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Monthly Archives: September 2014

What You Need to Know about Flood Insurance

Homeowner’s policies do not cover flood damage!! Yet, during hurricane season, many hurricane claims are denied because the loss is actually caused by flooding. This leaves the homeowner frustrated, angry, and cynical about insurance in general. Homeowners in Florida need to purchase flood insurance, even if they are not in a flood hazard zone.
This is a brief tutorial on flood insurance and why you need it, even if you have homeowners insurance.

How Do I Buy Flood Insurance?
Gracey-Backer, Inc. is an agent for the National Flood Insurance Program (NFIP), which is a division of the Federal Emergency Management Agency (FEMA).

What Does Flood Insurance Cover?
Flood insurance provides up to $250,000 coverage for buildings and $100,000 for contents for flood damage to your property. If you desire higher levels of coverage, you may purchase an excess flood insurance policy from other sources. According to the NFIP, the average flood insurance policy costs $570 per year.

If your home is located in a high risk flood zone (A or V), where the risk of flood damage is excessive, your lender will require you to purchase flood insurance. If your home is located in a less risky flood zone (B, C or X), where there is less risk of flood damage, you should still consider purchasing flood insurance, as most flood damage occurs in low to moderate risk zones. You should qualify for a preferred risk flood policy, with the flood insurance premium as low as $129 per year for building and contents.

If I have an Insurance Claim for Flood Damage, What Can I Anticipate Receiving?

  • Building – You can purchase replacement cost coverage if the home is your primary residence. You need to purchase an amount at least 80% of the full cost to replace your home with new materials and design, or the maximum amount available under the flood insurance program.
  • Contents – If you have an insurance claim for flood damage, the most you will receive is actual cash value, the value of your contents less depreciation.

Are There Any Major Exclusions if I File an Insurance Claim for Flooding?
As with any insurance policy, the flood insurance policy is comprehensive, but does not cover everything. The following are key flood insurance policy exclusions:

Living Expenses or Business Interruption: The NFIP policy excludes additional living costs (such as renting a hotel room) you may incur as the result of flood damage. It does not cover lost income (if you operate a business out of your home) or any other loss of your home’s use.

Water Coming from Inside your Home: If a pipe breaks or a toilet overflows and water damages your property, there is no Flood coverage if an insurance claim is made. You should place a claim under your homeowner’s policy.

Swimming Pools and Landscaping: If your swimming pool overflows or leaks, causing an insurance claim, there is no Flood coverage. Additionally, there is an exclusion for flood damage to flowers, landscaping, vegetable gardens, etc.

Small Floods: To be deemed a flood for insurance claims sake, the water must have covered at least two acres or have affected at least one other property. If you sustain mold or mildew damage that could have been prevented, there is also no coverage.

Money and Valuable Papers: Your flood insurance policy will not pay if you file an insurance claim for damage to paper, currency, precious metals, stock certificates or any other valuable documents which sustain flood damage.

Contents Located Below-Ground: Personal property and improvements located in a basement or other areas of your home below the lowest elevated floor are not covered for flood damage.

There Is a Waiting Period for the Flood Policy to Take Effect
You cannot purchase a flood insurance policy if a hurricane is bearing down on your location. With all flood insurance policies, there is a 30 day waiting period once an application and payment are received.

Even if it is not hurricane season, you can still benefit by purchasing a flood insurance policy now. Flood damage can occur from heavy Florida rainstorms, storm surges, clogged storm drainage systems, levy failures and mudslides.

Barbara Gracey Backer

Barbara Gracey Backer is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance. She may be contacted at 800-272-6055 X118 or at

Healthcare Reform and Medical Malpractice Insurance

While no one really knows the impact of the Affordable Care Act (ACA) on Medical Malpractice Insurance in Florida, some assumptions can be made.

As more people become insured, the number of medical malpractice claims against physicians and surgeons will increase. Compounding the issue is the fact that these newly-insured individuals are largely unfamiliar with the healthcare system.
The doctor-patient relationship is diminishing as expanded-care teams take over at different steps of the patient’s treatment program. For instance, nurses are taking on larger roles in the doctor’s office, and hospitalists, doctors who monitor the hospital stays of patients, are taking on medical center duties. The physician may diagnose a patient’s problem and then show up again for the out-of-hospital follow-up.

As a result of the Affordable Care Act, the Accountable Care Organization, ACO, model is gaining traction. Hospitals are purchasing smaller physician practices, hiring the doctors and nurses, and blending them all into ACOs. Patients are far less likely to be treated by and develop a trusting relationship with a single physician. Rather, the patient sees a number of professionals as he moves through the system.

Insurance Companies who specialize in medical malpractice insurance see this loss of personal connection to the patient by the medical community as ripe for med mal claims.

On the other hand, as hospitals buy up small physician practices around the country, the market for medical malpractice insurance shrinks. The hospitals who employ the physicians and surgeons pick up more of the risk. Insurers will be forced to compete harder for clients, creating pressure on rates.

Meanwhile, the ACO will standardize treatment methods. Some of this standardization will be good. Some will not be sound. The deep-pocketed hospitals will risk exposure to extreme lawsuits similar to the asbestos lawsuits of the 1980’s.

In addition to all this, the country is experiencing demographic changes which will surely impact medical malpractice insurance companies.

  • Americans are aging and requiring more care, thereby stressing the already overburdened system and a growing doctor shortage.
  • Physicians are also aging. Younger physicians want a better work/life balance which entails shorter working hours.
  • Americans are experiencing more obesity, leading to more diabetes, heart issues, cancer, and knee and joint problems.

All of these trends, and others we cannot anticipate, will lead to greater medical malpractice exposures in the years ahead. Based on an article in the Insurance Journal-National, June 16, 2014.

Barbara Gracey Backer

Barbara Gracey Backer is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance. She may be contacted at 800-272-6055 X118 or at

Impact of Healthcare Reform on Medical Malpractice Insurance

The impact of the Affordable Care Act (ACA) on the cost of medical malpractice insurance is still a puzzle. No hard data exists, and the facts that do exist are subject to political spin.

We do know that the Affordable Care Act (ACA) will lead to more people purchasing health insurance through government-run insurance exchanges. These people formerly did not carry health insurance. Within the next few years, it is estimated that more than 22 million people will have health insurance. The mere presence of more insured people will likely increase the number of medical malpractice claims.

Experts also predict the dilution of the doctor/patient relationship, as the model of one physician treating one patient through the various stages of care gives way to expanded-care teams and hospitalists with only surface relationships with patients. Under this new model, patients are not likely to be treated by a single family physician, with whom he has a relationship. Instead, he will move through a series of medical professionals as he goes from diagnosis, to treatment, to recovery. This model, of a team of professionals—doctors, nurses, physician assistants, hospitalists—makes up what is called Accountable Care Organization, or ACO. The ACO model is growing rapidly, as hospitals buy up small physician practices, making the doctors and nurses employees of the hospital, and blending them all into the ACO model.

The Accountable Care Organization model creates a new set of risks for the medical malpractice insurance companies. Patients gradually lose contact with the doctor because of the lack of continuity of care. As a result, he is more likely to sue because he is less emotionally and physically attached to his treating physician, thereby giving way to more medical malpractice claims.

As the number of private medical practices decreases, as hospitals buy up practices and take on their risk, medical malpractice insurance companies will compete heavily for the remaining private practice business. And malpractice companies that insure the deep-pocketed hospitals could face massive lawsuits similar to the ones faced in the asbestos lawsuits of the last couple of decades.

Other interesting trends are playing out concurrently, putting pressure on the already-strained medical malpractice system: Americans are aging and putting more pressure on the healthcare system, physicians are getting older and wanting to create a better work/life balance, and obesity is rising, leading to more cases of heart disease, diabetes, and joint ailments.

In addition, the Affordable Care Act does not address the issue of medical liability reform, which has proven to bring down the cost of medical malpractice insurance, not only in Florida, but nationwide. This is a glaring missed opportunity of the entire healthcare reform legislation, according to analysts.

Barbara Gracey Backer

Barbara Gracey Backer is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance. She may be contacted at 800-272-6055 X118 or at

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