Louisiana Department of Insurance Office of Consumer Advocay

Volume 2, Issue 3
MARCH 2011

Senator Sharon Broom
Dist. 15 Community Meeting
3/10/2011
Baker Branch Library
3501 Groom Road
Baker, LA
6:00 p.m.- 7:30 p.m.

Sen. Karen Carter Peterson
District 5 Town Hall Meeting
3/14/2011
ICCF Church
819 First Street
New Orleans, LA
6:00 p.m.

Sen. Karen Carter Peterson
District 5 Town Hall Meeting
3/15/2011
Dryades YMCA
2220 Oretha Castle Haley Blvd.
New Orleans, LA
5:30 p.m.

Sen. Karen Carter Peterson
District 5 Town Hall Meeting
3/16/2011
Andrew Wilson School
3617 General Pershing
New Orleans, LA
6:00 p.m.

Community First Disability Rights Rally
3/16/2011
Peltier Park Pavillion
Thibodaux, LA
9:00 a.m. - 11:00 a.m.

Louisiana Aging Network Association Conference
3/16-18/2011
Samstown Casino
Shreveport, LA

Sen. Karen Carter Peterson
District 5 Town Hall Meeting
3/17/2011
St. Matthews United Church
1333 South Carrollton Ave.
New Orleans, LA
6:00 p.m.

Senator Sharon Broom
Dist. 15 Community Meeting
3/17/2011
Zachary Branch Library
1900 Church Street
Zachary, LA
6:00 p.m.- 7:30 p.m.

Hoffman Triangle Neighborhood Association
3/19/2011
Taylor Park
3100 Washington Ave.
New Orleans, LA
10:00 a.m. - 2:00 p.m.

Senator Sharon Broom
Dist. 15 Community Meeting
3/24/2011
Greenwell Springs Library
11300 Greenwell Springs Rd.
Greenwell Springs, LA
6:00 p.m.- 7:30 p.m.

NDF 25th Anniversary House Party
3/26/2011
1429 South Rampart Street at Martin Luther King
New Orleans, LA
7:30 p.m.

For speaking engagements scheduled after the release of the newsletter or for more detailed information about engagements listed in the newsletter, visit our website at www.ldi.la.gov. Click on the Events tab, found in the center of the home page.

To view previous newsletters, click on Consumer Advocacy under Consumers, then click on Consumer Advocacy Newsletters.

To find out if Consumer Advocacy will be in your area or to request a speaker for your organization or group, call (225) 219-0619 or send an email to
consumeradvocacy@ldi.la.gov

If you no longer wish to receive this newsletter please send an email to the following address with "REMOVE" in the subject line.
consumeradvocacy@ldi.la.gov

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National Flood Safety Awareness Week

Flood Safety Awareness
National Flood Safety Awareness Week
March 14-18 2011

Flooding is a coast to coast threat to the United States and its territories, year round. National Flood Safety Awareness Week is intended to highlight some of the many ways floods can occur, the hazards associated with floods and what you can do to save life and property.

The National Flood Insurance Program (NFIP) was created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The program enables property owners in participating communities to purchase insurance protection from the government against loss from flooding. The insurance is designed to provide an insurance alternative to disaster assistance in order to meet the escalating cost of repairing damaged buildings and their contents caused by floods. As of April 2010, the program insured about 5.5 million homes, the majority of which were in Texas and Florida.

The Community Rating System (CRS) is a voluntary program for NFIP-participating communities. The goals of the CRS are to reduce flood loss, to facilitate accurate insurance rating, and to promote the awareness of flood insurance.

The CRS was developed to provide incentives for communities to go beyond the minimum floodplain management requirements to develop extra measures that provide protection from flooding. The incentives are in the form of premium discounts.

How can I know how severe a flood will be?
Once a body of water (i.e. river, stream, canal, bayou, etc.) reaches flood stage, the flood severity categories used by the National Weather Service (NWS) include minor flooding, moderate flooding, and major flooding. Each category has a definition based on property damage and public threat.

  • Minor Flooding - minimal or no property damage but possibly some public threat or inconvenience.
  • Moderate Flooding - some inundation of structures and roads near streams; some evacuations of people and/or transfer of property to higher elevations.
  • Major Flooding - extensive inundation of structures and roads; significant evacuations of people and/or transfer of property to higher elevations.

The impact of a flood varies according tp location.  For each NWS river forecast location, flood stage and the NWS flood severity category is determined in cooperation with local public officials.  Water levels above flood stage constitute minor, moderate, and major flooding.  The impact varies from one river location to another because a certain river stage (height) in one location may have an entirely different impact than the same level above flood stage at another location.

Flood and Flash Flood; what is the difference?
A flood occurs when prolonged rainfall over several days, intense rainfall over a short period of time, or an ice or debris jam causes a river or stream to overflow and flood the surrounding area. Melting snow can combine with rain in the winter and early spring; severe thunderstorms can bring heavy rain in the spring and summer; or tropical cyclones can bring intense rainfall to the coastal and inland states in the summer and fall.

Flash floods occur within six hours of the onset of rain or after a dam or levee failure or following a sudden release of water held by an ice or debris jam. Flash floods can catch people unprepared. You will not always have a warning that these deadly, sudden floods are coming. So, if you live in an area prone to flash floods, plan now to protect your family and property. The use of the word “flash” here is synonymous with “urgent.”

According to the National Oceanic and Atmospheric Administration (NOAA), each year more deaths occur due to flooding than from any other severe weather related hazard. The main reason is that people underestimate the force and power of water. More than half of all flood related deaths result from vehicles being swept downstream. Many deaths can be prevented when the proper precautions are observed.

When it comes to tropical cyclones, a generic term for a hurricane, typhoon, or tropical storm, wind speeds (e.g. severity categories 1-5) do not tell the whole story. Intense rainfall, not directly related to the wind speed of a tropical cyclone, often causes more damage. NOAA states that since the 1970s, inland flooding has been responsible for more than half of the deaths associated with tropical cyclones in the United States. Typically, greater rainfall amounts and flooding are associated with tropical cyclones that have a slow forward speed or stall over an area.

According to NOAA, these are some facts to consider:

  • According to historical data from the NFIP, since May 1978, there have been 209,067 flood claims paid by the NFIP totaling more than 14.6 billion dollars, for an average of more than $64,000 per flood claim paid in Louisiana.
  • Last year, about 25% of all claims paid by the NFIP were for policies in moderate-to-low risk communities.
  • Flooding causes more damage in the United States than any other severe weather related event, an average of $5 billion a year. Flooding can occur in any of the 50 states or U.S. territories at anytime of year.
  • Everyone lives in an area that has the potential to flood.
  • Most homeowners insurance policies do not cover flood or damage due to flooding.
  • If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a federally backed mortgage, your mortgage lender requires you to have flood insurance.
  • Just an inch of water can cause costly damage to your property.
  • A car can easily be carried away by just two feet of floodwater.
  • Inland freshwater floods accounted for more than half (59%) of U.S. tropical cyclone deaths over the past 30 years.
  • Hurricanes, winter storms and snowmelts are common causes of flooding.
  • New land developments can increase flood risk, especially if the construction changes natural runoff paths.
  • Federal disaster assistance is usually a loan that must be paid back with interest.
  • If you live in a moderate-to-low risk area and are eligible for the Preferred Risk Policy, your flood insurance premium may be as low as $129 a year, including coverage for your property's contents.
  • You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program (NFIP).
  • It takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the floodwaters start to rise.
  • A home in a high-risk area is three times more likely to be damaged by a flood than to be damaged by a house fire during a 30-year mortgage.
  • Louisiana’s close proximity to the Mississippi River and Gulf of Mexico, as well as the 50 rivers, streams and bayous in the state leave many of our 1.6 million households at an increased flood risk.
  • When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium discount of up to 45%.
  • Over 5.5 million households currently hold flood insurance policies in more than 20,500 communities across the U.S.

Following some simple safety rules such as the ones listed below can keep you, your family and your property safe:

  • Monitor your favorite news source for vital weather related information.
  • If flooding occurs, get to higher ground. Get out of areas subject to flooding. This includes dips, low spots, canyons, washes etc.
  • Avoid areas already flooded, especially if the water is flowing fast. Do not attempt to cross flowing streams.
  • Road beds may be washed out under flood waters. NEVER drive through flooded roadways.
  • Do not camp or park your vehicle along streams and washes, particularly during threatening conditions.
  • Be especially cautious at night when it is harder to recognize flood dangers.
  • Keep all insurance policies and important papers in a safe central location so that they are easily accessible when evacuating.
Floods Can Happen Anywhere, Any Time; Evaluate Your Need for Flood Insurance Now.
The Importance of Renters Insurance

When disaster strikes, it doesn’t differentiate between those who rent and those who own homes. Renters face the same risk of loss or potential of loss as homeowners. Your landlord or condominium association may have insurance, but it only protects the building structure, not the personal items inside.  Renters insurance protects your personal property against damage or loss, and insures you in case someone is injured while on your property. Most companies that sell homeowners insurance also offer renters insurance.  If you rent or lease your home or apartment this is the right coverage for you.

Tenants who rent apartments might not be required to carry renters insurance.  A decision not to have it could cost you hundreds, even thousands of dollars if a disaster strikes.  The landlords insurance will not cover anything owned by the person leasing or renting, so to replace personal items after loss or damage, the renter will have to pay out of pocket. 

Independent Insurance Agents & Brokers of America reported that 64.4% of renters did not have insurance, and most people said that cost was the main reason. The amount of the premium can vary depending upon the company issuing the policy, deductible amounts, and coverage.   Renters can save money on insurance and protect valuables if they get a broad coverage.  Most renters will purchase a lower coverage plan, but lower cost plans will cover only the most common causes of loss: fire, theft, flooding from plumbing, lightening and power surges. A comprehensive policy will offer more coverage for all events unless specifically excluded, but they come at a slightly higher price. Renters insurance should not be considered optional.

Renters insurance protects you and your personal property in very important ways:

  • The liability section provides coverage for all sums that you are legally obligated to pay as a result of a suit or claim by others who are injured by you or your family members or your pets.
  • The contents section protects personal property against loss from a wide  variety of covered perils, such as:

    • Fire, lighting or smoke;
    • Theft, vandalism or malicious mischief;
    • Windstorm or hail;
    • Explosion;
    • Riot;
    • Damage from vehicles and falling objects;
    • Plumbing, water damage;
    • Electrical surge.

  • Additional living expense coverage provides you with a reasonable refund for expenses above normal rent in the event your home or apartment is uninhabitable.

The deductible for renters insurance can vary.  A deductible is the amount you will pay out of your own pocket. The amount may be a percentage of the value of the actual loss, a percentage of the value of the insured property, or a specific dollar amount. For example, if your policy has a $200 deductible and your claim is $1,000, you will pay the first $200 and the insurance company will pay the remainder.

Once you purchase a policy, it is important that you keep an inventory of your personal items. List each item, its value and serial number. Keep receipts for major items in a fireproof place.  Also, remember to add to the list when you buy something new, and report it to your insurance company, as well as delete items from the list you no longer possess.

Renters insurance is a major investment for a fairly cheap price.  Renters insurance gives the policyholder the ability to sleep soundly, knowing that if anything does happen to their rented home or apartment, they will be able to receive some type of compensation for the loss of their personal property.

When you are budgeting money for rent, a security deposit, telephone, and other utilities, make sure to include the cost of a renters insurance policy to protect the things you and your family have worked hard to acquire over the years.
EDITOR’S LETTER

The Louisiana Department of Insurance Recovered Over $9.6 Million for Insurance Consumers in 2010

The Louisiana Department of Insurance (LDI) aided Louisiana insurance consumers
in recovering over $9.6 million in insurance payments from consumer complaints last year. This is an additional $1.4 million over the amount of funds recovered in 2009.

The recovered funds resulted from insurance claims disputes that the LDI was able to recover above the amount the insurance companies originally offered the consumers to settle their claims. Funds recovered are from formal complaints regarding property and casualty, health insurance, life and annuities, and consumer advocacy claims. 

Claim disputes included

  • Sales/ Policyholder Services;
  • Premium Rates/ Refunds;
  • Cancellation/ Non-Renewals;
  • Claim Delays/ Denials/Unsatisfactory Settlement;
  • Other Insurance-Related Disputes.
Consumers who feel they are not being paid what they should for losses as stated in their insurance policies can contact the LDI and request assistance and/or file a formal complaint. LDI insurance specialists thoroughly review complaints from policyholders to determine if the insurance company has honored the insurance policy and paid the consumer what he is due per the provisions of the policy.  Contact the LDI toll-free at 1-800-259-5300.  Consumers may also file a complaint online at www.ldi.la.gov, by clicking on “Consumers” and then “File an Insurance Complaint.” 
Office of Consumer AdvocacyP.O. Box 94214Baton Rouge, LA 70804-9214
(225) 219-0619 or (800)259-5300www.ldi.la.govconsumeradvocacy@ldi.la.gov