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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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TurkeySSIA is proud to once again sponsor the Great Turkey Drive. This 2nd annual fundraiser helps us raise funds to provide a turkey and holiday meal families seeking assistance through Catholic Social Services Mobile and Baldwin Counties. And SSIA will once again MATCH every donation “turkey for turkey” until we feed every family CSS serves this holiday.

Every $15 donation received provides the following to a needy family:

  • One 10-12 lb turkey
  • 2 sides of Corn
  • 2 sides of Green Beans
  • 1 side of Stuffing
  • 1 side of Cranberry Sauce
  • 1 side of Potatoes

Commitment forms are available by clicking here. Please complete the form and return as indicated by Monday, Dec. 7th via email to anne@sshoreins.com or fax to 251.923.4464.

Cain’s Piggly Wiggly has been kind enough to provide all products purchased at cost for this year’s Turkey Drive. Please try to support them with your patronage.

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There are so many insurance providers in the marketplace today that searching for the right fit can become overwhelming to consumers. Not only is securing the right coverage for your home, car, or business an important process, but selecting who will assist you with obtaining that insurance coverage is just as critical. Many consumers are unaware of the difference between independent insurance agencies and captive agencies, but knowing what each can provide is very important.

Independent insurance agencies are just that – independent from any one specific insurance company. This means they can provide you access to a variety of insurance products from numerous insurance carriers. Independent agencies can shop the marketplace and choose to partner with the insurance carriers who offer the products their customers need. For example, an independent agency may have access to five different carriers for homeowners insurance. What does this mean for the consumer? Simply put, it means they can provide more choices. By shopping coverage through multiple carriers, independent agents can seek out the carrier that offers their customer the best coverage, premium, and payment schedules.  An independent agent will often provide the customer with multiple options for their coverage.

The independent agent is often a one-stop-shop for multiple types of insurance – everything from homeowners to life insurance to auto coverage. And since insurance isn’t a one-size-fits-all industry, having more choices allows the consumer to make the most of their time by having their agent search the best options for them. It’s like having a personal shopper!

Captive agencies typically sell for a single insurance provider – you often see their national advertisements on TV. These providers offer a variety of insurance products; however, these products are only those underwritten by their parent company. The downside to this arrangement is that captive agents don’t have multiple insurance carriers from which to seek coverage. Think of captive agencies like a big box store that only carries one specific brand. They offer great products, but only from their own brand so there isn’t as much variety.

Independent agencies serve an important role to property owners along the Gulf Coast. Many standard carriers cancelled all of their coastal policies and stopped writing any new business after hurricanes Ivan and Katrina, which made it difficult for consumers to find coverage. However, many independent agencies were still able to offer coverage as they had a much larger pool of carriers at their disposal.  Many of the standard markets that are currently offering coverage in our area are doing so without coverage for wind, thus forcing the homeowner to seek out an additional Wind & Hail policy from another carrier.

As an independent agency, South Shore Insurance Agency prides itself on not only finding the correct coverage for our customer, but also educating the consumer on the policy details with words one can understand. An insurance policy is not all about the bottom line premium, but rather the coverage that you will or won’t receive when the unthinkable happens. Simply put, the loyalty of the independent agent lies with the consumer, not with a big box captive agency.

SSIA is a Trusted Choice®Independent Agency – click here to learn more about how this partnership can benefit you.

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Business Insurance Header

Much like the various homeowners policies available, there are multiple options for commercial insurance as well. Different industries have varying insurance needs, and as such require different types of policies.

Homeowner’s insurance coverage often includes coverage for the dwelling, personal property, loss of use, and personal liability. Similarly, most business insurance policies contain coverage for multiple risks as well. The most common types of commercial insurance are property, general liability, and workers’ compensation. Other coverage types available are business income coverage, hired & non-owned auto coverage, professional liability, and liquor liability. Here are 3 of the most recommended coverages for businesses:

 

Comm Prop Ins

 

1. PROPERTY INSURANCE

Generally speaking, property insurance covers damage to the business’s property such as signs, furniture, computers, equipment, inventory, and the building (should one own it).

 

Gen Liability Ins

 

 

 2. GENERAL LIABILITY INSURANCE

Liability insurance covers damages to third parties. This can often be referred to as General Liability Insurance or Commercial General Business Liability. This type of coverage protects a company’s assets and pays for any covered claims including legal costs if someone is injured on the business’s premise, or arising out of the business’s operations. General liability coverage can protect tenants of a building if the tenant causes any damage to the property being leased. It can also cover you against claims of false advertising including libel, slander, and copyright infringement (www.sba.gov).

 

Workmans Comp Ins

 

 

3. WORKMANS’ COMPENSATION

Workers’ compensation covers on-the-job injuries employees may sustain, typically providing wage replacement and medical benefits to employees injured while on the job. Many states require companies with a certain number of employees to obtain workers’ compensation insurance. It is important to note that when an employee files a claim under the business’s workers’ compensation, they forfeit their right to sue the employer for negligence.

 

Doctors and lawyers may be required to obtain malpractice insurance (also known as professional liability insurance or errors & omissions insurance), which can cover various professionals against inadvertent mistakes. Learn more about small business and commercial insurance by visiting the Small Business Administration’s website.

 

Resources: http://en.wikipedia.org/wiki/Workers’_compensation; http://www.sba.gov/content/types-business-insurance; http://www.irmi.com/online/insurance-glossary/terms/c/commercial-general-liability-cgl-policy.aspx

Visit us on these sites too! Facebook /// Twitter /// LinkedIn

 

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In last week’s post, we discussed loss settlement types – ACV (Actual Cash Value) versus RCV (Replacement Cost Value).  We provided information about the benefits of RCV settlement types and touched on the fact that many insureds may not know what type of loss settlement method their policy contains.  As we’ve said many times, when it comes to your insurance, the devil is in the details. Knowing your settlement type, deductibles, and most importantly what is and is NOT covered is extremely important when purchasing insurance.  We’ve made it our mission at SSIA to help educate the consumer so they aren’t surprised and trapped in an unfortunate financial situation upon suffering a loss.

Part of our education mission is to advise the public when we become aware of any important issues in the insurance industry, particularly those that can, and often do, affect some of our friends and neighbors.  One such issue is related to certain AIUA (Alabama Insurance Underwriting Association) issued policies.  If you currently carry, or are considering the purchase of a homeowners or dwelling policy issued through AIUA, this information is very important to you.

Currently, there are approximately 31,000+ AIUA issued policies, and of these, roughly 91% are written with an actual cash value settlement method.  Combined with high deductibles, many of these policyholders may be paid nothing, or only cents on the dollar after a claims event.  This leaves citizens in our community in an extremely vulnerable position creating a situation where they may not be able to repair or rebuild.

AIUA’s mission statement is to provide a market from which consumers can “obtain essential insurance when they are unable to obtain coverage in the private insurance market.” Essentially AIUA is there to provide coverage when there are no other alternatives left for the consumer.  Despite multiple carriers currently offering broad coverage at affordable rates in Mobile and Baldwin counties, AIUA’s sales continue to grow suggesting that they are becoming the preferred choice amongst many agents and consumers, rather than the insurer of last resort, as bottom line price savings become the only focus.  Consumers must begin to realize that high deductibles and actual cash value settlement methods may make it financially impossible for them to repair their property after a loss.

If you are an AIUA policyholder, here are some ways to determine what settlement method your policy is:

  • If your home is older than 25 years of age, your policy will be settled with an ACV settlement method.
  • If your home is not your primary residence, but rather a secondary or rental, your policy will be settled with an ACV settlement method.
  • Locate your declarations page, and go the second page titled, “Policy Provisions,” and look for “Forms and Endorsements”.  If your policy is shown as DP-01, your policy will be settled with an ACV settlement method.  If your policy is shown as DP-02, your Dwelling will be settled on an RCV basis, but your Contents/Personal Property will still be settled on an ACV basis.
  • Here is a sample declarations page for reference:

Untitled

We want our local consumers to know that “by design, AIUA policies provide basic, no frills coverage.” We at SSIA are proud to work with many reputable carriers who can provide affordable, well-rounded coverage.  Let us conduct a free insurance review of your policies – we’ll be happy to discuss the details of your current coverage and offer suggestions to better protect you, while keeping your premiums affordable.

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Have you had a difficult time finding coverage for tenant occupied Ho-6 policies? We have you covered! SSIA is now writing homeowners, flood and condominium owners policies in Florida! Contact us today for a quote – 251.923.4463

FL

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With insurance, the devil is in the details.  With so many abbreviations and industry specific terminology, shopping for the right coverage can often seem daunting.  One of the most important things to know about your homeowner’s insurance policy is the policy’s loss settlement method.  Loss settlement types refer to the way the insurance company will settle your loss and value your property in the event of a claim.  There are two types of loss settlements: ACV (Actual Cash Value) and RCV (Replacement Cash Value).  Knowing the type of loss settlement method your policy includes is incredibly important as it determines what you will, or often won’t, receive in the event of a loss.

 

Roof

Let’s review by using the example of a roof with a 20-year life that is 10 years old and that would cost approximately $10,000 to replace.

 

In the event the roof is damaged and must be replaced, an ACV (Actual Cash Value) settlement method will consider the cost of depreciation of the roof before settling the claim for a dollar amount.  For example:

  • Cost to replace the roof = $10,000
  • Roof is 10 Years old x 5% Depreciation per Year = 50% Depreciation
  • Settlement from Insurance Company = $5,000 (after applicable deductible)

 

Seems a little unfair, right?  This settlement type will leave the insured with a $5,000 out of pocket expense in addition to his or her deductible.

 

Now let’s look at the same loss situation under an RCV (Replacement Cash Value) settlement method.  In the event of a loss, an RCV settlement type will NOT consider deprecation as part of the settlement in the event of a claim.  For example:

  • Cost to replace the roof = $10,000
  • No Depreciation subtracted
  • Settlement from Insurance Company = $10,000 (after applicable deductible)
Appliances
Appliances depreciate 15% per year
Clothing
Clothing depreciates 50% per year
Home Electronics
Home Electronics depreciate 25-50% per year

For many insureds who either do not understand, or were not properly informed about their policy’s settlement method, this can be a rude awakening at the time of a loss.  At SSIA, we recommend RCV settlement types for all homeowner and dwelling policies.  Please don’t forget that the contents in your home depreciate too! Depreciation is based on the lifespan of the item. For example:

Remember, it’s not just about the deductible at the time of a loss, but also the settlement method.  If you need assistance reviewing your policy for these details, feel free to give us a call.  Don’t allow the devilish details cost you more than you anticipate!

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ExploringTheHistoryOfFortMorgan_610x300

For most consumers, there is a good bit of mystery associated with the availability of flood insurance, especially at an affordable price, for properties located within “COBRA Zones” (CBRA – Coastal Barrier Resource Area).  We feel it is important that the consumer be fully aware of the CBRA definition, as well as the impact on insurance when building in these areas.

According to www.FEMA.gov, “The Coastal Barrier Resources Act (CBRA) of 1982 removed the Federal government from financial involvement associated with building and development in undeveloped portions of designated coastal barriers.”  Essentially, this act was proclaimed to discourage development in certain ecologically sensitive coastal barrier areas, both to help protect wildlife habitats and to help mitigate losses.  It removed Federal incentives to develop in these areas, and made these areas ineligible for federally subsidized flood insurance programs (i.e. the NFIP – National Flood Insurance Program).

COBRA zones are an overlay to the flood zones we’ve discussed in previous blog posts (click here to learn about flood zones).  So while a property may be located in a COBRA zone, it will also be in an X, AE, or VE flood zone.  The same lender flood insurance requirements as previously discussed will apply to these zones regardless of a COBRA overlay.  The majority of Alabama COBRA zones are located in the Fort Morgan peninsula area – neighborhoods like Kiva Dunes, Morgan Town and The Dunes are located in COBRA zones.

The difficulty for many property owners in COBRA zones is finding affordable flood coverage.  Since these areas are not eligible for NFIP coverage, insurance must be purchased through the private market at non-subsidized rates.  Lloyds of London is the largest private flood provider willing to write flood insurance in COBRA zones; SSIA just so happens to have access to some of Lloyd’s flood programs offering coverage in these areas.  Knowing your flood zone and other factors about your property are critical to knowing what coverage is required and what it may cost.  Please let SSIA know how we can help you obtain the correct coverage for your property!

 

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Building homes to a more sound structural standard makes a huge difference in a storm. These videos available at www.disastersafety.org show the difference between homes built to fortified standards and those built to older construction codes. Take a moment to visit this website and learn how you can protect your investments. Fortified homes are subject to homeowners insurance discounts, and taking steps to make your home more structurally sound can save you time and money in the event of a loss.

IBHS Wind Test Highlights

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