Advocate Claim Service, Inc

Advocate Claim Service Newsletter May 2008

It is with great satisfaction that we bring this newsletter to you. In this issue and in coming months, we will discuss pertinent insurance topics which may affect you. We sincerely hope that you will find this newsletter informative and please do not hesitate to contact us should you have any questions or needs.

This months topics:

• NAIC Offers Tips to Expedite Your Insurance Claim
• Determining What Coverage Limits You Need for Auto and Homeowner’s Insurance
• Insurance Mistakes That Will Cause You to Lose Money
• Who Pays for Damages When Your Tree Falls on a Neighbor’s Property?

NAIC Offers Tips to Expedite Your Insurance Claim

Filing an insurance claim can seem like an overwhelming task, but it doesn’t have to be. The National Association of Insurance Commissioners has put together the following tips to help policyholders facilitate the process:

• Know your policy - Your insurance policy is a contract between you and your insurance company. Know the terms of that contract, including what’s covered, what’s excluded and the amount of any deductibles.
• File claims as soon as possible - Call your agent or your insurer’s claims hotline as soon as possible. Your policy might require notification within a certain time frame.
• Provide complete, correct information - Be certain to give your insurance company all the information they need. Incorrect or incomplete information will only cause a delay in processing your claim.
• Keep copies of all correspondence - Write down information about your telephone and in-person contacts, including the date, name and title of the person you spoke with and what was said. Also, keep a record of your time and expenses.
• Ask questions - If there is a disagreement about the claim settlement, ask the insurer for the specific language in the policy that explains the reason why the claim was settled in that manner. If this disagreement results in a claim denial, make sure you obtain a written letter explaining the reason for the denial and the specific policy language under which the claim is being denied. If you have a dispute with your insurer about the amount or terms of the claim settlement, you should contact your state insurance department for assistance.
• Make temporary repairs to protect property from further damage - Your auto/homeowners policy might require you to make temporary repairs. If possible, take photographs or video of the damage before making such repairs. Your policy should cover the cost of temporary repairs, so keep all receipts. Also, maintain any damaged personal property for the adjuster to inspect.
• • Don’t make permanent repairs - An insurance company may deny a claim if you make permanent repairs before the damage has been inspected.
• Try to determine what it will cost to repair your property before you meet with the claims adjuster - Provide the claims adjuster with records of any improvements you made to your property. Ask the claims adjuster for an itemized explanation of the claim settlement offer.
• Don’t rush into a settlement - If the first offer made by an insurance company does not meet your expectations, be prepared to negotiate. If you have any questions regarding the fairness of your settlement, seek professional advice.

[ Back to Top ]

Determining What Coverage Limits You Need for Auto and Homeowner’s Insurance

Most of us prefer to avoid thinking about scenarios that would cause an insurance claim — our homes damaged by fire or wind, someone injured on our property, or people hurt in an auto accident. However, it is necessary to give some thought to these disturbing possibilities to ensure that you are adequately prepared and protected in the event of such a catastrophe. Reviewing your insurance coverage will also clarify if there’s a need for an additional umbrella policy for extra protection. So, let’s try to cover some of the basics on coverage limits.

Homeowner’s Insurance

Homeowner’s insurance covers three areas: damage to the home, damage to the contents of the home (personal property), and your liability for injuries to others.

Before obtaining homeowner’s insurance, it’s a good idea to stop and consider exactly what you want the insurance to offer you. You may want coverage just to pay off the mortgage in the event you can no longer occupy your home. It’s more likely you’ll want to continue living in your home after a claim or sell it at market value, so you will want your insurance to pay for repairs caused by fire, wind, or some other covered peril. In most cases, reconstruction means you will need insurance that actually covers more than the home’s market value.

Replacement value, which is the cost to reconstruct a damaged home, is generally higher than the cost of buying a similar home on the market due to the specialized nature of reconstruction as opposed to new construction. For example, in reconstruction there will be the initial cost of debris cleanup. New construction starts at the bottom and builds up, but with reconstruction it’s often necessary to take off the roof and build down, which is more expensive. Furthermore, after a natural disaster, construction costs rise due to demand. Bear in mind that your insurance can cover not only the costs to rebuild, but also the costs for you to live elsewhere, if necessary, while the home reconstruction is completed. We are experienced in determining replacement value and can help assess your coverage needs as well as determine available coverage based on the age and condition of your home.

Also consider whether you want replacement coverage for clothing, furniture, appliances, and other personal property inside your home. Without replacement coverage, your coverage for personal property is depreciated by the age and wear of the items lost. Due to depreciation, the computer you paid $1,500 for three years ago may be valued at only $400 or $500, which is all the insurance company would pay if you don’t have replacement coverage.

Some insureds will need more coverage for personal property (contents) than their policy provides. The amount of personal property coverage is usually limited to 70% of the coverage limit for the structure. For example, if you have an art collection, antique furniture, jewelry, or other valuable possessions, talk to your agent about supplemental coverages, such as fine arts or scheduled property endorsements, to adequately protect your investment in these items. The cost is modest for the extra protection.

The standard amount of liability coverage in a homeowner’s policy is $100,000, which covers personal liability for damage to property or personal injury caused to others. Will this be enough to protect your assets in the event you are found liable in a personal injury lawsuit? If not, you need to consider a higher level of liability coverage with your homeowner’s policy and/or you may want to consider purchasing a separate liability umbrella policy (discussed below).

Auto Insurance

There are six different types of auto insurance coverage. Three relate to liability, two for damage to your vehicle, and one provides specific coverage for accidents involving you and an uninsured or underinsured driver.

Collision coverage covers the costs of damage to your vehicle caused by collisions with other cars or objects; comprehensive coverage covers theft or damage to the vehicle caused by events other than a collision with another car or object. How much coverage you need depends on the value of your vehicle.

Auto liability insurance is required in most, if not all, states, but the liability limits that drivers are required may not be enough to protect your assets. Even one serious injury caused by an accident for which you are liable could cost into the six figures, or more in extreme cases, just for medical expenses. And the amount only increases if there are more injured people. It’s easy to see that the $50,000 of per accident liability coverage required in many states would not be enough to pay all the costs of property damage and bodily injury. Auto insurance companies recommend that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your personal net worth is more than $300,000, consider buying additional liability auto insurance.

Do I Need an Umbrella Policy?

Unfortunately, even with our best intentions and efforts, accidents may happen for which we are legally at fault. Medical costs are sky high. If someone were permanently disabled by an accident, the expenses of lifetime care could be astronomical. If someone killed left behind survivors who were depending on that person for support, you could be liable for damages to the survivors.

Keep in mind that any costs not covered by insurance will come out of your pocket; you could be forced to sell property or to turn over part of your earnings for years to come, perhaps the rest of your working life, to an injured party.

There are limits on the amount of liability coverage available as part of your homeowner’s and auto insurance policies. If you have total assets valued at more than these limits - including, say, your vacation home, investments, rental property, boats and vehicles -- or if you have a high income, an umbrella policy offers a great deal of protection for a relatively low premium.

In addition to the assets you want to protect, you may want to consider your risk of being sued. Do you live in a state that is particularly friendly to plaintiffs? Do you have frequent guests on your property? Do you have a swimming pool, trampoline, swing set, or other sports equipment in your yard? Do you have a dog that is overly protective of your property? Are you or any of your household members aggressive, fast, or careless drivers? If so, your risk is greater that someone may be injured, perhaps very seriously, and you would be legally at fault. In fact, any situation that could result in serious injury, long-term physical impairment, psychological damage or death could put your financial well-being at risk.

Once the liability limits are exhausted on your home or auto policy, your umbrella policy takes over and provides another layer of liability protection. Policies typically start at $1 million with coverage available up to $10 million. Premiums start at around $300 a year - less than a dollar a day for a great deal of protection.

The best way to determine whether you need an umbrella policy is to discuss your financial status, lifestyle, and current and future assets with your insurance agent. Ask him or her to review the liability limits in your current policies and suggest the best strategy to ensure protection of your assets in the event of an injury for which you are legally liable.

[ Back to Top ]

Insurance Mistakes That Will Cause You to Lose Money

Fear is an important motivator when it comes to buying insurance. We worry about what will happen to assets like cars or homes if they are involved in a disaster, so we buy insurance to help us maintain their financial integrity if something should happen.

But in spite of the fact that insurance is designed for this purpose, sometimes it can’t give us the outcome we expect. That’s not because of something inherently wrong with the policy, but rather it is the result of human failure. When you bought your policy, you failed to take into consideration the level of coverage you really needed, and what you have isn’t sufficient to restore your assets to pre-disaster condition.

That’s just one of the most common insurance mistakes that could end up costing you.

Here are some others:

• Thinking you’re saving money because you bought the cheapest policy you could find – Initially those low premiums will seem like a savings; but if the cost of an accident ends up being more than your policy coverage limits, the rest of the expense will be out-ofpocket. In addition, the other parties involved could sue you, and if you don’t have any coverage, you could end up losing a large part of your assets.
• Failing to pay your premiums on time, or not at all – There could be a legitimate instance in which you don’t pay on time. However, when you don’t pay, your insurance company isn’t required to cover you. To avoid a disruption in coverage, set up automatic payments through your bank or insurer.
• Making assumptions about what is covered – There are limitations to the coverage a homeowner’s or auto policy will provide for high-ticket items. You should never assume that all of your possessions are covered. What you can do is add extra coverage to your policy with an endorsement, which gives you higher limits on these types of items.
• Overlooking the importance of umbrella liability policies – These policies got their name because they protect you from a financial downpour. They can be purchased separately or you can obtain one from the same company that insures your car or home. Buying from the insurer you already have usually entitles you to a premium discount on the liability coverage. Umbrella policies are usually sold in increments of a million dollars. Generally you would pay between $100 to $300 a year for the first million dollars worth of coverage and another $50 to $100 for each additional million. Keep in mind that when determining your premium, your insurer may take into consideration such factors as the number of traffic tickets you’ve received over the past few years, and your credit report.
• Failing to inform your insurance agent about changes that could affect your coverage needs – If you’ve added on to your home, or purchased an expensive sound system, you need to contact your agent to see if the policy you have still meets your needs. Your agent can also find ways to help you save money on premiums that won’t affect the quality of your coverage such as enrolling in a driver safety class, installing a home security system, increasing your deductible, or taking advantage of multi-policy or good student discounts.

[ Back to Top ]

Who Pays for Damages When Your Tree Falls on a Neighbor’s Property?

Trees are a wonderful addition to your home’s landscape, but they can also cause real problems if a heavy wind topples one, and it lands on your neighbor’s property and damages their home. Who is legally responsible for paying to repair that damage?

If you answered, “I am,” you would be wrong. Your neighbor would have to submit a claim to their homeowner’s policy insurer to pay for any necessary repairs. Wind and lightning are generally covered perils in a standard HO3 homeowner’s policy, or they are included in a homeowner’s all-risk policy.

Since your carrier doesn’t have to pay, your policy won’t be impacted, which means your insurance premiums won’t increase. However, you still may not be off the hook for liability, because your neighbor might decide to sue you to cover their deductible.

The only instance in which you would be required to pay for the damage to your neighbor’s property caused by your fallen tree is when the damage resulted from your negligence. You could be held liable if your tree was dying or already dead before it fell on your neighbor’s property, and you did nothing to prevent property damage. In this case, your insurance carrier would have to cover the repairs. In addition, if your neighbor files a lawsuit against you alleging negligence, your insurer would be required to defend you and investigate the claim.

If you are found to be legally responsible for the damage to your neighbor’s house, your carrier will pay up to your policy limits. Your neighbor can also submit a liability claim against your homeowner’s insurance policy.

Of course, the best way to avoid a situation like this is to prevent it from happening. If you have a tree on your property that looks unhealthy, consider having it checked by an arborist and, if necessary, removed before it falls. It may seem like a large expense, but it may actually save you money in the long run by helping you avoid increased insurance premiums. Equally as important, removing the possible risk of damage will help you maintain a good relationship with your neighbor. And as any homeowner knows, that is worth its weight in gold, especially if you plan to stay in your home for a while.

[ Back to Top ]

Disclaimer

Information contained in this newsletter about product offerings, services, or benefits is illustrative and general in description, and is not intended to be relied on as complete information. While every attempt is made to ensure the accuracy of the information provided, we do not warranty the accuracy of the information. Therefore, information should be relied upon only when coordinated with professional tax and legal advice.

Advocate Claims Service provides insurance claim help to Florida home and commercial property owners
to ensure you receive a fair settlement for your property insurance claim.

We provide public adjusting services to South Florida including:

Broward County, Miami-Dade County & Palm Beach County

and the cities of

Boca Raton   •   Coconut Creek   •   Coral Gables   •   Coral Springs   •   Davie   •   Fort Lauderdale
Hallandale   •   Hollywood   •   Jupiter   •   Margate   •   Miami   •   Mirimar   •   Pembroke Pines
Plantation   •   South Beach   •   Stuart   •   Tamarac   •   West Palm Beach

Residential Insurance Claims   •   Commercial Insurance Claims   •   Condo Insurance Claims
Hurricane & Windstorm Insurance Claims   •   Mold Insurance Claims   •   Flood Insurance Claims
Fire Insurance Claims