HUD Rule Could Step On The Toes Of Homeowners Insurance Companies Meaning Higher Rates For You

Pity the North Carolina homeowners insurance marketplace.  The past year has been pretty rough.  The huge storm losses from 2011 have forced most insurance companies to dramatically raise their rates and limit which homes they are willing to insure.  Trying to buy insurance for your home without the support of your auto policy is rate suicide now.  And even with the auto insurance as support, many homeowners have had to sign the dreaded consent to rate form, giving their insurance companies the right to raise their home insurance rates far above the maximum rate allowed by the state.    And now, the home insurance marketplace faces another ratemaking hurdle – The new HUD rule and the unkown impact that it might have on the insurance industry’s underwriting practices.

This new HUD rule is called the disparate impact rule, and it would expand the Fair Housing Acts discriminatory effects standard and how it applies to actions that have discriminatory effects on minority groups.  Simply state, this new rule would hold companies responsible for policies that result in discriminatory effects on minorities whether or not there was ever any intention to discriminate against them as minorities.  What this could mean, is that home insurance rates might be held to be discriminatory and if so, then this could have enormous impacts on homeowners rates in North Carolina.

When it comes to pricing a homeowners insurance policy for your home, your insurance company will study many different factors that are individual to your specific house and you as the owner.   These factors can be as diverse as the quality of fire protection services are offered in your area to your credit score to your past claims history.   The very nature of insurance rate making is to isolate the high risk home from the lower risk ones in order to price each policy most appropriately.  By their very nature, many of these rate making tools could be seen to have a discriminatory effect on all kinds of different groups of people. All of these factors along with many others that are unique to the house itself as well as the life and attitudes of the home owner go into the process of determining a specific price for insurance for that home and that customer.  But what if the insurance company was unable to use some or all of this information to determine their rates for a home because their methodology could be seen as discriminatory against some particular minority?

  

A rule of this nature could limit the ability of insurance companies to provide more risk specific rates and this could result in an insurance marketplace with two flaws that will force upward pressure on pricing for all insurance buyers.  First of all, if we strip the insurance company’s ability to underwrite a specific location or area for risks that are unique to that location or area, then we will be forcing them to raise the rates on all other homes in order to subsidize those that deserve a  higher rate due to their higher risk factors.  The second flaw in this approach of insuring with more unknowns is that if you limit the information that an underwriter has to evaluate the risk of a home, then the underwriter will have to overestimate the risks, and thus the rate to cover this gap in knowledge about the home or its owner. In the end, this will mean that all homeowners will face higher rates.

At this point in time, we will have to wait for lawsuits to work their way through the system before we know for sure what impact this new rule will have on insurance companies and their home insurance rates.  Some feel that this rule could run afoul of the McCarran-Ferguson Act which gives states the power to regulate insurance.  Perhaps McCarran-Ferguson will protect the insurance companies and allow them to continue to discover the information that they need to create a fair rate for a specific home.   At this point we will have to wait and see what the higher courts rule as challenges to this new HUD rule wind their way through the court systems.

Clinard Insurance Group is an independent insurance agency located in Winston Salem, NC.  We insure thousands of homes all across North Carolina and it is important to us that all buyers of insurance products to be informed consumers.  If you have any questions about your home insurance, your auto insurance or your business insurance, please feel free to call us, toll free, at 877-687-7557.  We will take as much time as you need to help you understand the insurance products that buy.

Medical ID Theft – Some Facts and Figures

While the concept of identity theft is pretty well understood by most of the public, an offshoot of this problem, specifically medical identity theft is much less well understood.  Less than 15% of adults are familiar with the term medical identity theft and of that group, only 1/3 of them could correctly define medical identity.  Still worse, even those that understand the risks are for the most part unable to buy any kind of insurance protection for this risk exposure.   

If medical identity theft is not well understood, it is also grossly underappreciated by the public.  Take a look at a few rather daunting facts and figures relating to medical identity theft.  This crime victimizes some 1.5 million Americans every year.  And the costs of these attacks are now more than $30 billion.  And if this crime strikes you, then understand that the average cost of resolving a medical identity theft issue is $20,000 and the time it takes to do so averages between 4 and 6 months.  And while we are all very protective of our social security numbers, and rightly so, consider for a moment that the street value of a stolen social security number is about $1 while the street value of a stolen medical identity is $50.

There are many different scams designed to steal medical identities but we tend to group medical identity thefts into three broad categories.   

Financial medical identity theft – Someone is getting medical help using another person’s name or other information.

Criminal medical identity theft – A victim may be held responsible for the actions of another person’s criminal behavior.

Government Benefit Fraud – Someone’s medical benefits are being used by another person.

What strategies can you employ to make it less likely that you become a victim of medical identity theft?  Well, most of these are pretty easy steps and what is really required here is that you just take a little bit of time to constantly review and stay in touch with your medical paperwork.  For instance, you should carefully monitor and review all explanation of benefits letters that are sent to you by your health insurance company.  Make sure that each and every benefit listed is accurate and valid.  You can even be more proactive and go ahead and request a listing of benefits from your health insurance company and check this for accuracy.  Also, you can request a copy of current medical files from each health care provider that you use.  Move quickly to promptly correct any errors or false information that you find in any of your medical files.  Keep a close eye on your credit reports in case they show medical debts outstanding.  And you can request an accounting of disclosures from your health insurance company.

While the insurance industry is relatively silent in the area of insurance protection against this risk, there are a few insurance companies that are beginning to offer some options for protection against this type of fraud.  Check with your homeowners insurance agent to see if you can add medical identity theft insurance to your home insurance policy.  While you are at it, you may want to check and see if you can add identity theft to your policy as well.  While the number of insurance companies that provide medical identity theft protection right now is pretty small more and more insurance companies are evaluating this coverage each day and over time it may become much more of a mainstream type protection that you will be able to add to your homeowners insurance policy.

Clinard Insurance Group, located in Winston Salem, NC, currently insures thousands of families all across North Carolina.  We would love to help you with your homeowners insurance, your auto insurance, your life insurance or even your business insurance.  Please feel free to call us, toll free, at 877-687-7557.  We will take as much time as you need to help make sure that you are getting the protection that you want at a price that will pleasantly surprise you.

Homeowners Insurance – Did You Make Any Of These Three Mistakes When You Purchased Yours?

If you purchased a home and got a mortgage with it, then chances are you have had experience buying homeowners insurance.   For the first time home buyer out there, buying homeowners insurance is just one of many distractions in the process that have to be checked off before the loan can close.  That kind of scenario makes a homeowner pretty vulnerable to focusing much more on the cost of the policy rather than the protection it provides.  Now if several years later you find the fire engines are racing toward your home while you stand in the driveway watching it burn, then you may suddenly find yourself wondering what you left off or ignored when you bought your policy.   Here’s a list of some of the most common mistakes that homeowners make when buying home insurance.

The most common mistake that I see is not purchasing enough insurance.  I know;  you are buying a home and in the process you start to feel like you are being nickelled and dimed all the way through.  But your insurance policy is one item where you should focus on protection first and price second.  It’s true that for the majority of homeowners, the insurance policy turns out to be nothing but a promise.  You are purchasing peace of mind and financial stability after a disaster but there is nothing tangible to take home and enjoy after you write the big check to the insurance company.   This is why I don’t blame folks for zeroing in on price as the primary factor in the purchasing decision.  But this is where you really need to take a bit of care and insure your home for full value.  It will be too late to call and ask for an increase as the sirens are wailing through your neighborhood.

 The problem of underinsurance is often exacerbated by the fact that you should be focusing on and insuring for the replacement value of your home.   You will have to build it back after all, and this can often exceed the price you just paid for the home.  For some people that is a difficult concept to understand.    Your agent should help walk you through the process of determining the replacement value of your home so that you can insure it for full value.  This won’t leave you with as much of a queasy feeling as those sirens are getting closer.

Homeowners also often make the mistake of failing to check to see if their home is in a flood zone area.  Flood losses are not covered by your homeowners insurance policy.    Could you easily absorb the costs of repairing flood damage that is equal to 1/3 of your home’s value?   Luckily, if you have a mortgage, then the bank will often catch this and require you to purchase a flood insurance policy.  I’ve also seen several cases where a bank wanted to require a flood insurance policy somewhat unnecessarily when the flood zone only crossed a small portion of a lower corner of the homeowner’s back yard.  If this happens to you, your agent can be very helpful in speaking with the bank to attempt to waive the flood insurance requirement.

The third most common mistake that homeowners make when purchasing their home insurance is failing to insure valuable items separately.     If you own valuable items like jewelry, paintings, musical instruments, guns or silverware, or other collectibles or fragile items, then you should consider adding coverage for these items under a separate endorsement.  Doing so can result in better protection since insurance coverage for these items may be severely limited under your homeowners policy.  If these things are important to you, take a few extra minutes and make your agent aware of them and discuss the best way to protect them.  Some homeowners policies will allow you to add a blanket endorsement for a low limit of coverage for these types of items.  This is a simple, quick and inexpensive way to protect these items if your collections are not extensive.

Clinard Insurance Group is located in Winston Salem, NC, and we insure thousands of homes all across the state.  We will take as much time as you need to listen to your story and to help you fashion a homeowners insurance policy that best suits your needs and your budget.   If you would like help with your homeowners insurance or your  auto insurance, your life insurance or even your business insurance, please call us, toll free, at 877-687-7557.

Fallen Trees – What Does The Insurance Policy Say?

You and I both know it, almost no one actually reads their homeowners policy.   Although if you are having trouble sleeping at night, reading is might help with that problem.   And even if you do read it, you may have some trouble interpreting what is covered and what is not.  In this blog I’d like to tackle a common question and point out an area where no policy provides protection, yet could result in an expensive bill for you: fallen trees.

I love to see large old trees in the yard in front of or behind a home.  But large trees in the yard can pose several risks to homeowners.  The most dangerous of course is that a falling tree could injure someon in the house or on the property.  After that, there is risk to the property itself, from the house to outbuildings to fences, yards, patios and driveways.  Now for the legal disclaimer:  Insurance policy forms vary from state to state and from company to company so I suggest that you consult your own policy for exact and specific coverage.  This blog will try to answer these questions in a general way that should be accurate for the majority of NC homeowners with a North Carolina Homeowners Insurance Policy.

With the disclaimers behind us, let’s move on and talk about what is covered and what is not covered in the area of fallen trees for the standard NC HO-3 policy form.  The damages to your home or your structures caused by a windblown, fallen tree will be covered, subject to your deductible.  In addition, the standard HO-3 homeowners policy form will provide up to $1000 for the cost to remove the tree from your premises.  This applies if your tree was felled by wind, hail, or weight of ice, sleet or snow.  But here is where it gets tricky.  If that tree does not damage your home, outbuildings, or fences, then no removal coverage will apply.  There is one exception to this rule.  If the fallen tree is blocking your driveway, then you will have up to $1000 coverage to clear it from your driveway enough to let you get vehicles in and out of your driveway.

Sometimes when reading the coverage on an insurance policy, you have to look carefully for what is not written in the policy language.  So what is missing here?  Well, think about the $1,000 coverage limitation.  While generally $1000 seems like plenty of money for removing a fallen tree, if you have large trees, or if several come down at one time, then $1000 might fall far short of what you need.  I have seen situations where a tree fell in a difficult place between two houses  and while it didn’t hit any structures, a crane was required to remove it.  Those costs can run up into the $10,000 range in a big hurry.  I’ve also seen cases where one tree falling brought down a couple more trees with it, generating cleanup costs well beyond the $1000 mark.  So if you have large trees around your home, you might have a rather large loss exposure that simply won’t and can’t be covered by an insurance policy.

If you are a perceptive reader, then you may have noticed that lightning was not mentioned in the list of covered perils that can trigger the removal coverage.   There is good news on that front.  The Standard NC HO-3 policy form includes some direct coverage for trees, shrubs and other plants that are damaged by lightning.  The policy will pay up to 5% of the coverage limit on your dwelling for lightning damage to trees, shrubs, plants or lawns.  But, no more than $500 will be paid for any one tree, shrub or plant.  But here’s the good news, if that tree is hit by lightning, it is now considered covered property and is eligible for removal coverage as well.  So if that huge tree in your yard falls and hits nothing on the way down, you might find yourself hoping for some evidence that it was hit by lightning.  Otherwise, you are going to be writing some big checks to tree removal service companies.

Here at Clinard Insurance Group, located in lovely Winston Salem, NC, we want all insurance buyers to be informed consumers.  If you need any help with your home or auto insurance, or with your life insurance or even insurance for your business, we hope you will call us, toll free, at 877-687-7557.

Home Insurance And Your Vacation House – Some Issues To Consider

Not many families can afford to own a second home, so kudos to you if you are one of the lucky ones.  If you are beginning to consider the idea of purchasing a second home, or even if you already own one, then I hope the information in this article will help you identify problem areas with this type of home ownership so that you can take care of them before they bite you with an uncovered claim or an insurance unavailability problem. 

Secondary home ownership can create quite a few unique insurance issues.  These problem areas can sometimes be attributed to the location of the house or how the property may be used.  The way the property is titled can also create insurance problems.  In some areas there is a wide discrepancy between the market value of the home and the replacement value of the home.  The personal property which is kept inside the home can also create insurance confusion that is best solved before there is a loss.   Let’s take a closer look at each of these kinds of issues.

Let’s start with location issues.  Many vacation homes are found at the coast, or in the mountains or near rivers and lakes.  Each of these kinds of places can present geography based insurance issues.  Beach homes of course face huge property risks to wind and flood loss from hurricanes.   Vacation homes located in the mountains may have poor fire protection.  Many mountain homes face the prospect of waiting on a fire truck full of water to climb the mountain to save them as they are burning. Homes located near  rivers or lakes need to be aware of flood zones and understand their flood risks very carefully.  All of these geography risks can mean a huge insurance price tag and might even lead to insurance unavailability at any price.  Carefully review these risks with your agent before you purchase your secondary home.

The way that a vacation property is used must also factor into the insurance equation.  Is the property going to be rented to others?  If so, then a dwelling fire policy might be more appropriate than a homeowners insurance policy to insure this property.  Dwelling fire insurance is generally more restrictive in coverage and often more expensive to buy than homeowners insurance.  But more importantly, buying the correct policy here might mean the difference between being paid and facing a denied claim after a loss.

A more recent insurance problem with vacation homes is caused by the way in which they are titled.  The latest trend is for several families to purchase a property together and own it through an LLC.  At this time, most insurance companies are not willing to write a homeowners policy for an LLC so this structure could limit your marketplace choices and thus force you to pay more for insurance on this secondary home.

Then there is the problem of market value versus the replacement value of the home itself.   Many vacation homes sit on land that is much more valuable than the house itself.  A great example of this is a NC beach house sitting on land that could be valued at more than $2,000,000 per acre.  Imagine that you want to build a $500,000 beach house on a lot that costs $1,000,000 to buy.  Say you need to borrow $1.3 million to do the deal.  The bank might want you to have more than $500,000 insurance since your loan is way above that amount, but the insurance company will not insure the house for more than its replacement value.  These issues will be easier to resolve if you get your insurance agent involved early in the process.

Last of all, consider the personal property left in the vacation home.  Who actually owns it?  Are the renters allowed to use it?  How will you insure it?  Special care should be taken to make sure that the insurance company understands the answers to these questions and that the insurance is set up to handle this situation correctly.

Insuring your vacation home is best done with an independent insurance agent who understands these issues and how to help you through them.  At Clinard Insurance Group, in Winston Salem, NC, we insure hundreds of vacation homes all across NC from the mountains to the sea.  We understand these issues and we have access to the marketplace that you need to make sure that you don’t pay too much for your vacation home insurance.  We can also help you with your auto insurance, your life insurance and even your business insurance.  Just give us a call, toll free, at 877-687-7557 and let us go to work for you today.

NC Home Insurance Rates Poised To Go Up

If you live in NC , then you have many things to be happy about.  One is that your NC homeowners policy rates are among the lowest of any state in this part of the country.  And relatively speaking, they should remain that way.  But brace yourself, homeowners insurance rates in North Carolina, like most other states in the South and Southeast are poised to increase rather dramatically.  And to go along with these rate increases, the availability of homeowners insurance in NC is going down.

In most cases, insurance companies who sell auto insurance and home insurance in North Carolina, also do the same business in many other states all across the country.  So bad loss years in one state for an insurance company can be balanced out by profits made in other states for that year  In 2011 though,  this formula did not work out well for most insurance companies as 2011 was a year of storms and weather related losses all across the country.  Now, insurance numbers are notoriously slow in being published (what do you think that says about the speed of their claims service?) so we don’t have all the numbers in at this time.  Still, with my ear to the ground and hearing what the company people are saying, it is an easy call to say that insurance rates for homes in North Carolina will almost certainly be increasing in 2012 for almost everyone.  And for those with more risky situations or poor loss history, these changes might even mean it is hard for them to buy insurance for their home at any price.

The numbers aren’t all in yet, but the insurance industry has suffered 4 straight years of record losses in the area of home insurance.  The losses have to be recovered somewhere and you know the most direct way to do so will be to increase the rates that you pay for your home insurance.  Take a look at some numbers that indicate the trends that the insurance industry has been fighting against for the past 4 years.  The average cost for a homeowners policy in the United States in 2008 was $791.  In 2009 that number climbed to $799 and in 2010 it went to $807.  The 2011 number is estimated jump to about $840.  For 2012 we can expect a national increase of about 5%.  But that doesn’t tell the whole story for those of us who own homes in NC.  Here we had heavy hail losses last Spring, and that combined with the underfunded beach plan and the risks of beach plan assessments on NC insurance companies, means that you can probably expect rate increases of more than 5% as well as an increasingly tighter market for homeowners insurance in our lovely state.

It is already game on for some insurance companies who are starting to place limits on the number of homes they will insure in 2012.  Many insurance companies are now requiring that you buy your auto insurance from them or they will not insure your home.  Others have even stopped writing new homeowners insurance policies.  There are a few companies that are actively reducing the number of homeowners policies that they sell in NC by non-renewing policies in their book of business.

So what does this mean for you and what should you do to protect yourself and your home from this troubled insurance environment?  First of all, I would suggest that you use an independent agent to help you procure your home and your auto insurance policies.  If you are buying your insurance from a  direct writing company such as a State Farm, Nationwide, Allstate or Geico, remember that if your insurance company takes drastic action towards NC and home insurance, then your agent will probably not have an alternative solution for you.  This could leave you scrambling for coverage in tight marketplace.  Also, you should always keep your home and auto insurance insured with the same insurance company.  This will save you money of course but it will make you a more important client to that insurance company.  If your insurance company starts taking  action to reduce their homeowners exposure in NC, then your account is less likely to be affected.

At Clinard Insurance Group in Winston Salem, NC, we insure thousands of homes and thousands of cars all across North Carolina and South Carolina.  We are an independent agent and we have many insurance companies that still have a good appetite to write home insurance in NC.  If you would like the personal help and attention of one of our trusted agents, please call us, toll free at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.  We will take as much time as you want and need to be sure that you are buying exactly the protection that you want for the lowest possible cost to you.

Frozen Pipes And Your Insurance – Prevention Is The Key

It is estimated that almost a half million businesses and residences experience water damage losses  as a result of frozen pipes each year.  While most homeowners insurance policies and businessowners insurance policies will pay for these losses, this kind of preventable loss is a terrible black mark on your insurance record.  But more importantly, protecting your pipes in advance could save you from the huge problems associated with experiencing this kind of catastrophe.  This article will give you some tips on what to do now, before the cold weather sets in to keep your home or your business safe from this type of loss.

The first step in this loss prevention process is to protect the pipes themselves.  If your pipes are in a vulnerable spot like the attic or the crawlspace, then they need proper insulation.   Be sure to insulate both the hot and the cold lines.  Next study the environment for these pipes.  You should seal any leaks to the attic or space that might allow enough cold air into that space to freeze the pipes.  And don’t forget to  disconnect your garden hoses and drain your  sprinkler system to reduce the chance of freezing at those points in the system.

Now when you know that a hard freeze is coming, there are some additional things you can do for the short term to protect your pipes.  You can let warm water trickle from the faucets overnight, particularly on an exterior wall, or on a long stretch of unprotected pipe.  Also, you can open cabinet doors to allow heat to reach non-insulated pipes under sinks.  If you do this and have small children don’t forget to put all poisons and dangerous chemicals out of their reach.  And on those hard freeze nights, don’t turn your thermostat down.  You will need as much heat as possible to protect your pipes.  I know this might run up your heating bill a bit but  that cost is nothing compared to damage from burst pipes.

 If your pipes do freeze, don’t panic, it doesn’t mean that they have burst.  There is still a good chance that you can avoid a large water loss claim.  First of all, turn on the faucets and leave them on.  The water pushing against the melting ice in the pipe will speed up the melting process.   Next try to locate where your pipe is actually frozen.  If you can do this, then you can try to safely apply heat to the frozen area.  You can wrap the pipes in towels soaked in hot water, or you can use an electric hair dryer or an electric heating pad.  Do not use a blow torch, kerosene or any other open flame to heat the pipe.  These techniques could leave you with a home destroyed by fire!  If all of this fails, or if you are uncomfortable with this step, then call a licensed, professional plumber to help you.

In NC, the standard homeowners form will almost always cover loss to your home and your contents from water damage as a result of a burst pipe.  But insurance protection should be your last resort.  Preventing the loss in the first case will save you time, money and heartache.    In this case, an ounce of prevention is definitely worth a pound or more of cure.

At Clinard Insurance Group, located in Winston Salem, NC, we want all insurance buyers to be informed consumers.  If we can help you with your home insurance, your auto insurance or even your business insurance, please call us, toll free, at 877-687-7557.

Did Your Homeowners Deductible Go Up To $1000 While You Weren’t Looking?

Pity the poor insurance companies trying to make a buck selling homeowners insurance in North Carolina. These policies tend to lose money as a group, year in and year out due to tornadoes and hurricanes and they also subject the insurance companies to the risk of large assessments to help pay for the underfunded beach plan which picks up the wind and hail exposure to the beach houses on our coast. But, if they can’t sell you a homeowners policy, then they are not likely to be able to sell you an auto insurance policy. And that’s where they make their real money. For the past decade or so, personal auto insurance has been the most profitable line of business for insurance companies doing business in North Carolina.

Now a new cost reducing solution is sneaking up on those who purchase NC homeowners insurance. The latest insurance company strategy is to apply a minimum deductible requirement to all homeowners policies. This stragegy first appeared several years ago with a few insurance companies that wanted to reduce their homeowners presence in certain higher risk areas of the state. Instead of just cancelling all of the policies in that area in a wholesale fashion, they began adding wind and hail deductibles that were based on a percentage of the total loss. So, if you have a 5% deductible and a $100,000 loss, then your total deductible will be $5000. With the more aggressive companies, these percentages went as high as 15%.

Now we are hearing that one of the largest homeowner writing insurance companies in NC is considering implementing a minimum $1000 deductible on all of its policies, both new policies and renewal policies. Now a change of this type will certainly be accompanied with some notice in the renewal and an insurance company spin that tells you how this is best for you, but the sad reality is that very few homeowners will take the time to read this notice and so they will be blissfully unaware of this new, higher deductible until after they experience a loss. Then the surprise will sting.

So, as a buyer of NC homeowners insurance, what can you do to protect yourself? Well, first of all, you should always check your renewal policies very carefully and read and understand any notices of changes to that renewal. If your insurance company has forced a higher deductible on your policy, and if that’s not what you want, then call your agent and see if they can provide you with another option. We represent dozens of companies and so far, none of ours are implementing these new, higher minimum deductibles except for a few exceptions in coastal counties.

Clinard Insurance Group is located in Winston Salem, NC and we help homeowners every day, all across North Carolina with their home and auto insurance needs. If your insurance company is ramming a new $1000 deductible down your throat and you don’t like the way that tastes, please give us a call. We will take as much time as you need to go over your home insurance in detail and help you make sure that you get the policy you want at rates that will truly surprise you (And I mean surprise in a good way, not in a higher minimum deductible way). Give us a call, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

Does Your Credit Score Match Your Insurance Company’s Appetite?

There is an awful lot of talk these days about credit scores. You see the ads with the people walking around with a number over their head, indicating their particular credit score. While these ads really have more to do with borrowing money or protecting your credit, a little known fact is that these scores also have a huge impact on your auto insurance policy rates and your home insurance rates.

Now, to clarify, most insurance companies don’t work straight off of your credit score, but rather a more complicated formula that is called your insurance score. They pool data that includes but is not limited to your credit score from database companies like Experian and Equifax. And your insurance score can actually vary from company to company. Add to this the fact that your rates are directly affected by your credit score. Insurance companies now have so many different rating tiers that it is almost as if they have a specific rate for you that is different from the rate that any other customer might receive.

So why is this important? I was recently at an annual meeting for a very large insurance company that specializes in auto insurance and home insurance. One of the graphs that came up on the overhead showed the percentage of policies that they wrote in many different insurance score bands. I guess that is no real surprise, but then they showed which bands of insurance score they wanted to grow in next year. And guess what, it wasn’t the highest score band. Now what that should tell you is that most insurance companies are not just trying to write all the policies they can, far from it. In fact, they are trying to write policies for people who fit their niche in the insurance score universe.

So this got me thinking. If every insurance company has a sweet spot in terms of insurance score, and almost every insurance buyer has his or her own unique insurance score, how in the world can the two match up so that the insurance company gets just the consumer that it is targeting and of course the consumer, by being in that company’s sweet spot, gets the best possible rate? There is no place where people can go and have their insurance score run and then plug those numbers into a data base that sorts them to the best insurance company. So, at best, this is an inexact science. But it does underscore the need for you to have an experienced advocate working for you in the process of buying your auto or your home insurance. And if you use an independent agent, then their access to and experience with the multiple insurance companies that they represent will give you a huge edge over the direct writers who only have access to one insurance company. So, who are the direct writers who are not independent? Well, they will be names that you recognize, State Farm, Allstate, Nationwide, Progressive and Geico. These companies spend a lot of money on TV talking about saving money and low prices, all designed to steer the conversation away from their weak point, the fact that they have only their one product to offer you and thus they minimize your chances of making a good match between your insurance score and your insurance company.

At Clinard Insurance Group, Inc, in Winston Salem, NC, we want insurance consumers to be informed consumers, whether or not they choose to buy from us. We believe the independent agent gives you the best possible chance to purchase the most coverage at the lowest price consistently over the long term. If we can help you with your NC auto insurance or your home insurance, please call us, toll free, at 877-687-7557, or visit us on the web at www.ClinardInsurance.com.

You can read source information for this article among other articles at www.InsuranceAnswerGuy.com.

NC Homeowners Insurance Rates Are Changing - Here Are Tips For Getting The Best Quotes

The North Carolina Homeowners Insurance market has undergone wild gyrations this year as insurance company rate makers have tried to react and prepare for regulatory changes with the NC Beach Plan. The uncertainty of the legislatures actions and the slow motion change of the rate bureau in North Carolina have led to some crazy rate changes for homeowners policies in North Carolina. As a consumer, you want to tread carefully before switching companies.

For those NC homeowners who watch the bottom line costs of their home insurance policy, 2009 might have held some real sticker shock surprises. As our fragile Beach Plan Insurance Program threatened to take down the entire system of home insurance in North Carolina, the insurance companies reacted with rule changes, rate changes and the dreaded consent to rate forms. It’s enough to make my head spin, little wonder that it has caused great confusion for the insurance consumer.

If you are thinking of shopping for a better rate on your homeowners insurance policy, here are a few tips that you might want to consider:

First of all, if you are thinking of getting a NC homeowners insurance quote online, be careful. Insurance is a complicated contract and there is a reason that agents are heavily regulated and must be licensed by the state. Don’t put your largest assets at risk in a do it yourself disaster. I suggest that looking for a knowledgeable agent on line is a good idea, but trying to rate and issue the policy yourself is at best ignorant and at worst financial suicide.

Secondly, take a good look at the covered value of your home on your current policy. Make sure that this number makes sense in the context of what it would take to rebuild your home at today’s prices. Many people simply ask for a quote that matches their current coverage amount with questioning if that is the correct coverage limit for them.

Third, don’t forget to carry the highest liability limits that you can afford. Liability coverage is truly protecting you for the unknown and possibly unlimited loss. It is cheap protection and it makes no sense to skimp pennies here.

Fourth, if you have unusual valuable items like musical instruments, stamp or coin collections for jewelry, you should consider having it scheduled for an agreed amount on your policy.

Fifth, you will always save money on both your home and your auto policy if you combine them with the same insurance company. There are times when you may not be able to do this due to prior losses or a specialized need on one policy or the other, but those cases are rare.

Last of all, I would recommend that you use an independent agent to help you with your homeowners insurance quote. An independent agent represents many different companies and can help you find the company that is really targeting your type of home, not only from a pricing standpoint but from an underwriting rules standpoint.

At Clinard Insurance Group in Winston Salem, NC, we want all insurance consumers to be educated consumers. If you need help with your NC homeowners insurance policy, please feel free to call us, toll free, at 877-687-7557.

The source information for this article can be found by visiting www.InsuranceAnswerGuy.com.

North Carolina Homeowners: Watch Out For The Consent To Rate Letter

Several large insurance companies are now actively sending out consent to rate letters to their customers with homeowner insurance policies. This letter is bad news for anyone who gets one although the language in the letter might seem to make it sound fairly benign. But that’s like putting a tablespoon of sugar on rotten meat. Here’s some help for you in understanding why you might be receiving this letter and what it means for you.

To better understand what this letter is, you must first understand better why you are receiving it. In North Carolina, we have an insurance crisis that is getting worse each day. The problem is that the government run beach plan to insure property at the coast is under funded and when a big storm hits the North Carolina coast, there won’t be enough money to pay the claims. The way the current law is written, the beach plan will assess the insurance companies in an unlimited amount to recover these losses. This unlimited liability to the insurance companies has made them uncomfortable about writing homeowners insurance policies in NC and as a result they are finding ways to reduce the number of policies that they write, or ways to get more money in the door for the ones that they continue to insure. To read more about how this crisis click here. To learn how to protect yourself from it, click here.

The consent to rate letter will always request that you sign it at the bottom and return it to your insurance company. What you are agreeing to when you sign this letter, is that you are willing to pay rates on your homeowners insurance policy that are higher than the maximum rate that the state allows the insurance companies to charge for your policy. Currently, almost every company insuring homes in North Carolina will charge rates that are dramatically lower than the state maximum rate. In some cases the discount off of the state rate is as high as 50%. So you can see, if you sign and return this letter, you can expect a huge rate increase on your home insurance policy.

As an added insult, some of the companies sending out this letter are saying that they will only increase the rate by some small amount, say 3% or 5%. But this increase is over the state maximum rate, not the rate the homeowner is presently paying. This is deceptive and unfair in my opinion. Also, these letters will say that if you do not sign and return the letter, then the insurance company will not renew your policy.

So what should you do if you receive a consent to rate letter? First of all, I would call your agent and ask them why you received it and if there are any other options for you. If they cannot offer you any options, I would suggest you call an independent agent who has access to many different insurance companies to see if they can provide you with a quote. Any quotes below the state rate will save you money. If you are unsure where to turn or if you would like a second opinion, please feel free to call us, Clinard Insurance Group, toll free, at 877-687-7557 or visit our web site at www.ClinardInsurance.com. At Clinard Insurance Group we represent dozens of home insurance companies and none of them are currently sending out consent to rate letters.

The source information for this article was pulled from an article at www.insuranceanswerguy.com.

NC Homeowners Insurance Policy – What’s This Sewer Backup Coverage?

If you own a home in North Carolina, then you probably have a NC homeowners insurance policy. If so, you need to understand the sewer backup coverage option and whether you need this protection or not. At Clinard Insurance Group in Winston Salem, NC, we insure thousands of homes and we are often asked about this very misunderstood add on coverage to the home insurance policy. In helping new clients with their policies we have found many homeowners who need this protection, haven’t added to their policy and some who don’t need it, are wasting their money purchasing it. So, what is the skinny on this coverage?

First of all, a quick explanation. Sewer backup coverage will pay the clean up and damages costs of a backup of your sewer system into your home. And yes, this does happen more often than you may realize. There are various causes but suffice to say, if it hits your home, you will have an awful mess on the lowest level of your home. And cleanup is expensive.

Now, what few people understand is that this coverage is already built in to some people’s homeowners insurance policy in North Carolina. That is because if the sewer system that backs up into your home is your own septic system, then the NC home insurance policy covers this loss automatically. The problem comes when you experience a back up of a sewer system that is not owned by you. For instance, if you are on a city or county sewer system, and their system causes a backup of sewer into your home, your policy is not going to cover this loss unless you have added the backup of sewers and drains coverage to your policy. And good luck trying to collect for damages from your city or county sewer manager.

So the simple answer is that if you are own a city or county sewer service, then you should add the back up of sewers and drains endorsement to your NC homeowners insurance policy. The cost of this endorsement is usually around $25 per year and your regular deductible will apply to this protection. If you have any questions about your homeowners insurance policy or want to know more about this important endorsement, please feel free to call our office, toll free, at 877-687-7557 or visit us on the web at www.clinardinsurance.com.

The information for this article was taken from http://www.insuranceanswerguy.com

Homeowners Insurance – don’t let that escrow account bite you.

As a convenience (and a way to earn more money for bankers) the insurance escrow system was set up many years ago. This technique of having your home insurance policy premiums paid by your mortgage servicing company looks like a great deal for the consumer but in fact there are several traps in this procedure that the smart consumer must avoid. At Clinard Insurance Group, in Winston Salem, NC, we want all insurance buyers to be informed consumers so if you have an escrow account associated with your home mortgage, read this short article to make sure you stay out of these traps.

First of all, even though the escrow account seems like a real convenience for the consumer, keep in mind that the banks make money on these accounts and so they cost the consumer money. Sure, you have your insurance and taxes etc rolled up in your monthly house payment but remember that the bank has collected all of this money (usually 16 months or more of expenses) ahead of time. In other words, they are making interest on your money. In addition, if you have scheduled items on your homeowners insurance policy like jewelry, or fine arts, the bank is escrowing funds ahead of time on the premium associated with these items when these items, along with your personal contents inside the home, are not what you borrowed money against in the first place.

The real problem with your escrow account paying your homeowners insurance premium is that it puts your homeowners policy into “out of sight, out of mind” mode. This is dangerous for several reasons. Most people, upon receiving their annual homeowners renewal policy don’t even give it a sidelong glance, they just toss it in their insurance file. But, these same people, when forced to get the checkbook out and pay for that home insurance policy renewal bill, then take the time to look at the bill and hopefully ask questions. Questions like – “How does this renewal premium compare to what I paid last year?” and “How much coverage am I buying when I write the check to the insurance company for this renewal?” This should eventually prompt a call to their insurance agent to get these questions answered.

At Clinard Insurance Group, we often find with our new clients coming to us to purchase homeowners insurance, that if their policy has been paid by escrow for many years, they are often paying far too much for their insurance coverage and in some cases they have too little protection because they haven’t taken the time to review and update their policy each year. If your homeowners insurance policy is paid each year by your escrow account, then it is important that you take the time to review your coverage with your personal agent each year to make sure that your rates are staying competitive and that your coverage amounts are appropriate for your situation. If you have any questions at all about your homeowners insurance in North Carolina, please call us toll free at 877-687-7557 or visit us on the web at http://www.ClinardInsurance.com.


The information for this article was collected from the website blog, www.insuranceanswerguy.com.

Looming NC Homeowners Insurance Crisis – Part II How To Protect Yourself

At Clinard Insurance Group in Winston Salem, NC we are keeping an eye on a developing crisis in homeowners insurance availability for North Carolina residents. The NC Beach Plan will likely become insolvent when the next major storm hits the NC coast. In my part I article on this topic I explained just how and why this crisis has developed. This part II article tells you what you can and must do now to protect yourself from being swept up in this disaster.

When insurance companies doing business in NC begin to renegotiate their July 1 reinsurance contracts, they will discover that they are no longer able to purchase insurance for Beach Plan assessments that will hit them when the next big storm hits the NC coast. They will then begin to scramble to lessen the impact of this potential assessment. There are three ways that they can do this:

Work to have the laws in NC changed so that the insurance companies do not have to carry the losses that will be incurred by a Beach Plan that has not lived within its means…
Reduce the number of homeowners insurance policies that they write in NC…
Increase the rates on homeowners insurance policies in N.C.

How each company reacts will be a direct function of their market share. It is estimated by some experts that the assessment from a category 3 storm strike could be as much as $5 million per 1% market share. The largest homeowner insurance provider in NC is estimated to have a market share of nearly 25%. That means this company is facing potential assessments of over $125 million! So the companies with larger market share are likely to do everything that they can to reduce their market share. This means you will see companies raising rates, applying high percentage deductibles and non-renewing policies. Already in NC we are seeing companies require that consumers place their auto insurance with them in order to write a home policy. Some companies are planning to stop writing new home insurance policies in NC altogether until this crisis is settled.

The flip side of this is that some companies with very low market share in NC may take this opportunity to increase their homeowners policies. If they go from .25% market share to .5% market share, they can double the number of policies that they write and only increase their assessment risk by about $1.25 million, a price that many could afford.

So what can you do? Here’s my quick list for the steps you can take to protect yourself from getting swept up in this mess.
Contact your state legislators and ask them to work to solve the Beach Plan crisis. The rates for those owning beach property must be increased, perhaps as much as 1000%.
Make sure that you are not insured with one of the insurance carriers with the largest market share as they will be the most impacted. The top 3 in NC are: Nationwide, Allstate, then State Farm, in that order. Each of these companies will have a heavy burden in assessments when the big one hits. One of these companies is already asking their customers to sign “consent to rate” forms prior to renewal that allow them to charge rates above the rates that they filed with the NC insurance department. This is a big warning sign and should be a red flag to anyone who insures their home with this company.
Place your home insurance with a company with low market share. They will be the most flexible when times get hard and they will be most able to keep writing home insurance and the least likely to send you a non-renewal notice.
Put your home and auto insurance with the same carrier. This will give you the best rate and it will also give you more clout with that insurance company since you will be a bigger client for them.
Use an independent agent. Agents that are direct writers and only represent one insurance company like the big 3 mentioned above will not be able offer you an alternative if they close their doors for homeowners insurance. It is better to establish your relationship with an agent and a company before the market tightens up.

At Clinard Insurance Group we are an independent agency and represent many companies. Some of our companies have low market share or large surplus and they will be able to weather this homeowners crisis very well. If you would like to know more about us and how we can help you keep your home insurance intact, please call us toll free at 877-687-7557 or visit us on the web.

The source of much information in this article can be found at www.insuranceanswerguy.com.