Insurance and the Local Economy

Our friends at Insurance Career Movement ( have been beating this drum now since 2015. They are asking participants to write about insurance and how we impact the world. This week’s focus is about philanthropy and economic impact. Because of that, I think its time for a history lesson because we need to be reminded just how important this industry is to the rest of the economy. I may have a simple view of things, but the insurance industry impacts economies all over the world, but our primary impact is in the local economy.

A brief history of insurance

The concept of insurance dates back thousands of years and while the forms of insurance change over time and the written contracts change as well, the idea has remained the same.

The ancient Babylonian king Hammurabi recorded one of the earliest forms of insurance in his code of laws in the 18th Century BC (for those keeping score, that’s over 3800 years ago). The code stated that when someone rented a field to farm it, if there were extreme weather conditions (draught, flooding) or great sickness that caused a failure of the crops or the inability to harvest them properly, the rents on that field were to be forgiven for that year.

Let’s fast forward to a time that many of us are already aware of. If you’ve done any kind of study of insurance history, you know Edward Lloyd. You probably don’t need me to tell the whole story, so I’ll skip to the gist of it. By establishing his coffee house where he did and being willing to move it into the heart of the maritime industry, he created conditions where the basics of ocean marine insurance could be created and flourish.

We could tell insurance history stories all day, including how our old friend Ben Franklin established a pattern of fire insurance and fire protection that still exists today. We could talk about the Buffalo, NY doctor who bought the first recorded true automobile policy in 1989. We could even talk about how in 1929 a group of Texas teachers were able to contract with Baylor University hospital to provide them with pre-paid health care services.

What do all of these moments in history have in common?

  • A farmer can’t work his fields.
  • A shipper seeks help from “names” to underwrite the risk of his shipment.
  • A group of people gather together to agree to protect one another against the risk of fire by forming a fire company and an insurance company.
  • Teachers seek help paying for the medical care that they might need.

In all of these cases, we are talking about people coming along side people and creating economic stability and opportunity in their communities. How does the insurance world support economic health?

Insurance reduces risk in commerce

If you’ve ever applied for a loan, you know that banks like to loan money when they think that they will be repaid. If you’ve ever been refused for a loan, or been asked to find a co-signatory, you can bet that the bank looked at your information and decided that the likelihood was that you wouldn’t repay that loan.

One of the risks that a bank has is that something will happen to the item that the loaned money for. Bankers actually fear that something will happen to your car or your home. They fear that if your car is wrecked or your house burns, and you don’t have insurance on it, you’ll stop paying for it. That kind of makes sense in a way. I mean, who wants to make payments on a wrecked car that’s sitting in a part yard?

In order to let them sleep at night, they require insurance on those big purchases before they write the loan. That way they can rest, knowing that if something happens, you’ll keep paying. It makes writing loans easier for them and keeps the wheels of commerce moving.

Insurance reduces risks in community

Imagine that you and you family just went out to watch a movie. On your way home, three fire trucks speed past you. You think little of it until you realize that they’re on your street. They’re not just on your street, but they’re in front of your house and a cascade of water is spraying from the top of one truck. By the time they’re done, the smoke still billows in spots; rivulets of water sprinkled with half burnt pictures wander down your driveway; you hold your dear ones, trying (uselessly) not to cry; and wonder what you are going to do tomorrow.

Now imagine that 2 months ago you wrote the check that paid off the mortgage and you called your insurance agent. She begged you not to cancel your homeowners’ policy, telling you that it covers more than just the house, but you were looking to save $3,000 next year. Besides, when was the last time a house burned down around here?

The family in this story needs clothes and food. They need a place to stay. They need someone to help them figure out which way is up so that they can find normal again and find it soon.

The homeowners’ policy that they used to have included coverage so that they could get a place to stay while they assess what’s next. It included coverage for some new clothes so that they aren’t washing the same pair of jeans and underclothes every day. It included coverage to get a company out to clean up the rubble of their home and start the process of rebuilding it.

Without insurance, they don’t have the money to get the debris removed so the city has a new hazard that they have to deal with. The neighborhood has a problem because the burnt house down the block drives property values down. Some neighbors want to move, but they can’t sell their homes with that over there.

We haven’t even mentioned that with insurance, communities can have public parks and fun things for the kids to do. Insurance policies protect fire departments from the possible claims that could come against them.

Oh. Did I mention that insurance companies hire people who buy things and drive our economy forward? The insurance industry supports my local economy because I’m about to go get some groceries.

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Expert: Florida’s Hurricane-Hit Timber Industry Will Need Years to Recover

Expert: Florida’s Hurricane-Hit Timber Industry Will Need Years to Recover

It could take a decade or more for Florida’s timber industry to recover from Hurricane Michael’s devastation, and the countless downed trees pose an immediate wildfire threat, Florida Forest Service Director Jim Karels told a Senate committee last week.

Karels told the Senate Agriculture Committee that about 1.4 million acres had severe or catastrophic tree loss, meaning 75 to 95 percent of the pine trees were damaged or destroyed. He said a 20-mile (32-kilometer) swath from the Gulf of Mexico to the Georgia border was the worst hit area. More than 16,000 private landowners were affected overall, including moderate damage far beyond the storm’s eye, he said.

Karels recommended the state provide $20 million to help landowners clear fallen trees and start replanting the forests. He also recommended spending nearly $9 million for equipment and programs to help reduce the fire threat.

“It would help landowners remove their debris,” he said. “It’s really geared towards getting that rural economy back on its feet (and) reducing the fire threat.”

The timber industry suffered about $1.3 billion in damage during the storm.

Democratic Sen. Bill Montford said he represents many of those communities and timber is one of the largest employers after schools and prisons.

“You’re at the point where what was an asset is now a liability,” Montford said. “This is more than a timber issue here, this is a long-range financial stress we’re looking at.”

Karels said landowners in hard-hit areas will have to pay about $1,000 an acre to clear the debris from their land.

“That timber you’re looking at there was probably (worth) $2,000 an acre, and possibly they will get zero dollars for it right now, and then they have the liability,” he said.

Montford worried that some landowners won’t be able to recover.

“I’m not sure if many of these people can afford $500 to $1,000 an acre to clear, prep and reseed,” he said.

Karels said there could be a shortage of contractors available to clear the land, as well as a shortage of seedlings to replace the trees that were lost.

5 Hints for Policy Comparisons

A few weeks ago, we got a question in through IJPro. The agent was asking about the wisdom of having a customer change from a dwelling fire type policy form to a commercial property type of policy. Of course, my first inclination was to simply tell them that I thought that a commercial property policy would be better. That was my gut reaction. Of course, I didn’t go with my gut reaction. I asked a couple of questions and spent the next few hours pouring over forms to find out that my gut was right (within some limitations.) That did make me think that you might have a similar question. Before you send it to me, I thought I would help you by telling you about my process for comparing policies. Give it a try and if you have any questions, by all means, give me a shout.

Make sure you know which policies you are comparing.

There’s a big difference if you’re asking me to compare an ISO DP-3 to an ISO CP 00 10 or if you’re asking me to compare a carrier specific DP-3 (or state specific DP-3) to an ISO CP 00 10. I need to know what endorsements might be modifying the policies in question. I really need to know the edition dates of the policies. All of these details make a difference in making comparisons because every edition of every policy has differences. They may look huge or they may look small, but they’re usually significant in some way or another.

Knowing the specific details of the policies in question helps us to fully and accurately compare them. Think about it like this. What if your customer had a property written on a DP-3 with a personal liability endorsement attached and she was considering converting to a commercial property policy, what’s the big glaring hole that you have to advise her to fill? If you didn’t say get liability coverage, we need to have a conversation. Yes. It may seem obvious right now while we’re thinking about it, but that’s a real issue because the customer may not think about the liability component of the DP-3 policy, but you have to.

Make sure that you compare the definitions.

Here’s a simple one, comparing some parts of a state-specific dwelling property form and parts in an ISO commercial property form.

From the dwelling property form…

In this policy, “you” and “your” refer to the “named insured” shown in the Declarations and the spouse if a resident of the same household.

From the commercial property form…

Throughout this policy, the words “you” and “your” refer to the Named Insured shown in the Declarations.

Did you notice the difference? On the dwelling form, the definition of “you” is different than the definition of “you” in the commercial property form. Remembering that the insured is the same person on both forms, we immediately find a difference in coverage. We have redefined who is insured. Does that make a big deal? I don’t know, did the customer’s spouse get named on the policy? If not, it might make a difference. This is why we check these things.

Make sure you compare the coverages provided.

From the dwelling property form…

COVERAGE D – Fair Rental Value

If a loss to property described in Coverage A, B, or C by a Peril Insured Against under this policy makes that part of the Described Location rented to others or held for rental by you unfit for its normal use, we cover its:

Fair Rental Value, meaning the fair rental value of that part of the Described Location rented to others or held for rental by you less any expenses that do not continue while that part of the Described Location rented or held for rental is not fit to live in.

What about the ISO commercial property policy?

Here’s the thing; unless you get the customer a Business Income, without Extra Expense Coverage Form, a gap between the two policies will exist. Is it possible that the customer doesn’t care about this? Maybe they can survive if the rental home is damaged and can’t be rented out? That’s great. It’ll save them money. But if you miss telling them that there’s a difference here and don’t recommend that they take steps to close the gap, you might be dealing with this issue again later.

Make sure you compare the conditions.

When you compare two different policies, the conditions may be identical but it’s more likely that they’re not. I urge you to look at different conditions. You should consider how coinsurance applies on a personal property policy (like a dwelling property policy) and how it applies on a commercial property policy. There’s a difference and it can be significant.

Make sure you compare causes of loss.

Many personal property policies will provide open peril coverage for the dwelling and other structures but named peril coverage for the personal property. Many times, a commercial property policy includes one causes of loss form as part of the policy. You have to make sure you’re aware of what causes of loss apply to what property. Paying attention to that little detail may help, or harm the customer, when they have a loss to covered property.

There are more items that you need to consider, including what the exclusions look like, what endorsements you can get to cover any gaps that arise if you end up making the transition, is the property accurately valued and more.

What sounded like a simple question when this whole conversation got started turned into a multi-hour project. It’s a good thing that I enjoy reading insurance policies, otherwise that wouldn’t be much fun. Isn’t usually the case that when you thought you would get an easy answer, you got a lot more than what you bargained for?


5 Things Not to do This Thanksgiving

A burnt-to-a-crisp turkey served along a side of political discourse is just one potential disaster your insureds might face this Thanksgiving.

Help things go without a hitch by sharing these quick tips.

1. Don’t drink and drive

This should be a no-brainer, but drunk driving still causes 28% of all traffic-related deaths in the U.S. according to the Centers for Disease Control and Prevention. Arrange a designated driver or use a ride-hailing service when traveling on Thanksgiving.

2. Don’t loan someone your car
Be mindful about who drives your vehicle. It’s easy to give a friend or family member keys to the car while they’re in town, but this “permissive use” leaves the insured in the driver’s seat when it comes to responsibility for a claim.

3. Don’t serve alcohol to minors
Under social host liability laws, party-givers can be held responsible when minors drink, even if the hosts were unaware that they were doing so. If a minor was drunk, chose to drive and caused an auto accident, the host could be liable. Keep a watchful eye during parties and be sure guests who imbibe are 21 or older.

4. Don’t subject your pets to holiday stress
Pets can be easily overwhelmed by visitors during Thanksgiving; the extra noise and activity can be upsetting and people often aren’t educated about how to act around animals, which can result in unwelcome behavior by both the person and the pet. Give pets a quiet “sanctuary” behind a closed door, complete with a bowl of water, comfy blanket and special treat. They’ll be grateful.

5. Don’t leave tools laying around
Tackling winterizing to-dos is a top priority this month, especially with house guests on approach. Be sure shovels, rakes and ladders are kept well out of the way to avoid slip-and-falls and store them properly after use.

Your clients depend on you to tell them about the coverage they need.

By taking 3 minutes to give them a personal umbrella quote, you’ll show them how this indispensable policy can help protect their assets and pay for medical and legal expenses should the worst happen, whatever the season.

About Daina Kawchack Smith, Chief Marketing Officer,
Daina Kawchack Smith is a respected leader in the field of personal umbrella insurance. With over 24 years of experience in the insurance industry, Daina brings a breadth of experience to help agents grow by sharing innovative ideas. Before being named chief marketing officer at, Daina was an independent agent, CSR and an underwriter for a Fortune 500 wholesaler. She is a licensed Nevada agent and holds a CISR designation.


Insurance Research Finds Many Homeowners Don’t Understand Deductibles

Almost five years after Superstorm Sandy, one third of homeowners in several coastal states are still unaware of hurricane deductibles and how they work, new insurance research has found.

Not only did 33 percent of respondents say they had never heard of these deductibles or were not sure what they were, one quarter of respondents lacked an understanding of deductibles in general.

The Insurance Research Council (IRC) released its poll results as the National Oceanic and Atmospheric Administration projects two to four major hurricanes this hurricane season, which lasts from June 1 through November 1.

Homeowners in New Jersey, North Carolina, South Carolina, Florida and Texas were asked whether they were familiar with hurricane deductibles, which is a higher deductible found in homeowners insurance policies that applies when a hurricane occurs.

“The findings from this survey suggest that ample room exists for educating homeowners about a key feature of every homeowners insurance policy—deductibles,” said Elizabeth Sprinkel, senior vice president of the IRC. “The need is especially acute as the 2017 hurricane season gets underway and insurers hope to minimize post-event misunderstandings with their policyholders regarding deductibles.”

Hurricane deductibles were a prominent issue in 2012, with misunderstanding and confusion due to the fact that Sandy did not make landfall as a hurricane. These deductibles, which became more common after insurers suffered heavy losses from Hurricane Andrew in 1992, are often calculated as a percentage of the insured value of a home — another concept the IRC survey found unfamiliar to homeowners.

One in three respondents with percentage-based hurricane deductibles did not know or were unsure of the percentage applicable to their deductible, and four in 10 did not understand the basis for calculating the deductible. One in four respondents incorrectly thought the percentage was applied to the total amount of their claim.

The survey also found that the level of understanding of hurricane deductibles varied across the five states studied. Compared with respondents in the other states, New Jersey respondents demonstrated the lowest level of awareness and understanding of several hurricane deductible issues, despite the fact that about 346,000 homes in New Jersey were damaged or destroyed by Sandy.

The report, “Public Understanding of Hurricane Deductibles, Need for Consumer Education Persists,” is based on an online survey conducted by GfK Public Affairs & Corporate Communications on behalf of the IRC. A total of 1,047 homeowners were surveyed – 200 or more in each of the five states studied. Only homeowners living in selected counties where the home involved was their primary residence and with insurance coverage purchased exclusively from private insurance companies were included in the survey.


5 Mistakes to Avoid When Buying Life Insurance

Life insurance is designed to provide some financial security to your loved ones after you’re gone. Depending on your situation, the money can help pay off debt, fund your spouse’s retirement or help your children pay for their education. There are several different types of policies to choose from. If you don’t know the facts, it could spell financial disaster for those you leave behind. When shopping for a policy, you’ll want to watch out for and avoid these major missteps.

1. Choosing the Wrong Type of Policy

There are two basic types of life insurance: term and permanent. Term policies pay out a specific death benefit and remain in place for a set period of time. Term life insurance can typically be purchased for a 5, 10, 15, 20 or 30-year term.

Permanent life insurance on the other hand stays in effect over the course of your life. Whole life, variable life and universal life are all types of permanent insurance. A whole life insurance policy allows you to build cash value that you can draw against later on. Universal and variable life policies are tied to different types of investment vehicles.

When deciding between permanent and term life insurance, you’ll need to assess what you really want from the policy. Then you can weigh those goals against the costs of each policy. For example, if something happens to your spouse and you only need enough to cover mortgage or credit card payments, a term policy may make the most sense. But maybe you’re looking for a policy that will allow you to earn some returns on your investment. If you don’t mind paying a little more, you may want to look into a permanent policy.

2. Underestimating Your Insurance Needs

In addition to choosing a policy type, you also have to decide how much of a death benefit you need. It’s probably best to avoid just picking a number out of thin air. If you don’t do your homework, you run the risk of selling your beneficiaries short later on.

You’ll want to consider several factors when calculating how much life insurance you need. These include your age, overall health, life expectancy, your income, your debts and your assets. If you’ve already built a sizable nest egg and you don’t have much debt, you may not need as much coverage. On the other hand, if you have young children and your spouse doesn’t work, you’ll need enough insurance to provide for them financially over the long-term.

You will also want to avoid underestimating the value of a non-working spouse. In the case of their death, you won’t need life insurance to replace lost income. However, that money can still help cover new expenses like child care or housekeeping help.

3. Not Comparing Rates

Like any other type of insurance, you’ll want to shop around to make sure you’re getting the best rate. Signing up for a life insurance policy without comparing rates for a few different companies could end up unnecessarily costing you money.

When you’re looking at multiple plans, you want to make sure you’re providing the same information to each insurer. You also want to review the different policies to look for any major differences in the coverage. This helps to ensure you’re getting the most accurate quotes.

4. Focusing on Price

In some cases, the cost of buying life insurance may be enough to scare you away. Or you could be tempted to reduce your coverage amount to score a lower premium. But life insurance is not something you can afford to skimp on.

Looking at your out-of-pocket costs is a more immediate concern. You’ll need to think about whether the money you save now is really worth the affect it could have on your family when you’re gone. If you’re finding that life insurance is too pricey, you may need to take a look at your budget. Try to see what you can cut back on before you opt for less coverage than you actually need.

5. Waiting Too Long To Buy

The sooner you buy life insurance, the better. Premiums will only increase as you get older. Even if you’re in relatively good health, you’ll still pay more for every year you put it off. Not only that but you also run the risk of developing a serious illness or disease which may result in much higher premiums or being denied coverage altogether.

Final Word

Once you decide on a life insurance policy, don’t make the mistake of sticking it in a drawer somewhere and forgetting it. You should take the time to review your policy regularly to make sure it still fits your needs. Knowing that you have the coverage you need can provide peace of mind, not only for yourself but those you love.

If you have any questions, consider talking to a financial advisor. Many financial advisors consider life insurance a crucial part of a financial plan and can guide you on what’s right for your situation. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

Photo credit: ©, ©, ©

REBECCA LAKE Rebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she’s always looking for ways to make the most of every dollar.

Boat Insurance and Safety

Keep your head above water—understand how to protect your seagoing vessel, yourself and your passengers

Boats afford recreation and adventure to their owners, but they come with risks, as well. Don’t let an accident or disaster sink you—understand how to insure your prized vessel.

Boat insurance basics

The size, type and value of the craft and the water in which you use it factor into what type of insurance you need and how much you will pay for insurance coverage. As with any insurance policy, make sure you understand exactly what perils are covered and what your policy limits are.

  • Small craft may be covered under your standard homeowners policy or renters insurance policy. Most insurers provide limited coverage for property damage for small boats such as canoes, small sailboats or small powerboats with less than 25 mile per hour horsepower. Coverage generally includes the boat, motor and trailer combined. Liability coverage is typically not included, but it can be added as an endorsement to a homeowners policy.
  • Larger and faster boats such as yachts require a separate insurance policy (as do personal watercraft such as jet skis).

Typical boat insurance policies cover physical damage to the boat itself. They also cover property damage, theft and medical payments, each with different deductibles. Your insurer may offer additional, optional coverage for trailers and boat accessories.

Boat insurance policies generally provide broader liability protection than a homeowners policy. However, depending on the assets that are at risk, boat owners may also consider purchasing an umbrella liability policy, which will provide additional protection for their boat, home and car.

Boat insurance coverage

Boat insurance is available in two types, each with different parameters and different premium costs.

  • Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
  • Agreed Amount Value policies are based on a valuation of your vessel that you and your insurer have agreed upon; in event of a total loss you will be paid the “agreed amount.” Agreed Amount Value policies will also replace old items with new ones in the event of a partial loss, without any deduction for depreciation.

Here are some of the common and optional boat coverages. Make sure you understand what exactly your policy will pay for and what the limits are.

  • Physical loss or damage to the actual boat, including the hull, machinery, fittings, furnishings and permanently attached equipment. Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.
  • Theft of the boat.
  • Bodily injury to persons other than the boat owner or his or her family.
  • Damage caused to someone else’s property.
  • Guest passenger liability—that is, any legal expenses incurred by someone using the boat with the owner’s permission.
  • Medical payments for injuries to the boat owner and other passengers.
  • Trailer or boat accessories.
  • Loss or theft of belongings may or may not be covered. Your homeowners policy may provide some coverage and boaters should specifically inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered.
  • Towing in the event of an accident.

Boat insurance discounts

If you’re thinking of obtaining boat insurance or changing insurers, inquire about discounts for the following:

  • Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
  • Coast Guard approved fire extinguishers
  • Ship-to-shore radios
  • Crew completion of boating and water safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.
  • Multi-policies with the same insurer, such as a car, home or umbrella policy.
  • Two years of claims-free experience

Best practices for boat safety

There are thousands of recreational boating accidents per year, which can be costly in injuries and damages. Contributing factors to boating disasters include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.

The best way to ensure your years of accident- and claims-free experience is to follow boating safety practices.

  • Properly equip your vessel with required navigation lights and with a whistle, horn or bell. Have on hand plenty life jackets and emergency safety devices such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio. Carry one or more fire extinguishers, matched to the size and type of boat and keep them readily accessible and in condition for immediate use.
  • Before you sail or launch, check weather forecasts before heading out to ensure good boating conditions. Let someone know where you’re going and when you expect to return. Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
  • When you have passengers and/or a load, pay attention when loading. Distribute the load evenly and don’t overload. In a small boat, warn passengers not to stand up or shift weight suddenly. Don’t permit riding on the bow, seatbacks or gunwales. Make sure that every person on board the boat gets and wears a life jacket.
  • Know and obey marine traffic laws; learn distress signals and other boating signals.
  • In shallow waters, keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
  • Don’t operate the boat while under the influence of alcohol or drugs, or allow anyone who might be impaired to operate the vessel


It’s Hurricane Season. Do You Need Flood Insurance?

The Atlantic hurricane season is here, and with it the threat of storm-related flooding. So homeowners may want to buy flood insurance, if they don’t already have coverage.

Hurricane season runs from June through November. The National Oceanic and Atmospheric Administration has forecast a “near- or above-normal” hurricane season this year, with one to four “major” hurricanes expected.

Standard homeowner policies typically don’t cover damage from floodwaters resulting from rising tides, flash floods or overflowing streams. To get flood coverage, you’ll need to buy a separate flood policy. (Homeowner policies often cover hurricane damage from wind and rain, but you may have to pay more out of pocket, especially in coastal states.)

Most flood insurance is sold through the National Flood Insurance Program, which is administered by the Federal Emergency Management Agency and covers about five million policyholders. A few private companies also sell coverage.

The government-run flood program is in need of an overhaul to make coverage more accessible and to put the program on firmer financial footing in the wake of big storm losses in recent years.

Congress has postponed debate on reforms, however, voting instead to keep the current program going through the end of July. Lawmakers must act by then to revamp it or extend it yet again.

Both insurance officials and consumer advocates recommend that homeowners not let the political debate over renewal of the flood program delay their purchase of coverage. New policies come with a 30-day waiting period before taking effect, so it makes sense to buy as soon as possible, given the heightened risk of flooding during hurricane season.

“We absolutely recommend that anyone with a home to protect should get a quote and, if you can afford it, buy it,” said Amy Bach, executive director of United Policyholders, an insurance advocacy group.

Recent floods, like last year’s catastrophe from Hurricane Harvey in Houston, have shown that too many homes needing coverage don’t have it, said David Maurstad, deputy associate administrator for insurance and mitigation at FEMA and chief executive of the flood program. The possibility of a lapse in the flood program, he said, shouldn’t make consumers delay buying insurance that “they probably needed for some time.”

Meanwhile, she said, homeowners should consider buying flood protection even if they are not in an area traditionally considered to be high risk. In recent years, she noted, areas that had not previously experienced problems have flooded.

The national flood program says 20 percent of claims are paid in areas considered low risk.

“Where it can rain,” Mr. Maurstad said, “it can flood.”

Cost of coverage varies, but the average annual federal flood premium for 2018 increased by 8 percent to $935, according to FEMA. Mr. Maurstad noted that policies for homes in low-risk areas cost around $500. Premiums in high-risk areas, however, can run to four or five figures, Ms. Bach noted.

Here are some questions and answers about flood insurance:

What does a federal flood policy cover?

National Flood Insurance Program policies cover up to $250,000 in damage to the home’s structure, and $100,000 for its contents. (Extra coverage may be bought from private insurers.) But federal policies generally don’t cover living expenses, like the cost of temporary housing.

How can I keep my flood insurance premium affordable?

Homeowners in high-risk areas who take steps to protect their properties, such as by elevating mechanical systems or even the entire home, can see as much as a 60 percent reduction in premiums, according to FEMA. The agency offers grants to help cover the cost of elevating homes, but the process can take time. So interested consumers should apply sooner rather than later, Ms. Bach said. “Be patient.”

Other suggestions for reducing flood insurance costs are available on FEMA’s website.

What happens if Congress doesn’t vote on the flood program by the new deadline?

The program would still process and pay claims on existing policies, he said, “as long as funds are available.”

A FEMA spokesman, Michael Hart, said the flood program currently has $5.5 billion available to pay claims, not including nearly $10 billion more in borrowing authority that would be unavailable during a lapse in authorization.

A lapse would also curtail the program’s capacity to borrow money, according to the Congressional Research Service. So Congress might have to approve extra funds or increase the program’s borrowing limit, to make sure that claims are paid.

notice on FEMA’s website says a lapse is “unlikely,” and states that “FEMA and Congress have never failed to honor the flood insurance contracts in place.”

Sinkhole Coverage – What you need to know

 Florida has more sinkholes than any other state in the nation. Because of this Florida made some changes to its laws regarding sinkhole coverage on homeowners insurance policies. Florida law now requires insurers to cover “catastrophic ground cover collapse”. This now means that damage caused by a sinkhole may not be covered under your home insurance policy. That’s because the law defines catastrophic ground cover collapse differently from sinkholes.

According to the FL Dept of Financial Services, “Florida law defines a sinkhole as “a land form created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater. A sinkhole may form by collapse into subterranean voids created by dissolution (the dissolving) of limestone or dolostone or by the subsidence as these strata are dissolved.”

“Catastrophic ground cover collapse” is defined as “geological activity that results in all of the following: 1). The abrupt collapse of the ground cover; 2). A depression in the ground cover clearly visible to the naked eye; 3). Structural damage to the building including the foundation; and 4). The insured structure being condemned and ordered to be vacated by the government agency authorized by law to issue such an order for that structure.”

“This means that if your home is damaged by sinkhole activity, but does not meet all four criteria for catastrophic ground cover collapse – for instance, you may have foundation cracks, but the home is still livable – your insurance may not pay for the damage if you do not have sinkhole coverage.

All insurance companies licensed to do business must offer sinkhole coverage, usually as an addendum or rider to an existing policy, and for an additional premium charge. However, insurance companies may require an inspection before extending coverage. If sinkhole activity is present on the property or within a certain distance of the property to be insured, the insurance company may decline coverage.”

Because of these changes it’s important to find out what is covered under your policy. If you are not sure if you have sinkhole coverage or catastrophic ground cover collapse coverage contact one of our agents today for a full policy review.

For more information on Sinkholes and Catastrophic Ground Collapse please visit the Florida Department of Financial Services website.

Commercial Insurance 101

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If you own a business, it’s important to match the insurance you carry to the company you keep. Doing so can save you time and money down the road. 

Commercial auto insurance can be especially important, so if you’re not sure what kind of commercial auto coverage you need, you may want to talk with an independent agent who specializes in that particular area. Independent agents work with you to put together a package that provides the protection that’s right for your business. 
“Anyone who owns a business with a commercial automobile needs to have coverage that is appropriate for the industry and the size of the business,” says Brett Stalnaker of The Progressive Group of Insurance Companies. “An independent agent who specializes in commercial auto cover-age can provide business owners with the kind of advice they need to make the right choice.” 

Here are some tips to help you find a commercial auto insurance agent: 

• Get objective advice. There are different types of insurance agents. A captive agent represents only one insurance company. Independent agents represent a number of different insurance companies. Independent agents tend to be more flexible, because they can offer coverage options from various companies, increasing your odds of getting the combination of cover-ages, price and service that fits your business needs. 

• Visit the Web site of a larger insurance company. Web sites such as can provide you with coverage option information and a way to find an agent in your neighborhood. 

• Seek referrals. These can come from professional organizations or other contacts such as other business owners. Chances are, other business owners in your industry can recommend an agent that they’ve worked with. 

One size doesn’t fit all when it comes to business-related insurance. A business that you start in the dining room or garage with just one vehicle can grow to the point where several vehicles are added and you move to commercial property. As your business evolves, your protection needs will most likely change, too. Be sure to check in with your agent periodically to reassess your commercial auto policy. 

Click here to learn more or to start your search for commercial insurance.