National Risk Management and Associates

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Don’t Be Scammed After Disaster

Don’t be a victim of dishonest service providers

Courtesy of iii.org

If your home was destroyed by a hurricane, wildfire or other disaster, be cautious.

Unfortunately, there are dishonest service providers that prey on disaster victims. They know that people who have lost their homes and valuables may not be thinking clearly. If you have suffered this type of loss, don’t make any rash decisions. Talk to your insurance agent, who may recommend service providers in your area.

Here are some basic guidelines for hiring service providers.

Here are some basic guidelines for hiring service providers.

Roofers and builders

  1. Don’t be rushed into signing a contract with any company. Instead, collect business cards and get written estimates for the proposed job.
  2. Beware of building contractors that encourage you to spend a lot of money on temporary repairs. Payments for temporary repairs are covered as part of the total settlement. If you pay a contractor a large sum for a temporary repair job, you may not have enough money for permanent repairs. In most cases, you should be able to make the temporary repairs yourself. Ask your insurance agent. And remember to keep receipts.
  3. Investigate the track record of any roofer, builder or contractor that you consider hiring. Look for professionals that have a solid reputation in your community. You can call your Better Business Bureau for help. Also, get references and never give anyone a deposit until after you have thoroughly researched their background.

A common fraud scheme is for a so-called “contractor” to convince a homeowner that a large deposit must be provided before repair work can begin. Frequently, the job will be started, but not completed. Unfortunately, these con artists are never seen or heard from again.

Public adjusters and attorneys

  1. Don’t make any rash decisions about hiring someone to handle your claim. Be especially wary of individuals who go door-to-door soliciting business in the aftermath of a catastrophe. Most importantly, don’t let anyone scare you into signing a contract. You don’t want to be victimized by someone who comes into town, hoping to make a fast buck. You could end up forfeiting a significant portion of your insurance dollars.
  2. Before hiring a public adjuster or an attorney, try to settle your claim directly with your insurance company. Your insurer provides an adjuster at no charge to you. Ask your insurance agent or company representative to help you with your claim and don’t be afraid to ask questions. If you decide to work directly with your insurer, you still have the right to hire a third-party professional to help you.
  3. If your claim is complicated and you want to hire a public adjuster or attorney, make sure that person is qualified to handle your case. Ask your friends, relatives or business associates for the names of well-regarded professionals in your community. Also, call your state insurance department regarding a public adjuster, and your state or county bar association about a prospective attorney.
  4. Understand that you will have to pay a public adjuster 15 percent and an attorney as much as 30 percent of your total claim settlement.

 

Next steps: Make sure your home is properly insured before disaster strikes.

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Cyperrisks & Your Business

Courtesy of iii.org

A lawyer once warned me during a seminar that I should never, ever send an email – ever. “Get on a phone instead,” he counseled. (I assume he hadn’t watched The Wire.)

Impossible to follow as his advice was, it stuck with me because he was right, in a way. If there’s anything we should’ve learned after all the data breaches these past few years, it’s that nothing about our online lives is safe from prying eyes. Not Social Security numbers. Not medical records. And definitely not our social media activity.

People know the risks. The good news is that many American consumers are aware that their connected lives are incredibly vulnerable. According to a recent Insurance Information Institute and J.D. Power 2018 Consumer Cyber Insurance and Security Spotlight SurveySM, almost seven out of 10 connected technology owners (69 percent) are not comfortable sharing personal information on social media such as Facebook and Instagram.

But behavior is slow to change. The bad news is that only about a third changed the way they used social media or connected technology after learning about recent data abuses and breaches.

And it’s even more alarming that fully 85 percent of surveyed connected technology owners either don’t have cyberrisk insurance or don’t know if they do.

Education and insurance are important. Just like in real life (wear a helmet, everybody!), leading a safe online life starts with education about the risks involved. That education includes learning how insurance can help. Insurers are in a unique position to spearhead these education efforts – people will often turn to their insurance company after they’ve suffered losses from a data breach.

But consumers first need to learn about the cyber insurance options out there that can help immensely after a hack. For that to happen, insurers need to demonstrate to consumers the relatively inexpensive and valuable coverage that is available to protect them.

The alternative is for all of us to go back to sending letters by snail mail – or, if a certain lawyer is to be believed, never writing anything down at all.

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The Low-Down on Renters Insurance

Courtesy of iii.org

Hey guys, I know you’re busy having fun watching football, but it’s time for us to have a talk about renters insurance. Why? Because the I.I.I. found that only 37 percent of renters have renters insurance. Which is bad, because renters insurance is important and good.

One of the most important things renters insurance covers is damage to your personal property. Your landlord’s insurance probably doesn’t cover any of your personal belongings if a covered loss happens to the apartment.

(Covered losses usually include fire, water damage from an overflowing sink, theft, vandalism, and a few other things. But be sure to talk to an agent and read your policy because different companies often vary in their wording.)

It’s important because you own things

The first objection I often hear about renters insurance is “Lucian, I don’t need it because I don’t own a lot of stuff.” Yes, we’re all about minimalist Instagram chic – in theory. But in practice, we own a lot of stuff, because we’re human beings who need clothes and dishes and sometimes we even own a couch.

Think about clothing for a minute. Unless you live by Miami Beach and only need a bathing suit, you own more than one set of clothes. A few pairs of pants. Blouses. Underwear (presumably). Maybe you own a suit or nice dress for work. If you live up north, you probably also have an entire winter wardrobe.

Now imagine you lost all your clothes in a fire. It could cost you hundreds, if not thousands of dollars to replace them. Because you own a lot of clothes.

Nothing is free – especially not replacing all your stuff

Another objection I often hear is “Lucian, won’t I just be giving those big insurance companies free money if nothing bad happens to my stuff?”

First, premiums are often pretty reasonable. The most I’ve ever paid for renters insurance was around $25 a month, and that was in a part of New York City where I was still probably getting a bargain. Some of the new app-based companies charge premiums as low as $5 a month. Your budget won’t hate you for that kind of expense.

Besides, no one ever says “at last, I can finally cash in on those insurance premiums I’ve been paying!” after their apartment building burns down and they lose everything.

Which leads me to my second point: an intangible value of insurance is peace of mind. People like to know that they don’t have to spend all their disposable income replacing everything they own. Odds are, you’re also one of those people.

Like life itself, renters insurance is about more than just the things you own

But let’s pretend for a minute you don’t actually own any stuff. Renters insurance also usually covers:

  • Your liability expenses if someone gets hurt in your apartment. Imagine someone is over at your apartment that has no furniture in it because you don’t own any stuff. Now imagine that someone gets hurt after slipping on your uncarpeted tiled floor because you don’t own carpets and they sue you. Your renters insurance will probably cover some legal costs. And even if they don’t sue you, your insurance can cover certain medical expenses for your injured guest.
  • Increased living expenses. Unfortunately, this doesn’t mean your insurer will cover your rent increase. But it does mean that if a covered loss (think: apartment fire) makes your apartment uninhabitable, your policy could reimburse you for food and temporary housing. You don’t want to be that person without renters insurance standing outside their burning apartment building in 20-degree January weather with no place to go.

It’s really easy to buy

We’re all busy, but applying for renters insurance takes maybe 15 minutes, tops. Many companies let you apply via an app, so while your train is hopelessly delayed you can use that time to protect yourself and your stuff. That way, if your apartment building catches fire while you’re at work, you can rest (relatively) easy knowing that you’ll have help buying replacement stuff and having a place to stay while you find a new apartment – for about the price of a coffee or four a month.

Seriously, get renters insurance.

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Understanding Florida Hurricane Deductables

Courtesy of iii.org

After Hurricane Andrew in 1992, insurers realized that losses from hurricanes could be much higher than they had previously thought. Hurricane Katrina, in 2005, which cost insurers more than $41 billion at the time, confirmed their fears. After these extraordinary losses, reinsurance companies, insurers that share the cost of claims with primary companies, such as homeowners insurers, said that they could not assume so much risk and that primary companies must reduce their potential losses.

During the Atlantic hurricane season, which lasts from June to November, every coastal state from Florida to Maine could potentially be hit by a storm. Increasing development along the coastal areas of these states has put more and more homes at risk of severe windstorm damage. To limit their exposure to catastrophic losses from natural disasters, insurers in these states sell homeowners insurance policies with percentage deductibles for storm damage instead of the traditional dollar deductibles, which are used for other types of losses such as fire damage and theft. With a policy that has a $500 standard deductible, for example, the policyholder must pay the first $500 of the claim out of pocket. But percentage deductibles are based on the home’s insured value. So if a house is insured for $300,000 and has a 5 percent deductible, the first $15,000 of a claim must be paid out of the policyholder’s pocket. The details of hurricane deductibles are spelled out on the declarations page of homeowners policies.

To some degree, depending on the state, insurance companies determine the level of the hurricane or windstorm or wind/hail deductible and where it should apply, except in Florida where state law dictates these variables. Insurers’ hurricane deductible plans must be reviewed by the individual state insurance department where they may be subject to various regulations and laws.

Nineteen states and the District of Columbia have hurricane deductibles: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington DC. Listed below are reports for these states detailing hurricane deductibles.

Explanation of Terms:

  • Beach Plan, FAIR (Fair Access to Insurance Requirements) Plan; and other involuntary or residual markets: insurers of last resort, state-run pools that provide insurance to people who are unable to obtain insurance in the voluntary market. Beach Plans operate in specific coastal territories, defined by zip codes, counties or geography; FAIR Plans are generally statewide.
  • Deductible: amount of loss paid by the policyholder before insurance kicks in.
  • Dollar deductibles: a flat dollar amount.
  • Mandatory deductibles: may be set by insurance rules, regulations or state law, or by an insurer.
  • Market Assistance Plan (MAP): a voluntary clearinghouse and referral system designed to put people looking for insurance in touch with insurance companies that have agreed to take on more business.
  • Optional deductibles: mostly used in less vulnerable areas. Policyholders may opt for these higher deductibles in order to pay a lower premium.
  • Percentage deductibles: calculated as a specified percentage, for example 2 percent, of the insured value of the property.
  • Standard deductibles: an indication of the usual homeowners insurance deductibles in the state or area.
  • Trigger: an event that is needed for a hurricane deductible to be applied. Hurricane deductibles are “triggered” only when there is a hurricane, or a tropical storm. Triggers vary by state and insurer and may apply when the National Weather Service (NWS) “names” a tropical storm, declares a hurricane watch or warning or defines the hurricane’s intensity. Triggers generally include a timing factor, i.e., damage occurring within 24 hours before the storm is named or a hurricane makes landfall up to as long as 72 hours after the hurricane is downgraded to a lesser storm or a hurricane watch cancelled.

How Hurricane Deductibles Work

There are two kinds of wind damage deductibles: hurricane deductibles, which apply to damage solely from hurricanes, and windstorm or wind/hail deductibles, which apply to any kind of wind damage. Percentage deductibles typically vary from 1 percent of a home’s insured value to 5 percent. In some coastal areas with high wind risk, hurricane deductibles may be higher. The amount that the homeowner will pay depends on the home’s insured value and the “trigger” selected by the insurance company, which determines under what circumstances the deductible applies. In some states, policyholders may have the option of paying a higher premium in return for a traditional dollar deductible, depending on how close to the shore they live. In some high-risk coastal areas, insurers may not give policyholders this option, making the percentage deductible mandatory. (See Infographic: Hurricane Deductibles.)

Florida Hurricane Deductibles

By Florida statute, the application of hurricane deductibles is triggered by windstorm losses resulting only from a hurricane declared by National Weather Service. Hurricane deductibles apply for damage that occurs from the time a hurricane watch or warning is issued for any part of Florida, up to 72 hours after such a watch or warning ends and anytime hurricane conditions exist throughout the state.

Hurricane deductibles and their triggers are set by law and are the same for the private, or regular market, as well as Florida’s Citizens Property Insurance Corporation (CPIC), the state-run program which provides property insurance to consumers. The hurricane deductible applies only once during a hurricane season. All insurers must offer a hurricane deductible of $500, 2 percent, 5 percent and 10 percent of the policy dwelling or structure limits. The percentages are based on the total value of the home. By Florida law, property insurance rate filings must include mitigation discounts or credits. These are applied to property insurance premiums. These discounts are available for personal and commercial residential property only. See Florida Office of Insurance Regulation for details.

The CPIC (Citizens), Florida’s state-run insurer of last resort will insure new homeowners in high-risk areas and others who cannot find coverage in the open private market. Under Florida law, Citizens may write a new insurance policy only if no comparable private market coverage is available or comparable private market policy premiums are more than 15 percent higher than a comparable Citizens policy See website for details.

The Florida Market Assistance Program is a free referral service designed to match consumers who cannot find property insurance with Florida-licensed agents and insurers who are writing new business. See website for details.

Information Sources:

 

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Help & Hurricanes

Courtesy of iii.org

Hurricanes are violent and dangerous to your family and your home. When a hurricane threatens to bear down, make sure that you know how to batten down your hatches and protect yourself, your loved ones and your property.

When it’s hurricane season

Hurricane season starts June 1 and runs through November 30. But don’t wait until a warning—take steps to prepare in advance for a potential hurricane—it’s the best way to protect your family, your home and your business.

For more preparedness tips, handy checklists (including ones you can personalize yourself) and evacuation planning advice to cover a variety of disasters, get the I.I.I.’s Know Your Plan app. It’s a great tool to help get you and your family—including pets—organized and ready to act more quickly if a hurricane or other emergency strikes.

When a hurricane watch is issued

A hurricane watch is issued when there is a threat of a hurricane within a 24-36 hour period. At that time, you should:

  • Purchase any emergency supplies that you don’t already have on hand. Hit the stores early, as items such as batteries, candles and flashlights will get snapped up quickly.
  • Prepare your yard by removing all outdoor furniture, lawn items, planters and other materials that could be picked up by high winds. If you haven’t already, remove weak branches on plants and trees. Lower antennas and retractable awnings.
  • Fully charge your cellphone.
  • Fill your car’s gasoline tank.
  • Jot down the name and phone number of your insurer and insurance professional and keep this information handy in your wallet or purse.

When a warning is issued

A hurricane warning is issued when hurricane conditions are expected in 24 hours or less, which means a storm is imminent.

  • Stay informed of the storm’s progress by listening to the radio or TV. Even better, listen to a NOAA Weather Radio for critical information from the National Weather Service (NWS).
  • Install hurricane shutters, board up or otherwise securely shutter large windows and draw drapes across windows and doors.
  • Get off the boat—never remain on a boat during a hurricane! Check mooring lines of boats in water.

If evacuation becomes necessary

Hopefully, you’re fully prepared with an evacuation plan. Also remember:

  • Don’t wait until the last minute—shelters might be full or the roads might be jammed. If you have pets, consider traveling before an evacuation is ordered—otherwise, you might be ordered by officials to leave your pet home.
  • Take along survival supplies from your list.
  • Keep important papers with you at all times, including your home inventory and make sure you have the name and phone number of your insurance professional.
  • Take warm, protective clothing for the whole family in case you get stuck.
  • Lock all windows and doors on your home. Don’t compound hurricane damage with the threat of possible looters.
  • Keep all receipts for anything that might be considered to be an additional living expense (ALE) in the event your home is destroyed or damaged and rendered uninhabitable.

If you remain at home during a hurricane

Stay indoors. Don’t go out even during the brief calm when the eye of the storm passes over as wind speeds can increase dramatically in seconds.

  • Stay away from windows and glass doors and move furniture away from exposed doors and windows.
  • Stay on the downwind side of house. If your home has an “inside” room, stay there during the height of the hurricane.
  • Keep the television or radio tuned into information from official sources.

After the hurricane, beware of the dangers that remain

The storm may have passed, but it likely has created new dangers.

  • Beware of outdoor hazards like loose or fallen tree limbs, loose signage or awnings that are in danger of breaking off and falling.
  • Keep away from loose or dangling power lines, and report them immediately to the proper authority.
  • Walk or drive extra cautiously as washouts may weaken road and bridge structures.
  • In the event of a power outage, throw out food that may be spoiled.
  • Boil municipal water before drinking until you have been told it is safe.

If your home is damaged

Notify your insurance professional as soon as possible of any losses. If you had to relocate, let your representative know where you can be contacted. In addition:

  • Make temporary repairs—if they can be made safely—to protect property from further damage or looting; for insurance purposes, keep all receipts for materials used.
  • Get written estimates for any proposed repair jobs and use only reputable contractors. Be especially careful of building contractors who want huge deposits up front or encourage you to spend a lot of money on temporary repairs. Ask for their references and check with the Better Business Bureau on complaints.
  • Gather any other receipts for expenses that will be covered by insurance or will be tax deductible.

Additional resources

Red Cross Hurricane Safety Checklist

Next steps: If you’ve been hit by hurricane that’s a declared national disaster, learn about FEMA assistance.

Business Hours

Monday – Friday: 9 AM- 5 PM

 

24 Hour Hotline: (407) 415-8528

National Risk Management & Associates
220 Magnolia Avenue
Sanford, FL 32771
Phone: (407) 767-2950