Season of preparedness starts early; notes from the Hurricane Conference

Hundreds of people were thinking about bad weather this week at the National Hurricane Conference in Orlando. This annual event is a forum for education and training in hurricane preparedness.

Here are a few quick notes based on topics discussed at the general session:

  • About 70 percent of Florida buildings were constructed before Hurricane Andrew hit, which proved the necessity of developing strong building codes. This means 70 percent of the structures in Florida do not have the resiliency needed to withstand high winds.
  • One speaker said we fool ourselves thinking that Florida’s now-exemplary building codes will help buildings survive when there is such a huge gap in new vs. old building codes. The code affects just the 3 percent of new construction added to the building inventory each year.
  • Coastlines have not been “scrubbed” by storms in decades. Conversations about whether to rebuild or retreat should be held now in communities, not in the midst of disaster recovery.
  • The intensity of storms may not be increasing, but the exposure is. Too many people live where the storms want to go.
  • Average annual insured losses from natural disasters in the U.S. are about $58 billion. If money is invested to harden homes, losses – and the arduous process of recovery and rebuilding – could be reduced.

Those are just a few highlights, and I’ll share more in the coming weeks. It’s probably safe to say that most of the attendees at the Hurricane Conference are above average when it comes to preparedness. They work in emergency management, law enforcement, the military or are government employees who focus on safety. The Insurance Information Institute was there, too, offering insurance workshops on topics ranging from flood coverage to understanding what’s in your policy. The first step to preparedness is education, and all progress begins with a first step.

Posted in Building Codes, Hurricane preparedness, Insuring Florida, Mitigation, Property insurance | Leave a comment

Cancel, nonrenewal have different meanings for insurance

Perhaps you (or someone you know) are among those Floridians who have had the experience of getting a letter from a property insurance company saying it would not be renewing your coverage. And, perhaps, your reaction was to shout something along the lines of, “I’ve been cancelled!” But that’s not what happened. You were not cancelled; your policy was not renewed, and there’s a big difference.

Nonrenewal of an insurance policy means you still have coverage until the insurance contract expires. On the other hand, a cancellation means the coverage ends before the expected expiration date.

A property insurance policy is typically for a one-year term, and after that year passes, either you or your insurer may decide not to renew it. If the insurance company decides not to renew it, Florida statute on insurance contracts requires at least 45 days’ advance notice. The law also requires that you be given a reason the policy won’t be renewed. If the reason doesn’t make sense to you, call the insurance company for a more detailed explanation. And, if that answer raises even more questions or concern, talk to the state’s Division of Consumer Services.

Insurance companies in Florida can only cancel a policy that has been in force for more than 90 days if the policyholder:

  • Failed to pay the premium,
  • Committed fraud or made a material misrepresentation on the insurance application,
  • Had a substantial change in the risk covered by the policy, or
  • Had coverage with an insurer that is cancelling all such policies in a given class of insureds, such as if it is no longer handling that specific line of business.

In these instances, the insurer is required to provide 10 days’ written notice of cancellation.

Florida statute does allow an insurer to terminate policies within the first 90 days of coverage. Why would a company do that? Well, just like you might change your mind about a purchase and want to return it, some insurers may decide the same thing. This doesn’t happen very often, but it’s happening right now to some people in South Florida who thought they had coverage with a private insurance company locked in for a year – and then learned otherwise.

If an insurance policy has been in effect for less than 90 days and an insurer decides to cancel the coverage, it must give the policyholder at least 20 days written notice, along with a reason for the cancellation. A reason given in this most recent case is for “exposure management.” Exposure is the possibility for loss, and what the company appears to be saying is that it took on more policies in the most vulnerable parts of the state than what it now deems fiscally prudent. So, it’s invoking a “return policy,” so to speak.

Posted in Homeowners+Renters, Insuring Florida, Property insurance, Risk | Leave a comment

Building a Plan B Mindset for Business Continuity

Does everything in your life work out exactly as you planned? Mine neither. Seems that life is nothing but Plan B – or something nearer the end of the alphabet. There are professionals who make a living planning for events other than the Perfect Day. I got to deliver a presentation on the Florida insurance market and business preparedness to a group of them recently, the Tampa chapter of the Association of Contingency Planners (ACP).

These professionals are crisis management experts and know all about disaster recovery and resuming business as usual after unexpected events. And, like many of us, they continually learn new things about being better prepared for disasters. One of the chapter officers had an interesting tale to relay about best-laid plans and how the pros keep learning.

Last month, several counties around Tampa Bay were under a tornado warning, and it looked like the twister was heading toward this individual’s place of employment. So, the tornado response plan was activated. Employees were directed to the stairwells to wait for the all-clear signal, while the executive team went to the conference room to keep tabs on the weather and be ready for the worst. That was part of the plan. Then they noticed a couple of things. There was no weather radio in the conference room; the radio was located in another part of the building. There was also no TV in the room, so they still couldn’t monitor breaking weather alerts. That practice drill proved valuable.

Does your company wait until a real threat to test its disaster response plan? A plan on paper is a good thing, and putting it into practice – before you need to – is a brilliant move. The first step is to get the plan on paper. If it’s only in your head, it’s not a plan. The Insurance Institute for Business & Home Safety has an Open for Business tool to create a business continuity plan. It’s free, easy to use, and vitally important to help every business stay in business after a disaster.

Sometime, even the smallest oversight can present a big obstacle to disaster recovery. And, you won’t know what the obstacle it until you run a drill.

Posted in Business, Hurricane preparedness, Insurance Institute for Business & Home Safety | Leave a comment

Making Bike Week a Safe Week

A sure sign of spring….it’s Bike Week in Daytona. What started as a motorcycle race along the beach in 1937 has morphed into a 10-day festival, bringing thousands to Volusia County. Bike Week – and every week – is a time for giving consideration to the two-wheelers on our roads.

There are a lot of registered motorcycles in Florida, more than 628,000 of them. That gives Florida the #2 slot, behind California, in the number of motorcycle riders. Ownership of motorcycles is also on the rise, as people look for less expensive ways to get around, considering the high cost of gas. But owning a motorcycle sometimes does carry a high cost. According to an analysis of motorcycle crash trends in Florida, registered motorcycle riders account for less than 4 percent of drivers and nearly 19 percent of all traffic fatalities. The analysis by the Center for Urban Transportation and Research at the University of South Florida relays that factors such as population and proximity to motorcycle rallies are reasons for increases in motorcycle crashes and fatalities. So, if you’re going to Bike Week and events like it, proceed with caution.

How much more dangerous is it to ride a motorcycle than in a car? Statistics on motorcycle crashes are scary – and not surprising. A motorcyclist is about 30 times more likely to die in a crash per mile driven than someone in a car. Driver behavior, of course, has much to do with motorcycle injuries and fatalities, specifically alcohol use or failure to wear a helmet. Those two behaviors are linked because motorcycle riders killed in traffic crashes at night were more likely to have blood alcohol levels over the legal limit and less likely to be wearing a helmet.

Bike Week is a blast. No doubt about it. And, the organizers have put together a “Survival Guide.” I didn’t see any safety tips on the website. Maybe everybody knows this stuff?

Posted in Motorcycles, Motorcycles | Leave a comment

Make mitigation happen while sun shines

Too many people only get things done in a last-minute panic. Don’t be that guy – or gal. “Make hay while the sun shines” is an old saying that makes perpetual sense. The sun is shining, there are no imminent threats of severe weather, and that makes this the perfect time to prepare for when skies are gray and winds whip up. To prove the point of “making hay” in the sunshine, the Florida Division of Emergency Management designated this as Severe Weather Awareness Week.

What you can do to protect yourself from Hurricane What’s-His-Name is somewhat limited when the storm is on its way. What you can do now is far more impactful. For instance, if you live in Tampa Bay, there’s a free workshop on Friday, Feb. 28 to teach you how to make your home storm ready.

Here are the details:

Make Mitigation Happen Workshop
Fri., Feb. 28
10 a.m. – noon
United Way Suncoast, 5201 W. Kennedy, Tampa

There are four more mitigation workshops planned in communities all over Florida to teach homeowners how to prepare their homes for a windstorm. Florida’s Division of Emergency Management partnered with Volunteer Florida and the Be Ready Alliance Coordinating For Emergencies (BRACE) to engage homeowners in protecting their property and families. It costs you nothing to attend, except 2 hours of your time. Here’s a look at the 20-page mitigation guide that is the basis for the workshop. Other resources to strengthen homes from high winds are available from the Insurance Institute for Business & Home Safety.

Yeah, hurricane season is three months away. But there’s always a good chance you would be glad you started preparing now.

Posted in Homeowners+Renters, Hurricane preparedness, Insurance Institute for Business & Home Safety, Mitigation, Property insurance | Leave a comment

Leaky pipes a figment of fraudsters’ imagination

Scenario: A friend of a friend says he has a way for you to make a couple of hundred bucks, plus get new kitchen cabinets, upgrade your plumbing and get a new tile floor at the same time. Something like that must have been said to the dozen Miami homeowners who took the bait and wished they hadn’t after they got arrested for insurance fraud last week.

According to fraud investigators, a licensed public adjuster and a plumber coached homeowners on how to file fraudulent insurance claims for pre-existing – or non-existing – water damage. A TV news report on “Operation Leaky Pipes” says the homeowners either created damage or faked it to make a claim on their homeowners insurance. What must have sounded like an easy way to make money turned into a costly error of judgment.

Another 14 people got arrested yesterday for staging fire and water damage claims. Investigators say 13 homes were set on fire. The arson was crafted to look like an electrical or kitchen fire. Lucky for the rest of us that arson investigators can tell the difference between a set up and the real thing.

I wish I could tell you this sort of thing is rare, but it’s not rare enough. If you like stories that continue to prove why crime doesn’t pay, check out the “cases of interest” that Citizens Property Insurance is investigating, such as the one where it paid a water-damage claim for soggy kitchen cabinets. The homeowner cashed the check, never replaced the cabinets, and then the spouse filed another claim for the same damage. Really.

Insurance fraud is a crime, and state fraud investigators, law enforcement, insurers and the  National Insurance Crime Bureau are aligned to fight it. Be glad they do because the bill for the cost of fraud is one all honest policyholders pay. Fraudsters think they are stealing from the insurance company, but they are stealing from you.

Posted in Fraud, Homeowners+Renters, National Insurance Crime Bureau | Leave a comment

Some auto, home insurance rates declining in Florida

We all know the phrase “What goes up must come down.” Some people think this saying applies to everything except insurance. But they’re wrong. For many Floridians, the cost of both auto insurance and property insurance may be going down.

The Office of Insurance Regulation (OIR) recently announced this news, and your first question is probably about how much and how soon any savings will be passed on to you. The quick answer has two parts: It depends on your insurer’s own loss experience, and if its costs went down, you’ll see it when your policy comes up for renewal.

Let’s start with auto insurance. Florida drivers pay high insurance rates. Yeah, you already know that, and you probably know why. Too many cars, lots of traffic, lots of accidents, some of them faked, and an auto insurance system that made it easy to commit insurance fraud. Florida’s no-fault auto insurance law was changed in 2012 to make it harder for those with an inclination to take advantage of the system, and the changes appear to be working. When claims costs go down, then rates can go down – and that’s starting to happen.

Not every auto insurance company is experiencing a downward trend, however. Of the top 20 auto insurance companies, eight of them are. A few more insurers have looked at their year-end results and are keeping rates flat. The OIR has a chart showing the rate change to date. The reason some companies experienced lower claims costs and others have not has a lot to do with the on/off switch affecting the insurance reforms that launched in January 2013.

For property insurance, Insurance Commissioner Kevin McCarty said this month that his department’s analysis shows homeowners insurance rates are going down in the voluntary market. The voluntary market is the private market, namely insurers other than Citizens Property Insurance. Half of the top 30 insurers have made rate filings that include savings from the latest reinsurance contract year, and all 15 of them showed lower reinsurance costs. Below is a list of insurers that have had their rate decreases approved by the OIR so far.

Property Insurance Company

Rate Change Filed & Approved

Universal Property and Casualty


Security First Insurance


ASI Preferred


Ark Royal Insurance


American Strategic Insurance


Reductions in costs and insurance claims are reflected in rates, just as increases in costs and claims are. As insurance consumers, a key word to note here is “reflected.” To determine costs, insurers look backwards to plan forward. Costs fluctuate to drive rates up or down, and whatever the rate charged, insurers base premiums on these trends.

Posted in Auto, Homeowners+Renters, Property insurance | Leave a comment

Extreme weather and short-term memory

We had a bout of cold weather in Florida, and we’re over it – already. Temperatures are back up into the high 70s. This is exactly the kind of “winter” that we love. However, weather extremes come and go, and because we don’t miss them much when they’re gone, we fail to prepare for them and fail to understand them.

A science writer for the Associated Press wrote an article suggesting Americans are becoming weather wimps. Severe cold weather has become less frequent as the world warms, so when bitter cold spell hits, people think it’s unprecedented – even when it’s not. Until 1997, cold extremes happened every four years. With the world warming, cold extremes happen less frequently. Conversely, warm extremes are far more common.

NOAA’s National Climatic Data Center has Top 10 charts of climate extremes that reflect a 30-year average of temperatures and other climate conditions. Florida has a lock on the Top 10 list for hottest average temperatures over three decades, with seven locations on the list. Key West and Miami were ahead of Yuma, Arizona for heat records. Kind of surprising? Additionally, three of the top 10 locations for wettest climates are in Florida, which is no surprise. (Interesting that no Florida location is on the Most Humid list, though.)

Scientists say the recent big buzzing over the cold snap up north, weather extremes and climate change is due to this: People have short memories. And, that’s a huge problem. When extremes hit, people tend to forget they’ve been through it before. That means few people remember what to do or take the steps necessary to be ready for extremes. This, unfortunately, is not limited to the volatility of the weather, but of life in general.

I don’t really want to talk about weather risk and hurricanes this early in the year, so I won’t. But here’s a discussion question: Can having a short memory be the biggest risk of all?

Posted in Cold Weather, General, Homeowners+Renters, Hurricane preparedness | Leave a comment

Cold weather hits Florida; protect your property

A cold snap is on the way for Florida. Many of us may have forgotten what that feels like. Last winter, it never got cold enough in my part of the state to freeze back the tropical plants, those that typically wither at a brush with coolness. They might succumb this week. Temperatures are expected to dip into the 30s in many parts of the state.

Damage to your property from freezing conditions is covered under your homeowners policy. However, keep in mind that there is generally a requirement to take reasonable steps to prevent the damage from occurring, such as keeping the house warm and maintaining pipes so they won’t burst.

Plumbing problems are very common with freezing conditions – and because freezing conditions happen rarely in the Sunshine State, here are some tips on surviving the cold:

  • If you have a swimming pool, it’s a good idea to keep the pump running overnight when the temperature is expected to go below freezing. Running the water through the pool pipes keeps the system from freezing up and prevents pipes from bursting.
  • Disconnect garden hoses. If you leave hoses connected to the outdoor faucet, ice can form inside and the pressure can build up in the water lines inside the house. That can cause a water leak – or worse. If it gets cold over extended periods where you live, you may want to put an insulated jacket over the outdoor faucet.
  • Know where the shut-off valves are for your home. They may be under the sink, near the water meter or out by the roadway. In fact, it’s a good idea to turn the valves on and off once a year, as a preventive maintenance step because the valves can “freeze up” from neglect, not the cold.

Hurricanes and tornadoes rank as #1 and #2 for natural disasters; winter storms are in third place. Most of the damage from these winter storms happens in places other than the South, of course. Yet, those living in Northern climates know how to deal with extreme cold, and we may be less prepared (while remaining thankful for not needing to know how to drive in snow…..).

Posted in Cold Weather, General, Homeowners+Renters, Insurance Institute for Business & Home Safety, Mitigation | Leave a comment

Year-end car sales drive need for GAP auto insurance

Here’s something to look forward to as December closes out:
An end to all those back-to-back TV commercials for new cars. (Goodbye to the holiday jingles featuring a certain crooner from the ’90s….) Continuous car ads must be paying off. According to The Detroit Bureau, an automotive news source, U.S. consumers will spend more than $34 million this month on new vehicles. Automakers have a lot of incentive offers available right now, so if you’re in the market for a new car, you also have incentive to review your auto insurance policy.

Before you select a new car, it’s a good idea to consider the cost of auto insurance for different makes and models. Some cars are less expensive to repair than others; some have better safety ratings. The Insurance Institute for Highway Safety gives safety awards for vehicles based on how well cars and trucks protect occupants in a crash. This is must-know information for many people.

Decades ago, when son #1 was born, we learned that my cool, sporty car was poorly rated for crash worthiness. It was promptly traded for something safer, and my auto insurance rates dropped. That helped me come to terms with the fact that I was “mini-van age….”

Car buying tip: Call your auto insurer and ask about GAP insurance. The car dealer will try to sell you this coverage, but it’s cheaper if you get it directly from the same insurance company that covers your vehicle.

GAP stands for Guaranteed Auto Protection, and the acronym actually explains what is does. Everyone knows that the minute you drive a car off the lot, it loses value. What many people don’t know is that if the car is totaled while it is still fairly new, your regular car insurance pays the depreciated value of the car — and that could be less than you owe on it. GAP insurance fills the gap. Your auto loan may require this coverage, and almost all lease contracts include it. Yet, buying it from the auto dealer or leasing company can cost you at least three to four times more.

If you are financing a vehicle and made a small down payment, you may need GAP insurance. Call your auto insurer to find out the cost and if this coverage is a good idea for you.

Posted in Auto, Saving money on auto insurance | Leave a comment