“Weak hurricanes” aren’t weaklings: Be prepared for winds & rain

Posted on June 4, 2013 by lynnem

Every hurricane season is different, yet history shows some noteworthy trends. The South Florida Sun-Sentinel did an analysis of storms over the past 100 years and determined that Florida was hit most frequently (21 times) by Category 1 systems. But don’t ever dismiss a “weak hurricane” as a weakling.

A Category 1 storm packs wind speeds of 74 to 95 miles per hour. To some storm-tested Floridians, that may seem like no big deal. But it’s been a long time since wind approaching anywhere near that strength passed through. Your memory of a “gentle breeze” of 80 mph is likely a little faded (no offense).

Forget about the wind for just a moment. Think about tropical weather all by itself. We’ve had lots of rain in parts of the state. In the first three days of this month, areas around Tampa Bay have already received close to the one-month average for rainfall. (How many times have you emptied your pool in the past few days?) Two words: Flood insurance. The most common natural disaster is flooding, and your homeowners policy does not cover it. You need a separate policy from the National Flood Insurance Program.

The Weather Channel’s “Hurricane Central” website has a list of the 10 most overdue hurricane cities. Four Florida cities are on the list: Tampa is #1, Naples is #2, Jacksonville is #3 – and Key West is ranked #9.

Over the past 100 years, Florida has experienced 64 hurricanes. Do the storm categories matter? Yes, in a way. But what matters more is preparing for one and knowing what to do afterward. No time like the present, since the National Hurricane Center is tracking a potential hurricane now.

Posted in Hurricane preparedness, Hurricanes, Insuring Florida | Leave a comment

Florida is vulnerable to tornadoes; being prepared is best defense

Posted on May 23, 2013 by lynnem

The fierceness of natural disasters must never be taken for granted. Witness the devastation of Moore, Oklahoma. You feel deeply for those affected, while at the same time sit in awe of the power Nature wields. But we should never feel helpless.

Initial reports of fatalities for the tornado that hit on May 20 overestimated the likely deaths. To date, 24 deaths were reported, along with two additional fatalities from a tornado that struck Shawnee, Oklahoma the day before. Any loss of life is a tragedy. Yet, it could have been worse without the proactive steps people took to protect themselves. Many of them had underground safe rooms. There is a Safe Room Rebate Program in Oklahoma that uses funds from the FEMA Hazard Mitigation Grant Program to pay for storm shelter construction. You probably don’t have a storm shelter, but you can consider a “safe room.” If a tornado is barreling down, where would you go? Get a plan and know what to do in case a tornado comes with the approaching hurricane season.

On a per unit area basis, Florida experiences more tornadoes than any state; most are of weak intensity. Florida’s tornadoes occur along the edge of hurricanes and, as you well know, hurricane season is on the doorstep. A recent Lloyd’s report on the rising risk of tornadoes notes that losses are increasing simply because tornadoes are affecting densely populated areas.

The U.S. experiences more tornadoes than any other country. Fortifying property against tornadoes as strong as the one hitting Moore, Oklahoma this week is probably impossible. That’s why storm shelters are lifesavers. Recovery and rebuilding will commence, as insurance claims adjusters have been on the scene since Day One, explaining coverage, writing checks and helping people who lost everything get started on the road back to home. I’m heading to Oklahoma today to be part of it. Will keep you posted.

Posted in Homeowners+Renters, Hurricane preparedness, Tornado | Leave a comment

Are you ready for hurricane season?

Posted on May 10, 2013 by lynnem

We’re three weeks away from the start of hurricane season, and Florida’s emergency responders are ready. Are you? The Governor’s Hurricane Conference commenced this week, and its theme was “Moving Forward in Changing Times.” The messages, however, were clearly about the challenges faced in these changing times. Here are a few highlights:

Over 250,000 New Residents with Limited Hurricane History
Gov. Rick Scott is proud of the fact that more people are migrating to Florida, yet he acknowledges that new transplants make the job of emergency management much harder. Educating people about an evacuation route, who goes and who stays, preparedness, mitigation and all the other disaster recovery actions is ongoing, of course. But newbies may need different motivation and messages than resident veterans.

Even native Floridians have a lot to learn, according to the director of the National Hurricane Center (NHC).

It’s Dangerous to Relate Each New Storm to Experience
Rick Knabb of the NHC says your personal experience from past storms does not matter because every year there is a unique set of storm activity. He said people need to focus on the specific hazard for the storm that is approaching at the moment. Forget the last one, he said at the Conference because chances are the next storm will be nothing like the previous one.

Knabb also cautioned against relying too much on the forecast track; the hurricane models don’t tell you about the individual hazards that can happen where you live. There are updates for the NHC services in 2013, and they include providing a focus on where the strongest winds will occur and moving towards providing storm surge watches and warnings.

Hurricanes are Not Just Coastal Events
Science of the storm threat points to bigger and stronger storms that impact a wide area, such as
Superstorm Sandy While most people equate strong winds with hurricanes, fewer consider the dangers of inland flooding. As storms move inland, they can bring heavy rains, with double-digit rainfall occurring in a couple of hours. That’s why flood insurance is something deserving serious consideration for those who live far from the beach.

Complacency
It has been seven years since a major storm (Category 3 or higher) hit the U.S. You already know that, so here’s what you may not know: That is the longest span in over a century. Our long reprieve can’t last.

Complacency makes disaster victims; preparedness makes disaster survivors.

Posted in Flood, Hurricane preparedness, Hurricanes | Leave a comment

Helping teen drivers be safe drivers

Posted on May 2, 2013 by lynnem

I remember, fondly, my 16-year-old self on the one driving lesson I had with my mother. She let me drive her to the deli to pick up fixings for dad’s lunch. I made a left turn on a green light, directly in front of a car coming through the intersection.  Yeah, that other car had the right of way, as I learned from that near miss, yet I thought I owned the road.

Lack of driving experience is a main factor leading to high crash rates among teen drivers. They don’t know all the rules of the road. In a study on teen driver fatalities, deaths of 16- and 17-year-old drivers are up 19 percent nationally. However, in Florida, teenage driver fatalities declined significantly between the first six months of 2011 and 2012. There were 14 teen driving deaths in 2011; 5 in 2012. That is still 5 too many.

The 2012 preliminary data from the Governor’s Highway Safety Association attributes the decline in teen driving deaths to the economic downturn. Teens are more affected by recessionary times than older drivers. The cautionary message: With the uptick in the economy, more teens are likely to be back in a position to afford the privilege of driving, and that could be dangerous.

The introduction of graduated driver licensing (GDL) laws has been credited with reducing teen driving deaths. In 1996, Florida became the first state to adopt a GDL program, which allows for on-the-road driving practice, supervised by an experienced driver.

First-time drivers in Florida are required to take a drug and alcohol course online, and there are online courses to get your learner’s permit and prepare for getting a driver’s license. Teens need to have a learner’s permit for one year without any traffic citations to get an intermediate license. Requirements to apply for a driver’s license include having a parent or guardian certify that you’ve completed at least 50 hours of behind-the-wheel training, 10 hours of it at night. Then, teens visit the Department of Motor Vehicles for the driving test.

Parents, remember that your teen under the age of 17 cannot drive around between 11:00 p.m. and 6:00 a.m., unless they are with a driver who is 21 years of age or older and holds a valid driver license, or they are driving to or from work. Once your teen has his or her 17th birthday, they may not operate a motor vehicle between 1:00 a.m. and 5:00 a.m., under the same conditions as before.

Those are the rules for teen drivers, and they appear to work at “graduating” your kid from a beginner to an experienced driver – and those rules save lives.

Posted in Auto, Teen Drivers | Leave a comment

No belly flops into the risk pool

Posted on April 25, 2013 by lynnem

The cost of insurance is based on risk. Risk is defined as the chance or possibility of financial loss. The more insurance policies in force, the more that risk is spread around. However, the more policies in the risk pool, the greater the chances of loss. This is why insurers take a planned approach to growth, which means letting everyone into the pool is not smart strategy.

Many homeowners do not understand why their options for purchasing property insurance are sometimes limited in Florida. It has to do with capacity, which refers to the amount of business an insurer is able to write based on a comparison between how much they collect in premiums and how much they have in surplus. Surplus is the financial cushion that protects policyholders if an event causes unexpectedly high claims. An insurer must have adequate policyholder surplus to be able to increase the volume of insurance business it takes on.

Private insurers cannot take all comers because selling more policies increases expenses, including claims expenses. Yes, risk is spread out if there are lots of people in the risk pool, but more people also increase the odds of loss.

Insurance regulators in each state have minimum surplus requirements. In Florida, it is the greater of $5 million or 10 percent of total liabilities. Insurance companies are much more conservative than regulators, and most of them strive for a much stronger financial buffer to account for fluctuations in investments or variations that occur in the underwriting process

You can check out the surplus and underwriting results of most of the residential property insurance writers. Keep in mind that the national insurers on the list are reporting data for all the states in which they do business. Surplus is an indicator of an insurer’s financial strength and one piece of information you should have if you are shopping for coverage.

Posted in General | Leave a comment

Sewer back-up coverage not a drain on your budget

Posted on April 15, 2013 by lynnem

Buying – and maintaining – flood insurance is important, especially given Florida’s vulnerability to flood damage. But flood waters are not the only ground water that can get into your home. If your sewer backed up, that would really stink – in more ways than one. Standard homeowners policies do not cover sewer backup; a separate, affordable optional endorsement can be added to your policy to cover it.

An endorsement is a written form attached to the insurance policy that alters the policy’s coverage, terms or conditions. It is also known as a rider. Endorsements for sewer backup vary by insurer, but they all address surface water runoff. Sewer backup is not that same thing as a real flood. The National Flood Insurance Program defines a flood as anything that affects one or more properties or one or more acres. With a sewer backup, it is more likely to be just your stinkin’ problem.

Many people do not know they are responsible for the maintenance and repair of the sewer lateral on their property. This is the pipe that goes from the building and connects underground to the city sanitary sewer main line.

Causes of sewer line blockage include having solid objects flushed down a drain, such as your preschooler deciding their action figure needs to travel via the toilet bowl. Sewers also backup when grease, hair or other solid materials clog up pipes. Over time, there could also be structural damage to sewer lines that cause them to deteriorate. Tree roots are another culprit; they can enter a service pipe at joints, snake through them as they grow – and eventually cause a pipe to crack. An endorsement to your policy pays to repair and clean up this type of damage.

Condo owners may also want to consider sewer backup coverage as it can also cover an assessment for losses. Talk to your insurer about sewer backup coverage to understand what you’re buying; some of these endorsements may exclude damage caused by you. The endorsement cost usually ranges from $40-$50 a year. You can reduce your risk of a sewer backup by installing a one-way valve that allows sewage to flow out, but not come back in.

Homes with basements are not too common in Florida, but if you have one, the sewer backup endorsement also covers sump-pump systems. A sump pump helps to prevent basement floods. They collect excessive groundwater through a series of pipes which empty into a sump pit located at the lowest point in the basement. Excess water collects in the sump pit and can then be removed from the home.

We’ve got some tips to prevent sewer backups.

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

Pinching PIP Perps: The Fight Against Auto Insurance Fraud

Posted on April 3, 2013 by lynnem

Want to know who to blame for rising auto insurance rates? I can give you names. Actually, the Florida Dept. of Insurance Fraud can give you names – of the arrests made in just one month of those who make a living by filing fraudulent insurance claims.

Personal Injury Protection (PIP) is also known as no-fault auto insurance coverage. It provides up to $10,000 in medical benefits for those involved in a car accident, no matter who is at fault for the crash. Even if the driver is the only one paying for PIP coverage, passengers also get $10,000 in protection under the driver’s insurance policy if they don’t have PIP coverage of their own. Some say the $10,000 is a target amount for unscrupulous medical providers who give treatment until the money runs out.

In February, 43 people were arrested for stealing money from you, me and all other honest drivers. If that doesn’t sound like a high number, here’s one that will get your attention. The bills sent to insurance companies to pay for the fraud schemes associated with these February arrests is over $777,000. In one month. Some months, there are even more arrests, and the fraud dollar amount fluctuates as well.

So, why are you paying for fraud? Insurance rates are the cost of claims, and these costs get factored in. Drivers in Florida pay about $58 more than they should due to criminals who think it is okay to fake a car accident or fake an injury and send a bill to get a payday. Thankfully, they get caught. Insurance companies work hard to investigate suspicious claims, and so do law enforcement officials.

The Division of Insurance Fraud is very busy. Handling cases related to no-fault auto insurance keeps them that way. The Division’s statistical report for the 2011-2012 fiscal year showed it made 496 arrests for auto insurance fraud. That’s over 40% of all its arrests. (Workers’ comp fraud is #2 at 22% of arrests made last year.)

Take a look at pages 6 and 7 of the PIP Source newsletter published by the state. It has names of individuals, the so-called “clinics” providing services to “injured” people, and the metropolitan area where the crime took place.

Last year, the Legislature passed an auto insurance reform bill in an attempt to address some of the issues contributing to fraud. The law took effect three months ago – in January 2013. That’s not enough time to know if the reforms are working, particularly because all auto insurance policies have not yet transitioned to the new rules. (The changes take effect as policies renew.) But legislators are looking at alternatives to PIP already, including abolishing it altogether. Here’s hoping that whatever develops forces fraudsters to look for a legitimate line of work.

Posted in Auto, Auto Insurance Fraud, No-fault Auto Insurance | 1 Comment

How to Read Your Insurance Policy: What Did I Buy, How Does It Work

Posted on March 27, 2013 by lynnem

It’s only March, yet those who devote themselves to hurricane and disaster preparedness are readying themselves for storm season. This week, the National Hurricane Conference is underway in New Orleans. The Insurance Information Institute put together a number of programs for the conference, the first of which was a workshop to help emergency responders understand how their insurance works.

Professionals who are involved in the recovery process go into high gear after disaster strikes. Teaching them about insurance protection means they can focus on the important recovery role and not second guess the insurance decisions they made. That’s why it was gratifying to have so many of them in attendance. Our presentation was “How to Read Your Insurance Policy: What Did I Buy and How Does It Work.”

We started at the beginning, explaining the reason an insurance policy seems hard to read through is because it is a legal contract. But the most important sections are labeled and upfront. If something is labeled IMPORTANT MESSAGES as part of any contract, you darn well should read it. The Important Messages section of your policy has some big-type alerts that you should not overlook. For example, Florida property insurance policies have three (3!) 16-point bold type sentences considered “must read” information by insurance regulators because they mandate what the sentences say and the size of the font. One message is a reminder that a standard homeowners policy does not cover damage from flooding. Another explains that you may have a high hurricane deductible with a significant out-of-pocket cost. A third suggests you consider Building Ordinance or Law coverage so you have the funds needed to rebuild your home up to the latest building codes.

Look at your Declarations Page, too. It gives you the exact dollar amount of your coverage for the structure, your home’s contents – and it tells you the dollar amount of the hurricane deductible you selected.

We provided many other tips, and you can read all about it by looking through the presentation. If you have not had a conversation with your insurance company in the last year, pick up the phone and make sure your coverage is up to date. There is no time like the present to prepare for the future.

Posted in General | Leave a comment

Sinkhole insurance options explained

Posted on March 14, 2013 by lynnem

Worrying about sinkholes may seem a new nightmare for insomniacs following the tragic Florida story of a sinkhole fatality earlier this month. The ground opened as the man slept, and it continued to expand, making his rescue impossible. With sincere condolences to his family, this sad situation brings an opportunity for perspective.

Sudden collapse of the ground, without any apparent warning, is a very rare occurrence. One news report relays that over the past 45 years, there have been four deaths related to sinkholes in Florida. Compare that to the 62 fatalities related to lightning over a 10-year period and the 2,400 annual traffic fatalities.The incident did revive questions about insurance for sinkholes, and it got many people calling their insurers to see if and how they were covered.

The home in Seffner, FL had insurance, and the claim was paid. If you have a property insurance policy, you have coverage for this level of catastrophic damage, too. Florida has a sinkhole law requiring every property insurer to provide coverage for “catastrophic ground cover collapse,” which is defined as:

  • Abrupt collapse of the ground cover,
  • A depression in the ground cover clearly visible to the naked eye,
  • Structural damage to the insured building, including the foundation, and
  • The insured structure being condemned and ordered vacated by the governmental agency authorized to do so.

You’ll need a separate sinkhole insurance policy for any other type of sinkhole damage. So, if your property has had gradual damage, if there is not a visible hole in the ground, if there is no structural damage to your home, and you can still live there, then a “comprehensive sinkhole insurance policy” is needed to pay for any associated repairs.

You may want some background on sinkhole insurance and to know a bit of the history behind sinkhole claims. There also are maps of reported sinkholes by county that should clue you in to the vulnerability of your residence. My residence happens to be within the same county as the Seffner sinkhole, giving me renewed commitment to retaining comprehensive sinkhole coverage.

Posted in Sinkholes | Leave a comment

Private insurers have 3 times Citizens’ market share

Posted on February 28, 2013 by lynnem

Citizens Property Insurance has been dominating the news lately, albeit not in a particularly positive way, and it is true that Citizens dominates the homeowners insurance market as a single company with the most policyholders in Florida. But less than a quarter of homeowners have insurance from this state-run entity, and the three-quarters with private insurance should know how the majority rules.

There are 30 counties among Florida’s 67 counties where private insurers provide greater than 90 percent of the homeowner insurance policies. There are an additional 20 counties with upwards of 80 percent private market share. Yes, these are primarily counties without coastline; yet, looking at a
chart of residential policies in force debunks the myth that private insurers have “abandoned” the state.

Both Orange County and Seminole County have 98 percent of homeowners policies in the private market. The remaining 2 percent are in Citizens, and these may be older homes or those with the wind portion of coverage being provided by the state. On the other end of the spread is Dade County, the most populous county in Florida that is only about 6 feet above sea level. It has 44 percent of its residential policies in the private market. Keep in mind when many people have both a Citizens policy for their wind risk and a private insurance policy for everything else, such as fire, tornado damage or other perils.

The county with fewest private insurer policies is Hernando, and that’s due to its sinkhole history.

So, the vast majority of Floridians have a private insurance policy – 77 percent of us. And, this vast majority also helps finance the claims costs for those who have Citizens coverage. If you have a private insurance policy, check out the Declarations Page on your homeowners insurance policy. You’ve kicked in money to Citizens every year. Maybe you don’t mind or maybe you didn’t know?

Posted in Citizens Property Insurance, General, Homeowners+Renters, Insuring Florida, Property insurance | 1 Comment