MONDAY, NOVEMBER 12, 2012
In the wake of the recent storm, homeowners may have questions about what damages are covered by insurance.
While each insurance policy differs, Pennsylvania Insurance Commissioner Michael Consedine today offered the following examples of what is and is not covered in a typical homeowner's policy:
- Flood damage. Standard homeowners and renters insurance does not cover flood damage. Flood coverage, however, is available in the form of a separate policy from the National Flood Insurance Program and takes 30 days to become effective. If your flooding was related to sewage backup, ask your insurance agent or carrier if an endorsement for sewer backup coverage was added to your homeowner's policy. If so, your losses may be covered if the water damage was caused by sewer lines backing up through your home's drain pipes.
- Auto damage. If you have comprehensive coverage on your auto insurance policy, the damages sustained from flooding will be covered.
- Power outages. Generally, there is no coverage for damage or a loss caused by a power outage if the source of the power outage did not occur on the insured premises. However, if the source of the power outage occurred on the insured premises, there is coverage.
- Removal of trees and branches. The removal of downed trees and/or debris is covered if there is damage to a covered structure or the Pennsylvania governor declares the area where the damage occurred is a disaster area.
- Additional living expenses. There may be an allowance for offsite housing until your home is repaired. Keep all your bills and payments made for offsite housing.
Consedine encouraged consumers to read the terms and conditions of their own policies.
After you contact your insurance company, take pictures of the damage and log your expenses:
- Do not throw away your damaged property and do not make any permanent repairs. Your claim could be denied if the insurance company or adjuster is unable to see the extent of the damage to your property. If you do make permanent repairs before the adjuster has seen the damage, your claim could be denied.
- Be wary of anyone who knocks at your door and offers to do your home repairs. Natural disasters can be a magnet for scam artists.
- Know your options when working with a property claims adjuster. You have the option of working with a company-appointed adjuster or you may choose to use a public adjuster to assist you in filing your claim. Be aware that public adjusters will charge a fee for their services.
- Be sure you are working with a reputable, dependable contractor. Home-improvement contractors that do more than $5,000 of business per year in Pennsylvania must register with the Attorney General's Bureau of Consumer Protection. You can also check with the Better Business Bureau.
Consumers should also visit www.insurance.pa.gov and click on the "Storm Tips" icon.
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MONDAY, NOVEMBER 5, 2012
Hurricane Deductibles Won’t Apply for Sandy in Pennsylvania
Delaware, Pennsylvania, Rhode Island and the District of Columbia have declared that hurricane deductibles won’t be applicable for Sandy-related claims in their jurisdictions. They are joining New York, New Jersey, Maryland and Connecticut that made similar announcements after Sandy slammed into the New Jersey shoreline.
Pennsylvania Gov. Tom Corbett announced last Thursday, Nov. 1, that Pennsylvania homeowners will not have to pay hurricane deductibles on insurance claims stemming from damage caused by Sandy.
“Insurance deductibles could have added significant costs to Pennsylvanians already struggling to clean up and rebuild after Hurricane Sandy,” said Gov. Corbett. “Insurance companies have deployed catastrophe teams to Pennsylvania and they have been advised that hurricane deductibles should not be applied to any homeowner’s insurance claims.”
Pennsylvania regulators said some homeowner’s insurance policies for properties in Pennsylvania have special “hurricane,” “tropical storm” or “named storm” deductibles based on a percentage of a property’s insured value. These deductibles typically range from one percent of a home’s insured value to five percent.
“We are very pleased with the initial, proactive response we’re seeing from insurance companies and their commitment to helping Pennsylvanians recover,” Pennsylvania Insurance Commissioner Michael Consedine said. “Insurance companies are experts in managing risk and responding to disaster. We will actively monitor the insurance industry to ensure they are fulfilling their commitments to their policyholders.”
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MONDAY, OCTOBER 29, 2012
First comes the storm, then — all too often — the higher insurance premiums.
When Hurricane Sandy makes landfall this weekend it could cause as much as $1 billion in damage along the eastern seaboard, by some estimates. The result could be widespread damage to homes, including fallen trees, torn-off roofs and broken windows. And even homeowners spared the worst of the storm might not get off entirely scot free: Insurance agents say premiums may rise and coverage could be slashed for homes in affected areas, whether or not they file claims. “Even if you haven’t been hit, [that] doesn’t mean some of your neighbors haven’t been adversely impacted by the storm — and that could impact you,” says Michael Barry, a spokesman for the Insurance Information Institute, which represents home insurers.
Homeowner insurance premiums have been on the rise for years. They average $1,004 this year, up 5% from a year ago and up 22% since 2007, according to the Insurance Information Institute. This is the first year the national average cracked the $1,000 mark. Meanwhile, insurers in some states have already raised premiums by as much as 12% this year .
Insurers cite several reasons for the spike, including losses from claims filed in previous years and low returns on their investments.
But critics say insurers have more leeway to avoid hiking insurance premiums for the time being. The first half of this year saw a drop in catastrophic losses, which totaled $13.8 billion, compared to $24.4 billion during the same period a year ago, according to the Insurance Information Institute. The industry’s overall net income after taxes skyrocketed during this period to $16.4 billion, compared to $4.8 billion a year prior.
Still, the risk of rising premiums or scaled back coverage isn’t off the table, especially as severe weather events rise in frequency in the northeast. In the last 14 months, the region has been hit by Hurricane Irene, a severe October 2011 snowstorm, and now there’s pending Hurricane Sandy. “They’re looking at changing weather patterns and saying this is changing the way we need to look at risk,” says Scott Simmonds, an independent insurance consultant in Saco, Maine.
To avoid changes to clients’ policies, some independent insurance agents say they will recommend they don’t file claims from this storm. Spencer Houldin, president of Ericson Insurance, an independent insurance agency based in Washington Depot, Conn., says he plans to tell clients who’ve filed two claims within the past three years to refrain from filing another one related to a natural disaster—if they can afford to cover the costs for the repairs themselves. Otherwise, he says, there’s a good chance their insurance company won’t agree to provide coverage when their policy is up for renewal. (Even if they don’t file, insurers could look to raise premiums anyway, says Barry.)
The type of coverage homeowners receive could also change. Some experts say if severe weather events persist in the Northeast, insurance coverage could begin to mirror policies in the Gulf Coast. In the Gulf Coast many basic homeowner insurance policies have limited wind damage coverage — or exclude it entirely. “As more of these events happen, the chances increase that policy structures will change,” says Simmonds.
For its part, the insurance industry says that’s an unlikely scenario for much of the Northeast for the time being. Barry says roughly 98% of homeowner insurance policies in New York are provided by private insurers. In some Gulf Coast states, by contrast, many homeowners are now covered only by state-run property insurers of the last resort.
So what can homeowners do? If the loss sustained by Hurricane Sandy is too large to realistically cover on their own or if it’s the first damage in years, experts say they should file a claim with their insurer. Keep in mind that insurers can’t raise premiums or drop coverage until a policy is up for renewal. And even then in many states they’ll need approval from the state’s insurance department before they can do this.
If premiums rise, homeowners can avoid that hit by increasing their deductible. But that means they’ll have to pay more out of pocket when they file a claim in the future.
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