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Wednesday, September 30, 2009

New Trends in Home Owners Insurance for Replacement Cost Dwelling Coverage.....

New Trends in Home Owners Insurance for Replacement Cost Dwelling Coverage.....

There is a trend happening in Harris County regarding Tenant Occupied Homes, especially wood frame homes. To get replacement cost on a tenant occupied home in Harris County and the home is more than 20 years old, the following should be 100% completely replaced:
1. Roof
2. Wiring
3. Plumbing
4. A/C
Proof will be required by city permits, a contractors letter or inspection report.

If none of the above, or at least 3 out of the 4 haven't been done, then the purchaser / owner of the home will qualify for Actual Cash Value Dwelling Coverage on the home only. In other words, the replacement cost will be determined and depreciated. The same will apply on repairs. The repairs will be determined at 100%, depreciation taken and the deductible applied.

If a home is on pier and beam, the crawlspace must be enclosed by a solid material (with the proper venting per codes) to as close to the ground as possible. Companies are quickly moving from insuring or at least providing replacement cost on homes with open crawlspace, either owner or tenant occupied.

If you have any questions about this new trend please let me know. I hope you have found this information helpful!

Tuesday, September 29, 2009

7 Reasons you need Life Insurance

Life Insurance...
1. Buys time – Allows loved ones to focus on their grief by helping to pay for the funeral and other final expenses.

2. Provides a fresh start – Lets loved ones start with a clean slate by helping to pay off credit card bills, outstanding loans and even the mortgage.

3. Generates income – Helps replace lost income for years to come so that surviving family members can continue to pay for life’s necessities.

4. Offers flexibility – Gives a surviving spouse the chance to take time off from work or to switch to a job that offers a more flexible work schedule.

5. Creates opportunities – Can provide funding to start a business, or pay for schooling so surviving family members can train for a new career.

6. Funds the future – Offers a way to fund longer-range goals like a college education for the kids or a secure retirement for a surviving spouse.

7. Leaves a legacy – Gives parents the chance to leave future generations with the legacy of long-term financial security.

In these challenging times, many people have been hit with painful losses in the value of their homes and savings. With less to fall back on than in years past, life insurance can be that safety net that catches our loved ones if the worst were to happen before we’ve had the chance to rebuild lost savings.

Monday, September 28, 2009

Teens With Own Cars Have More Crashes, Study Finds

Teens With Own Cars Have More Crashes, Study Finds
By Lindsey Tanner
September 28, 2009

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Parents beware: Giving in to teens' demands for their own cars can have dangerous consequences, new research suggests.

Teenagers with their own cars or free use of one are much more likely to get in crashes than those who share a car. And crashes are much less common among teens whose parents set clear driving safety rules.

The findings are in two studies by researchers at Children's Hospital of Philadelphia and funded by State Farm Insurance Co. They are in the October issue of Pediatrics.

The researchers say the findings can help parents keep their kids from becoming a grim statistic: Traffic crashes are the leading cause of death for U.S. teens, killing more than 5,000 each year.

Getting a driver's license and car are often viewed as rite of passage for U.S. teens, and many parents underestimate the risks.

More than 7,000 people nationwide were killed in crashes involving teen drivers in 2007, government data show. More than 3,000 of these deaths were teen drivers, and more than 250,000 teen drivers were injured.

"With teen drivers, you have to recognize that it's a public health issue,'' said Dr. Jeffrey Weiss, a Phoenix pediatrician who co-wrote an American Academy of Pediatrics report on teen drivers.

The 2006 report encourages parents to highlight the seriousness of driving privileges by requiring teens to sign driving contracts promising to abide by safety rules.

The new research shows that kind of hands-on approach pays off.

"Families need to know that driving is different'' from other steps toward independence,said Dr. Flaura Koplin Winston, the study's lead author. "Just at the time their teen is pulling away, they need to get back involved to spare them heartache.''

The research is based on a nationally representative survey of more than 5,500 teens in grades nine through 11. Students at 68 high schools answered questionnaires in 2006.

More than 2,000 students who reported driving on their own were the focus of one study; 70 percent said they had their own cars or were the main drivers of cars they used.

Winston said it's alarming that so many kids have their own cars or feel that they have free use of one. She said that freedom can lead to "a sense of entitlement about driving'' that may make them less cautious.

Among these "main'' drivers, 25 percent had been involved in crashes, versus just 10 percent of teens who shared driving access. Winston said the lower crash rate doesn't reflect less driving time, but is likely due to having to ask for the car keys, which helps parents monitor their kids' driving.

Compared with teens whose parents were uninvolved, kids who said their parents set clear rules and monitored their whereabouts without being overly controlling had half as many crashes and much better driving habits.

These teens were 71 percent less likely to drive while drunk and 30 percent less likely to use a cell phone while driving than kids with uninvolved parents.

Dr. Niranjan Karnik, a University of Chicago specialist in adolescent mental health, said the research underscores the importance of appropriate parenting and widely enacted graduated licensing laws for teens.

Debby Hendricks of Hatfield, Pa. made her daughters wait until age 17 to get their licenses, and gave them lots of driving practice beforehand.

The girls, aged 17 and 19, also share a family car, and can't "just grab the keys and leave'' without saying where they're going and with whom, Hendricks said.

So far so good -- neither girl has been in an accident, although the younger one, Leslie, has only had her license for a few months.

Leslie considers herself a safe driver, but adds, "I probably do underestimate the risks.''

Friday, September 25, 2009

Answers to Possible Questions Regarding the October 2009 Change

On October 1, 2009, important changes to the NFIP will take effect. There will be an increase in rates, the standard deductibles, and the basic insurance limits. These combined changes will result in an average premium increase of 8 percent . Many policyholders will have questions about these changes. To help you best serve your clients, we have developed a number of “answers to possible questions” to help your customers better understand how these changes will affect them.

Q: Why are my premiums going up?

A: It is not uncommon for insurance companies to implement annual rate increases to help offset their increased costs, including inflation. The NFIP, like most insurance companies, has found it necessary to implement these important program changes to ensure that current premiums more accurately reflect the current risks.

Q: Are the rates increasing to collect the premium dollars that were used to pay for claims as a result of Hurricane Katrina?

A: No. It is a misconception that rate increases happen to offset debts attributed to Hurricane Katrina or any past event. Actually, Federal regulations clearly state that the NFIP cannot raise rates to recoup for previous losses. Simply put, NFIP premiums only reflect expected future losses and expenses. There is no charge contained in the premium to recoup past losses.

Q: Why is my deductible doubling?

A: The NFIP’s previous minimum deductibles were in place for more than 10 years. The NFIP found it necessary to discontinue the minimum deductible of $500 and increase the new standard deductibles to avoid overall larger premium increases.

It is important to remember, that in most cases the deductible is only a fraction of the average flood insurance claim, which can cost tens of thousands of dollars.

Q: Why are the basic limits of coverage on the Standard Flood Insurance Policy (SFIP) for residential and non-residential buildings increasing?

A: The NFIP takes many steps to financially prepare for future flooding. In order to do so, the basic limit of coverage, the level which sustains the most damage in a flood, needs to be brought into better alignment with the typical NFIP paid claim.

If you purchase flood insurance beyond the basic limit, you will receive more coverage at a lesser charge. And, to get full replacement cost for your primary residence in the event of a flood, you must insure your building to at least 80 percent of its replacement value (or $250,000, whichever is less).

Click here for the new Flood Insurance Rate Manual that reflects these changes as well as additional information from the NFIP. Please email us at info@femafloodsmart.com with any questions.

Parents Lead to Safer-Driving Teens

By Sharon Silke Carty, USA TODAY
Two studies coming out in the journal Pediatrics Monday show that parents have a big impact on the safety of teen drivers.
Parents who are actively involved in setting rules and boundaries, and following up on those rules, lead to safer drivers. Teens who say their parents are actively involved cut their risk of drinking and driving by 70%, are half as likely to speed and 30% less likely to use a cellphone. And kids who don't have access to their "own" car — they have to ask for the keys — are half as likely to get into a crash.


TELL US: How did you handle teaching your children to drive, or what kinds of things did your parents do in teaching you?

"The real message of this paper is that parents matter," says Ken Ginsburg, associate professor of pediatrics at The Children's Hospital of Philadelphia and University of Pennsylvania School of Medicine, and author of one of the papers. "If you take this seriously and you are an active parent that gives appropriate rules and appropriate boundaries combined with warmth and support, you can actually make a tremendous difference here."

In 2008, 4,400 teenagers died in car accidents. Car accidents are the leading cause of death for people 16 to 20 years old. The risk of teen-related accidents goes up dramatically when there are passengers in the car, if the teen is speeding, or if they've been drinking or using drugs.

Ginsburg says parents who are most effective at curbing bad driving behavior are those who enforce strict rules, but in a kind way. Parents need to send a message that they are looking out for their teen's safety, and give them opportunities to earn more privileges as their driving skills progress.

Ginsburg suggests parents should set rules like no passengers in the car for the first six to 12 months of driving, limit driving time during bad weather, and enforce curfews.

Parents should also control the keys to their teen's car, he says. Teens who consider themselves the primary driver of a car are twice as likely to crash than a teen who is driving a family car.

Laurette Stiles, vice president of strategic resources for State Farm Insurance, says she hopes the studies will encourage parents to spend more time practicing driving with their teens.

"Parents have the opportunity to reinforce over and over what the teens learn in driver's ed," she says. "That becomes more important than what they're learning in the classroom."

Driver's Edge, a non-profit group that teaches teens road skills, is developing programs that will talk directly to parents.

"A parent who can become involved in a teen's driver education … has this great opportunity to be involved in so much of their kid's life in a way that's not overbearing," says Steven Tepper, president and chief operating officer of Driver's Edge.

Friday, September 18, 2009

David Lorms, Farmers Insurance Agent, Completes Agency Accelerator Course at the University of Farmers

Houston, TX (Grassroots Newswire) September 15, 2009 - David Lorms, Farmers Insurance agent in Houston, has completed the Insurance Agent Career Accelerator Course at the University of Farmers.

The University of Farmers training facility, located in Agoura Hills, California, was officially dedicated November 3, 2006. Farmers CEO Robert Woudstra noted that the University is national in scope, and offers training to Farmers’ 15,000 agents and their staff, 500 district managers and 10,000 claims staff year round.

"David completed the Agency Accelerator course designed for the Farmers agent to learn best practice methods surrounding staffing, business management, marketing, and sales," explained Annette Thompson, senior vice president of Farmers. “This curriculum is built for top performing Farmers agents and it gives each agent a solid understanding of the various issues he or she faces in their agency every day," she said.

"It allows Farmers agents to build on their knowledge in providing the best Commercial, Financial Products and advanced Life products that Farmers has to offer," Thompson added.

Farmers is a trade name and may refer to Farmers Group, Inc. or the Farmers Exchanges, as the case may be. Farmers Group, Inc., a management and holding company, along with its subsidiaries, is wholly owned by the Zurich Financial Services Group. The Farmers Exchanges are three reciprocal insurers (Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Exchange), including their subsidiaries and affiliates, owned by their policyholders, and managed by Farmers Group, Inc. and its subsidiaries. For more information about Farmers, visit our Web site at www.farmers.com.

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Thursday, September 17, 2009

Gulf Coast Construction 'Woefully Inadequate' to Survive Storm Flooding

Gulf Coast Construction 'Woefully Inadequate' to Survive Storm Flooding
September 17, 2009

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Government minimum flood elevation requirements for properties vulnerable to storm surge throughout the Gulf Coast region are "woefully inadequate," according to a new study of property damage caused by Hurricane Ike, which struck the Bolivar Peninsula near Galveston, Texas one year ago yesterday, Sept. 13, 2008.

The study reveals that significantly more Gulf Coast homes and businesses are imperiled by disastrous flooding from storm surge than previously recognized by property owners or policymakers.

The authors say that the National Flood Insurance Program (NFIP) should do a better job of encouraging building at higher elevations to avoid flooding.The NFIP, which provides flood insurance to homes and businesses, also establishes base flood elevation (BFE) levels for properties.

The report, Hurricane Ike: Nature's Force vs. Structural Strength, was issued by the Institute for Business & Home Safety (IBHS), a not-for-profit research organization supported by property insurers and reinsurers.

"Lessons learned from Hurricane Ike, which is the third-costliest hurricane on record, should be used by vulnerable communities from Texas to Maine to effectively reduce property damage in all hurricane-exposed areas," said IBHS President and CEO Julie Rochman.

"Simply put, the study found that many properties are not built high enough to withstand storm surges, tightly enough to prevent water from causing interior damage or strongly enough to prevent damage when high winds strike."

IBHS questions the current basis for elevating properties along the Gulf Coast and urges the NFIP to provide greater incentives for building well above the minimum elevations now in place. More than 50 percent of the nation's population lives within 50 miles of the coast, with more than $9 trillion of insured coastal property vulnerable to hurricanes.

According to the study's findings, the BFE requirement for homes on Texas' Bolivar Peninsula ranged between 13 feet for homes built in the 1970s and 17 feet to 19 feet for homes built beginning in 1983. All but a handful of properties within the first few rows of houses from the coast, built to even the highest elevation requirements, were washed away during Hurricane Ike.

By contrast, the study found that 10 homes on the Bolivar Peninsula designed and built under IBHS's building code-plus new construction program, Fortified…for safer living, survived the storm sustaining minor damage. The Fortified homes had outdoor decks at 18 feet that were destroyed, but the homes, which were elevated to 26 feet, survived.

According to IBHS Senior Vice President of Research and Chief Engineer Dr. Tim Reinhold, most homes in coastal areas are built to or slightly above 100-year base flood elevations. "A 100-year flood means that the level of flood water has a 1 percent chance of being equaled or exceeded in any single year. However, it is well recognized in the engineering community that coastal homes built to this level have a 26 percent chance of being flooded or demolished over the life of a 30-year mortgage. This chance increases to about 40 percent in a 50-year period," Reinhold said.

"All it takes is a breaking wave about 2 feet above the base of a house to knock out the bottom floor or destroy a frame house," explained Reinhold. "The chances of destruction can be significantly reduced by employing what has been learned about the importance of proper elevation, which can be relatively inexpensive when building a coastal home," he continued. "For example, building to a 500-year base flood elevation reduces the chance of storm surge exceeding the base elevation to about 10 percent in a 50-year period."

The IBHS study also provides a detailed, real world performance evaluation of superior construction techniques when tested by a truly extreme weather event;

It also includes a retrofit guide for Texans in coastal areas to use. The guide takes into account the current Texas building code requirements and outlines specific retrofit options that homeowners and residents can use to harden their property by doing things such as strengthening their roofs, accoroding to Rochman.

Wednesday, September 16, 2009

Flood Policy Forms And Participating Communities

Flood Policy Forms And Participating Communities
By Chris Boggs

September 16, 2009


Compared to more common property insurance policies, National Flood Insurance Program (NFIP) policy forms are actually quite intriguing. First, the Federal government wrote them; and second, they use terms and conditions not found in other property policy forms. The three most commonly used NFIP coverage forms are highlighted below.

Three Policy Forms

Each Standard Flood Insurance Policy (SFIP) form issued by the Federal Emergency Management Agency (FEMA) specifies the terms, conditions and agreement between FEMA (as the insurer) and the named insured. Provisions are essentially the same among the three forms with the only differences being the qualifications for coverage, the limits available and the property valuation methods applied.

Dwelling Form: Approximately 85 percent of current NFIP policies are written using the dwelling form. It is designed for one to four family structures primarily occupied as a residence. Homeowners, residential renters, owners of two to four unit residential structures, residential townhouse or row house and the owner of an individual unit in a condominium building are eligible for the dwelling form.

Property insured on the dwelling form is valued at replacement cost provided two requirements are met:


Property is insured to at least 80 percent of its value (or the maximum coverage available); and

The insured lives in the residence at least 80 percent of the year.

If either of these requirements is not met, the most the insured is going to receive is the property's actual cash value.

Although the policy states that replacement cost is paid if 80 percent of the value is carried, this is not a coinsurance form. Like the homeowners' form, the dwelling form will pay the greater of actual cash value or the amount developed in the coinsurance calculation; but only if the insured lives there 80 percent of the year. If both conditions are not met, losses are paid at actual cash value; this is the reason this is not the equivalent of a coinsurance form.

In regular program communities, coverage for buildings and contents are limited to a specified maximum. Current (as of 2009) maximum limits are $250,000 on the structure and $100,000 on contents (which applies to "renters" as well).

General Property Form: Owners or lessees of "other residential" and non-residential structures or units are eligible for protection under the general property form. Residential structures with five or more units, hotel or motels, apartment buildings, cooperative condominiums, assisted living facilities and dormitories are examples of "other residential" structures insurable on the general property form. Non-residential structures, as is evidenced by the name, are any structures where people do not live and includes stores, office buildings, manufacturing facilities, warehouses, churches, schools, detached garages commercial condominiums and any other eligible structure not normally considered a place of residence.

Structures and contents insured on the general property form are valued at actual cash value with no other options available.

Maximum limits differ depending on the classification of the structure. "Other residential" structures are limited to $250,000 on the structure and $100,000 on the contents. Non-residential structures are eligible for up to $500,000 on the building and another $500,000 for the contents.

Residential Condominium Building Association Policy (RCBAP): Provides building coverage and if desired can be used to provide contents coverage for common use personal property for residential condominium buildings provided 75 percent or more of the building is residential use. Coverage is written in the name of the association for the benefit of the association and the unit owners. Only buildings with a condominium form of ownership are eligible for this coverage form. The unit owners must take title and deed to specific units.

Cooperative condominiums are NOT eligible for the RCBAP as title to a specific unit is not passed to the occupier of the unit; an "owner" buys stock in the cooperative and is allowed to live in a particular unit (based on the amount of stock purchased). Timeshare buildings MAY be eligible for the RCBAP if condominium-style ownership is offered in jurisdictions which allow title to individual units be vested in the owners names (a fee simple-type arrangement allowing the title to be transferred to heirs).

Property insured on the residential condominium building association policy is valued at replacement cost. In fact, this is the only form that offers a true coinsurance clause similar to the homeowners' or commercial property policy.

Much higher limits are available for buildings insurable under the RCBAP. Up to $250,000 per unit, per building is available. A 10-unit building, for example, can purchase up to $2.5 million in protection. Coverage for commonly owned personal property is limited to $100,000 per building.

Participating Communities in the Regular Program

Two requirements must be met before owners or lessees can avail themselves of the coverage and limits highlighted above:


The structure must be in a participating community (currently over 20,400); and

The community must have transitioned into the Regular Program.

A participating community is one that 1) has been notified by FEMA through the Federal Insurance and Mitigation Administration (FIMA) that there are flood-prone areas within the community (usually resulting from previous floods); 2) have been notified of the location of those areas by publication of a Flood Hazard Boundary Map; 3) within one year of notification agrees to join NFIP; and 4) agrees to participate in the development of local flood plain management guidelines. Being labeled a participating community is the first step toward becoming a regular community.

Immediately following a community's decision to participate with NFIP, the emergency program is made available to residents and businesses in the community. During the emergency program phase, very limited amounts of coverage are available.

Regular Program: Moving from the emergency program to the regular program requires completion of a more detailed flood insurance study (FIS) by FIMA and the Army Corps of Engineers, more clearly defining the community's flood hazards. Simultaneously, the community, in conjunction with FEMA, is developing and codifying the flood plain ordinances and laws to regulate construction and maintenance in flood zones and flood ways.

After the flood insurance studies are completed and FEMA is satisfied with the locally adopted flood plain management ordinances, the community moves to the regular program. Once the community enters the regular program, the limits presented above become available.

Flood Plain Management

Flood plain management is the local community's responsibility. Reviewing and updating existing laws are solely the duty of the participating community; FEMA does not take part in this process. However, if the community fails to comply with its own flood plain management requirements, FEMA may place the community on probation for one year.

During that year, every flood policy in that community has a $50 surcharge tacked on to the current premium: 1) to help finance the increased risk the community is presenting; and 2) as a political move to encourage policy holders to call the community to push for resolution.

The community is no longer considered a "participating community" as they are not working with FEMA to mitigate losses. If deficiencies are not corrected within that year, the community is suspended and no NFIP-backed flood policies can be written or renewed.


David Lorms spoke with Garden Oaks Gary Greene Realtors today about the changes coming to Flood Insurance Policies 10.1.09 and Tenant Occupied Insurance Policies. Pictured with Real Estate Agent Nila Middleton.

Tuesday, September 15, 2009



David Lorms and Sandra Campos, Farmers Insurance Agents, spoke at REMAX about changes in Flood Insurance policies effective 10.1.09

David Lorms, Farmers Insurance Agent, attended Oak Forest Elementary School Open House 9.9 and 9.10 handing out Child Safety Information.

Monday, September 14, 2009

Ike Study: Hurricane Storm Surge a Threat to More Coastal Properties

Government minimum flood elevation requirements for properties vulnerable to storm surge throughout the Gulf Coast region are woefully inadequate, according to a new study of property damage caused by Hurricane Ike, which struck the Bolivar Peninsula near Galveston, Texas, one year ago yesterday, Sept. 13, 2008.

The study, HURRICANE IKE: Nature's Force vs. Structural Strength, reveals that significantly more Gulf Coast homes and businesses are imperiled by disastrous flooding from storm surge than previously recognized by property owners or policymakers.

The report was issued by the Institute for Business & Home Safety (IBHS), which is an independent, not-for-profit applied research and communications organization supported by property insurers and reinsurers.

"Lessons learned from Hurricane Ike, which is the third-costliest hurricane on record, should be used by vulnerable communities from Texas to Maine to effectively reduce property damage in all hurricane-exposed areas," said IBHS President and CEO Julie Rochman.

"Simply put, the study found that many properties are not built high enough to withstand storm surges, tightly enough to prevent water from causing interior damage or strongly enough to prevent damage when high winds strike."

The IBHS study questions the current basis for elevating properties along the Gulf Coast and urges the National Flood Insurance Program (NFIP) to provide greater incentives for building well above the minimum elevations now in place.

More than 50 percent of the nation's population lives within 50 miles of the coast, with more than $9 trillion of insured coastal property vulnerable to hurricanes. The NFIP, which is the federal government program that provides flood insurance to homes and businesses, also establishes base flood elevation (BFE) levels for properties.

According to the study's findings, the BFE requirement for homes on Texas' Bolivar Peninsula ranged between 13 feet for homes built in the 1970s and 17 feet to 19 feet for homes built beginning in 1983. All but a handful of properties within the first few rows of houses from the coast, built to even the highest elevation requirements, were washed away during Hurricane Ike.

By contrast, the study found that 10 homes on the Bolivar Peninsula designed and built under IBHS's building code-plus new construction program, Fortified…for safer living, survived the storm sustaining minor damage. The Fortified homes had outdoor decks at 18 feet that were destroyed, but the homes, which were elevated to 26 feet, survived.

According to IBHS Senior Vice President of Research and Chief Engineer Dr. Tim Reinhold, most homes in coastal areas are built to or slightly above 100-year base flood elevations. "A 100-year flood means that the level of flood water has a 1 percent chance of being equaled or exceeded in any single year. However, it is well recognized in the engineering community that coastal homes built to this level have a 26 percent chance of being flooded or demolished over the life of a 30-year mortgage. This chance increases to about 40 percent in a 50-year period," Dr. Reinhold said.

"All it takes is a breaking wave about 2 feet above the base of a house to knock out the bottom floor or destroy a frame house," explained Reinhold. "The chances of destruction can be significantly reduced by employing what has been learned about the importance of proper elevation, which can be relatively inexpensive when building a coastal home," he continued. "For example, building to a 500-year base flood elevation reduces the chance of storm surge exceeding the base elevation to about 10 percent in a 50-year period."

In addition, the IBHS study achieves the following:

Provides a detailed, real world performance evaluation of superior construction techniques when tested by a truly extreme weather event;


Sets the course for rigorous laboratory testing to explore and resolve remaining issues with specific building materials and systems;

Proves (once again) the importance of enacting and enforcing strong, appropriate building codes - and proper elevation requirements in storm surge-prone areas; and,

Showcases the leading edge of construction and real estate markets, i.e., developers choosing to design buildings to the highest standard, because they understand the favorable cost/benefit ratio and want to meet consumer demand for safety and durability.

EDITOR'S NOTE: Download A copy of the full report is available online at: http://www.disastersafety.org/resource/resmgr/pdfs/hurricane_ike.pdf. A low resolution video of the Fortified homes that survived Hurricane Ike is also available.

Source: IBHS

Thursday, September 10, 2009

October 2009 Flood Insurance Program Changes

October 2009 Flood Insurance Program Changes

Changes to the NFIP Flood Insurance Rate Manual take effect twice a year, in May and October. This fall, the October 2009 manual revisions include changes to Standard Flood Insurance Policy rates and deductibles, which may impact your clients. It’s important for you to understand the changes so you can provide informed counsel to your clients and answer questions that may arise. The bullets below reflect just a few highlights. Click here for the full Flood Insurance Rate Manual that provides details for ALL of the October changes.

Rate and Premium Changes

Changes to standard flood insurance policy rates may result in premium increases for some of your customers, on policies written or renewed on or after October 1, 2009. On average, premiums will be increasing 8 percent; however, individual rate changes may vary – and some policyholders may see their premiums decrease. Preferred Risk Policy premiums are not changing.

It’s important to inform your customers that rate increases take effect regularly to ensure premiums stay aligned with NFIP costs. Premiums are also dependent upon a variety of factors such as the amount of coverage and deductible factors, among others. Consult your Flood Insurance Manual “Rating” section for detailed rating information and examples of how to discuss rate calculations with your customers.

Another factor driving increases are changes to the basic coverage limits for both residential and non-residential properties. Standard policy basic insurance limits are increasing for all categories of building and contents coverage as follows:

1-4 Family Dwelling Building Coverage: Basic limit increases from $50,000 to $60,000.
Residential Contents Coverage: Basic limit increases from $20,000 to $25,000.
Other Residential and Non-Residential Building Coverage: Basic limit increases from $150,000 to $175,000.
Non-Residential Contents Coverage: Basic limit increases from $130,000 to $150,000.
Deductible Changes

In addition to rate and basic coverage changes, all policyholders, including those with a Preferred Risk Policy, will see increases to their standard deductible. The NFIP is discontinuing the $500 deductible for all properties. New deductible levels are listed below:

Standard deductible increases from $500 to $1,000 for post-FIRM buildings and pre-FIRM buildings rated as post-FIRM in SFHAs.
Standard deductible increases from $500 to $1,000 for buildings in non-SFHAs.
Standard deductible increases from $1,000 to $2,000 for pre-FIRM buildings.
Owners of pre-FIRM properties can pay a surcharge and buy back the $1000 deductible, so make sure to communicate this option as pre-FIRM policies come up for renewal. It’s also important to alert your customers to these changes so that they are not surprised at the change in the event they need to file a claim. Be sure to remind them that while their deductibles have increased, they are still just a fraction of the cost of the average flood insurance claim. Just a few inches of water can cause tens of thousand dollars in damages.

Application Changes

Effective on or after October 1, 2009, there will be some changes to language in the standard application and endorsement forms. Changes to the Flood Insurance Application, PRP Application, and General Change Endorsement forms will capture additional community, building, and construction information.
New information must be provided for all grandfathered policies. Agents are asked to identify the type of grandfathering (i.e., Built in Compliance, Continuous Coverage) on the revised flood insurance application form and WYO companies must also include the grandfathering indicator on the front of the flood insurance policy declarations page. These requirements may help resolve disputes when a lender has a different flood zone determination than the agent or insured.
Other Insurance Program Changes

Two new building types have been added, elevated on crawlspace and non-elevated with subgrade crawlspace
Pre-FIRM buildings in Unnumbered Zone A areas with a basement, enclosure, or crawlspace may use Post-FIRM rates if the rates are more favorable to the insured. When policies affected in these zones up for renewal, you may want to consider rerating the policy applying the new rules. It may result in significant savings for your customers.
WYO Companies must report the source of the building construction date, e.g., Building Permit Date, Date of Construction, Substantial Improvement Date, etc.
Important DFIRM Change to Note: Paper FIRM to Digital FIRM (DFIRM) Transition

As of October 1, 2009, FEMA will provide a single paper flood map and Flood Insurance Study (FIS) to each newly mapped NFIP community. FEMA will convert all other distribution of maps and FIS reports for digital delivery. Consequently, paper FIRMs will no longer be available besides this one copy.
Agents, property owners and others will still be able to access the current and historic maps (for grandfathering) and print FIRMettes by visiting FEMA’s Map Service Center.
A more complete description of this change can be found here.
Click here for the new Flood Insurance Rate Manual that reflects these changes as well as additional information from the NFIP. Please email us at info@femafloodsmart.com with any questions.

Wednesday, September 2, 2009

LuLu M Stevens Elementary 2009 Open House



David Lorms attended LuLu M Stevens Elementary School Open House on 9/1 passing out Child Identification Kits, New Parent Safety Kits, Bicycle and Driving Saftey Brochures and Fire Safety Coloring Books. Pictured with Principal Lucy Anderson.

Study: 1 in 10 Binge Drinkers Gets Behind the Wheel

National News
Study: 1 in 10 Binge Drinkers Gets Behind the Wheel
By Mike Stobbe
September 2, 2009

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One in 10 binge drinkers got behind the wheel the last time they drank heavily. And half of those drivers left from a bar, restaurant or nightclub after downing five or more drinks, a new study has found.

AdvertisementThe study is being called the first to try to measure the likelihood someone will drive after binge drinking. It suggests a need for stepped-up efforts to prevent bars and restaurants from serving people after they're intoxicated, according to its authors at the Centers for Disease Control and Prevention.

The researchers focused on 14,000 "binge drinkers " -- people who said that at least once month that they had five or more drinks on a single occasion. About 12 percent said they had gone driving within two hours of their last bout of heavy drinking.

Of those drivers, more than half took the wheel after drinking in a bar, restaurant or other licensed establishment. And half of the drivers who left an establishment said they had seven or more drinks; a quarter said they'd had at least 10.

Some people can handle alcohol better than others, and eating food or drinking over several hours can soften alcohol's impact. But clearly 10 drinks is a lot, said James Fell of the Pacific Institute for Research and Evaluation, a national research organization focused on alcohol policy.

"Almost everybody's going to be intoxicated after 10 drinks,'' said Fell, who was not involved in the study.

Binge drinking is a main factor behind the more than 11,000 deaths annually from alcohol-related motor vehicle crashes, said Dr. Timothy Naimi, an epidemiologist with the CDC's alcohol program. He led the study, which was released Tuesday and will be in the October issue of the American Journal of Preventive Medicine.

Nearly every state has a law that in theory prohibits licensed establishments from selling alcohol to drunk patrons. But most states don't have enough enforcement personnel to stop in on bars and watch for over-serving of customers.

"These are among the most disregarded laws in the country,'' Naimi said.

Without policing, there's little incentive for bars, clubs and restaurants to discourage drinking. Tips depend on keeping patrons happy and buying, noted Jim Mosher, a Washington, D.C.-based legal researcher and consultant on alcohol issues.

The American Beverage Institute, a restaurant trade association, had no immediate comment on the study. The organization's Web site promotes efforts to apprehend and penalize drunk drivers, but also notes voluntary server training and other efforts by restaurants to discourage drunk driving.

The CDC study was based on a telephone survey done in 2003 and 2004, and some things have changed since then. Drunk driving fatalities have decreased, dropping nearly 10 percent from 2007 to 2008, according to the National Highway Traffic Safety Administration. There have also been a variety of efforts to reduce drunk driving including court-mandated devices that prevent a car from starting if a driver is drunk.

But most efforts focus on punishing the driver and not preventing drunk driving by focusing on those who enable it.

"The drinking location is really important,'' said Naimi. "We're trusting these licensed establishments to serve responsibly, and more than half of the intoxicated people who drive have been drinking in these places.''

A follow-up survey in 2008 found the situation hadn't changed, he added. Those results haven't yet been released.

Tuesday, September 1, 2009

Some Texas Windstorm Policyholders Must Buy Flood Coverage

Texas / South Central News
Some Texas Windstorm Policyholders Must Buy Flood Coverage
September 1, 2009

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Some property owners in Texas coastal counties that seek wind insurance coverage from the Texas Windstorm Insurance Association will be required to buy flood insurance equal to at least 90 percent of the property's value, or the maximum available from the National Flood Insurance Program (NFIP), under new Texas Department of Insurance rules, the Independent Insurance Agents of Texas (IIAT) reports.

The maximum coverage available for dwellings in NFIP is $250,000.

The new rules were developed in response to legislation passed in 2009; they apply only to property that is "constructed, altered, remodeled or enlarged" after Sept. 1, 2009. The requirements specifically do not apply to property being repaired, such as property rebuilt after Hurricanes Ike and Dolly.

The new rules apply to property owners seeking wind coverage from TWIA whose property is located in what is termed a "V" Zone, including NFIP rating zones V, VE and V1-V30. Properties so designated are usually close to the water and considered at high risk of flooding with possible damage by wave action (surge). Most independent insurance agents can advise property owners of their property flood hazard, or consumers can go online to www.floodsmart.gov to determine their flood zone.

The new requirements go into effect immediately, though TWIA may have to develop procedures to monitor the requirements.

As a result of legislation that overhauled TWIA's funding, consumers and their agents will now have to demonstrate that an insurance company writing business in coastal counties has declined to write or renew their windstorm insurance before they are eligible for insurance in TWIA.

Independent agents who represent multiple insurance companies should be able to obtain that declination for TWIA insureds renewing coverage this year.

Another new requirement affects the cancellation of insurance. If a TWIA property insured cancels coverage, or fails to pay premium due resulting in cancellation of coverage, the law requires TWIA to keep a portion of the premium equal to 180 days of coverage.

If this premium is not paid, the insured will not be eligible for future coverage in TWIA, until the debt is cleared. A lapse in coverage in TWIA could also result in a property owner having to obtain a building code compliance certificate in order to obtain insurance again.

Source: IIAT, www.iiat.org