Why Home Inventories Can Help With Your Claim Settlement

Home InventoryNatural disasters can strike us at any time. Homeowners can insure they are best prepared by documenting their home inventories. Home inventories are detailed list of household and personal belongings with their proximate value.

“The format is not nearly as important as just having some kind of list” said Jeanne Salvatore of the New York based Insurance Information Institute, a nonprofit that helps educate the public about insurance.

“Just going around your home with a pen and paper taking notes, or making a video with your smartphone of yourself walking around you home and describing the things around you, can make a world of a difference when you need to make a claim.”

Inventories are recommended for homeowners, renters, and even places of business.

“Regular people, whether they’re homeowners or renters, need home inventories way more than the wealthy, because they need the money more.” Salvatore said. “People always say they don’t have a lot of stuff. But If you add up the cost of your bed, with your mattress, mattress cover, bed frame, and maybe a few suits hanging in your closet, some high-tech items or small appliances, and bike or golf clubs, it easily adds up to thousands of dollars. And you’re going to really depend on that money to get up and running again after a disaster.”

Experts estimate that less than 40 percent of households have compiled a detailed inventory of their belongings. Having an inventory may decrease the time it takes to process a claim and can even mean the difference of whether you are reimbursed for your loss.

The goal is to value your personal property that was destroyed or damaged in the least time-consuming and painful way possible.

Basic Strategy   

Creating a home inventory is as easy as putting together a list of belongings and their estimated value. It is also recommended that you save receipts when you buy valuable items and get in the habit of taking photos. In the occasion that you did not keep receipts, copies of credit card bills, serial numbers, or even notes on where and when item was purchased can be of great help.

Taking on the task of creating an inventory list will take time to put together. Salvatore suggests that if you have children to get them involved as well. Have the children take pictures of their own rooms, taking photos of their sporting goods, computers, gaming systems and, all other personal belongings.

There are also software programs available to help prepare inventory which are free or inexpensive. However, experts say there are benefits to hiring home inventory companies to get the job done. Hiring a home inventory company can generally cost $500-$800 but can save thousands of dollars in potential losses. The great advantage of having an experienced expert to do the inventory is that there is no dispute of the claim. Having a third-party eliminates the burden of proof that it is not fraud.

Homeowners may also want to send a copy of their inventory list to their insurance agent to assure they are carrying adequate coverage. If possible, update your home inventories annually. Do it at the same time every year so that it is easy to remember.

“Take a look at your garage and ask yourself what you’d want to claim if it went up in smoke. It might be as simple as detailing and photographing gardening and sporting equipment,” said Salvatore.

Make sure to include your wardrobe, which can add up to a lot. Take into account sentimental or irreplaceable items, such as painting and jewelry. Although they may not be replaceable, it is possible to replace it with another item of the same value.


Hillsborough Sinkhole

sinkholeJust last month, Hillsborough County gave two Valirco families three minutes to get out of their homes. This is shortly, after a 6- foot deep sinkhole opened between their homes.

The sinkhole is between property line 4724 and 4726 Copper Canyon Blvd. A local news station discovered the homeowners of 4724 Canyon filed a claim with their insurance company in connection with significant cracks in January. State Farm investigated by hiring an engineering firm which documented cracks and found sinkhole activity under the home. However, State Farm denied the homeowner’s claim to stabilize the house. “They told them, ‘Oh, you’re fine, and now, eight months later, we know what the definition of fine is,” said Chris Codling, an attorney representing that homeowner, Santiago Trujillo.

Now geologists and engineers from both homeowners’ insurance companies are investigating the damage by using ground penetrating radar to determine the activity is going on beneath their homes.

However, the homeowners remain are worried about what will happen to their personal belonging and homes, questioning why State Farm didn’t take the proper steps to stop this from happening.

Codling explained that Florida laws changed in 2011 that now allow insurance companies to deny sinkhole claims if they determine the sinkhole activity has not caused structural damage.

Codling says his clients maintained that the cracks were structural damage, and initially worried about a sinkhole opening under the house since they first reported their claim. Nonetheless, State Farm stated that the structure was intact.

State Farm is now forced to fix both properties, including the home next door that belongs to 80-year-old Yolanda Altreche and her husband. They got out with only the clothes on their backs and are terrified.

“It’s taking a toll on me,” she said. “I’m not a young person. I’m an old woman. It’s hard. It’s very hard.”


Flood Insurance Rates – FL

floodingKevin McCarty, Florida Insurance Commissioner and top regulator voiced his concern over federal flood insurance rates in a letter to state Senator Jeff Brandes. McCarty stated they were “unfairly discriminatory” and will ask U.S. officials for data that may possibly help private companies set rates and compete. “The averaging together of zones with different costs and charging one rate would be considered unfairly discriminatory from an actuarial perspective which would not pass scrutiny under Florida law.”

Brandes told The Palm Beach, “It confirmed what we knew: There’s no justification for these rates.”

Federal flood insurance rates are not under the control of state regulators. Florida officials say the state has approximately 37 percent of all the flood polices in the National Flood Insurance Program- but is paying out a lot more than it gets back under the program. Evidence suggest the National Flood Insurance Program has paid out 28.3 cents in losses for every dollar in premiums collected in Florida from 1978 to 2012, these rates are affecting more than 2 million Floridians, McCarty said.

“This is not an alarming loss ratio and does not seem to suggest that dramatic increases are needed for Florida Risk,” McCarty wrote.

The national flood program’s $24 billion debt gave rise to the 2012 overhaul in Congress which opened the door to rate increases of up to 1,000 percent for some property owners in Florida and several coastal states. That sparked commotion from consumers and business groups that the rates were crushing real estate sales and paralyzing local markets.

Approximately one in five policies nationally, and about 5,000 in Palm Beach County, fell into the category of homes facing the biggest hikes. A GOP-led Congress redrafted the law governing the flood program in 2014. The law now allows rate increases up to 18 percent a year for homeowners, along with additional surcharges.

“Floridians deserve to know if the rates they are paying are based on fact or fiction. I believe it is the role of the state to provide that transparency.” Brandes said.

Brandes sponsored a bill that was passed and came into effect last year to encourage private insurers to enter the market, which currently remains dominated by the federal programs. In a recent letter to Florida congressional delegation, Brandes called for greater access to federal loss-history data in an effort to help provide that transparency.

Private insurers are starting to write their own flood policies, which include supplementary coverage beyond the $250,00 of the protection the federal program offers. The supplementary coverage includes “surplus lines” insures such as Lloyds of London, whose rates are not regulated by the state.

A few private companies have ventured forward. Take Tampa-based insurer Homeowners choice for example, who recently announced in 2014 that it would offer a limited number of flood insurance policies as a state-regulated carrier.

The private industry has remained involved and continues to reap premium benefits. The Palm Beach Post found last year that private agents and insurance companies have pocketed one in three governments flood premiums dollars to sign up people and administer policies all while assuming no risk.

Watchdogs including Congress’ General Accounting Office have look into about $10 billion in fees since the 1980s private middlemen.

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Drone Use & Home Insurance

mineo drone use image 220wThe Consumer Electronics Association is estimating that consumer drone purchases will have a 50% increase in sales this year, meaning there will be an additional 300,000 drones in the skies.

The uses of drones are becoming increasingly common. These remote controlled aerial drones come equipped with onboard cameras and they can be purchased online for as little as $1,000.

While the Federal Aviation Administration considers the threat that civilian drones can pose to commercial and private aircraft, the insurance industry is assessing their potential impact on home insurance.

Let’s say a drone crashes on a neighbor’s car, takes photos of children at play or adults at leisure in backyards without permission, or – even crash and causes bodily injury to a neighbor or pet. Would home insurance cover the damage caused by the drone’s operator?

In most occasions, yes, depending on the terms and exclusions of their policy.

“The standard homeowners’ policy provides coverage for damages the insured becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which the policy applies,” says attorneys Tom Schrimpf and Russ Klingaman in Claims Journal. “Absent extenuating circumstances, there is no doubt this broad grant of coverage initially extends insurance for liability arising from recreational (drone) operations. However, this broad coverage may, of course, be limited by policy exclusions.”

Most policies do exclude coverage for injuries or damage caused by the use, maintenance or, ownership of “aircraft.” However, most are not placing drone use in the category of “aircraft” because they are not designed to transport cargo or humans.

Property insurance coverage for the use of drones is not a given.

Typically, claims which result from the business use of a drone are not covered. Say for example taking aerial photos for real estate listings

Policies will often exclude coverage for intentional acts. With drones, it may be hard to differentiate the intentional act from accidental act.

In regards to invasion of privacy, some jurisdictions recognize invasion of privacy as an intentional act which automatically excludes coverage.

If you own a drone, look closely at the language in your policy for commercial-usage of an “aircraft” and the intentional-acts exclusion before you start operating your drone.

“Given the increase in recreational operations, there will be an increase in claims against (drone) operators for accidents that cause both bodily and personal injury, as well as property damage,” Schrimpf and Klingaman noted. “We predict that — in the near term — insurers will see a significant increase in recreational operators seeking coverage under existing homeowners’ insurance policies.”

Currently the Federal Aviation Administration has FAA has given the approval for home insurers to use drones for surveys, underwriting, risk assessment and documenting claims damage from natural disasters.