tens of thousands of homes in Hurricane Katrina? After the initial rage at the decision has died down and we calmly think about it, the decision isn’t as flawed as it seems. Firstly, the insurance companies didn’t get an absolute victory. The judge rejected attempts by the insurers to cancel coverage for wind damage when it occurred in combination with the flooding.

This means homeowners whose claims have been denied may have the opportunity to present proof in court that at least some of the damage resulted from wind — which is the main protection provided by home insurance policies in hurricanes. What the ruling did was to uphold a longstanding practice of insurers of not covering flood damage, which is typically insured through the federal government. The insurance industry had stated that a ruling requiring insurers to pay all flood damage would have meant that the courts could rewrite their policies or contracts. This might have led some of them to withdraw from the home insurance business.

Flooding Is A Reality! Are You Prepared?

There are some parts of the country where flood insurance is considered mandatory. Yet, only 50 percent of homeowners actually carry a policy. Now if there is another hurricane of the magnitude of Hurricanes Katrina or Wilma, who’s to blame for the tragedy? Definitely some of the blame must go to the homeowner.

You probably need time to understand why you need flood insurance, but you don’t need half that much time to buy it. Buying flood insurance is the easiest thing since pricing is standard. You can easily find a list of agents who sell the NFIP policies on the FEMA-run website. Msnbc.msn.com reports:

Anyone living in one of the 20,000 communities participating in the NFIP’s floodplains management program qualifies for coverage, regardless of their risk for flooding. Only those living in communities designated coastal barrier resource system areas are excluded.

Read more: Before the deluge: Why to buy flood insurance

No Flood Compensation for the Leonards

If a hurricane destroys your home, how do you decide the percentage of damage that was caused by wind and the percentage that was caused by flood waters swept in by the hurricane? Do you even stop to think twice if your homeowners’ policy covers both damage due to wind and floods?

This couple is paying the price for not reading the fine print. A U.S. District Court judge ruled that Paul and Julie Leonard were not entitled to any claims on flood damage from Hurricane Katrina. The court offered them a small amount as compensation for wind-induced damage, a ruling that the couple’s attorney called a small victory.

Nationwide Mutual Insurance, the insurance company on the other side of the case is jubilant with the judge’s decision. It should be, considering that the court saved the company from having to shell out $130,000 claimed as flood damage by the couple. The insurer is liable to pay only $1,228 to cover wind damage.

What Gets You a Discount?

Browsing a few websites of homeowners’ insurance providers, I came across a number of features that were guaranteed to fetch me a discount if I insured my home with them. While I can understand the fact that I may have to pay more for owning a certain breed of dog or for not living in close proximity to the fire station, how do insurers offer a 15 percent discount for insuring my home online?

Does that mean that loyalty, the fact that no one in my house smokes, the security measures that protect my house, and the fact that I buy all my insurance products from the same company rank at the same level as buying insurance online?

Minorities Run Risk of Foreclosure

The national Association of Community Organizations for Reform Now (ACORN) has released the results of a study of homeowners in Kansas City and 129 other cities in the United States. The report states that home owners belonging to minorities and those with low incomes are more susceptible to foreclosure. Rising mortgages are forcing even homeowners who are not in foreclosure to sell their homes, according to ACORN activist Deni Coker. Kansas City reports:

The ACORN study found that one in five Kansas City area homeowners were making payments on higher-cost sub-prime mortgages but that African-American borrowers were 4.4 times more likely than whites to receive the loans. Latino borrowers were 2.1 times more likely.

Insurers Win Katrina Case

So now it’s official – a federal judge recently ruled that insurers did not have to pay for the flooding that destroyed tens of thousands of homes in Hurricane Katrina. The ruling upholds a longstanding practice of insurers of not covering flood damage, which is typically insured through the federal government. Nytimes.com reports:

It was not a total victory, however. The judge rejected attempts by the insurers to cancel coverage for wind damage when it occurred in combination with the flooding.

Read more: Judge Rules for Insurers in Katrina

Four-Step Guide To Lower Your Insurance

Homes, unlike most other possessions have very strong emotions attached to them. It takes years for a person to build a home, mortgage loans and other loans pull you down, but you somehow manage to hold onto your dream home and build on it. Only to see everything lost in a flood or hurricane. And what’s worse, your insurer may not even pay up with the excuse that you did not have the exact insurance coverage for say wind or flood. To make matters tougher, these policies are long and complicated and quite costly.

But it needn’t be that way. There are quite a few simple tricks that can help you save on your homeowners policy. Firstly, try to get more information about the various discounts or credits. Then find out from your insurance agent how you can qualify for them. Here are a few of the more popular ones:

Be loyal & Don’t claim: Yes, I know that sounds crazy. I mean you get yourself an insurance cover and then don’t claim for it! Well, that’s the catch. So getting down to details, if you’ve been with your insurer for three or five years you can expect a discount. Now if during this period, you make no claims, your discount is even higher.

Increase business with insurer: Don’t just stop at insuring your home, go ahead and insure your car as well with the same company. This can get you discounts of 10 –20 percent from Allstate, while State Farm offers a 10 percent discount. The best part is that this discount applies to renters and condo insurance as well.

Arm Yourself: Install alarms, smoke detectors, fire extinguishers and dead bolts – just about anything that makes your home more secure. You’ll pay much lesser on insurance this way. And the more sophisticated your security system, the bigger the discount.

Renovate, improve: Anything that improves a home's condition often earn a discount that decreases over time.

Know the Types of Home Insurance

It’s not enough to know that if you have a home, you need home insurance. When you get out there into the market, you will be presented with different types of homeowners insurance that range from basic to specific ones. Know the different types before you choose the ones that are best for you. Insurancefinder.com reports:

Home insurance can be broken down into 7 basic types of plans. What differentiates them from one another are the types of circumstances they cover.

Read more: Types Of Home Insurance

Drive to extend deadline for filing lawsuits for Hurricanes Katrina and Rita victims

Insurance Commissioner Jim Donelon has asked the companies writing homeowners insurance in Louisiana to extend the deadline for filing lawsuits for the victims of Hurricanes Katrina and Rita. While the deadline proposed for hurricane Katrina victims is till Aug 31, 2007, the deadline for hurricane Rita victims is September 27, 2007.

Although over 175 insurance companies have obliged, they mainly constitute the smaller players in the market. They account for only one third of the home insurers market. Several larger players have yet to indicate whether or not they will volunteer for this.

While Donelon is hoping for a unanimous positive action from all the players, he has a threat in the offing for those who will fail to comply with the ‘request’. In the event that some companies do not follow this rule, his will use his authority as commissioner and impose fines on them. If the situation so requires, he might even order suspension of their authority to do business in Louisiana. Times Picayune reports:

As of 5 p.m on Thursday, 24 hours before Donelon's deadline, 176 insurance companies representing 31.1 percent of the market had indicated they will comply with the order, said Department of Insurance spokeswoman Amy Whittington.

Captured your home yet?

No I haven’t made a mistake up there. All I was trying to do is ask you if you have photographed your home with all the essentials in it. It is important to keep a record of all that you have in your home so that in the case of an eventuality, you have a proper record of all the things in your home. This makes it easier for you to claim your home insurance.

One of the first things you need to do is check your homeowners insurance policy. And don’t think I’m trying to spoon feed you guys. Actually quite a few people do take out a policy but have no idea about what it covers. According to a recent survey of over 1000 US homeowners, nearly 90 percent don’t understand their policy or the areas of insurance coverage they need to have!

How To Prevent Electrical Fires In Your Home

While it is a good idea to take a good homeowners insurance policy to provide for any losses, it is an even better idea to prevent losses. As the age-old adage goes: Prevention is always better than cure. But that doesn’t mean you shouldn’t take a homeowners insurance policy. What I’m trying to say is that there are certain situations, which are under our control, and if we take care, we can prevent dangerous situations from occurring. According to statistics, home electrical fires claim the lives of 200 Americans each year and injure 1,500 more. Let’s check out some simple steps that will help you prevent loss of life or property from electrical fires.

You must regularly check your electrical appliances and wiring. Faulty electrical outlets and old wiring are the main causes of electrical fires. Problems with cords and plugs, such as extension and appliance cords, are cited as the primary cause of home electrical fires.

You must keep a look out for frayed wires and replace all worn, old, or damaged appliance cords immediately. Never overload electrical extension cords.

The next highest causes of electric fire are electric stoves. However, it has been found that careless cooking is the reason for these fires and not stove malfunction. Here you must firstly learn the right methods of using electric stoves. Secondly, pay special care to all electrical appliances in the bathroom and kitchen and keep them away from wet floors and counters.

Don’t buy an electrical appliance that doesn’t meet the UL standard for safety. You don’t want to compromise on your life for a few dollars less.

Children should not be allowed to play with or around electrical appliances like space heaters, irons and hair dryers. Heaters are quite dangerous and you should keep clothes, curtains and any other inflammable items away from the heaters. A three-feet distance is recommended.

Finally, always ensure that your smoke detector is in good working condition.

Insurer Enters South Carolina

Houston General Insurance Exchange is entering the automobile, home and personal possessions insurance market in South Carolina. Independent insurance agents will market the company’s OneChoise Auto, OneChoice Homeowners and OneChoice Package insurance options. Houston is offering members added advantages such as assistance during emergencies involving insured vehicles, identity theft resolution services and travel assistance. Claims Guide reports:

Houston General Insurance Exchange is managed by Houston General Insurance Management Company, a subsidiary of Boston-based OneBeacon Insurance Group. South Carolina is the second state for Houston General; the company has conducted business in Arizona since November 2005.

Fire Away Fire Fears

A fire can destroy your home and all your possessions and memories in a few minutes. It may even claim your life and that of your loved ones. There are standard drills that help you prevent a fire in your house. This website offers two tests that help you decide if your home is fire-proof. The first set of questions help you assess your risk from fires, while the second tests how ready you are to cope in case a fire breaks out.

Cape Cod Insurance Hiked

The harrowing wait for homeowners in the Cape Cod area is over, and the news is not good. State insurance regulators have approved a 25 percent hike in premiums for homeowners who are subscribed to policies from the Massachusetts FAIR Plan, an industry consortium of insurers. The rise follows revised hurricane projections that forecast heavy damage in the area. Insurance Commissioner Julianne Bowler gave her blessings to the increase, which includes a rise of 20 percent for premiums in New Bedford and parts of the counties of Plymouth and Bristol, and an average of 12.4 percent all across the state. FAIR Plan, which insures 8 percent of homes in Massachusetts, predicts more hikes next year. Boston News reports:

The average FAIR Plan annual premium on the Cape now costs about $1,300. The plan has swelled into the Cape's largest insurer, covering 43,000 properties, or about a third of the market. Six years ago, the FAIR Plan had about 6,000 Cape policies.

Claiming Dangerously…

Did you know that making a claim against your insurance company can result in you losing your home insurance? Yes, this is preposterous but true.

Columnist for the Kiplinger magazine Kimberly Lankford, says in her book “The Insurance Maze”, that insurers do not have fixed rules for dropping customers. But claims that are water-related do the most damage, she adds.

Chris Heidrick, vice president for personal insurance with Firemen's Fund, suggests that homeowners raise their deductibles so as to save on premiums. These savings can contribute to increasing their coverage which will stop them from claiming for even the most minor damage.

Insurers have a database of all the claims you’ve ever made, even the smallest ones. You can access a report of all your claims from the Comprehensive Loss Underwriting Exchange, once a year at no cost.

Global Warming Turns the Heat on Hurricanes

It’s bad news that the much-harassed homeowners who live along the North Atlantic coast can do without. Global warming will soon be making a deep dent in their pockets, if risk predicting models are revamped around this latest threat to the environment. Insurance rates for homeowners are set based on computerized models that analyze and simulate future weather conditions and trends.

Is global warming contributing to the frequent occurrence of hurricanes along the North Atlantic coast? Even as the debate rages on, firms that forecast the probability of hurricanes are already including global warming as a key factor in making predictions.

Risk Management Solutions launched its new hurricane risk model that looks five years into the future of weather, in May. Insurance agencies that use this particular model will be in a hurry to hike insurance rates with Risk Management predicting that hurricanes will contribute to a 25 to 30 percent increase in average annual losses.

Consumer groups are up in arms against this report from Risk Management; they stress that the company is hand in glove with insurance agencies that are looking for the smallest excuse to raise prices.

Meanwhile, others such as Florida state officials and the AIR Worldwide Corporation, Boston, are also investigating the truth of this statement. For its study, AIR has roped in Kerry Emmanuel, a scientist from the Massachusetts Institute of Technology (MIT), who created a storm in a teacup with his paper published in the journal Nature just before hurricane Katrina struck. He had claimed that hurricanes were becoming more frequent and ferocious in the North Atlantic because of global warming caused by human indiscretion and disregard for nature.

Ultimately, the people who live along the coast from Maine to Texas will have to pay the highest; if they don’t pay through their noses for homeowners’ insurance policies, they are in danger of losing the roof above their heads.

How to be in the good books of your homeowners insurance company: Some tips!

Homeowners constantly worry about coming in the bad books of their insurer, should they put forward a claim. This worry is not without a base. The insurance industry is quite sensitive to the frequency with which one requests a claim.

Some insurance companies actually keep a count of not only how many times you have filed for a claim but also how many times you have made a query on the topic. This is quite a difficult situation since what it means is that even if you make a harmless call to the insurance company, chances are that they may put you on the ‘watch out for’ list. This list may be accessible to a lot of parties including other insurers.

Hence you need to be careful about the decision to ask for a claim. There are chances that not only insurance company may refuse cover in the future, other insurance companies may also do the same. Therefore you stand to lose any loyalty or claims-free discounts you may have earned under your present coverage. On top of this you may have to end up with the state's high-risk insurance pool that will charge you high premiums and low damage caps.

Homeowners insurance rates reduction proposed

United Services Automobile Association (USAA) has recently put forward a proposal to cut rates for homeowners policies by 22%. This proposal is under consideration by the state Department of Insurance. This landmark move would impact at least 182,000 customers. The cut would ensure an average annual saving of $244 to $381 for the customers. USAA is California’s fifth largest homeowners insurer and its effort is being praised by the Insurance Commissioner John Garamendi.

According to recent study by the Department of Insurance it was found that four of the largest homeowners insurers, represent 51% of the California homeowners insurance market. It was also found that these companies pay much less than 50 cents of each premium dollar to settle policyholder claims. The commissioner has ordered these four insurers to prove that their charges are not excessive. These companies are State Farm, Allstate, Farmers, and Safeco. If the companies fail to prove that their charges are fair and reasonable, they will be formally asked to reduce their rates.

Texas Select Customers Face Uncertain Future

More than 150,000 Texans face losing their homeowners insurance later this month after insurance company Texas Select folded recently. Insurance agents around the state are trying to let those homeowners know they need to take action and get new insurance. Customers wanting to get more information about Texas Select can visit the Texas Department of Insurance Web site. Wacotrib.com reports:

The Texas Department of Insurance “had to take over and close down” Texas Select Lloyds Insurance Company, one of several companies that operates under the Vesta Insurance Group umbrella, Hagins said. Vesta is based in Birmingham, Ala. Jerry Hagins, a spokesman for the Texas Department of Insurance said Texas Select “actually had a good year last year.” But Vesta suffered heavy losses due to claims related to Hurricane Katrina.

Read more: After insurance company folds, many homeowners stuck looking for new coverage

Damned If You Do, Damned If You Don't

The problem with homeowners insurance nowadays is that you just don't know if the company that insured your home is still interested in your account. It may just drop you when renewal time comes around as is happening to some people who live along the coast. And if not anything else, homeowners have to worry that making a claim will get them dropped by the insurer. A pampered lot, these guys.. Eh?

Well, if you do claim and your insurer does drop you, you are in deep trouble. This could only mean higher premiums with another insurance company or, if you're deemed troublesome, with your state's high-risk pool. If you are really unlucky, you may end up with NO coverage at all. And the worst part -- you'll also lose any loyalty or claims-free discounts you earned under your present coverage. This is one big sellers' market all right. So how do you know when or why your insurer will drop coverage? Marketwatch.com reports:

Even inquiring about whether to make a claim can hurt your reputation, says Kimberly Lankford, a Kiplinger's magazine columnist. Some companies will count such inquiries against you in a central database that other insurers can access.

Read more: Don't get dropped by homeowners insurance

How to be prepared for the worst

The hurricanes that ravaged New Orleans last year may have become history today, but the lessons learnt then cannot be forgotten. Of course, you have your homeowners insurance and all that but you still need to have something more set aside for an emergency. Emergencies are something you cannot predict and but you can always be prepared to some extent. You need at least three months of savings in case of emergencies. Eurweb.com reports:

In addition, if you do have a property loss because of a natural disaster, you may be eligible for a tax deduction. As a general rule, your deduction is determined by an equation that compares your basis (i.e., how much you paid for the property), with the decrease in fair market value as a result of the casualty. You then take whichever

Read more: FOR THE LOVE OF MONEY: Stormy Weather

USAA Cuts Premiums

USAA, the fifth-largest homeowners’ insurance provider in the state of California and the sixth-biggest in the country, is doing its customers a huge favor and reducing premiums by as much as 22 percent in the state. This move is expected to save its policy holders $55 million in 2007, at an annual average savings of $381.

USAA, which has 182,000 customers in California, is following the trend set by Hartford Insurance which lowered premiums by 18 percent in June. The state’s Insurance Commissioner John Garamendi is thrilled with this development, coming as it does on the heels of four other major insurance companies’ reluctance to decrease premiums.

The Commissioner has been hounding State Farm Fire & Casualty, Allstate Corp., Farmers Insurance Group and Safeco Corp. to lower their insurance rates. But these agencies dismiss the Commissioner’s demands, claiming it is just a ruse to gain political mileage in the elections for lieutenant governor. Garamendi is the Democrat candidate.

Insurer Revived With State Loan

This insurance agency can now hold its head above the flood and windstorm waters with a $20 million loan from the state’s coffers. The State Board of Administration and the Florida Office of Insurance Regulation will administer the loan to the St. Johns Insurance Company, which will use the money to issue more than 100,000 policies over the next year.

To qualify for this loan which is issued under the provision of an insurance bill passed by the Legislature earlier this year:

• An insurer must meet a list of creditworthiness standards.
• It should be capable of repaying the loan within 20 years.
• It should match the state’s loan with capital investment from outside investors.
• All investments and loans should total at least $50 million in capital and policy holders’ surplus.
• The loan should be used to write a minimum pre-determined number of policies.

St Johns, which is based in Orlando, lost $6.5 million to the 2005 hurricanes, but managed to finish the year with $10.2 million in capital and surplus. It is the first insurance company to be approved for this loan.

Insurer Enters Florida Fray

Coming in the wake of several insurers closing shop or moving out of Florida, the entry of a new insurance agency into the State is certainly newsworthy. Coldwell Banker Residential Real Estate is all set to offer home and automobile insurance in Florida through NRT Insurance Agency, a subsidiary of Coldwell Banker’s parent company. NRT Insurance, which is licensed to operate across all the 50 states, provides insurance through Chubb, American Strategic Insurance, ASI-Lloyds of London, Fireman’s Fund and Liberty Mutual. Biz Journals reports:

Initially, the company will offer residential property and casualty insurance as well as automobile and watercraft policies. The agency will have six employees in Florida who will be supported by marketing and telephone representatives based at the company's headquarters in Waltham, Mass., executives said.

Don’t Let the Burglars Know You’re Away

An empty house is an open invitation for burglars to strike. What gives away the fact that your house is not presently occupied? Your mail accumulating in your mailbox is a sure sign that you’re away.

For those who are on good terms with the neighbors, this is a simple problem. But for the rest, there’s good news if you buy home insurance from Hibernian General Insurance.

The insurance company is offering all its home insurance customers free mail holding service for a period of four weeks every year. Hibernian has tied up with An Post in order to offer its nationwide customers this service. 

Cape Cod Insurance Set to Rise?

A computer forecast that predicts a hurricane over the Cape Cod area is proving to be costly for the people who live there. The Massachusetts Fair Access to Insurance Requirements Plan (FAIR Plan), the insurance consortium who covers nearly 175,000 high-risk homes in the Bay State area, has submitted a bid to the State Insurance Commissioner’s office seeking approval for a 25 percent hike in insurance premiums.

The group had a similar proposal turned down last month by State Insurance Commissioner Julianne Bowler. She gave FAIR Plan a 30-day deadline to either reduce the hike amount or provide more proof that substantiates the need for a hike.

John Golembeski of FAIR Plan argues in favor of the hike; he adds that the insurer is doing the people a favor by increasing premiums only by 25 percent, when analysis models show that the $1,036 average annual premium is 64 percent too low.

According to Deputy Commissioner Joseph Murphy, FAIR Plan’s revised filing “is still under review.”

Rent a Home? Take Renters Insurance

I’ve spoken so much about homeowners insurance and how you should ensure that you have your insurance, file for it, how to reduce insurance rates, …the works. However, not all of us live in our own homes. Yes, we do dream of owning a home of our own, but that doesn’t necessarily translate into reality so soon. So, what happens if you have rented a home, or an apartment? Are you exempt from taking insurance? That would be a nice though eh? Sadly, if you don’t insure your stuff, your homeowner aint gonna do it for you.

So, even if you don’t like it, do go out and take insurance, no not homeowners, but renter insurance. This insurance will provide coverage to you, in the event that your belongings are lost. And guess what, it will also cover your ass in case you do something naughty like damage your landlord’s property (by mistake of course!). For instance, if you host a party, and one of your guests makes a hole in the wall!

Fine, let’s get back to business. What do you need to consider before taking insurance? First, create an inventory. Take stock of your dwelling. Make note of all items of value, and especially of those items with high value/high replacement cost. You could catalog all your possessions for easy reference in future.

Decide your deductibles. Remember, the higher the deductible, the lower your premium will be. If you’ve taken a basic policy, it will begin with coverage for the actual cash values of your covered belongings. Example: a 5-year-old washing machine would be covered for its initial cost, minus the depreciated cost. You may not get much money for that one coz minus the depreciation the value isn’t much. In such cases, you could opt for replacement cost coverage instead. With this coverage, you would be reimbursed for the total current cost of a washing machine. BUT, remember this kind of coverage is more expensive.

Updated Your List Now

I began this insurance checklist some time back where I asked you to check your list against mine. Here are two more items that need to be on YOUR insurance checklist:

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.

Don't Fiddle Around Before A Storm

If you own a home, especially along the coast, my sympathies are with you. The last few years have been bad in general and particularly so for homeowners who’ve been trying to get insurance. Companies are either dumping homeowners or refusing to write new policies as they continue to smart in the aftermath of the hurricanes that lashed the country last year.

So, while a storm heading toward Florida must make homeowners sit up and wonder if they can beef up their coverage, fact is there is not much they can do. However, you cannot blame insurers for all the problems homeowners face. Even when there is prior knowledge of storms, homeowners prefer to wait. Many homeowners don't even think about insurance coverage until just before the damage is a certainty, or even worse, after a storm has passed. Fact is that once a storm is close enough to create warnings, insurance companies quit writing new business, and they many not even update existing policies. Wesh.com reports:

"There's a 30-day waiting period," said insurance agent Mike Meza. And don't bother scrambling right now to buy flood insurance, even if you don't live in a flood zone, he said. "It's not going to help you now," Meza said. "It's going to help you 30 days down the road."

Read more: Don't Wait For Storm To Think About Homeowners' Insurance

Your Insurance May NOT Cover a Disaster

Did you know that nearly 60 percent of U.S. homeowners are absolutely unprepared for the threat that wind, storms and floods pose to their home and its contents? Homeowners should perform a yearly review of their standard homeowners policies, which pay to rebuild a home, rather than compensate homeowners for its market value. App.com reports:

If you haven't reviewed your insurance policies recently, consider doing it soon. "The peak of the hurricane season is in September, so you have time," says Robert Hartwig, chief economist of the Insurance Information Institute, a trade group. "But the amount of time you have is limited. Don't put it off."

Read more: Many homeowners don't have enough insurance to cover disaster

Tips to Lower Insurance on Your Second Home

If you have managed to secure a second home for yourself, you will know by now that insurance on the second home doesn’t come cheap. But that shouldn’t be a cause for worry since a few adjustments will help you lower the cost of insurance on your second home. Smartmoney.com reports:

A central alarm system that detects both fire and burglaries can cut a quick 20% off the top, insurance salespeople say. A basic system costs around $300 to install, depending on the number of zones and sensors in your system, according to alarm company ADT. Expect to pay $70 and up for service each year.

Read more: Second Home Insurance Tips