The below is an article published by Farmers. This is a good example of how Farmers responds in a catastrophe. Every event from Hurricane Ike (Farmers Ike Video) to wild fires in California were handled the same way. Farmers has the size and willingness to help customers 2 days to 2 weeks before other companies can even start. The desire combined with creating relationships by providing large donations of diesel or other needs to city services. Here is a link to hurricane Ike respo

As rescuers begin combing through the wreckage after tornadoes tore across Oklahoma on Monday, Farmers employees, agents and district managers are already meeting with affected customers in the Oklahoma City metropolitan area.

“Oklahoma City and the surrounding areas have been hit hard by these tornadoes and we are making contact with our customers as quickly as we can,” says John Lucido, state executive director – Oklahoma.

District manager Pepper Williams and members of Oklahoma’s Agency Catastrophe Team have been touring damaged neighborhoods and talking to customers in the harder hit areas since sunrise.

“We have unbelievable access to damaged areas as a result of the disaster relations we’ve created with local authorities and the insurance commissioner,” says Williams. “As a result Farmers is the first insurance carrier on the scene. Our Agency Catastrophe Team has been meeting customers to fill the gap between the 24 to 48 hours until the Farmers team of catastrophe adjusters arrives.”

Williams and the catastrophe team have been making sure customers and non-Farmers customers are OK and letting them know what general Homeowners policies state can and can’t be done to fix a damaged home.

“The customers are so impressed with Farmers being here to help right away,” Williams said. “But the greatest reaction we are getting is from those who aren’t Farmers customers. Their carriers aren’t here yet, and the 800-number customers I’ve talked with said their phone calls haven’t been returned yet.”

In addition, Oklahoma’s Customer Care Vehicle (CCV) is being deployed to help customers. It’s located in the Wal-Mart parking lot at 501 SW 19th Street in Moore, Okla. And one of the Mobile Claims Center (MCC) buses is stationed at 7105 S Anderson Rd., in Oklahoma City. At the CCV and MCC, Farmers customers and non-Farmers customers can use the free internet service, make calls on satellite phones, find information about emergency medical services or simply enjoy a cup of coffee.

Customers can also follow Farmers’ response to the tornado and the MCC’s whereabouts on Twitter at twitter.com/FARMERSRESPONSE and twitter.com/FARMERSMCC9.

Nashville Flood 2010

   Flood insurance is one area of insurance where most people don’t think about it until its close to home. One reason is most feel they can predict their flood risk, based on prior events. If you think about it this is partially true, depending how close you are to a river, ocean, or body of water.

   However, take it one step further and its easy to see that weather patterns have been changing, development of land changes the nature of water runoff, and floods are measured in chances in 100 years (longer than most of us live). So more now than ever prior short term indications are poor predictors of the future. This is one reason the national government provides insurance and not the private industry.

 A few keys to understanding on flood insurance works:
   1) There is a 30 day waiting period to issue a flood policy, unless its lender forced. Meaning if you see the water around you rising, it’s too late to buy a policy.
   2) A flood is defined as 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 your property). Bad drainage just on your property is not a flood.
   3) The highest coverage available from FEMA is 250K for a home, 100K for personal property. You can buy excess from private companies in most cases.
   4) Each structure even if on the same property must carry its own policy. 

Determine your Flood Risk at FloodSmart.gov 

 Is your property in a high risk or moderate to low risk area? Knowing your flood profile will help you understand your risk of financial loss. 

 Find out your relative flood risk right now — online at FloodSmart.gov’s “Assess Your Risk”. Simply enter your property address to see your relative risk, find links to flood maps, and other flood insurance community resources. 

 Flood maps determine your level of risk. You can also view current flood maps at FEMA’s Map Store located at www.store.msc.fema.gov. FEMA is also undertaking a nationwide effort to produce new digitized flood maps for hundreds of communities over the next five years. These new maps will reflect changes in floodplains caused by new development and natural forces. 

 News for Low-Risk Properties 

Expanded, Lower-cost Coverage 

If a single family home or business is located in a low- to moderate-risk area, the owners may be eligible for the Preferred Risk Policy (PRP). For homeowners, this policy covers the home and contents and starts at $112 a year. PRP policies are available for businesses as well, saving about 30 percent off standard premiums. Contents-only PRP policies are available for renters, and business owners that lease their buildings. Ask an insurance agent for details.

What about your car? If you carry comprehensive coverage (Other Than Collision) on your auto policy, then your car is covered for flood damage.

 The following is an article published by the Insurance Information Institute: (Apirl 2010). I think it does a good job of explaing the question I get often, “What does my credit have to do with insurance?”.

Credit Report Information—Who Wants It? 

It is becoming increasingly important to have an acceptable credit record. Whether we like it or not, society equates the ability to manage credit responsibly with responsible behavior, even if individuals have a bad credit record through no fault of their own. Landlords often look at applicants’ credit records before renting apartments to see whether they manage their finances responsibly and are therefore likely to pay their rent on time. Banks and other lenders look at the credit records of loan applicants to find out whether they are likely to have loans repaid. Some employers also look at credit records, especially where employees handle money, and view a good credit record as a measure of maturity and stability.

Why Insurers Need It: Insurers need to be able to assess the risk of loss—the possibility that a driver or a homeowner will have an accident and file a claim—in order to decide whether to insure that individual and what rate to set for the coverage provided. The more accurate the information, the closer the insurance company can come to making appropriate decisions. Where information is insufficient, applicants for insurance may be placed in the wrong risk classification. That means that some good drivers will pay more than they should for coverage and some bad drivers will pay less than they should. The insurance company will probably collect enough premiums between the two groups to pay claims and expenses, but the good drivers will be subsidizing the bad.

By law in every state, insurers are prohibited from setting rates that unfairly discriminate against any individual. But the underwriting and rating processes are geared specifically to differentiate good risks from bad risks. Since insurance is a business, insurers favor those applicants that are least likely to suffer a loss. One of the key competitive aspects of the personal lines insurance business is the ability to segment risks and price policies accurately according to the likely cost of claims generated by those policies.

Insurance scores help insurers accomplish these objectives. Actuarial studies by Tillinghast, an actuarial consultant firm, have shown a 99 percent correlation between insurance scores and loss ratio—the cost of claims filed relative to the premium dollars collected. In other words, people who have low insurance scores, as a group, account for a high proportion of the dollars paid out in claims. Insurance scores developed by the insurance scoring company Fair Isaac involve a set of 15 to 30 credit characteristics, each with an assigned weight, that produce a score ranging from 100 to 999. The lower the score, the greater the risk. According to Fair Isaac, 76 percent of consumers exhibit good or fair credit management behavior. Only four percent of the population are so-called “no hits” with no credit history. This small group would include the very young, who have not yet established a credit history; those who might not use credit for personal or religious grounds; and retirees who have probably paid off their mortgage.

The reasons behind the predictive value of credit scores appear to be behavioral. The character trait that leads to careful money management seems to show up in other daily situations in which people have to make decisions about how to act, such as driving. People who manage money carefully may be more likely to have their car serviced at appropriate times and may also more effectively manage the most important financial asset most Americans own—their house—making routine repairs before they become major insurance losses. But of course, there are always exceptions to the rule. For example, there are people who have filed for bankruptcy that have never filed an insurance claim. Furthermore, a low insurance score doesn’t predict that a person will have an accident.

The information used in insurance scoring models does not include personal data such as a person’s ethnic group, religion, gender, family or marital status, handicaps, nationality, age, address or income. The scoring process relies on information in a person’s credit record. Particular emphasis is placed on those items associated with credit management patterns proven to correlate most closely with insurance risk, such as outstanding debt, length of credit history, late payments, collections and bankruptcies, and new applications for credit. Credit-related activities within the last 12 months are given most weight.

Common Misunderstandings about Credit Scoring: Many people have no idea they are beneficiaries of insurance scoring. More than 50 percent of policyholders have a lower premium because of good credit, insurers say, although consumers themselves, when asked, think most people do not benefit.

Some consumers are disturbed by the fact that, when applying for insurance, one insurer will reject their application based on their insurance score yet another company will find it acceptable. They ask how insurers’ responses can be so different when they are all working from essentially the same credit report information. Many large insurance companies have now developed their own insurance scoring model, using their own proprietary information in combination with standard actuarial data. Even when insurers use the leading vendors of insurance scoring models they may have the model tailored to their own target market. Not all insurers are looking to insure the same kind of drivers or homeowners. Some may target only those with the best scores, with no recent accidents or traffic violations, while others may seek out people with a less than perfect record.

So, what’s the difference?

You already know what the typical townhouse and condo physically look like. And 90% of the time you know what it is when you see it. But it’s the other 10% that can get you in trouble. In Austin, the last 10 years it’s even more common for builders in downtown areas to split a lot in half with a two unit condo complex versus a two unit townhome. This is because the building permit process is much faster to build condos because the land does not need to be re-deeded since its still one owner of the land, the HOA, vs. two or more with a townhouse complex.

NOTE: being listed as a condo can mark a big difference when you look for a mortgage on a property like this as lending standards are stricter on condos.

The only way to tell the difference is by checking the legal documents that show exactly how it was defined when it was built. The restrictive covenants will state whether it is a townhouse or a condo. Usually, the closing attorney will pull a copy of these when they do their title search but, that may be a day before closing and you need insurance prepared well in advance. So, you may want to call the homeowners association president to get a copy or verification. Don’t trust the seller! They could have been mis-informed when they bought it.

NOTE: you can call your HOA and ask them if there is a master policy for the outside walls; If they say yes, then you live in a condo.

What’s the big deal? Condos and townhouses are insured by two different kinds of policies.

Since a condo owner only owns the space within the unit and its contents, that’s all a condo policy covers. The association’s master policy covers the walls, roof, and sometimes the deck, porch, etc..  And most condo association policies cover the interior cabinets and floor coverings as they were originally installed. There could be a problem if a unit has been upgraded from the original. Most times, the association policy will not cover any upgrades in cabinets, light fixtures, etc.. The buyer will have to increase this coverage. It’s called “alterations and improvements” coverage.

A townhouse is insured with a standard homeowners policy, just like a single family home. Since the townhouse owner owns everything from the ground up, they must be insured from the ground up, including the walls, roof, contents, lights, cabinets, etc..

With home insurance the perils covered (losses covered) can vary from insurance company to insurance company, but follow the outline of Broad or Open Perils for the structure. This outline is a good starting point to understand your home insurance, but you should always read the policy. It’s easier than you would think and can avoid surprises later.

The typical HO-A or ISO HO-1 policy which are broad form policies Cover the following Perils.

-Fire and lighting
-Windstorm an Hail
-Explosion
-Riot or Civil Commotion
-Aircraft
-Vehicles
-Smoke
-Vandalism and Mischief
-Theft
-Volcanic Eruption

By endorsement and extra premium often Accidental Discharge or overflow of water/steam can be added.

In addition to the above perils, the Open perils which offers more coverage, and are standard on the HO-B and ISO HO-3, as well as many individual insurance companies modified forms.

- Accidental Discharge or overflow of water/steam
- Falling Objects
-Weight of ice, snow, sleet
- Cracking, bulging of heating and A/C system
-Freezing
-Damage from artificially generated current
-Risk of Loss with exclusions (in other words they cover losses unless its excluded.)

The website below can guide you to compare policy forms among companies. NOTE: I have found many errors so use it as guide and ask your agent to clarify if need be.

http://www.opic.state.tx.us/hoic.php

As a benefits advisor, I would like to provide you a summary of the key components of the health care reform legislation and how it may impact you or your business. I expect that given the number of years that it will take to fully rollout these reforms, there will continue to be changes to many elements of the legislation. However, for the first time in over a year, we have a much clearer view of the changes that will potentially take place. This bill will:

• Mandate that everyone must have insurance. (This is the trade off to get Health insurance companies to accept all applications. Current situation in the individual market is if you have a prescription or medical condition then health companies exclude the coverage)
• Result in more than 30 million additional people becoming insured.
• Provide for subsidized coverage for people that can’t afford it and increase the number of people that will qualify for Medicaid.
• Make cuts to Medicare Advantage Plans and change their payment formula.
• Increase taxes and fees to many individual Americans and Corporations.
• Make many changes to the way Insurance Companies do business from not allowing them to use pre-existing conditions to limiting their rates based on medical loss ratios.

Many of these elements do not phase in for many years.  Those that are most immediate and are expected to occur in 2010 are:

• Tax credits for certain small businesses.
• Elimination of pre-existing conditions and an increase in dependant coverage to age 26.
• Creation of a temporary reinsurance program to provide coverage for retirees over 55 who are not eligible for Medicare. (This has been a huge issue for clients retiring early, as most in this age group when applying for health insurance after they leave work can’t get affordable rates or get coverage with exclusions).
• The further creation of a temporary national high risk insurance pool.
• The prohibition of lifetime limits on benefit payments.
• Closing the so called “doughnut hole” by providing immediate tax credits for Medicare patients who face a gap in prescription drug coverage.

The real impact in the health insurance system won’t occur until the year 2014.  During the interim, there will be the phase-in of additional new taxes that will provide added government revenue to pay for these changes.  The four most significant changes occurring in 2014 are:

• Insurers will be required to take all applicants. (This will help most people over the course of their lifetime)
• Insurance will be mandated for all Americans.
• Tax credits to help pay premiums will start flowing to middle-class working families.  The most aid – including help with copayments and deductibles – will be made available for those individuals and families on the lower end of the income scale.
• Insurance exchanges will be created to help administer subsidies for those individuals that require them.

When fully implemented, I believe that the majority of working-age Americans and their families will continue to have employer-sponsored coverage as they do today. In addition, through mandates and other subsidies, the number of people insured can grow by more than 30 million. But the rest of the story remains to be seen on how to control the cost of medical care going foward.

It is one of the most commonly repeated myths about insurance. Renters don’t need insurance because their landlord’s policy provides coverage for the renters’ property.

Renters insurance is basically like homeowners coverage without coverage for the structure. However unlike a home an apartment can have several buildings connected. This exponentially makes your chance for a fire or water damage occur, as many other units could affect your apartment and property. For example a neighbor starts fire with a cigarette, and it spreads to your apartment.

The Stats:

192 property crimes per 1000 rented households, making a renter 40% more likely to be a victim then a home owner.

U.S. Department of Justice Bureau of Justice Statistics – 2005

Average property loss in burglary is 1000

FBI – 2004

What does Renters Insurance Protect:

Renters insurance provides coverage for your possessions and for liability if someone injured while on your premises sues you. Renters insurance also covers any of your possessions when they are away from your residence, including in your car.

In addition, renters policies provide what are called additional living expenses. If some catastrophe covered by the policy — fire, bursting pipes — makes the place you are renting uninhabitable, the policy will pay some of the costs you incur to live somewhere else while the residence is being repaired.

 The best part is renters insurance cost as low as 75 per year for a minimal policy, and with a typical policy costing about 250 per year.

NOTE: There are often savings on your auto insurance policy if the renters and auto insurance policy are with the same company. That savings can make the true cost of the policy sometimes nothing or a few dollars a month.

You’ve just had an accident. At the scene, you need to do the following:

 1. Stop the car and get help for any injured drivers or passengers. Give whatever help you can to the injured (covering them with blankets, making them comfortable), but don’t move them. You could aggravate the injury(ies). Have someone call the police or highway patrol. Tell the police how many are injured and the possible extent of the injuries (whether they appear serious or not). The police can then notify the nearest medical units if they are needed.

 2. Protect the accident scene. Try to prevent further damage to the vehicles involved be setting up flares or getting your car off the road.

 3. Give the police officers whatever information they require, including your version of what happened. Do not admit you were at fault, either to the police or the other driver(s). Just give the facts as you see them. Ask the investigating officer how you can get a copy of the police report. You might need the report when you submit your claim to the insurance company. Stay at the accident scene until the police have left. (If it’s a minor accident, the police may not make a report. In fact, they may not even come to the scene if there are no injuries or serious damage to any of the vehicles involved). The officer plays a big role in documenting the accident and reports the facts from both sides and witnesses. Getting all this information is important because stories often change as time goes on. NOTE: If one party of the accident is ticketed by the officer then it’s almost certain that person will be at fault.

 4. If the officers refuse to come, you will want to see if you can find any witnesses and take pictures with a camera phone. This is also important in a parking lot accident, as there are no rules governing. By collecting this information you are protecting yourself from someone changing their story after the fact. Which in my personal experience the story will change about 50% of the time within 1-2 days. If it’s a hit from behind there isn’t much a changed story can do to change fault.

  5. Write down the names and addresses of all drivers and passengers involved in the accident, as well as the license number, make, model and year of each car. Make a note of the driver’s license number(s) and insurance information of the other driver(s). Write down the names and addresses of as many witnesses as possible. You can take pictures to help you document as well.

 6. Call your insurance agent or the local claim representative for your insurance company to report the claim. Actually, it’s a good idea to call your insurance agent in addition to the claim representative. If your agent is involved, it could help speed the claim process. You should also tell your agent if you are not satisfied with how your claim is being handled.

 7. Ask your agent or insurance company representative how to proceed and what forms or documents you will need to support your claim. Your insurer may require you to fill out a “proof of loss” form, as well as supply documents pertaining to your claim such as medical and auto repair bills, and a copy of the police report.

 8. Keep records of any expenses you have as a result of the accident, including any related to a temporary inability to work or perform basic household functions. Your policy may allow you to be reimbursed for such things as medical and hospital expenses, and lost wages.

 9. If you are not satisfied with how your insurer is handling/has handled your claim, make your feelings known to the company and to your agent.

      Ask an insurance agent, a mortgage broker, and a realtor “How much insurance should I have on my new home” and I will guarantee you will get three different answers.  The mortgage broker might say the loan amount, the realtor might say the market value, and the insurance agent, if he or she is doing their job correctly will say the replacement cost of the home.  So who’s correct?  In short, it has to be the replacement value. Homeowners want enough coverage to rebuild their home if a catastrophe happens.  Let’s take a look at how an insurance company comes up with this number.

      Insurance companies use a computerized “replacement cost worksheet” using historical data of building costs in a given area. This data is compiled by independent companies who do actual surveys of building costs and provide it to insurance companies and others in the construction business. One of the best known companies providing this information is Marshall & Swift. By plugging in the square footage, number of baths, style of the home, and the home’s other amenities into the worksheet a replacement value is determined.  The worksheet also considers the extra cost of rebuilding a home like demolition cost, debris removal, architectural plans, and even environmental costs.  The replacement value may be more or less than the home’s market value. In a depressed home market, this value could be more than what a home sold for. The replacement value could also be more than the sales price in a distress sale.  In a hot real estate market, the value could be, and usually is, less than what the home sold for.  The replacement value will also be less than the market value when a sale involves a large amount of acreage.  This causes a dilemma in that the mortgage company or bank wants the insurance to be equal or greater than the loan amount and the buyer doesn’t want to insure more than the replacement cost.  Many states have enacted laws stating lenders cannot force insurance above the replacement cost of a home due to this problem.  Keep in mind that the replacement cost worksheet works well in determining the correct amount of insurance for the average home in the average community.  High valued homes with a lot of customization present a different set of challenges.

Why do Insurance Companies Insist on Insuring at Replacement Cost?

      First and foremost, insurance companies and their agents want clients to have adequate insurance in the event of a catastrophe.  No one wins when a fire destroys a home and there is not enough insurance to rebuild what a family has worked long and hard to accumulate.  Insuring to replacement cost also ensures that the insurance company is collecting enough premium to set aside the reserves that are needed to pay its clients claims when they do happen.

      I hope this sheds a little light on the difference between the market value and that mysterious number insurers use call “Replacement Value”

You absolutely have insurance issues to consider when renting out your home. As you might have guessed, rental property owners have some unique insurance needs. A standard homeowners policy isn’t appropriate for rental property, because:

 (1) you don’t need to insure the contents of the house, unless you provide furnished accommodations;

(2) you need to be more concerned about liability issues; and

(3) you need to protect yourself against the loss of rental income.

 A good rental property policy should provide the following, however the best proactive protection you can do is rent to people with good credit scores, and offer to repair the small things before they become large issues.

Broad coverage for the physical structure of the house:

• Coverage for other structures located on the property (garages, sheds, etc.)–this coverage is often limited to 10 percent of the coverage for the house but usually can be increased if needed
• Coverage for your property left on the premises (appliances, maintenance equipment, etc.)  Many policies designed for rental properties give a minimal amount of coverage.  Check to make sure it is enough
• Coverage for loss of use, if you lose rental income as a result of a covered loss.  Many mortgage companies are now requiring that this coverage be included before providing a loan on a rental property.  Without this coverage you will have to reach into your pocket to pay the continuing mortgage payments.