P&C - Home & Auto Insurance

Property & Casualty

Property and casualty insurance is a type of insurance that covers losses related to property and liabilities for accidents or injuries that occur on the property or as a result of the property owner's actions. It is a broad category that includes several types of insurance policies, such as:

Property Insurance: This covers damage to or loss of the policyholder's property due to events like fire, theft, vandalism, or natural disasters. It can include homeowners insurance, renters insurance, and commercial property insurance.

Casualty Insurance: This covers the policyholder's legal liability for injuries to other people or damage to their property. It includes liability coverage in homeowners, auto, and commercial policies.

Auto Insurance: This covers damage to vehicles and liability for injuries and property damage caused by auto accidents.

Liability Insurance: This provides protection against legal liability for bodily injury, property damage, or other harm caused to others. It can be part of various policies, including homeowners, auto, and business insurance.

Three basic types of Property Loss

Loss or damage to an item/asset itself
Loss of income or benefit from the use of an item/asset
The additional expenses created from the loss of an item/asset

Casualty Losses: Financial loss liability protection - “Third-party losses”

Insured is first party
Insurance company is the second party
Whoever is holding the insured liable for damages is the third party

Reading a Home Insurance Policy:

Useful Terminology:

Insured: The applicant/purchaser of the insurance policy, the one who is being insured
Insurer: The insuring entity providing the insurance coverage and payout in the case of a loss
Deductible: The amount the insured has to pay out of pocket before the insurance covers the damages
Dwelling: Refers to the main structure of a property (typically in reference to its coverage A replacement amount)
Perils: The source of damages or a loss in regards to a claim (ie: fire, water, etc.)
Named Perils Policy: A policy that only covers the LISTED or NAMED perils on the policy
Open Perils Policy: A policy that covers for all-perils EXCEPT those which are specifically EXCLUDED

The Six Core Coverages of Homeowners Insurance

Dwelling
Other Structures
Personal Property
Loss of Use
Personal Liability
Medical Payments

Your typical home insurance policy consists of six main coverage parts.

The first four of these coverages deal with the property and damages that may impact it directly (Dwelling, Other Structures, Personal Property, Loss of Use).

The last two are liability coverages that will pay damages for which you are held liable (Personal Liability, Medical Payments). Coverages E and F have NO Deductible.

Coverage A - Dwelling

The Dwelling amount is the foundation of a home insurance policy as all other property values are calculated in proportion to that amount. The Dwelling value is determined on an individual basis by each insurance carrier for the replacement value of the building in question. The carrier underwriters determine this value based on a number of factors that reflect the total cost to rebuild the structure in case of a total loss.

It is important to note that there is no correlation between the Dwelling value of a property and its market value or purchase price.

This is the coverage that will protect for any damages to the structure of the property itself by a covered peril.

Coverage B - Other Structures

This coverage is almost always 10% of your dwelling value and covers additional structures built around your home. This would include structures such as fences, gazebos, decks, sheds, etc.

Coverage C - Personal Property

This is coverage for all of your “stuff” in the property. Your clothes, furniture, appliances, toys, etc. Typically between 50% - 75% of your Coverage A - Dwelling limit.

Some item classes/categories have a further specified special limitation amount for how much coverage is provided on them. (Jewelry, Electronics, Silverware, Money).

Most home policies cover personal property on a “Named Peril” basis. Which means they are only insured against listed perils. However, most carriers offer the option to expand this coverage to an “Open Peril” basis.

Coverage D - Loss of Use

This coverage will help pay for expenses that arise if you cannot live in your residence due to the property having been damaged or otherwise rendered inaccessible due to a covered peril. This coverage will cover payments for extended hotel stays, eating out at restaurants and other living expenses associated with you not being able to use your property.

Typically around 20% of your Coverage A - Dwelling limit. Loss of use coverage DOES NOT typically have an applicable deductible

Coverage E - Personal Liability

Personal liability coverage is one of the more comprehensive coverages on your home insurance policy and provides protection for any bodily injury or property damage to others for which you are held liable.

This liability protection extends to you everywhere, NOT just within your home.

It does NOT provide coverage for injuries sustained by you, the insured, that would be covered by a health insurance policy.

It does NOT cover liability resulting from an auto incident, that would be covered by an auto insurance policy.

This limit is not based in proportion to any other limit, typical range selection is 100K, 300K, 500K, or 1M. Some high value carriers sometimes offer much higher limits up to 10 million, but typically higher liability protection is achieved through extension of an Umbrella policy.

Your deductible does NOT apply to personal liability claims.

Coverage F - Medical Payments

Medical payments coverage, also known as “Goodwill coverage”, is designed to provide for the medical expenses of others who are injured on the insured’s residence or through the actions of the insured.

Its coverage that can be immediately used to get an injured individual medical attention without repercussions of a claimant lawsuit to be required for the liability coverage to go into effect.

This limit is not based in proportion to any other limit, typical range selection is from 1K to 5K.

Your deductible does NOT apply to medical payment claims.

Exclusion List for Your Home (Traditional - HO3)

The only perils that are typically excluded on your home are:

Earth Movement (earthquake coverage can be purchased separately)
Ordinance or Law (some coverage may be provided in your policy)
Water Damage (Sudden & Accidental Water Damage is automatically included; others such as flood or back-up can be endorsed onto the policy)
Power Failure
Neglect
War
Nuclear Hazard
Intentional Loss
Government Action
Collapse (some coverage may be provided in your policy)
Theft to a Dwelling Under Construction
Vandalism or Malicious Mischief (only if vacant more than 60 days)
Mold, Fungus, or Wet Rot (some coverage may be provided in your policy)
Wear & Tear, Deterioration
Mechanical Breakdown
Smog, Rust & Corrosion
Smoke from Agricultural Smudging & Industrial Operations
Discharge, Dispersal, Seepage of Pollutants
Settling, Shrinking, Bulging, or Expanding
Birds, Vermin, Rodents, Insects
Animals Owned by Insured

Limited Personal Property

Some of these item categories have a further specified limited coverage on most home policies. (Jewelry, Electronics, Silverware, Money)

$200 on money, bank notes, coins, precious metals, stored value cards and smart cards
$1500 on securities, accounts, deeds, evidences of debt, letters of credit, notes, manuscripts, personal records, passports, tickets and stamps (limit includes cost to research , replace or restore the information from the lost or damaged material)
$1500 on watercraft of all types, including trailers, furnishings, equipment and outboard engines or motors
$1500 on trailers or semi trailers not used with watercraft of all types
$1500 for loss by theft of jewelry, watches, furs, precious and semiprecious stones
$2500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware, platinum ware, platinum-plated water and pewterware
$2500 for loss by theft of firearms and related equipment
$2500 on property, on “residence premises”, used primarily for “business” purposes
$500 on property, away from the “residence premises”, used primarily for “business” purposes.
$1500 on electronic apparatus and accessories, while in or upon a “motor vehicle”. Accessories include antennas, tapes, wires, records, discs or other media
$1500 on electronic apparatus and accessories used primarily for “business” while away from the “residence premises” and not in or upon a “motor vehicle”. Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus described above.

Named vs. Open Perils

Most home policies cover personal property on a Named Peril basis. Which means they are only insured against listed perils. However, this coverage can easily be amended to insure against all perils except for the same exclusions as applied to the dwelling portion of the home policy.

NAMED PERILS - The 16 named perils that are INCLUDED on a named perils basis:

Fire or Lightning
Windstorm or Hail
Explosion
Riot or Civil Commotion
Aircraft
Vehicles
Smoke
Vandalism or Malicious Mischief
Theft
Volcanic Eruption
Falling Objects
Weight of Ice, Snow, or Sleet
Accidental Discharge or Overflow of Water or Stream
Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
Freezing
Sudden & Accidental Damage from Artificially Generated Electric Current

OPEN PERILS - The 21 perils that are EXCLUDED on an open perils basis:

Earth Movement (earthquake coverage can be purchased separately)
Ordinance or Law (some coverage may be provided in your policy)
Water Damage (Sudden & Accidental Water Damage is automatically included; others such as flood or back-up can be endorsed onto the policy)
Power Failure
Neglect
War
Nuclear Hazard
Intentional Loss
Government Action
Collapse (some coverage may be provided in your policy)
Theft to a Dwelling Under Construction
Vandalism or Malicious Mischief (only if vacant more than 60 days)
Mold, Fungus, or Wet Rot (some coverage may be provided in your policy)
Wear & Tear, Deterioration
Mechanical Breakdown
Smog, Rust & Corrosion
Smoke from Agricultural Smudging & Industrial Operations
Discharge, Dispersal, Seepage of Pollutants
Settling, Shrinking, Bulging, or Expanding
Birds, Vermin, Rodents, Insects
Animals Owned by Insured

The HO Forms

There are 8 main HO forms that exist in regards to homeowners insurance.

HO-1
HO-2
HO-3
HO-4
HO-5
HO-6
HO-7
HO-8

HO-1 (Basic Form)

Commonly referred to as Basic Form property insurance a HO-1 policy typically only provides coverage for 10 NAMED perils:

Fire and smoke
Explosions
Lightning
Hail and windstorms
Theft
Vandalism
Damage from vehicles
Damages from aircraft
Riots and civil commotion
Volcanic eruption

Personal liability is typically NOT covered on a basic HO-1 form.

In practice this form is rarely used anymore as there simply isn’t value in insuring a property so scarcely compared to the alternatives.

If personal property coverage is included, will also typically be named perils.

HO-2 (Broad Form)

Referred to as Broad Form property coverage, the HO-2 covers all the NAMED perils of the HO-1 and adds 6 additional perils:

Falling objects
Weight of ice, snow or sleet
Freezing of household systems
Sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems
Accidental discharge or overflow of water or steam
Sudden or accidental damage from artificially generated current

Complete list of covered NAMED perils on the standard HO-2:

Fire and smoke
Explosions
Lightning
Hail and windstorms
Theft
Vandalism
Damage from vehicles
Damages from aircraft
Riots and civil commotion
Volcanic eruption
Falling objects
Weight of ice, snow or sleet
Freezing of household systems
Sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems
Accidental discharge or overflow of water or steam
Sudden or accidental damage from artificially generated current

While still a NAMED perils policy the HO-2 is still commonly used to insure properties today and often offers personal liability coverage on the policy as well.

If personal property coverage is included, will also typically be named perils.

HO-3 (Special Form)

The bread and butter of the home insurance market, the HO-3 is the gold-standard of home insurance policies when it comes to shopping for primary property insurance.

Unlike the HO-1 and HO-2, the HO-3 is an Open Perils policy and NOT a Named perils form when it refers to the structure of the property.

This means that rather than listing the perils the policy covers you against, it ONLY lists the perils that are NOT covered.

The EXCLUDED perils on an all-risk/open-perils policy are typically:

Earth Movement (earthquake coverage can be purchased separately)
Ordinance or Law (some coverage may be provided in your policy)
Water Damage (Sudden & Accidental Water Damage is automatically included; others such as flood or back-up can be endorsed onto the policy)
Power Failure
Neglect
War
Nuclear Hazard
Intentional Loss
Government Action
Collapse (some coverage may be provided in your policy)
Theft to a Dwelling Under Construction
Vandalism or Malicious Mischief (only if vacant more than 60 days)
Mold, Fungus, or Wet Rot (some coverage may be provided in your policy)
Wear & Tear, Deterioration
Mechanical Breakdown
Smog, Rust & Corrosion
Smoke from Agricultural Smudging & Industrial Operations
Discharge, Dispersal, Seepage of Pollutants
Settling, Shrinking, Bulging, or Expanding
Birds, Vermin, Rodents, Insects
Animals Owned by Insured

If personal property coverage is included, will also typically be named perils, BUT can usually be endorsed to provide special form coverage on contents.

Most insurance carriers allow for this endorsement to match the HO-5.

HO-4 (Renters aka Tenant Form)

Most commonly known as renter’s insurance, primarily provides coverage for an individuals belongings and liability, NOT the physical structure of a building or apartment.

Belongings are typically Broad form - named perils coverage, but can often be endorsed to special form - open perils coverage.

Personal property can be insured at replacement cost or actual cash value.

Will typically provide:

Personal property coverage
Additional living expenses coverage
Personal liability coverage
Medical payments to other coverage

HO-5 (Comprehensive Form)

The HO-5 is the upgraded form of an HO-3 form that simply covers BOTH the dwelling and personal property on an Open perils basis.

By contrast, the standard HO-3 typically covers the dwelling on an Open perils basis, but the content/personal property on a named perils basis.

HOWEVER, most carrier HO-3 policies can be endorsed to effectively match an HO-5.

Some carriers ONLY offer HO-5 policies, or bundle additional features into their HO-5 policy.

Generally speaking, the HO-3 is still more popular because it offers more flexibility in quoting but also the named perils for contents coverage tend to be sufficient for the insured in most cases when it comes to content coverage.

Common Named Perils for contents:

Fire and smoke
Explosions
Lightning
Hail and windstorms
Theft
Vandalism
Damage from vehicles
Damages from aircraft
Riots and civil commotion
Volcanic eruption
Falling objects
Weight of ice, snow or sleet
Freezing of household systems
Sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems
Accidental discharge or overflow of water or steam
Sudden or accidental damage from artificially generated current

HO-6 (Condo/Co-op Form)

The HO-6 form or unit-owners form insurance is used to insure condominium and co-op units because they offer more specific coverage that excludes the portions that should be covered by the condo or co-op association's Master policy.

The HO-6 form provides coverage for the interior of the dwelling unit, also referred to as “studs-in” or “walls-in” coverage and many of the same coverages provided on a renters policy.

Dwelling coverage on an HO-6 policy does not refer to the structure of the building itself (which is typically covered on the association’s Master policy), but rather the walls, flooring, ceiling, cabinets, partitions, etc.

Depending on the quality of the condo interior the dwelling replacement cost is generally decided upon by unit-owner, but should be guided by the agent in making sure they are accounting for at least a minimal replacement evaluation of the materials.

A general rule of thumb can place dwelling coverage estimates from $75/ sqft for standard builders grade materials up to $100 or more for custom material interiors.

Depending on the associations covenants, conditions and restrictions (CC&Rs) there may be additional coverage that is provided to the unit-owner by the Master policy.

The HO-6 form also provides the standard coverage options for personal property in the unit, loss of use coverage, liability coverage and medical payments to others coverage.

Another highly recommended coverage on most condo/co-op forms (but really any property that is part of an association) is loss assessment coverage.

Loss assessment provides coverage to a unit-owner who has to make any payments to the association for assessed damages to common grounds in the association such as pools, tennis courts, gyms, gardens, or other shared sections.

Typically when these common grounds are damaged, the repair costs are assessed and divided among all unit-owners to pay. So depending on the number of units in your association you could be at higher or lower risk in terms of your portion due.

HO-7 (Mobile Home Form)

The HO-7 is the equivalent of the HO-3 form but makes the distinction of applying to mobile or manufactured homes which are NOT as commonly insured by all carriers on the market.

Typically HO-7s are offered by carriers that specialize in insuring mobile/manufactured home risks.

HO-8 (Older Home Form)

The HO-8 policy is a form specifically designed to accommodate the insuring of older or historical properties that would be particularly difficult to rebuild in the event of a loss typically due to their material quality characteristics and craftsmanship involved. These policies are typically written on an agreed value basis which considers the custom evaluation of the property details.

The HO-8 policy however, only typically insures for NAMED perils.

Reading an Auto Insurance Policy

Liability
Collision
Comprehensive (Other than Collision)
Medical Payments or PIP (Personal Injury Protection)
Uninsured and Underinsured Motorist Coverage
Additional Coverages

Liability

Pays medical bills, legal expenses, and repairs from damages caused to SOMEONE ELSE’s person or property that you or a designated driver are held liable for. It will also protect you when driving someone else's car with their permission (as a permissive driver). Required in almost all states, but at a different minimum levels.

Typically written as three values, for example: 100/300/100

1st value: Per person limit for bodily injury

2nd value: Per incident limit for bodily injury

3rd value: Per incident limit for property damage

Collision

Collision coverage pays for any damage to YOUR car resulting from a collision with another car or object, regardless of whether you are at fault. Deductibles generally range from $250 to $1,000.

Comprehensive

Comprehensive coverage pays for damage to YOUR vehicle that is caused by theft or something other than a collision. Covered perils include fire, falling objects, explosions, earthquakes, windstorms, hail, flood, vandalism, riot, or contact with animals, such as deer. It also covers damaged windshields and other glass damage. Like collision coverage, you can choose your deductible amount, which normally ranges from $100 to $1,000. May carriers offer an alternative Full glass coverage that would apply a lower or zero deductible specifically for glass and windshield claims.

Medical Payments or Personal Injury Protection (PIP)

This will pay for the medical treatment of the policyholder and any passengers in the vehicle that were injured during an auto accident, regardless of fault.

PIP may cover lost wages and funeral costs (Medical payments does not). Requirements for this coverage vary DRASTICALLY by state.

Uninsured and Underinsured Motorist Coverage

This coverage pays for damages if you, a family member or a designated driver are hit by a driver who is uninsured or underinsured (or a hit & run). Requirements for this coverage vary by state. In states where the coverage must be offered but can be rejected, your declarations page should note “insured rejects” if you have waived the coverage.

Additional Coverages

Most carriers offer several additional optional or auxiliary coverages that range from roadside assistance and towing services to new car replacement should a vehicle be entirely totaled. Sometimes these coverages are required or included as part of a specific carrier product package. Examples include:

Rental Reimbursement (typically shown as an “amount per day/ maximum limit” - $30/$900, $40/$1,200, $50/$1,500)
Roadside assistance
Personal belongings in vehicle
Accident Forgiveness
New Car Replacement

These coverage offerings can vary significantly from carrier to carrier if offered at all

Limited Tort vs Unlimited

Primary vs. Secondary PIP/Health Insurance option

Guidelines for Health Care as Primary for Personal Injury Protection

Government health insurance is accepted through

Cigna
Horizon Blue Cross Blue Shield

Only one named insured needs to have Private or Government health insurance to be eligible
If the insured is 65+ and is eligible for Medicare / Medicaid BUT is still working and receives health insurance through their employer, they are eligible for H/C primary

Benefits of Health Care as Primary option for PIP

Treated by primary care physicians
PCP are familiar with your medical history
Personal Injury Protection plan will provide excess coverage should health care benefits be exhausted
Lowering your existing car insurance premium while maintaining the same level of protection

Potential savings of up to 25% on PIP portion of your auto premium

FAQs regarding Health Care as Primary option for PIP

Who is not eligible for Health Carrier Primary?

Individual/families who’s health insurance is covered by Medicare or Medicaid

What happens if I lose my healthcare coverage or it changes after I had an accident and I already started treatment?

Your PIP carrier will step in and process your claim as primary from that point forward

What happens if my healthcare insurance carrier changes while my automobile policy is in force?

The insured is required to inform their agent if there has been a chance in your coverage

What if I lose my healthcare insurance during the policy period?

Inform your insurance agent as your policy needs to be adjusted to reflect that PIP coverage is changed to primary

What happens if I elect Health Carrier Primary and my carrier does not cover a specific type of care?

Your PIP coverage will provide those services only as primary. The Healthcare insurance will remain primary for all other care

Vehicle Evaluations

Book Value vs. Stated Value vs. Agreed Value

Owners of classics, collectibles, or even mainstream cars that have been souped up will often want to know the actual cost it will take them to replace or repair their damaged cars. For some, especially one-of-kind treasures, replacement is probably out of the question. Because parts for many of these types of cars are rare, their costs can actually increase over time, and, in many cases, the repairs can exceed the original price of the car. At the very least, the cost of repair can easily exceed the book value of the car.

The first mistake classic car owners often make is to simply tack their specialty car onto their standard auto policy which pays the cost of repair or the market value of the vehicle whichever is less. Specialized cars need specialized insurance, and, in the realm of classic cars or customized luxury cars, the best course is to go with a specialized carrier. Even then it is important to know exactly what you are getting because some carriers will offer “stated value” policies which might suffice in some cases,” and others offer “agreed value” policies which provide the ultimate in coverage for high-end vehicles.

Stated Value Policies

Stated value policies pay for repair costs or the stated value of the car, whichever is less at the time of the claim. The stated value is the number provided by the insurer in order to determine the amount of the premium. If a higher value is stated, a higher premium is charged. Even though the insurer accepts the stated value at the time of policy issue, it is under no formal agreement to adhere to the stated value in the event of a claim. Based on the language in the policy, the insurer could, instead, establish an “actual cash value” if it is a lesser sum.

Agreed Value Policies

Agreed value establishes and guarantees a specific amount of coverage at the time of policy issue. Instead of allowing the insurer to establish a value, either stated or actual, agreed value allows for an appraisal of the vehicle that is to be accepted by both parties as a valid representation of its worth. And, unlike standard insurance policies, agreed value means that the value of your car does not depreciate.

Generally, in order to secure agreed value, the owner may have to agree to some driving limitations, i.e. weekend leisure driving only. But if the vehicle is well-maintained and protected with added security features, insurers may loosen up some of the restrictions.

Obviously, agreed value is the best possible coverage for classic and specialty car owners, but it is important to be able to negotiate the agreed value from a position of knowledge. Specialty insurers not only offer the unique insurance products needed, they also are more apt to appreciate the vehicle’s intrinsic value and negotiate in good faith.

Ride-Sharing Coverages

Period 0: Offline your personal auto policy coverage

Period 1: Offline WITHOUT ride request: rideshare coverage + Uber/Lyft coverage

Period 2: Online WITH ride request but no passenger: Uber/Lyft coverage

Period 3: Online WITH passenger in vehicle: Uber/Lyft coverage

Insurance Principles

Loss Settlement

Replacement Cost

Will pay whatever is necessary to replace your damaged property with property of a like kind and condition, up to the policy limits.

Actual Cash Value/ Fair Market Value

ACV is defined as “fair market value” or the cost for a new car minus depreciation.

For example, if a car was $20,000 brand new, and a policyholder totaled it after owning it for a few years, they would not get the full $20,000, but rather a lower amount, perhaps only $10,000 or even less depending on how old it is.

Functional Replacement Cost / Common Construction

Will pay whatever is necessary to replace your damaged property with property of a FUNCTIONALLY SIMILAR kind and condition, up to the policy limits.

Agreed Value

The agreed value loss cost settlement option is typically reserved for one-of-a-kind, unique items, or items of high worth where the value cannot be easily assessed. For example, if you are insuring a rare coin or an expensive painting, you and the insurance company will have to agree on what the item is worth at the time the policy is written, which is what you will be paid if it is destroyed. Often an independent appraisal will satisfy this requirement.

Reviewing Quotes: What goes into finding the BEST policy available?

Client Needs and Wants

Not JUST what you WANT, but what they NEED. What will your policy do for them, how does it compare to the alternatives? What lines of coverage are you reviewing in totality? What do you value most from your insurer?

Risk Tolerance Preference
How do you intend to use your insurance
Why do you want insurance
Financial standing

Coverage

Not all coverage is the same. Yes, insurance is fairly heavily regulated industry and thanks to some standardization in policy form it’s become a safer market overall. An essential part of an insurance broker's services is reviewing any policy a client may already have in place for potential shortfalls in terms of their coverage form that they may or may not know about.

Carrier

Clients will change their insurance based on a bad experience with a certain carrier, it’s important that we find them someone they will be happy with. Broadly speaking, carriers can be assessed into four tiers:

Luxury (Private Client groups): This is not necessarily always cost-effective insurance, but it is tailored to the client above all else. Servicing is often done on a one-to-one basis and policies generally include several additional features. Many high value clients or individuals will have to be insured by these carriers purely based on the profile and size of their assets.

Standard (Well-known national brands, mid-market): These companies are established carriers that offer all major product lines and compete territorially from state to state. They rate favorably in a preferred market with minimal claims. Their underwriting leniency tends to be fairly standard across the board with some exception.

Flex (Accessible Product Line Carriers): These companies are carriers that offer the most popular product lines, but not necessarily all of them. Some usually offer some or all of their products through indirect affiliates. These carriers generally can insure almost every client regardless of claim history as long as the product type itself is eligible. Named “Flex” due to their flexible underwriting capabilities. The ability to insure DUIs, or leniency on older home types.

Specialty Niche Carriers: These carriers are either specialized in a single product line of insurance or specialize in offering an all-risk solution for nearly every type of property. These carriers are often at the front-end of product expansion and while they may generally represent a bit riskier of a carrier, they often outprice and outvalue competitors in their coverage offerings. Most of these carriers are either MGAs or reinsurers.

Carrier Reviews

When it comes to assessing carriers, it is very difficult to paint their services and fit for a customer at a general level. Insurance recommendations should always be tailored to the client. The online insurance carrier reviews that clients usually research on their own are often polarized due to the nature of insurance (if you just had a claim, regardless if it was resolved quickly, it was still likely a traumatic experience and not exactly 5-star review material). This returns to understanding not only a carrier’s product offerings in terms of coverage, but also the ease of writing business with them and getting to understand how they go about evaluating risks.

Pricing

The majority of clients shopping or re-shopping are focused on price because it’s the most intuitive factor of the product. They may not understand their insurance policy, but they do know what they’re paying for it. This is why it’s essential to educate our clients on what their insurance can do for them, so that they consider VALUE and not just PRICE. It’s important to understand what the driving factors on their policy pricing are. Is it the size and age of the property, the territory, their age, their credit or insurance history? Understanding what’s driving their rate will allow you to understand who the best fit may be, since not all carriers rate the aforementioned factors equally.

Specialty Risks

Mobile homes

The term Mobile Home is often used interchangeably with the term Manufactured Home but in fact they mean quite different things. "Mobile Home" refers to homes built PRIOR to 1976 when the HUD code governing building standards for factory-built homes was instituted, greatly improving quality standards.

Manufactured homes

Homes built AFTER 1976 should, technically, no longer be referred to as Mobile Homes but instead are Manufactured Homes and are built to a higher standard of quality than yesterday's "Mobile Homes".

Manufactured Homes are built entirely in a factory under the federal building code administered by the Department of Housing and Urban Development (HUD). These homes are constructed to meet the Federal Manufactured Home Construction and Safety Standard Act of June 15, 1976. The federal standards regulate manufactured housing design and construction, strength and durability, transportability, fire resistance, energy efficiency and quality. The HUD Code also sets performance standards for the heating, plumbing, air conditioning, thermal and electrical systems. HUD is the only federally-regulated national building code. Each home or segment of a home is labeled with a red tag that is the manufacturer's guarantee the home was built to conform to the HUD code. On-site additions, such as garages, decks and porches, often add to the attractiveness of manufactured homes and must be built to local, state or regional building codes.

Manufactured homes generally come in single or two-section units and their dimensions range from 8 feet or more wide and 40 feet or more long. Manufactured homes can be placed on a basement and include multiwides and expandable manufactured homes. Excluded are travel trailers, motor homes, and modular housing.

Modular homes

A modular home is manufactured in a production facility and are built in two or more sections in a controlled factory setting that are then transported and assembled on location. The assemble process typically uses a traditional concrete foundation (permanent). Unlike a mobile home, a modular home cannot be moved once built. These homes are treated just like a traditional home you'd buy in a neighborhood. They offer outstanding features, a huge assortment of pre-designed homes, and their price per square foot are sometimes lower than the traditional stick built home.

Modular homes are homes assembled at the building site. Modular homes are built to either local or state building codes as opposed to manufactured homes (sometimes still erroneously referred to as mobile homes) which are also built in a factory but are governed by a federal building code.

Modular homes can be completely customized to meet the home-buyers needs and tastes.

Flood Insurance

Water Damage

With torrential rains and flash flood in most parts of the Northeast recently, many find themselves asking: my house has suffered water damage, am I covered?

Well, like all good legal responses the answer is, “it depends.” Many homeowners’ policies do not provide coverage for groundwater or surface water which seeps into your home. Most policies will not provide coverage for water damage because of a sewer or drain backup or a failed sump pump. However, some policies do have added endorsements which provide coverage for backup of sewers, drains or sump pumps for a limited amount of money. Many homeowners in the Northeast have suffered large losses from the backup of sewers, drains or sump pumps, so it is important to check your homeowner’s policy for coverage as it relates to water damage from your drainage systems.

Unfortunately, many people are under the mistaken belief that their homeowner’s policy will cover water damage, but that is not the case. Any type of ground or surface water is almost always excluded (you’ll need flood insurance for that). Which means in most cases water damage as a result of flooding from ponds, rivers, bays, oceans, rain, storms, hurricanes and the like are not covered. Some water damage from appliances or frozen pipes may be covered. However, even those claims are not without their exclusions.

Water that accidentally discharges from an appliance that breaks may be covered, but the appliance itself is not. Frozen pipes may be covered so long as you adequately maintain the heat in your home or properly winterize the system. Damage to your roofing system which results in interior water damage may be covered so long as the damage is not the result of wear and tear or deterioration. Some water damage you may not see until it manifests itself as water marks or spots. That water damage may end up being the result of a broken pipe, appliance or toilet. Some policies exclude coverage for water damage that is the result of a hidden or latent defect over a certain period of time. So, if the water was leaking from the toilet upstairs and leaks downstairs over a period of weeks or months, you may not be covered.

What is a flood?

Here's how "flood" is defined by the National Flood Insurance Program: "A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder's property) from:

Overflow of inland or tidal waters; or
Unusual and rapid accumulation or runoff of surface waters from any source; or
Mudflow; or
Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above."

What?

So, in plain English, a flood is an excess of water (or mud) on land that's normally dry. Floods often happen when bodies of water overflow or tides rise due to heavy rainfall or thawing snow. But you don't have to live near water to be at risk of flooding. A flash flood, which can strike anywhere without warning, occurs when a large volume of rain falls within a short time.

The Basics

Flood insurance is available to everyone in your state (everyone is in a flood zone). Some parts of your state are in a high hazard flood zone and others in a moderate to minimal flood zone.

Zone Risk

A High hazard, 1% annual chance of flooding

V High hazard, 1% annual chance of flooding

B Moderate to minimal, less than 1% annual chance of flooding

C Moderate to minimal, less than 1% annual chance of flooding

X Moderate to minimal, less than 1% annual chance of flooding

30% of all flooding occurs in moderate to minimal flood zones.

Preferred v. standard flood

Preferred rates (lower cost) are available for flood zones B, C & X. Standard rates apply in flood zones A & V.

Primary flood coverage v. excess flood coverage

Primary flood insurance offers a maximum coverage amount of:

$250,000 Building coverage

$100,000 Contents coverage

Additional coverage is available as excess flood coverage. This excess coverage is written as a second policy.

Elevation Certificates

An elevation certificate is only needed if the structure was built after the original FIRM (Flood Insurance Rate Map) date. This is referred to as “post-firm”. If the structure was constructed “pre-firm” and elevation certificate is not required and rates are subsidized by the National Flood Program.

Limited coverage

Flood insurance is limited. There is no coverage for personal property kept in a basement through the National Flood Insurance Program and no coverage for finished structure of the basement.

Waiting period

In most cases, there is a 30 day waiting period when purchasing flood insurance. The 30 day waiting period can be waived when a lender requires flood insurance on a new purchase.

Payment

The National Flood Insurance Program and most private flood insurance companies requirement payment in full for the year to start the policy and at each renewal.

Canceling my policy

What if I decide I don’t want flood insurance, how can I cancel my policy? Since many flood insurance policies are required by a lender for the purchase of a property, canceling a flood policy may not be easy.

There are a limited number of reasons you can cancel a flood insurance policy. Just because you don’t want the coverage may not be reason enough.

State Specific Risks

Earthquake Coverage

Earthquake insurance covers damages caused by an earthquake, a sudden and violent shaking of the ground resulting from movement of the earth’s crust. More specifically, earthquake insurance covers damages to your house, personal belongings inside your home, and Additional Living Expenses (ALE) or loss of use, which are the costs to live somewhere else while a policyholder’s area is evacuated or their home is repaired. Insurance coverage for earthquakes is generally not included in standard homeowners or renters insurance policies. It can be added to an existing homeowners insurance policy as an endorsement or purchased as a separate policy.

Foundation Coverage

Particularly common in Texas, coverage for settling, cracking, shrinking, bulging, or expansion of the foundation, floor slab or footings that support the dwelling caused by seepage or leakage of water or steam from within a plumbing, heating, air condition or automatic fire protective sprinkler system.

Mine Subsidence Coverage

Coverage for loss to property due to the sinking of a man-made mine. Buildings in some states—such as Illinois, Ohio, Kentucky, and West Virginia—may be located over abandoned mines.

If the mine sinks, shifts, or collapses and damages the insured property, such damage is excluded by the "earth movement exclusion."

A few states have mandated that insurers make coverage for mine subsidence available to property owners who live in such areas. Typically, the property owner need not request such coverage; it is added automatically. If the property owner decides against the coverage, a signed rejection form may be required.

Mine subsidence coverage is currently mandated for both commercial and residential property in: Illinois, Kentucky, and West Virginia. The coverage is mandated only for dwellings and farms in Ohio.

Sinkhole Coverage

Sinkhole coverage is protection for damage that may occur to your property caused by a sinkhole. Since most homeowners policies don’t include land movement and collapse by default, this is a coverage that must generally be endorsed onto your policy or bought entirely separately.

Sinkholes are found all over the world. In the United States, sinkholes are especially common in Florida and Pennsylvania followed by Texas, Alabama, Missouri, Kentucky and Tennessee, according to the U.S. Geological Survey. The actuarial risk of a catastrophic sinkhole happening is relatively low, at around 1 in every 100 years.

There are some states that require insurers to offer optional sinkhole coverage for an additional premium. Depending on the mandates established by state insurance regulators, sinkhole coverage can be offered either as an endorsement to a property insurance policy or as a stand-alone policy. Just as California property insurers offer optional earthquake coverage, Florida and Tennessee insurers are required to offer optional sinkhole coverage, which provides comprehensive protection against sinkhole damage.

How are sinkholes created?

Natural causes:

After-effects of earthquakes
Erosions in the earth's surface
Presence of excess groundwater
Excessive rains and flooding
Extreme droughts can have the same effect
Natural sinkholes usually show early signs of erosion

Man-made causes:

Excessive drilling
Mining
Construction
Lots of heavy traffic
Hydraulic fracture mining ("fracking")
Mine subsidence in abandoned coal mines over which development has occurred

Catastrophic Ground Collapse

Florida and Tennessee are the only two states (as of this writing) that require homeowners insurance policies to cover “catastrophic ground collapse.” This is NOT the same as sinkhole loss coverage. In fact, most sinkholes are EXCLUDED from this coverage unless they meet all four of these criteria:

An abrupt collapse of the ground cover must occur
The depression in the ground must be clearly visible to the naked eye
Structural damage must be done to the building covered, including the foundation
The Insured structure must be condemned and ordered to be vacated by the government agency authorized to issue such an order for that structure.

Your home almost has to fall into a sinkhole for this coverage to help you. A sinkhole could easily fail to meet one of those criteria and still be financially devastating. For example, say a sinkhole occurs beneath your home and cracks the foundation. Unless your home is condemned, catastrophic ground collapse coverage will not activate. You would have to pay the cost to repair the crack out-of-pocket, which we've seen as high at $8,500 depending on the severity.

Catastrophe Prevention

Tornadoes

Tornadoes can be extremely devastating and certain states such as Texas fall victim to more tornadoes each year than any other state. Homeowners in the area should always stay alert in the most common tornado season of May and have a forum where they can be updated by national weather alerts and potential evacuations.

Preparing for tornado season:

Trim overhanging or dead nearby branches/trees

Trees and branches can cause significant damage to siding, roofs, and windows

Have utility shut-off systems

Know how to turn off your utilities in case a tornado knocks out gas or water

Secure all yard debris and landscaping

Sheds, patio furniture, grills and other yard items can be blown away

Have an emergency portfolio

Keep track of important documents that you may need, such as your insurance

Damage mitigation and protection

Reinforce garage doors, install storm shutters for windows and doors

Claims

4 Questions to ask a claims adjuster

How much am I fully entitled to?
When am I going to get those benefits?
Are you certain that I am not entitled to more, and what are those benefits?
Is there anything you can do to speed up getting what I am owed?