MONDAY, OCTOBER 14, 2013
One year ago this month, Superstorm Sandy struck a dozen states in the Northeast and became the third costliest storm in U.S. history, after hurricanes Katrina and Andrew, according to the Insurance Information Institute (I.I.I.).
"Every disaster offers lessons learned for future events and Sandy was certainly no different," pointed out Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. "If we can learn from this disaster, we can be better prepared for the next one."
Here are four key takeaways from the disaster:
Consider purchasing flood insurance
Ninety percent of all natural disasters are accompanied by some form of flooding. However, flood damage is not covered by standard homeowners, renters or business insurance policies. Instead, separate flood insurance is available from FEMA's National Flood Insurance Program (NFIP) and a few private insurance companies. Many Sandy victims did not have flood insurance and were either uninsured or underinsured for the disaster, which was the second costliest U.S. flood, based on NFIP's payouts as of July 12, 2013.
The NFIP provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. Coverage for the structure on an NFIP policy is on a replacement cost basis (what it would cost to buy it new) and contents coverage is on an actual cash value basis (the depreciated value). For additional insurance protection over and above the amounts in an NFIP policy, excess flood insurance is available from private insurers. To learn more, see our information on flood insurance, go to FloodSmart.gov or talk to your insurance professional.
Understand the differences between a homeowners policy and a flood insurance policy
A standard homeowners policy is different from an NFIP flood insurance policy in many ways. Coastal residents should ask their insurance professional to explain the differences, so they understand exactly what is and is not covered under each policy. For example, a standard home insurance policy provides coverages for additional living expenses (ALE) if the home is damaged by an insured disaster listed in the policy. This would provide reimbursement for costs associated with living elsewhere while the home is being rebuilt. An NFIP flood insurance policy does not provide ALE. In addition, coverage for the contents in a basement is very different. The NFIP put limits on this type of coverage that do not exist in most standard home insurance policies. In addition, the NFIP flood insurance policy includes very specific definitions of what is considered a basement, while standard home insurance policies generally do not.
Know if you have a hurricane or windstorm deductible
Do you have a hurricane or windstorm deductible in your policy? And how will it affect your claim? A standard homeowners insurance policy deductible is usually expressed as a dollar amount, for example, $500 or $1,000. Hurricane deductibles, however, are calculated as a percentage of the insured value of a house. Hurricane deductibles apply solely to damage caused by hurricanes, and typically vary from 1 percent to 5 percent of the insured value of a home. Whether a hurricane deductible applies to a claim depends on the specific "trigger" selected by the insurance company. These triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane's intensity. Windstorm deductibles apply to any kind of wind damage and are generally also percentage based. A deductible is the amount of money you pay out-of-pocket before your insurance coverage kicks in.
Renters need insurance too
In New York City, 69 percent of residents rent their homes so a large number of renters were impacted by Sandy. Unfortunately, many learned that their landlords were not responsible for damage to their personal belongings caused by Superstorm Sandy as many did not have renters insurance. Indeed, a 2013 I.I.I. poll found that only 35 percent of renters in the U.S. have renters insurance. A renters insurance policy costs about $185 per year, on average, and provides coverage for personal possessions damaged by wind, fire, theft and other disasters listed in the policy as well as the costs associated with living elsewhere while a rental home is being repaired. Renters can also purchase flood insurance from the NFIP to protect their possessions.
It is equally important to be prepared for a disaster; here are some steps you can take:
- Review your insurance. The time to review your insurance policy is before you have to file a claim. Make sure that you have both the right amount and type of insurance. You should have enough insurance to rebuild your home and replace all of its contents.
- Create a home inventory. A home inventory is a list of all of your personal possessions and their estimated value. An up-to-date inventory will help you: purchase the right amount of insurance; speed up the claims process by substantiating losses; and provide documentation for tax purposes or disaster assistance. In order to make the process of creating and updating an inventory easier, you can use Know Your Stuff® Home Inventory, the I.I.I.'s Web-based software and mobile app.
- Disaster-proof your home. Talk to your insurance professional about ways to keep wind and water out of your home. For instance, you may want to invest in storm shutters and reinforced garage doors.
- Have an evacuation plan. Decide ahead of time where you will go and how you will get there, and have more than one option. The I.I.I.'s iPhone app, Know Your Plan, provides interactive checklists that will help you plan ahead to better protect yourself, your family, your home, and even your pets. If you have pets, contact your veterinarian for a list of boarding kennels and facilities or ask your local animal shelter if they provide emergency shelter or foster care for pets. Also identify hotels or motels outside of your immediate area that accept pets. For more information see the video, Protecting Your Pet During a Disaster. The I.I.I. also recommends practicing your evacuation plan by doing a test run: give yourself just 10 minutes to pack up your family, pets and important items and get out—possibly for good. See our video, Ten Minute Challenge.
MONDAY, SEPTEMBER 16, 2013
As a personal friend of mine, John Tassone has played a vital role in my life. I wanted to share his book with you so you could learn a little bit from him as well.
John Tassone was born and raised in Chicago. As a child, he had a newspaper route, shined shoes, and made deliveries for a meat market. Throughout high school he worked in his father’s hardware store. He earned a bachelor’s degree in Education at Chicago Teachers College (now Chicago State University), and then taught drafting in the Chicago public school system.
He later became a draftsman for U.S. Steel. While working there, John started selling life insurance part-time. After a year, he quit U.S. Steel and went to full-time insurance sales. He moved quickly through the insurance-company ranks, and became regional VP of the Chicago area. In 1976 he opened his own agency, Associated General Insurance Agency of Illinois. The broad knowledge he derived from forty years’ experience have made him a sought-after speaker. John and his wife, Catherine, live near Chicago.
In the author’s own words:
I’ve been in sales of one type or another since seventh grade. I sold newspapers, magazines, encyclopedias, land investments, and insurance. I have almost every kind of sales experience imaginable. I’ve been in insurance for over forty years, traveling the state of Illinois, but mostly in the Chicago area. Besides selling, I’ve trained hundreds of new sales agents through classroom teaching and motivational seminars ;Today’s world is characterized by negativity. Too many people have lost sight of the positive. I want to teach people how to refocus, stay positive, and reach out for a better life. I wrote Go For It! to help those who read it feel better about themselves and the world around them. This book wasn’t written by some distant millionaire, but by ‘a regular guy’ who’s been in the trenches fighting the battles that life presents to all of us.
You can buy John's book at Amazon, Barnes & Noble, Cypress House Publishing or by clicking here.
TUESDAY, AUGUST 13, 2013
The purchase of a home is usually the single largest financial investment most people will ever make, so taking steps to protect that investment is critical. While you may believe that your attention to maintenance, repair, and security issues leaves you highly unlikely to ever need the benefits of property insurance, you simply can’t plan for acts of nature. A freak storm could tear your roof off, or a particularly fierce hail shower could cause extensive damage to walls and windows. Property insurance is a considerable cost to bear, but it is far cheaper than dealing with huge repair bills out of your own pocket.
What Is Included in a Standard Property Insurance Policy?
Most property insurance policies in America stipulate that coverage is provided for events that are “sudden and accidental.” Events that are typically included in coverage include fire, hail, wind, and theft. This means that a collapsed roof that has been caused by many years of deterioration will not be eligible for coverage, but a collapsed roof resulting from a hurricane will be. The average property insurance policy will also have a provision for liability. This could prove valuable if a fire that starts in your home spreads to other properties on the block.
What Is Not Included?
Unfortunately, many homeowners wrongly believe they are covered for all eventualities that are beyond their control, but this is not the case. The National Association of Insurance Commissioners stated in a recent report that one-third of U.S. homeowners believe standard property insurance provides coverage for flooding. While there are some exceptions, standard property insurance will not cover the cost of repair or replacement as a result of flooding, earthquakes, or mold.
Common Pitfalls to Avoid
It is vital that you take the time to check the small print of your policy to ascertain the level of coverage provided. If your policy only covers the actual cash value of repairs and replacements, this could leave you with hefty shortfalls to pay yourself. For instance, ACV coverage for a new roof will pay out on what the roof is worth at the time of the claim, less your deductible, and not the cost of replacing it.
If you have valuable art or jewelry in your home, you should check what your policy states regarding expensive items, since there will often be a maximum cash figure involved in payouts, and particularly expensive possessions may exceed that amount. An insurance advisor might suggest a “floater,” which is an add-on to a policy that provides for increased coverage or special arrangements for specific, named items.
Property insurance is a complex issue, and a number of factors can affect the premiums you end up paying. If your area is prone to freak weather events or burglaries, you could be forced to pay far more than the national average. Your premiums could also be higher if you’re a smoker, or if you have a poor credit score.
Negotiating the property insurance minefield is not easy. Call Big Don Insurance at 708-957-7020, and one of our specialist agents will be able to point you in the right direction with your Chicago Property Insurance.
FRIDAY, AUGUST 9, 2013
In the majority of cases, a standard home insurance policy will cover your personal possessions against loss or damage as a result of several named perils. However, there are often cash limits to the amount of coverage offered, and those limits apply to both the total amount that can be claimed and how much individual items are covered for. If you have particularly expensive items in your home, such as antiques, state-of-the-art audio-visual equipment and designer furniture, you should seriously consider additional insurance coverage, and there are two main options available to you.
The Purchase of “Riders”
A rider – sometimes referred to as a “floater” or an “endorsement” – can be added onto your existing policy for an extra premium. This is ideal if you have very expensive items in your home that are worth significantly more than your policy’s maximum coverage level for individual items, which can be anything between $1,000 and $3,000. However, if you own several items that barely exceed your policy’s stated limits, you may need to consider some other options, as riders are typically designed for individual, high-value items.
The Purchase of Blanket Coverage
Let’s say you are an avid antiques collector, and you want to insure your prized collection for its true worth. Instead of purchasing several riders at considerable expense, it may be possible to buy blanket coverage for the category of antiques in general. This may also be a good idea if you like to collect wine and art or if you like to buy all the latest electronic gadgets.
Which Type of Insurance Is Best for You?
Insuring individual items through a series of floaters is usually far more expensive than the blanket coverage option, but there are some key benefits to consider. If you are forced to list or schedule your high-value items, you will need to have them individually appraised in order to discover their true value. This will help you avoid arguments with your insurer should you need to make a claim.
In any event, you will need to provide proof of your items’ market value, which will already be in place when you make a claim against a floater. If you choose the cheaper option of blanket coverage, you will need to provide that proof in the form of receipts and other official documents upon making the claim. Furthermore, the need to schedule individual items almost always means you can value them for their true worth, instead of the best guess often offered with blanket coverage. Riders often include “mysterious disappearance” coverage as well. So, if a precious stone were to fall out of your ring or necklace, the true cost of replacement would be covered.
If you want to insure a range of low and medium-value jewelry, artwork and collectibles, the blanket form of insurance may be the most cost-effective solution. However, if your items are particularly expensive – worth more than $10,000 each – a series of floaters may be the safest option.
If you have any questions or concerns about your own valuables and Joliet Homeowners Insurance, call Big Don Insurance at 708-957-7020, and we’ll be happy to guide you through your options.
FRIDAY, JULY 12, 2013
If you live in a house with multiple drivers and more than one car in the driveway, you may be interested in hearing about all the advantages of having a multi-car insurance policy. There are many benefits associated with this type of policy, which can save you a lot of money in the long run. Read on for a look at some of the top benefits of multi-car insurance policies.
One of the biggest advantages of having a multi-car insurance policy is the savings you get. By combining all the cars in your driveway into one multi-car insurance policy, you can save up to 25% on car insurance. Depending on where you live and the cost of your insurance, that could be a very large chunk of change. In addition, you are reducing the amount of mail you receive and have to send each month as well.
Need to add or remove a car? Multi-car insurance policies are easy to change. You have the ability to easily add or remove vehicles on your policy with little or no hassle. This can be a big benefit if you and other family members lease your cars and change them up every other year or so.
Another great benefit to having a multi-car insurance policy is the great convenience that comes with combining all your cars onto one policy. It is much easier to maintain and pay for one policy as opposed to three, four or even five different policies. By reducing your paperwork and switching to a multi-car insurance policy, you can enjoy the convenience that comes with the bulk billing.
Fewer Insurance Fees
Multi-car insurance policies have fewer insurance fees, since the policy is being bulk billed. There's no need to tack on added expenses when you put all your vehicles on one policy. It's convenient and also more cost-effective. If you have more than one car in your driveway or garage, it doesn't make sense to have separate policies for them. Combine them up on a multi-car insurance policy and enjoy the savings. Do you worry about forgetting to renew your auto insurance? With a multi-car insurance policy, you can get all your cars' renewal dates synced so that you can renew them all in one shot. This effectively takes the stress and annoyance out of renewing your cars' auto insurance and helps you avoid legal problems or penalties that would result from letting your coverage lapse.
For more information and tips on Homewood car insurance, call us at 708-957-7020.
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