Wading Through the Red Tape to a Victory in Flood Insurance!

Unless you are a realtor, mortgage banker or insurance sales person you probably have remained confused about the Flood Insurance Reform, what it means, or how it will affect you personally. Many people are misinformed, and some of that misinformation actually comes from the media. When it comes to bills, acts, and all of that government jargon, most folks just put their faith in the media to translate for them. While the actual concept of the reform was financially frightening, the misinformation was more like a horror story. The good news though, is that on March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act into law, so we can all breathe a sigh of relief. But, what we at SouthGroup Insurance would like to do here is break down the Flood Insurance Reform and the Homeowner Flood Insurance Affordability Act into bite sized pieces that will give the consumer a better understanding of what has been flooding our heads with confusion!

Flooding has been, and continues to be, a serious risk in the United States. To address the need, in 1968, the U.S. Congress established the National Flood Insurance Program (NFIP) as a Federal program. It allowed property owners to purchase flood insurance if the community had adopted floodplain standards for new construction. However, owners of existing homes and businesses did not have to rebuild their structures to the higher elevation standards, and many consumers received subsidized rates that did not reflect their true risk exposure. Over the years, the costs and consequences of flooding have continued to increase. After many studies, for the NFIP to remain sustainable, the premium structure would have to more accurately reflect the true risks and costs of flooding.

In 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the NFIP is run. Key provisions of the legislation required the NFIP to raise rates to reflect the true flood risk, to make the program more financially stable, and to change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes meant huge premium rate increases for most policyholders over time, and in some cases, exponential increases right away.

Under BW-12, policyholders with subsidized policies for non-primary residences, businesses, and severe repetitive loss properties, would see large increases. Subsidies would be removed for policies on newly purchased properties, lapsed policies, policies covering properties for the first time, properties of one to four residences that have experienced severe repetitive loss; and properties that have incurred flood-related damages where claims payments exceed the fair market value of the property. Most policyholders would see a new 5% charge on their premiums to cover the Reserve Fund assessment that is mandated by BW-12.

Rate changes would have had the worst impact on properties located within a Special Flood Hazard Area that were built before a community adopted its first Flood Insurance Rate Map (FIRM) and had not been elevated. For many communities, the initial FIRM would have been adopted in the 1970’s and 1980’s. Many of these pre-FIRM properties have been receiving subsidized rates. There would also be premium changes for policyholders after their community is remapped. Currently, the NFIP Grandfathering procedure provides the option of using risk data from previous Flood Insurance Rate Maps (FIRMs), if a policyholder has maintained continuous coverage, or if a building was constructed "in compliance" with the requirements for the Zone and Base Flood Elevation (BFE) reflected on a previous FIRM. A provision of BW-12, however, required FEMA to use revised flood risk data (Zone and BFE) provided by the latest map revision, thereby eliminating Grandfathering.

Thankfully, the Homeowner Flood Insurance Affordability Act was signed and will address many of the unintended consequences of BW-12. Here are some highlights:

+ Average rates will only be allowed to increase 15%-18% annually.

+ Property that is purchased will be provided the same flood rates as the prior owner.

+ Grandfathering will still be honored.

+ Refunds will be returned to policy holders who were detrimentally impacted by BW-12

+ Policies will be surcharged $25 for primary homes and $250 for all other policies to build an NFIP reserve to build a cushion for future catastrophic losses

+ Installment payments will be allowed, as well as higher deductible options

Some more fun information: A community’s Flood Insurance Rate Map (FIRM) shows the base flood elevations, flood zones, and floodplain boundaries. Each zone communicates the risk of flooding for that area. Everyone lives in a flood zone, but the risk of flood is different based on the area. The BFE is the computed elevation to which floodwater is expected to rise. A Special Flood Hazard Area, or high-risk zone, has a 1 in 4 chance of flooding during a 30-year mortgage. For a property in the high-risk zone, you need to know the elevation of the structure in relation to the BFE. Generally, the higher the elevation of the structure above the BFE, the lower the flood risk. All of these measurements are shown on an Elevation Certificate, which is a form completed and signed by a licensed engineer or surveyor. So to determine the premium for a property in a high-risk zone, you first need an elevation certificate. Then, an insurance agent can calculate the premium based on the amount of coverage desired.

Still sound like a foreign language? Call SouthGroup Insurance and speak with one of our licensed agents to learn more. We offer full insurance reviews of all your policies at no charge, helping you better understand what coverage is best suited for you personally and why. No appointment is necessary to visit one of our 3 convenient coastal locations in Bay St. Louis, Diamondhead and Biloxi. Call SouthGroup today and we can help you through your flood of confusion and protect you from getting drowned!

We are your LOCAL Trusted Choice Advisors, SouthGroup-Gulf Coast http://www.southgroupgulfcoast.com / ,
SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: atreutel@southgroup.net , phone: 228-466-4498 , fax:888-415-8922, FaceBook www.facebook.com/southgroup.gulfcoast, or Twitter www.twitter.com/atreutel !

 

We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states. Insurance is stressful, but we make saving easy.  We help you save money on insurance!

Weekend Warrior! Monday Morning Backache!!

Yes, we are all guilty of over-doing it when we get Spring Fever.  The weather is so nice, that we put on our shorts and go jogging, or biking, and we start working in the yard.  All of the above leads to body aches and pains, because we have been home-bound during the long cold winter.  But the pain can be avoided!!


Trusted Choice shared some reminders:


+ Warm Up!! Even professional athletes stretch before starting to play.


+ Dress right! Be comfortable and be sure you are protected for the activity you are beginning.


+ Slap on Sunscreeen !  and re-apply periodically.


+ Wear protective gear!  Protect your nose, toes, and elbows --- and your eyes and head too!


+ Don't Over Do it!  Pain is not fun.  You don't have to get everything done in one day. 


Enjoy the moment.  Breathe.  Relax. 


And be sure all of your Spring and Summer toys are protected with proper insurance (boats, golf carts, four wheelers, jet skis, hunting guns, and more)!


We are your LOCAL Trusted Choice Insurance Advisors, SouthGroup-Gulf Coast http://www.southgroupgulfcoast.com / ,
SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: azeringue@southgroup.net , phone:228-466-4498, fax:888-415-8922, FaceBook www.facebook.com/southgroup.gulfcoast, or Twitter www.twitter.com/atreutel !

We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states.

Insurance is stressful, but we make saving easy.  We help you save money on insurance!

Too good to be true? Don’t wait for a claim to find out!

Any time you shop your homeowner’s insurance policy for better rates, there are key things to look for. When you see a dramatic decrease in premium, you see a great bargain, but, without a professional and comprehensive review of the new offer against your existing coverage, you may be losing more than you’re bargaining for. One of the most important items consumers are not familiar with is the difference between Replacement Cost Coverage and Actual Cash Value. (These items are commonly labeled as RCV and ACV in your policy language).

Replacement Cost Coverage is defined as "the cost to replace damaged property with materials of like kind and quality, without any deduction for depreciation." Therefore, what it costs to restore a home after a loss at current costs, or to replace your older electronics at current costs, is the basis of RCV. Actual Cash Value, however, is defined as "Replacement cost minus depreciation." Depreciation is a decrease in value based on wear and tear or age. In the event of a claim, ACV coverage works by calculating the current replacement cost at the time of the loss and deducting the estimated depreciation. The only difference between replacement cost and actual cash value is the deduction for depreciation, as both are based on the cost today to replace the damaged property. This is a small difference on paper, but a HUGE difference in the event of a claim. 

 

One of the best examples on how this difference in coverage can affect you is on roof damage. A good roof can last a very long time, and rightfully so, because it can be very expensive. Imagine your 10 year old roof is currently valued at $20,000 on your insurance policy with ACV coverage and a $2,000 deductible when your roof is destroyed in a storm. After adjusting a depreciation of $1,000 per year and applying your deductible, you would receive only $8,000 for your claim leaving you responsible for the other $12,000 needed to replace your roof. However, with RCV coverage, the same scenario would pay you $18,000 leaving you only responsible for your $2,000 deductible.

One item to be aware of, however, is the process in which claims are paid. Aside from the calculating previously described, most insurance companies do not provide the full replacement cost until after you have procured the replacement and provided evidence that the item has been replaced. This is often referred to as the "hold back". For example, 3 years ago you purchased a living room set for $4,000 that was just destroyed in a fire claim, and you have RCV coverage - just like if you had ACV coverage, your insurer will initially deduct for depreciation. In this example, a deduction of $500 per year for wear and tear is used. Therefore, your RCV claim coverage will initially provide you with $2,500 toward your replacement living room furnishings. You would use this $2,500 toward a similar living room set at today’s purchase price of $4,500. Once you provide the purchase receipt for the replaced item to your claim adjuster, your insurer will reimburse you for the additional $2,000. Of course, if you purchase a replacement at a lesser value you will only be reimbursed for that value, or if you choose not to purchase a replacement, you will only receive the original $2,500. Insurance companies do vary on these rules, and we recommend you ask your agent detailed questions today – before a claim occurs. If you had ACV coverage in this example claim, you would only receive the original $2,500 payment, whether you replace the damaged item or not.

Mortgage companies normally require RCV coverage on a home they have a lien against. When the consumer chooses ACV coverage to save on the front end, most mortgage companies consider this a failure to meet their contractual agreement and have the right to "force-place" RCV coverage on the home creating an additional and unnecessary expense to the client. Force-placed insurance, also known as "collateral protection insurance", is an insurance policy placed by a lender on a home when the property owners' own insurance is cancelled, has lapsed, or is deemed insufficient. This insurance allows the lender to protect it’s financial interest in the property. Force-placed insurance is usually a lot more expensive than what you can obtain by shopping for an insurance policy yourself. In addition, the lender-placed insurance may have limited coverage and only cover the value of the loan, and not cover the full value of the home, and, these policies generally do not cover personal items or owner liability. In many cases, the consumer isn’t even aware that this force-placed coverage has been added to their monthly escrow bill, and they end up paying hundreds of dollars more that could’ve been avoided if they had known and purchased an RCV policy originally from a Trusted Choice agent. 

 

As always, we recommend a full insurance review to all of our readers. Your insurance policy is an investment, just like your retirement plan. Don’t settle for less or base your investment choices on assumptions. Schedule your free insurance review with a professional agent at one of our 3 convenient coastal locations today. Don’t be afraid to ask questions or list your concerns. We are licensed professionals and are eager to discuss what coverage is best for you. 

 

We are your LOCAL Trusted Choice Advisors, SouthGroup-Gulf Coast http://www.southgroupgulfcoast.com / ,
SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: atreutel@southgroup.net , phone:228-466-4498, fax:888-415-8922, FaceBook www.facebook.com/southgroup.gulfcoast, or Twitter www.twitter.com/atreutel !

We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states. Insurance is stressful, but we make saving easy.  We help you save money on insurance!

Thanks to Susan Monti for her words of wisdom!

You can lose EVERYTHING - even if you rent

An apartment building burned to the ground yesterday.  So tragic.  Almost 100 people are now without a home and have lost all of their possessions.  Hopefully, the impacted people had insurance.

When you don’t own your home, you don’t think about insurance.  That’s your landlord’s problem, right? Wrong! Your landlord is probably insuring their asset, which is the structure you are renting from him(her), but not your property inside. Your contents are your responsibility to insure. Also, in most cases, you are the liable party if someone is injured at your rented residence. Another myth about renter’s insurance is that is costly and coasts as much as homeowner’s insurance. Wrong again! The average renter’s fire policy ranges from $30-50 per month.  And if you think about it, it’s something you can’t afford NOT to have!

Why do you need renter’s insurance? Kitchen fires cause damage…dangerous damage!! Think you’re too good of a cook to worry about that, think again – about your neighbors! One wall away there could be a bad cook, and in moments your home could be on fire because of that bad cooking! Notice water dripping from the light fixture above your head while you’re brushing your teeth? Perhaps the neighbor above you let their tub overflow! What items of yours are damaged because of this!?!? Of course, you may have the greatest neighbors around, or perhaps you’re renting a house and not sharing your walls with the careless person next door. That helps! Now you just have to worry about weather threats, burglary or the crazy chance that you may have a fire or water damage without having a bad neighbor to blame.

In other words, bad things happen to responsible people every day.  Renters Insurance can protect you from the terrible incidents described above and more! Coverage for clothing, furniture, appliances, and computers is an important part of why you should have this insurance.  Also, in today’s litigious society, you need to be protected in the event you find yourself legally responsible for someone who may have been injured while at your residence.  A renter’s insurance policy can offer you that kind of protection at a very reasonable price.
Take a few moments to do a quick inventory of your belongings.  Don’t do it in your mind, but physically go around and list the items you possess.  Every fork, every sock, every DVD and everything in between.  Can you afford to replace all of this yourself? Many people don’t realize how quickly this adds up.  The average renter has $50,000 in personal belongings at stake.

Now consider your valuable items such as your fine jewelry, art, collectibles and even your car.  In other words, consider your assets. At this point you may be thinking how would a renter’s insurance policy protect my car? That’s a great question.  Renter’s insurance doesn’t protect your car from collisions or comprehensive claims, but it does protect your assets in the event a liability claim is raised against you.  For example, a door to door salesman comes to your residence on a rainy day and slips on your wet doorstep causing an injury.  He decides to sue you for medical expenses.  Is this your landlord’s problem or is it your problem? You didn’t have a proper rug in place to prevent slips, you didn’t dry the step after a hard rain to prevent slips, you could be the at fault party in such a law suit.  Can you afford to pay his $30,000 in medical bills? You may not have that kind of cash on hand, but your assets could add up to that much. So, with renter’s insurance, the question is not do you need the coverage but how much coverage do you need!

Here we just addressed a few questions about renter’s insurance, but we know you have more questions! At SouthGroup Insurance Services, we have several Trusted Choice Agents on staff ready to answer your questions.  An insurance review takes only a few moments and could save you thousands of dollars.  Make a list of your questions along with your inventory and visit one of our 3 coastal locations today.  It’s always the right time to think again and play it safe! 

Your Trusted Choice Insurance Agent stands ready to assist you. We help you through the maze of insurance coverages, carriers, and premiums, and we find the best personal and business coverage for you at affordable rates. We help you save money on insurance --- and we save you time!  And remember, when it comes to insurance, one size does not fit all.

We are your LOCAL Trusted Choice Advisors, SouthGroup-Gulf Coast http://www.southgroupgulfcoast.com / ,
SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: atreutel@southgroup.net , phone:228-466-4498 begin_of_the_skype_highlighting 228-466-4498 FREE  end_of_the_skype_highlighting, fax:888-415-8922,  FaceBook www.facebook.com/southgroup.gulfcoast, or Twitter www.twitter.com/atreutel !

We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states.

Thanks to Susan Monti for her words of wisdom!