Thursday, November 23, 2017

Climate Change Will Cause More Disasters in California

The phrase “natural disaster” can be misleading. Disasters such are earthquakes, flood and fires are beyond human control. But that does not mean that humans have not played a role in how frequently these disasters occur and how much damage they cause. The case for and against the effects of climate change will continue to be argued for years, but as California Gov. Jerry Brown said recently "With a warming climate, dry weather and reducing moisture, these kinds of catastrophes have happened and will continue to happen.” In other words, in California, the ground realities of climate change are clear.



The Effects of Climate Change

The increase in the severity and frequency of wildfires in the state is alarming. Experts say that as long as global temperatures continue to rise, the problem will increase. While climate change is not what starts wildfires, the variations in temperature and rainfall that it causes contributes to how these fires develop and spread. In California, weather patterns over the last few years have created an ideal foundation for a devastating fire season which usually reaches full intensity in the month of October. There are 4 key factors involved:

   ·     The high temperature in summer months results in grass, bushes and trees being significantly drier by the time the fire season starts.

  ·     The dry winds from the interiors of the continent enable the fires to spread faster than they did before.

  ·     The higher temperatures also mean that the fire season will last for longer than it did in the  past.

  ·     There is more rain and snow during the winter. This may appear to be a factor that will help prevent fires, but it is not so. The higher precipitation in winter means that more vegetation will grow and grow faster. There will thus be more of it to dry out and burn when the fires start.

Improvement Will Take a Long Time

The Paris Climate Acord, which the U.S. is no longer part of, has set a limit of a 2 degree Celsius rise in global temperature by the year 2100. The amount of drying that such an increase will cause will require a huge amount of precipitation to counteract the drying out and the fire risk that will result. None of the existing scientific models predict such an increase. Till things change for the better, the risk of loss from fires will continue to rise.

The only protection for homeowners against the loss of this biggest investment in their lives and the one on which their family’s future depends is through insurance.Unfortunately, California has a large number of uninsured and under insured homes. The reasons for this are the cost of insurance and a common belief that disasters happen to the “other guy.” Saving a few dollars today may have a small impact on a family’s budget, but the loss of a home can destroy its hopes for the future. Finding the right insurance coverage at a cost that is viable, requires professional expertise. Talking to an insurance broker about home insurance needs will give homeowners the information they need to make insurance decisions that are in their family’s best interests.

Cost of Wildfires

Wildfires are not new to California, and most residents take the risk as a fact of life. What is worrying, however, is the increasing amount of damage and financial losses that these disasters cause. This year the California Department of Insurance has made a preliminary estimate that the insured wildfire losses are in the region of $1.05 billion. This number is based on claims received from the largest insurers in the state and is expected to rise. As of mid-October insurers have received 601 property loss claims, 4177 claims for partial residential losses and 3000 claims for auto losses.

Since the fires began on October 8th, over 250,000 acres have been burnt black, and almost 7,000 structures which includes homes, commercial establishments and wineries, have been destroyed. Over 15,000 people were displaced.




Cost to Families

These numbers are bad and with climate change expected to increase the risk of fire in the future, the dangers will only surge. It makes sense to take steps to protect your home from fire damage and loss, but there is never going to be a 100% certainty that you are safe. A home directly in the path of a wildfire will be destroyed. That is why along with protection it is important to also plan for recovery after major damage or complete loss of your home.

Losing a home is not just a physical and financial loss, it is an emotional one too and with all these factors put together, the devastation that a family will suffer is huge and will affect their lives, and often their futures, for years to come. Nothing can make up for the loss of a home, but having the right insurance coverage will speed the recovery and rebuilding of lives.

Path to Recovery

The federal and state aid that is made available after natural disasters are meant only to help those affected, survive. It is not for recovery and rebuilding lives that requires insurance.That’s what, those who have suffered losses because of the wildfires will be depending on. However, in many cases, the coverage may not be enough to allow complete recovery. If there are savings available, it could help make up the shortfall. But savings are created for a specific purpose and to use those resources to rebuild a home will mean that other important objectives must be sacrificed. If there isn’t enough in the form of savings to make up the insurance coverage shortfall, then what? The family’s future will be damaged and in the worst case, ruined.

Check Your Coverage

Underestimating insurance needs is easy. The value of a home will change over time and so too will the possessions that the family accumulates. What was an adequate coverage a couple of years ago may no longer be so, now. That is why it is essential to regularly review your insurance coverage and ensure that what you have is enough to help your family recover if your home should be lost.

All that it takes is a call to an insurance broker who will be able to review your existing coverage, your actual insurance needs s and then help you to cover the gap, if it should exist.

Wednesday, October 25, 2017

What Does Small Business Insurance Cover?



As a small business owner, you know the importance of insurance coverage for your business. It helps protect you from financial losses and against specific risks covered by the policy which typically includes fire, wind damage, lightning, falling objects, theft etc.  A normal policy will offer 3 basic types of coverage.

Clothing Store Owner.
https://www.allstate.com/tools-and-resources/business-insurance/small-business-insurance-need.aspx


General Liability Coverage

General liability will cover the medical costs if anyone is injured at your business place due to negligence. Depending on the policy terms, it may also pay for legal costs if you should besued over an accident that occurred at your place of business. General liability coverage is subject to limits. If the medical expenses are in excess to your coverage limit, you may have to pay from your pocket to cover the balance.

Business Property Coverage

Property coverage will protect the business premises (if you own it) from risks that are listed in the policy. For example, if the premises are damaged or destroyed by fire, the policy will help to pay for the repairs or rebuilding. If the furniture or equipment is damaged, destroyed or stolen, the policy will cover the cost of replacement or repair. When buying a small business policy it is important to choose the right deductibles and limits. This means that you can select the amount you will pay yourself before the policy kicks in, and the maximum amount that the policy will pay. As a general rule, higher the deductible, lower the premium.  Because of cash flow limitations, many small businesses make the mistake of keeping deductibles and limits low to reduce the premium outflow. However, saving a few dollars a month could result in paying thousands of dollars from your pocket if damage or loss occurs that is not covered. An insurance agent will be able to help you find the optimal coverage for your business.

Business Interruption Coverage

This will help you to continue operations after a covered peril occurs. It is meant to help in replacing lost income and the higher expenses that arise after your business operationsare affected. For example, if your premises are not usable after a fire, the coverage will help in paying rent for a temporary workplace. This coverage is subject to limits both in terms of the overall dollar amount payable as well as the time period for when it is applicable. Your insurance agent will be able to give you a clear picture of what the limits are to help you to find additional coverage, if you should need it.


Additional Coverage

In addition to these 3 basic coverage, it is often possible to buy additional coverage which can include:

 ·         Data compromise coverage

 ·         Employment practices liability coverage

 ·         Business auto insurance

 ·         Outdoor property coverage

 ·         Equipment breakdown coverage

 ·         Product liability coverage

 ·         Professional liability coverage


Ensure You Are Protected

The loss of your business could have a severe impact on you, your family, and your employees. Small business insurance is a protection to your business and by extension, to the ones who depend on you. The variable coverage limits and options available mean that the best way to get the protection you need, at a cost you can afford, is to consult a professional insurance broker.


Disaster Insurance – What You May Not Know

Hurricane, earthquakes and other natural disasters have been around since the beginning of time. The spurt in the volume and intensity of these disasters appear to be increasing over the years. While part of this may be due to climate change, the expanding population of cities, exponential growth of infrastructure and increasing value of homes are among the major reasons for these massive financial losses. These disasters and the publicity surrounding them have caused homeowners to re-look at their insurance coverage. While the overall policy may appear to offer adequate protection, there are factors that could limit the resources available to repair or rebuild your home.





Issues to Consider

         ·         Your standard disaster policy may not be enough. A typical homeowners’ policy will not normally cover damage from floods or rising water. Some policies pay for damage caused by wind or wind-driven rain but others do not. Some policies issued in areas that are prone to hurricanes include a specific “hurricane deductible” where the policyholder has to pay a large amount from his pocket before the coverage kicks in. For example, if a home valued at $200,000 is destroyed by a fire, the standard deductible is typically from $500 to $1,000. However, under the same policy, if the destruction it is caused by a hurricane, the deductible could be 5% or around $10,000. This is a huge difference. 

          ·         Because of this, you may have to dip into your savings. In the case of earthquake damage, you may need to pay as muchas 15% from your pocket. Without enough cash available, you could be forced to sell off assets to cover the cost of repairs. Ideally, you should have savings set aside for such a contingency or a Home Equity Line of Credit (HELOC) set up to cover you. The HELOC should be set up in advance because no lender will extend credit on a house that has already been damaged.


       ·         Since the standard homeowners insurance does not cover flood damage or loss, taking out flood insurance may be a good idea, depending on the flood risk in your zone. A qualified insurance agent will be able to help you evaluate the risk and find the right coverage. Note that there is awaiting period for this coverage to kick in – it is usually 30 days. This is to discourage people taking out a policy only when a flood threat is imminent. Another factor to keep in mind is that coverage offered by the federal government’s National Flood Insurance Program is limited to $250,000 for property and $100,000 for contents. Additional coverage can be bought from private insurers.


Check Your Coverage

The complexities of insurance coverage mean that it is easy to make mistakes when taking out a policy or misunderstanding the coverage that exists. Talk to a reputed insurance broker about your existing disaster coverage to know if there is a gap that needs to be covered. He will be able to help you stay completely protected.

Sunday, September 24, 2017

Filing a Claim after a Natural Disaster

Natural disasters like hurricanes and floods have been a major topic of conversation of late. The silver lining in the massive loss and damage that has occurred in Texas is that it has caused many homeowners to reevaluate the need for flood and earthquake damage coverage that is not typically covered by a homeowners’ insurance policy. Those who have the coverage will be protected if a disaster occurs. However, ensuring that you get the insurance pay out as quickly as possible is often not easy. It is estimated that the damage caused by hurricane Harvey in Texas could be around $10 billion. It means that insurance companies will have to process tens of thousands of claims. That volume will often lead to delays in the payouts. According to the National Association of Realtors, after a major natural disaster it could take anywhere from a week to a few months for an insurance adjuster to get in touch with a policy holder. It is worthwhile knowing what you can do to speed up the process if you should ever need to make a claim.

Image Courtesy : https://upload.wikimedia.org/


Expediting an Insurance Claim

  • Contact your insurance company as soon as possible. Even a day’s delay could mean weeks or months longer before the payout is made. It is not that the companies intentionally delay payments – they are flooded with claims and so the sooner the claim is filed, the sooner it can be processed.
  • Ask the insurance company when you can expect the adjuster to contact you. This will enable you to be ready when he comes.
  • Take pictures and videos of the damage, including personal items. Include the date of purchase and keep receipts of high-value items in a place where they will not be lost.
  • Keep a record and receipts of everything you spend to make any immediate repairs that maybe possible and are essential. Also, record everything you spend on accommodation and food in case your home is unlivable.
  •  Keep a detailed record of all the actions you take in filing your claim. This includes the people from the insurance company you speak to or correspond with. Note down the dates, times and include details of what was discussed.
  •  Be careful of what you discard. The adjuster may want to see these items. In case you have to discard them because of municipal hazard regulations or for your own safety, take pictures of all that is discarded to show to the adjuster.
  •  If the insurance company offers you the options of signing up for text alerts, do so. This is the quickest way to know the status of your claim, when the estimate is ready and when the payment will be made.

If you have the insurance policies or if you are planning to get additional coverage, talk to your insurance broker about other area or insurance company specific actions you can take to expedite the process, if you should ever have to make a claim.



Most Hurricane Harvey Victims Do Not Have Flood Insurance

Hurricanes are a part of life in many parts of US and people typically take some basic protections against them. It’s good enough at time, but not when something like hurricane Harvey hits. The flooding has been massive as we’ve seen on TV. The billions of dollars of damage that has been caused is a figure that many people may not be able to comprehend; but everyone can relate themselves to pictures of people being taken out of their homes by boats.


Image Courtesy : www.media.defense.gov/


Rescue Is Where Problems Begins

Rescuing people from the flooded areas was, of course, the priority. But for the families, who left flooded basements, water damaged walls and ruined furniture, appliances and valuable behind, the next stage is often a huge question mark. Some may have the resources to rebuild their lives, but the burden will be crushing. For most, the pockets are not deep enough. Many of them will be forced to sell and leave their communities. A major reason is that many of them do not have the insurance coverage they need to rebuild their lives.According to the Consumer Federation of America, only about 2 out of 10 homeowners in Houston have flood insurance.

Homeowners insurance generally covers only damage and loss caused by winds - flooding is not part of the policy.Separate policy is required to protect from flood damage. There are three wrong assumptions that caused so many Houston homeowners to not have the coverage they actually needed:
  •  The premiums flood insurance is thought by many to be too high. Actually, the cost would be even higher if the premiums were not subsidized by the federal government under the National Flood Insurance Program. Unfortunately, people did not realize that the cost of this insurance is reasonable considering the potential loss a flood could cause.
  •  Flood insurance is mandatory for those with federally backed mortgages in high flood risk areas called Special Flood Hazard Zones. Since Houston does not fall into this zone, homeowners thought that the risk was non-existent and so flood insurance was not required. Being outside a flood zone does not guarantee that flooding will not occur, as the residents of Houston found out.
  • A large number of people were under the assumption that state and federal aid that is made available when an emergency is declared will help them to recover. This aid is only meant to help people survive in the aftermath of natural disasters, not to enable them to rebuild their lives and homes.

California Is No Stranger to Flooding

California is no stranger to storms and weather-related property damage. Flooding could happen anywhere, whether or not the area is a flood zone. The fact that fierce storms and wind-related damage has occurred in the past with no flooding does not mean that it will not happen. In Corpus Christi and Rock port the damage was wind-related. In Houston, the same hurricane caused flooding.

California homeowners who do not have flood insurance are at a much greater risk than they realize. To understand the risks and potential loss and get the coverage that is needed, an insurance broker should be consulted. Being rescued from home by boat can be bearable if you know that you have the insurance coverage to rebuild and get back to normal life.


Monday, August 28, 2017

Car Insurance for New Drivers

If you have just gotten your driving license, you probably feel that the world is your oyster – you are now free to travel and go wherever you want. It is important to remember that passing your driving test does not automatically make you a good driver. That comes with experience on the road and an appreciation of the dangers that exist on the road. It is these dangers that you need to protect yourself against. Even if you do not make a mistake, the mistakes of others could put you and your vehicle in danger. That is why it is illegal to drive without insurance.



The Coverage You Must Have

There are varying levels of auto insurance available. In California, the minimum requirement is liability coverage. This is twofold:

 Bodily injury coverage which covers injuries suffered by others in an accident you are involved in.
 Property damage coverage which covers damage to another person’s property caused by an accident you were involved in.

The idea behind this minimum coverage is to protect others from injury or loss; it does not protect you or your car and if you are injured in an accident or your car is damaged, the medical and repair bills will have to be paid by you.

To be fully protected, you should consider optional coverages that will protect both you and your car. There are many types of optional coverage and an insurance broker will be able to help you find the policy that is right for you. That being said, here are the 3 most common types of additional coverage.

Coverage Options

Collision and Comprehensive Coverage:


  • Collison coverage covers damage to your vehicle in the event of an accident.
  • Comprehensive coverage covers damage or loss of your vehicle due to theft, vandalism, natural disasters natural phenomena etc. If your vehicle is an old one that needs to be replaced soon, then comprehensive coverage may not be essential and collision coverage may be enough. An insurance agent will be able to help you make the right decision.


Underinsured andUninsured Motorist Coverage:

Underinsured motorist coverage protects you should you be involved in an accident with a driver who does not have enough insurance to cover the damage that has occurred.
Uninsured motorist coverage protects you if you are involved in an accident with a driver who has no insurance at all.

Personal Injury Protection:

This will cover your medical expenses if you are injured in an accident, irrespective of whether it was your fault or not. This type of coverage usually allows you to have your medical bills paid without the need to wait for the accident investigation to be completed, a process that could often take a very long time.

What Do You Need?
Insurance is a complex subject and obtaining the guidance and advice of an insurance professional is always a good idea. He will be able to understand the type of driving you do, your current financials status and the type of coverage you require. He will then be able to offer you a policy that best fits your individual needs.