Homeowners Insurance Lowdown

S.C. Requires A Few Insurance Lessons From N.C.

You know I’ve begun to believe in that funny saying about the crying baby getting the milk. In South Carolina, everyone seems to be worried about the rising insurance rates for businesses and condo owners along the coast. Nobody seems to give a thought to the poor individual homeowner who has also been subject to the same unwarranted increases or cancellations in homeowners insurance. And their situation is more precarious than businesses and condo owners.

Moreover, critics believe that the S.C. Department of Insurance is only a politically appointed group. It seems to have little clout regard the premiums paid by harried customers. One possible solution that was put forth by a harried citizen was that the S.C. Director of Insurance should meet with her counterpart in N.C. who has been on the job for 20 odd years. The reason should be quite obvious since N.C. has managed to retain its insurance rates at a considerably lower level than what consumers in S.C. pay. Myrtlebeachonline.com reports:

In South Carolina, insurance company cherry-picking to get high profit margins is allowed, as is either denying coverage or raising rates as much as 700 percent for homeowners, apparently with Kitzman's blessing.

Read more: State should stand firm in insurance crisis

Off-Campus Students Require Renter’s Insurance

I’m going to talk to you about something that pertains not to the loans you take for college but to the costs you incur when in college and how you can reduce them. If you are in college and live off- campus, you should probably consider purchasing renters' insurance.

I know this may sound incongruent with your ideas of wanting to save money in college. When I talked to a few student friends of mine, their first reaction was that the landlord does have insurance so why should we shell out more money? Good argument. But remember, when you leave home, you are probably coming with quite a few of your personal items like your computer, stereos, and probably bicycles. All this will be worth a few thousand dollars. Do you think your landlord’s insurance will cover all this personal property of yours? What happens if there is a burglary and all your stuff gets stolen, or a fire rages through the apartment you stay in and ravages everything. What are you left with? Nothing.

If you take out a renters' insurance, it will protect personal property against damage or loss and will also protect you in the event that someone is injured on the premises. You should carefully consider the type of coverage you require. Personal property coverage applies only to repairs or replacements of damaged, destroyed or stolen personal belongings. Liability insurance provides coverage against a claim or lawsuit resulting from injury or property damage to others caused by an accident that took place on your property. Monthly premiums for renters' insurance average between $15 and $30, depending upon the home's location and size, as well as the value of the policyholder's possessions.

As I always say, before you purchase the insurance policy, confirm that you are dealing with a legitimate company by contacting the Insurance Department's toll-free number at 1-877-881-6388.

Maintaining Costs in Expensive Oklahoma

A recent study shows Oklahoma is the 3rd most expensive state in the country for home insurance. However, according to some, the high cost of insurance is worth it. The winds that sweep down the plain combined with hail make it quite difficult to live here. And no homeowner can claim to have a peaceful night’s sleep unless s/he has a home insurance cover.

It doesn't come cheap though. Oklahoma can claim a lot of things as far as low-cost of living, but home insurance isn't one of them, with an average annual premium of $925. The cheapest state, Idaho, is just $400 a year. State Farm says you can lower your insurance premium by using wind and hail-resistant construction materials on your home.

Fewer Storms Do Not Lead To Lower Insurance

Did you notice that Florida hasn't seen too much of the dreaded hurricanes this season? Well so does this mean that insurance rates will remain constant, or still better, fall? High hopes! Heraldtribune.com reports:

Long-term forecasts still call for increased hurricane activity in the Atlantic basin. "There is still great pressure on the insurance markets in Florida, and through much of the Southeast, because of the expectation that the next 10 to 20 years are likely to be above average," says Robert P. Hartwig, chief economist with the Insurance Information Institute.

Read more: Despite fewer storms, property insurance continues to skyrocket

Lower Your Insurance Payout

As home insurance rates keep rising, hompeowners are finding it increasingly difficult to keep up with the expenses. But there are ways to economize and reduce your costs -- well not too much, but in these hard times, every dollar saved counts. Buffalonews.com reports:

Consider increasing your deductible, the amount of money you must pay toward a loss if you ever have a claim. Higher deductibles usually mean lower premiums.

Read more:How to save some money on your homeowners insurance

Do You Know Yourself As Well As Your Insurer Does?

If you are shopping around for affordable homeowners insurance, you need to know this bit of info—the insurance company knows your credit profile. They have probably checked into your insurance score to know how you fare. Companies need this information to do business with you as this score can affect just about everything – from the amount you pay for your insurance to whether a bank will let you open an account.

If this scares you, here’s a bit of good news: you too can avail of this information. The Fair Credit Reporting Act allows you to get copies of these reports, improve your scores and correct errors, all of which could save you money. Let us take a look at one thing insurers check most: your credit-based insurance scores.

Put simply these scores are a combination of many factors like your past homeowners-insurance claims and credit score. Insurers use these scores to determine the likelihood of you filing an insurance claim in the next one year. Yes, I know this sounds a bit like hedging or gambling. But, hey they got to make money too! So, now that you know how this score is calculated, here’s how your score can go really down: previous insurance claims, not-too good credit report data including bankruptcies and liens, and the ratio of debt-to-credit limit on your credit cards. All this goes into determining the your rates when you apply for a policy.

If your credit is not too bad and you haven’t had a bad financial past, you will not find it difficult to get a homeowners insurance policy at a good rate. However, if that isn’t the case, here’s what you should do. First get a copy of your credit report. If you are denied insurance because of your score, the insurer might tell how to get a free copy of your report. Next, work to improve your score by avoiding small or unnecessary insurance claims. However, if you find an error on your report, immediately write to the appropriate department.

Don’t miss out this week’s Carnival of Real Estate hosted by Matrix. Our blog article Florida Losing Appeal is featured there.

Tips To Make Your Home Burglar Proof

Holiday season is a time of cheer – you get to go away from home and the drudgery. Just lock up and leave for the great outdoors. And it is a time of cheer for burglars as well because they can burgle the great indoors without any hindrance. That is if you haven’t been smarter than them and take steps to make your house easily accessible to them. If you haven’t thought of them already, here are a few handy tips that will help you relax and enjoy your vacation without worrying about who’s home:

• Ensure that the doors and windows are secure.
• If you are going away for quite some time, give your house the lived in look. You could put your lights on a timer and ask a neighbor to ensure that the front of your home is clean of debris.
• Get an alarm system, and be sure to advertise that you have one. Most security companies will give you complimentary stickers and yard signs.
• Keep your homeowners insurance policy up to date.

Citizens Insurance Spent $312,000 Of Your Money On Brochures

There’s a brochure doing the rounds of Florida. A brochure with lots of happy people, smiling because they’ve got homeowners insurance cover. No problem with that, coz jut about every firm advertises. The problem is with the firm that is giving around these pamphlets – Citizens Insurance. Citizens is supposed to be the insurer of last resort and hence really doesn’t need any advertisement. But that isn’t what got Floridians angry.

Actually, all Floridians have no choice when it comes to paying for Citizens. Because every policy holder in the state, regardless of what company that have insurance with, pays a 9 percent surcharge that goes to Citizens. In addition the company receives $750 million dollars from the state to keep it afloat. And the reason why this brochure angers them: It’s costing a total of $312,000 dollars for the pamphlet plus an additional charge for postage – and all this is paid for from the money collected from the common folk of Florida. Tampabays10.com reports:

Not only are Citizens policy holders captive customers, they are also paying the highest rate possible. Under state law citizens can not charge rates lower than the most expensive insurance company in an area. An anti Citizens group, homeowner against Citizens estimates the average Citizen's policy is 20 percent more expensive than other insurance.

Read more: Citizens Insurance spend hundreds of thousands on pamphlet

Crist Blasts Citizens

At last, some respite, somebody really had the gumption to stand up to Citizens and call its bluff. Attorney general and gubernatorial candidate Charlie Crist recently pushed through a measure that forces Citizens to hold three public hearings and forbids it from hiring outside lawyers to fight for rate increases. Palmbeachpost.com reports:

Crist persuaded Gov. Jeb Bush and the other two Republicans on the Cabinet to reject Citizens' proposed "plan of operation" for failing to keep the interests of its 1.2 million residential policyholders in mind.

Read more: Crist blasts Citizens, pushes restrictions

Insurance Hikes, Not Storms, Submerge Florida

Some more good news... for insurers that is -- four more companies have joined the list of insurance sellers that want Florida homeowners to pay more. Federated National Insurance Co., Homewise Insurance Co., Liberty American Insurance and Florida Family Insurance Co. are seeking double-digit rate increases. These hikes are expected to affect more than 180,000 Florida customers. Heraldtribune.com reports:

Federated National wants to boost its homeowners insurance rates an average 49.5 percent in Florida. The company has 42,578 homeowners policies, including 1,790 in Sarasota, Manatee and Charlotte counties. Homewise has filed for a 75.8 percent increase for its 17,404 policyholders, including 1,197 in this area. Liberty has two companies seeking higher rates. Liberty American Select Insurance Co. wants an increase of 44.8 percent on homeowners and 96.2 percent on dwelling fire coverage.

Read more: Insurers ask for rate hikes

Inventory: The Why And How

I know I’ve been focusing quite a bit on floods and storms of late. In the recent past, they were quite a bit of a reality and so you really cannot ignore them. That said, we’ll move onto other things. It’s not only floods and storms that can wreck a home. Fires and other natural disasters can also be quite dangerous and we need to be equally prepared for these as well.

According to the Insurance Information Institute (III), one way to prepare for such a possibility is to maintain a home inventory. An inventory can help you recognize the amount of homeowners insurance you'll need. It also can help you settle insurance claims faster after a disaster strikes and verify your disaster losses on income taxes. Nwtimes.com reports:

Since taking the inventory initially can appear as an overwhelming task, the III suggests that you organize the work. You might begin the process one room at a time, one category at a time (e.g. electronics first, furniture second, etc.) or from the newest or most expensive items on down.

Read more: Inventories help with homeowners insurance

No End To Florida’s Insurance Woes

The home insurance sector in Florida is spiraling out of control and needs to be reined in before it causes the state’s economy to collapse. I know this sounds a bit over the top but if experts are to be believed, the announcement that Floridians who pay homeowner insurance premiums will have a one-time charge added to help cover Citizens Property Insurance Corp.'s $1.7 billion deficit, is just the beginning.

Florida is one of the few states where you pay more for less coverage. According to recent data, policyholders in Florida pay much more than their counterparts elsewhere. And yet, they receive lesser coverage, higher deductibles and policy exclusions. Moreover, they are also liable for the enormous deficits of the state's three bailout funds: the Florida Hurricane Catastrophe Fund, Citizens Property Insurance and the Florida Insurance Guaranty Association. So, is there a solution to this impending crisis? To be honest, I believe Floridians are in for some tough financial times.

Citizens Needs Bailing Out, Floridans Need Money

Officials with Citizens Property Insurance Corp recently decided that all Floridians who pay homeowner insurance premiums will have a one-time charge added to help cover the state-backed home insurer's $1.7 billion deficit in 2005. The extra cost will be $20.70 for every $1,000 of annual premium paid and will be in addition to the insurance price increases that consumers already are paying to insure their homes. Sun-sentinel.com reports:

The timing of theCitizens extra levy adds to the financial burden many Floridians already have because all of the state's major insurers have moved to raise premiums after the two recent storm seasons. Some State Farm Florida Insurance Co. customers are bracing for two double-digit rate hikes this year.

Read more: All Florida insured homeowners to help bail out Citizens with fee

How Much Is Enough?

I’ve been harping on the need for home insurance for so long that I forgot a basic question: How much is enough? This is quite an important question today because most people can hardly afford to waste any money – a dollar saved is a dollar earned. In the case of home insurance, you must ensure that you take enough to protect your home and your personal possessions in the event of a loss. Some insurers will offer you a policy that has a limit equal to at least 80 percent of your home’s value. So in the event of damage to your home, you will have to pay damages equal to the deductible. In case you wish to insure at less than 80 percent, you can do so, only remember you will have to pay a co-insurance penalty. This means you will be responsible for more of the cost of the damages.

One thing you MUST remember is that whatever percentage you choose, it should not reflect the cost of the property on which you’ve built your home. There are some banks and lenders which will try to make you buy insurance for the entire amount of the mortgage – including the cost of land. If your bank tries to make you do this, feel free to call the Department of Financial Services Consumer Helpline on 1-800-342-2762 (toll-free).

I’ll explain it through an example: If you buy a piece of property for $100,000 and build a house worth $150,000, your total mortgage would come to 250,000. When you take homeowners insurance you will need it only for the $150,000 home. In the event of covered peril destroying your home, your insurance company would pay $150,000 for the home and not for the property. So you must buy enough insurance to protect you’re your home or in other words for enough money to replace your house.

Upgraded Your Home? You Could Still Lose Your Insurance Policy

Did I ever tell you that installing storm shutters in your home could get you a discounted rate on your homeowners insurance policy? Forget I ever said that. After reading this bit of news, I'm really irritated. I mean, here we have government agencies telling us how to fortify our homes and a woman (Virginia Neill) follows this advice. And what does she get in return for sinking $15000 into storm shutters for her home in Florida? A notification that her homeowners insurance policy was being canceled!

Not one to give up, Neill gets a professional home inspection done and sends the results to her insurer. They still don't relent. But they do ask her to replace her roof -- and they still offer no guarantee that they will renew her insurance policy. Reason? The company no longer accepts new applications on houses more than 50 years old and Sunshine State's records indicate Neill's home was built in 1955! Brandenton.com reports:

The case illustrates the confusion surrounding a push in the state to strengthen homes against storms. "Home-hardening" and "wind-protection retrofitting" are terms that have been bandied about lately as a solution to mounting damage claims in the state following the past two storm years.

Read more: Homeowner's dilemma: Shutters fail to save policy

Congress May Not Challenge Insurers

According to the Center for Responsive Politics watchdog group, the insurance industry is among the top political donors to federal campaigns, giving more than $21 million in contributions this year. About 66 percent of the contributions went to Republican candidates. Now you know why Congress may approve some changes to the flood insurance program but don't want to do anything much for the victims of last year's hurricanes. Clarionledger.com reports:

Fourth District Rep. Gene Taylor, a Democrat, and Republican Sen. Trent Lott, who both lost their Gulf Coast homes, are pressing for Congress to reform the industry. They are suing their insurance companies over Katrina-related losses...The insurance industry -which has paid about $15 billion in Katrina-related claims -- says no reforms are needed. They also say changes to the industry could result in higher homeowners' insurance bills for every American.

Read more:Congress unlikely to challenge insurers

Protect Your Antiques

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. 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.

After The Deluge – Claiming Flood Insurance

Fine you’ve taken that flood insurance and you aren’t too worked up about the recent storms since you know you can claim. So how do you go about filing a claim? Here are a few tips:

Capture: Firstly, if you can, try to photograph the outside of the premises showing any damage or flooding. You should also photograph the inside, showing the damaged property and the height of the water if your property was flooded.

Call: Next, it is time to call your insurance agent to report your claim. If you have flood insurance, you should call your flood insurance agent who will prepare a ‘notice of loss’ form. Once that is done, an adjuster will be assigned to assist you.

Separate: Now here’s where your work actually begins. You should now separate the damaged from the undamaged property. Try to put things in order as much as you can so the insurance adjuster can examine them. If the weather is still bad and there are chances of future flooding, try to protect your property from further damage.

Inform: You must know how you want your claim – as an advance or a partial payment of loss. You can inform the adjuster of your choice. A piece of advice here: try keeping good records because this can help you get an advance from your insurance company. Create an inventory, if possible, a room-by-room one of the missing or damaged goods. If you can, try to include manufacturers’ names, dates and places of purchase, and prices. If you have receipts of purchase, keep them safely.

Dispose: If any of your property has been damaged and could hamper clean up operations, or pose a health hazard, it is important that you dispose it. But don’t forget to make a list of discarded items so you can present it to the adjuster.

Rate Cut: Insurance Firms’ Gift To Homeowners?

Some really good news for Californians! State Farm, California’s largest homeowners insurance company recently proposed a rate cut that would save customers millions. Over 1million customers could save around $103 a year through this 11 percent rate cut if the state approves. The reason given for this generous cut is that the number of claims is down, so State Farm’s reserves are healthy.

Actually, there seems to be quite a bit of health going around after State Insurance Commissioner John Garamendi asked the industry to justify their homeowners’ premiums. Since June, when the insurance commissioner made the announcement, three insurance companies have applied for a rate cut. But this latest rate cut may not be good enough to satisfy the insurance commissioner. Abclocal.go.com reports:

His department found less than 40 percent of the money was paid out in claims over the last two years -- a period that saw small scale disasters or losses: no major earthquakes and no major firestorms.

Read more: Major Homeowners Insurance Rate Cut Proposed

Regulator to hear from insurance companies

The Florida Office of Insurance Regulation (OIR) recently scheduled public hearings on rate filings submitted by Companion Property and Casualty Insurance Co., Vanguard Fire and Casualty Co., Omega Insurance Co. and Tower Hill affiliate insurance companies. The requested rates for all the companies are not uniform. Some areas in the state are subject to higher or lower rate changes. Southflorida.bizjournals.com reports:

Tower Hill filed for statewide average increases of 27.2 percent, 21.5 percent and 18 percent for its various homeowners insurance lines in Florida, as well as 32.9 percent for one of its dwelling fire insurance programs.

Read more: Regulator to hear from insurance companies

Hurricane Preparation

We’ve had a close escape from the recent hurricanes, but that doesn’t mean the season’s over. Far from it. So are you prepared for the next one? No, I didn’t mean only your home insurance policy. Of course, you do need to ensure that it has been updated and that you have included all the essential items on the list… etc, but are you prepared for when a storm or hurricane actually strikes. If not, you will need to learn the drill soon.

One of the most important things you need to do is listen to local emergency officials, and follow their instructions. Listen to local TV and radio. It is very important to have a plan of action for any emergency. If you must relocate, have a predetermined destination, route and alternate route -- whether out of the area or to the nearest shelter. Pcoem.org reports:

Remain indoors during a hurricane. Stay in the lowest level of your home well away from any windows. An interior hallway, bathroom or closet may the safest location. Remember to cover members of your family with a mattress or to seek shelter under something very sturdy like a well-constructed dining room table that could protect them from possible debris.

Read more: Hurricane Preparation