posted by RonL @ 12:30 AM
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Tuesday, November 03, 2009
Floodsmart from FEMA: Answers to Possible Questions Regarding the October 2009 Change
Answers to Possible Questions Regarding the October 2009 Change
On October 1, 2009, important changes to the NFIP will take effect. There will be an increase in rates, the standard deductibles, and the basic insurance limits. These combined changes will result in an average premium increase of 8 percent . Many policyholders will have questions about these changes. To help you best serve your clients, we have developed a number of “answers to possible questions” to help your customers better understand how these changes will affect them.
Q: Why are my premiums going up?
A: It is not uncommon for insurance companies to implement annual rate increases to help offset their increased costs, including inflation. The NFIP, like most insurance companies, has found it necessary to implement these important program changes to ensure that current premiums more accurately reflect the current risks.
Q: Are the rates increasing to collect the premium dollars that were used to pay for claims as a result of Hurricane Katrina?
A: No. It is a misconception that rate increases happen to offset debts attributed to Hurricane Katrina or any past event. Actually, Federal regulations clearly state that the NFIP cannot raise rates to recoup for previous losses. Simply put, NFIP premiums only reflect expected future losses and expenses. There is no charge contained in the premium to recoup past losses.
Q: Why is my deductible doubling?
A: The NFIP’s previous minimum deductibles were in place for more than 10 years. The NFIP found it necessary to discontinue the minimum deductible of $500 and increase the new standard deductibles to avoid overall larger premium increases.
It is important to remember, that in most cases the deductible is only a fraction of the average flood insurance claim, which can cost tens of thousands of dollars.
Q: Why are the basic limits of coverage on the Standard Flood Insurance Policy (SFIP) for residential and non-residential buildings increasing?
A: The NFIP takes many steps to financially prepare for future flooding. In order to do so, the basic limit of coverage, the level which sustains the most damage in a flood, needs to be brought into better alignment with the typical NFIP paid claim. If you purchase flood insurance beyond the basic limit, you will receive more coverage at a lesser charge. And, to get full replacement cost for your primary residence in the event of a flood, you must insure your building to at least 80 percent of its replacement value (or $250,000, whichever is less).
Click here for the new Flood Insurance Rate Manual that reflects these changes as well as additional information from the NFIP. Please email us at info@femafloodsmart.com with any questions.
posted by RonL @ 11:10 AM
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Monday, July 21, 2008
Umbrella Insurance Protects Your Assets
By: Jim Pretin
At some point, you have probably heard of umbrella insurance, but have no idea what it is. Well, first off, it does not cover the umbrella you protect yourself from the rain. It is a figure of speech. An umbrella policy is designed to shield you from almost everything that your home and auto insurance does not, as well as fill in gaps in coverage when the limits of your regular policy are exhausted.
Every day, there are personal lawsuits filed against ordinary citizens, with the reasons ranging from the frivolous to the justified. When and if this happens to you, you need to be prepared. More often than not, people are sued and have no extra protection to block the plaintiff from going after their personal assets in the lawsuit. To protect yourself from such a quandary, you need to have umbrella insurance.
An umbrella is often referred to as excess liability. This excess liability coverage kicks in when the underlying limits on your home or auto policy have been exhausted, or if you are sued personally for something that neither your home nor your auto insurance covers. Depending on the company, you can purchase anywhere from 1 to 5 million dollars worth of excess coverage, sometimes as high as 10 million.
The amount of coverage you select really depends on how much you are worth. If you have 5 million dollars worth of personal assets, you should get a 5 million dollar umbrella. It is not uncommon for someone to buy a 5 or 10 million dollar umbrella policy even if that number far exceeds their net worth, because the coverage is so cheap to buy.Most insurance companies will not offer you the coverage unless you have both your home and auto already insured with them. Also, the insurer will require that you maintain a certain level of liability on the home and auto policies in order to qualify for the excess policy. Usually, you must maintain at least $250,000 of bodily injury liability per person, $500,000 per accident, and $100,000 for property damage for your autos, and $500,000 of liability for your home.
The coverage is cheap. It is possible to obtain 1 million dollars worth of excess liability for as little as $120 dollars. The more cars and homes you have, the higher the price for the insurance, but the cost is still low. In addition to your home and cars, liability associated with any other conveyances you may have, such as boats, motorcycles, and other recreational vehicles, may also qualify for coverage under the umbrella, depending on the insurance company.
You are probably wondering when the umbrella would actually come into play. Here is an example: If you are involved in an auto accident where you crashed into a pedestrian who was walking on the sidewalk, resulting in medical expenses for that person that costed more than what your auto policy covered, the umbrella would be used. Or, if that pedestrian then decides to sue you for negligence and seeks punitive damages, your umbrella can be utilized to cover your legal expenses and to pay any judgements levied against you.
It is also important to understand that the excess liability covers you for all sorts of things that have nothing to do with your cars or homes. Things such as personal injury protection are covered. This includes false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction.
Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member. You may have to contact your insurance company and pay an extra premium for this type of coverage.
I hope this has helped illuminate to you the importance of having umbrella insurance. Without it, your personal assets are totally vulnerable in any lawsuit or legal action. Talk to your agent about it and ask how much it costs. Even though multi-million dollar lawsuits are not common, they can happen. So, an umbrella is probably worth it.
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For help with your Insurance needs visit www.lisyinsurance.com
posted by RonL @ 3:26 AM
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