Sunday, September 24, 2017

Filing a Claim after a Natural Disaster

Natural disasters like hurricanes and floods have been a major topic of conversation of late. The silver lining in the massive loss and damage that has occurred in Texas is that it has caused many homeowners to reevaluate the need for flood and earthquake damage coverage that is not typically covered by a homeowners’ insurance policy. Those who have the coverage will be protected if a disaster occurs. However, ensuring that you get the insurance pay out as quickly as possible is often not easy. It is estimated that the damage caused by hurricane Harvey in Texas could be around $10 billion. It means that insurance companies will have to process tens of thousands of claims. That volume will often lead to delays in the payouts. According to the National Association of Realtors, after a major natural disaster it could take anywhere from a week to a few months for an insurance adjuster to get in touch with a policy holder. It is worthwhile knowing what you can do to speed up the process if you should ever need to make a claim.

Image Courtesy : https://upload.wikimedia.org/


Expediting an Insurance Claim

  • Contact your insurance company as soon as possible. Even a day’s delay could mean weeks or months longer before the payout is made. It is not that the companies intentionally delay payments – they are flooded with claims and so the sooner the claim is filed, the sooner it can be processed.
  • Ask the insurance company when you can expect the adjuster to contact you. This will enable you to be ready when he comes.
  • Take pictures and videos of the damage, including personal items. Include the date of purchase and keep receipts of high-value items in a place where they will not be lost.
  • Keep a record and receipts of everything you spend to make any immediate repairs that maybe possible and are essential. Also, record everything you spend on accommodation and food in case your home is unlivable.
  •  Keep a detailed record of all the actions you take in filing your claim. This includes the people from the insurance company you speak to or correspond with. Note down the dates, times and include details of what was discussed.
  •  Be careful of what you discard. The adjuster may want to see these items. In case you have to discard them because of municipal hazard regulations or for your own safety, take pictures of all that is discarded to show to the adjuster.
  •  If the insurance company offers you the options of signing up for text alerts, do so. This is the quickest way to know the status of your claim, when the estimate is ready and when the payment will be made.

If you have the insurance policies or if you are planning to get additional coverage, talk to your insurance broker about other area or insurance company specific actions you can take to expedite the process, if you should ever have to make a claim.



Most Hurricane Harvey Victims Do Not Have Flood Insurance

Hurricanes are a part of life in many parts of US and people typically take some basic protections against them. It’s good enough at time, but not when something like hurricane Harvey hits. The flooding has been massive as we’ve seen on TV. The billions of dollars of damage that has been caused is a figure that many people may not be able to comprehend; but everyone can relate themselves to pictures of people being taken out of their homes by boats.


Image Courtesy : www.media.defense.gov/


Rescue Is Where Problems Begins

Rescuing people from the flooded areas was, of course, the priority. But for the families, who left flooded basements, water damaged walls and ruined furniture, appliances and valuable behind, the next stage is often a huge question mark. Some may have the resources to rebuild their lives, but the burden will be crushing. For most, the pockets are not deep enough. Many of them will be forced to sell and leave their communities. A major reason is that many of them do not have the insurance coverage they need to rebuild their lives.According to the Consumer Federation of America, only about 2 out of 10 homeowners in Houston have flood insurance.

Homeowners insurance generally covers only damage and loss caused by winds - flooding is not part of the policy.Separate policy is required to protect from flood damage. There are three wrong assumptions that caused so many Houston homeowners to not have the coverage they actually needed:
  •  The premiums flood insurance is thought by many to be too high. Actually, the cost would be even higher if the premiums were not subsidized by the federal government under the National Flood Insurance Program. Unfortunately, people did not realize that the cost of this insurance is reasonable considering the potential loss a flood could cause.
  •  Flood insurance is mandatory for those with federally backed mortgages in high flood risk areas called Special Flood Hazard Zones. Since Houston does not fall into this zone, homeowners thought that the risk was non-existent and so flood insurance was not required. Being outside a flood zone does not guarantee that flooding will not occur, as the residents of Houston found out.
  • A large number of people were under the assumption that state and federal aid that is made available when an emergency is declared will help them to recover. This aid is only meant to help people survive in the aftermath of natural disasters, not to enable them to rebuild their lives and homes.

California Is No Stranger to Flooding

California is no stranger to storms and weather-related property damage. Flooding could happen anywhere, whether or not the area is a flood zone. The fact that fierce storms and wind-related damage has occurred in the past with no flooding does not mean that it will not happen. In Corpus Christi and Rock port the damage was wind-related. In Houston, the same hurricane caused flooding.

California homeowners who do not have flood insurance are at a much greater risk than they realize. To understand the risks and potential loss and get the coverage that is needed, an insurance broker should be consulted. Being rescued from home by boat can be bearable if you know that you have the insurance coverage to rebuild and get back to normal life.


Monday, August 28, 2017

Car Insurance for New Drivers

If you have just gotten your driving license, you probably feel that the world is your oyster – you are now free to travel and go wherever you want. It is important to remember that passing your driving test does not automatically make you a good driver. That comes with experience on the road and an appreciation of the dangers that exist on the road. It is these dangers that you need to protect yourself against. Even if you do not make a mistake, the mistakes of others could put you and your vehicle in danger. That is why it is illegal to drive without insurance.



The Coverage You Must Have

There are varying levels of auto insurance available. In California, the minimum requirement is liability coverage. This is twofold:

 Bodily injury coverage which covers injuries suffered by others in an accident you are involved in.
 Property damage coverage which covers damage to another person’s property caused by an accident you were involved in.

The idea behind this minimum coverage is to protect others from injury or loss; it does not protect you or your car and if you are injured in an accident or your car is damaged, the medical and repair bills will have to be paid by you.

To be fully protected, you should consider optional coverages that will protect both you and your car. There are many types of optional coverage and an insurance broker will be able to help you find the policy that is right for you. That being said, here are the 3 most common types of additional coverage.

Coverage Options

Collision and Comprehensive Coverage:


  • Collison coverage covers damage to your vehicle in the event of an accident.
  • Comprehensive coverage covers damage or loss of your vehicle due to theft, vandalism, natural disasters natural phenomena etc. If your vehicle is an old one that needs to be replaced soon, then comprehensive coverage may not be essential and collision coverage may be enough. An insurance agent will be able to help you make the right decision.


Underinsured andUninsured Motorist Coverage:

Underinsured motorist coverage protects you should you be involved in an accident with a driver who does not have enough insurance to cover the damage that has occurred.
Uninsured motorist coverage protects you if you are involved in an accident with a driver who has no insurance at all.

Personal Injury Protection:

This will cover your medical expenses if you are injured in an accident, irrespective of whether it was your fault or not. This type of coverage usually allows you to have your medical bills paid without the need to wait for the accident investigation to be completed, a process that could often take a very long time.

What Do You Need?
Insurance is a complex subject and obtaining the guidance and advice of an insurance professional is always a good idea. He will be able to understand the type of driving you do, your current financials status and the type of coverage you require. He will then be able to offer you a policy that best fits your individual needs. 

Too Old For Life Insurance?

Most people buy life insurance during the years that their families are dependent on them financially. This means that the typical age for buying life insurance is between 20 and 40 which is when marriages occur, children are born and homes are purchased. However, this does not mean that you can take a policy after this period. Late marriages are more common, resulting in the financial liabilities continuing until a later age. People are now continuing to work till their 60s and 70s and/or even start new careers. Whether their aim is to simply remain occupied or supplement retirement income, the additional money becomes a part of everyday life and its loss, through the death/disability of the earner, will affect those who are part of their lives.



Life Insurance in Later Years

Contrary to popular belief, life insurance is available for those in their 60s, 70s or even older. Of course, the premiums will be higher as the age increases and there are more procedures to undergolike health checkups, etc. But that is often a small price to pay for the knowledge that if the inevitable should occur, the dependents will not suffer financially, even if they are not completely dependent on the income that is lost. For seniors whose children are financially independent and who have no liabilities, the death benefits from a life insurance policy are often seen as a way of thanking the family for the happiness they brought to the policy holder during their lifetime. Additionally, the benefits from the policy can also help to cover estate duties and other expenses.

The Type of Policy andthe Duration

For seniors, a term life policy is the best option. Death benefits will be paid to the beneficiaries if the policy holder dies during the term of the policy. The benefits of whole life insurance - thecompounding of cash value, liquidity and flexibility are not typically relevant. However, a whole life policy could make sense in some cases. An insurance broker will be able to give guidance on this after studying the policy holder’s financial status.

Age limits for life insurance vary from company to company, but in general the cut offs and duration are:
    • Age 80 for a 10-year term
    • Age 75 for a 15-year term
    • Age 70 for a 20-year term
    • Age 55 for a 25-year term
    • Age 55 for a 30-year term

Is It A Good Option For You?


Every individual and family’s case is different. If you are a senior citizen with no financial liabilities or obligations, you may think that life insurance does not make sense for you. That may be so. However, it is always wise to consult an insurance professional to discuss the matter in detail. There may be benefits for those who are important to you which you may not appreciate. 

Monday, July 24, 2017

4 Wrong Reasons not to have Earthquake Insurance

According to the latest reports, only about 17% of homes in California are covered by earthquake insurance. So what about the remaining 83%? Are they in denial or have they weighed to risk factors and made a rational choice?

It Won’t Happen To Me

To not dwell on the possibility of tragedy striking is human nature. We see images of people whose lives have been destroyed by natural disasters and feel sympathy for them – a sympathy that is tinged with relief that it happened to the other guy. We live in the hope that such things will not happen to us. That is what so many in Northridge thought before the 1994 quake. To know the extent of the risk all that is required is the read the U.S. Geological Survey’s reports on the likelihood of a major temblor hitting California. Optimism, unsupported by fact, is no reason to not have earthquake insurance.

Rational Decisions – The Common Mistakes


  • My home survived the last quake just fine. Every earthquake is different and the next one could be much worse. Also, new fault lines are being discovered and the next one to be found could be under where you live. What happened last time will have no effect on what could happen the next time.
  • My home is bolted to the foundation. This will reduce the risk of damage, not eliminate it. Even bolting cannot offer complete protection. In addition, studies show that bolting is most effective in single storied wood framed structures. Homes that have 2 or more stories or have large picture windows are likely to suffer damage, even if they are bolted to the foundation.  And if the ground gives way below the foundation, bolting will be of no help.
  • State and federal assistance will get me back on my feet. This assistance is meant only to help survivors cope with the aftermath of an earthquake. It is not going to cover the cost of rebuilding a home and the lives of those who lived in it. The low-interest FEMA loans that may be available are just that – loans that have to be paid back and while they are outstanding, they become liabilities on your personal net worth.
  • I’ll just give the keys to the bank and move on. The problem with this course of action is that allowing the bank to foreclose on an earthquake damaged home will mean a complete loss of equity. In addition, your credit rating will be negatively impacted, making it difficult, perhaps even impossible, to arrange financing for a new home.

It Could Happen At Any Time

Thinking about the possibility of losing a home is not scaremongering. It is being realistic. Of all the material possessions, the home is the most difficult to replace. If you do not have earthquake insurance, the right thing to do is to contact an insurance professional to understand in detail the risks, the potential loss, how earthquake insurance can protect you and how much it will cost. To put it simply, your home protects your family and insurance protects your home.

Friday, July 14, 2017

Too Young for Life Insurance?

The young rarely, if ever, think about their mortality. There is too much happening in their lives and so much that lies ahead contemplating the end of life is something that can easily be ignored. A young man or woman entering college has so many demands on their limited income that spending money on life insurance seems a waste when the risk of death seems remote. Insurance is something that can be thought about in the future, when obligations and responsibilities increase.

Delaying Is Expensive

What is often not realized is that while life insurance becomes an important issue as their lives and careers take shape, the longer they wait the more expensive it becomes. One of the most significant factors that affect the cost of life insurance is the age at which a policy is taken. The premium is set at the time a policy is purchased and the lower the age, the lower the premium. The premium will remain the same for the duration of the policy. A delay of a few years in purchasing a policy may not seem to be a major issue, but the typical increase in premium is between 8% and 10% for each additional year of age. In other words, each year of delay could mean increased recurring costs for every year of the policy. For example, a 45 year old who is in good health could purchase a 20 year $1,000,000 term life insurance policy for about $250 less per year than one who is in the same health but is 2 years older. This may not seem to be much (it works out to about $20 a month) but over the term of the policy, that translates into an additional cost of $5,000.

The increase may seem to be unreasonable, but there is a reason behind it. A human being has a finite lifespan and with each passing year the end of life comes closer. And in a time when life can be uncertain and filled with unexpected risk, death could come to anyone at any time.

Health Is another Factor

The cost of life insurance is based on the statistical probability of how likely it is that a policy holder will die and the insurance company will have to pay the claim. With increasing age, there is an increasing chance of having health problems that could affect the likelihood of a policyholder dying. The premium will rise to balance out the increased risk. That is why the older a person is, the greater the number of medical tests that have to be done before a premium is calculated and a policy issued.

The Younger the Better

With no obligations and few if any liabilities, purchasing life insurance may seem to be a needless expense for the millennial. What needs to be taken into account is the fact that life insurance is not for today; it is for the years that lie ahead and the savings of taking a policy when young can mean a substantial saving in later years when the need for insurance has grown manifold. To fully understand the benefits of taking out a policy at a young age, consult an insurance broker who will be able to lay out the benefits and savings as they affect different individuals.

Thursday, June 22, 2017

Cyber Insurance Basics

The WannaCry ransomware attacks last May have shown everyone that there is no such thing a complete cyber security. Hackers are among the most creative of software developers and when they go bad and use their skills to invade and cripple businesses through the internet, security agencies play a game of catch up. If large corporates with dedicated IT departments can’t protect themselves against such occurrences, needless to say about small and medium businesses. The off the shelf anti-virus programs are necessary, but will not help against a targeted attack. That is why cyber insurance is growing at a rapid pace. It cannot prevent cyber-attacks, but it can help to mitigate the often disastrous results of a system being hacked.

What Is Cyber Insurance?

Cyber Insurance (also known as “cyber risk insurance” and “cyber liability insurance”) is meant to help provide a business with the financial resources to recover from a cyber-attack. Although there is no standard policy framework as yet, in general cyber insurance will reimburse:


  • Investigation expenses: A forensic investigation into how the attack happened is essential to plug holes and prevent the same thing happening again. Often private security firms are required to help law enforcement in this and the costs can be high.
  • Business losses: A cyber-attack results in business interruption, data loss, network being down and ancillary costs of managing the crisis.
  • Third party loss: Not only do customers have to be notified of data loss that could affect them, in some cases credit monitoring of affected customers is mandated by law. These could total up to a very substantial cost.
  • Ransom and lawsuits:Cyber extortion such a ransomware can mean huge payouts. A business could also be liable for loss of confidential data, intellectual property and regulatory fines. Lawsuits from affected customers are also very common.

What to Look For In Cyber Coverage?

  • Standalone policies are typically better than extensions to an existing policy. They are usually more comprehensive.
  • Do the deductibles work for you?
  • Are third party service providers covered? This is essential if your service providers do not have coverage.
  • Does the policy cover both generalized attacks and those targeted specifically at your business?
  • Are non-malicious acts by employees covered? This may be part of E&O coverage, but it may not.
  • Are phishing and similar attacks covered?
  • Advanced persistent threats  may take place over an extended period of time. What, if any, are there time frames that limit the coverage?

Contact an Insurance Professional That Understands Cyber Insurance

Cyber insurance is a new and rapidly evolving field. The best way to get the right coverage for your business, at the right cost, is to get in touch with and insurance company that has in-depth knowledge of the issues involved. By understanding the nature of your business, the risk you face and the potential liabilities, a coverage that will protect you can be developed. This is not something that can wait. The businesses that were hit by WannaCry thought these things happen to the other guy, until they discover the other guy was them.