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The annual postcard from my township assessor arrived. At first glance it looked like good news. The appraisal of my New Jersey coast home was lower by almost $60,000, which indicated that this year's taxes should go down. Then I thought about it. There was a reason why the assessment was less. Assessments reflect housing values, and my house, like most others in the Long Beach Island area of Ocean County, had been flooded by Superstorm Sandy. Now we, as homeowners, will be faced with a myriad of new problems and all of them, in some way, seem to involve insurance. My conclusion: it is getting more and more difficult to either repair -- or sell -- our homes. Risky business The natural inclination of property insurance companies is to avoid risk. So when an area has too much risk, insurers back off, as they did in the Gulf Coast states after Hurricane Katrina hit in 2005. Just how much is too much? Sandy is the sixth costliest insurance event in our country's history, with up to $25 billion in losses just for private insurance companies, predicts Insurance Information Institute (III) President Bob Hartwig. And now two of the top… (continue reading......)
A lot of people are complaining about their home insurance policies. And the loudest cries are from the victims of Superstorm Sandy, who are trying to rebuild on a shoestring budget. These homeowners say their insurance companies, the Federal Emergency Management Agency (FEMA) and the banks are keeping a tight lid on the amount of money they thought they would get. Now we can add the victims of sinkholes such as the unfortunate residents of Seffner, Florida, where Jeff Bush was swallowed up whole and his neighbors forced to flee their homes. Florida allows people to obtain sinkhole insurance, which may cover some of their needs, but the restrictions on this insurance have tightened up after tort lawyers took advantage of it. Earth, wind and fire The basic premise of home insurance is that events emanating from the earth, like earthquakes, floods, water seepage, and even mudslides, aren't covered by a standard homeowners insurance policy. The wind that blows your roof off or flings a branch through your window is a "covered peril." So is fire damage, assuming that you didn't intentionally start the fire. But there are a lot of variables in a home insurance policy that don't fit… (continue reading......)
Newspapers and television stations in New York and New Jersey are still covering the sad stories of those who thought that they were insured from the damage done by Superstorm Sandy -- until they learned that they weren't. One such story appeared in The Star-Ledger of Newark, N.J. about a retiring couple who insured their beachfront cottage and its contents for $225,000. The house was torn apart, but their insurer gave them only little more than $6,000. That's because the majority of Sandy's damage was caused by flooding, so if you didn't buy federally sponsored flood insurance, you weren't covered. Like hundreds and perhaps thousands of others, this couple is taking their case to court, according to the newspaper, but probably won't win. The insurance contract that they have with their private carrier is crystal clear: It doesn't cover flood damage. Hard line softens Insurance companies have long taken a hard line on this, refusing to pay for flood damage in previous hurricanes such as Katrina and Irene. "If you didn't read the contract and realize you weren't covered, that's your tough luck," is one insurance agent's argument. But in a recent rare moment of self-reflection at their recent annual… (continue reading......)
Donald Light is one of the smartest -- and busiest -- people I know. But even this longtime Celent Research Services insurance consultant makes mistakes. Light was so busy minding other people's insurance needs this year that he didn't keep track of his own. His story came to light when he admitted in an online mea culpa, titled "Why Billing Matters," that his homeowners insurance policy had been cancelled. So for all of us who've lived through the nightmare of cancelled insurance policies, here's the unmistakable message: Insurance companies don't care. Slip and fall Here's how it happened. Light's homeowners policy ends each year on Oct. 8. When Light got the bill in August from his insurer, he thought he had paid it online. But when he returned home from a trip on Oct. 21, Light found out that his insurance policy had been cancelled as of Oct. 8 due to "non-payment." "Looking at the letter telling me that my single largest investment had been uninsured for the past two weeks was horrible," he admits. "If someone had slipped and fallen in front of my house, I would have been out a lot of money." During the time between the… (continue reading......)
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