Is there a good reason why my mortgage company gets to keep my insurance settlement until I get my hurricane damage to my house repaired?
Yes, there is a very good reason for the mortgage company to have some control over what you are paid to repair your damaged home.
When you bought the house, you took out a loan, and as a part of that transaction the lender required that you purchase an insurance policy to protect the lender’s financial interest in your home as well as your own. Yet many people are taken by surprise when the insurance payment for damages to their homes was made out to them and the lender. When you think about it, though, the company holding the mortgage has to have some way of protecting its financial interests.
When you got the check, you were no doubt concentrating on having your home repaired and getting on with your life. Your first thought was of getting those repairs done as quickly and effectively as possible. But the lender has no guarantee that everyone will act responsibly when paying their bills.
In any case, the person might think they of the money as a kind of loan to be paid back soon. Meanwhile, that little leak in the roof or the structural damage here or there in the foundation might not be a problem at first. By the time the money is spent and the house really starts to suffer from the need for repairs, the mortgage company has lost total control over its financial investment.
By being a cosigner on the check and a partner in the decisions about the repairs of the home, the mortgage company is defending its interests and acting in your best interest as well. It’s true that you probably don’t need somebody to watch over you to make sure you use that insurance payment wisely, but insurance and lender contracts have to take into account the possibility that some people may not act as responsibly as you.
Just how much oversight the mortgage company has in a claims settlement matter will vary somewhat, depending on your individual contract. As long as the company is not unreasonable in the demands it places on you during the rebuilding process, it is probably acting within its rights. If you feel your mortgage company is not acting responsibly, give us a call to discuss steps you can take to resolve the problem.
Do you think someone would really consider setting fire to a hurricane-damaged home to collect insurance money? If they do, won't they be in big trouble if they get caught?
We have very good reason to believe people in hurricane-ravaged areas may set fire
to a home or other property to try and collect insurance money. And everyone--from
local law enforcement to the Department of Insurance to insurance companies--is
watching that situation very closely. Right now, local authorities are reporting
at least one suspicious fire a day in areas hardest hit by Katrina and Rita. Some
of those fires are breaking out just hours after the adjuster has talked to the
homeowner about insurance coverage. When there is no one living in a storm damaged
area and no electrical power, a sudden fire in the middle of the night looks very
suspicious.
People may think they are getting away with committing arson if they aren't arrested
right away. They'd better think again. Investigation of arson takes time, but law
enforcement and insurance company investigators are very skilled at gathering the
evidence it will take to bring an arsonist to justice.
Everybody has a stake in helping to stamp out arson and other types of insurance
fraud. An estimated $27 million in fraudulent claims is collected in Louisiana every
year by people who torched their homes or other property.
My message to anyone considering arson is: don't do it. If you are found guilty
of committing arson, you will get no insurance money, and you could go to jail for
a very long time. Setting fire to any structure can get you a hefty fine and several
years in jail. Setting a fire that endangers human life brings with it an even stiffer
penalty.
You can help stamp out arson fraud by following a few simple steps: First of all,
be aware of your surroundings. If you witness suspicious activity, make a mental
note of what you saw. Second, if you or someone you know has good reason to suspect
arson has occurred, contact your local law enforcement office. Third, contact our
Fraud Division at the 800 number listed below. Tell us anything you can about what
you suspect arson. You can make your report confidentially and it will be thoroughly
investigated.
Arson by someone living near you can endanger your life and the lives of members
of your family. Arson aimed at collecting insurance benefits costs us all. If we
remain silent, we pay the bills and bear some of the blame for any loss of life
that might occur.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214. Our e-mail address is public@ldi.state.la.us
Who do insurance adjusters work for? The one who came
to my house after the hurricane said he doesn't actually work for my insurance company.
How does that work?
There are three kinds of adjusters operating in this state in the aftermath of Katrina and Rita. They are: insurance company adjusters, independent adjusters who contract with insurance companies and public adjusters who offer their services, for a fee, to policyholders and others who want help with getting their claims paid by the insurance company.
The adjuster you worked with was no doubt a contractor who was working for an insurance company, which made that person a legitimate company representative. For future reference, remember that anyone who is representating a company should be able to show an ID. If you have any concerns about an adjuster or any other insurance company representative, always contact the insurance company for verification.
In Louisiana, we do not license adjusters, but the company the adjuster is working is responsible for that adjuster at all times, just as it is responsible for all the other employees and contractors who conduct business for that company in this state.
Because public adjusters are not employed by anyone the Department regulates, we are requiring that they register with us, whether they live here or have just come into the state to help with the storm damage claims.
Through the registration process, we gather the vital contact information we need if some question about a claim comes up after the fact.
To return to your question, insurance adjusters, whether contractors or employees of companies, play a vital role in the claims process. That is never more evident than it is after a disaster. Many companies do not have enough people on staff to handle such a large workload and rely on contractor to help them expedite the overwhelming number of claims they receive.
If you have a problem with an adjuster or anyone else in the insurance industry, contact the appropriate insurance company or call us for further information.
After Hurricane Katrina, I heard someone bragging about filing a claim when they didn't have any damage. I know fraud is bad, but is there anything I can do about it?
Unfortunately, some people are exploiting the relief efforts meant for the true victims of the hurricane. You may be surprised to know that Louisiana law requires you to report any knowledge of insurance fraud to the Fraud Section of the Department of Insurance. Reporting insurance fraud is also in your best interest because it costs you and me money. Statistics indicate that more than 10 percent of every insurance dollar we pay goes to make up for insurance claims fraud.
We follow up on every insurance fraud tip we get, and you can report your suspicions of fraud confidentially. Make your fraud report by calling our toll free number, 1-800-259-5300, and asking for the Fraud Unit, or by calling the Fraud Unit directly at 225-342-4956. Or, fill out your report on the Internet by going to our website, www.ldi.state.la.us, and clicking on Report Fraud.
One of two major sources of information about fraudulent insurance activities is individuals like you. The other major source is insurance companies, who can lose their right to do business in the state if they don’t report suspicions of insurance fraud committed by their employees, agents or the general public.
Individuals usually contact us quickly when they feel their insurance agent is pocketing their money instead of sending it to the insurance company. However, we also need to hear from you and your neighbors if you have reason to believe that someone is committing claims fraud. The bit of information you give us may not seem like much to you, but it could be that one piece of the puzzle that will lead to the conviction of a perpetrator of fraud. For example, in one case, our Fraud Unit received an anonymous tip that a homeowner had submitted a bogus theft claim for valuable personal items that the homeowner still had. That anonymous call started an investigation that led to the arrest and conviction of the guilty parties.
If you have reason to believe that an individual or a group has committed insurance fraud, do your part by passing that information along to us. We’ll do the rest.
Hurricane Katrina has raised a lot of questions about homeowners and flood insurance. How do I make sure that I am properly covered in the future?
I always tell people they should review all their insurance policies at least once a year. Usually the beginning of the year is a good time to do that. But, if I were you, I'd be looking over all my policies right now.
Some important things you should consider when reviewing your insurance policies are:
1. Contact us here at the Department of Insurance.
The Louisiana Department of Insurance works for you. We are an unbiased source for
information that can help you understand what you need and should expect from your
insurance policies and providers.
2. STOP. CALL. CONFIRM...before signing up for any new policies. Call the
Department to verify that the insurance company and producer you are dealing with
are legitimate and licensed to do business in Louisiana.
3. Schedule a routine insurance check-up.
It is a good idea to get with your insurance providers at least once a year to make
sure you have the right insurance, in the right amounts, to adequately protect you
and your family. Be sure to let them know of any changes in your life, such as marriage
or a birth in the family or additions to your home.
4. Dig for discounts.
Ask your producer about ways you may be able to reduce the cost of your coverage.
Some companies offer discounts for such things as good driving, good grades, special
education and training, and safety equipment, as well as discounts for multiple
policies and healthy lifestyles. Also inquire about the cost benefit of opting for
higher deductibles.
5. Filing a complaint.
If a claim has not been resolved to your satisfaction in a reasonable amount of
time, contact us at the Department of Insurance. Often, your questions can be answered
without a written complaint. However, if you feel you need to file a formal complaint,
contact us for a complaint form and a copy of our brochure, How to File an Insurance
Complaint.
Many family members will be staying at our home because of Hurricane Katrina. Do I need to make changes in my homeowners policy to be sure they are covered as members of the household?
You should let the insurance representative and company who handles your homeowners
policy know of the change in your household as soon as you can.
Your family will be covered under the liability provisions of your homeowners policy.
If, for example, someone visiting your home makes a claim against your homeowners policy for something for which a family member is allegedly responsible, it would be covered. However, as a member of your household, your family member cannot claim liability damages under your homeowners policy.
Personal belongings could present a special problem, depending on their dollar value. If, for instance, your guests have jewelry or other valuables with them, you will want to consider additional insurance. A rider, similar to the one you might have on your own valuables, might be your best solution in that case. Your insurance representative can help you decide on your best option, depending on the specific situation.
A word about minors: Your basic homeowners coverage would extend to minors living in your home, with some possible exceptions. If the minor is a foster child or an evacuee, discuss with your insurance company what special rules may apply. Be prepared when you contact your representative by having with you any written contracts concerning the arrangement that may affect your homeowners liability.
Adult relatives and their possessions would be considered a part of your household, as minor relatives are. However, the personal possessions of adult nonrelatives might be covered under your homeowners policy, although they personally would not be covered by the liability provision.
In a recent radio interview, I heard you say that we should all check the deductible on our homeowners insurance. Is that true even though I’ve had insurance with the same producer for 15 years?
Yes, you should double check your deductible even though you have had the same producer and the same basic insurance policy for a number of years. Here’s why.
Your homeowners or renters insurance company can make some changes in your deductible, such as adding a hurricane or windstorm deductible, at the time your policy is up for renewal. Generally you will be notified in writing before that happens. The problem is that many people don’t read the notices they get from their insurance company. They just assume that as long as they keep paying their premium on time everything will remain the same, but that’s not always true.
For example, if you live in a hurricane-prone area your company may add a hurricane deductible of 2% to the insurance on your home. If that happens, you could find yourself paying a deductible far more expensive than the $500 or $1000 deductible for all covered perils that you have been carrying all those years.
The good news is that, in most cases, if a weather-related deductible has been added to your policy, you have the option of a buyback. That is, if you choose to pay a higher premium, you may be able to have any storm-related deductible removed. However, if you aren’t reading the information you receive from your insurance company, you run the risk of getting a big surprise the next time you have storm damage.
On a related subject, you should also be on the lookout for a rise in deductibles or a reduction in benefits on your health care coverage. Here, too, you should be notified in writing of any changes before they go into effect. The message is clear: Be sure you know what you are consenting to before you write that next check for any insurance renewal.
To be sure you keep up with changes to your policies, check with your producer or
health plan representative for the latest information. If you have any other questions,
please contact us here at the Department of Insurance.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I have just learned that my homeowners insurance does not cover flooding. What about other Acts of Nature, like tornados, hail and hurricanes?
As you point out, flooding is not covered under your homeowners or renters insurance. However, you may purchase flood insurance through a local property and casualty insurance carrier participating in the National Flood Insurance Program. Also, you do not have to live in a designated flood plain to be eligible for flood insurance.
Most homeowners policies, even on property along the coast, cover wind and hail damage. If you aren’t sure about your own policy, check with your producer (agent). If you find you do not have wind and hail coverage, you can purchase it as supplemental coverage through two alternative sources, the FAIR and Coastal insurance plans. Hurricanes are an important issue in themselves as hurricane deductibles become more and more prevalent on property insurance in South Louisiana. A hurricane deductible lowers the amount of your regular insurance premium, but it significantly raises the amount you will have to pay out of your own pocket if your property is damaged by a hurricane.
Even though your homeowners insurance may cover all the usual perils except flooding, be aware that a large percentage of the loss from a hurricane is flood related. This means that, depending on the policy, flooding related to the hurricane might not be covered by your homeowners policy. Note that the weather-related exclusions discussed here apply to homeowners and renters property insurance. They do not affect the flooding provision of comprehensive insurance on your car, truck or SUV.
Other natural perils that may require special insurance coverage are earthquakes and landslides. We don’t have a significant concern with landslides in Louisiana, but earthquakes are a definite possibility. Earthquake insurance is available through several companies writing insurance coverage in the state.
If you are thinking of buying flood insurance, PLAN AHEAD. There may be as much as a 30-day waiting period from the time you buy flood insurance until it goes into effect. Also, you cannot buy home or auto insurance in a hurricane-prone area to cover damage from a storm that is already in the Gulf of Mexico.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
How do I choose a reliable, professional contractor if a disaster damages or destroys my home or business?
We all hope a natural disaster or other catastrophe never strikes our home or other property. However, it can happen, no matter where we live.
If you need a contractor after a disaster or in any emergency situation, be extra careful. Get bids from at least three different sources. Do not do business with a contractor that cannot show proof of insurance. Also, only do business with a contractor that is bonded, which will offer you some protection if the job is not satisfactorily completed or supplies purchased to make your repairs were not paid for.
With all contractors, request the names and phone numbers of at least two references who have had similar work done by them in the last year. Follow though by calling each reference and discussing the contractor’s work in some detail. In addition, call your Better Business Bureau to learn if there have been any complaints filed against them. Be especially cautious in dealing with an out-of-state contractor who may have just breezed into town to take advantage of the local situation.
Before any work is begun, request a clearly worded, itemized contract. Review it with the contractor and make sure you understand and agree with its contents before the contract is signed. The contract should include the following:
- A separate breakout of labor and cost of materials.
- The contractor’s responsibility to get all required permits.
- The date the project is to begin and the date it is to be completed.
- Proof of insurance coverage from the start date to the finish date.
- A statement guaranteeing that the work area will be left in its original condition when the job is done.
Go one step further and ask that the contractor’s insurance carrier mail a certificate of insurance coverage directly to you. Finally, don’t do business with a company that demands money from you upfront.
Following the suggestions outlined here can help you avoid additional problems during the difficult times that follow any major storm or other disaster.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My husband and I are selling our house and disposing of everything that won't fit in our new motor home. What changes should I expect to make in my insurance coverage?
You will want to make sure you carry adequate liability insurance on your motor home. Consider limits of $50,000/$100,000/$50,000 or more, depending on your financial worth. The chances are that the 10/20/10 auto liability limits required on motor vehicles by Louisiana law will not be adequate.
When you sell your home, you will, of course, cancel your homeowner's policy and receive a prorated refund for the unused premium you have paid the insurance company.
Talk with your producer (agent) about possibly buying an umbrella policy to offer liability protection above and beyond what your insurance on your motor home will cover. If you already have an umbrella policy, review it with your producer to determine whether it needs to be updated to make up for the loss of the homeowners coverage.
Remember that any riders, or endorsements, on your homeowner's policy will be cancelled when the coverage on your house is cancelled. For example, if you have added an endorsement on your homeowner's policy to cover jewelry, firearms or a boat, that coverage will no longer be there once the homeowners policy is gone. Don't forget about insurance coverage you now have on items like jewelry that are located elsewhere, such as in a lockbox.
When finding a new home for your belongings, be aware of continuing liability on such things as vehicles you give to family members or valuables you pass along to others. You will be responsible for insuring any vehicles as long as they are registered in your name or your husband's name. You will also need to consider whether you want to provide insurance coverage on family heirlooms and other items of value that you pass on to others.
If you plan to travel, find out what healthcare coverage you will have. Some health insurance plans provide less coverage, or none at all, when you leave your home area. Special insurance is available to make up the difference. You may also need special insurance for your motor home if you drive it beyond U.S. borders, especially if you take it to Mexico.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Shouldn’t I get some of my homeowners insurance payment back? I paid my annual homeowners insurance premium on January 3 and the rates went down $300 just four days later because our fire station has some new equipment.
Insurance rate changes are almost always set up to become effective for renewals on or after a certain date. When you miss out on a rate reduction by just a few days, it may not seem quite fair, but over a lifetime of paying premiums, it should average out. After all, if your home's rates had gone up instead of down, you would be one of the lucky ones who just barely missed having to pay the extra $300 this year.
The January 7 effective date of your company’s rate reduction was no accident. It came about as part of an overall plan that applies to insured homes and other property throughout your fire district.
Here’s how the plan, or system, works. As you know, your home or other property is considered safer from fire if it is located in an area where there is good fire protection. The Property Insurance Association of Louisiana rates each fire district on a scale of “1” to “10,” with “1” being the best. PIAL recently resurveyed your fire district and determined that it offers better fire protection than it did in the past. When the “grade” improved, perhaps going from something like a “6” to a “4,” it automatically triggered a formula for reduction of rates for people with policies like yours with your particular company. Each formula for rate changes had been approved for each insurance company writing property insurance policies in your area by the Louisiana Insurance Rating Commission that I chair. Your district was just one of several that received updated ratings effective January 7.
One word of caution. You probably did not receive the same rate reduction from your insurance company that your neighbors did if they had coverage with a different insurer. Each company files its own rate change formula separately. But I assure you that any increase or decrease in rates that you receive is based on the formula approved for your company by the Insurance Rating Commission.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I recently got a job out of state and will be moving. What do I do about my insurance?
Whether you move to another state, or even to another town, there are certain steps to take with all primary insurances. Primary insurance includes Homeowners Insurance or Renters Insurance, Health Insurance, Auto Insurance and Life Insurance.
First of all, remember to notify your current insurance producers (agents) of your new address so they will be able to contact you if necessary. Also, keep in mind that ratings for Homeowners and Auto Insurance are not the same in every state, so your premium rates could go up or down, depending on where you move.
For Homeowners Insurance, if you buy a new home you will need to insure the new property. Likewise, if you've sold your old home, that policy will have to be cancelled. It is important that coverage on your new policy begin as soon as your old policy ends. If you plan to rent, Tenant Insurance is beneficial. It protects your personal belongings. For example, if your apartment complex burns down, your belongings will be insured. Remember, however, that Flood Insurance is a separate coverage. This is important for people who rent ground floor apartments as well as for those who rent or own homes in areas that may flood.
For Auto Insurance, if you move out of state you will have to register your automobile in your new location. Check with your local Department of Motor Vehicles for further information on how to properly register your automobile. Keep in mind that insurance requirements differ, depending on what state you move to. Regardless, it is always important that all paperwork regarding your Auto Insurance is updated.
For Health Insurance, if you have an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization) plan, you should get a list of approved physicians and health care facilities in the area from your insurer. By using doctors and facilities on the list, you can avoid paying higher prices than some physicians and facilities not on the list may charge.
For Life Insurance, remember to notify your insurance producer of your new address so that he or she can contact you and continue to help you maintain a plan that fits your needs.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’ve been told I need to buy travel insurance if I go out of the country. I already have all the recommended kinds of insurance on my family and myself. Why would I need more?
Even if you are comfortable with the amount of insurance you carry, your vacation might involve special risks that will not be covered. Keep in mind that personal insurance does not cover certain things such as Trip Cancellation or Interruption and Emergency Medical Evacuation Services. So, if you have a family member with a special medical condition that could cause you to have to return home early, or your travels are interrupted due to airline or weather problems, you may want to consider trip insurance so you can be reimbursed.
Homeowners policies will provide coverage for lost or stolen luggage but only if the value of the property loss exceeds the policy deductible. Stolen articles are covered and lost items may or may not be, depending on what your Homeowners policy covers. If you purchase items on your trip, make sure you keep the receipt just in case they are lost or stolen. Remember that if you do not have a floater for your jewelry you only have limited coverage under your Homeowners policy for theft. Also, if you plan to rent a car, consider the possibilities of damage to your rental. Most credit cards provide only secondary coverage, requiring you to file a claim with your own auto insurance first if any damage occurs. If you purchase coverage on the rental car, that insurance is primary. Lastly, in response to recent events and public concern, policies are now available to cover acts of war and terrorism.
Whatever your travel plans, there are possibilities that you may need Travel Insurance. With that in mind, the three basic insurance questions to ask yourself are: what insurance do I have, what part of it covers me and my family while we are traveling and what additional coverage will I need to meet the special requirements of this trip? To learn whether you have the insurance you need for your trip, start by contacting your own insurance representatives several weeks before you plan to leave. Find out the type and amount of insurance you already have that will cover you while you are traveling.
With the help of your insurance representative and your travel agent, you should be able to buy insurance coverage that will give you peace of mind, no matter where your travels take you.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’m buying an established business in my hometown. Any
suggestion on what kind of business insurance I will need?
Congratulations on your business venture. As you no doubt are aware, there are several
kinds of insurance you will want to consider. What coverage you decide to buy will
depend partly on the size and type of your business. Another consideration will
be whether to buy separate policies or a couple that provide a combination of coverage.
Let’s take a look at some of the possibilities.
Fire insurance is the oldest and most familiar kind of insurance we have, and you
will, of course, want to have fire insurance protection on all buildings and other
insurable items connected with your business. Be sure you understand possible limitations
or special consideration in your basic policy relating to such things as hurricanes,
earthquakes, war and terrorism. These will differ from company to company, so ask
your agent for details. As is true of your homeowners’ policy, if you want
flood insurance, you must buy it separately.
Also consider Business crime insurance to protect your business assets from crime
ranging from simple robbery to embezzlement and a host of criminal activities in
between. Professional liability provides protection if your business, either directly
or indirectly, leaves you open to being sued because of loss or damage to property
damage or bodily injury suffered by someone not connected with the business. And
look into the possible need for workers’ compensation insurance for employees
who may incur work-related illnesses or injuries.
You’ll also want to consider business interruption insurance to cover a specified
percentage of the loss you may incur if you have to shut down your business temporarily.
Again, you will want to ask about limitations or restrictions, such as terrorism,
that may affect the coverage with any given company. To make an informed decision
about business insurance, sit down with your local producer (agent) or other insurance
company representative to discuss the matter. Your accountant should be able to
help you prepare for the meeting.
Just to be sure you buy the best business insurance coverage for you, consider getting quotes from two or three different companies before making a final decision.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Are Acts of God and Acts of Nature the same thing? Are they covered by insurance?
The terms Acts of God and Acts of Nature are used to describe similar kinds of occurrences that, for the most part, are beyond human control. Hurricanes, earthquakes, and floods are commonly used as examples.
Most insurance policies do not directly cover the issue of coverage of Acts of God. Instead, insurance policies, especially homeowners or other property coverage, generally list either the perils that are covered or the ones that are excluded from coverage. Acts of God are usually not treated as a group.
Property insurance coverage on your home, for example, can range from a standard fire insurance policy that only covers a few types of losses to an All Risk policy that covers all kinds of losses to the property except those that are specifically excluded. The type of insurance needed to qualify for a home loan, or the cost of the policy, often dictates which policy an individual policyholder chooses.
Flood insurance is a familiar example of a peril that you can always expect to be excluded from your homeowners policy. Insurance to cover flooding must be bought as a separate policy. Some property insurance policies also exclude wind damage while others may include the additional cost of a separate hurricane deductible. For an additional premium, coverage for these commonly excluded perils can be purchased. Note that flooding, wind damage and hurricanes may all be defined as Acts of God, but they are treated quite differently in property and casualty insurance policies.
The rules governing Acts of God on homeowners insurance also apply to renters and commercial property insurance. However, automobile insurance must be considered as a separate issue. If a vehicle is covered by comprehensive insurance, it is generally insured for most physical loss (such as fire and flood), including theft. One notable exception is that comprehensive coverage excludes collision, which must be added to the policy for an additional cost.
Your question about Acts of God is a good one because it brings to mind the number of combinations of property insurance coverage that are out there. Policyholders need to educate themselves on what is and is not covered under the specific terms of each individual policy before a loss occurs.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Is my cell phone covered under my homeowners policy, or do I need to buy extra insurance for it? What about deductibles?
The answer to your first question is yes, your cell phone would be covered under most homeowners policies for the usual named perils, such as fire and theft. The problem, as your second question suggests, is the deductible. If your homeowners policy stipulates that you pay the first $250 or $500 before you collect any money from the insurance company, having coverage on the cell phone isn’t going to be of any help.
There are, however, alternative means of insuring cell phones that you may want to consider. Two of the best known are personal effects and personal articles coverage. Ask your agent if an endorsement can be added to your homeowners insurance policy to cover personal property, such as your cell phone. If not, separate coverage should be available under what is called an inland marine policy.
In either case, you will be asked to specifically list what items are to be covered in the policy. One advantage to the inland marine policy is that it is available even if you do not have a homeowners or renters policy. Before the advent of cell phones, items that were most commonly included in such special policies or policy endorsements were jewelry, cameras, fine arts, musical instruments and precious stones.
Such coverage is designed to fill gaps in coverage at both ends of the spectrum in terms of value per item. On the one hand, it provides reimbursement below the usual deductible level. On the other, it provides reimbursement for losses too great to be fully covered under the terms of the standard homeowners policy. Jewelry is perhaps the most popular item in this category.
Personal effects insurance provides similar coverage, but it is specifically designed for personal items usually carried or worn while traveling. It applies to all members of a household, anywhere in the world.
If your insurance company does not handle the various types of coverage discussed here, shop around. When you narrow your choices down to one or two, feel free to contact us here at the Department of Insurance to ensure that the company and the agent you choose are reliable, financially stable and authorized to do business in Louisiana.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I stepped in a hole in the yard of the house I am renting. Are my medical bills covered by the landlord's insurance?
The answer to your question will depend on a number of factors. Under present law, the liability portion of the landlord's insurance on the property cover liability. That means the insurance company will pay up to the limits of the policy if a law suit is brought and it is determined that a bodily injury was the result of negligent acts or omissions on the part of the landlord. Let's look at two extreme examples of what can happen, depending on the circumstances.
On the one hand, let's say the hole in the yard was there because you or a member of your family dug up some dirt and failed to fill it back in. That would clearly not be the fault of the landlord, and the insurance would not pay. On the other hand, let's say you fell in a large sunken place on the property that was difficult to spot because it was covered by debris.
Furthermore, let's say the landlord had not warned you of the hazard and you have
proof that the last renter complained about the hole more than a year before your
accident. In that case, the landlord would clearly be negligent.
In a less extreme case, let's say your injury was caused by the settling of the earth or some other normal change that occurs in the landscape. In that case, your landlord would not be negligent and the insurance company would not pay your medical bills.
Also be aware that, if the landlord or the landlord's insurance company does pay your medical bills, you should not turn those same expenses in to your health care policy. When you are being reimbursed for actual expenses, such as medical bills, you should not receive a higher reimbursement than the dollar amount of those expenses.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I want to operate a small business out of my house. Will I need extra insurance?
The first place to look for the answer to that question is your homeowners or renters insurance policy. Homeowners policies spell out the limits on the kind of coverage you already have. For example, most will only cover products used in business for up to $1,000 in your home and $250 away from your home.
With many home-based businesses, you can soon build up quite an inventory of equipment, such as computers, printers, calculators and fax machines. Most of that equipment is not covered by your homeowners policy when it is away from your residence unless it is being repaired, serviced or used temporarily. Perhaps more importantly, laptop computers may not be covered by your homeowners policy at all, no matter where they are.
If you are using an employer's equipment for the work you are doing at home, check with the company on whether that equipment is insured. Corporate insurance policies may only cover business equipment at the primary work location.
Similarly, your insurance company may refuse to pay even a minimal amount for damage or loss of equipment owned by your employer.
Also be aware that most homeowners policies will not provide liability insurance protection if, for example, a client slips and falls while at your home on business. Generally, if you have a limited amount of equipment and do not have clients coming to your home, a rider, or endorsement, on your homeowners policy may cover your additional insurance needs.
Until recently, if a homeowners endorsement was not enough, your only choice would have been a full-blown commercial insurance policy. However, as the number of home businesses grows, the insurance industry is beginning to respond. Many companies are now offering affordable policies or endorsements specifically tailored to the home-based business.
Check with your homeowners insurance agent for options available under your present policy. If you can't get what you need by expanding the coverage on your homeowners policy, consider shopping around for the home-based insurance coverage that is best for you.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I'd like to know more about homeowners insurance. Do you have a publication that might help?
We have published a free homeowners insurance information booklet called "Consumer's Guide to Homeowners Insurance." Whether you are thinking of changing insurance companies or buying homeowners or renters insurance for the first time, you should find this publication helpful.
The guide explains that homeowners insurance is actually a "package" policy that covers both property and liability claims. What is often called the fire insurance portion of a homeowners policy applies to claims you file for loss or damage to your home or your personal belongings. The liability portion of the policy applies to claims others file against you for injury or damage to themselves or their property.
In today's sophisticated insurance market, there are more variations in the homeowners policy package than ever before. The guide explains those variations in concise, easy-to-understand language.
The guide explains the various "forms" of coverage that are available. As with other products you purchase, you will find that the basic form of homeowners insurance costs less, and gives you less insurance protection, than the comprehensive form that covers a much greater range of risks.
For people who own condos or rent their homes, the guide offers information on policies tailored to their personal property and personal liability insurance needs. Other important types of insurance that are discussed include flood insurance coverage, which must always be bought separately, and business property insurance.
Even if you are satisfied with the coverage in your present homeowners policy, the company is allowed to make significant changes in your policy simply by notifying you of those changes in your renewal notice mailing. The Consumer Guide can help you understand those proposed changes before you send in your renewal payment.
To help you evaluate your insurance needs, a handy insurance shopping worksheet and a blank insurance rate comparison chart are also included in the guide. For your free copy, contact us at 1-800-259-3500 and ask for our "Consumer's Guide to Homeowners Insurance," or look for it under "Guides and Forms" on our web site at www.ldi.la.gov
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I would like to have a dog. Is it true that my homeowners insurance may be canceled if I buy the wrong kind?
Some people have had problems obtaining or renewing homeowners or renters insurance policies because of their choice in dogs. The reason is that dog-bite claims are paid under the liability portion of your insurance on your home, and the cost of these claims is going up at an alarming rate.
When deciding what kind of dog to buy, be aware that certain breeds are high on the list of those whose behavior has led to costly lawsuits paid for under homeowners insurance policies. Doing some research on this subject should be worthwhile for two reasons. Knowing the attack record of different dogs will tell you something about their insurability. It will also help you determine whether your pet could pose a threat to the safety of others, especially when you consider that most reported dog bites involve children.
Ask your homeowners insurance producer (agent) about your insurance company's policy on dogs before you buy. Some insurance carriers will actually refuse to sell homeowners insurance to anyone who owns certain breeds of dogs. Others feel that the key to any dog's behavior is responsible ownership. Most take a very dim view of unprovoked attacks by any dog.
Your question suggests that you may already know a homeowners or renters insurance company might not renew your policy if you were sued for what was clearly an unprovoked attack by your dog. If that happened, you could ask the company about measures you could take, such as having a dog spayed or neutered, that would make it possible for you to keep the policy. As a last resort, you could ask for a policy that excluded liability coverage on your dog.
Generally speaking, though, if your new dog is properly trained and you see that it is properly supervised or confined at all times, it should never be of any concern to your insurance company.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A friend and I are pooling our money to buy a house in both our names. Can you tell me what effect this joint ownership will have on our homeowners insurance? What if we also decide to put our vehicles in both our names?
Buying homeowners through the insurer of your choice should not be a problem, as the house will be in both your names. The same would be true if you were renting or leasing your home in both names and buying renters insurance. On the vehicles, I'd suggest you check with several insurance companies, and perhaps even talk with a lawyer, before making the final decision on the issue of joint ownership.
All else being equal, living in the same household should not affect the status of your current auto insurance coverage if each of you is insured as the sole owner and driver of your vehicle. One possible disadvantage of leaving the private passenger vehicles in your individual names is that you may not be eligible for any multi-car discounts. The exact nature of multi-car discounts or multi-policy discounts on homes and vehicles varies from company to company because this is a decision left to the discretion of the individual company.
Combining two households may also raise the possibility of joint health care coverage. Some health insurance providers offer health insurance coverage to household members not related by marriage or blood, and others do not. As with homeowners and motor vehicle coverage, you will need to check with each individual health insurance provider for that company's policy on the subject.
Even though it is a good idea to shop around, it is always a good idea, of course, to seriously consider continuing to do business with insurance agents and companies you have had a good business relationship with up to now.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Any time you have additional people living in your home for an extended period of time, you should notify your insurance producer (agent). This simple gesture could make filing a claim much easier if the need arises. Even without notification, while your grandson lives with you he is automatically covered as a member of your household for personal liability and loss of personal possessions just as other members of your household are.
If, for example, someone files suit against your grandson, he will be covered under the personal liability portion of the policy. That also means that he cannot claim liability damages against you under your homeowners policy, any more than other members of your household can.
The chances are that your existing homeowners policy will adequately cover your grandson's personal belongings. The exception would be if he brought with him something that is of considerable value. An example would be a rare coin collection. In that case, you would want to consider adding a rider to your homeowners policy such as the one you may already have on your own jewelry or other big ticket items. Your insurance representative can help you decide whether your grandson's belongings warrant additional coverage if that is a concern.
Your basic homeowners coverage would extend to other minors living in your home as well, with some possible exceptions. If a minor is a foster child or a foreign exchange student, you would be wise to review with your insurance producer any written contracts concerning the foster care or foreign exchange arrangement. There could be provisions in such contracts that would affect your homeowners liability coverage.
If an adult is living in your home on a temporary basis, the extent of the coverage can vary, depending on whether the person is a relative. Adult relatives are ordinarily considered a part of your household under all provisions of your homeowners insurance. However, non-relatives may not be covered under the personal liability portion of the policy.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I live in a wooded area. How can I make my home more resistant
to forest fires? Will my insurance company help pay for such improvements?
There are a number of things you can do to make your home more fire resistant. The
insurance company won’t reimburse you directly for any of the improvements.
However, adding fire resistant features may entitle you to discounts on future insurance
premiums that would help to defray your costs over time.
No matter where you live, the roof of your house will be highly vulnerable to outside sources of fire. Generally speaking, homeowners should consider using fire-resistant building materials for any exterior building or remodeling project.
Overhanging tree branches should be trimmed regularly because they can be ignited
from a nearby fire. Remove dead branches promptly and clear away all branches that
are within 10 feet of a chimney. For added protection, cover chimney and stovepipe
vents with nonflammable screens of small mesh. These screens may also be placed
on windows and skylights which are a significant entry point for fires.
To cut down on glass breakage from external fires, install dual or triple paned
windows. Also be aware that burning shrubs or underbrush as much as 30 feet away
from a window can start a fire through the glass. Speaking of distance, firewood
and butane or propane tanks should be located at least 30 feet away from all flammable
structures.
Inside your home, properly maintained smoke detectors and fire extinguishers are your best defense, and fire alarm and sprinkler systems are also options. In your case, consider placing a fire extinguisher in areas exterior to the main house, such as a garage, a workshop and any outlying buildings. Fire resistant bedding and upholstered furniture are also important fire deterrents.
If you do not have access to a community water system or other adequate water source, consider sharing the cost of a water storage tank with neighbors or purchase one on your own.
Exercising good maintenance habits in the area surrounding your home will provide some protection if a fire breaks out nearby. Before deciding on additional fire safety measures, talk with your insurance producer. Knowing what insurance discounts may be available will help you get the most fire protection for your money.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
The answer to your question is yes, if the injury or harm is unintentional and is not covered by other insurance. The personal liability coverage on your homeowners policy covers suits brought against you because of unintentional acts resulting in property damage or bodily injury to others. That insurance extends to your spouse, other adult relatives in the household and children under 21 who are under your care. Almost any incident is covered, no matter where it occurs. For example, if you accidentally hit someone in the head with a ball while playing recreational golf in another state, or even out of the country, you will be covered.
Liability limits on homeowners and renters insurance policies vary. Ask your insurance producer (agent) or company representative if you are unsure about what your policy covers and what special limitations may apply. Consider raising the limits if you have property and other assets worth more than the amount of liability coverage you now have or if you are in a highly visible position or profession that may attract major lawsuits.
Many people cover the risk of very costly liability claims by purchasing an umbrella liability policy. As the term implies, an umbrella policy is designed to pay liability limits above those you can get on your homeowners policy.
If you are thinking of buying an umbrella policy, begin by finding out the maximum amount of personal liability your homeowners policy can cover. Shop for an umbrella policy that will pick up where your homeowners leaves off. You do not have to buy the homeowners policy and the umbrella policy from the same company. However, you will want to make sure you coordinate the liability limits so that the umbrella policy covers any liability claim in excess of the amount your homeowners will pay.
In summary, your homeowners policy will pay for unintentional bodily injury and property damage liability claims not covered by other insurance. This applies to all members of your insured household. Contact your producer if you have questions about whether you should purchase an umbrella policy to provide you with additional coverage.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
We seem to always take a lot of personal belongings with us when we travel. Will our homeowners insurance cover our things when we are on vacation?
That is a good question. Many of us do travel with personal belongings, from a favorite pillow to the family video camera.
Questions of coverage can arise when you take insured possessions from your home to another location. After all, the property protection portion of our homeowners policy is primarily designed to protect our home and our possessions in that home.
Just how much coverage you have when your possessions are damaged or stolen away from home varies, depending on the circumstances and the specific terms of the policy.
In most cases, the way the coverage works really makes a lot of sense. If you own a camp or other second home, the TV set you normally leave at that location may have very limited coverage under your homeowners policy. Obviously, you can't expect your homeowners policy on your primary residence to cover a house full of furniture at a second location.
On the other hand, if you rent or lease a motel room or a condo for a few days or weeks each year, most of the belongings you take with you should be covered there just as they are when you are at home.
For example, if the condo you are renting is burglarized while you are out for the day, your personal belongings are generally covered while you are staying at that location. Note that these items are covered away from home because they are with you. If you leave them at one location away from home while you travel to another location, they probably will not be covered if there is a loss.
The same rule of thumb applies to those items in your home that are covered by a rider, or endorsement, on your homeowners policy. Such items often include cameras, video equipment, computers and jewelry. Consult your homeowners policy for details, and ask your producer (agent) about any language in the policy that you do not understand. Vacation floater policies are available if you are going to have a significant gap in insurance coverage while you are on vacation.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My home and my truck were damaged this week by a storm. I don't
know yet if it was from a tornado or straight line winds. Will my homeowners insurance
pay more if the damage was caused by a tornado? What else do I need to know before
I file a claim?
We hear a lot of discussion about whether storm damage was caused by a tornado
or straight line winds. The fact is that the amount your insurance policy will pay
is not affected by whether the damage was caused by a tornado or straight line winds.
The amount paid will depend on a number of factors, including the dollar amount
of the deductible, the type of damage, and the type of property insurance policy
you purchased. Although you didn't mention flood damage, always remember that flooding
is not covered under your homeowners, renters or other traditional property insurance.
To find out what your homeowners and automobile insurance policies cover, contact
your producer (agent) or other insurance company representative as soon as possible.
It's a good ideas to have your insurance policy or policies on the damaged property
with you when you call. The policy number and other information will help your producer
or company answer questions about what your insurance covers. When filing a claim,
especially after a storm, be sure to give a phone number where you can be reached
during the day.
If you have hail or other damage to your truck and it is drivable, you may want
to meet the adjuster sometime during the day at a place close to where you work.
Of course, the adjuster will have to come to your home during daylight hours to
inspect the damage to your house and other immovable property.
Comprehensive insurance on your damaged vehicle will pay for hail and other storm
damage just as it does other covered perils. For example, if you have $250 deductible
on your car, the insurance company will pay for damages up to the value of the car,
minus the $250 deductible. Any car that is financed or leased is probably going
to have comprehensive coverage on it, although the amount of the deductible will
vary. If your liability policy doesn't include collision and comprehensive coverage,
look for a separate policy in your car loan or lease papers.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A few years ago a healthy tree in my yard fell on my neighbor's
garage without warning. My insurance company paid for the damage. Now I am told
my neighbor's insurance probably will not pay if the same thing happens to me. What
is the difference?
The difference in the two situations you describe came about because of a change
in Louisiana law. The first situation, in which your apparently healthy tree fell
on your neighbor's property, no doubt occurred prior to May 5, 1996, when the state
had what is called a strict liability law. Under strict liability, you could be
held responsible for the damage or injury even if you were unaware that the dangerous
conditions existed.
Under present state law, if a tree falls on a neighbor's property, the damage probably
will only be covered by the tree owner's homeowners policy if the owner knows, or
should know, that the tree is likely to fall. For example, if the tree had a visible
hole in it or had a weakened or damaged branch, the damage will probably be covered.
If not, the owner's homeowners policy probably will not pay.
In some cases, the homeowner's property damage coverage may cover the loss, if,
for example, the cause of the damage was a covered peril such as strong winds or
lightning.
Another example of the difference between strict liability and present law is in
the area of bodily injury. If your dog bit a neighbor's child when we had a strict
liability law, the treatment of the injury would almost certainly have been covered
under your homeowners policy. Now, if your usually good natured little dog bites
someone without warning, your company may deny the claim.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My producer (agent) says I need to be on the lookout for insurance
premium increases and coverage decreases. Can you explain?
Your producer is right. When you get an insurance bill, you need to carefully
read any information that is sent with it. Even if the premium remains the same,
you have to read the policy or other material that came with the notice to learn
whether there have been any changes made to your coverage. In particular, look for
decreases in coverage without a corresponding decrease in your premiums. If the
company has made changes in your coverage, they are required to notify you, so any
changes in your policy should be explained in the renewal notice mail out.
Let's say, for example, that your health care plan has required you to pay the first
$10.00 for each individual prescription. When you get your health insurance bill,
you see that your premium remains the same, but along with the bill there is a notice
that says you must now pay $15.00 for each individual prescription. Your premium
didn't go up, but you will pay $5 more every time you get a prescription filled.
Knowing that, you may want to explore other options before you write the check to
renew your health care plan.
Sometimes there is a straightforward option allowing you to choose between a premium
increase and a coverage decrease. Let's say you live near the coast and you get
a bill for the renewal of your homeowner's policy. The premium stated on your renewal
notice is a little less than last year's premium. When you read the terms of the
renewal notice, however, you find out that your policy now includes a hurricane
deductible of 2 percent in addition to your $250 flat deductible for all other types
of loss. No premium was added, but coverage was taken away. If your house is damaged
or destroyed by a hurricane, you will now have to pay a deductible equal to 2 percent
of the total insured value of your home instead of only $250.
But keep reading. The notice may also explain that you can buy back your old deductible
- that is, remove the 2 percent hurricane deductible and go back to the $250 flat
deductible for hurricane damage. To do this you have to pay a premium that is significantly
higher than what you have been paying. In this situation, you are being given a
choice between a premium increase and a coverage decrease.
The message is clear. Always be sure you understand what your options are before
you automatically pay the amount listed on any insurance premium renewal notice.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana
Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write
Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I need a builder's risk policy while my house is being built,
but it seems to me the premium is too high. Should I shop around?
It is always a good idea to shop around for insurance if you have the time to
do so. However, you need to have a builder's risk policy in place when the construction
starts on your home. If you procrastinate, you leave yourself open for a loss and
you stand the risk of paying even more for a policy because you bought it after
the construction was underway.The premium on a builder's risk policy seems high
in the early stages when all you have to lose is the foundation and a pile of lumber,
but the dollar figure is based on a number of factors, not the least of which is
the value of the house when it is near completion. The insured value is based on
what it would cost to replace the completed house, not the amount of the construction
loan or the amount it cost you because you did some of the work yourself.
For example, if you have a construction loan of $100,000 on the house but it is
expected to appraise at $130,000 when it is completed, you must buy a builder's
risk policy based on the $130,000 figure.
If you do get an insurance company to sell you a policy based on something less
than the actual value upon completion, the company may cancel your policy on the
grounds that you misrepresented the facts in your application.
The same argument holds true if you are buying insurance on an existing house. For
example, with most policies you cannot buy the amount of insurance that it would
take for you to relocate to a less expensive home if you had a loss.
When shopping for builder's risk or homeowners insurance on a completed home, you
may want to ask if you have the option of buying a policy for 80 or 100 percent
of replacement value. Obviously, a policy that pays 80% of the replacement value
in the event of an insured loss will cost you less than one that pays 100% of value.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
If my rented apartment is damaged by fire, do I contact the insurance company, or does the landlord take care of that?
First of all, be aware that your landlord does not carry insurance on your belongings. None of the things that you brought into your apartment or other rented home are covered by your landlord's property insurance on the building.
An estimated 65% of the people in many areas of the state rent rather than own their houses or apartments. Many, if not most, of them do not carry insurance on that home.
Once you have insurance, there is a list of actions I can suggest that may be of help to you after a fire:
- Contact your insurance producer (agent) right away. Have a copy of your homeowners or renters insurance policy and the policy number handy at all times.
- Give your producer the phone numbers and addresses where you can be reached, day or night.
- When an adjuster contacts you, ask for identification. Do not permit an adjuster to inspect your property without proper I.D. Con men often try to take advantage of people who have suffered loss of property.
- Protect your property from further harm. Make whatever reasonable temporary repairs are needed to windows, doors, walls, ceilings or the roof to protect your property and the dwelling. If possible, work with the landlord on this. Keep a record of these repairs for possible reimbursement either from your insurance company or the landlord's insurance company.
- Do not authorize any permanent repairs to the building itself. That is the responsibility of the landlord and the insurance company providing coverage on the dwelling.
If you should be in the unfortunate position of advising someone whose rented home is damaged by fire, there are some instances in which they may be reimbursed. If, for example, it is well known and documented that the landlord knew about faulty wiring in the home and investigators determine that the faulty wiring caused the fire, a renter might be reimbursed for damage to belongings under the liability portion of the landlord's insurance policy.
However, the fact remains that you cannot count on help from any other source if you don't have insurance on your belongings, no matter where you live.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
What liability coverage, if any, would I have if a member
of my family accidentally shot someone?
A property insurance policy, such as your homeowners insurance, may pay up to the
liability limits of the policy if an insured family member is involved in an accidental
shooting.
For example, a group of youngsters might find a gun at the residence of a friend.
Let’s assume, as is often the case, that the youngster who is holding the gun
when it fires does not live in that household. It is possible that the homeowners
policy at that residence and the homeowners policy on the home of the youngster
holding the gun would both provide some protection.
Another type of policy that could provide liability coverage in such a shooting
incident would be an umbrella liability policy if either of the families involved
had such a policy. Again, the amount of liability would be spelled out in the policy
itself.
If someone is accidently shot in a hunting accident, the homeowners or umbrella
liability policy of the person holding the gun could be a source of liability coverage.
If a third person owned the gun that discharged, that person's liability insurance
might also be involved. The owner of the land on which the hunting accident occurred
might also have liability coverage that would provide the owner with insurance protection.
Check your homeowners and other applicable policies, then call your insurance producer
(agent) to be sure you have the liability coverage you need if you or another member
of your family should be found liable in a shooting incident. If you own land on
which other people hunt, also look into what liability coverage you may need to
protect you as a landowner.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana
Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write
Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Our home is 30 years old. We have been with the same insurance company since the beginning. The company has told us they must do a safety inspection of our house. This hasn’t been necessary for the past 30 years, so why now?
More than likely the age of your home triggered the re-inspection request. You haven’t needed one before because your home wasn’t as old as it is now.
Insurance companies will usually ask for a re-inspection to make sure their "risk," in this case your home, has not changed. What this means is that the insurance company wants to make sure your insured property is in the same condition, or better, than when the policy was originally issued.
In general, an insurance company is looking for "pride of ownership." If your home is well maintained, there should not be any problems. Inspectors will usually look for maintenance problems such as the condition of your roof, porch or deck, or any trim that needs paint or replacement.
Inspectors will also check for any safety hazards such as faulty breaker boxes or uneven pavement in your driveway or front walk. Believe it or not, they may also look for junk cars or broken refrigerators in your yard.
Before the insurance company sends an inspector to your home, ask your agent if he or she will pre-inspect your home. That way, if there are problem areas, you can correct them before your insurance company sends out an inspector.
If you are required to have your home re-inspected, look at it as a possible way to reduce your insurance costs. Any improvements you make, such as installing smoke detectors, alarm systems, or updating your wiring and plumbing, may help lower your premiums.
You have probably acquired more furniture, jewelry and other assets during the 30 years you have lived in your house. If you have to have your home re-inspected, take this opportunity to discuss with your agent any upgrades to your policy to ensure you and your home have adequate coverage.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
Is it safe to buy insurance over the Internet?
The Internet is a great way to find information on just about any subject, including insurance. One of the most fascinating aspects of the Internet is that it is always open for business. You can use it 24 hours a day to find an insurance producer (agent) or company in your area, evaluate your insurance needs, compare insurance rates and even apply for insurance.
When using the Internet to shop for insurance, you should follow the same steps you take when shopping for insurance the traditional way. Take time to evaluate your needs, gather several quotes and buy only the coverage you need, based on your research. There are, however, some specific things to consider when looking for insurance online.
Since virtually anyone can put information on the Internet, it is crucial that you know who you are dealing with when transacting business online. In one case, a dishonest person set up a phony web site by using an official insurance company logo. A consumer, thinking he was dealing with a legitimate producer, filled out the online application, and included his credit card number. He later learned that the insurance company never received his application or his payment.
You should also be careful in giving out personal information over the Internet. Look for the company’s online privacy policy on its web site. If a policy is not posted, contact the company directly, and ask about it. If the company does not have a policy or its representative is reluctant to talk with you about it, think twice before doing business with that company.
While the Internet provides access to information, products and services you need, it may also allow a company to collect personal information about you. Oftentimes the information collected by one company is shared with other companies without your knowledge. If you are concerned about privacy, let the company know you do not want your personal information disclosed.
Before you buy insurance on the Internet, give us a call. We can let you know if the producer or company you are about to do business with is licensed to sell insurance in Louisiana. We can also let you know if any complaints have been filed against a producer or a company.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My producer (agent) tells me I have to carry enough insurance on my house to replace it. Why can’t I decide how much insurance coverage I want? I’m retired, and if my house burned down or blew away, I’d probably just rent a camp out on the river anyway.
I understand how you feel about your particular situation. It sounds like you may have more house than you want at this time in your life and you are thinking of moving.
Your producer is right in telling you that a special insurance policy cannot be issued to fit your rather specialized circumstance. That is because homeowners insurance contracts are designed to fill the need of most people while treating everyone fairly and equitably. That requirement keeps companies from treating individuals unfairly, but it also keep them from issuing a special policy just for an individual’s unique need.
As you know, what the vast majority of people look for in a homeowners policy is just what your prodcucer was talking about: the security of knowing the insurance company will help them replace their home if it is heavily damaged or destroyed by an insured peril, such as a fire.
The homeowners insurance contract between you and the insurance company requires you to pay small amounts of money, that is, the premium, on a regular basis. In turn, it requires the insurance company to bear most if not all the risk of having to repair or replace your home if it is damaged or destroyed.
Some policies specify that they will pay full replacement costs. Others, which cost less, may only pay 80% of replacement cost. In either case, the homeowner is required to pay a set amount of money based on what it would cost to replace that dwelling, in that location at this time.
If you are not sure your insurance company is giving you the best deal possible, you may want to shop around before you renew your policy. If you do get quotes from other companies, be sure that they are all for the exact same coverage. Read the fine print before you buy the wrong policy just because it is cheaper.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My husband and I are getting ready to buy a house. He wants to wait until the day of the closing to buy our homeowners insurance. Shouldn’t we get our insurance sooner than that?
You should shop around for homeowners insurance in the same way you shop around for your new home. Take your time and make sure you are getting the best homeowners policy for your insurance dollar. If you rush into buying any type of insurance, whether it is homeowners, automobile, life or health, you run the risk of not getting the right type of coverage for your needs.
While you are looking at houses, contact several insurance producers (agents) or companies and give them general information about the type of house and the location that you are interested in. Doing so will not only give you a good idea of what your homeowners insurance will cost, it will also help you find the insurance company or producer you feel most comfortable doing business with.
When getting price quotes for property insurance on your home, ask about any hurricane exclusions that might apply if you live on or near the coast. Keep in mind that some homeowners policies, especially for property along the coast, may exclude wind and hail damage or have a wind/hail deductible. Wherever you live in Louisiana, you will want to consider buying flood insurance, which must be purchased as a separate policy.
Another thing to keep in mind is that most lenders will almost always offer to provide
the required insurance coverage as a part of your loan. However, it is usually cheaper
if you buy your own policy. You fulfill the insurance requirement simply by showing
proof of insurance at the closing of the deal on the house. The same thing holds
true for collision and comprehensive coverage on an automobile.
Don’t forget to ask your insurer if they provide multiple policy discounts.
Often times, companies may be able to give you a better rate if you carry more than
one policy with them, such as your homeowners and your automobile insurance or more
than one automobile policy.
Once you have reduced your insurance choices to one or two, call us for further
information. We can tell you whether the producers and companies you are considering
are licensed to do business in Louisiana, whether any complaints have been filed
against them, and what each company’s rating is with a national insurance rating
service.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My home suffered some damage when a storm hit the other day. The authorities are not sure if a tornado or "straight- line" winds caused the damage. I know my insurance will cover damage caused by a tornado, but what about damage caused by straight-line winds?
In most cases, any damage to your home caused by wind is covered under a standard homeowners policy, including damage caused by a tornado and "straight line" winds. Some homeowners policies, especially for property along the coast, may exclude wind and hail damage or have a wind/hail deductible, but that fact should be clearly stated in the homeowners policy.
Supplemental coverage for wind and hail is available through two alternative sources, the FAIR and Coastal insurance plans. If you have questions about wind and hail damage exclusions you should check with your local insurance producer (agent) for details.
Regardless of what type of wind caused the damage, you should contact your insurance producer or company immediately to report any loss you might have incurred. If you cannot reach your local producer, you may find a number for the insurance company on your policy. We can also help you locate your company or producer.
Just like tornadoes, straight-line winds are very dangerous. They often reach speeds up to 60 miles per hour, but they can exceed 100 miles per hour. These downward rushing currents of air, or downdrafts, usually start along the leading edge of all thunderstorms. You may also hear a roaring sound when straight-line winds occur, just as you will if a tornado is approaching.
Because straight-line winds and tornadoes are virtually the same in terms of the damage they can do, plan to take the same precautions in either situation. In a home or other building, you and your family should move to a pre-designated shelter, such as a basement. If an underground shelter is not available, move to an interior room or hallway on the lowest floor and get under a sturdy piece of furniture. Flying debris from tornadoes or straight-line winds causes most deaths and injuries so, by all means, stay away from windows.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’ve just returned from a trip and the airline lost my laptop computer and some of my luggage. When I went to file a claim, they said they would reimburse me for the lost luggage but not the lost computer. What can I do?
Unfortunately, the airline is right. While they will reimburse you for lost luggage up to a specified amount, most people don’t realize that many items they and their families frequently travel with, such as laptop computers, cellular phones, and hand-held games, are not covered by the airlines.
What this means is that even if the airline loses your laptop, they cannot be held liable for the loss. This means proper insurance is a must, especially if you fly a great deal and take your laptop computer and other electronic equipment with you.
Coverage for a laptop computer can be a tricky issue because it depends on who owns it and what it is used for. The general rule of thumb is that the owner of the laptop is responsible for it. If your employer is listed as the owner of the laptop, the employer’s business insurance should cover it. That’s not always the case, though, so check with your employer to make sure the computer is covered under the appropriate business insurance.
If you own the laptop and it is primarily for personal use, make sure that it is covered under your homeowner’s policy. Check on whether the policy would pay a sufficient amount on the replacement of the computer should it be lost or stolen. You may find you need to add an endorsement to your current policy to cover your computer or other electronic equipment.
Also be aware that if you often use your personal laptop for business purposes, it may not be covered under your standard homeowner’s policy. In this case, you could add an endorsement to your homeowner’s policy to cover not only your laptop, but all of your business equipment.
Because the type and dollar amount of insurance coverage in any specific category can differ from carrier to carrier, discuss coverage on computers as well as other expensive items with your present insurance producer (agent) or another knowledgable insurance representative. A little planning on the front end of your trip may save you a lot of hassle after your return.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My producer (agent) said I should consider a scheduled personal property endorsement on my homeowner’s policy for my gun collection. Is this really necessary?
When you insure your home, you are insuring not only your house, but your personal belongings as well. If a loss occurs, coverage for certain types of personal property is limited. That means an insurance company will only pay the dollar amount listed in the policy for a specific item. Many times that amount doesn’t come close to what it would cost to replace that item.
Personal property with limited coverage includes valuable property that not everyone would own, like your gun collection. For example, say your prized Civil War musket is stolen. If you only have basic homeowner’s coverage, the insurance company will compensate you only for a limited amount, as specified in your policy, not what the musket is actually worth.
To guarantee you are reimbursed sufficiently for your loss, you can purchase additional coverage by adding a scheduled personal property endorsement to your policy. The endorsement will accomplish two things. First, any article listed in the endorsement will be covered on an "all risks" basis instead of the usual "named perils" coverage. All risks coverage will protect all losses that occur unless they are excluded on the policy. Named peril coverage is just that, it only covers losses to those risks listed on the policy.
Second, when you schedule personal property the insurance company will ask you to verify the replacement cost of the article. You can do this by having the article appraised and giving a copy of the appraiser’s report to your insurance company. The replacement cost reported in the appraisal will then become the coverage limit for that item.
Additional kinds of property with limited coverage include items that should be covered under other types of insurance. For example, a computer in your home used for business purposes should be covered under a business property policy. If it is only covered by your personal homeowner’s policy, the computer would be subject to a limit of liability if something should happen to it.
It’s important to know what and how much your homeowner’s policy covers before tragedy strikes. Review your policy from time to time to make sure you have the coverage you need.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I live in a wooded subdivision. Over the weekend, a large deer crashed through the plate glass window on one side of the living room of my home and out the window on the other. The deer caused a lot of damage both to my home and to the furnishings inside. Will my insurance pay for the damage?
Damage done by the deer that went through your window would be covered under what is often referred to as the sudden and accidental occurrence provision in your basic homeowners policy. Payment under this coverage should be made subject to the same deductibles and exclusions that apply if any other kind of covered damage occurs to your home.
At first thought, it would appear the scenario you describe would only occur in rural areas, but a number of incidents in which a deer went through a window have been reported in heavily populated areas of the state in recent years. Another example of damage done by one of the many woodland creatures that are often seen in Louisiana residential areas would include a squirrel chewing through your electrical wiring. Birds also often fly into windows, although most of the time the glass does not break. You can probably add your own list of experiences with the havoc that even the smallest of wild animals can cause.
The fact remains, of course, that if the damage is done by an animal that has an owner, that owner is responsible for damages. For example, if your neighbor's dog bites you or if his cow or other animals damage your property that neighbor will be required to provide reimbursement, whether or not he has a homeowners insurance policy.
Policies vary from company to company, but a basic homeowner’s policy will protect your home and the usual personal property such as furniture, carpeting and clothing from the sudden and accidental occurrence caused by a wild animal. However, as with other types of damage, if an animal causes extensive damage to a valuable collection, such as antique furniture or fine china, reimbursement will be limited unless you have a special endorsement to provide additional coverage. In other words, damage by the wild animal is subject to the same limitations as any other covered peril.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A friend of mine said she and her husband are taking out an umbrella policy since her kids are now teenagers. My kids will be teenagers soon, so should I consider an umbrella policy also? I thought umbrella policies were just for people with a lot of money.
An umbrella policy, also called an excess liability policy, is designed to protect you if you are held personally responsible to another person for injury or property damage. In other words, an umbrella policy will cover you if you are sued and have to pay more than the coverage limits under your homeowner’s or auto policies.
As parents of teenagers, you may want to seriously consider an umbrella policy. Parents of any aged children can be at risk because of their child’s actions. If your son or daughter seriously injures someone or causes them to be injured, you may be held responsible and have to pay for damages.
Let’s look at a familiar scene. Your teenaged son is driving several of his friends around town. Unfortunately, there is a wreck and several of the boys are injured. Because your son was driving, you, as a parent, might be held responsible and have to pay out thousands of dollars. If your liability limits on your auto policy weren’t enough to cover what you are required to pay, the difference would have to come out of your pocket. But if you had an umbrella policy, the policy would cover the balance of what is due.
An umbrella policy can also protect you if someone is injured in your home or on your property. Say, for example, you have a party and someone falls and gets hurt. If they successfully sue you, your umbrella policy can provide the extra coverage to pay any damages that aren’t covered by your homeowner’s policy.
The thought of not having enough insurance coverage is sobering when you think about how many lawsuits are filed these days. Umbrella liability coverage provides peace of mind for relatively little cost.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I am buying my first home and I was told by my lender that I may have to set up an escrow account. What exactly is an escrow account?
Congratulations on buying your first home. Many people are unsure of what an escrow account is or how they work, so you are not alone.
An escrow account, also called an impound account or a reserve account, is the way a mortgage company can make sure you put enough money aside to pay your annual property taxes and homeowners insurance with the company of your choice.
A mortgage company usually collects enough each month to cover that month’s portion of your yearly property tax and insurance bill plus enough for an additional two months, just in case the rates increase. For example, if your annual property tax is $1,000 and your annual homeowners insurance is $200, the mortgage company would collect one-twelfth of the total amount, $100 per month, plus an extra $16.67 for the additional two months. This would then add $116.67 to your mortgage payment.
A mortgage company will pay your taxes and insurance costs for you with money from your escrow account. Many people prefer this option because it eliminates the hassle of having to pay these bills themselves.
Not all mortgage contracts require an escrow account, so you may be able to talk with your lender about paying your own property taxes and insurance, separate from your mortgage payments. Paying the costs yourself will allow you to use your money until the annual payments are due. Remember, though, all payments would be your responsibility if you exercise that option.
If you provide your own homeowners insurance and it lapses, the company will notify your lender and your lender has a right to place your insurance with a carrier of its choice. This is called "forced place" insurance and generally costs a great deal more than insurance you can get on your own. Another drawback to forced place insurance is that the amount of the premium will be added to the principal of your loan balance. You will then be paying interest on your insurance premium as well as on your loan balance.
Escrow accounts have both benefits and drawbacks so it’s a good idea to be well informed about them before you begin any real estate transaction.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I’ll be operating my business out of my home temporarily. What are my insurance options?
If the business will gross less than $5,000 a year, you can probably purchase an endorsement to your homeowners policy that will provide the coverage you need. If your gross is more than $5,000, a special home-based business policy may be your best bet. Such a policy combines the usual homeowners insurance coverage with the business property insurance, loss of income and business liability coverage you need for your business.
Some people might be tempted to coast along with their homeowners insurance coverage since this is to be a "temporary" arrangement. However, there are a number of reasons why relying on your homeowners insurance is not a good idea. Let’s look at some examples.
One of your basic needs is for insurance coverage of your equipment and supplies. If you don’t have business property insurance and your house is burglarized, your homeowners insurance will pay only a limited amount for replacement of business property, such as exercise or computer equipment you would have in a home-based fitness center.
Personal injury can also be a big ticket item. For example, if an altercation breaks out between two of your fitness center clients and one of them requires medical attention, your homeowners policy will not cover the injured customer’s $1,000 or more in medical bills because the injury was a direct result of your operating the business.
Or, if a fire in the laundry room of your home forces you to leave the house for a month and you are unable to conduct business during that time, your homeowners policy will not cover your loss of business income and ongoing business expenses or the cost of getting the business up and running again.
Perhaps the greatest argument for business insurance is your liability exposure, which poses your greatest risk of financial loss. If, for example, you advertise that your fitness equipment will make a new man of every client, one might file a suit against you if he winds up having back surgery instead. Again, your homeowners policy will not cover you because the suit arose directly from the business operations.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I live on the ground floor of a condo and I carry renters insurance.
However, most of my neighbors don’t. Is that unusual?
The majority of renters, an estimated 59%, do not carry any renters insurance.
A much higher percentage do not carry flood insurance.
Renters need only do a quick inventory of their televisions, computers, stereos,
and other expensive items to learn how much they would lose if a fire, burglary,
major storm or some other catastrophe befalls their building. Granted, the owner
of the building is responsible for carrying insurance on the building itself, but
that is of no comfort to the apartment dweller who has just lost everything because
of a fire or other destructive force.
There might be an occasional situation in which the owner of the building would
be responsible for a renter’s loss, but in most instances, you are on your
own. As you know, people in apartments or condos who share common walls with other
residences have less control over their exposure to fire than someone does in a
single family unit. No matter how often you check your smoke alarm and fire extinguisher
or how careful you are about fire safety in the kitchen, you can’t be sure
all your neighbors are exercising the same precautions.
Two special concerns that should be noted are liability and flood coverage. We usually
think of renters insurance first of all as insurance on our belongings. However,
you will need liability insurance if a visitor is bitten by your dog or falls over
a piece of your furniture. Liability insurance is a part of your renters insurance
coverage, unless you request a “contents only” policy. However, being
prepared for rising flood waters is another matter.
Your usual property insurance, such as renters or homeowners policies, will not
pay for flooding. I always advise people who live anywhere in Louisiana to give
serious consideration to buying flood insurance, which is a separate policy. This
certainly applies to renters who have ground level exposure as you do. As with other
coverage, the fact that your landlord has flood insurance will not help you replace
your belongings in case you are the victim of flood waters.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I seem to be hearing about a lot of home fires lately. What are
some things I can do to protect my home and family?
You are correct, there are more home fires now than in the past few years.
Additionally, large majority of the deaths by fire in the United States each year
are from home fires.
In Louisiana, most home fires are a result of careless smoking, unattended cooking
or the use of portable heaters. Fire from these particular situations can easily
be prevented with a little effort and planning.
First, install smoke detectors on every level of the house. Check the batteries
monthly and replace them at least once a year. Working smoke detectors double a
person’s chance of surviving a fire. Second, plan and practice a fire escape
route; designate a meeting place outside and be sure everyone in the household knows
how to call for emergency assistance.
Deaths due to children playing with fire are particularly avoidable. If you have
children in your home:
- Keep matches and lighters in a secured drawer or cabinet.
- Teach children how to get out of a burning house and how to call for help from another
location.
- Show them how to “stop, drop and roll” if their clothes catch on fire.
Close to a third of all home fires occur in the kitchen, extra caution should be used when cooking:
- Never leave food unattended on the stove.
- Keep items away from the stove that could catch fire, such as towels, clothing and
curtains.
- Keep a fire extinguisher in the kitchen, and know when and how to use it.
Because alternate heaters are a leading cause of residential fire deaths, special care should be taken when using portable heaters:
- Keep flammable materials, clothing, blankets and anything else that could catch fire away from the heater.
- Plug heaters directly into the wall socket and unplug them when not in use.
With a little preparation and common sense, the incidence of home fires can greatly be reduced and, hopefully, tragic consequences may be avoided.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I am moving to Louisiana from Canada. What insurance do
I have to buy if I own a car and a house?
First of all, let me welcome you to Louisiana. As to your question about what insurance
you have to buy, the only insurance you are required to carry by law is 10/20/10
liability coverage on your motor vehicle. That is, if you are liable for damage
or injury in an auto accident, the minimum liability policy will pay up to $10,000
for bodily injury to one person, $20,000 for bodily injury to more than one person
and $10,000 property damage.
In addition, you will be required, by the lender, to buy collision and comprehensive
coverage if there is a lien on the car. The same thing is true of property insurance
on your home. The company holding the mortgage on your house will require you to
carry insurance to protect the company’s investment. Most lenders will offer
to provide the required insurance coverage as a part of your loan. However, it is
cheaper if you buy your own policy. You fulfill the insurance requirement simply
by showing proof of insurance at the closing of the deal on the house or car.
Shop around for quotes on automobile and homeowners insurance from two or more insurance
companies. Companies may be able to give you a better rate if you carry more than
one policy with them.
When getting price quotes for property insurance on your home, ask about any hurricane
exclusions that might apply if you live on or near the coast. Wherever you live
in Louisiana, you will want to consider buying flood insurance, which must be purchased
as a separate policy.
Once you have narrowed your insurance choices to one or two, call us for further
information. We can tell you whether the producers (agents) and companies you are
considering are licensed to do business in Louisiana, whether any complaints have
been filed against them, and what each company’s rating is with national insurance
rating services.
Health insurance is not required, but if your employer does not provide a health
care plan, you will probably want to purchase some kind of health care coverage
to help with potential medical costs.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
A house I pass on the way to work was damaged by fire about six months ago. I heard the owner had insurance, but no repairs have been made. Why would settling a claim after a fire take so long?
Because you do not know the circumstances, trying to explain what is happening in this case would be pure speculation. However, the subject does raise a good question about delays that may occur when a property claim involving a fire is being settled.
Let's assume that the owner of the house filed a claim in a timely manner. Louisiana law requires that an insurance company make an offer to settle an insurance claim within 30 days of the time it is filed.
The 30 days can be suspended if there is an active arson investigation by the appropriate authorities, such as the Fire Marshall's office or local law enforcement officials. That is, if the insured is strongly suspected of setting fire to the home, the company will not be required to offer a settlement before the investigation is completed.
If an insurance company does not offer to settle a claim within 30 days, the insured can file suit against the company. It will then be up to the court to decide whether to assess penalties against the company for failing to offer to settle within the prescribed time period. Also, the Department of Insurance can take administrative action against a company for not paying a claim on time. An example of administrative action would be to make the company pay a fine.
If the company refuses to pay a claim after a fire, they must put that denial in writing and give a copy to the insured or other claimant. If the insured is suspected of arson, then the company will probably deny the claim. However, they cannot refuse to pay just because the fire is of a suspicious origin. They must be able to provide enough evidence to support their charge that the insured committed arson.
Even if the insured is accused of arson and found guilty, the insurer will usually pay the mortgage company the amount of money that company would normally collect under the policy.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I am renting an unfurnished apartment. What do I need to know when shopping for insurance to cover my belongings?
As a renter, you need to insure the furniture and other belongings you have in the apartment. You will also need to have liability coverage, which you can get as a part of the renter’s policy on your household belongings.
Perils normally covered under a basic tenant policy include fire, theft, vandalism, and tornado damage. Flooding is not covered. A flood insurance policy must be bought separately.
The liability portion of your renter’s insurance covers you in case you are sued because someone is injured while in your apartment. It will also cover you if you or other members of your household (including pets) are responsible for hurting someone even if the event does not take place at your apartment.
For example, if someone slips and falls in your apartment or your dog bites someone down the street, your liability coverage under your renter’s insurance would cover you if you were sued.
Before deciding on an insurance company, you will want to shop around for the coverage you need at a fair price. If you have an automobile, you can start by calling your automobile insurance agent as most auto insurance carriers also sell homeowners’ and renter’s insurance. One obvious advantage of doing that would be that you have already established a working relationship with that producer (agent). Also, some companies or agencies can give you a discounted rate if you carry all your insurance with them.
Be sure to ask each insurance office you call the same questions. That way, you will know you are getting comparable rates for the same coverage. Before you make that first call, inventory your apartment and come up with a dollar value on the contents. Ask for the rate for a basic renter’s policy, with liability and household contents coverage.
You may also want to consider a special rider or endorsement for any particularly expensive items you own, such as computer or stereo equipment, jewelry or antiques. If you need a special endorsement, be sure you get a quote for that from each company you call, too. Just keep that information in a separate column so that you don’t confuse it with the basic figures you are comparing.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
My house has never flooded. Why shouldn’t I just drop my flood insurance policy? After all, I have homeowners and automobile insurance.
Statistics show that up to one third of the claims filed with the Federal Emergency Management Agency's National Flood Insurance Program comes from an area that is not considered to be “flood prone.” Because of the relatively small premium involved, I would recommend that you keep your flood insurance policy. Furthermore, I would recommend that anyone living in Louisiana who does not have flood insurance at the present time consider purchasing a policy.
Many people make the mistake of assuming their homeowners or renters insurance covers flood damage. It doesn’t. Also, your auto insurance will only cover flood damage to your automobile if you have comprehensive coverage.
It is true that some of the heavy losses from flooding in Louisiana have been hurricane related-- and you may not live in a hurricane-prone area. Yet much of the flood damage from hurricanes occurs far inland. And, as you know, not all flooding in Louisiana is related to hurricanes.
If your exposure to flooding is limited, according to local flood plain maps, that fact is reflected in your premium. In areas where there is a relatively low risk of flooding, annual premiums can be surprisingly inexpensive.
Some people feel they can rely on disaster relief if their homes or businesses are flooded. Even if disaster assistance is available, relief generally comes through one of two forms of assistance: a Small Business Administration loan that must be paid back with interest, or a one-time-only grant of a few thousand dollars.
In most circumstances, once a storm is about to enter the Gulf, it is probably too late to buy flood insurance to cover that storm. The reason is that, regardless of where you live in the state.here is a 30-day waiting period until the coverage goes into effect.
National flood insurance, available in all 50 states, can be purchased through many local insurance agencies.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.
I have a small business operation with one location and a larger one with three locations. Do I need business interruption insurance?
When there is a national disaster, a lot of attention becomes focused on business insurance. In regard to your particular businesses, ask yourself this question: "If my business was shut down for three months during my busy season, what would it cost me?" And then ask, "Could I afford to absorb the loss myself?" If you could afford 50 percent of the loss, you can buy insurance to cover the other 50 percent. In fact, you can get insurance for whatever percentage of the loss you want to consider insuring.
The above questions apply to you, no matter whether you have a large business operation, a Mom and Pop store, or some other kind of income-producing business, such as rental on an apartment building you own. If you have more than one location for the same business, you can insure them all under a single policy. The policy would cover any one or more of the locations that were shut down.
Business interruption insurance coverage may vary from insurance company to insurance company. However you can expect certain perils to be specifically covered in a good basic contract.
Common perils include fire, theft, most acts of nature, road construction that shuts down your business, and collision, such as the Riverwalk shopping area in New Orleans being hit by a ship, or an out-of-control car crashing through the front door of your place of business.
The destruction of the Twin Towers in New York City illustrates how business interruption insurance provides coverage directly or indirectly. Businesses that were directly involved and had business interruption insurance were covered, as were those not damaged directly but were closed because they were in the immediate area.
To make an informed decision about business interruption insurance, sit down with your local agent or other insurance company representative to discuss the matter. Your accountant should be able to help you prepare for the meeting.
Anyone with insurance-related questions or concerns is invited to contact the Louisiana Department of Insurance at 1-800-259-5300 or 225-342-5900 in Baton Rouge or write Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214.