Category Personal Lines

The information below was copied directly from the NFIP website on Thursday, February 8, 2018. Here is how a government shutdown could affect flood policyholders:

Congress must periodically renew the NFIP’s statutory authority to operate. On January 22, 2018, the President signed legislation passed by both houses of Congress that extends the National Flood Insurance Program’s (NFIP’s) authorization to 11:59 pm on February 8, 2018.  The legislation also authorized FEMA to honor all policy-related transactions inadvertently accepted between January 20, 2018, and January 22, 2018.

Congress must now reauthorize the NFIP by no later than 11:59 pm on February 8, 2018.

FEMA and Congress have never failed to honor the flood insurance contracts in place with NFIP policyholders. In the unlikely event the NFIP’s authorization lapses, FEMA would still have authority to ensure the payment of valid claims with available funds. However, FEMA would stop selling and renewing policies for millions of properties in communities across the nation. Nationwide, the National Association of Realtors estimates that a lapse might impact approximately 40,000 home sale closings per month.

As affected communities recover from the devastating impacts of the 2017 hurricanes, a timely, multi-year reauthorization is critical for insured survivors and businesses. Policyholders need confidence not only that FEMA can pay flood insurance claims, but also that the NFIP will be able to sell and renew policies to help them protect against future flooding. Flood insurance – whether purchased from the NFIP or through private carriers – is the best way for Americans to financially protect themselves from losses caused by floods.

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AIUA recently announced significant changes to their homeowners insurance policies which will become affective June 1, 2016. AIUA has typically been seen as the “insurer of last resort” due to the majority of their lower premium programs being offered having an Actual Cash Value, or ACV, settlement method. An ACV settlement method means the insurance company will pay you the depreciated value of your property (home, contents) in the event of a claim. That means that many property owners would not be able to afford to pay to rebuild or repair their homes in the event of a storm because the depreciated value is so much lower than the actual cost to repair or replace. Alabama Department of Insurance Commissioner, Jim Ridling, was quoted as saying: “If you drive from here to New Orleans, you get a good view of what happens when people cannot afford to rebuild. There are still abandoned homes, slabs, blue tarps and abandoned businesses from the Mississippi border to New Orleans. I do not want that to happen in the state of Alabama when we have a storm.”

The more favorable settlement method, and that used most often sold by SSIA is the Replacement Cost Value, or RCV, settlement method. This settlement type pays you for the cost to replace your property with items of like kind in the event of a claim. Check out our quick, 2-minute video which describes the two settlement types.

The policy changes which AIUA has just announced will provide policyholders with the option of purchasing the RCV settlement method for a smaller fee than previously offered, however the coverage the AIUA policies offer is still very limited as compared the policies that can obtained through the many carriers writing coverage along the coast. SSIA’s experienced agents can walk you through the benefits of obtaining better coverage while also finding you the best rates available with an RCV settlement method. Don’t let your property go under-protected, as the cost savings you see now may come back to haunt you in the form of high deductibles or inadequate settlement payment after a storm.

Why wait until June to look at changes? Obtain a fast, free, real-time insurance quote in just 5 minutes or less with no personal information via our online quote portal: www.ssiaquote.com.

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South Shore Insurance Agency is proud to announce our recent appointment with Safeco Insurance.Safeco Insurance

Originally founded in 1923, Safeco Insurance is an industry leader, providing comprehensive personal lines insurance products, including homeowners insurance, as well as auto, boat and RV insurance, at competitive prices. SSIA is proud to offer Safeco products to our customers because they share our mission – to not just provide the best product options at the best price, but to help educate and grow with our customers as their lives and needs change.

Contact one of our agents today to learn more about insurance options with Safeco Insurance – 251.923.4463 or email them directly at admin@sshoreins.com.

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The Federal Emergency Management Agency (FEMA) has placed more than 20,000 communities in the United States into a category of flood zones. Each community is able to participate in the agency’s National Flood Insurance Program (NFIP), with premium rates determined by the risks of flooding. To indicate the risks in different parts of the country, FEMA has assigned a character from the alphabet to each zone.

The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water).

V Zones

According to FEMA and the National Flood Insurance Program, any building located in an A or V zone is considered to be in a Special Flood Hazard Area, and is lower than the Base Flood Elevation. V zones are the most hazardous of the Special Flood Hazard Areas. V zones generally include the first row of beachfront properties. The hazards in these areas are increased because of wave velocity – hence the V designation. Flood insurance is mandatory in V zone areas.

Living in a V Zone

If your home is in a “V” zone (this includes VE and V-1-V-30), adhere to the following recommendations:

  • • The bottom of the lowest horizontal structural member of the lowest floor elevation must be at or above the Base Flood Elevation (BFE).
  • • Enclosed areas below the lowest floor cannot be used for living space. The building must be elevated on piles, piers, posts or column foundation.
  • • Electrical, heating ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE.

A Zones

A zones – the next most volatile of the Special Flood Hazard Areas – are subject to rising waters and are usually near a lake, river, stream or other body of water. Flood insurance is mandatory in all A zones because of the high potential of flooding. A-zone maps also include AE, AH, AO, AR and A99 designations, all having the same rates. The different A zones are named depending on the way in which they might be flooded.

Living in an A Zone

If your home is in an A zone (includes AE, A1-A30, AH, AO, AR) follow these important recommendations:

  • • Enclosed areas below the lowest floor cannot be used for living space.
  • • Electrical, heating, ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE.

Other Zones

  • • X zones are minimal-risk areas where flood insurance is not mandatory.
  • • D zones are areas that have not been studied, but where flooding is possible.

Finding Your Zone Information

There are several ways to find out which zone applies to you. You can determine your risk online by visiting floodsmart.gov. You can also go to your town hall or city hall, where employees responsible for issuing building permits in your area have access to flood zone maps. If you are buying a home, your Realtor and your insurance agent should be able to help you. Also, you can view your flood map by visiting the FEMA Map Service Center website at http://msc.fema.gov or by calling (800) 358-9616.

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Fortified Homes

Carriers are rewarding customers with discounts for building and renovating homes to be more structurally sound – and these building standards make a significant difference in a storm. According to www.disastersafety.org, “FORTIFIED can be affordable at every price point and uses a unique systems-based method for creating stronger, safer homes. The program employs an incremental approach toward making new and existing homes more resistant to damage from hurricanes, tropical storms, hailstorms, high winds and wind-driven rain associated with thunderstorms. With three levels of FORTIFIED Home™ designation available – Bronze, Silver and Gold – builders can work with homeowners to choose a desired level of protection that best suits their budgets and resilience goals.”

The links below provide downloadable fact sheets explaining in greater detail FORTIFIED Homes in Alabama:

What Is FORTIFIED?

FORTIFIED Homes for Existing Structures

FORTIFIED Homes for New Homes

 

 

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Gavel on Booksby Morgan Smith, Assistant Editor at IA Magazine

 

Your client hires a babysitter for the night, a chef for a dinner party or a gardener for a weekend. Do they understand their potential liability?

Many families form close relationships with their household employees, which makes having a conversation about coverage for domestic staff awkward and difficult to initiate. But the potential liabilities are too big to go unnoticed—and they don’t just apply to high net-worth homeowners. Anyone who hires in-home staff like nannies, butlers, chefs, housekeepers, gardeners, home health care workers and tutors all face liability.

“When an insurer looks at their risks, they think about if their house is insured properly or if they have auto covered, but they’re not realizing that they need to be aware of these additional areas that require liability insurance” says Julie Sherlock, vice president and national underwriting manager at ACE Private Risk Services. “Anybody who looks to employ somebody that’s going to have any type of exposure to their personal possessions, and/or their family, should look into coverage.”

A March 2012 whitepaper published by ACE reported that while 54% of high net-worth survey respondents employed domestic staff, 31% did not have appropriate employment practices liability coverage (EPLI) despite a high level of concern about being sued by an employee for injury on their property. Risks include injuries on the job through car accidents, criminal behavior such as identity theft or kidnapping and lawsuits for wrongful termination, sexual harassment or discrimination.

But protection and risk management practices can start before work even begins for both domestic contractors like nannies and one-time chefs and domestic employees who work on a regular basis multiple days a week. To minimize risks of employing household staff, Sherlock offers five tips to share with your homeowners clients:

  1. Check references. You find out who people are through word of mouth and through friend recommendations, but you still want to be sure you know exactly who you’re employing.
  2. Do a professional background screening. Look at criminal records, verify references, view credit reports and check motor vehicle reports.
  3. Do another professional background screening. If you’re hiring somebody for a short time, completing one background check is fine. But if you’re bringing somebody on long-term, make sure you’re checking their reports at least every other year.
  4. Maintain a clear employment contract. Outline responsibilities, payment terms, requirements and causes for termination. Be clear on what employees can and can’t do, or what they can and can’t be fired for—this will hopefully minimize the potential for a wrongful termination lawsuit down the road.
  5. Review that process on that a regular basis.

 

When first discussing domestic staff coverage with a homeowners client, Bill Burbine, vice president and personal lines manager at Fred C. Church, Inc., suggests gaining a general understanding of what protection measures they’ve already taken and then educating them on best practices. “In the initial risk assessment, talk about employment relationships they have from part-time handy work to full-time domestic staff and then seek to understand what they’ve done in the past to document and protect themselves,” he says.

Although potential liabilities can fall under general property, homeowners and auto policies, added EPLI and workers comp coverages might also be useful. (Note that EPLI does not apply to domestic contractors such as babysitters or one-time chefs.) For these additional coverages, David Wall, vice president at Mississippi-based SouthGroup, suggests looking at state regulations about whether workers comp for domestic employees is required or available—and then closely reviewing the language on ISO forms for bodily injury coverage. For EPLI, “most of the markets I’ve seen thus far will limit that endorsement as a limit to the policy,” Wall says, noting that some carriers provide coverage for up to five residential staff members based on seniority.

According to Sherlock, who advises gaining insight into a client’s lifestyle in order to help mitigate potential exposures, “when talking about liability in general, you really want to look to understand not just the value of what your tangible assets are but investable assets as well.” Veiled coverages include crisis reputation coverage—used to mitigate name and reputation damage for clients in the public eye—or counsel shadow defense cover—used for personal attorneys to shadow the insurance company’s attorney.

Underestimating the potential of a liability lawsuit from a domestic employee and misunderstanding affordability of effective protection can be irreparable. Says Burbine: “This is an opportunity for independent agents to differentiate themselves, reinforcing the independent agent model and providing value to their clients by bringing these exposures to the table.”

- See more at: http://www.iamagazine.com/markets/read/2014/11/24/is-your-ho-client-s-babysitter-a-liability-#sthash.663ldEmK.dpuf
 
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choosing-homeowners-insurance-deductables

The deductible is one of the most important elements of your insurance policy and the term is the most widely understood by the insurance consumer.  It is defined as a specified amount of money that the insured must pay before an insurance company will pay for a claim.  Since most consumers carry automobile insurance, they are accustomed to the deductible being the amount that they’ll have to pay out of pocket before the insurance company will step in.  Let’s say for example that you’re in a car accident and the damage to your vehicle is $1000, and your deductible is $500.  You – the policyholder – will pay $500 of the $1000, and your insurance company will pay for everything over that $500 deductible up to your policy limits.

The homeowners insurance deductible works similarly to auto insurance; however, there are many different types of deductibles available, and sometimes your policy can contain more than one type.  Knowing the types of deductibles that your policy contains, what they are based on, and what that means for you after a claim, is extremely important, as this knowledge will allow you to properly prepare for a loss.

COMMON TYPES OF DEDUCTIBLES

  • All Other Peril (AOP) Deductible: any peril covered under the policy except those that are listed separately.
  • Wind & Hail Deductible: this is the deductible that will apply to any event that results in damage caused by wind and / or hail.  This type of deductible is often expressed on your policy as a percentage of the covered dwelling amount, or a percentage of the TIV (Total Insurable Value – the full value of the insureds covered property including dwelling, other structures, personal property, and loss of use).  These deductibles are often higher than AOP deductibles.
  • Named Storm Deductible: this is the deductible that will apply to any named storm event like a tropical storm or hurricane.  These deductibles are also typically expressed as a percentage and higher than AOP deductibles.*
  • Hurricane Deductible: applies only to damage caused by a hurricane.  These deductibles are also typically expressed as a percentage and higher than AOP deductibles.*

*An example of which deductible might apply:  If a hurricane is downgraded upon landfall to a tropical storm and the insured does not have a named storm deductible, the insureds AOP deductible would then apply sense the damages were not the result of an actual hurricane.

It is important for the consumer to be educated on which deductibles are included in their policy.  It is even more important that the consumer have that deductible amount set aside in case of a claim.  In the event you have a percentage based deductible, you will want to be sure to understand what the percentage equates to in actual dollars.  Here’s an example:

Your home is insured for $200,000

Your contents are insured $50,000

Your AOP deductible is $2500

Your wind and hail deductible is 5%

If the deductible is based on dwelling only, the deductible equals $10,000.

If the deductible is based on TIV (total insurable value including contents, other structures, personal property and loss of use, the deductible equals $12,500.

Click on either of these links to view actual quotes from the same carrier, but each with different deductibles. These illustrate how deductibles influence the annual premium.

2 Percent Wind Hail 1000 AOP

5 Percent Wind Hail 2500 AOP

Our coastal market was once dominated by 5% wind and hail deductibles; however, there are now many carriers offering Named Storm and 2% deductibles, so be sure to ask your agent what is available in your area.  Given the same carrier, lower deductibles often mean higher premium costs, and vice versa.  Many consumers find that paying a slightly higher premium is more financially feasible than risking a large out of pocket expense with higher deductibles after a loss.

The examples we’ve given are common types of deductibles for our coastal areas.  In other parts of the country, deductibles for earthquakes, landslides, and other natural phenomenon are common. Deductibles for theft are common in commercial policies.  Talk with your agent to determine what deductibles are right for you – not just in terms of your yearly premium, but also in terms of what that deductible could actually cost you after a claim.

 

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