Twelve Ways to Save on Homeowners Insurance

 

The best way to save on homeowners insurance is to protect your home against typical perils. By preventing losses and claims against your policy, you can help to keep the cost of insurance down. These include: 1.) Keep fire extinguishers in fire-prone areas such as the kitchen, laundry and garage. 2.) Replace old, faulty wiring and make sure to tell your insurer. 3.) Regularly check your roof, down spouts and water pipes for clogs or leaks. 4.) Discourage crime by using exterior lights at night, installing deadbolt locks on all doors, and using timers on inside lamps and lights. 5.) Keep your property safe. Repair loose railings, steps or walkways. You may want to consider adding storm shutters. 6.) Ask about available discounts. Some companies provide homeowners discounts for newly constructed homes, since they’re built to updated building codes and electrical standards. Most companies offer discounts for homes that include a monitored security system, but be sure to ask how much you’d save on your insurance before going to any great expense in security system installation. If you’ve had your home insured with the same company or agency for several years and have been claim-free, you may also be eligible for an additional premium discount. Ask your agent or company representative for tips to help reduce your risks. 7.) Raise your deductibles. By raising your policy’s deductible, you’re responsible for smaller losses, not your insurer, thus lowering your premium and chances for frequent claims. 8.) Review your policy annually. Before tucking away your policy renewal, make sure the information is correct and up to date. For instance, brick or masonry is less expensive to insure than a frame structured home (except for earthquake insurance). Double-check the information regarding how far your home is from a water source such as a fire hydrant or a retention pond, as well as the location of the nearest fire station. If you’ve insured an item separately and it’s depreciated, reduce the floater amount and pocket the difference. 9.) Don’t over-insure. Your land is included in your home’s market value, so don’t include it when deciding how much insurance to buy. If you do, you’ll wind up paying higher premiums. 10.) Avoid frivolous claims. Submitting a claim after years of paying premiums is justifiable, but frequent claims may mark you as a high risk. 11.) Cover your home office. Don’t assume automatic coverage. Premiums can run as little as an extra $20 and can protect business risks. 12.) Keep your garage doors closed, even when you’re home.

Source: Arizona Insurance Council

Homeowners insurance losses are climbing; Cost Drivers List

The following are true of both residential and commercial buildings.  I believe this information can help us all keep our insurance costs down.

Goal: Affordable Homeowners Insurance

Affordable homeowner insurance is a major concern for insurance companies and their customers. In recent years, the factors that determine the cost of insurance have forced premiums higher.

Cost Driver Number 1

Building Materials, Home Repairs: In recent years, increases in cost for lumber, steel, concrete and copper have significantly outpaced other products measured by the Consumer Price Index. Those price increases affect what insurers pay to repair and rebuild homes and the costs of satisfying those claims is shared by all homeowner insurance consumers.

Cost Driver Number 2

Water Claims: Insurers have paid more money to satisfy claims caused by water damage than any other single cause.

Cost Driver Number 3

Crime : Arizona continues to rank as having one of the highest crime index’s in the United States. In its latest analysis of crime, the Arizona Criminal Justice Commission reported that Arizona’s property offense rate was 36% higher than the national average in 2005. For every 100,000 people who live in Arizona, 5,168 are victimized by crime annually.

Cost Driver Number 4

Windstorms: Windstorms are an annual occurrence in Arizona, typically occurring during the “monsoon season.” These strong winds, usually accompanied by hail or rain, cause millions of dollars of damage to Arizona homes each year. In 1996, one monsoon storm caused $160 million in damage to Arizona homes.

Cost Driver Number 5

Fire/Arson: The top five causes of home fires are cooking mishaps, heating equipment malfunctions, arson, faulty home-and-appliance wiring, and wildfires.

Wildfires have become more serious in recent years as increased development borders forests and deserts in a growing number of Arizona communities. Oftentimes, these unincorporated areas lack the necessary regulations to protect homes from wildfires.

Arson is also increasing. While it is a difficult crime to successfully prosecute, government statistics indicate arson may be responsible for a third of all home fires and in most of those cases, the homes are total losses.

Sources: Insurance Information Institute; Phoenix Fire Department; Office of Federal Housing Enterprise Oversight; Federal Bureau of Investigation; and U.S. Department of Labor, Bureau of Labor Statistics.

Homeowners insurance losses are climbing; Cost Drivers List

The following are true of both residential and commercial buildings.  I believe this information can help us all keep our insurance costs down.

Goal: Affordable Homeowners Insurance

Affordable homeowner insurance is a major concern for insurance companies and their customers. In recent years, the factors that determine the cost of insurance have forced premiums higher.

Cost Driver Number 1

Building Materials, Home Repairs: In recent years, increases in cost for lumber, steel, concrete and copper have significantly outpaced other products measured by the Consumer Price Index. Those price increases affect what insurers pay to repair and rebuild homes and the costs of satisfying those claims is shared by all homeowner insurance consumers.

Cost Driver Number 2

Water Claims: Insurers have paid more money to satisfy claims caused by water damage than any other single cause.

Cost Driver Number 3

Crime : Arizona continues to rank as having one of the highest crime index’s in the United States. In its latest analysis of crime, the Arizona Criminal Justice Commission reported that Arizona’s property offense rate was 36% higher than the national average in 2005. For every 100,000 people who live in Arizona, 5,168 are victimized by crime annually.

Cost Driver Number 4

Windstorms: Windstorms are an annual occurrence in Arizona, typically occurring during the “monsoon season.” These strong winds, usually accompanied by hail or rain, cause millions of dollars of damage to Arizona homes each year. In 1996, one monsoon storm caused $160 million in damage to Arizona homes.

Cost Driver Number 5

Fire/Arson: The top five causes of home fires are cooking mishaps, heating equipment malfunctions, arson, faulty home-and-appliance wiring, and wildfires.

Wildfires have become more serious in recent years as increased development borders forests and deserts in a growing number of Arizona communities. Oftentimes, these unincorporated areas lack the necessary regulations to protect homes from wildfires.

Arson is also increasing. While it is a difficult crime to successfully prosecute, government statistics indicate arson may be responsible for a third of all home fires and in most of those cases, the homes are total losses.

Sources: Insurance Information Institute; Phoenix Fire Department; Office of Federal Housing Enterprise Oversight; Federal Bureau of Investigation; and U.S. Department of Labor, Bureau of Labor Statistics.

Homeowners insurance losses are climbing; Cost Drivers List

The following are true of both residential and commercial buildings.  I believe this information can help us all keep our insurance costs down.

Goal: Affordable Homeowners Insurance

Affordable homeowner insurance is a major concern for insurance companies and their customers. In recent years, the factors that determine the cost of insurance have forced premiums higher.

Cost Driver Number 1

Building Materials, Home Repairs: In recent years, increases in cost for lumber, steel, concrete and copper have significantly outpaced other products measured by the Consumer Price Index. Those price increases affect what insurers pay to repair and rebuild homes and the costs of satisfying those claims is shared by all homeowner insurance consumers.

Cost Driver Number 2

Water Claims: Insurers have paid more money to satisfy claims caused by water damage than any other single cause.

Cost Driver Number 3

Crime : Arizona continues to rank as having one of the highest crime index’s in the United States. In its latest analysis of crime, the Arizona Criminal Justice Commission reported that Arizona’s property offense rate was 36% higher than the national average in 2005. For every 100,000 people who live in Arizona, 5,168 are victimized by crime annually.

Cost Driver Number 4

Windstorms: Windstorms are an annual occurrence in Arizona, typically occurring during the “monsoon season.” These strong winds, usually accompanied by hail or rain, cause millions of dollars of damage to Arizona homes each year. In 1996, one monsoon storm caused $160 million in damage to Arizona homes.

Cost Driver Number 5

Fire/Arson: The top five causes of home fires are cooking mishaps, heating equipment malfunctions, arson, faulty home-and-appliance wiring, and wildfires.

Wildfires have become more serious in recent years as increased development borders forests and deserts in a growing number of Arizona communities. Oftentimes, these unincorporated areas lack the necessary regulations to protect homes from wildfires.

Arson is also increasing. While it is a difficult crime to successfully prosecute, government statistics indicate arson may be responsible for a third of all home fires and in most of those cases, the homes are total losses.

Sources: Insurance Information Institute; Phoenix Fire Department; Office of Federal Housing Enterprise Oversight; Federal Bureau of Investigation; and U.S. Department of Labor, Bureau of Labor Statistics.

FARMERS INSURANCE FINANCIALLY STABLE DURING RECESSION

(Dallas Business Journal) While most of the United States is in the midst of an economic recession, the Farmers Insurance Group of Companies^® continues to grow its business and attract new customers just as it has since its founding in 1928. Farmers Insurance is playing up these facts in a new advertising campaign, which touts the company’s financial solvency, stability and strength.

The advertising campaign includes 60-second radio commercials now running on stations nationwide. The message is also in several online venues, including Yahoo.com, CNN.com, MSNBC.com and WSJ.com. Farmers Insurance is currently one of the fastest growing, multi-lines insurance companies in the United States.

“Our new ads speak to Farmers’ history of solvency during the Great Depression; the wisdom of our conservative investment strategy; and our recent upgrade in financial-strength ratings,” said Kevin Kelso, Executive Vice President and Chief Marketing Officer for Farmers Insurance. “We want our customers and prospective customers to know that when it comes to Farmers Insurance, we are a silver lining in today’s dark, gloomy economic storm clouds.”

In the Farmers Insurance radio ads, reference is made to the Great Depression when Farmers Insurance was just starting out in the business of selling insurance. “During the Great Depression, while some insurance companies were paying claims with IOUs, Farmers was paying its customers’ claims with cash,” said Kelso. “The Farmers Insurance proud tradition of financial stability and industry leadership continues today.”

The new campaign is the first developed by Farmers new advertising agency, The Richards Group of Dallas , Texas . To learn more about the products Farmers Insurance Group has to offer, visit any Farmers Insurance agent or the Farmers Web site at www.farmers.com.

WEDDING SEASON FAST APPROACHING: GOT RING INSURANCE?

Putting a policy on your engagement ring may sound unromantic, but nothing’s sweeter than peace of mind.

What It Is: Ring insurance is best purchased as an extension (also called a “rider”) for your renters’ or homeowners’ policy. Renters’ and homeowners’ policies cover the stuff in your home, but only up to a certain dollar value: Expensive, special items like engagement rings, art, and electronics are guaranteed through scheduled personal property coverage — an insurance policy extension that covers particular items.

Who Needs It Most: Any couple with jewelry that has high material or sentimental value — whether your wedding and engagement rings cost $500 or $50,000, an insurance policy is a way of honoring not just their financial value but what they represent. The sentiment behind your rings is priceless, but the rings themselves can be replaced — if they’re insured — in the event that something happens to them.

What to Know About How It Works: You’ll need to provide your receipts, as well as an appraisal (which costs a small fee; you can get an appraisal from a certified gemologist). And remember: If you move after the wedding, make sure your “ring rider” follows you. Some couples have the ring insured at the bride’s house (or her parents’) before the wedding, but forget to add it to the policy for their new home when they move in together.

If you don’t have a renters’ or homeowners’ policy, there is an alternative way to insure your ring: Certain insurance companies offer policies through jewelers on individual pieces — ask your jeweler if they work with an insurance company to offer ring insurance. These kinds of policies can vary widely company by company (usually a jeweler will offer a policy that’s underwritten by smaller company), so ask specific questions about the level of coverage provided.

Questions To Ask Before You Choose a Policy:

Average Cost: The yearly cost to insure your ring is $1 to $2 for every $100 that it would cost to replace. In plain English, this means that if your ring would cost $9,000 to replace, you might expect to pay between $90 and $180 per year to insure it — or slightly more in cities where the risk of theft is higher.

How To Get Your Cost Down: Buy a vault or safe to keep jewelry in when it’s not being worn. (You can also keep paperwork like appraisals in the safe, so you’ll always know where it is if needed.)

What To Remember if You Only Remember One Thing: When you shop for a “ring rider” policy, make sure to read the fine print: A good policy will cover every potentially ring-threatening situation from theft to damage to accidentally dropping it in the garbage disposal. © 2009 The Knot Inc. All rights reserved.

Driven to Desperation; Auto Dumping Surges as Economy Sours

AUTO DUMPING SURGES

 

 

(Claims Magazine) A woman parked her late-model car just feet from the stormy Gulf Coast waters by Gulfport, Miss. as Hurricane Gustav closed in. She jumped into a waiting vehicle and zoomed off, leaving her car to the mercy of the raging wind and surging ocean.
Paula Parent allegedly sunk her 2005 Chevy Trailblazer in Lake Erie for insurance money in June 2008. According to investigators, the keys were still in the ignition, and a rock was tied to the gas pedal. The Buffalo-area woman later admitted that she wanted to buy a vehicle with better mileage.
Helen Marler, a Yuba County, Calif. resident, torched her Jeep Liberty to escape the $ 600 monthly payments, while her husband plunked his Nissan Titan into a river to collect a $ 29,000 insurance policy, prosecutors say.
As America’s economy sinks deeper into a trough, growing numbers of anxious drivers are illegally dumping unwanted vehicles in the hope that insurance payouts will help relieve the financial misery. Gas prices have surged, and credit has been perhaps all too readily extended. The nation’s sudden financial downturn has created a perfect storm of economic stress. People cannot afford vehicles that have suddenly grown too expensive, and their personal finances take a beating. Other economy-driven problems, such as untenable mortgages, may lead some to seek insurance money to ease the pinch.
Parting Is Sweet Sorrow
So-called vehicle give-ups have long been a common insurance crime. When a vehicle becomes too expensive or burdensome, a driver may torch it, drown it in a lake or a river, or simply abandon it in a remote location. The driver then tells the insurer that someone stole the doomed vehicle, demanding an insurance payout. Unfortunately, rapidly spreading warning signals suggest that this scheme may be spreading.
“Spikes in people dumping their vehicles are the norm in an economic downturn,” said Douglas Ashbridge, director of special investigations for Farmers Insurance Group. “The vehicles are easy to report stolen, and the fraud is more difficult to verify. It’s a way out, a way to get out from under vehicle payments and let the insurance company pay off the loan.”
The Coalition Against Insurance Fraud (CAIF) investigated nearly a dozen locales around the U.S. in the late summer and early fall of 2008. The data gathered are usually anecdotal and suggestive but do reveal warning signals. As Ashbridge put it, “We’re seeing more give-ups pretty much across the board.”
In New York, arrests for owner give-ups have soared 25 percent in 2008 compared to the previous year, according to the state’s insurance department. The department logged 101 busts for all of 2007, but had recorded 93 cases by August 2008. Most of the busts happened in New York City, including nearly two dozen that involved gas-gobbling SUVs.
“Owners are giving up their vehicles due to high leases, the economy, and prices of gasoline,” says Frank Orlando, head of the New York Fraud Bureau. “Some are high-end vehicles that are costly to maintain.” This problem persists in other states as well. For instance, in New Jersey, suspected vehicle arsons have risen steadily. The state fire marshal recorded 59 possible torchings in 2004; 76 in 2005; and 94 in 2007. “Fraud investigators noticed a spike in suspected auto give-ups this past summer, though firm statistics still are being compiled,” says John Butchko, special assistant with the state attorney general’s office. “We’re seeing the troubling signs of an increase in suspicious claims, which have especially been trending toward the larger, low-mileage vehicles.”
In Ohio, the state fire marshal recorded 3,168 vehicle arsons last year, which represented a 10 percent increase from the 2,872 reported in 2006. According to Columbus’ arson division, vehicle fires rose from 140 in 2005 to 202 in 2006, the year the subprime mortgage crisis first began exploding.
“I’m sure more give-ups are coming,” says Michelle Brugh, head of Ohio’s Insurance Fraud Bureau. “I wouldn’t be surprised, so we’re taking a proactive approach.”
In Mississippi, police have unearthed dozens of vehicles suspiciously abandoned on piers, beaches, and other places near seashores, where surging waters and high winds from Hurricane Gustav could easily wreck them. In California, the state fraud bureau reported that insurers referred 40 percent more suspected give-ups to the state’s insurance department during the 2008 fiscal year — which ended June 30, 2008 — than the previous year. California also had a jarring 5.4 percent unemployment rate in 2007, according to federal figures. In addition, RealtyTrac reports that the state ranked second in the nation for foreclosures through August 2008.
Cases in San Bernardino County and San Joaquin Valley also have increased in recent months, according to news reports. In Fresno County, prosecutors charge that 12 people ran an insurance fraud ring that burned vehicles for clients.
Actual arrests, however, have remained fairly steady statewide, though investigations often are lengthy and could yield more arrests later, said Dale Banda, former head of the state fraud bureau, who retired this fall.
Meanwhile, mixed messages are flowing from Florida. Recorded vehicle fires have dropped, according to the state fire marshal. Vehicle give-ups also have decreased slightly, according to the state fraud division’s Maj. Jack Kelley. However, local police in Miami also recently told reporters that give-ups were rising in their city. State Farm said it has noticed a statewide uptick.
“We’ve seen a substantial increase in vehicle fires in Florida and New York,” said Dennis Schulkins, claim consultant with State Farm’s investigative unit. “How much you can attribute to arsons based on the economy is unclear. Clearly, when there’s an economic downturn, you’ll see an increase in opportunistic fraud. I think that’s the situation we’re in now.”
Utah’s Fraud Bureau, which normally has a caseload of one or two suspected give-ups, is now investigating 30 cases, said Joe Christensen, head of the state fraud bureau. The troubled economy, along with a new state rule requiring insurers to report cases, may account for the spike, he said.
The Arkansas Fraud Bureau is seeing similar trends. It normally investigates a few suspected give-ups each year but logged 18 cases in July and August this past year, including three arsons, according to Cory Cox, director of the unit.
In Nevada, about one in every four cases investigated by an auto-theft task force covering the Las Vegas metro region involved suspected owner give-ups.
“Those are picking up,” said Las Vegas Police Lt. Robert DuVall, who is on the city’s task force. “The national average is about 18 to 20 percent. In my professional opinion, we’re a little higher than the national average. We’re seeing more of it as a result of the economy.”
Coincidentally or not, the unemployment rate in the Las Vegas area stood at 7.1 percent through August 2008, which was among the worst rates for metro areas in the U.S.
Lastly, in South Carolina, a survey of insurers conducted by the South Carolina News Service indicated that suspected arson schemes of all kinds — including vehicle torchings — rose as much as 200 percent from 2006 to 2007. Many dumped vehicles around the United States are gas-inhaling SUVs, investigators say. Overall, SUV resale values have plunged 50 percent in the last year, which is triple the normal depreciation, according to Kelley Blue Book prices. Lured by easy credit, drivers often owe more on their loans than their SUVs are worth in trade-in value.
In fact, the environment for a yet another SUV give-up spike may already be emerging. SUV sales are firming up, thanks to recent drops in gas prices as well as sales incentives averaging around $ 6,000 as of August 2008. Are yet more overeager drivers buying more vehicle than they can afford? How many will want to unload their SUVs if the economy keeps tanking or gas prices skyrocket again? Only time will tell, but preparation and vigilance can help mitigate the problem.

DIFFERENT TYPES OF COMMERCIAL INSURANCE

The most common types of commercial insurance are property, liability and workers’ compensation. In general, property insurance covers damages to your business property; liability insurance covers damages to third parties; and workers’ compensation insurance covers on-the-job injuries to your employees. Depending on your business, you may want additional specialized coverages. Listed below are some of the different types of business insurance.

PROPERTY INSURANCE Property insurance pays for losses and damages to real or personal property. For example, a property insurance policy would cover fire damage to your office space. You can purchase additional coverages for business property, including:

Boiler and Machinery Insurance Boiler and machinery insurance, sometimes referred to as “equipment breakdown” or “mechanical breakdown coverage,” provides coverage for the accidental breakdown of boilers, machinery, and equipment. This type of coverage usually will reimburse you for property damage and business interruption losses. For example, this coverage would cover fire damage to computers.

Debris Removal Insurance Debris removal insurance covers the cost of removing debris after a fire, flood, windstorm, etc. For example, a fire burns your building to the ground. Before you can start rebuilding, the remains of the old building have to be removed. Your property insurance will cover the costs of rebuilding, but not of removing the debris.

Builder’s Risk Insurance Builder’s risk insurance covers buildings while they are being constructed. For example, a Builder’s risk policy would cover losses if a windstorm takes down your partially constructed condominium complex.

Glass Insurance Glass insurance covers broken store windows and plate glass windows.

Inland Marine Insurance Inland marine insurance covers property in transit and other people’s property on your premises. For example, this insurance would cover fire-damage to customers’ clothing from a fire at your dry cleaning business.

Business Interruption Insurance Business interruption insurance covers lost income and expenses resulting from property damage or loss. For example, if a fire forces you to close your doors for two months, this insurance would reimburse you for salaries, taxes, rents, and net profits that would have been earned during the two-month period.

Ordinance or Law Insurance Ordinance or law insurance covers the costs associated with having to demolish and rebuild to code when your building has been partially destroyed (usually 50 percent). For example, your three-story building is 100 years old. A flood destroys the basement and first two stories. Because more than 50 percent of your building has to be rebuilt, a local ordinance requires that the building be completely demolished and rebuilt according to current building codes. Property insurance covers only the replacement value, not the upgrade.

Tenant’s Insurance Commercial leases often require tenants to carry a certain amount of insurance. A renter’s commercial policy covers damages to improvements you make to your rental space and damages to the building caused by the negligence of your employees.

Crime Insurance Crime insurance covers theft, burglary, and robbery of money, securities, stock, and fixtures from employees and outsiders.

Fidelity Bonds A bond company covers losses due to a bonded employee’s theft of business property and money.

LIABILITY INSURANCE Liability insurance covers injuries that you cause to third parties. If someone sues you for personal injuries or property damage, the cost of defending and resolving the suit would be covered by your liability insurance policy. A general liability policy will cover you for common risks, including customer injuries on your premises. More specialized varieties of liability insurance include:

Errors and Omissions Insurance Errors and omissions (“E & O”) insurance covers inadvertent mistakes or failures that cause injury to a third party. The act must actually be an inadvertent error, and not merely poor judgment or intentional acts. For example, an E & O policy would cover damages arising from an insurance agent failing to file policy applications, or a notary forgetting to fill out notarizations properly.

Malpractice Insurance Malpractice insurance, or professional liability insurance, pays for losses resulting from injuries to third parties when a professional’s conduct falls below the profession’s standard of care. For example, if a doctor makes a mistake that other doctors of his specialty would not have made, his patient might sue him. A malpractice policy will pay his defense costs and any judgment or settlement. Malpractice insurance is available for doctors, dentists, accountants, real estate agents, architects, and other professionals.

Automobile Insurance Commercial automobile policies cover the cars, vans, trucks and trailers used in your business. The coverage will reimburse you if your vehicles are damaged or stolen or if the driver injures a person or property.

Directors’ and Officers’ Liability Insurance This type of insurance is generally purchased by corporations and nonprofit organizations to cover the costs of lawsuits against directors and officers.

WORKERS’ COMPENSATION INSURANCE Workers’ compensation insurance covers you for an employee’s on-the-job injuries. Businesses with employees are required by various state laws to carry some type of workers’ compensation insurance. In most cases, workers’ compensation laws prohibit the employee from bringing a negligence lawsuit against an employer for work-related injuries.  

Source: Findlaw.com

Farmers goes NASCAR!

Attention, all NASCAR racing fans. Farmers has just announced that we’ll be sponsoring driver Travis Kvapil and the No. 28 Ford Fusion entry at next weekend’s NASCAR Sprint Cup Series in Fontana, Calif.

For Farmers, it’s an opportunity to put our name in front of a huge audience of passionate NASCAR fans. As for Kvapil: “It’s another great opportunity for the No. 28 team and Yates Racing to have Farmers Insurance on board for next weekend’s race at Fontana,” he says. “Yates and Ford Racing have a great intermediate track program, which gives us a lot to look forward to next weekend at Fontana.”

“This is an exciting first for Farmers, and we’re pleased to sponsor Travis Kvapil in next Sunday’s Sprint Cup race,” says Kevin Kelso, executive vice president and chief marketing officer. “The Farmers Family of 21,000 employees and 26,000 agents from coast to coast are longtime fans of NASCAR. We’ll all be cheering for Yates Racing and a big win for Travis Kvapil.”

Kvapil is from Janesville, Wis., and has recorded six top-10 finishes and one career pole in the NASCAR Sprint Cup Series. In 2003, Kvapil won the Craftsman Truck Series Championship.

The No. 28 Farmers Insurance Ford Fusion will debut on Friday, Feb. 20, during opening practice of the NASCAR Sprint Cup race weekend at Fontana.  The NASCAR Sprint Cup Series at Fontana will be broadcast this Sunday, Feb. 22, at 2 p.m. (Pacific Time) on FOX.

Travis Kvapil