Posts Tagged ‘catastrophe’

Catastrophe Insurance

Catastrophe Insurance
Is the property insurance market ready for the big one?
Florida’s property insurance market appears to be better prepared for hurricane season in some ways this year than it has been the past few years.
New Farmers Insurance Commercial: Catastrophe Response

Insurance sells question?

How are any and all insurance agents making out in business considering groceries over catastrophe is most important in this time of need?

If there is a 5.5% unemployment rate, it means that there is a 94.5% EMPLOYMENT rate, which means that 94.5% of the employable population is WORKING.

People need insurance, especially when the economy is not as good as it should be. Your sales should INCREASE, if you explain to your prospects that it might be harder to come up with the needed funds, should the unthinkable happen. How would a familiy’s economy be if the breadwinner was taken out of the picture? That family would be a whole lot worse off without adequate life insurance on each family member’s life.

Another thing to think about is your client’s possiblity of being disabled. If this should happen, that family’s economy will be the pits.

If you do a Financial Need Analysis (FNA) or other Total Needs Selling presentation, your sales will be easier to close, even in economically hard times.

In the Property/Casualty market, licensed vehicles and financed houses are required to be insured, regardless of the economy.

Catastrophe Insurance Claims

Catastrophe Insurance Claims
Fitch Upgrades Florida Hurricane Catastrophe Fund Finance Corp. to ‘AA’
NEW YORK—-Fitch Ratings assigns an ‘AA’ rating to the following Florida Hurricane Catastrophe Fund Finance Corp bonds:
Farmers Insurance’s Fleet of Catastrophe Claims Vehicles

Why would insurance companies include “acts of God” in their policies if there wasn’t a God?

Aren’t they themselves acknowledging the existance of God when they pay or not pay for damages caused by catastrophic events?

Maybe they put it there in case there is a god? Why does this matter, really?

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Catastrophe Claims

Catastrophe Claims

Disasters and Catastrophes – Prevent, Protect and Recover

Catastrophes are any misfortune, mishap, or failure and disasters are calamitous events, occurring suddenly and causing great loss of life, damage, or hardship (Dictionary.com). Whatever we call them, when a flood, fire, tornado, hurricane or theft occurs, it can cause major financial loss.

You never know when something is going to happen, and rarely is anyone completely prepared. There are three ways, however, to help minimize the loss.

PREVENT

Though no one can completely prevent anything from ever happening, there are levels of prevention that will make your life more secure. An alarm system quickly detects fire and smoke. This will not prevent the fire, but it will minimize the loss by notifying the fire department as quickly as possible. This is especially true if the fire breaks out when no one is home!

An alarm system will also provide a level of prevention against theft. Professional burglars know how much time they have to get in and out of a building before law enforcement arrives. They know their time is limited, so it will reduce the number of items they’ll be able to remove from your home or business. The less professional burglars might pass by your property as they seek an easier target (one with no alarm).

PROTECT

Purchasing the proper insurance policy will help protect you against financial loss. Make sure you have an annual review with your insurance agent and discuss anything new that has happened over the previous 12 months. If you have added on a room, made major upgrades, purchased high end items (collectables, fine art, etc.), you will most likely need to increase your insurance coverage. The intent of insurance is to get you back where you were before your disaster. The proper insurance policies will give you that vehicle. But just having insurance isn’t enough.

RECOVER

One of our customers stated that without an inventory of his personal property, an insurance premium is just another bill. This is because without a listing and photographs of your belongings, it will be extremely difficult to remember and list everything that has been stolen or destroyed. A thorough inventory will give you that information so you can file your claim quickly and maximize your claim settlement.

An alarm to lessen the loss, an insurance policy to protect your financials, and the inventory to allow you to file a thorough claim are the full package required to prevent, protect and recover.

Make BP pay its fair share
It took the 1989 massive Exxon Valdez oil spill in Alaska to nudge Congress into passing the Oil Pollution Act in 1990, which made oil companies responsible for paying all spill cleanup costs. The law set a liability cap for oil companies at $75 million for economic damage claims caused by a spill.

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Catastrophe Insurance Adjuster

Catastrophe Insurance Adjuster

What Do You Need To Know About Earthquake Insurance

What do San Diego County residents have to know about Earthquake Insurance Policies, Risks and Costs?

Quality Claims Management views Earthquake coverage as catastrophic insurance. You will only need it if we have a really big earthquake. However, depending on where you live in San Diego and how much you have invested in your home, you may opt to get coverage. Here is what you need to know.

First, most standard homeowners, mobile home owners, condominium, and renter’s insurance policies DO NOT cover earthquake damage.  Similar to flood insurance, earthquake insurance usually must be purchased separately.

However, fire insurance is part of most typical homeowners insurance policies. This means your home insurance policy may cover a significant part of the damage if your home burns down or is damaged in a fire that is caused by an earthquake.

Much of the damage that often arises from an earthquake happens after the ground stops shaking. Gas lines that may have ruptured and start leaking can catch on fire and burn your home to the ground.  In San Diego County, it is also very possible that your home may be consumed in a wildfire sparked caused by earthquake motion many miles away.  A power line may have collapsed. A home may have caught fire because of the quake and flames traveled many miles through brush to your home.

Another major factor is water damage. Quakes often break pipes. Even small quakes can crack a water or sewer pipe that floods your home and can cause extensive damage to your floors, rugs, furniture – even to the structure of your home.

If your homeowner’s insurance includes fire and flood damage, you should be covered for this “earthquake” damage – even if you don’t have earthquake insurance. 

Another danger from earthquakes is landslides. You may or may not be covered for this. You need to check your homeowner insurance policy to make sure of your coverage for both landslide and fires. If your home does burn down, are you fully covered? Will you be able to replace your home and all of your belongings.

Check our other articles about homeowners insurance for details about coverages and what you need to know.

Where do you get Earthquake Insurance?

The law requires insurers that sell residential property insurance within the state of California to offer earthquake coverage to their policyholders.  Most of these California earthquake insurance policies are backed and administered by a government organization known as CEA – the California Earthquake Authority

Even though most earthquake insurance policies are sold by the state-run insurance pool, a few private companies also sell earthquake coverage. In order to provide earthquake coverage, insurance companies can become a CEA participating insurance company and offer the CEA’s residential earthquake policies or they can manage the risk themselves.  To date, companies that sell over two-thirds of the residential property insurance in the state have opted to become CEA participating companies.

According to the CEA website, the CEA homeowners policy is designed to help get you back into your home after an earthquake.  The CEA base-limits policy for homeowners includes:

Dwelling coverage - The coverage limit is the insured value of your home stated on your companion homeowner policy.

* Personal Property coverage - $5,000

* Additional Living Expense/Loss of Use coverage - $1,500

* You may select either a 10% or 15% deductible on your Dwelling coverage, and CEA’s increased-limit options allow you to increase Personal Property coverage to as much as $100,000 and Additional Living Expense/Loss of Use coverage to as much as $15,000.

Residential property insurance includes coverage for homeowners, condominium owners, mobile home owners, and renters.

Earthquake insurance is not intended for smaller losses as you must have enough damage to surpass your deductible.  Even though deductibles are generally 10-15% of the amount of the Coverage A limits, it can be a little confusing to calculate the actual deductible amount since there are several factors that go into the formula.

How will your home handle an earthquake – Do you need Earthquake Insurance

- where in San Diego County do you live (see part 1)

- what is under your house (rock, sand, fill, etc?)

- how is your home constructed – is it up to code and why that matters for your coverage

Age and type of construction contribute to how a residential structure reacts during an earthquake.  Based on the scientific and engineering research, the CEA premiums reflect the following rating factors:

- In general, houses built on a slab perform better than those built on a raised foundation.

- One-story houses are less vulnerable to earthquake shaking than multi-story houses.

- Unreinforced masonry structures are more susceptible to damage than those of wood-frame construction.

- Houses of a certain age are not as strongly constructed as others.

The type of home you have affects your risk. One-story homes that are “tied together” — with the roof bolted to the walls, and the walls to the foundation — tend to survive earthquakes and windstorms better than multistory homes that aren’t. As you would expect, houses with big openings, such as plate-glass windows or large garage doors, fare worse than ones without those features.

In addition, your home can be substantially fortified with some special construction measures.  For many, this can be a better investment than buying earthquake insurance.
The Institute for Business and Home Safety has a “Fortified For Safer Living”  program that specifies building techniques that can help homes better withstand disaster.

Other California Earthquake Insurance Factors

No Known Loss Letter Requirement

In areas that have been previously affected by an earthquake or other catastrophic event, an insurer may require a “No Known Loss Letter” with all requests for earthquake insurance or to add earthquake coverage to an existing policy. These kind of letters letter confirms that no known losses or damages have already occurred to the requested coverage location(s).

DIC Policy

DIC (Difference in Conditions) insurance provides coverage designed to close specific gaps in standard insurance policies. It allows coverage to be customized to extend to such exposures as water damage, flood, collapse, earthquake, landslide, etc., according to the insured’s needs. DIC coverage may be provided by means of a separate insurance policy or it may be added by endorsement to the basic policy.

Is Earthquake Insurance Right For You? How Much Equity Do You Have In Your Home?

As mentioned earlier, we view Earthquake coverage as catastrophic insurance. You will only need it if we have a really big earthquake. The more equity you have in your home, the more you need insurance.

According to UnitedPolicyHolders,  a non-profit organization that fights for the rights of insurance consumers and educates individuals and businesses on how to get fair treatment,   “a generally accepted rule of thumb is that you should not risk more than 10 percent of your liquid assets. A large earthquake could mean 10 to 100 percent of your home’s structure could be damaged or destroyed, up to 20 percent of your belongings could be damaged, and/or you may need to come up with $3,000 a month for temporary rent and relocation costs.”

In San Diego, we get lots of smaller quakes on a regular basis.  These are reminders to YOU to review your current coverages to be sure that you are adequately insured. Is your current homeowner’s insurance up to date? Will it pay to rebuild your home to current building codes? Do you have additional coverage and riders for all the new stuff yiou may have acquired since you first bought your insurance policy?

Remember, it is far more likely you will have pipes break or fires start from the smaller earthquakes. If either of these happen, you should have coverage under your regular homeowners policy. Check to make sure it is up to date and that you have enough coverage. As a result of the 2003 and 2007 wildfires, we have found that most homeowners in San Diego are underinsured.

By the way, businesses should review their policies to be sure they have EQSL – or Sprinkler Loss coverage. There is a greater chance you will suffer damage from sprinklers leaking than from a building falling down.

RESOURCES

The California Earthquake Authority is a publicly managed, largely privately funded organization that provides catastrophic residential earthquake insurance and encourages Californians to reduce their risk of earthquake loss.  http://www.earthquakeauthority.com

UnitedPolicyHolders.org – United Policyholders is a non-profit that fights for the rights of insurance consumers and educates individuals and businesses on how to get fair treatment.

Quality Claims Management online article with maps to find out if your home is in a danger zone – check for landslide, liquefaction and earthquake fault zones. http://www.qualityclaims.com/homeowner.aspx?sect=_quakeinsurance

How much could a first year independent Catastrophic insurance adjuster expect to earn?

This is a very tough question to answer as the answer depends on a ton of different factors. I have two former catastrophic insurance adjuster that work for our MN independent adjusting company. They got tired of chasing storms or waiting for one to hit so they could work.

I have no way of verifying it but they both claim to have had gross incomes of 150K + in years where big hurricanes hit the south. They worked from sun up to sun down 7 days a week. They both had 15+ yrs of CAT experience so I would think a first yr adjuster wouldn’t get as many assignments and would earn quite a bit less.

I would suggest this website for a better place to get insight from an actual catastrophic insurance adjuster

Good Luck

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