So, why is it so expensive? The state senate of Texas wanted to know so they commissioned a report from the Texas Department of Insurance to find out why.  It’s a very complex and informative 43 page report exploring the why of rate increases. But I know, I know, it’s boring. Good thing you came here for info!

I will summarize the findings over the next few weeks, starting with key findings.   Key finding 1 is that primary driver of high premiums is high losses. Simple math really, if it costs more to repair your home after a claim, it’s going to cost more to insure it.

When you look at the past few years, you can see where the money goes. Without insurance, there would have been hundreds of thousands of homeowners along the gulf coast unable to rebuild their home after Hurricane Ike. The damages from that storm alone were over $11 billion. The milder Hurricane Isaac, which is pummeling New Orleans as we speak, is estimated to cost $1 billion to repair the damages.

Come back to this blog next week for more information on homeowner insurance and any other insurance questions you might have for Your Independent Insurance Agent, Warner Phelps!

Almost 3,000 fires a year in homes across the U.S., are caused by ventilation to household dryers catching fire, according the the U.S. Fire Administration.

According to their report:

• These fires happen more frequently in colder months, peaking in January.
• Over 1/3 of these could be prevented if someone just cleaned out their vents.
• Most of the items first to catch fire are either clothing or lint. Clothing that no one is wearing at the time fortunately, but clothing none the less.

An estimated $35 million in damages can be attributed to dryer fires!  Surprising isn’t it? Your own diligence can prevent it from happening.  But cleaning out the old dryer vents ain’t always a priority is it? If you do suffer the misfortune of a fire from this happening to you, what does that mean? Are you covered by your insurance?

The legislation extends the NFIP to Sept. 30, 2017, and makes important reforms to modernize the NFIP. These include phasing out subsidies for many properties, raising the cap on annual premium increases from 10 to 20 percent, allowing multifamily properties to purchase NFIP policies, imposing minimum deductibles for flood claims, requiring the NFIP administrator to develop a plan for repaying the debt incurred from Hurricane Katrina, and establishing a technical mapping advisory council to deal with map modernization issues. The legislation also requires the Government Accountability Office (GAO) to conduct a study on the prospect of adding business interruption and additional living expenses coverages to the NFIP. IIABA lobbied for inclusion of this provision.

// Information provided by David VanDelinder of IIAT.

Some of this can be due to deliberate misleading information spread by a few nefarious individuals. The majority however is based in a unfortunate by product of living in the information age. It’s become nearly impossible to find good reliable facts when the internet is full of misinformation.

Lesson 1, Chapter 1

You don’t know as much about insurance as you think you do.

I know that the marketing masterminds have you convinced otherwise by popular television ads that constantly talk about shopping for insurance yourself on the internet. Truthfully, as an average every day consumer, you may be able to do this your entire life and get by without ever having a problem.

But there is a reason that states require you to be licensed as insurance agents to sell insurance. You can spend your entire life paying for something that is completely worthless and you’d never know because you never asked a qualified agent.

It would be worthless because you are personally not covered under the policy but you never took the time to ask someone who knows. We throw around words like licensed, bonded, and insured but does anyone really know what that means? Did you know that you can slap those words on your marketing with very little trouble? Does anyone ever ask to see proof of insurance or licensing or bonding? Of course not because then where would you start? Would you know what to look for?

An independent insurance agent does. Find one today in your neighborhood!

Warner Phelps, MBA, CLCS

www.warnerphelps.net

D: 936-494-6115

Edited by author on 6/15/2011:

For whatever reason, this post has been the most popular of all my blogs. Here is my quick synopsis of basic, broad and special form coverage for those who come here via internet search:

Basic coverage, sometimes referred to a HO-A, is the most stripped down version of homeowner insurance coverage available. It includes coverage against damage from windstorm, hurricane and hail in addition to other named perils.

Broad coverage, sometimes called HO-B, takes the basic coverage and adds a few insured perils.

Special form, sometimes called HO-C, is the most comprehensive form and usually includes an open peril coverage, which means coverage is included for everything. UNLESS IT IS SPECIFICALLY EXCLUDED.

I hope this added information is helpful. However, my advice for all insurance consumers is summed up as thus: DO NOT DO IT YOURSELF. There is too much at risk to not know with certainty that you are covered. And trust me when I tell you that coverage varies widely, nearly on a house to house basis. Find an independent insurance agent in your community. Email or call me if you are confused. I am always eager to help. Give me a chance to show you!

END OF AUTHOR’S EDITS

In Texas, Homeowner insurance is limited in several ways. Your policy should have A, B, C, D, E and F limits. Has anyone ever explained to you what that means?

A – The limit of insurance on your physical home – The cost to replace and/or rebuild your home due to catastrophic loss
B – The limit of insurance on “other structures” – Usually includes sheds and other buildings but if you have an unattached garage, this is part of that limit
C – The limit on personal property – Basically everything from the studs in is included in this number, furniture, fixtures and clothing. It seems like a lot of money but you’ll burn through this money fast when you start to think about buying new clothes and furniture, appliances, etc. And you better hope that you have “Replacement Cost” coverage. Because if you don’t you’ll be getting $80 for the $1500 couch you bought 10 years ago.
D – Loss of use – The limit of what will be paid if you are unable to live in your house
E – Personal Liability – Did you know the average liability claim in Harris County, after jury trial, is $270,000?
F – Medical Payments – A coverage that can be used if you are not liable but still want to rectify the damaged parties.

Confusing, isn’t it? Has your agent ever explained this process to you? I bought insurance from different agents for 5 years and never understood any of this until I became an agent myself. I hope you’ll consider how much is at stake the next time you think about insurance because it’s a lot more than saving $100 here and there.

And furthermore, that doesn’t even scratch the surface of whether or not you have a broad form or special form coverage. It can be confusing. Don’t do it yourself, get an agent involved. DO IT!

Call or email if you would like to know more!

Warner Phelps
Your Independent Insurance Agent
281-450-6774
www.warnerphelps.net

Please remember that if you or your friends ever need any assistance with insurance related questions, I am here to help.

Which got me thinking..I wonder if anyone out there is prepared?

National Hurricane Center has some good advice here. I’ve attempted to summarize below.

 
“Preventing the loss of life and minimizing the damage to property from hurricanes are responsibilities that are shared by all.”

Disaster Prevention should include:

• Developing a Family Plan
• Creating a Disaster Supply Kit
• Having a Place to Go
• Securing your Home
• Having a Pet Plan

One of the most important decisions you will have to make is “Should I Evacuate?”

If you are asked to evacuate, you should do so without delay. But unless you live in a coastal or low-lying area, an area that floods frequently, or in manufactured housing, it is unlikely that emergency managers will ask you to evacuate. That means that it is important for you and your family to HAVE A PLAN that makes you as safe as possible in your home.

Disaster prevention includes modifying your home to strengthen it against storms so that you can be as safe as possible. It also includes having the supplies on hand to weather the storm. The suggestions provided here are only guides. You should use common sense in your disaster prevention.

• DEVELOP A FAMILY PLAN - Your family’s plan should be based on your vulnerability to the Hurricane Hazards. You should keep a written plan and share your plan with other friends or family.
• CREATE A DISASTER SUPPLY KIT - There are certain items you need to have regardless of where you ride out a hurricane. The disaster supply kit is a useful tool when you evacuate as well as making you as safe as possible in your home.
• SECURE YOUR HOME - There are things that you can do to make your home more secure and able to withstand stronger storms.
• ONLINE VULNERABILITY INFO - There are web sites that can give you information about your communities vulnerability to specific hazards. These include hurricanes as well as other weather related hazards.

Here is a quick list of what to get together if a storm is coming, courtesy of NOAA:

Water - at least 1 gallon daily per person for 3 to 7 days

Food - at least enough for 3 to 7 days
— non-perishable packaged or canned food / juices
— foods for infants or the elderly
— snack foods
— non-electric can opener
— cooking tools / fuel
— paper plates / plastic utensils

Blankets / Pillows, etc.

Clothing - seasonal / rain gear/ sturdy shoes

First Aid Kit / Medicines / Prescription Drugs

Special Items - for babies and the elderly

Toiletries / Hygiene items / Moisture wipes

Flashlight / Batteries

Radio - Battery operated and NOAA weather radio

Telephones - Fully charged cell phone with extra battery and a traditional (not cordless) telephone set

Cash (with some small bills) and Credit Cards - Banks and ATMs may not be available for extended periods

Keys

Toys, Books and Games

Important documents - in a waterproof container or watertight resealable plastic bag
— insurance, medical records, bank account numbers, Social Security card, etc.

Tools - keep a set with you during the storm

Vehicle fuel tanks filled

Pet care items
— proper identification / immunization records / medications
— ample supply of food and water
— a carrier or cage
— muzzle and leash

—Tobie Stanger

Where is the coverage for liability arising out of serving alcohol in a social setting, including the liability imposed on social hosts by the Dram Shop Act? There is no liquor liability exclusion in the Texas or ISO homeowners policies. What about the intentional acts exclusion? The exclusion precludes coverage for BI or PD which is “caused intentionally by or at the direction of the insured” (Texas form) or “expected or intended by an insured” (ISO form). Texas courts have consistently ruled that this exclusion is effect-focused and not cause-focused, voiding coverage only when the resulting injury was intentional, not merely when the insured’s conduct was intentional.

What about a lawsuit involving an auto accident caused by an intoxicated guest after leaving the party? The auto exclusion on the Texas homeowners policy only applies to autos owned or operated by or rented or loaned to an insured, so the policy would defend the insured if he or she were sued by a third party for a liquor-related auto accident. The auto exclusion on the ISO homeowners policy is more restrictive and would not apply in the same case. Coverage may be available in the Texas or ISO personal auto policy. The PAP covers an insured’s liability arising out of an auto accident involving a nonowned auto – even if the auto is operated by someone else – subject to certain exclusions not relevant in this case.

The previous information was authored by David Surles of IIAT. Shared here for client and potential client information

It isn’t that I love talking to people about life insurance. It’s quite the opposite. The reason I continue to bring up the subject of life insurance with clients and potential clients is that there is an overabundance of bad information about life insurance.

The problem: The sage advice of “Buy term and invest the difference” has been around for much longer than most know. Dave Ramsey did not invent it. But what is the best method and what actually happens are two completely different things. I can tell you with 100% certainty that whole life insurance is the only investment that some people make. Because if they keep their term insurance for 20 years and then outlive it, but never took the time to ‘invest the difference’, what are they left with? Nothing.

I don’t categorically recommend whole life for everyone. I have clients who have whole, term and a combination of both. It depends on who you are, what your financial strategies are and how disciplined you are. Not everyone is as disciplined as they should be.

The solution: Get to know your independent insurance agent and discuss life insurance with them. A personal relationship with a competent financial and insurance advisor is and always will be the key to financial success!

For whatever reason, this post has been the most popular of all my blogs. Here is my quick synopsis of basic, broad and special form coverage for those who come here via internet search:

Basic coverage, sometimes referred to a HO-A, is the most stripped down version of homeowner insurance coverage available. It includes coverage against damage from windstorm, hurricane and hail in addition to other named perils.

Broad coverage, sometimes called HO-B, takes the basic coverage and adds a few insured perils.

Special form, sometimes called HO-C, is the most comprehensive form and usually includes an open peril coverage, which means coverage is included for everything. UNLESS IT IS SPECIFICALLY EXCLUDED.

I hope this added information is helpful. However, my advice for all insurance consumers is summed up as thus: DO NOT DO IT YOURSELF. There is too much at risk to not know with certainty that you are covered. And trust me when I tell you that coverage varies widely, nearly on a house to house basis. Find an independent insurance agent in your community. Email or call me if you are confused. I am always eager to help. Give me a chance to show you!

END OF AUTHOR’S EDITS

In Texas, Homeowner insurance is limited in several ways. Your policy should have A, B, C, D, E and F limits. Has anyone ever explained to you what that means?

A – The limit of insurance on your physical home – The cost to replace and/or rebuild your home due to catastrophic loss
B – The limit of insurance on “other structures” – Usually includes sheds and other buildings but if you have an unattached garage, this is part of that limit
C – The limit on personal property – Basically everything from the studs in is included in this number, furniture, fixtures and clothing. It seems like a lot of money but you’ll burn through this money fast when you start to think about buying new clothes and furniture, appliances, etc. And you better hope that you have “Replacement Cost” coverage. Because if you don’t you’ll be getting $80 for the $1500 couch you bought 10 years ago.
D – Loss of use – The limit of what will be paid if you are unable to live in your house
E – Personal Liability – Did you know the average liability claim in Harris County, after jury trial, is $270,000?
F – Medical Payments – A coverage that can be used if you are not liable but still want to rectify the damaged parties.

Confusing, isn’t it? Has your agent ever explained this process to you? I bought insurance from different agents for 5 years and never understood any of this until I became an agent myself. I hope you’ll consider how much is at stake the next time you think about insurance because it’s a lot more than saving $100 here and there.

And furthermore, that doesn’t even scratch the surface of whether or not you have a broad form or special form coverage. It can be confusing. Don’t do it yourself, get an agent involved. DO IT!

Call or email if you would like to know more!

Warner Phelps
Your Independent Insurance Agent

Please remember that if you or your friends ever need any assistance with insurance related questions, I am here to help.