Flood Insurance Changes - FEMA Risk Rating 2.0

Most aren’t aware that within the past couple of weeks on October 1st, the business of flood insurance experienced a dramatic change; a shift from the way flood insurance has been written for decades. This change will affect most people in Florida’s coastal and low lying communities in ways that isn’t fully realized yet. Many property owners will see their premiums increase more than 300%, and some could experience even higher increases depending on the property. In order to understand the full impact, a little background is needed. 

The vast majority of all flood insurance policies in force in this country are underwritten through the National Flood Insurance Program (NFIP), which is a government program wholly managed by FEMA. Established by the National Flood Insurance Act of 1968, the program uses private insurance companies and their agents to insure both residential and commercial properties in participating communities throughout the country. The process is administered by a private carrier but claims are paid from the NFIP. 

The long standing rating methodology for these FEMA backed flood insurance policies included flood zone based maps and elevations. That all changed starting October 1st for newly issued policies. Now information used for rating includes distance to the flood source, type of construction, overall rebuild cost of the property, claims history, and prior insurance history, among other data points. This new methodology is a radical departure and FEMA’s goal is to have more equity in the rating process. There is a long held belief in parts of the insurance industry that less risky, interior parts of the country are subsidizing the exposures of the more risky, coastal areas of the country. 

This new process is called Risk Rating 2.0 by FEMA.

The most fundamental change doesn’t come from the data points used to rate, although that alone is a large shift. It has to do with premium subsidies and full risk rating. Before this change and starting in the late 1960’s, flood premiums have been “subsidized” by FEMA not collecting the full risk premium on higher risk homes. If a home was built below base flood elevations, as is normally the case with older homes, then the premium was discounted. The general thinking was that the program didn’t want to price people out of their home, some of which were occupied through multiple generations. Legislation changes in 2012 (Biggert-Waters Act) phased out this premium subsidy for non-primary homes, but the subsidies remained for primary homes until now. Going forward, all homes are now rated for their full risk and after April 1st 2022, renewal policies will start to see an annual increase up to 18% until full rate is reached. 

It cannot be overstated how massive of a shift this is. Rating data wasn’t released to the insurance industry until September 1st and is only now being fully understood. Surprisingly, this has received little media coverage. News outlets in certain parts of the country have reported flood map zone changes which had been in review for several years, but not really addressing the larger change of this new rating methodology. 

If you live in a flood zone, you’ll want to be prepared for the possibility of some pretty sharp premium increases. FEMA has stated that many policy holders will see a decrease, but many industry leaders feel that may apply less to a low and coastal state like Florida. Those same leaders think a state like ours will likely see much of the increased premium, and some will be dramatic. It will be very common for someone used to paying $3,000 or $4,000 a year to be paying $10,000 and up in the coming years. 

Private insurance carriers have been using newer technology and rating methodology for years, and FEMA is simply catching up. The good news is that with legislation passed in the last decade, private flood options are now much more prolific. The vast majority of the flood policies in force are still on a FEMA backed paper, but in the coming months and years there will likely be many opportunities for independent insurance agents to help property owners find relief with alternatives that simply weren’t available in the past. 

Florida is home to over 1.7 million FEMA backed flood policies of the total 5 million plus in the United States. It’s almost 35% of the nations flood risk. Six of the top fifteen most at risk metropolitan areas for flooding are in Florida. It’s very clear this rating change by FEMA concerns Florida property owners more than almost anywhere else in the country. 

Having a long history of working with the National Flood Insurance Program in many parts of the country, the team and leadership at Dockside Insurance Group have an expertise in flood risk, rating, and coverage unmatched by almost all other insurance agencies. Let our expertise help find you creative solutions as premium increases come to Florida in the coming months and years. 

2020 Hurricane Season Lessons

Flood Insurance Lessons Learned from the 2020 Hurricane Season -By Jim Albert

At long last, the 2020 Atlantic hurricane season has officially ended. The grim statistical tally highlights a dramatic year, the most active in recorded history.

This year saw 30 named storms and 13 hurricanes, of which 6 were major hurricanes of Category 3 or higher on the Saffir-Simpson scale. Students of Greek linguistics were I’m sure thrilled, but the rest of us tired of seeing another Greek alphabet storm appear in the tropics, running all the way through Iota in mid-November.

Of the 13 hurricanes, a record 12 made landfall in the U.S., versus a historical average of 1.75 per year. As a point of reference, in the entire decade of 1971-1980, there were 12 landfall hurricanes; 2020 had 12 just this year. Total damage is estimated to be between $35 billion and $40 billion.

There are several lessons to be learned from the 2020 season that can help guide our actions in future years:

1.) Flooding is more frequent than in the past, and likely to get worse. Eighteen of the past 26 years have had higher than average hurricane activity. Slow moving storms like Sally, and Harvey, Imelda and Florence in recent years, are becoming more common, increasing the risk of rain-induced inland flooding on the back of a hurricane. Many coastal areas are observing higher high tides, leading to increased flooding during, and also not during, storms.

2.) The potential losses were much worse than the actual losses. Despite a record number of storms and billions in damage, experts say that it could have been much worse, as major metropolitan population centers were largely missed by the hurricanes. For example, if Hurricane Isaias was a little more intense and tracked 50 miles closer to the Southeast coast, according to one modeling firm, it would have been the “worst case scenario” of all the modeled storms.

3.) Just because a storm has not hit recently does not mean that homeowners should not protect themselves with flood insurance. Many people who thought they were not at risk, in fact suffered losses and were uninsured. Often, areas that have not experienced storms for many years have a lower uptake of flood insurance. This year, Alabama had its first tropical cyclone landfall since 2004. Louisiana had five storms make landfall in the state. The Tampa, Fla., area was brushed by Eta, the first storm in decades to directly affect the region.

4.) Preparation is more important than ever before. Several storms did not follow the usual Atlantic track from West Africa, and instead started as rain showers in the islands, then rapidly escalated into powerful hurricanes in the Caribbean and Gulf of Mexico. Ocean temperatures are warmer, further contributing to rapid intensification, and causing many to believe that evacuation was unnecessary until it was too late.

What the Future Holds

As has been the case in 2020 with other catastrophes, just because it should be over doesn’t mean it’s really over. Since 1966, 45 named storms have formed in December, and in 2005 there was one in late December. The trends also indicate a strong potential of continued flood risk in 2021 and beyond, and reinforce the point that a historical flood zone or perception of flood risk are not good indicators of future risk.

The good news is that municipalities, states, insurance regulators, and even tangential industries such as real estate and banking are increasingly aware of flood risk. Flood insurance is easier to purchase than ever before, thanks to new private options. A FEMA report produced recently identifies an average of $1.5 billion in loss damages averted by the establishment and enforcement of new building codes in states like Florida, Texas, California, South Carolina, and others. Homeowners have a range of options to mitigate their potential losses by floodproofing their homes.

A concerted effort of education, responsible and careful regulation, mitigation, and insurance industry product diversity is required to improve the current situation, enabling a higher level of protection and coverage for homeowners and business owners in the United States.

As 2020 has made very clear, the risk is not going away.

Insurance For First Time Homeowners

Owning your first home is one of the most exciting and most significant accomplishments in life. It is a memorable time and something to be proud of. With this excitement comes the responsibilities of maintaining and insuring the home. While we can’t help with the maintenance, we can help you understand and adequately insure your new home.

What Does Home Insurance Cover: Homeowners insurance is a broad policy that covers the structure of your home against losses like fire, theft, vandalism, and other weather-related losses. You also have coverage for liability for injuries to others while visiting your property, such as slip and fall claims or even dog bites. It is essential to understand that losses from floods and earthquakes are typically excluded from the standard homeowner’s insurance policy. You can get a separate policy for these types of damages.

What Does Home Insurance Cost: The cost of a homeowner’s insurance policy varies on several factors, including your credit history, your previous loss history (dog bites or liability, or property loss claims), the value of your home, and any scheduled property like jewelry and art. Our agency can give you exact numbers, and because we’re an independent insurance agency, we can compare several home insurance companies at once for you to find the right coverage at the right price.

Does Home Insurance Cover Detached Structures? If your home has a detached garage or other detached structure like a home office or art studio, your policy can include things like “Other Structures Coverage.” Talk to one of our agents to learn more about insuring your detached structures.

Are My Personal Items Covered?  Homeowner's policies come with personal property coverage. This amount varies by company and can be increased with most companies. Be sure that the amount of coverage you select for personal property is sufficient for the items you own.

Are Dogs okay? Most dog breeds are okay to be covered under the liability portion of your home insurance policy. Some dog breeds such as Pit Bulls, Akitas, and other dogs are classified as dangerous and may be excluded from coverage. Talk to us about breeds your insurance carrier may not insure, or if you have a complete animal liability exclusion. In almost all instances, stand-alone animal liability coverage can be written to protect you from any unforeseen incidents.

Many options and additional coverages are available for home insurance that is not included in a standard home insurance policy. Check with one of our licensed agents for other coverages you may want to add with your new home. Congratulations on your home purchase, and if we can help you in any way, please let us know. We appreciate the opportunity to be your homeowner's insurance agent.

Teen Will Drive Soon

It seems like a "right of passage" from childhood into becoming an adult. Your little boy or girl turns 16 and MUST have a car because everyone in school has one. Teens crave the freedom away from Mom and Dad, acceptance by their peers and the ability to show off (with the right vehicle of course!).

TEEN DRIVING STATISTICS

Motor vehicle crashes are the leading cause of teen death in the United States. An average of 6,000 teens die and another 300,000 are injured annually across the nation. Teens crash for many reasons, but the most common are overconfidence, speeding, impaired driving, distraction and inexperience. In addition, seat belt use among teens is the lowest of any age group on the road.

In the United States, teens (16 to 20 years of age) are invovled in 15% of crashes, and in some localized areas that percentage is even higher! Recent statistics show that motor vechicle crashes are now the #1 killer of teens in America, and while crashes account for only 2% of all deaths nationwide, they account for a surprising 70% of teen injury deaths. Speed, distraction, fatigue and inexperience, coupled with a lack of seat belt use, are all prevalent factors in these fatal crashes.

DRIVER EDUCATION

In fact, because of the high death toll involved with teen driving, many states have already enacted Graduated Driver Licensing (GDL) laws.

Graduated Driver Licensing introduces teenage drivers to the road in stages, over an extended period of time and in an environment that minimizes risk. First is the Permit Phase where the teen practices with supervision. Next is the Provisional or Probationary Phase where the teen is allowed independent driving with restrictions. Only after successfully completing both phases will the teen be granted full driving privileges. As your teen learns this new and important skill, practice is very important. As a parent or guardian of a new driver, spend as much time as possible helping and teaching your teen good driving habits.

Many states have restrictive laws that go along with having a GDL license, such as:

• May not drive between midnight and 5:00am

• May not have more than one passenger in the car who is under 21 and not an immediate family member

• May not use a cell phone (including hands free), or any other hand held electronic device

• Driver and ALL passengers must wear seat belts

These laws may vary a bit by state but are now becoming extremely common. In most states with GDL laws, your child must complete at least 6 months of driving, and be at least 16 years of age, before they can apply for a standard driver's license with no restrictions.

FL - FLORIDA FRAUD LAWS AND AUTO INSURANCE

Insurance statistics show that since the youthful driver is significantly more likely to have an accident than a typical adult driver, so there will be a higher premium charged when the youthful driver is added to the parents policy.

There is a temptation then to "forget" to add the new driver to the auto policy or not list the new driver on your renewal questionnaire in order to save money even though the child is driving Mom or Dad's car. We caution you against this practice. The State of FL - Florida has certain fraud laws in this area that will allow an insurance company to deny a claim in the event the driver is an undisclosed household operator. In addition, the Attorney General has the ability to fine the policy holder in the range of thousands of dollars.

INSURANCE-FRIENDLY CARS FOR TEENS

The decision is made. You want to buy your son or daughter their first car. It will be in your name and properly added to your policy. But what to buy? You know it's not only the car model you have to consider. You also have to think about the impact the car will have on your auto insurance.

Insurance companies surcharge youthful operators in three areas:

• Liability

• Comprehensive (theft)

• Collision (damage caused to the vehicle in an accident

If you choose a vehicle that may be older, and does not require comprehensive or collision (a lower value vehicle) the premium will be considerably less than a newer one which will require full coverage.

Let us assist you in making a good choice for your teen. Contact Dockside Insurance Group and one of our agents can help you make the right decision when buying that first car for your teenager.

2020 Hurricane Season

May 21, 2020 - An above-normal 2020 Atlantic hurricane season is expected, according to forecasters with NOAA’s Climate Prediction Center, a division of the National Weather Service. The outlook predicts a 60% chance of an above-normal season, a 30% chance of a near-normal season and only a 10% chance of a below-normal season. The Atlantic hurricane season runs from June 1 through November 30.

NOAA’s Climate Prediction Center is forecasting a likely range of 13 to 19 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher). NOAA provides these ranges with a 70% confidence. An average hurricane season produces 12 named storms, of which 6 become hurricanes, including 3 major hurricanes. [Watch this video summary of the Outlook.]

“As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season,” said Secretary of Commerce Wilbur Ross. “Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe.”

The combination of several climate factors is driving the strong likelihood for above-normal activity in the Atlantic this year. El Nino Southern Oscillation (ENSO) conditions are expected to either remain neutral or to trend toward La Nina, meaning there will not be an El Nino present to suppress hurricane activity. Also, warmer-than-average sea surface temperatures in the tropical Atlantic Ocean and Caribbean Sea, coupled with reduced vertical wind shear, weaker tropical Atlantic trade winds, and an enhanced west African monsoon all increase the likelihood for an above-normal Atlantic hurricane season. Similar conditions have been producing more active seasons since the current high-activity era began in 1995.

“NOAA’s analysis of current and seasonal atmospheric conditions reveals a recipe for an active Atlantic hurricane season this year,” said Neil Jacobs, Ph.D., acting NOAA administrator. “Our skilled forecasters, coupled with upgrades to our computer models and observing technologies, will provide accurate and timely forecasts to protect life and property.” 

This year, as during any hurricane season, the men and women of NOAA remain ready to provide the life-saving forecasts and warnings that the public rely on. And as storms show signs of developing, NOAA hurricane hunter aircraft will be prepared to collect valuable data for our forecasters and computer models.

In addition to this high level of science and service, NOAA is also launching new upgrades to products and tools that will further improve critical services during the hurricane season. 

NOAA will upgrade the hurricane-specific Hurricane Weather Research and Forecast system (HWRF) and the Hurricanes in a Multi-scale Ocean coupled Non-hydrostatic model (HMON) models this summer. HWRF will incorporate new data from satellites and radar from NOAA’s coastal Doppler data network to help produce better forecasts of hurricane track and intensity during the critical watch and warning time frame. HMON will undergo enhancements to include higher resolution, improved physics, and coupling with ocean models. 

As the hurricane season gets underway, NOAA will begin feeding data from the COSMIC-2 satellites into weather models to help track hurricane intensity and boost forecast accuracy. COSMIC-2 provides data about air temperature, pressure and humidity in the tropical regions of Earth — precisely where hurricane and tropical storm systems form.

Also during the 2020 hurricane season, NOAA and the U.S. Navy will deploy a fleet of autonomous diving hurricane gliders to observe conditions in the tropical Atlantic Ocean and Caribbean Sea in areas where hurricanes have historically traveled and intensified.

As with every hurricane season, the need to be prepared is critically important this year.

“Social distancing and other CDC guidance to keep you safe from COVID-19 may impact the disaster preparedness plan you had in place, including what is in your go-kit, evacuation routes, shelters and more. With tornado season at its peak, hurricane season around the corner, and flooding, earthquakes and wildfires a risk year-round, it is time to revise and adjust your emergency plan now,” said Carlos Castillo, acting deputy administrator for resilience at FEMA. “Natural disasters won’t wait, so I encourage you to keep COVID-19 in mind when revising or making your plan for you and your loved ones, and don’t forget your pets. An easy way to start is to download the FEMA app today.”

In addition to the Atlantic hurricane season outlook, NOAA also issued seasonal hurricane outlooks for the eastern and central Pacific basins.

NOAA’s outlook is for overall seasonal activity and is not a landfall forecast. The Climate Prediction Center will update the 2020 Atlantic seasonal outlook in August prior to the historical peak of the season. 

Hurricane preparedness is critically important for the 2020 hurricane season, just as it is every year. Keep in mind, you may need to adjust any preparedness actions based on the latest health and safety guidelines from the CDC and your local officials. Visit the National Hurricane Center’s website at hurricanes.gov throughout the season to stay current on any watches and warnings.

Water Damage

Does Homeowner’s Insurance Cover Water Damage?

Waking up to a flooded basement or returning home from vacation to a home filled with water from a broken pipe is anything but pleasant. One question that you’ll probably ask yourself is – does my homeowner’s insurance cover water damage?

As with so many other insurance matters, the answer is, it depends!

Below is a rundown of the things that insurance will and won’t cover when water damage occurs on your home.

Instances that Homeowner’s Insurance Cover Water Damage

A standard home insurance covers damage deemed to be “sudden and internal.” That is, your homeowners’ insurance will cover water damage occurring suddenly or accidentally from a source inside your home. One example is, water damage resulting from a busted pipe.

However, your standard policy will not cover damage caused by water coming from outside your home.

Instances where your policy covers you:

·     Vandalism

·     Mold (only when it’s the result of covered water damage)

·     An accidental overflow of an appliance or fixture (bathtub, washing machine, toilet)

·     A leaking roof (coverage would extend only to the home interior, not the roof itself)

·     Water damage from extinguishing a fire

·     Plumbing problems such as accidental overflow, faulty plumbing, frozen plumbing, and burst pipes

·     Rain or snow storm

Instances where your policy won’t cover you:

·     Flood

A standard homeowners’ insurance will not cover any type of flood damage. Many things can cause a flood. Some examples are storms, over-saturated ground, surging or overflowing water bodies like oceans, lakes, ponds, and rivers.

You could buy a separate flood insurance policy. It’s especially important if you live in a high-risk area susceptible to flooding.

·     Water backup from an outside sewer or drain

This is also not covered by standard homeowner’s insurance. However, you may be able to buy an additional sewer or water backup coverage to cushion you against such risk.

·     Replacing or repairing the source of the water damage

This means that a standard policy won’t cover the cost of replacing your faulty washing machine or broken dishwasher. However, it’ll however cover the cost of tearing out and replacing that damaged floor.

·     Damage from unresolved maintenance issues

A standard homeowner’s insurance will not cover an unresolved maintenance issue such as a plumbing leakage. However, it’ll cover the cost of repairing or replacing a damaged floor if your dishwasher abruptly goes on the fritz.

Mold from Water Damage

Mold is not only an eyesore, but it’s also a health risk. That said, is it covered by your standard homeowner’s insurance? Well, it depends on the root cause. In other words, it may or may not be covered.

If the mold occurs as a result of water damage from things, like an Air Conditioner (AC) overflow or burst pipes, then your homeowner’s insurance will cover some or all of the costs. This is because mold is considered a “water damage” extension.

Typically, most homeowner’s policies cover mold remediation to up to $5,000. However, some can range anywhere between $1,000 and $10,000. You could also add an additional policy coverage on top of your standard home insurance policy.

Of course, mold damage isn’t covered when it occurs due to neglect or lack of maintenance. For instance, don’t expect coverage if a pipe in your home has leaked for years without being repaired.

Similarly, don’t expect your policy to cover mold growing in a humid environment, like basement or a bathroom either.

To prevent mold from growing in your home, you need to be proactive. It would be best for you to bleach the area after a spill or leak, and stay on top of maintenance around your home, especially in bathrooms, crawl spaces, and basements.

Also, use vents and fans to reduce humidity and moisture in appliances and areas prone to such.

Preventing Water Damage

Prevention is better than cure. Even if the damage is covered, you’ll still be better off not having to deal will the issues that come about. Below are some tips from Dave from State Property Management to help you in this regard. His long experience in rental property management business helped him to learn a few tips and tricks on how to prevent water damage:

·     Consider buying a water leak sensor

These water leak sensors will alert you to the presence of water before the water has a chance to damage the property.

·     Keep your pipes warm and insulated

More often than not, frozen and burst pipes are the cause of flooding in many homes.

·     Drain water heaters twice a year to prevent sediment buildup

If an unsafe amount of pressure builds up the tank, the Temperature and Pressure (T&P) valve will begin releasing some water. If not replaced immediately, this can flood your entire home.

·     Be careful to ensure water supply lines are clear and open

If these run under other objects, make sure that these aren’t pinched or crimped.

·     Inspect, clear, and replace hoses going to and from refrigerators, water heaters, dishwashers, and washing machines.

As you can see, your standard homeowner's Insurance may or may not cover water damage. Basically, if its “sudden and internal,” it’ll be covered. But, if caused by neglect or improper maintenance, it’ll not.

If you have any specific questions, please call us so we can discuss further and make sure you are protected the way to want to be.

Agreed Value vs Stated Value Car Insurance

If you own a classic or collector car, you may be concerned about the amount that your insurance company will pay you if you have a loss to your prized vehicle. You wonder if there is a way to be sure you will know what you will be paid in the event of a total loss to your collector vehicle.

There is a way to do this. You can get the coverage you want by purchasing what is called an "Agreed Amount" or "Agreed Value" policy. These policies are generally offered by companies that specialize in insuring classic or collector cars.

There are three different ways that the insurance company can value your car at the time of a loss.

Actual Cash Value

The most common type of coverage is actual cash value (ACV). Most cars are insured for ACV, and this would be the way the cars you drive every day and have insured on a standard personal auto policy are covered for loss or damage to the vehicle. If you have a total loss, the adjuster will determine what the car was currently worth just prior to the loss, and this is the amount you will be paid for the car (minus your deductible).

Stated Amount or Stated Value

The second type of coverage would be stated amount. In many cases, an individual will ask the insurance company that insures their other personal autos to add coverage for their collector car, so the insurance company will add the car to the policy with the stated value endorsement. This endorsement changes the loss payable clause to read:

"In the event of a total loss we will pay either the stated amount or the actual cash value, whichever is less".

The company may even ask for some type of documentation to determine the stated amount at the time they insure the car, and this stated amount will be listed along with the car on the declarations page. Because of this, the insured may think this is what they will be paid if they have a loss.

But, if the claims adjuster thinks that the actual value is less than the stated amount on the policy, they will pay you the lower amount. While there are some cases where this type of coverage would be OK, this is not the type of coverage that most people want for their collector car.

Agreed Amount of Agreed Value

Most insurance companies that specialize in insuring collector cars will use Agreed Value coverage. At the time the policy is issued, the insurance company will look at the car and any documentation they may require such as photos, appraisals or receipts, and they will agree on a value for the car and insure it for that amount. This agreed value will be listed on the policy declarations page along with the vehicle information. The loss settlement clause in the policy will then read something like this one:

"In the event of a total loss, we will pay the agreed amount indicated on the declarations"

This is the coverage that you want to have for your collector car. Very simple, with no question what the value is or what you will be paid.

So, if you do own a collector car, it is important that you understand how your car is insured on the policy you have purchased. You do not want to find out after something happens that you did not have the right coverage.

If you have any questions about this, or if you have a collector car you would like to insure, please contact us today!

Implications of a Vacant Home

No, we’re not talking about the classic 1990 movie, Home Alone. We’re talking about leaving your home alone, voluntarily or involuntarily.

First, let’s define some terms. You might think that the terms vacant home and unoccupied home are synonymous. In fact, even courts have confused the terms and considered them as meaning the same thing. But in reality, and for insurance purposes, they have very different meanings.

The differing meanings of vacant and unoccupied go to the very core of the insurance coverage that protects you: 

• In homeowners insurance language, a vacant home is one that is not just unlived in, but that has nothing at all in it. That includes people, furniture, or appliances—it is entirely empty.

• In contrast, an unoccupied home is one in which no one currently lives. In other words, it is not now lived in despite there being physical objects that would make it possible for someone to live in it—furniture and appliances, for example.

It’s important that homeowners understand the distinct meanings of the terms. The importance lies in the fact that different homeowners insurance policy forms cover distinct risks or categories of risks. A policy form is the written contract that specifies what the insurance company is responsible for. It also defines the insured’s responsibilities to the insurance company, such as paying premiums and timely reporting of occurrences that may give rise to claims. 

What Difference Does It Make?

The difference is based upon the language of the policy that is in force when an otherwise covered loss occurs. Some policies exclude coverage when the house is vacant, and others may have a broader exclusion. The latter policies eliminate coverage when a house is vacant, unoccupied, or uninhabited. That is a broader exclusion because there may not be coverage if either condition exists: vacancy or unoccupied. 

What It Can Mean to You

Let’s imagine you are fortunate enough to go on an around-the-world cruise that will last for two months. You choose not to have a housesitter, so during your journey, no one is staying in your home. Most homeowners insurance policies contain limitations on how long a home can be unoccupied before insurance coverage limitations apply. 

Why? When you think about it, the answer is fairly clear. If the house is occupied (people living in it) and, for example, a water pipe bursts, chances are that damage can be minimized by a timely response: turning the water off at its source, having required repairs done, and doing whatever else might be needed to stem the tide (no pun intended). Even if the occupants are at work when the pipe bursts, it is a far different scenario than if they are away on a two-month cruise.

But don’t cancel those travel plans just yet. The good news is that many insurance companies offer an endorsement that you can purchase to extend your homeowner’s insurance to allow for situations when the house will be unoccupied for longer than the time stated in the policy. Yes, there will be an additional premium for the endorsement, but it is far preferable than leaving your valuables uninsured.

For rental or non-owner occupied homes, we provide a dwelling property 3 (DP-3) policy that is made for these specific situations. Since the dwelling policy provides less coverage than a traditional homeowners insurance policy, it’s also much more cost-effective.

Similar considerations exist when a residence is vacant (empty of people and things): We also offer a vacant home policy, which is written on a dwelling property 1 (DP-1) policy form. A vacant home policy may be needed when an owner is trying to sell or rent a home, for example. 

For more information about our home insurance products and to find the best coverage for you, contact us today and we will be happy to help find the right fit for your situation.

Dockside Insurance Group is located in Downtown Dunedin, and is a general lines insurance agency providing insurance solutions for our clients in Dunedin, Clearwater, Palm Harbor, Tarpon Springs, Largo, St Petersburg, and the remainder of Florida. We specialize in business insurance, flood insurance, homeowner's insurance, auto insurance, and most all other lines to help our clients on an individual level. 

Ordinance and Law

A client sent us the following email recently-

"I accidentally picked up my Homeowners Policy (Good gosh…not to read it) and there it was in BIG BOLD Letters….IMPORTANT: ORDINANCE & LAW COVERAGE IS A PART OF THIS POLICY!   Why the shout out from my insurance company?"

First, your Homeowners Policy provides coverage which has the intent to rebuild or repair a damaged structure and return it to the state in which it existed prior to the loss caused by a covered peril. This coverage is not intended to pay all of the costs to update the structure so that it complies with current building and zoning laws, codes and ordinances.

This becomes a particular issue when a structure is substantially, but not completely, destroyed and when the undamaged portion of the structure requires extensive renovation to comply with current building and zoning laws, codes and ordinances.

The Florida Building Code that went into effect in March, 2002 substantially changed how homes are constructed from the concrete and reinforcement steel to the roof covering.  If your home was permitted for construction prior to March, 2002, many aspects probably do not meet code.  In most counties, “When repairs and alterations amounting to more than 50% of the value of the existing building are made during any 12-month period, the building or structure shall be made to conform to the requirements for a new building or structure or be entirely demolished.”

Without adequate Ordinance & Law coverage, you would be responsible for the cost of demolishing the rest of the structure, the removal of that debris, and for the cost to rebuild the undamaged portion of the house. You can easily imagine those kinds of costs running into the tens of thousands, or even more. Ordinance or Law coverage is designed to help fill that gap.

Ordinance & Law coverage can come into play on smaller damages as well. A storm may damage a portion of your roof, which would be covered by your Florida homeowners policy after your deductible. But building regulations in your area might require that the entire roof be retrofitted with tie-downs or even replaced to meet new hurricane resistance standards. These upgrades, even though they are required by law, are regarded as home improvements by your home insurance and are not covered. Without ordinance or law coverage, you will pay the difference out of your pocket. Ordinance & Law coverage will fill the gap, helping you to bring your house up to code.

Typically, the HO3 Homeowners Policy Form includes Ordinance & Law coverage for 10% of the building coverage.   However, some companies do not include O&L coverage and it must be purchased as an endorsement. Other carriers offer 25% and 50% O&L coverage. This coverage is not expensive.  You should discuss this matter very thoroughly with us. Be prepared for whatever life throws at you.

We at Dockside Insurance understand property values, Building Codes and how to apply Ordinance & Law coverage.   Call us at 727-475-7788 for a competitive insurance proposal. We are a local agency with access to big markets. We provide auto insurance, homeowner's insurance, boat insurance, flood insurance, and business insurance for our clients throughout Florida. 

Sinkhole Coverage

Sinkholes have been a serious risk for Florida residents in areas such as Pasco County and Hernando County for decades. In recent years such losses have become a problem in other areas including South Florida. In fact, sinkhole losses are such a concern that the topic seems to trail only the state’s exposure to monster hurricanes as one of the top property issues facing insurers, consumers and our legislature.

In 2007, and further in 2011, the Florida Legislature made changes to Florida law related to insurance and sinkholes that you need to know about. Prior to these changes losses increased dramatically; sinkhole losses in one county increased from $2 million in 2005 to $30 million in 2006. 

CURRENT COVERAGE OPTIONS

Florida homeowners have the option to purchase sinkhole insurance as an added option and pay the additional premium. Prior to the 2007 legislative changes, sinkhole coverage was automatically included at a minimal cost.

In place of sinkhole coverage, Florida policies now include a more restrictive coverage called “catastrophic ground cover collapse”.

CHANGES IN SINKHOLE LEGISLATION

The 2007 legislature changed the laws relating to sinkhole coverage for property policies of admitted insurers. Prior to the change, Florida required admitted insurers to issue property policies (commercial and personal) with the peril of sinkhole included

Since most standard property policies normally exclude coverage for damage caused by sinkhole, the coverage was added back by an endorsement. The insurer could charge a premium for the endorsement, but the policy could not be issued without sinkhole coverage.

The 2007 legislation added a new definition, “catastrophic ground cover collapse”, and changed the options that insurers have in issuing property policies. As a result of this statute, insurers must now issue property policies that include coverage for catastrophic ground cover collapse at a minimum. There is no longer a requirement that property policies be issued with sinkhole coverage. If a policy is issued without sink- hole coverage, two things must happen:

1. The insurer must offer sinkhole coverage, and may charge an additional premium.

2. A large bold-font notice specified in the statute must appear on the policy.

Catastrophic ground cover collapse coverage is more limited than sinkhole coverage and a claim that would be covered under the sinkhole coverage may not be covered. For example, mere cracks in walls or foundation of a structure could be covered by sinkhole coverage, but not covered by catastrophic ground cover collapse. 

CITIZENS COVERAGE

Citizens Property Insurance, Florida’ s largest property insurer and the state’s own insurer of last resort, paid $247 million in residential sinkhole claims in 2007. Such claims have become so costly that the insurer is planning on inspecting homes for pre-existing damage before writing new policies, a change other insurers are expected to follow. Other changes include:

1. The peril of sinkhole will no longer automatically be included in Citizens homeowners and dwelling policies, it will be an added endorsement known as the Sinkhole Loss Coverage Endorsement.

2. Since October 2007, renewal policies in Hernando & Pasco Counties do not have the sinkhole endorsement included.

3. Renewal policies for all other counties on and after October 2007 automatically include the sinkhole endorsement, but policyholders may request it be removed.

4. Citizens is planning to increase rates for sinkhole coverage by an average of 430% statewide and much more in counties where claims have exploded. Orange County has a proposed rate increase of 2,226% and Jackson County located in Florida’ s panhandle is looking at a 6,461% increase.

5. New policyholders can choose whether or not to purchase the Sinkhole Loss Coverage Endorsement at the time of application. 

“SINKHOLE” SUMMARY

• The sinkhole and catastrophic ground cover collapse coverage issue deals with property policies of admitted insurers.

• Insurers may issue a property policy without the peril of sinkhole coverage.

• Policies without the peril of sinkhole included must have the statutorily prescribed 14-point notice.

• Insurers must issue policies with the peril of catastrophic ground collapse included and must offer sinkhole coverage if requested by the policyholder.

• Catastrophic ground cover collapse coverage is more limited than sinkhole coverage. 

Boat Insurance Basics

Are you a first time boater looking for information about insurance coverage? Maybe you’re a veteran of the open water and just need a quick refresher on important boat insurance policy items. Either way, you’ve come to the right place.

As North America’s leading provider of boat and yacht insurance, Dockside Insurance Group knows boats and understands the key components that make up solid marine insurance coverage. Below is some basic information that will help you better identify your particular boat insurance needs.

Once you’ve read through these basics, give us a call to discuss your specific situation and we can tailor the correct coverage for you and your vessel. 

Policy Basics

The following is a list of some important factors that can influence the type of boat insurance coverage that best suits your needs.

• Personal vs. commercial use – It’s a simple idea, but identifying whether your watercraft is for personal or commercial use will help guide the insurance policy you require.
• Is it a boat or a yacht? – For most cases, a boat is defined as a vessel that is 26′ or smaller while a yacht is classified as 27′ and larger. Policies vary between the two and clearly identifying what type of vessel you need coverage for will determine the specifics of your policy.
• Boat Liability Insurance – Liability coverage helps protect you in the event you are responsible for property damage other than your own boat or bodily injury to someone other than a family member. The amount of liability coverage needed will depend on your specific situation.
• Agreed Value vs. Actual Cash Value – While most of the policies sold at Dockside Insurance Group are agreed value policies, it’s important to know the difference between the two. Agreed value policies pay a predetermined agreed value of the watercraft when it’s involved in a loss, while covered losses in actual cash policies are subject to deprecation.
• Medical Coverage – In the event of bodily injuries sustained in association with your boat, yacht or other watercraft, the medical coverage included in your insurance policy will help cover resulting medical expenses.

The above are just a few basics to help get you started. For more information about yacht and boat insurance coverage options available for your particular boating needs, please feel free to contact Dockside Insurance Group.

Umbrella Insurance

One of the most certain things in life is, certainly, uncertainty. Your dog could bite the neighbor’s kid. Your teen driver could hit a cyclist. A guest could fall down your stairs. A rainy morning commute on worn-out tires could result in a multi-car accident. And you could be held liable to others for the cost of damages – injuries, property destruction, emotional distress, lost wages and more.

Good thing you have insurance. But, wait, your policy covers $300,000 of liability, and, in a lawsuit, you’re judged liable for $1 million. That leaves $700,000 left to pay. How will you cover it?

If you have umbrella insurance and your policy covers the incident, the additional $700,000 will come from your policy. If not, it will come from the assets you have now, such as your home and savings, and from future assets, such as your wages or inheritance.

This is what we do at Dockside Insurance. We look at the entire picture and offer sound insurance solutions and advice to our clients. Umbrella policies are one tool in our arsenal we rely on. 

The fact is, it only takes one serious accident and a resulting lawsuit to put everything you own – and will own – at risk. And it only takes one umbrella policy to help protect it all.

Here are a few things you should know about umbrella insurance:

• Personal umbrella policies typically offer $1, $2, $3, $4 or $5 million of liability coverage. Consider your net worth when choosing your coverage –you could be sued for everything you have.
   
• An umbrella policy is not a stand-alone policy. Your insurance carrier will typically require you to meet certain qualifications, such as having an auto policy with a certain level of liability coverage, in order to purchase umbrella insurance.
   
• Even when you have umbrella insurance, your car or home insurance is your first line of defense. For example, if you are liable for $2 million in a car accident and your auto insurance covers $500,000 of liability, your auto policy covers the first $500,000. Your umbrella policy covers the remaining $1.5 million, assuming your policy covers the incident and that you purchased that much coverage. If you are liable for $250,000 in an accident on your property and your homeowners insurance covers $300,000, your umbrella policy won’t be needed.
   
• If you insure a motorcycle, ATV, golf cart, snowmobile, motorhome or watercraft, your umbrella policy may provide additional liability coverage on top of those policies as well. Be sure to check with us to confirm your coverage on these types of vehicles.
   
• A single umbrella policy typically covers all of your family members who are residents of your household.

Essentially, an umbrella policy gives you excess liability coverage on top of what your other policies provide. If you’re at fault for a serious accident, you’ll need it.

Umbrella insurance also gives you liability coverage in instances where other policies don’t. Examples include driving in a foreign country or renting a boat.

If you’re curious about how umbrella insurance might play a role in protecting the life you’ve built or plan to build, talk to us about additional details. 

Dockside Insurance is an independent insurance agency located in Downtown Dunedin, Florida. We serve clients statewide, and have a specific interest locally in Dunedin, Clearwater, Palm Harbor, Tarpon Springs, Countryside, Largo, Seminole, and St Petersburg. We specialize in all lines of insurance to include auto insurance, homeowner's insurance, flood insurance, business insurance, boat and marine insurance, liability insurance, and worker's comp.

Top Causes of Boat Damage

Before heading out for an adventure on the water, make sure you have the suitable protection in place if an accident happens. In 2014, the United States Coast Guard (USCG) reported Florida had $7,386,874 in boat damages.

At Dockside Insurance Group, we can tailor your boat insurance to fit your lifestyle. We know boats, and we know insurance. We speak "boat", with our principal agent being a US Coast Guard licensed captain. We are boat insurance specialists. 

Listed below are some of the most common causes of boat damage and how you can prevent them.

Striking a submerged object – It is very difficult to avoid striking a submerged object such as a log because it can be so hard to see. Drought conditions and heavy rains can contribute to floating debris in the water.  If you hit a submerged object, stop and check the bilge for leaks. Once you arrive at the dock, do another more thorough check for damage.

Grounding – Grounding can be prevented by keeping up to date and accurate charts as well as a depth finder or depth sounder. Once you run aground check for leaks. Next, stop the engine and lift the outdrive.  Powering up can result in more damage to your vessel. Shift weight to the area farthest away from the point of impact and try shoving off with a paddle or boathook. If this does not work, it is best to wait for the tide or a tow to get you back in the water.

Storms – Protecting your boat from bad weather often depends on the amount of advanced warning you are given. Storms are common in Florida, so it is best to have a plan of action in place before a storm hits.

Everything removable should come off the boat or be secured such as, canvas, sails, radios, dinghies, cushions or life vests. Shut off and disconnect all electrical systems and remove your battery. Make sure all openings are closed and sealed.

Sinking – Bad weather, grounding and strikes can cause your boat to take on water. Holes and damage can also be responsible. Regular maintenance and inspections will help keep the water out. Examine drains and scuppers before setting out and during your trip. Confirm the bilge pump is fully operational and installed at the lowest part of the bilge so it can detect the water level and turn on when necessary. Also, make sure the battery is fully charged.

Fire – Most boat fires are fuel-related or caused by electrical issues. A boat fire can result in a total loss. Boating Magazine reports boat fires are especially dangerous because, “fiberglass burns vigorously while emitting toxic fumes.” Avoid a lapse in maintenance and check your fuel-system regularly. Faulty wiring or corrosion in your wires should be repaired right away. Always keep the proper number of working fire extinguishers on board.

Collision – Unlike the roads, the water has no marked lanes or stoplights.  It is important to be vigilant while driving a boat. The best way to avoid a collision with another boat is to learn International and Inland Navigational Rules. Watch your speed around other boats, keep watch on traffic around you including blind spots and make course changes early.

Dockside Insurance Group offers personalized service to boat owners, and has the broadest markets of boat insurance available in Florida. We write and service polices from the smallest tenders to the largest yachts. We are an agency and broker, so we have lines of coverage available that aren't easily found. Contact us for a coverage review and we'll shop the lowest rates for you. 

Critical Illness Insurance

Here’s Why You Need Critical Illness Insurance (But Maybe Your Parents or Grandparents Didn’t)

One thing that makes critical illness insurance unique is that it was not created by an insurance company, but by a world-famous heart surgeon, Dr. Marius Barnard. He was part of the team, headed by his brother, Christian Barnard, that successfully performed the first human heart transplant.

Dr. Barnard was practicing medicine in South Africa, and saw that, with the changes taking place in medicine, when a critical illness struck he was able to heal his patient physically, but the financial stress that accompanied cancer, heart attack and stroke was killing his patients.

His thought was that critical illness protection would work similarly to a life insurance policy and pay a lump sum upon diagnosis of the critical illness. Critical illness insurance was introduced in South Africa in 1983, and is now sold in more than 60 countries around the world.

You are probably wondering, “Why critical illness insurance now? Why haven’t I heard more about it before?” The reason is that, thanks to great doctors and incredible advances in medicine and medical technology, people today survive the cancers, heart attacks, strokes, etc., that would have killed us a generation ago.

For example, a good friend of mine, Keith, has a client who is 38 years old. Keith’s client was running on a treadmill at a gym when he experienced a heart attack. Twelve people called 911. The woman on the treadmill next to him walked over, grabbed the defibrillator from the wall, and applied it.

Think about it. If this client had had such a heart attack 15 years ago, how many gyms would have had defibrillators? How many of the other people in the gym would have had cellphones to dial 911 to get paramedics there immediately?

Same Question, Different Answer

The question is, what’s the right insurance product for cancer, heart attack or stroke? When I started in the insurance business 35 years ago, the answer to that question was life insurance. At that time, very few people survived a critical illness.

This reminds me of a story about Albert Einstein. His teaching assistant came into his office, panic stricken. The assistant said, “Professor Einstein, the questions on this year’s exam are the same as last year’s!”

Einstein replied, “No problem, because the answers are different.”

Consumers still want to know what the right insurance product is to protect against critical illnesses such as cancer, heart attack and stroke. The question is the same, but the answer has changed. A person still needs life insurance, but he or she also needs critical illness insurance.

To quote Dr. Barnard: “You need critical illness protection not because you are going to die, but because you are going to survive.”