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Wednesday
Sep212011

Reduce Your Exposure to Mold Losses

Mold can be defined as a growth of minute fungi forming on vegetable or animal matter, commonly as a downy or furry coating, and associated with decay or dampness. Growth of mold may begin with or become exacerbated by water damage that is inadequately repaired. Increasingly, airtight building construction (for purposes of improving energy efficiency) and the recirculation of contaminated air can contribute to the growth of mold as well.

Mold claim costs have increased dramatically over the years. According to the Insurance Information Institute, the typical mold claim costs between $15,000 and $30,000, compared to only $3,000 to $4,000 for an average homeowners claim. Part of this reason is the additional living expenses component of the claim. Frequently, a home owner must temporarily move out of the home due to necessary and major remediation work.

Active mold is fuzzy, velvety, or slimy, and is orange, green, black, brown, pink, or purple in color. If you suspect you have a mold problem in your home, here are some tips to consider.

  • Check the inside and outside of the dwelling for leaks and any visual evidence of contaminants since plumbing leaks are a primary cause of mold in homes. This task includes investigating the attic and basement to closely check for dampness and discoloration. It is important that the source of the leak be repaired as quickly as possible.
  • If there is a slight amount of mold, used a detergent solution to remove it. Wear a mask, safety goggles, and rubber gloves while performing this task.
  • For larger amounts of mold or resistant mold, contact a qualified specialist in the area of mold remediation.
  • For moderate or major damage to property, also contact your insurance agent.
  • To mold-proof your home, dehumidify your basement during the warm months. Eliminate standing water, and frequently clean and replace furnace filters.
  • Regularly check the condition of your roof and exterior finish for any places where water might enter your home.

If mold is suspected of causing an illness, consider the following recommendations.

  • Contacting an environmental consultant may be necessary. You should ascertain the credentials of this consultant and contact the references provided. In addition, it is wise to select a consultant who does not perform the actual remediation work or have an interest in a company that does.
  • If symptoms persist, a physician who specializes in occupational and environmental medicine (rather than a family practitioner) should be consulted. The specialist is often able to more easily isolate the cause.

Copyright 2011 International Risk Management Institute, Inc.

Friday
Aug262011

Hurricane IRENE threatens Northeast with 100 mph winds and heavy rains!  

Forecast to strike NJ on Sunday evening as a CAT 2 (100 MPH Winds) storm, IRENE is likely to cause widespread power outages and tree & structural damage.

Some important information for Personal insurance customers:
 
If you own a house that is located along the ocean, bay or within a coastal county, your home may be vulnerable to wind damage caused by a hurricane or Nor Easter.  It is important to take preventative measures to help protect your family, home and possessions.  Here are some things you can do.
Protect Personal Belongings and Important Documents:

Jewelry and Collectibles: 
Valuables should be inventoried and stored in a secure location (such as an inland bank safety deposit box).  If off-site storage is not possible, then place these items in a waterproof container and store in an interior closet.

ü  Personal Documents
Keep all important papers such as legal papers, birth certificates, marriage license, financial papers, and insurance policy information in a bank safe deposit box or other off-site storage or in waterproof containers.

Damage Prevention Steps When a Storm Approaches:
ü  Clear Loose Objects
Bring outside patio and lawn furniture, potted plants and outdoor bicycles and toys indoors.  Help your neighbor bring in their backyard items as well so these items do not become flying objects that impact your home.  Be sure all awnings are closed and secured.  Tie down any other loose items that may become projectiles in a high wind.

ü  Reinforce Winds & Doors
If your windows and doors are not wind and impact resistant, plywood can be used as last minute protection.  However, be sure it is strongly secured.

ü  Reinforce your Garage Door
If you do not have a storm bar or other garage door reinforcement, you may want to back up your car against the inside of your garage door to help prevent it from “twisting” due to high winds.

ü  Move Furniture and Household Fixtures
Move them away from exterior door and window openings.  If possible, elevate these items and cover them with plastic.

ü  Secure Household Appliances
Appliances, including personal computers, should be unplugged and stored away in cabinets or interior closets.

ü  Test and Refuel Your Backup Generator
If you’ve installed a gas-powered generator as a backup power supply in your home, regularly test it to ensure that it is operational at the time you need it.  When a storm approaches, run another quick test and make sure that plenty of fuel is available.

Preparing an Emergency Supply Kit:
Assemble and maintain an emergency kit throughout the hurricane season.  Items should be stored in a watertight container.
ü  Water-minimum
1 gallon per day, per person for one week is needed.  Two quarts are for drinking and 2 quarts for food preparation or sanitation. When a storm approaches, fill empty containers and a bathtub with water as an additional emergency supply.

ü  Food
A one week supply of non-perishable food.  Remember a non-electric can opener, cooking tools, camping stove, paper plates and plastic utensils.  Remember special dietary needs for infants, the elderly or pets.

ü  Clothing
Rain Gear and Sturdy Shoes

ü  First Aid Kit
Painkillers, such as aspirin or ibuprofen, an assortment of bandages and gauze pads, antiseptic, latex gloves, first aid cream, scissors, tweezers and a thermometer.  Also include a two-week supply of prescription drugs.

ü  Flashlights and Batteries
Using candles for light can pose a fire hazard.

ü  Battery-operated radio
To help you stay informed of severe weather updates

ü  Cash
ü  Bleach & Antibacterial Soap
ü  Toilet paper and personal hygiene items
ü  Plastic bags and tarps
ü  Matches
ü  Pillows and Blankets
Store your kit in a place commonly known to all family members.  Replace and/or refresh items in your kit
 
 
 
Some important information for Business insurance customers:
 
Steps To Take When a Hurricane Watch Is Issued

  • Activate you facility’s Emergency Action Plan and ensure that copies are accessible off site.
  • Listen frequently to radio, TV or NOAA Weather Radio for official bulletins on the storm’s progress.
  • Evacuate non-essential personnel.
  • Move fuel and service emergency vehicles and generators inside the building or to a safe location.
  • Inspect storm, roof and floor drains to ensure they are free of debris and fully functional.
  • Prepare to cover all windows and doors with shutters or other shielding materials.
  • Anchor all equipment stored outside.
  • Brace all signs, tanks and roof equipment.
  • Remove all awnings and lightweight outdoor coverings.
  • Protect vital records against flooding and wind.  Elevate all possible valuables off the floor onto furniture and shelving.
  • Secure backup records off site, away from the targeted hurricane area.
  • Ensure an adequate stock of non-perishable food, first-aid supplies, drinking water and other supplies for staff and emergency crews.
  • Check batteries in flashlights and radios.

Steps To Take When a Hurricane Warning Is Issued

  • Listen closely to radio, TV or NOAA Weather Radio for official bulletins
  • Complete preparation activities, such as putting up storm shutters and storing loose objects.
  • Patrol the facility, as long as it is safe to do so.
  • Check for leaks and fire protection system impairment.
  • Shut off valves when pipes have broken.
  • Complete emergency repairs that are safe to perform.
  • Move to a safe area before you are cut off by floodwater.  Use sandbags if necessary.
  • Follow instructions issued by local officials. Leave immediately if told to do so!
  • If you choose to stay in the building:
    o   Close all interior doors.  Secure and brace external doors.
    o   Stay away from windows and doors even if they are covered.  Take refuge in a small interior room, such as a bathroom, closet or hallway.
    o   In a multiple-story building, go to the first or second floors.  Lay on the floor under a table or other sturdy object.

Steps To Take After a Storm

  • Account for all employees who stayed at the facility during the emergency.  If someone needs to be rescued, call professionals with the right equipment to help.
  • Use caution in flooded areas.  Floodwaters may be contaminated by agricultural or industrial chemicals, or hazardous agents.
  • Do not attempt to drive across flowing water.  As little as six inches of water may cause you to lose control of your vehicle.  Two feet of water will carry away most cars.
  • Stay away from standing water.  It may be electrically charged from underground or downed power lines.
  • Conduct a preliminary inspection to verify stability before entering a flooded, formerly flooded or wind-damaged building.  If there is extensive damage, have a professional engineer or architect certify that the building is safe for work.
  • Have professionals check gas, water and electrical lines and appliances for damage.
  • Assess damage to buildings and equipment.  Photograph and document all damage.  Notify your insurance agent as soon as possible.
  • Make temporary repairs to protect the building and contents.   Remove and discard porous organic materials that have become wet or visibly contaminated.
  • Use a flashlight for emergency lighting.  Never use candles and other open flames indoors.  Only use tap water for drinking and cooking after local officials have reported that it is safe to do so.
  • When using a generator, be sure that the main circuit breaker is off and locked out prior to starting the generator.  This will prevent inadvertent energizing of power lines and help protect utility line workers from possible electrocution.
  • Avoid breathing dust (potential fungal spores) generated by wet building materials.
  • Use telephone only for emergency calls.

 
 
Some important information for Yacht and Boat insurance customers:

Hauling

ü  If your boat is trailer able, ensure that both your trailer and towing vehicles are in good operating condition.  Immediately fix flat tires, faulty brake lights, etc.
ü  Identify a safe, accessible destination, preferably within a hurricane-proof storage facility or garage.  If possible, negotiate a storage contract in advance.
ü  If your vessel is not trailer able, negotiate contractually for a boatyard haul-out at a facility that is equipped to accommodate your boat and not endangered by a storm surge.
Securing in a Marina or Private Berth
ü  Every marina will not will not have the same pre-storm procedures.  If your boat is berthed in a marina facility determine what the hurricane procedures are directly from the dock master and identify your responsibilities.
ü  If berthed at a private dock, coordinate mooring arrangements with your neighbors.
ü  Inspect your boat’s deck hardware and make sure that all cleats, winches and chocks have suitable back plates and bolts.
ü  Purchase a second set of mooring lines and a suitable quantity of fenders, fender boards, chafing gear, back-up batteries and anchors.  It may not be possible to buy supplies immediately before a storm; buy more than you think you might need.
ü  Develop an alternative plan.  Depending on the force and direction of the storm, your current berthing location may not always be the safest place for your boat.
Moving To a Safer Location
ü  If you plan on moving your boat inland, identify in advance:
-Where you plan to go
-All possible routes to get there

-Any potential obstacles along the way, such as bridges, tidal or depth restrictions, etc.
ü  Some bridges may be closed for land evacuation during the approach of a hurricane.  Check with your local marine or law enforcement authorities for further information.
ü  Plan how, and where, you will secure your boat.  As noted previously, inspect your deck hardware and identify the equipment you will need to moor safely in this location.
Additional Pre-Storm Tips
ü  Keep a battery-powered radio, as well as, a supply of batteries, to receive the latest weather information.
ü  Do not plan to leave your boat on a boat lift.  Instead, employ one of the strategies noted here.
ü  Make a checklist of all items that will need to be removed from onboard.  Store any tools that will be needed to remove electronics or other installed items.  Estimate how much time it takes to remove and/or secure gear so that you can plan accordingly.
ü  Keep a folder with all of your boat’s relevant paperwork and/or information in a safe place off of the vessel.  Included copies of your insurance policy, boat registration, marina contract and equipment inventory.  Also list important telephone numbers,  such as your insurance broker, harbor master, the Coast Guard, etc.
ü  IMPORTANT:  Share your severe weather plan with a reliable person who can execute it in your absence.  If you are an absentee owner, formalize this arrangement with a contract.

Monday
Aug222011

Don't Become an Auto Theft Victim

Every 30 seconds, a motor vehicle is stolen in the United States. Using Federal Bureau of Investigation statistics, the National Insurance Crime Bureau reports that annual property losses from these thefts are approximately $5 billion. Although technology and aggressive law enforcement actions have lowered the auto theft rate in recent years, you should still be cognizant of this loss exposure. The following tips may prove helpful in reducing the chances that your vehicle or property in it may be stolen.

  • When temporarily leaving your vehicle, never leave it running or with the keys in the ignition.

  • Always lock your car and roll up the windows, even if it is in your driveway. If you have a garage, park your car in it, and close and lock the garage door.

  • Park in busy, well-lit areas.

  • When purchasing auto stereo equipment, choose items that can be removed and locked in the trunk.

  • When using valet parking or taking your car in for repairs, leave only the ignition key with the attendant.

  • Turn your wheels sharply toward the curb when parking since this makes it extra difficult for thieves to tow the vehicle. Always use your emergency brake, and leave the transmission in park or in gear.

  • Look into various antitheft devices for your auto. Ask about auto insurance discounts for antitheft devices, including alarms and window etchings.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Wednesday
Jun152011

Don't Underestimate Your Exposure to Natural Catastrophes

Americans tend to be an optimistic bunch—which is typically a good quality to possess. A key exception, however, concerns our impressions that we are very unlikely to ever experience a devastating natural disaster. As you know, 2011 has already proven to be one of the very worst for natural catastrophes in decades. This reason alone should cause you to systematically consider your exposure to natural disasters and take sound action to mitigate these types of losses if one were to occur. Here are a few ideas for properly handling your exposure to natural disasters.

  • Flood losses have impacted tens of thousands of people during the past month—particularly those near the Mississippi River and its tributaries. You can checkfloodsmart.gov to see if your home has a higher exposure to flooding. Remember, however, that about 33 percent of all flood losses occur outside the flood zones. Studies indicate that in the course of a home's 30-year mortgage, it has a 26 percent chance of suffering damage from a flood, compared to a 9 percent chance of a fire. If you do not have flood insurance, talk to your insurance agent about the protection provided by this policy and annual cost.
  • Tornados can decimate houses, as seen in the massive storms in Missouri and numerous southern states. And yet many people fail to carry adequate dwelling limits on their home. According to one of the largest residential building cost data companies, Marshall & Swift/Boeckh (MSB), 64 percent of U.S. homes are undervalued by an average of 19 percent. So if you are unsure whether you have the proper protection, ask your insurance agent about your dwelling limits and your potential for being underinsured. Note that some insurers offer guaranteed replacement cost or extended replacement cost—invaluable coverages in the event your home is destroyed.
  • If your home is near an earthquake fault zone, consider procuring earthquake insurance. Here is a U.S. Geological Survey map of the contiguous United States indicating various levels of risk.
  • Develop a home disaster plan and rehearse it with your family on an annual basis.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011
International Risk Management Institute, Inc.

 

 

Monday
May162011

Make Certain Your Antiques Are Properly Insured

     Many Americans own valuable antiques, which are often inadequately insured under a standard homeowners policy. Homeowners policies may contain restrictive limits and coverage for these valuable items, and the valuation may only be provided on an actual cash value basis. Even if the personal property replacement cost endorsement is added to a homeowners policy, the endorsement explicitly lists antiques, fine arts, paintings, and memorabilia as ineligible properties. Coverage is also restricted to a limited number of perils. For example, the homeowners policy does not provide any personal property coverage for breakage or accidental scratching. If you possess extensive and valuable antiques or fine arts, the following tips may prove helpful.

  • Properly inventory and document your antiques and other collectibles. Videotaping should also be utilized; be sure to videotape the item from every angle.
  • Arrange an appointment with your insurance agent to review your antique and fine arts coverage. Bring as much information about your portfolio as possible, including photos and any appraisals.
  • Consider utilizing the services of an experienced appraiser who specializes in antiques. Some antique and fine art dealers perform free general value assessments online for lesser-value pieces if acceptable photos and descriptions are provided. For extremely valuable items, most appraisers want to personally inspect the piece, which normally involves a fee. All appraisals should be prepared in accordance with the codes and requirements of the American Society of Appraisers and the American Appraisers Association. High-quality appraisals normally include a description and comment on the antique, an auction value of the item, and a replacement value.
  • For valuation assistance on less valuable or more common items, consider visiting eBay and other Internet auction sites to help establish various items' market value. An examination of the item's closing price, not its initial asking price, is more representative of its true value.
  • Ask your agent about procuring a personal inland marine policy or endorsement that can be added to your homeowners policy. This policy/endorsement allows you to schedule your items on an agreed valued basis established by the appraisal and gives you much broader coverage than the homeowners policy provides. Note that this special coverage may also have a breakage exclusion, which may be eliminated for an extra premium. Take steps to safeguard your collection, with adequate security precautions and appropriate storage.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011 - International Risk Management Institute, Inc.

Friday
Apr152011

Personal Lines Beat: Few U.S. Homes Have Earthquake Insurance

The tragic earthquake and tsunami that struck Japan on Friday, March 11, have raised questions regarding insurance coverage and provide a stark reminder that the United States is also vulnerable to these natural disasters, according to the Insurance Information Institute (I.I.I.).

"Everyone, no matter where they live, should contact their agent or company representative to make sure that they have the right type and amount of insurance for their specific situation," said Jeanne M. Salvatore, senior vice president for the I.I.I. "All Americans also need to have an up-to-date home inventory of their personal possessions and an evacuation plan," she said.

The potential cost of earthquakes in the United States has been growing because of increased urban development in seismically active areas and the vulnerability of older structures, which in some cities may not have been built or upgraded to current building codes. Standard homeowners, renters, and business insurance policies do not cover damage from earthquakes. Coverage is available either in the form of an endorsement or as a separate policy. (And a flood insurance policy would provide coverage for a tsunami.)

Many private insurers offer earthquake coverage. In California, homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization. Only about 12 percent of California residents currently have earthquake coverage, down from about 30 percent in 1996, 2 years after the Northridge, California, earthquake. Unfortunately, 86 percent to 90 percent of U.S. homeowners lack earthquake coverage, according to A.M. Best.


Monday
Mar142011

Lower Your HO Insurance Costs

Homeowners insurance premiums often take a substantial bite out of a family’s budget. You may, however, be paying too much for this coverage. The following are some approaches you can use to reduce your homeowners insurance costs.

  • Try to increase your deductible to the highest one you can afford, even if the premium savings do not appear to justify it. This will decrease your premium and increase the likelihood that your loss history will be excellent, since minor losses will be paid by you and not your insurance company. A loss-free record over time saves premium dollars. For example, if you currently have a $250 deductible on your homeowners policy, consider increasing it to $500 or $1,000.
  • Consider purchasing a monitored burglar alarm. Alarms have proven successful in reducing burglary rates. In addition, most insurers provide premium discounts to consumers with these alarms, some as high as 20 percent.
  • Maintain your home in optimum condition. If a repair is needed, perform it as soon as possible. For example, loose or missing roof shingles should be repaired or replaced immediately. A home in excellent condition is much less likely to experience a loss.
  • Buy your home insurance and your auto insurance from the same company. Discounts normally apply when you do.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011
International Risk Management Institute, Inc.

Friday
Jan282011

Please credit who needs to be Credited. Coordinate Other Exclusions with the "Personal Profit" Exclusion

We've been advocating for years that policyholders should attempt to negotiate "final adjudication" or similar wording in the "personal profit" exclusion of a D&O policy. Such wording would require a final judgment on the merits that the insured did, in fact, receive illegal remuneration. This language would prevent the insurer from denying coverage for defense costs based solely on the allegations of the complaint.

But exclusions apply seriatim (a legal term meaning separately in successive order). So even if a claim survives the application of one exclusion, it could still be felled by another exclusion. In effect, the language of other pertinent exclusions must be coordinated with the wording of the "personal profit" exclusion to fully preserve coverage for defense costs, as demonstrated by a recent Eighth Circuit case.

In Wintermute v. Kansas Bankers Surety Co., No. 09-2806, 2011 U.S. App. LEXIS 174 (8th Cir., Jan. 6, 2011), a director of an Arkansas bank was indicted by a federal grand jury. The first two counts alleged that she made false statements to banking regulators in the paperwork she filed to acquire the bank. The other counts alleged that she committed various criminal acts while she was a director and during the D&O policy period. She was convicted on the first two counts but acquitted on the others.

Because the first two counts involved conduct before she was a director (i.e., while she was in the process of acquiring the bank), she conceded that there was no coverage under the D&O policy for the cost of defending those counts. However, she sought a partial recovery from the D&O insurer for the costs to successfully defend the other counts involving her conduct during her term as a director. The D&O insurer denied her claim, asserting that the allegations in the indictment alone were sufficient to trigger the "personal profit" and "dishonesty" exclusions.

The appellate court disagreed. The "personal profit" exclusion stated that the D&O insurer shall not be liable for a claim made against a director "based upon or attributable to the Director ... gaining in fact any personal profit or advantage to which [she was] not legally entitled." [Emphasis added.] While broader than "final adjudication" wording, the court held that the "gaining in fact" language required (1) a final decision on the merits in either the underlying case or a separate coverage case, (2) an admission by the insured, or (3) "at least some evidentiary proof that the insured reaped an illegal profit or gain." Therefore, the D&O insurer could not apply the "personal profit" exclusion by relying solely on the allegations in the indictment.

The "dishonesty" exclusion stated that the insurer shall not provide any defense in connection with any claim against a director "brought about or contributed to by the dishonesty of the Directors.... This exclusion shall not apply to any protection provided for any Director ... under the terms of this policy who was not involved in the dishonest acts." [Emphasis added.] The court read the "severability" language in the last sentence of the "dishonesty" exclusion as serving the same purpose as the "in fact" language contained in the "personal profit" exclusion. That is:

The last sentence ... makes the dishonesty exclusion inapplicable if the specific director was not actually involved in the dishonest acts. Thus, it is not enough that the criminal indictment charged [the director] with committing fraud. Material fact disputes exist concerning whether [she] "was involved in the dishonest acts" alleged, particularly in light of her acquittal on those counts.

If it weren't for the "severability" language in the "dishonesty" exclusion, the director might have lost the benefit of the "in fact" language of the "personal profit" exclusion. Heed her victory. Check the other exclusions in your D&O policy to make sure there is nothing in them that contradicts the favorable wording you (hopefully) have negotiated.