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This issue is sponsored by
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Flood Insurance Facts
I know what you're thinking. MORE INFORMATION ABOUT FLOOD INSURANCE! Unfortunately, insurance is something most people don't want to think about until they need it. This is especially true with flood insurance since there is a waiting period before a flood policy will take effect.
The Federal Emergency Management Agency (FEMA) is responsible for maintaining a Flood Insurance Rate Map (FIRM) for each participating community. Based on where your property is located on your community FIRM, you may be in a high, moderate, or low risk zone which is a major part of what determines your flood insurance rate.
Since the FIRM is occasionally revised and updated, it is possible that a property can change from a low or moderate risk zone to a high risk zone. This could significantly increase a property's flood premium. If you are currently in a low risk zone, you may benefit from the "grandfather rule". If you maintain continuous flood coverage (before a map was modified), you may still be able to qualify for the same premium as if your zone risk level had not changed. The National Flood Insurance Program will also extend this concession to a new owner if the previous owner maintained flood coverage. Similarly, if a home was built in compliance with a specific FIRM, the homeowner may still qualify for previous FIRM rates with proper documentation.
No matter where you are on the flood map, it is a good idea to have flood insurance because we all have the potential of experiencing a flood. According to FEMA records almost a quarter of flood claims come from areas that are not considered high risk because rapid accumulation and runoff of rain water can be considered a flood. Don't wait until you need coverage. By then it will most likely be too late.
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Teens and Texting
Text messaging is cited as one of the biggest distractions for teens while driving. We tell our teens to buckle-up and obey the speed limit, but do we tell them to turn off their cell phones? Recent studies show that text messaging has become just as dangerous as drinking and driving for teens in regards to inhibiting their ability to concentrate on the road.
A recent study has shown that almost 80 percent of crashes and 65 percent of near-crashes can be attributed to some form of driver inattention within three seconds before the event. Add the fact that 46 percent of teens text message while driving and you have a deadly combination.
Many states are taking legal action to prohibit texting while driving, since it has been cited as the likely factor in fatal accidents across America. Police officers state that it is difficult to enforce a texting ban because it is often done with the phone held where it's difficult to see.
In addition to setting a good example for your teens, here are some guidelines you may want to consider when dealing with a teenage driver:
- No cell phone usage while operating a vehicle.
- Consider whether or not your teen is ready at age 16 to obtain their license.
- Not all teens are mature enough to take on the responsibility of driving.
- Parents should set driving and car usage rules and consequences and stick to them.
- Create ownership in the vehicle by having the child share in the cost of maintenance, gas, and insurance.
As parents, it's important to enforce safety rules when your teen is first learning how to drive, so that it becomes a habit. Always pull over before using your cell phone while driving. By simply setting a good example for your teen, you may save their life.
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The Risks And Responsibilities Of Hosting A Party
With wedding and graduation season in full swing, many of us are hosting or attending parties, open houses, and receptions with little thought as to who is liable if guests drive under the influence, get food poisoning, damage property, or are injured on the host's property.
A recent survey asked homeowners if they believed they were legally liable if a guest caused an alcohol-related traffic accident after leaving a party they hosted. Additionally, they were asked about their responsibility if a guest was injured on the sidewalk in front of their property or suffered food poisoning from food served at their party. Alarming percentages of homeowners either thought they could not be held liable or did not know the answer.
In most states, hosts can be held responsible for the actions and negligence of their guests while attending and following such a social event. Many courts have found hosts liable for the damages their party guests cause as a result of consuming alcohol at a social gathering and then operating a motor vehicle. Most homeowners policies include liability coverage for these types of events, including host liquor liability. With many companies, however, the maximum amount of liability that can be included on a homeowners or tenants insurance policy is $500,000. Purchasing a personal umbrella policy for excess liability limits may be prudent for the frequent host, especially if alcohol is served.
A homeowner can be liable for anything that happens on their property. Homeowners should understand that having a pool, trampoline, recreational vehicle, or even certain breeds of dogs or exotic animals can significantly raise their potential for liability; and may even make them ineligible for coverage with certain insurance companies. In some cases, an insurer may choose to restrict or exclude coverage for undesirable risks. Any unusual or unique liability exposures should be disclosed to the insurance company so that appropriate coverage can be obtained.
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Term Life Insurance
Inexpensive term life insurance can be very valuable to a family or business that shoulders the responsibility of providing the financial means to meet future obligations.
Term life insurance provides a low cost death benefit for a specific period of time with coverage typically guaranteed to a particular age.
Common reasons for having term life insurance are:
- Family Living Expenses
- Children's Education Needs
- Mortgages
- Business Loans
- Business Buy/Sell Agreements
- Key Person Insurance
- Miscellaneous Debt Obligations
If you are interested in term life insurance, please contact our office at 800-814-2122 ext. 3565.
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Insurance Advisor: Questions & Answers
Q SHOULD I HAVE AN UMBRELLA POLICY?
A Absolutely. Your automobile and homeowner's insurance have liability coverage in the event of a lawsuit, however, when you take into account our litigious society, an umbrella policy provides additional coverage. For example, if a settlement is $900,000 and you have liability insurance of $500,000, your insurance company will pay their portion of $500,000 and you will be responsible for the remaining $400,000. Almost everything you own could be used to pay off the debt. Your home, future income, 401K, and inheritance could all be fair game. A personal umbrella policy protects you against excess liability judgments for loss, injury, or even death caused by negligent acts. Umbrella policies begin at $1 million dollars and are relatively inexpensive. Please contact our office if you would like to add this valuable protection to your personal insurance program.
Q IS IT NECESSARY TO HAVE A LIST OF ALL OF MY PERSONAL PROPERTY? WHY WOULD I NEED IT?
A Doing a home inventory allows you to purchase adequate insurance to replace the things you own, get insurance claims settled faster and with less work, and substantiate losses for an income tax return. The Insurance Information Institute has free online software, called Know Your Stuff, with no download required. Know Your Stuff will help you enter information by room and upload photos or scanned receipts. Once the information is in the system, items can be sorted by price, date of purchase, or type. You can also customize your own categories. The final report can be printed, saved, emailed, or burned on a CD. Because the information is automatically stored remotely on servers, you can access the information from any computer. To access the free home inventory software go to www.iii.org.
Q I RECENTLY GOT LAID OFF. SINCE MONEY IS TIGHT, I AM LOOKING FOR WAYS TO CUT COSTS. WHAT OPTIONS DO I HAVE WHEN IT COMES TO MY INSURANCE?
A There are a couple options you can consider to cut premium costs. First, consider taking a look at your home and auto deductibles. By increasing your deductible to $1000 or more for your home and $500 or more for your auto you can reduce your premium. Doing this also eliminates the need to file smaller claims that can later impact your rates.
Second, consider reducing the physical damage coverage for older vehicles. A car's value depreciates as it ages and the amount you receive may not be worth what you are currently paying for physical damage coverage. For example, a 1997 Toyota Camry LE with 150,000 miles. It runs great and is in good shape. The claims adjuster cuts you a check for $2300 ($2800 for the vehicle less your $500 deductible). Now, suppose you've been paying $200 a year for the last five years for the physical damage coverage. That's a net amount of $1300 paid to you after you factor out your insurance cost. This may be a situation where you want to consider removing the comprehensive and collision coverage.
Finally, reducing your liability protection is never a good option. As today's economy gets tougher and money gets tighter, our society will become more litigious. A person does not need a good reason to sue someone; they just need a reason. If you lower your liability limit to save a few dollars, you could be risking financial ruin if you are sued, as your liability limits would not be adequate to pay for the potential lawsuit. If you have questions or want more information, please contact our firm at 800-814-2122 ext. 3565.
Q WHAT CAN I DO TO PREVENT WATER DAMAGE IN MY HOME?
A When many of us think of water damage to our home we think of water coming from a source external to the house. However, most water damage claims are caused from a source inside the home. Whether it is a toilet overflow or a failed sump pump, there are steps you can take to reduce your chance for a water loss.
The most recent technological invention is a water detector; which is a lot like a smoke detector in the way it functions. They vary in price starting at $10 and some can be connected to your central station alarm system.
By placing the device on each floor near water sources the water detector alerts you before serious damage can occur.
Other ways to help prevent a water loss:
- Periodically drain the water heater to clean out any sediment in the tank.
- Check and replace hoses on the washing machine that show signs of deterioration.
- Take action quickly for small leaks.
- Be vigilant of what goes down the drains such as grease, lint, and large amounts of dirt.
- Shut off the water before you leave your home for an extended length of time.
- Keep your home an appropriate temperature so pipes do not freeze.
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