Identity Theft, Flood Insurance, and antique coverage – Part Three

In this final installment of our 3 part mini-series, we are going to review a little bit of information about coverage for antiques and high-value items you may have in your home.

This is a topic that I covered briefly in my post reviewing homeowner’s insurance (HOI) in general.  As discussed there, while most HOI policies provide replacement level coverage for dwelling and contents, there are very specific limitations in place regarding antique, unique, and high value items.  Replacement coverage is defined as “like kind and quality” but does not specify replacing unique items with exact or proximate matches – for example, an antique grandfather clock will typically be replaced with a newer version of the same unless specifically scheduled.

Policies and guidelines will differ from company to company, but in general, HOI policies do not provide adequate coverage for your specialty items:

Antiques:  Typically this is an item that is at least 50 years old, is out of production, and generally can be considered challenging to replace.  It can be just about anything – Griswold Cast Iron Skillets , Seth Thomas Mantel Clocks, or antique jewelry are just a few examples – and will need to be specifically scheduled on the policy to receive the appropriate level of coverage.  An appraisal will almost always be required.

Unique Items & Artwork:   Another broad category of items, this would include collectibles (like Hummel figurines), collections (like baseball cards), and a vast array of artwork – paintings, pottery, statuaries & sculptures, and more.  This coverage typically applies to higher value or difficult to replace items, will need to be specifically schedule, and will require an appraisal.

High Value Items:  This is basically a catch-all for items that don’t fall into one of the first two categories, and most commonly is non-antique jewelry.  Coverage can be placed in two ways: in a blanket format (one total limit for all pieces) for mid-level values (individual pieces typically less than $2500-$3000), or on a scheduled basis (each piece individually listed) for high value items (greater than $3000 each).  For high value scheduled items, an appraisal will be required.

These scheduled items will be covered on a policy form called “Inland Marine.”  I won’t bore you with the history of why it’s called that, but it will provide you with the more detailed and specific coverage you are seeking for your high value and unique/irreplaceable items.  For the amount of coverage purchased, especially since most Inland Marine policies or endorsements carry $0 deductibles, you will pay a relatively minor amount of premium.  I hope that you found this series to be enlightening and informative, and if you have questions, you can always feel free to email me at scott@poleskyagency.com or find me on Facebook!

The Insurance Dogger does not have a great deal of respect for delicate items!!
The Insurance Dogger does not have a great deal of respect for delicate items!!
Not funny, Insurance Dogger!  Not funny!
Not funny, Insurance Dogger! Not funny!

 

Identity Theft, Flood Insurance, and antique coverage – Part Two

Hello everyone, we’re back again! This time we are going to briefly review the debacle that is flood insurance.  Operated by the National Flood Insurance Program (under the auspices of FEMA) or NFIP for short, flood insurance has gone through quite the upheaval lately.  This is due, in large part, to the fact that the program is about $20 BILLION in debt.

As a result, Congress passed the Biggert-Waters Act in 2012 in an attempt to bring the NFIP’s budget deficit back in line.  This was to be accomplished primarily by removing subsidies from policies in heavily flood-prone areas so the premium reflected the real risk of insuring a homeowner in such an area.  As you can imagine, this created quite a bit of backlash from property owners along the coast, particularly those in Louisiana.

The resultant premium increases imposed by Biggert-Waters were shocking and dramatic, far higher than what was originally predicted.  Instead of removing subsidies over time, as was initially proposed, they were yanked all at once for thousands of property owners nationwide.  For example, one of our clients saw her premium jump from a little less than $500 to nearly $3,000 in one year.

Thus Congress & the Senate recently passed the Homeowners Flood Insurance Affordability Act.  Boiled down, the HFIAA basically sets annual limitations on premium increases to attempt to raise rates in (very small) steps.  However, even a glance at FEMA’s overview page outlining the changes reveals confusing and challenging definitions and procedures.  When I called the company about getting our client’s premium scaled back due to the change, I was told, almost word for word, “We don’t know whether the new act is going to affect her premium, so we are going to wait until FEMA tells us to do something.”

Very simply, I would summarize all the changes to flood insurance this way:  Our government took a program that was quite literally drowning in debt, put together a knee-jerk and poorly executed solution, and reversed it in a similarly ineffective fashion in response to public outrage.  This article puts it all together perfectly.

The government had a chance to fix a broken program that had previously served constituents relatively well.  It had its problems, as most government programs do, but it was completely blindsided by the severity of storms like Katrina and Sandy.  Instead of scaling up property owner premiums over 5 or 10 years to more accurately reflect the risk that they carry, a “NOW NOW NOW” followed by a “LATER LATER LATER” mentality prevailed.  As usual, it will ultimately be the property owners and tax payers who foot the bill.

Sammy is this covered
Sammy thinks these flood changes are all wet….

Identity Theft, Flood Insurance, and antique coverage – Part One

It’s hard to believe how quickly time is going by!  It seems like just yesterday that it was -30*F and now we’re nearly halfway through May already!  In  other words, I really hope you’ll forgive my lengthy absence from blogging.

Today I’m going to start a series addressing a couple different things to consider when insuring your home.  As you are certainly aware, things are moving at a pretty rapid pace these days – even for our government!  So that means there are a lot of things for you to keep up with as a home owner or renter, not the least of which are threats to the fidelity of your personal & financial identity and protecting your home against flood waters.

We’ll start with the one that affects virtually everyone – data breach and identity theft.  It’s hard to imagine that anyone hasn’t yet heard about the thieves that struck Target right before Christmas, accessing the credit information of millions of customers and having a major & long-term impact on Target, both financially and from a human resources perspective.  And, of course, there has also been the recent Heartbleed attack and the vulnerabilities of Internet Explorer.

Coupled with the dramatic increase in usage of social media , especially on smart phones, and the amount of business being done online means the chance of having your identity stolen has become dangerously high.  All you need to do is take a look at a couple statistics – here or here or here – to know that the risk now is greater than ever before.  Yet many customers do not have any form of identity theft coverage on their homeowner’s or renter’s insurance policy.  For a relatively minimal amount of premium – $25-50 a year on average – you can add typically $25,000 of identity recovery insurance.

Bear in mind, Identity Theft insurance is intended to assist you in restoring your good name by assigning you a coach or assistant to work you through the process, as well as paying for credit reports and monitoring, but not to restore what’s been stolen.  Your insurance company will, via your coach, work with the credit card companies to remove fraudulent charges and with your bank to restore what was stolen.  The final decision, though, rests with each of your financial institutions, not with your insurance company.

To summarize, for a minimal amount of premium each year, you can gain a lot of assistance in protecting your identity!  (PS – if you’re renting, and you don’t have a renter’s policy – that’s a cheap and easy problem to solve – much cheaper than you think!)

The Dog Blog
Will the real Slim Sammy please stand up?

Christmas Outtakes

As promised last weeks, here are some of the more amusing outtakes from last week’s photoshoot for our Christmas “card”:

Sammy
She just couldn’t stay awake!

These next three would’ve made an amusing gif.  It appears almost as though she’s singing “Joy to the World!” like Clark Griswold.

Sammy
JOY
Sammy
TO
Sammy
THE WORLD!

This is one of my favorites of all of them:

Sammy / Mork
Nanoo Nanoo
Oh, wait – too young for that joke?

These last pictures show just how hard it is to keep Sammy’s attention, even with treats!

Sammy steps
Who’s upstairs?
Cute bored dog
Are we done yet? Pretty bored over here…
Sammy looking down
What’s that?
Sammy treats
I’m coming to get my treat now!
Sammy housetop
Up on the housetop, click click click….

(for reference on that last one)

Merry Christmas from the Dog Blog!

Good afternoon and a Merry Christmas from the Insurance Dogger!

We hosted a mini-photo shoot with Sammy last night in preparation for putting together Social Media Christmas greetings, and some of the results are below.  We narrowed and narrowed, and the picture on top was the final winner!  (Outtakes to follow some time later this week or next!)

We hope that all of you have a wonderful Christmas Holiday, and that you have a healthy and prosperous New Year!  We hope that if you are traveling, that you have a safe journey and enjoy your time with your family and friends.

Merry Christmas and Happy New Years!

Sammy Bo Journey, Scott Berney, and the Polesky Agency.

Dog Blog
We wish you a Merry Christmas!
Christmas Tree
Cute, but too busy!
Sammy adorable
Very hard not to pick this one, but no place to put the Christmas Message!
How cute is she anyway?
How cute is she anyway?
This one would've been great, but it was too dark.  Unfortunately, it wasn't possible to lighten it up without affecting quality
This one would’ve been great, but it was too dark. Unfortunately, it wasn’t possible to lighten it up without affecting quality

Before you have work done on your home….

Might be time to call in a repair man!
Might be time to call in a repair man!

Good morning!  Today we have a very simple recommendation for you to consider before having a contractor come to do work on your home.

Before you have a contractor (any type of contractor) come in to your home to work, you should have them provide you with a current certificate of insurance.  A certificate (example below) will reflect the liability coverages that the contractor is carrying.  Liability coverages pay for injury or damages suffered by another – like yourself – for which the contractor is responsible (liable).  Thus, you will want confirmation that your contractor has the appropriate coverage in place!

What is the appropriate coverage, you ask?  Well, there are a few things to look for on the certificate:

  • General Liabilitythis is a catch-all for many types of injuries and damages.  It covers a broad range of incidents, such as someone (including you!) being injured at your home as a result of the contractor’s work, or the damage that’s done to your home if the contractor does the repairs improperly (important note – it does not cover the correction of the original mistake, but it DOES cover the damage that’s done as a result of the mistake.  The contractor is on the hook to pay for the correction).  Pennsylvania law only requires a contractor to carry $50,000 in coverage, but most good agents will not write a GL policy for less than $300,000 in coverage.
  • Voluntary Property Damagethis is a critical coverage for ALL contractors to carry, and it is OFTEN MISSED by both agents and contractors.  Basically, VPD will pay for damage that results from the contractor taking any of your household items into their “possession” – for example, carrying your TV across the room to do work behind it, and the TV is dropped.  This type of incident is NOT covered under general liability; thus the contractor without it would have to pay this claim out of his own pocket!
  • Workers Compensation – this provides protection for the employees of the contractor if they are injured while working.  Why is this coverage important to you?  If an employee is injured while working at your home, and the contractor doesn’t carry WC coverage, YOU could be on the hook to pay for the employee’s lost wages and medical expenses!  The most common scenario is that the contractor would be required to pay these expenses, but if he does not have the means to do so, they will most likely pursue you next.  Even if you aren’t found to be liable, you will have a claim against your homeowners policy to pay your defense expenses.
  • Generation and policy effective datesWhile reviewing the certificate, be certain to review two items of particular importance – the date the certificate was generated, and the policy effective dates!  Make sure, of course, that the policy is within its effective dates and is not expired.  And make sure the date that the certificate was generated (at the top right hand corner of the certificate) is relatively recent (within the past week or two).  Less scrupulous contractors have been known to pass off older certificates, being fully aware that their coverage has cancelled (due to non-payment, for example).

I hope that this information is helpful to you in protecting your home and your claims record!  Be cautious, and if you have questions after receiving a contractor’s certificate – ask your agent to review it with you!  Until next time, I bid you a fond adieu!

ACORD certificate
Example copy of the most common form of a certificate of insurance

 

 

 

 

The Dog Blog gets patriotic

Today our country stands on the edge of a precipice of our own making.  The actions of the few, those who we elected as our political representatives, have had (and could continue to have) serious negative repercussions on the many.  As we watch, waiting anxiously for word that our chosen government will continue to honor its financial obligations, we debate amongst one another about the proper way that we should move forward – sometimes cordially, sometimes not.  But I am reminded over and over throughout this process of how much these types of situations represent some of the best characteristics of our great nation.

I had a brief conversation with my brother recently about whether or not we could still be considered the greatest nation on Earth.  He brought forth a large amount of hard analytical data that would seem to indicate that we are not.  While I do feel that these figures demonstrate how our country has slipped, I don’t feel that they represent the full picture of what makes us great.  Part of that greatness cannot be easily quantifiable.

While the political process is considered by many to be corrupt and reprehensible, it is part of what I feel makes this country so great.  Even the small minorities of opinions can be represented if they are able to collaborate and get a candidate who represents their opinions elected.  We want to pour fire and frustration into the laps of our politicians, but we conveniently forget that we are all responsible for having sent them there to represent us – and in that, we find one of the greatest things about our country.

The opinions, tactics, and processes that occur in our government accurately represent the divergent opinions, tactics, and processes that make up our wildly dynamic country.  There is nothing remotely uniform about our ideas and beliefs, and as such neither should our government be uniform in its ideas, beliefs, and actions.

This will create difficulties and dissention, and sometimes results in very challenging situations like the one we currently face.  But I hope that we do not lose sight of the fact that these difficulties and challenges are created by one of the things that makes us such a great nation – the ability to have a fully representative government.  If we don’t like where our nation is headed, we have the ability through voting and elections to change that direction.

In addition, the sometimes heated debates that we have in various forums – in person, via social media, e-mails, etc – is another character of our country that makes it an incredible place to be while also being not easily quantifiable.  There are plenty of places in this world that has either limited or no ability to speak their mind freely and discuss the actions of their government openly.  I think sometimes we take this freedom for granted as we express our frustrations in the state of our nation.  Such freedom of speech is unheard of in places like China and North Korea, and severely limited in many other places.

Ultimately, I hope that reading this reminds all of us that we are not merely Democrat or Republican, conservative or liberal, but instead that we are all Americans.  While we may disagree on the questions of who, what, why, or how, we all share a common bond in our freedom of expression and our ability to alter the course of our great nation.

american-flag-2a

A review of Personal Insurance – Home Owners (Part 1)

dog blog
Sitting at home, blogging away!

Homeowners coverage.  Where to begin?  With your home, of course!  In this “installment,”  I’m going to review a couple things to keep in mind while reviewing or considering insuring your home – based on the assumption that you own, not rent.

The primary “concern” of homeowners is protecting the actual dwelling itself.  As there are quite a few formats to do this, I’m only going to cover the most common form, called an HO5 policy

Under an HO5 homeowners policy, the dwelling is covered for comprehensive perils at replacement cost valuation.

  • Comprehensive Perils – CP is actually easier to explain by starting with its counter-part, named perils.  A named perils policy means that only claims (causes of loss or perils) specifically named on the policy are covered – if it’s not listed, it’s not covered.  Comprehensive perils is the opposite – if a cause of loss is not specifically excluded, it’s covered.  Every company has its own list of excluded losses, but some common ones are flood, acts of war, intentional acts of the homeowner (arson, for example), and wear and tear (in other words, maintenance is typically NOT covered!).
  • Replacement Cost Valuation – RCV describes how payment for a loss will be made.  When you carry RCV coverage, a loss will be paid out based on the true cost to repair or replace damaged goods (less your deductible).  Actual Cash Value, by contrast, pays based on the cost to repair or replace MINUS depreciation (typically based on age and condition). 

Understanding RCV is what typically causes frustration.  The easiest way to understand how this works is by using an example.  If you have a fire in your home, and the kitchen is destroyed, RCV dictates that the insurance company pay the cost of restoring your kitchen (as closely as possible) to its original condition, REGARDLESS of the age of materials there.  In other words, your cabinets may be 15 years old, but an RCV policy pays for the cost of brand new cabinets (comparable – “like kind and quality”).

The replacement cost valuation of your home is commonly found by entering in the characteristics of your home into software designed for this purpose – how many square feet, how many stories, year built, updates, style, construction, etc etc.  A common source of confusion is that the RCV of your home is often greater than the market value of the house – this occurs because the cost to rebuild per square foot is almost always higher than the actual market value per square foot – but this works in your favor!  If a home policy were written based on market value, and you had the kitchen fire described above – guess what!  The cost to repair would not be paid in full: unless your kitchen were brand new, it’s virtually impossible that it’s market value would be anywhere close to what the replacement value is!

Contents Coverage – Another important component of your homeowners policy is contents, or personal property, coverage.  This is for the actual contents of your home – simply put, anything that’s not permanently attached.  So all of your clothing, furnishings, appliances/electronics, decorations, etc etc.  This is almost always calculated as a percentage of your building limit – 60, 70, and 80% are the most common levels. 

Something important to remember – if you have high-value, unique, antique, or difficult to replace items, it’s generally a good idea to schedule them on the policy.  Most policies have limitations or exclusions for these items that generally mean that you are only going to get a fraction of what they are actually worth.  In addition, by scheduling items, you can typically get minimal or zero dollar deductibles, which drastically reduces your out of pocket expense in the event of the loss.  The coverage tends to be more expensive than general contents (PP) coverage, but in the long run is far more beneficial!

Liability Coverage – The last of the major coverages I will review today is liability coverage, which covers damage or “injury” for others.  The most common example of a liability situation would be if a person (NOT a guest of yours, who are covered by “Medical Payments” coverage) were on your property, slipped and fell, and required you to pay for their injury and rehab costs.  This would be covered by the liability coverage on your policy.   Other examples of common liability claims would be if you happened to accidentally damaged someone else’s goods – knocking over the TV in their house, hitting a baseball through their picture window, etc.  It would also cover injuries caused if your dog bites someone.  Contact your agent if you have questions about what would and wouldn’t be covered by your liability coverage. 

A common situation that often causes consternation – what if your neighbor’s tree fell over onto your property and damaged your home?  Would that be covered by your neighbor’s liability coverage, or your dwelling coverage?  Everyone’s favorite answer:  That depends.  If the tree is long since dead and your neighbor has been negligent in removing it, then his liability policy would cover your damages.  HOWEVER, if the tree is still alive, and was simply blown over by the wind, or some other similar “unforeseeable” incident, then the damages would be paid out of your dwelling coverage (and subject to your deductible). 

Some other coverages to consider:  Loss of Use, Other Structures, Medical Payments, Inland Marine Floater (see Scheduled goods)

Blog
Tuckered out after a long day of writing!

Concerns about the Affordable Care Act

Some of the reasons why the Affordable Care Act (ACA) gives me a great deal of concern about it’s potential economic impact:

  • Employers are required to provide coverage if they have 50 or more full-time employees, or face paying taxes and fines
  • Individuals are required to carry coverage, or face paying taxes and fines
  • A 5% Affordable Care Act tax to subsidize uninsured individuals
  • Limits employer contribution to flexible spending account to $2500
  • Confusing definitions on who is an employee vs sub-contractor
  • An excise (read: sales) tax will be charged on “Cadillac” health plans starting in 2018

The two really serious kickers to the whole program:

  •  Health insurance companies will be required to spend at least 80% of premiums collected on the provision of care, drastically limiting how much revenue can be used for administrative costs and profit.  This will likely create incentive for companies to reduce overhead expenses, such as customer service and claims-processing employees.

AND THE MOST CONTROVERSIAL POINT OF ALL:  

  • Starting in 2014, health insurers cannot charge higher rates to those who will use more medical services (and thus costing insurers more money)!!  This creates a subsidy situation where customers who don’t use medical services very often will still pay increased premiums to pay for the medical services of those who use them more often.

In other words, forget underwriting, forget being able to charge more for the customers who will cost more.  EVERYONE is going to have to pay more in order to subsidize those who are more expensive to the insurance companies – for example, people who have pre-existing conditions and, usually, women.  I certainly have nothing against women.  But if the reality is that insuring a woman is more expensive that insuring a man, then a comparable plan for a woman should cost more than a man’s.  That, unfortunate though it may be, is how insurance works – if you cost more, you pay more.  This will no longer be the case under the Affordable Care Act.

Not charging more for those with pre-existing conditions would be comparable to an auto insurance company not being allowed to charge more for drivers who have prior claims.  So even though people with pre-existing conditions will cost carriers more money than those without pre-existing conditions, they cannot be charged more.  Top that off with the 80% premiums-for-care requirement, and we are facing a situation where a health insurer cannot hire the most qualified individuals (because they are not allowed to divert the money from revenue for care), cannot provide the best services (by hiring more customer service representatives, adjusters, billing employees, etc), and cannot charge people based on their potential cost to the company.

Dog Blog ACA
The Insurance Dogger is not looking forward to 2014 or the implementation of the ACA….
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