Different types of insurance and their purposes
July 9, 2010
Since the future cannot be predicted, it’s better to get it insured. There are different insurance policies, which you can choose according to your needs and urgency.
Types of insurance policies
All insurance policies are important since they are for the things you possess and don’t want to lose. So you should get them insured. Some of the most important insurance policies are cited below:
1. Life insurance
This policy ensures the family members of a sole bread earner financial security after his death. When you are the only person who has all the responsibility of your family, it’s always important to go for life insurance policy. This way, part of your premium is put into savings account so that money is not a problem in the future
2. Health insurance
This is also an important insurance policy that pays for all the treatments and medications if you are seriously injured. Suppose you are involved in an accident and don’t have health insurance, you will have to pay for the treatment from the money you have saved. If you don’t have the money required, you may fall in medical debt and the hospital may stop your treatment. It’s better to have a health insurance to ensure you a secured and healthy life.
3. Property insurance
This insurance policy ensures the property you own. This is also very important as you spend a good amount of money on the things you possess and so it’s only natural that you should have property insurance. This policy provides coverage against fire, earthquake, vandalism, etc. This insurance policy protects your assets which can be business or your personal property. Usually homeowners policy covers for most of the personal property.
4. Auto insurance
If you own a car or a vehicle, it’s important that you have auto insurance. This policy covers the cost of the damage caused to the vehicle and you in an accident. It also pays for the damage the other party incurs in an accident. This insurance policy also covers your vehicle from the damage caused by natural calamities and robbery, vandalism, etc.
The above list gives you an insight of the most important insurance policies you should go for.
Flood Insurance Program Reauthorized by Senate
July 1, 2010
Home owners in need of flood insurance can rest assured. Last night, the United States Senate reauthorized the national flood insurance program until September 30, 2010; according to the National Underwriter.
“It is alarming that the NFIP was allowed to remain expired for so long, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for almost a month,” said Robert Rusbuldt, president and chief executive officer of the IIABA in a statement.
He added that we “are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”
The current measure, as soon as it is signed by President Obama, allows any new policy applications or renewals that were signed and submitted during the hiatus to become effective from the date of application (or in the case of waiting periods, the waiting period will start from the date of application).
The bill would restore authorization of a program that lapsed June 1; marking the fourth time the program has lapsed.
Short-term reauthorizations have been held up because the program is being held hostage to efforts by Democrats to use it as an incentive to get Republicans to act on their other priorities, for example, extensions of jobless insurance and a program that subsidizes healthcare coverage for the unemployed.
Action on a longer-term extension has been delayed because the program has a deficit nearing $20 billion, but Congress is reluctant to act to reduce that deficit by raising rates to “market level” because that would generate severe criticism from hard-pressed homeowners.
The temporary extension bill passed by the Senate was passed by the House on June 23.
Insurance industry officials have reacted strongly by demanding that Congress restore certainty to the program and promptly adopt a long-term extension.
While praising the bills passage, Jimi Grande, National Association of Mutual Insurance Companies senior vice president of federal and political affairs said, “The hurricane season runs two months beyond the NFIP’s new Sept. 30 expiration date. Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”
“This is yet another short term fix, as Congress has once again kicked the can down the road…,” said Professional Insurance Agents National President-elect Brian Marino, co-chair of the association’s working group on natural catastrophes. “Although we greatly appreciate the short term extension, Congress has failed to extend the program through the Atlantic hurricane season. With our economy in peril, we cannot have closings held in limbo. The real estate market has again suffered due to this needless lapse in coverage.”
“We’re pleased this program has been extended, even if it’s for a short time,” said Leigh Ann Pusey, president and CEO of the American Insurance Association. “Between now and September, Congress must pass a long-term extension.”
“We are pleased that Congress reauthorized the flood insurance program,” said David Sampson, president and CEO of the Property Casualty Insurers Association of America. “But this three-month extension threatens to leave communities vulnerable again in September, at the height of hurricane season.”
Courtesy of the National Underwriter
Summer Fire Safety
July 1, 2010
Summer Storm Fire Safety
Protect yourself, your family and your home from the potential threat of fire during or after a summer storm.
Every year Americans look forward to summer vacations, camping, family reunions, picnics, and the Fourth of July. Summertime, however, also brings fires and injuries due to fireworks and outdoor grills. Annually just under 10,000 Americans are injured by fireworks and almost 5,000 are injured by charcoal/wood-burning and propane grill fires. In 2007, 64 percent of fireworks injuries occurred between June 22 and July 22.
Families also enjoy camping in the summer. It is important to follow the park’s rules for the use and extinguishing of campfires.
Summertime should be a time for fun and making happy memories. Knowing a few fire safety tips and following instructions will help everyone have a safe summer.
Fireworks Safety
- The best way to enjoy fireworks is to visit public fireworks displays put on by professionals who know how to safely handle fireworks.
- If you plan to use fireworks, make sure they are legal in your area.
- Never light fireworks indoors or near dry grass.
- Always have a bucket of water and/or a fire extinguisher nearby. Know how to operate the fire extinguisher properly.
- Do not wear loose clothing while using fireworks.
- Stand several feet away from lit fireworks. If a devise does not go off, do not stand over it to investigate it. Put it out with water and dispose of it.
- Always read the directions and warning labels on fireworks. If a devise is not marked with the contents, direction and a warning label, do not light it.
- Supervise children around fireworks at all times.
Barbecue Safety
- Before using a grill, check the connection between the propane tank and the fuel line. Make sure the venturi tubes – where the air and gas mix – are not blocked.
- Do not overfill the propane tank.
- Do not wear loose clothing while cooking at a barbecue.
- Be careful when using lighter fluid. Do not add fluid to an already lit fire because the flame can flashback up into the container and explode.
- Keep all matches and lighters away from children. Teach your children to report any loose matches or lighters to an adult immediately. Supervise children around outdoor grills.
- Dispose of hot coals properly – douse them with plenty of water, and stir them to ensure that the fire is out. Never place them in plastic, paper or wooden containers.
- Never grill/barbecue in enclosed areas – carbon monoxide could be produced.
- Make sure everyone knows to Stop, Drop and Roll in case a piece of clothing does catch fire. Call 911 or your local emergency number if a burn warrants serious medical attention.
Campfire Safety
- Build campfires where they will not spread, away from dry grass and leaves.
- Keep campfires small, and don’t let them get out of hand.
- Keep plenty of water and a shovel around to douse the fire when you’re done. Stir it and douse it again with water.
- Never leave campfires unattended.
Tracking Hurricane Alex
June 30, 2010
- The coast of Texas south of Baffin Bay to the mouth of the Rio Grande River
- The coast of Mexico from the mouth of the Rio Grande to La Curz
WATCHES AND WARNINGS——————–CHANGES WITH THIS ADVISORY…
According to Weather.gov, tropical storm and hurricane warning remains in effect for to following: The coast of Texas south of Baffin Bay to the mouth of the Rio Grande RiverThe coast of Mexico from the mouth of the Rio Grande to La Curz
ALEX IS MOVING TOWARD THE WEST-NORTHWEST NEAR 7 MPH…11 KM/HR. A SLOW WEST TOWEST-NORTHWESTWARD MOTION IS EXPECTED OVER THE NEXT 24 TO 48 HOURS. ON THE FORECAST TRACK…THE CENTER OF ALEX WILL APPROACH THE COAST OF NORTHEASTERN MEXICO OR SOUTHERN TEXAS BY LATE THIS AFTERNOON OR EARLY EVENING…AND MAKE LANDFALL IN THE HURRICANE WARNING AREA LATE TONIGHT OR EARLY THURSDAY MORNING.
MAXIMUM SUSTAINED WINDS REMAIN NEAR 80 MPH…130 KM/HR…WITH HIGHER GUSTS. ALEX IS A CATEGORY ONE HURRICANE ON THE SAFFIR-SIMPSON HURRICANE WIND SCALE. ADDITIONAL STRENGTHENING IS FORECAST…AND ALEX COULD BECOME A CATEGORY TWO HURRICANE PRIOR TO LANDFALL. ALEX WILL BEGIN TO WEAKEN AFTER ITS CENTER CROSSES THE COASTLINE.
HURRICANE FORCE WINDS EXTEND OUTWARD UP TO 25 MILES…35 KM…FROM THE CENTER…AND TROPICAL STORM FORCE WINDS EXTEND OUTWARD UP TO 200 MILES…325 KM. NOAA BUOY 42055 LOCATED SOUTHEAST OF ALEX RECENTLY REPORTED SUSTAINED WINDS OF 54 MPH…86 KM/HR WITH A GUST OF 63 MPH…101 KM/HR.
THE MINIMUM CENTRAL PRESSURE MEASURED BY AN AIR FORCE RESERVE UNIT HURRICANE HUNTER AIRCRAFT WAS 959 MB…28.32 INCHES.
HAZARDS AFFECTING LAND———————-RAINFALL…ALEX IS EXPECTED TO PRODUCE TOTAL RAINFALL ACCUMULATIONS OF 6 TO 12 INCHES OVER PORTIONS OF NORTHEASTERN MEXICO AND SOUTHERN TEXAS…WITH ISOLATED MAXIMUM AMOUNTS OF 20 INCHES. THESE RAINS COULD CAUSE LIFE-THREATENING FLASH FLOODS AND MUD SLIDES…ESPECIALLY IN MOUNTAINOUS TERRAIN. RAINBANDS ASSOCIATED WITH ALEX ARE SPREADING ONSHORE IN NORTHEASTERN MEXICO AND SOUTHERN TEXAS.
WIND…TROPICAL STORM CONDITIONS ARE EXPECTED TO REACH THE COAST WITHIN THE HURRICANE AND TROPICAL STORM WARNING AREAS LATER THIS MORNING…MAKING OUTSIDE PREPARATIONS DIFFICULT OR DANGEROUS. STORM SURGE…A DANGEROUS STORM SURGE WILL RAISE WATER LEVELS BY AS MUCH AS 3 TO 5 FEET ABOVE GROUND LEVEL ALONG THE IMMEDIATE COAST TO THE NORTH OF WHERE THE CENTER MAKES LANDFALL. THE SURGE COULD PENETRATE INLAND AS FAR AS SEVERAL MILES FROM THE SHORE WITH DEPTH GENERALLY DECREASING AS THE WATER MOVES INLAND. NEAR THE COAST…THE SURGE WILL BE ACCOMPANIED BY LARGE AND DESTRUCTIVE WAVES.
TORNADOES…ISOLATED TORNADOES ARE POSSIBLE OVER PORTIONS OF EXTREME SOUTHERN TEXAS TODAY.
forecast courtesy of www.weather.gov
Home Insurance Preparing for a Weather Emergency
June 25, 2010
Texas home owners already have lots to worry about when it comes to being a home owner without having to think about storm damage. Even though your rates are protected from increase due to weather related damage, Texas home insurance policies are already some of the highest in the nation.
Face it. Everyone wants to save money on their home insurance policy. If you have to file a claim on your home insurance policy, the insurance company will take care of you, but what should you do before the storm, during the storm, and after the storm?
The following tips will help prepare you in case of a major storm:
What to do Before a Storm
Protect Your Property
- Ensure that your property is protected to the fullest extent possible:
- Install storm shutters in wind-prone areas.
- Secure or store outdoor furniture and loose items.
- Trim tree branches that are close to the structure; remove dead trees or limbs.
- Reinforce garage doors.
- Inspect and replace caulking and weather stripping around doors and windows.
- Be sure you have a copy of your insurance policy and an inventory of the property and contents in a safe place.
Protect Yourself and your Family
- Be sure you have these items on hand:
- Battery-operated radio and flashlights with fresh batteries.
- Supply of bottled water and non-perishable food.
- Blankets and clothing.
- First aid kit and any necessary prescription medications.
- If you’re in an area prone to power outages, consider purchasing an auxiliary generator.
- Familiarize yourself with evacuation routes, and if asked to evacuate, do so.
- Be certain your car is in good working order and the tank is full.
After a Storm
- Make sure all family members are safe. Listen to the radio for public service announcements. If evacuated, do not return to your home until authorized to do so. If at home, wait for the “all clear” announcement before venturing outside.
- Don’t touch downed power lines; assume they are live no matter how long they have been down.
- Check for gas leaks. If you smell gas, leave immediately and call the utility company from a neighbor’s house.
- Don’t try to move large trees or branches that have fallen on your home. You could hurt yourself and possibly increase the damage to your home.
- Cover broken windows or holes in walls or roofs to prevent further damage.
State Farm Won’t Handle Claims For Flood Insurance Program
June 12, 2010
State Farm Mutual has confirmed that it will stop administering federal flood insurance policies this fall, leaving government officials to find a new home for 800,000 customers nationwide who bought their coverage through the company. State Farm is the nation’s largest administrator of such policies written by the National Flood Insurance Program (NFIP).
According to FEMA spokeswoman Rachel Racusen, existing customers will not be affected by State Farm’s decision. Both new and renewing customers will be able to obtain federal flood insurance through a State Farm agent “or one of the other 90 insurers that sell flood insurance through the National Flood Insurance Program” after the program is renewed.
“The news that State Farm announced it was pulling out of its Write Your Own (WYO) participation in the National Flood Insurance Program (NFIP) does not come as a total surprise,” said Rita Hollada, past chairman and currently PIA National’s representative to the Flood Insurance Producers National Committee (FIPNC). “The NFIP has become the victim of an increasingly political atmosphere in recent months and years. The repeated lapses in the program and its manipulation by Congress affect the certainty of the NFIP as a viable insurance program whose sole purpose is to protect and fund recovery for flood damage.”
Hollada added, “Lenders, companies and insurance agents have become increasingly frustrated with the current Congressional attitude and tactics. Some Members argue for increased premiums and a requirement that the NFIP be fully self-funded while others want premium relief and broadened coverage for their constituents. Meanwhile the NFIP struggles to provide protection to policyholders while making interest payments on the deficit created by the claims paid as a result of Hurricane Katrina in 2005. State Farm’s response may assist in getting Congress to recognize its obligations to support its WYO partners by keeping the National Flood Insurance Program accessible and adequately funded to achieve its stated purpose.
“Eliminating this work will allow us to focus our resources on the coverage we do write,” said Phil Supple, a State Farm spokesman at the company’s corporate headquarters in Bloomington, Illinois. Starting October 1, State Farm will begin dropping the flood policies as they come up for renewal, Supple said. Customers will be given 90 days notice that they will be redirected by FEMA to another servicing agent to handle their policies. Supple said premiums would not change. He added State Farm agents will handle reports of claims for policies where State Farm provides homeowner’s coverage as well as writes flood policies. But claims will either be handled directly by the Federal Emergency Management Agency or its designee.
State Farm Won’t Handle Claims for NFIP (National Underwriter 6/7/10)
State Farm Won’t Add New Flood Policies (Insurance Journal 6/8/10)
State Farm Won’t Handle Claims For Flood Insurance Program
Gulf Coast Cleanup is Looking Sticker for Everyone
June 7, 2010
Based on recent reports, BP stands to lose the most from insurance claims that rise as a result of the Gulf oil spill. If the press conferences between BP, and politicians did not confuse you, may finding out who is going to pay for the cleanup will. From an insurance perspective, the financial clean up is getting stickier by the day.
As an insurance professional, my first question is simple. What is BP truly liable for? BP’s chief executive officer Tony Hayward has told major new outlets the company will honor all legitimate claims arising from the disaster. What will BP and all the experts consider legitimate insurance claims?
Based on reports from the Insurance Journal and Business Insurance blogs, BP will bear the cost of clean up. Clean up estimates range as much as $3 billion or more. Now that at least 70 lawsuits have already been filed against BP, Transocean, Cameron, and Halliburton, who will payout and how much will they pay? Since U.S. law currently limits energy companies’ liability to $75 million per spill, how is the rest going to be paid? Well, simply put, taxpayers could end up paying.
Similar to the National Flood Insurance Program, the U.S. federal government maintains a fund which is financed through taxes on energy companies. At some point, that fund may kick in to start paying oil spill related damages. On top of all that, BP only carries reinsurance. That means they are self-insured up to a certain amount and then a excess company kicks in to cover the remainder – depending upon how much they’ve contracted with BP.
So if you ask anyone for a black and white answer regarding who will pay for the oil spill and how much will they are liable pay, at this point they’ll probably say some think like, who knows? This will get even more confusing once you add in the Hurricane factor.
Since the official beginning of Hurricane season, questions arose regarding pollution caused by a Hurricane dispersal of crude oil. Since most home insurance policies specifically exclude damage caused by pollution, BP, et al, and the U.S. Federal government may need to look at the potential damage to coast home owners caused by pollution.
Don’t forget all the different businesses that will be hurt because of the lack of seafood production coming from the Gulf of Mexico. Will we see Business Interruption claims from seafood companies on the east coast that get their Seafood from Gulf because they cannot get food to cook and sell? We already know that all the gulf fishermen are stranded because of oily fish. No pun intended! All I can say is that this oil spill will get really sticky. I didn’t mean that one either.
Texas Flood Insurance on hold until Congress reauthorizes the NFIP
June 1, 2010
Texas Flood Insurance hit a snag when the U.S. Senate adjourned for the Memorial Day recess without taking action to extend expiring provisions, including extension of the National Flood Insurance Program (NFIP). This means that the program expired at midnight on May 31, 2010.
The Senate is not due to vote on the bill to extend the NFIP until at least Monday, June 7, 2010. This means that there is a lapse in statutory authority to renew or issue or renew flood insurance policies based on flood insurance program guidelines. This means that insurance companies are unable to issue any new or renewal flood policies, or make coverage changes on existing flood policies.
FEMA has advised us to pend premium transactions received after May 31, 2010, until, and if, Congress and President Obama pass and sign the bill that reauthorizes the NFIP. For home insurance shoppers that need flood insurance because of a mortgage application, the Senate will have to grant authority retroactively in order to give customers coverage effective the date of closing. Additionally, if Congressional extension is granted retroactively, any claim for flood insurance claims from the effective date for the policy term will be honored by the NFIP, even if the authority is granted after the date of such losses.
Please note that policies or coverage changes will only be effective if the extended authorization of the NFIP becomes law, which is expected. If Congressional extension is not granted within a reasonable period, insurance companies will refund insurance premiums. In this event the requested coverage will not be provided and no protection of flood insurance existed during this period.
If you have any questions regarding this issue, please feel free to call Texas Insurance Pro at 214.717.4326.
For more information regarding flood insurance stay tuned to www.txinsurancepro.com.
Texas Home Insurance Rate Increases Possible for State Farm Customers
May 28, 2010
Dallas-area home owners insured with State Farm insurance may soon pay more for their insurance due to recent rate filings according to information published on the Texas Department of Insurance’s website.
Customers of Texas’ largest home insurance company could experience rate increases of 35 percent or more for their home insurance policies when their policies renew this year. Shoppers that are looking for new home insurance, may see the results of State Farm’s new insurance rates even sooner. Based on TDI data, Dallas Home Insurance Zip codes may be among the hardest hit zip codes.
Kevin Davis, a spokesman for State Farm, said company officials will have to review the insurance department figures before making any comment.
“Of course, the best place for policyholders to continue to get information about any of our rate changes is with their State Farm agent,” he added.
State Farm cited that their increased rates were due to several factors including the increased cost of building materials, severe hailstorms in North Texas, and hurricanes in the coastal areas of South Texas.
Based on TDI’s new sample rates, homeowners around Dallas, Duncanville, Garland, Irving, Richardson, and Fort Worth could face increases as much as 39 percent.
The Texas Department of Insurance listed the new sample rates on their on Friday, May 29, 2010. State Farm and TDI have been engaged in a heated battle regarding proposed rate increases. State Insurance officials, including Commissioner Mike Geeslin, warn that a large rate increase from State Farm’s could disrupt the Texas home insurance market. If State Farm follows through with their new rates, it could force Texas home owners to shop their insurance. As a result, other insurance companies may follow State Farm’s lead and increase their rates as well.
Texas’ home insurance rates are already higher than all other states with the exception of Florida home owners.
Texas Home Insurance Policies are Not Created Equally
April 12, 2010
The other day, I spoke with a mortgage broker regarding getting his business and working with his clients. I explained the normal sales pitch. You know, my agency has great service, great Texas home insurance policies, great rates, and free online quotes. You’ve heard it before. He told me that was okay, but he only cared about the great rates.
Face it, Texas home insurance has increased over the past few years. In a recent article published in the Dallas Morning News states that the following:
The National Association of Insurance Commissioners released Monday showed that the average annual premium in Texas for the most common homeowner policy was $1,409 a year, considerably more than the nationwide average of $804.
Even though the most common Texas homeowner policy can be rather expensive, there are some things that consumers can do to lower their costs without compromising their insurance coverage. For the mortgage broker that wanted me to simply save his people money without regard for the type of policy I write I say to you, fooey! I will not compromise my client protection for the sake of a quick sale.
When you shop for home insurance in Texas here are a few tips to look for when you look at different insurance policies:
- Fire the Fire Policy – A Fire policy or a DP policy is an insurance policy that covers the dwelling or house only. Typically, insurance agents have to add liability to the policy manually by endorsement only. The primary use of this policy is for landlords that do not want contents coverage because they figure their tenants are going to get their own renter insurance policies.
- Home Owners Policies are for Home Owners – Home owners policies come in several forms. The common thread for Texas home policies and other home policies is that they typically have dwelling coverage for the home, other structures coverage for out buildings, contents coverage for your personal contents, medical payments, and personal liability.
- Letters are for Texas Home Insurance Policies – Typically, Texas Home Insurance policies come in the forms HO-A, HO-A+, HO-B, HO-T, and HO-C. There are other home policies out there, but until recently these were the most commonly written policies.
- Numbers are for National Policies –Companies are now offering national forms that offer even more flexibility than before. Texas insurance companies like The Hartford, and Travelers, have begun writing HO-2, HO-3, HO-4, HO-5, and HO-6 policies. The policy languages are similar Texas Home Insurance policies, but the coverage reflects companies outside Texas are writing.
With all that said, companies like State Farm, Allstate, and Nationwide have their own policies that do not fit into either category. If you are insured with either of those companies, you can always compare those policies online at opic.state.tx.us. Otherwise, always talk to an insurance agent that knows what is going on and can give you an honest policy review. As a Texas independent insurance agent, it is my job to make sure that my customer has the right coverage, at the right price. Independent insurance agents have a number of different companies available that Texas homes policies and National policies that will protect you according to your individual needs. If you cannot find a good agent to compare your home policy online, then you came to the right place. Call me at 214-717-4326.
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