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As we close in on the One year anniversary of the Great Hurricane of 2012, we read more and more about the consequences of Hurricane Sandy.  Insurance policy holders have found out that they hardly knew what their policies covered and what they didn’t cover. Those who had no insurance, or minimal losses, should be re-evaluating their risks and plan for the future. As images of waterlogged homes and closed businesses dominate the nightly news, the biggest surprise of those who lost everything seems to be that their policies don’t cover damage to flood. Yet despite a decade long public awareness program from the National Flood Insurance Program, folks are still confused. To get coverage from flood you generally have to buy a separate policy through the federal program, but most people decline the coverage due to cost, even though flood is the most common form or natural disaster, and unfortunately that decision will cost them dearly. Some experts openly suggest it will be 5 to 10 years before the Jersey shore recovers. 

According to the Insurance Information Institute ---Only 18 percent of Americans have flood insurance. And data at the National Flood Insurance Program shows that 25% of all flood claims come from people in low or moderate-risk areas. In 2011 the tri sate area of NJ, NY and Pa were the top three states in flood claims. Many major lenders in these states require flood insurance when any loan is involved. But because property insurance is complex, and the benefits and deductibles vary from company to company, there are some common questions one should ask when taking out any P&C insurance policy.

Q. Does My Policy cover tree removal?

A. If a tree hits your home or property and was caused by wind then generally the Insurance company will cover it, but if the tree fell on the property and didn’t damage anything, then NO. You will have to pay for its removal. There is one exception, if the tree falls and hits electrical lines, generally the power company will take care of it, however if the tree was rotten and the property owner failed to act responsibly then the claim may be denied. If a tree falls on your car, your Insurance company should cover it if you the correct comprehensive coverage. If your car was not properly insured don’t expect a check. And whether you had personal auto or business Auto policy and only had liability coverage, don’t expect a check. Also if your car was flooded, you car would be covered if you had comprehensive coverage. If your neighbors tree fell on your car, both insurance companies will effectively work out who is responsible to pay your claim. If your neighbor had coverage, you should be covered, additionally your home policy or auto policy may cover it, there are several variables under this scenario, ask your agent beforehand.

Q- What’s the difference between rain damage and flooding?

A- The government defines flooding as the overflow of inland or tidal waters — including a storm surge, a mudflow, or the rapid accumulation of surface waters that can occur from a sudden rainstorm. Water leaking through the roof is not covered as flood and would be under your homeowner’s insurance policy not the flood policy.  

Q. What us flood insurance?

A. Find detailed Information about flood insurance from the US Govt. website at www.floodsmart.gov Flood is typically defined as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is the policyholder's property) from: --Overflow of inland or tidal waters; or
                       --Unusual and rapid accumulation or runoff of surface waters from any source; or Mudflow.

Q. What does flood insurance cover?

A. See FloodSmart.gov  a detailed site that has info about the National Flood Insurance Program, but simply, insurance coverage for a home maxes out at (up to $250,000 in damage) and some of its contents (up to $100,000). Typically the standard policy covers the building, electrical/plumbing systems, carpeting and major appliances like stoves, refrigerators and water heaters. Additional costs are for cover contents like clothing, furniture etc.  Flood insurance does not swimming pools, fences, docks, plants: coverage for items in basements below ground is limited. Check with your agent for details. Excess policies are available for coverage above $250,000.00 and Commercial coverage is available up to $1,000,000. Call your trusted choice agent for more information.

Q. What if I don’t have flood insurance?

A. If you live in a federal declared disaster area, you can apply to the Federal Emergency Management Agency for assistance even if you don’t have flood or other property insurance. Go to DisasterAssistance.gov or call 1-800-621-FEMA (3362) for details. Benefits may be a grant or a loan. But don’t think that the Federal Government will pay for your losses, many storms do not qualify as disasters, and any assistance is usually much lower than anything your insurance company would offer if you had the correct coverage.

Q. Is wind damage covered on Home or Business Property Insurance?

A. Damage is generally covered from high winds but should a storm become a hurricane with winds above 74 MPH, then your claim may be subject to the “hurricane deductible” which depending on your Home or Business insurance policy could be anything from 1% to 5% of your area zone and policy coverage, and in some cases higher... i.e. If you have a 5 % deductible and have $500,000 in coverage, then the deductible is $25,000.”  Check your policy for specifics. Business coverage can be up to $1,000,000 so check with your agent for more info.

Q. Does my policy cover temporary expenses?

A.  Most home insurance and rental policies offer additional coverage for temporary expenses if you are displaced and unable to live in your home due to covered perils. Check with your agent and policy for specifics. The expenses covered could include hotel bills, temporary rental etc, but again check your policy for specifics.

Q. Does My insurance pay for my spoiled food?

A. When a blizzard, hurricane or a bad storm is in the forecast, most people run out and fill up on food and supplies, but if you loose power for more than 48 hours most of that food could spoiled.  First pick up goods than can stay longer without refrigeration.  But, you didn’t do that and everything in your frig is spoiled, well some companies will reimburse policyholders after the deductible is assessed, but some others companies don’t. So check your policy now and ask your agent for specifics, better to know early. If this is your only claim due to a storm — and your losses are less than $1000 it may not make sense to file a claim. Insurance companies do monitor the frequency of claims so you do risk higher premiums if you experience multiple losses.

Q. Why doesn’t My Business insurance cover me for loss of income?

A. Business insurance policies are very different from Homeowners as they can cover a variety of different perils but most polices are ala cart. I.e. Many Business owner policies (BOP) will cover you if the power goes down and your business is closed more than 72 hours; however there are some exceptions like flood. If your business was closed by a flood and you didn’t have flood coverage, don’t expect you’re BOP to cover it. Now is the time for you to review your policies to make sure they do exactly what you want them to do, take notes and ask for a written summary of your coverage’s so there won’t be any misunderstandings in the event of a loss. Some polices will cover your actual losses or annualized. The Point is that you really need to ask questions and find out specifically what your policy does and does not cover. Don’t be afraid to ask your agent specific questions, Your Trusted Choice agent specializes in service.

Q. After a loss, my town says I must update for new laws, who pays?

A. That’s called Ordinance of Law Coverage and it can affect both homeowner and business policies alike. It occurs because of a change in usage or the change in a structure that was affected by a loss or the new requirements that a local civil authority may make. I.e. you may be required to have wheel chair ramps installed, or different exit signs or emergency lighting, or even flood vents added to your property. Issues will vary from state to state, but the message here: Coverage is available for changing laws if you suffered a loss and must upgrade a property due to changing local rules and regulations. Your insurance policy can provide this additional coverage. Just ask your local Trusted Choice Agent for explanations on the different coverages available. Now is the time to reevaluate your coverage and make sure your property is properly covered before the next emergency. Be ready for the next time.  Call your Trusted Choice Agent at I & E Insurance Agency for a review today. 
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