Here are some of the reasons why these changes are happening:

• Significant reinsurance pricing increases due to the following:
  1. Global catastrophe activity, including floods, earthquakes, wildfires, windstorms, etc.
  2. Severe losses from Hurricanes Irma and Michael
  3. Reduction in overall reinsurance capital due to COVID
  4. Trapped capital in the “retro” reinsurance markets
     A recent report from Aon Benfield estimated that “around $15B of collateral remains trapped in the wake of recent major natural catastrophe events. The reduced amount of capacity available for deployment is impacting the retrocessional market”. Retrocession, or “retro”, reinsurance refers to reinsurance for reinsurers. Trapped collateral and capital from insurance-linked securities (ILS) funds and other third-party capital backed reinsurance entities was expected to be a key catalyst for 2020 renewals. In the end, this lack of available capital proved to be a rate driver for the primary markets as evidenced in part by the rate filings occurring across the board for insurers.
  5. Social inflation and roof claims
     1. Increased litigation, broader definitions of liability and insured behavior.
     2. The feeling that someone needs to pay when there is some kind of damage or injury, regardless of negligence.
     3. Weather claims on rooves which are simply aged or worn. As a result, carriers are refusing to insure rooves older than ten years. Major rate increases on older rooves and coverage limitations. Florida is among the top five states for this type of fraud.

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The following is an attempt to summarize 10 of the top questions you might have about homeowner’s insurance but were afraid to ask. We can go into much more depth if you wish. But this is a beginning:

1. What is homeowner’s insurance?

   Homeowners insurance is a package policy of property and liability insurance. It is designed primarily to cover your home and the things inside it—the things that can fall out if you tip your home upside down—in the event of some problems. It is also designed to protect you if you are sued for negligence and causing injury or property damage to another.

2. What perils are covered by homeowner’s insurance?

   Homeowner’s insurance commonly covers these perils: fire, windstorm, hail, lightning, smoke, explosion, theft, vandalism, riot and vehicle collision. It commonly excludes — i.e. doesn’t cover– earthquakes, flood, power failure, war, nuclear explosion, neglect, ordinance of law (locally forced repairs) or intentional damage.

3. How do I insure against risks that the homeowner’s policy doesn’t cover?

   If you live in an area that is prone to flood or earthquake, you can purchase a separate policy to cover these perils. In fact, a mortgagee will probably require you to purchase flood or earthquake insurance if you live in an area prone to them.

4. Is homeowner’s insurance required by law?

   No, it is not. Unlike automobile insurance, you are not required to buy homeowner’s insurance. If you have a mortgage, the mortgagee will most likely require it. The bank doesn’t want to lose its investment.
   Homes are expensive and perils such as fire, windstorm, or flooding doen’t always discriminate based on the value of the home. Most homeowners are not in a position to self-insure if they have a catastrophic loss, like a fire, wind or a flood.

5. Will homeowner’s insurance replace my home if it is destroyed by, for example, a wildfire?

   Depending on your coverage and the amount of insurance you purchased, the homeowner’s policy will go a long way toward making you whole. It will even pay for “loss of use”, i.e., for you to secure temporary housing while your home is being repaired. As we like to say: “No one regretted having too much insurance at the time of loss”.

6. What are the different types of homeowner’s insurance?

   There are main types of homeowner’s policies: A replacement cost homeowners insurance policy, the better of the two, pays claims based on the cost of rebuilding or repairing your home with new like kind and quality at the time it is damaged or destroyed. An actual cash value homeowner’s insurance policy, which is less expensive, pays claims after accounting for any depreciation in your home’s value.

7. How do I determine how much homeowner’s insurance I need?

   The answer to this question really depends on the size and condition of your home (replacement value) and the value of your contents. The standard homeowner’s policy covers personal belongings at 50% of the limit of your dwelling coverage. Some valuable items, like jewelry and fine arts, should be insured separately.

8. How does liability coverage work?

   The liability section of the homeowner’s policy protects you if you are liable for someone’s injuries at or around your home. An example is if they slip and break a leg on a broken tile. The liability portion of the homeowner’s policy also covers property damage caused by you or a member of your household. The minimum limit is usually $100,000, but we recommend at least $300,000 to adequately protect your assets in the event of a loss.

9. How can I lower the cost of homeowner’s insurance?

   You can opt for a higher deductible — that’s the amount of money you’ll have to pay out of pocket before your insurance kicks in. But you should also ask if you qualify for any discounts, such as alarm system credits or wind mitigation credits. Be sure that the values on your home and your contents are accurate. Remember that we are talking about replacement value and not market value (including the value of land).

10. What is a Personal Umbrella Policy?

    Umbrella insurance policies are designed to give you extra liability coverage above and beyond that of your auto and homeowner’s policies. They are especially valuable for someone with substantial assets and/or someone with teenage drivers. Specific levels of underlying insurance are required. Uninsured Motorist Umbrella coverage should be included.

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The answer is not as simple as it seems. It depends on the source of the damage. Homeowners insurance policies do cover water damage but are very specific on the kinds and types of water damage that are covered.

Sudden and Accidental: Covered water damage is defined under most homeowners’ insurance policies as sudden and accidental discharge of water. If, for instance, you inadvertently leave the handle of the toilet down while you are away for the weekend, and water overflows onto your floor, this loss is probably covered. If a water pipe breaks under your floor and, a few weeks later, you find the floor buckling, the homeowners’ policy will likely respond. The homeowners’ insurance policy generally pays for damage from rain coming through a hole in the roof or a broken window if the hole is caused by violent winds.

There are cases where there is no coverage. These are as follows:

• Seepage: If the water seeped into the floor over time from an unresolved maintenance problem, such as a damaged plumbing fixture or a leaking faucet, there is no coverage on the homeowners’ insurance policy.
• Replacing or repairing the source of the water damage: Most insurance policies will not cover the source of the water damage. So, while your policy may cover the cost of tearing out and replacing that damaged floor, you shouldn’t expect it to cover the cost of replacing your broken dishwasher, washing machine, or pipe.
• Water backup from an outside sewer or drain: You also will not typically be covered by a traditional Florida homeowners’ insurance policy if water backs into your home through an outside sewer or drain. You may, however, be able to purchase additional sewer or water backup coverage (typically $5,000-$10,000 of coverage) that may help provide protection in case of such an event.
• Flood: No type of flood damage, no matter the source of the water, is covered by standard Florida homeowners’ insurance policies. Flooding, for example, can occur from heavy rains, over-saturated ground, overflowing or surging bodies of water such as rivers, ponds, lakes and oceans. Flooding can be thought of as rising waters coming from the outside into your home. In these cases, you will need to purchase flood insurance to cover damage.

The best thing one can do when it comes to water damage and their homeowner’s insurance is talk with us. Each homeowner’s insurance company is a little different and coverage can vary. The last thing a homeowner wants is to discover their water damage claim denied after suffering a water damage loss.

Some of the insurers that cater to high valued homes offer broader coverage for backup of sewers and drains. For instance, Chubb, AIG and PURE all cover backup of sewers and drains with no limitation.

For more information on this confusing subject, please call me at 1-800-272-6055 X118.

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Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. An umbrella liability policy covers a much higher limit and goes above and beyond your primary policies claims directly relating to your home and auto.

The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage will pay for the damages you’re legally responsible for up to the policy limit. Umbrella policies also provide a broader form of coverage and can help cover legal fees, false arrest, libel, and slander.

How Does Umbrella Insurance Work?

An umbrella policy only pays once your primary liability limits have been exhausted. The claim will be made against you, the policyholder, on behalf of the wronged party. Then your insurance company may pay the settlement amount up to the limits of your coverage. (Most umbrella insurers require underlying liability limits of $300,000 or $500,000.) If the settlement amount exceeds your coverage limits, you are responsible for paying the remaining amount out of pocket.

How Much Umbrella Insurance Should I Carry?

When choosing your coverage limits, consider three things:

1. The risks you may face. Consider risks as a homeowner or renter, the risk of causing an accident during your work commute, and any potentially dangerous activities you participate in that could put those around you at risk. High profile professionals might need more coverage, even though they do not have significant assets, as they are considered a target for lawsuits. Similarly, persons with lavish lifestyles and expensive possessions should purchase higher limits, as they too are targets.
2. Youthful Drivers. If you have teenage drivers in your household, you are at greater risk for a liability claim. Studies suggest that two-thirds of drivers between the ages of nineteen and twenty-nine text and drive while over eighty percent use their cell phone while driving.
3. The value of your assets. These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider. In a lawsuit, lawyers will aim for your available assets but probably settle for a comparable insurance amount. In this way, you are not dragged into court, where the results of a jury settlement are problematic.
4. The potential loss of future income. Because liability lawsuits can result in loss of both current assets and future income, even those with few assets to protect may want to consider. The umbrella policy will also pay for defense costs, which can be considerable, even if you win a judgment.

How Much Does Umbrella Insurance Cost?

Umbrella insurance is very inexpensive, because the odds of it ever paying out are quite small. Most claims are paid by your primary auto and homeowners policies. Umbrella policies provide peace of mind for a reasonable cost.

To receive a firm quote on personal umbrella coverage, please call me at 1-800-272-6055 X118.

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• Characteristics of the automobile – Age, manufacturer, value, safety features (anti-lock brakes, anti-theft devices, adaptive cruise control, lane departure feature) all matter to insurance companies.
• The coverage selected – Liability limits, uninsured motorist, collision, comprehensive coverages vary significantly depending on your willingness to take on more risk.
• Deductible you select – Higher deductibles mean that the driver pays more to repair his vehicle before the insurance kicks in, thus reducing your premium.
• Profile of the driver – Age, gender, marital status, place of residence, driving record all help determine your ultimate premium.
• Usage of the car – Do you commute to work, use your vehicle for business or pleasure only?

Before the dawn of advanced technology, determining an auto rate was fairly simple: look at the prospect’s age, driving record, location and type of vehicle. Today, because of advances in data technology, automobile insurance companies can pinpoint more exactly how much to charge based on our individual risk profile. The following are individual risk factors that will determine if you are charged more or less money by your auto insurance company:

1. Credit Rating – Study after study indicates that a person’s credit rating can determine their propensity to have an accident. The best automobile insurance companies insure drivers with the best credit scores.
2. Payment History – Similar to your credit history, if you pay your automobile premiums on time, you may be able to reduce your premium.
3. Age – Around 30% of all vehicle injuries in the U.S. are caused by drivers aged 15-24. Those in the 16-19 group are three times as likely as those over age 20 to be in a fatal car crash. Motor vehicle accidents are the leading cause of death for teenagers in the country. For this reason, drivers age 16-19 pay 50% more on average for automobile insurance than drivers aged 20-24. As drivers age, their rates typically decline until, by age 55, drivers can enjoy senior discounts.
4. Driving Record – Driving history has shown to be an accurate indicator of future claims. Drivers with a clean driving record enjoy discounts not granted to those with tickets or accidents.
5. Gender – Men, especially young ones, are much more likely to be involved in automobile accidents than women, regardless of their age. For this reason, men pay significantly more for their automobile insurance over the years than women.
6. Nature of Employment – Drivers who use their cars for business, like real estate salespeople, pay higher rates than drivers who work from home. While it is difficult to quantify, drivers who work in high stress jobs for long hours, like doctors, tend to have more accidents than those in low stress occupations.
7. Vehicle type – Cars that are more expensive to repair or which are most likely to be stolen carry higher rates than others. Some high performance automobiles are very difficult and expensive to insure. Cars with extra safety features may be subject to additional credits.
8. Location of your home – Drivers who live in high risk urban areas of the country and those who live in high-crime neighborhoods where their vehicles are more likely to be stolen or vandalized, pay higher rates than others.
9. Marital Status – Married people tend to be better drivers than singles and pay lower premiums. In many cases, the multi-car discount kicks in, thus reducing your premium.

Armed with this information, there are many ways you can reduce your automobile insurance rates by improving your risk profile. There are no quick-fix solutions but rather improving your risk profile is a long-term operation.

Talk with us to understand the wide array of options for automobile insurance. You are very likely subject to credits about which you were unaware. We represent many different insurance companies and can design a custom-made automobile insurance policy to fit your specific needs.

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• Be Sure your Home Is Properly Insured for Replacement Cost, not Market Value – Don’t confuse the market value of your home, which includes the value of your land, with the replacement value. Your land is not covered for fire, windstorm, vandalism, etc. so you are wasting your money if you try to insure these things. You are looking for what it would cost to replace the home itself with a new home if you had to rebuild. A cost estimator can help determine this replacement value.
• Raise Your Deductible – The deductible is the amount of money you will pay out of pocket in the event of a loss. At our agency, we believe that it is cost effective to maintain a relatively high deductible. Through the years, you will save a considerable amount of money by maintaining a high deductible, even if the savings in one year is minimal. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible.
• Make your Home more Disaster-Resistant – By making your home more resistant to loss, you can save significant premium dollars. Consider adding storm shutters or impact glass. Reinforce your roof. Consider renovating your plumbing, heating, and electrical systems to reduce the possibility of fire or water damage.
• Improve your Home Security – Burglar and fire alarms are not cheap, but can give you significant discounts on your homeowners insurance. Purchase systems that ring at the local police or fire station. If you were to have a house fire or if you were to be visited by a burglar, you will be very glad that you made investments in quality alarm systems.
• Maintain a Good Credit Score – Establishing an excellent credit history can cut the cost of your homeowners and automobile insurance. Insurance companies are relying more and more on credit scores to price their policies and decide whether or not to accept a new customer. Be sure to pay your bills on time, only purchase the credit you need, and keep your credit balance as low as possible to improve your credit score. It is wise to check your credit score regularly.
• Review your Coverages Every Year – During the year, you may decide to add or sell items of value—like jewelry or furs—and can then add or delete them from your scheduled items (extra insurance for items whose full value is not covered by standard homeowners’ policies such as expensive jewelry, high-end computers and valuable art work). This can save you money and fine tune youe homeowners policy.
• Don’t Forget About the Cost of Homeowners Insurance When Purchasing a Home – If you are buying an older home, you will save money if the electrical, plumbing, and heating systems are up to date and if the construction is up to code. If you buy in a flood-prone area, remember the extra cost of flood insurnace. Flood damage is NOT covered by a homeowners policy. If you are in area prone to wind damage, a concrete block home is preferred over a frame home. Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are thinking of buying. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have.

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]]> https://www.graceybacker.com/stack-new-insurance-data-gathering-ways-lower-risk/ Tue, 14 Feb 2017 00:00:03 +0000 https://www.graceybacker.com/?p=2028 Auto insurer actuaries are able to amass a vast amount of statistical data to accurately predict a person’s propensity for having an automobile loss—and they set rates accordingly. Risk profiling is employed by all the automobile insruance companies, and is the one area where the consumer has some control—to improve their risk profile and lower […]

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]]> Auto insurer actuaries are able to amass a vast amount of statistical data to accurately predict a person’s propensity for having an automobile loss—and they set rates accordingly. Risk profiling is employed by all the automobile insruance companies, and is the one area where the consumer has some control—to improve their risk profile and lower their automobile insurance premiums over their lifetime. The premium charged can vary depending on many factors that are anticipated to affect the cost of future claims.
Examples of factors are:
• • Characteristics of the automobile – Age, manufacturer, value, safety features (anti-lock brakes, anti-theft devices, adaptive cruise control, lane departure feature) all matter to insurance companies.
• • The coverage selected – Liability limits, uninsured motorist, collision, comprehensive coverages vary significantly depending on your willingness to take on more risk.
• • Deductible you select – Higher deductibles mean that the driver pays more to repair his vehicle before the insurance kicks in, thus reducing your premium.
• • Profile of the driver – Age, gender, marital status, place of residence, driving record all help determine your ultimate premium.
• • Usage of the car – Do you commute to work, use your vehicle for business or pleasure only?

Before the dawn of advanced technology, determining an auto rate was fairly simple: look at the prospect’s age, driving record, location and type of vehicle. Today, because of advances in data technology, automobile insurance companies can pinpoint more exactly how much to charge based on our individual risk profile. The following are individual risk factors that will determine if you are charged more or less money by your auto insurance company:

1. Credit Rating – Study after study indicates that a person’s credit rating can determine their propensity to have an accident. The best automobile insurance companies insure drivers with the best credit scores.
2. Payment History – Similar to your credit history, if you pay your automobile premiums on time, you may be able to reduce your premium.
3. Age – Around 30% of all vehicle injuries in the U.S. are caused by drivers aged 15-24. Those in the 16-19 group are three times as likely as those over age 20 to be in a fatal car crash. Motor vehicle accidents are the leading cause of death for teenagers in the country. For this reason, drivers age 16-19 pay 50% more on average for automobile insurance than drivers aged 20-24. As drivers age, their rates typically decline until, by age 55, drivers can enjoy senior discounts.
4. Driving Record – Driving history has shown to be an accurate indicator of future claims. Drivers with a clean driving record enjoy discounts not granted to those with tickets or accidents.
5. Gender – Men, especially young ones, are much more likely to be involved in automobile accidents than women, regardless of their age. For this reason, men pay significantly more for their automobile insurance over the years than women.
6. Nature of Employment – Drivers who use their cars for business, like real estate salespeople, pay higher rates than drivers who work from home. While it is difficult to quantify, drivers who work in high stress jobs for long hours, like doctors, tend to have more accidents than those in low stress occupations.
7. Vehicle type – Cars that are more expensive to repair or which are most likely to be stolen carry higher rates than others. Some high performance automobiles are very difficult and expensive to insure. Cars with extra safety features may be subject to additional credits.
8. Location of your home – Drivers who live in high risk urban areas of the country and those who live in high-crime neighborhoods where their vehicles are more likely to be stolen or vandalized, pay higher rates than others.
9. Marital Status – Married people tend to be better drivers than singles and pay lower premiums. In many cases, the multi-car discount kicks in, thus reducing your premium.

Armed with this information, there are many ways you can reduce your automobile insurance rates by improving your risk profile. There are no quick-fix solutions but rather improving your risk profile is a long-term operation.
Talk with us to understand the wide array of options for automobile insurance. You are very likely subject to credits about which you were unaware. We represent many different insurance companies and can design a custom-made automobile insurance policy to fit your specific needs.

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]]> https://www.graceybacker.com/insuring-teenage-driver/ Tue, 31 Jan 2017 00:00:44 +0000 https://www.graceybacker.com/?p=2025 Whether we like it or not, automobile accidents remain the leading cause of death among Americans ages 15 to 19 according to the Centers for Disease Control and Prevention. The reasons for this are twofold: inexperience behind the wheel and immaturity. Because of this tragic statistic, when it comes time to insure the newly-licensed teenage […]

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]]> Whether we like it or not, automobile accidents remain the leading cause of death among Americans ages 15 to 19 according to the Centers for Disease Control and Prevention. The reasons for this are twofold: inexperience behind the wheel and immaturity. Because of this tragic statistic, when it comes time to insure the newly-licensed teenage driver, parents must brace themselves for a significant jump in automobile insurance premiums. According to a report conducted for the website InsuranceQuotes.com in San Francisco, CA, adding a teenage driver to a married couple’s automobile insurance policy can boost premiums by a whopping 79 percent.

The caveat to this is that teenage driver rates vary by gender. Insuring a 16 year old son can raise the insurance bill by a staggering 92 percent, while adding the same teenage daughter will result in a 67 percent increase.

What about the driver with the learner’s permit only?
Since a child with a learner’s permit only is generally a casual driver and also under the supervision of his parents and cannot legally drive alone, he is not required to carry his own insurance or be added to his parent’s policy.

Should I purchase a separate policy for my teenager or add him to my family policy?
It is most expensive to purchase a separate policy for a teenage driver and less expensive to add him or her to the family policy. The downside of keeping him on the family policy is that an accident or ticket can affect the parent’s insurance premium and/or potentially expose the parent to lawsuits resulting from damage beyond the policy limits. Either way, a perent is responsible until the child turns 18.

When do rates begin to fall for my teenage driver?
Fortunately, if your teenager remains claims-free, his rates will drop as the years move on. According to InsuranceQuotes.com data, a teen driver’s premium surcharge will eventually fall to an average of 58 percent once he or she turns 19.

How can I reduce the cost of insurance for my teenage driver?
There are several ways you can mitigate the cost of your teenager’s automobile insurance:

• Shop around for less expensive coverage. You will be amazed at the variety of premiums charged by companies.
• Be sure you are receiving all available adult driver credits.
• Raise the deductibles for collision and comprehensive coverage.
• If your teenager (under age 25) qualifies for a good student discount (B average or better), present that certificate to your agent.
• Enroll your teenager in a qualified driver safety course.
• Consider an electronic monitor that plugs into the car’s onboard diagnostics.
• Is your teenager away at school? It may be less expensive to insure him at that location, especially if he resides more than 100 miles from your home and only occasionally uses your vehicle.

Call the experts in automobile insurance at Gracey-Backer, Inc. for a competitive quote. We are happy to advise you about ways to insure your teenage driver. Because we represent a “stable” of “A” rated insurance companies, we have the flexibility and knowledge to design a custom policy to fit your needs.

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]]> https://www.graceybacker.com/insurance-written-excess-surplus-lines-company/ Tue, 17 Jan 2017 00:00:48 +0000 https://www.graceybacker.com/?p=2009 Generally, a policy is written through the Excess and Surplus Lines company (E&S) because a standard carrier will not write the risk. The reasons for this are many, but usually include: The risk does not meet underwriting guidelines of standard carriers, due to claims history, age of the property, location or the risk, or cancellation […]

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]]> Generally, a policy is written through the Excess and Surplus Lines company (E&S) because a standard carrier will not write the risk. The reasons for this are many, but usually include:
• The risk does not meet underwriting guidelines of standard carriers, due to claims history, age of the property, location or the risk, or cancellation by another company;
• Your risk is not familiar to the standard underwriters, so they are uncomfortable writing it;
• Your risk is larger than the capability of standard carriers to insure it; or
• Your liabiilty requirements are greater than those acceptable to the admitted market.

In Florida, a standard insurance company, also called an admitted carrier, is one licensed by the state of Florida, bound by rate and form regulations, and strictly regulated to prevent abuse and fraud.

Admitted carriers are bound by law to contribute to the Florida State Guaranty Fund, which is used to pay losses if an insurance carrier becomes insolvent or otherwise unable to pay its claims. In contrast, an Excess and Surplus Lines (E&S) insurance company is not required to be licensed by the State of Florida. It can, however, conduct business in the state through a wholesale broker or managing general agent. Surplus lines insurers may be subject to greater capitalization requirements than standard insurance companies.

Excess and Surplus Lines carriers are also referred to as non-admitted or unlicensed carriers. They are usually domiciled in another state, but allowed to operate in different states. While they are not regulated by the Florida Department of Insurance and are given more flexibility within the free market system, they are regulated in other ways. For instance, they must submit financial background statements, articles of incorporation, a list of officers, and other pertinent information. Surplus lines carriers may pay higher taxes to the state.

E&S carriers cannot write business that can be written by standard, admitted carriers. They do not come under the auspices of the Florida State Guaranty Association (FIGA) and may only write a policy if it has been rejected by three admitted carriers. The State keeps a list of registered E&S companies, and policies can only be written by carriers on this list.

Because Excess and Surplus Lines carriers are not regulated in the same way as the standard carriers, they have much more flexibility to tailor coverage, charge the appropriate rate regardless of the State filing, and modify the policy form to make the risk more acceptable. They can add additional exclusions or other conditions that might put restrictions or demands on the insured. This is good for the consumer as well as for the company. It allows the carrier to accept risks that standard insurers refuse.

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]]> https://www.graceybacker.com/understand-coverage-homeowners-insurance-policy/ Tue, 03 Jan 2017 00:00:46 +0000 https://www.graceybacker.com/?p=2003 In a survey conducted by the Trusted Choice and the Independent Insurance Agents and Brokers of America, it was found that many homeowners lack adequate homeowner’s insurance coverage, do not understand their homeowner’s policies, and do not have adequate savings to support them if they are forced to vacate their homes in the event of […]

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]]> In a survey conducted by the Trusted Choice and the Independent Insurance Agents and Brokers of America, it was found that many homeowners lack adequate homeowner’s insurance coverage, do not understand their homeowner’s policies, and do not have adequate savings to support them if they are forced to vacate their homes in the event of a disaster.

According to the survey, at least 73 percent of respondents have not purchased flood insurance, to protect themselves against rising water or flooding, including the common problem of seepage of underground water into their homes. Many think a flood will be covered by their homeowner’s policy. According to FEMA, floods are the leading cause of loss in the United States. Most flood losses occur in areas outside the high-risk flood zones.

More than 40 percent of respondents did not know if they have coverage that will fully replace their furnishings and their home in the event of a covered loss (replacement cost coverage) or if they had actual cash value coverage, which takes depreciation of the building and personal property into consideration. Many agents sell actual cash value policies as a way to save the consumer premium dollars, much to the chagrin of the policyholder at the time of loss.

Most respondents to the survey were not able to fully support themselves for up to three months if they were out of their homes as the result of a covered loss. They didn’t realize that a standard homeowner’s policy provides only limited protection and a flood policy provides no coverage for these expenses, which, especially during the season, can be considerable.

The survey was conducted in August 2016, according to Insurance Journal, September 6, 2016, Vlume 94, no. 17, page 12.

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