Archive for Home Insurance

Disaster insurance: Homeowners, hurricanes and Katrina five years later.

Hurricane Katrina slammed into the Gulf coast almost five years ago. The disaster destroyed homes and lives and rocked the nation. Home insurance companies paid billions in claims.

The Property Casualty Insurers Association of America (PCI) has created a white paper that highlights some of the lessons from Katrina and analyzes ways insurers, communities and homeowners can reduce the impact of future hurricane disasters. The goal is to lower the financial impact to insurance companies which should translate to lower home insurance costs.

Of course this is a benefit to the insurers, but reducing risk should benefit consumers as well. For example, Florida home insurance rates are notoriously high, and sometimes it’s difficult for some property owners in that state to find coverage. Hurricanes, wildfires and floods have spooked many insurers.

Some of the lessons from PCI’s white paper include:

  • The need to encourage communities and homeowners to find ways to reduce hurricane damage risk.
  • Insurers have found better ways to communicate in the aftermath of a disaster, including using social networking sites like Facebook and Twitter, plus satellite technology.
  • Insurers have found better ways to reduce disruptions of service, such as deploying mobile command centers.
  • More homeowners in hurricane-risk areas need to be educated about the importance of having flood insurance. Many homeowners may not realize that their policies don’t cover flood. Flood insurance is a special government program.
  • The need to improve how to understand risks in disaster-prone areas.

In the meantime, many home owners in Gulf and Atlantic coast states have seen a rise in property insurance premiums. Even if their options are limited, it’s still advisable to periodically check to see if they can lower their costs by getting home insurance comparison quotes.

You should get at least three quotes for a good comparison, and talk to your agent or investigate flood insurance if you don’t have it.

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National flood insurance still available for homeowners.

If you’re a homeowner living in a flood zone, you’re probably glad that the National Flood Insurance Program received an extension until September 30 of this year. The program had been suspended from issuing new policies since May 31 and had put many homeowners at risk just as flood season is getting into full swing.

Standard homeowners insurance policies don’t provide flood coverage. The NFIP was started in 1968 to help people protect their property from the threat of flooding. Rates are set and do not differ from company to company, or agent to agent. Flood insurance rates are based on a number of factors including the date and construction type of the home plus the risk factors. Flood insurance covers the building and contents, but not the occupied land.

Flood insurance is required if you have a mortgage from a federally regulated or insured lender. Talk to your home insurance agency or company if you feel you need coverage. You can also get more information at the official site of the NFIP at FloodSmart.gov.

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Protecting your home during wildfire season.

The Schultz fire that nearly burned homes in Flagstaff is a good reminder to homeowners who live in wildfire risk areas to take steps to protect their property. The Federal Emergency Management Agency (FEMA) has some tips to help you reduce the risk of fire to your home. Like most disasters, preparedness is a key component of mitigation. Some of the tips include:

Learn about your fire risk — Make sure you understand the history, nature and frequency of wildfires in your area. How will fires be fought and where is the nearest hydrant or source of water to protect your home? Determine an evacuation plan. You may need the help of a professional to analyze your situation.

Create a safety zone around your home
— The idea here is to clear away anything that can fuel a fire near your home. You should have a 30 foot clear zone, plus a secondary zone 100 feet or more beyond that. For example, clean away pine needles from rooftops, prune branches near chimneys and the home, and clear out underbrush.

This “defensible space” can help even when fire is raging nearby, and is often required by home insurance companies.

Protect your home
— Cover house vents with wire mesh, use spark arrestors on chimneys, use fire resistant siding and safety glass during construction. And if you’re building a home, consider the location carefully with regards to how a fire spreads. Building on a hill can require a considerably larger defensible space.

Check out FEMA’s web page on wildfires for more helpful tips.

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