Mortgage Escrow Accounts: Could Mortgage Escrow Accounts Cause Your Financial Ruin?

November 21, 2008

The answer is “YES!” unless you follow my strategies shown below.

I learned first hand about mortgage escrow accounts back in 2003-2005 when I was working as a Claims Examiner for a huge insurance company. Their product was Forced-Placed Hazard Insurance, which is a property insurance policy sold to mortgage companies.

Here’s how it works when YOU choose your homeowner’s insurance and pay it through your escrow account.

When you buy a home, part of your closing costs customarily is the first premium payment for your homeowner insurance. After that, the insurance company sends their bill to the mortgage company. Part of your monthly house payment pays 1/12 of your annual homeowners insurance premium. The insurance company is sure to get their premium paid as long as you (a) have an escrow account, and (b) as long as you own the house, and (c) as long as you keep making your monthly house payment.

But there are BIG, BIG problems with mortgage escrow accounts. These problems are happening with much greater frequency than just a couple years ago. Foreclosures are only PART of the problem, and that’s a topic for another article.

“Forced-Placed” coverage nightmares

Pull out your file for the closing on your house. In the mortgage, there is a clause that allows the lender to buy a “Forced-Placed” insurance policy on your house if the insurance is cancelled for any reason. So, if you are a homeowner, and your policy gets cancelled for any reason, the bank will pay the premium for you and charge it to your escrow account.

Sometimes, the mortgage companies sell their mortgages in big portfolios to other lenders. When that happens, the buyer gets all of that escrow money, too. In the confusion surrounding the sale of those mortgages, and the time it takes to do the deal, the buyer sometimes fails to make premium payments on time. When that happens, some policies occasionally get cancelled.

Sometimes, lenders just screw up and forget to make premium payments…even when the money is in the escrow account and it’s no fault of the homeowner. And sometimes the lenders fail to notify the homeowner that they have no insurance. The homeowner finds out when they have a claim.

Sometimes, people don’t automatically renew their policies that are in escrow, and the policies cancel.

Sometimes, insurance companies cancel homeowner policies, and the insurance companies send the cancellation notices only to the lender, and the homeowner never knows his policy was cancelled. The homeowner finds out that things have changed when he has a claim.

In each of these examples, the home ends up without insurance coverage. Banks and mortgage companies do not like having loans on properties without insurance. If the house burns down, so does their equity. That’s the reason for “Forced-Placed” policies.

The BIG problem…the HUGE problem for YOU…the homeowner…is that the bank only cares about THEIR MONEY. They don’t care about you, the contents of your home, your legal liability, or where you’ll live if you have a fire and can’t live in that house. They usually only write the “Forced-Placed” policy for the unpaid balance of the loan.

Lenders don’t care about the replacement cost of your property. Forced-Placed coverage usually only covers the outstanding loan balance on your mortgage. So, if you had a house worth $150,000.00, and a loan balance of $50,000.00, the lender would buy a policy for $50,000. The lender only cares about getting the loan paid off.

What if your house is worth $150,000.00, and your loan balance was only $50,000, and you have a total loss fire with their coverage?

You are going to have a very bad, life-changing experience, that’s what!!

Normally, your property insurance covers your liability. Lenders don’t care about your liability exposure. They don’t care if a delivery man falls on your property and sues you for six figures. Forced-placed coverage only covers the outstanding loan balance on your mortgage. There is no liability coverage.

Another very bad, life-changing experience.

Normally, your property insurance covers your contents…your personal property, like your furniture and other belongings. Lenders do not care about your contents. They don’t care if everything you own is destroyed. Forced-placed coverage only covers the outstanding loan balance on your mortgage. There is no contents coverage.

Another very bad, life-changing experience.

Normally, when a homeowner buys insurance to protect his home and contents, the policy also has coverage for Additional Living Expenses. Lenders do not care if you are forced out of your home because something happens that makes your home unfit to live in. Lenders don’t care if you have to live temporarily in a homeless shelter. Forced placed coverage only covers the outstanding loan balance on your mortgage. There is no ALE coverage.

Another very bad, life-changing experience.

Also remember that the LENDER owns the forced-placed policy on your property, not you. The settlement checks will go to them, or perhaps made payable to the lender and you. But they usually won’t let you cash the check.

When I worked for that insurance company, I regularly talked to people who said that the first time they were aware of the forced placed policy is when they filed a claim. Their old insurance company sent the premium notice to the lender, who missed the premium due date, and the policy cancelled. The lender then forced-placed a policy on the property.

So, what do you do if this happens to YOU?

One of these scenarios will explain your situation:

1. You were negligent, and allowed your policy to lapse. It’s not the lender’s fault. The insurance company notifies the lender of the cancellation date. The lender forced-placed a policy for the loan balance. You have a claim.

What do you do? Go to the website for the author, found at the bottom of this article, to learn how to take control of your claim. Then, as soon as the claim is completed, buy your own policy and cancel the one the lender owns. Just make sure that you have coverage IN PLACE before you cancel the lender’s policy.

2. The lender was negligent, and allowed your policy to lapse. Then, the lender force-placed a policy for the loan balance. You have a claim.

What do you do? ALERT!!!! Get an attorney involved IMMEDIATELY!! Don’t wait!! Don’t try to be a nice guy!!

Get your documentation in order. Make sure that you can prove it was the lender’s fault that the premium was not paid. Next, have your attorney call the person at the lender who manages the Escrow Department. Explain what happened, and ask them what they plan to do to make things right. If they fix the problem and you don’t suffer any loss from their negligence, then all will be well.

How does the lender fix the problem THEY created?

The bank could contact your insurance company and accept liability. Many times, the insurance company will allow the bank to make the premium payment and reinstate the policy. Once that’s completed, you can proceed with your claim based upon the insurance policy that you did have before the cancellation.

The lender could accept liability and pay your claim out of their own pocket. You’ll usually see donkeys flying around outside your house right before this happens.

If the insurance company will not allow the policy to be reinstated, then you must seek damages from the lender itself. Your attorney must file a lawsuit against the lender.

Watch this carefully!!

1. If you have an escrow account through your mortgage lender, make sure that your homeowners insurance policy is in force at all times.

2. Call your homeowners insurance company, and make sure that they are sending renewal notices and premium notices to you, not just your mortgage company. Too many mistakes happen too frequently to trust your mortgage lender to take care of your business.

So, you cannot afford to place all your assets and your property at risk by trusting someone else to handle your money for you. You cannot just pay your monthly mortgage payment and forget it.

The strategy is to make CERTAIN that your escrow account keeps your Homeowners insurance policy in force AT ALL TIMES!

This strategy ALONE could save you, the homeowner, hundreds, perhaps many thousands of dollars of insurance benefits.

Final, final thoughts! Your mortgage contract probably states that the mortgage company will replace your coverage in the event of the cancellation of your insurance coverage. However, if the mortgage company force-places an inferior policy, a true “replacement” of coverage has not occurred. Point this out to your attorney. You might have a very compelling cause of action against the mortgage company!!

Check out: http://www.insurance-claim-secrets.com


Car Insurance: Five Things to Avoid When Buying Car Insurance

November 21, 2008

Buying car insurance can be frustrating, time consuming and confusing. But you can save yourself some time, frustration and confusion if you will avoid these five things when shopping for car insurance.

1. Low Deductibles

When you choose low deductibles, the insurance company charges you the highest premium. That’s because they are carrying most of the risk. The wise choice on Collision and Comprehensive (other than Collision) coverage is to take the highest deductible your budget could stand. If you already have a $500 deductible, consider a $1,000 deductible. You’ll save a bunch of money on premium.

2. Low Liability Limits

There are some car insurance companies out there that pride themselves on selling policies that are meet the state minimum requirements…just enough coverage to make you a legal driver in your state. I grudgingly admit that state minimum coverage is far better than having no coverage at all. However, most drivers have lives, assets and incomes that require better protection. If you injure another person in an accident, and they get a jury award of $250,000, and you only have $50,000 coverage…your finances are ruined a long time into your future. Choose very high limits…$250,000 or higher. The coverage is inexpensive. You’ll NEVER be sorry.

3. Phone quotes

You need to get your car insurance quote IN WRITING. Why? Because you need to know exactly what is covered, the coverage limits and the deductibles. Getting quotes over the phone is convenient, but you need to have the agent follow up by sending you the written quote by mail, fax or email. NEVER buy car insurance based upon only a phone quote.

4. Inexperienced Agents

I wrote an article entitled “Insurance Agents: Does Yours Measure Up?” In that article, I give all the criteria you should use to evaluate your insurance agent. But for this article, let me give you three recommendations:
• Interview EVERY insurance agent to find out their level of expertise. Only do business with the most qualified, educated and experienced agents. Let the inexperienced agents practice on people who don’t care about protecting themselves the right ways.
• Don’t always chase after the lowest premium. You get what you pay for. You’d be better served to pay a higher premium if a highly qualified agent takes care of you. You don’t drive the cheapest car you can find, do you?
• Never be hesitant to call the Department of Insurance of your state if you have problems with your agent. Agents are regulated for a reason.

5. Companies that get lots of complaints.

I recently wrote an article about the Top Ten Companies who get the LEAST amount of complaints with the New York Department of Insurance (DOI). You can read that article which is also posted at this website. These are companies that get complaints at the DOI.

The three most common complaints are:

1. Monetary settlements – settlement amount is too low.
2. Policy terminations
3. Promptness of insurance claim payments

They are: (in order, least complaints top, higher number as you descend)

1. Mercury General Group
2. American Express, Amex Assurance, IDS Property Casualty
3. Eveready Insurance Co.
4. Electric Insurance Group
5. Amica Mutual
6. Preferred Mutual Insurance Co.
7. United Services Automobile Assurance Group (USAA)
8. Chubb
9. Utica Mutual
10. State Farm

My recommendation is that you should never do business with ANY company that ranks below the top ten in number of complaints about their service.

If you will avoid these five things, you stand a very good chance of buying the right insurance at the right price. Take control of your insurance!

If you are one of the unfortunate people who experience a car wreck, you’ll need to know how to handle your insurance claim so that you maximize your recovery. You will need to know how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, check out my website at:
http://www.insurance-claim-secrets.com

Copyright 2008, Russell D. Longcore.


Car Insurance: Five Things to Do to When Shopping for Car Insurance

November 15, 2008

Shopping for car insurance can be confusing, frustrating and expensive. But you can save hundreds of dollars annually if you’ll use the strategies listed below.

Remember, folks. I’m an insurance adjuster. I’m the guy that keeps the promises that the insurance company makes. So, I bring a perspective to this topic that comes from years of handling insurance claims, not selling policies.

When I get a claim, it means someone who drives and owns a car bought car insurance. Then, something happened and there was a loss. Then, the policyholder submitted a claim to their insurance company.

But, at that point, the policy is already in place. The contract has been signed. The premium has been paid. This is NOT the time to find out that the coverage YOU THOUGHT YOU HAD is different from the contract.

Unfortunately, this is the most common moment when people find out their car insurance is not going to work like they had hoped. And do you know who it is who gets to break that news to the policyholder MOST OF THE TIME?

The Agent who sold the policy? No.

ME!! The Adjuster!

So, in an effort to help you buy the right car insurance, here are five tips when you are shopping for car insurance.

1. Get at least three quotes. Ask your friends, neighbors, relatives and co-workers who they have chosen for car insurance. Ask them for good and bad experiences. Five quotes would be better. Also, start shopping about three months before your renewal date, so that you have plenty of time to make a smart decision.

2. Choose high deductibles and high liability limits. Choose the highest deductible your budget will allow. Choose higher liability limits than just the minimum limits that state law requires. In today’s world, personal injury is expensive, and jury awards are always high. What happens if you only have $50,000 liability coverage, and a jury awards a claimant you injured $250,000?

3. In your quotes, make sure that all the coverages are as close to identical as possible. Agents are adept at switching around coverages to get the premium lower. Make sure you are comparing “apples with apples.”

4. Try to bundle your coverages with one company. Most insurance companies who write car insurance also write homeowners and renters insurance. They will give you significant discounts if you will place both your car and home insurance with one company. But, let your calculator be your guide.

5. Don’t do business with a company that gets a lot of complaints. Phone the Department of Insurance in your state. Ask them if they have a report that lists the number of complaints that they receive about insurance companies. (I just wrote an article about this recently, so I know that some states do have reports like that.) If the company you want to buy your car insurance from gets lots of complaints, DON”T USE THEM! Go on to another insurance company.

Well, that’s it for now. If you will use these strategies, you’ll buy your car insurance and save money. That will make you smarter than most people.

Remember this. Buying your car insurance wisely is best. However, at claim time, the insurance companies will not tell you the claims process that you should use to collect every dollar you are entitled to collect. But I will.

To find out more about how to take control of your insurance claims, and add hundreds or even thousands more dollars to your claim settlements, check out my website at: http://www.insurance-claim-secrets.com .


Insurance Company Complaints: Who Are The Top 10 Companies With The Least Number of Complaints?

November 13, 2008

Insurance Company Complaints: Who Are The Top 10 Companies With The Least Number of Complaints?

The New York State Department of Insurance (DOI) just released the 2008 Annual Ranking of Automobile Insurance Complaints. The report has been issued to help consumers find the automobile insurer that best meets their needs. You can use this report to compare the ranking of the insurance company you are doing business with now, or check another company you may be considering.

This report analyzed data collected from 2006 and 2007. It only ranks companies doing business in the State of New York. However, as New York is a heavily populated state, with both big urban centers and big suburban areas, the report can be considered a good representation of insurance company performance nationwide.

How The Ranking Works

The insurance companies are ranked on a complaint ratio. The ratio is calculated by the number of complaints upheld against companies as a percentage of their total private passenger auto business.

Insurers with the fewest upheld complaints per million dollars of premiums are shown at the top of the list. The companies with the highest ratio of complaints are ranked at the bottom.

Other Information to Consider

The ranking of an insurance company is important, but it is only one characteristic that consumers should weigh when considering doing business with an insurance company. Others are:

• Referrals from friends, relatives, neighbors or co-workers about the experiences they had with their insurance companies
• Price of the premium versus perceived value
• Search the Internet for other ideas
• Check your state’s DOI website, which may contain valuable consumer information about companies doing business in your state.

What The Ranking Does and Does Not Contain

• Private passenger insurance is the only type evaluated.
• It only includes the complaints referred by consumers to the DOI. It does not include complaints made directly to the insurance companies.
• Complaints are “upheld” when the DOI agrees with a consumer that an insurance company made an inappropriate decision.
• Information from prior years is included in the tables so consumers can see if the company has improved or gotten worse.
• All companies with at least $10 million in premium in 2006 and 2007 are included in the ranking. Insurers with less than $10 million were included if they had 10 or more complaints against them.

Top Three Most Common Complaints

1. Monetary settlements – settlement amount is too low.
2. Policy terminations
3. Promptness of insurance payments

2007 Auto Complaint Listing (ranked lowest number at top, higher as you go down)

1. Mercury General Group
2. American Express, Amex Assurance, IDS Property Casualty
3. Eveready Insurance Co.
4. Electric Insurance Group
5. Amica Mutual
6. Preferred Mutual Insurance Co.
7. United Services Automobile Assurance Group (USAA)
8. Chubb
9. Utica Mutual
10. State Farm
11. Central Services Group, Central Insurance Group, NY Central Mutual Fire Ins.
12. Main Street America Group, National Grange Mutual
13. Progressive
14. Liberty Mutual
15. Kingsway Insurance Group, Lincoln General Ins.
16. Response Insurance Group
17. Nationwide Insurance
18. American Modern Ins. Group, American Family Home Ins.
19. St. Paul Travelers
20. Unitrin Group, Kemper
21. Erie Insurance Group
22. Berkshire Hathaway Insurance, GEICO
23. Allstate Insurance
24. The Hartford Insurance Group
25. Hanover Insurance, Citizens Ins., Allmerica Financial Alliance
26. Metropolitan Group
27. American National Financial Group
28. Allianz Insurance Group
29. GMAC, Integon, MIC P&C, National General Ins. Co.
30. Zurich Ins.Group, Foremost, Maryland Casualty
31. Hannover RE Group, Clarendon National
32. State Wide Insurance
33. White Mountains Group, OneBeacon, Esurance, Auto One Ins.
34. Countrywide Insurance
35. Safeco Insurance Group
36. American International Group (AIG)
37. Tri-State Consumer Ins. Group
38. Interboro Mutual
39. Infinity Property & Casualty
40. Long Island Insurance

Conclusion

If your auto insurance provider is not shown on this list, it could be that they don’t sell insurance in New York. Or, it could be that their number of complaints is worse than the company in the #40 position!!

Think about this statement, my friends.

The only thing that truly matters about your auto insurance is what happens when you submit a claim. Claims are about KEEPING PROMISES. When the insurance companies don’t keep their promises, the complaints pile up!

So, why would you EVER consider doing business with any insurance company LOWER than NUMBER 10 on the list?

If you are one of the unfortunate people who experience an automobile loss of any kind, you’ll need to know how to handle your insurance claim so that you maximize your recovery. In fact I’ll be so bold to day this: If you submit a claim without using the strategies in my book, you are guaranteed to collect less money that you are entitled to collect. You will need to know how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, check out the website at: http://www.insurance-claim-secrets.com


EIFS: How Synthetic Stucco Can Cause Huge Damage to Homes Across America

November 8, 2008

The acronym “EIFS” stands for “Exterior Insulation and Finish Systems.” Most people call it “stucco,” although it’s not true stucco. It’s synthetic stucco. In this article, the terms EIFS, stucco and synthetic stucco will all be interchangeable.

There was an article in the Atlanta Journal Constitution on November 4, 2008 about Post Properties, headquartered in Atlanta. Post owns apartment complexes all across the USA. Post will spend $40 to $45 million dollars repairing over 11,000 apartments that have water damage due to improperly installed EIFS.

“This is a construction method that was prevalent in the 90s. We don’t use it anymore,” David Stockert, Post’s CEO and president, told analysts Tuesday. Stockert also said that very little of the damage will be covered by insurance.

$45 million is just a drop in the bucket compared to the damages to single family homes across America that are covered with synthetic stucco.

Over the last twenty years, MILLIONS of single family homes were built using stucco as the exterior finish. Stucco looks great, is easy to install, has great energy-saving features and can be made to look like stone and other masonry finishes.

However, in my own experience as a claims adjuster, I’ve seen very little residential stucco that has been installed properly. Nearly every EIFS-clad house I’ve ever inspected had water, mold and termite damage behind the stucco. Sometimes the damage is so extensive that the houses have to be condemned and torn down.

I spent lots of time handling claims for Construction Defect liability that involved stucco. I don’t know of any single building material that has been responsible for more builder bankruptcies in America than stucco. And, as the stucco product ages, more and more home damages are being discovered.

I remember inspecting a huge, three story wood framed, stucco exterior home in a golf course community in Athens, Georgia a few years ago. The owners discovered the damage when the wife walked over to a dining room bay window and her foot fell through the wood floor.

There was water damage on all four sides of the house, and around every door and window opening. Worse, the water behind the walls made the perfect breeding ground for termites that had been eating the house for a long time. The estimate I wrote was for $439,000, and the home was valued at about $500,000. The house was demolished and rebuilt on the foundations. The builder’s liability insurance paid the claim. The new house DID NOT have a stucco exterior.

EIFS manufacturers issue shop drawings that builders are supposed to use when installing EIFS. They specify that flashing must be used around ANY door or window opening. “Flashing” are formed metal pieces that keep the water from getting behind the stucco. But in millions of homes, the builder simply butts the stucco up against the outside of the window or door, smears on the stucco finish, and seals the joint with caulking.

It doesn’t take too many months for exterior caulking to crack and separate. Once that happens, water gets behind the stucco every time it rains.

So, when water gets behind EIFS, it gets trapped. Lots of homes have a layer of “housewrap,” or plastic sheeting as a vapor barrier under the stucco. But vapor barriers that keep moisture out also keep moisture in. When water gets trapped behind the EIFS, it creates the perfect habitat for termites…food and water. They’ll stay until the food and water run out.

Termites can destroy a home unprotected by pesticides. However, termites can also damage or destroy a protected home. Termites only need THREE THINGS TO THRIVE:
1. Access…a way to get in.
2. Moisture to drink.
3. Food…which in an average house is wood. Walls, floors, plywood, trim, windows, doors…all wood products are on the termites’ menu.

The other big problem for stucco is that builders ran the product down the side of the exterior wall and then landscaped up to it. Stucco that comes into contact with the ground makes it super easy for termites to invade without detection.

Why am I telling you this about your stucco-covered home? Because your damage will likely NOT be covered by your homeowners insurance policy. Wet Rot is excluded in your homeowners policy. The standard HO-3 policy also has exclusions for damage caused by insects. The policy also excludes damage caused by mold and mildew, commonly found where the water damage is.

I urge you to have a home inspector or contractor inspect your home. Look carefully at the outside trim around your doors and windows. If you cannot easily see a metal flashing between the stucco and the door or window trim, your stucco was improperly installed by the builder. The chances are overwhelming that you have interior water damage all over your home.

The final insult is that you likely can’t sell your home without making the repairs first.

If you find damage, and your insurance company denies coverage for your damages, you’ll have to notify the builder who built your home that you’re making a claim against his Liability insurance policy. I recommend that you consult an attorney as you begin the process.

EIFS, improperly installed on ANY building, causes nothing but nightmares and financial ruin. Don’t be a victim…find out your rights and fight hard!


Electronics Insurance: Are Your Electronics and Computers Covered by Your Insurance?

November 8, 2008

There is a lot of misinformation today about consumer electronics and how it is treated by insurance companies. Most people I talk to think that if they have homeowners or renters insurance, their consumer electronics are covered.

But they usually find out that their assumptions aren’t true…at claims time.

Sure, some of the property is covered. But there are a bunch of limits and exclusions that will surprise you if you have a loss and file a claim.

Don’t wait until claim time to learn about this important coverage. Read this article carefully and make good decisions about your coverage.

Twenty years ago, consumer computer usage and ownership was not all that common. If you owned a cell phone, you carried it in a bag the size of a small purse. There were few home fax machines. Answering machines were pretty common, but voicemail was still on the horizon. Scanners were non-existent. Printers and copiers were huge and expensive, and you didn’t see them in most homes. If you were the rare person who had satellite TV, the dish was about eight feet across and sat out in the back yard. And Personal Digital Assistants (PDAs) and MP3 players had not been invented yet.

But today….

In our home we have:
• two desktop computers with monitors
• four laptop computers
• four printers
• one stand-alone fax machine
• one combination fax, scanner, copier
• three TVs
• two VCRs
• one digital video camera with tripod for our home recording studio
• one audio mixing board, one microphone, one amplifier, two external soundcards, and a 500GB hard drive, all for our home recording studio
• two DVD players
• two cell phones, one smartphone, each with voicemail
• one satellite TV system with a 24” dish on the roof
• two Ipods

Your home may not have that amount of electronics, but then again, you might have more. The way that consumer electronics prices have tumbled over the years makes ownership much easier for more and more people.

But…is it covered? Does your homeowners or renters insurance cover your electronics?

We run three separate businesses out of our home. Most of our electronics are used in our businesses.

Do you have a home business? There are millions of home businesses…everything from home daycare to a service business to multilevel marketing businesses. Many times, those entrepreneurs own office electronics for their home business. Do you use your computers and other electronics for any kind of home business? Even if you’re answering office email on your home computer, it could be considered “business use.”

Are they covered by YOUR homeowners policy?

Are they covered if they are business-related?

What happens if your desktop or laptop computer is stolen, either from home or away from home? Is the theft covered by your homeowners insurance policy?

If you’re carrying your laptop through an airport anywhere in America, your laptop is at huge risk for theft. (See more below) What if your laptop is stolen while you’re in the airport?

Here is the answer to those questions…

MAYBE!!!!

In the Homeowners or Renters Policy, Coverage C, Contents, there are special limits of $2,500 for “property, on the residence premises, used primarily for business purposes.” The policy says there is a $500 limit for “property away from the residence premises used primarily for business purposes.” Of course, you will have a deductible to pay first, so if your deductible is $500 or more, you won’t get ANY money from the insurance company for this loss.

Are your personal electronics covered? Yes, but only for the following perils:

• Fire or lightning
• Windstorm or Hail
• Explosion
• Riot or Civil Commotion
• Aircraft (not in aircraft, but if aircraft fall on your stuff.)
• Vehicles (not in vehicles, but if vehicles crash into your stuff.)
• Smoke
• Vandalism or Malicious Mischief
• Theft
• Falling Objects (stuff falling onto your stuff)
• Weight of Ice, Snow or Sleet
• Accidental Discharge or Overflow of Water or Steam
• Sudden and Accidental Tearing Apart or Bursting (of a steam or hot water system).
• Freezing
• Sudden and Accidental Damage from an Artificially Generated Electrical Current
• Volcanic Eruption

As I said above, the policy limit for business electronics at the residence is $2,500.

If your laptop or other portable electronics are stolen from your car, there is no coverage under your Auto insurance for the theft.

Also remember, that under Coverage C, Contents, payment is made on an Actual Cash Value basis, not Replacement Cost Value. The only way to get RCV is to add the Contents Replacement Cost endorsement to your policy. It’s not automatic, you have to request it.

How about other kinds of damage that your computer might sustain?

• Accidental damage, such as dropped equipment, falls, liquid spills and auto collisions.
• Water damage

Those kinds of damages are not covered under your homeowners or renters policy.

And what about the software and sensitive data in your computer? Is that covered, too?

Not likely. In the Homeowners and Renters policies, under the “Property Not Covered” section, “business data, including data stored in computers and related equipment” is not covered.

So, to be fully covered, you’ll need to buy some additional coverage.

COMPUTER AND PERSONAL ELECTRONICS INSURANCE

The leading company in the world for computer and portable electronics insurance is Safeware Insurance. They have programs for students, individuals, small and large businesses and schools at very competitive rates.

Let me take a few minutes and tell you about their outstanding insurance product.

If you own:

• Desktop or Laptop Computers
• Personal Digital Assistants (PDAs)
• Smartphones
• Digital cameras
• MP3 players
• Scanners/Faxes/Copiers
• Printers
• DVD players
• Flash drives
• Servers
• External hard drives
• Digital camcorders
• Peripherals that connect to your computers through an USB port, Firewire, PCMCIA or another input

All of these electronic products need special insurance coverage not provided in Homeowners or Renters policies.

Did you know these facts about computers?

• Accidental damage is the number one cause of loss
• Theft is number two cause of loss
• Power surge is number three
• Manufacturer warranties do not protect your computer from accidental damage or theft
• Even though some manufacturers do offer special “damage only” coverage, they do not offer coverage for theft, power surges, natural disasters or vandalism.

You already know how easy it is to have electronics with replacement value in excess of $2,500. There are loaded desktops and laptops that easily exceed $2,500 EACH.

So, you have some choices:

1. Call your agent and buy a Personal Property Endorsement to add coverage to your homeowners or renters policy. Downsides to this choice are (a) many endorsements only pay the Actual Cash Value of the damaged property, not replacement cost, and (b) perils like Accidental Damage, Drops, Falls, Cracked Screens, Liquid Spills and Auto Collisions are not covered.
2. Buy a custom policy that just adds special coverage for your computers and other electronics, like:

• Desktops
• Laptops and notebooks
• Personal Digital Assistants (PDAs)
• Smartphones
• Digital cameras
• MP3 players
• Scanners/Faxes/Copiers
• Printers
• DVD players
• Flash drives
• Servers
• External hard drives
• Digital camcorders
• Peripherals that connect to your computers through an USB port, Firewire, PCMCIA or another input

Safeware’s policies cover Accidental Damage, Drops, Falls, Cracked Screens, Liquid Spills and Auto Collisions.

Business Electronics

In May 2006, burglars stole a laptop from the home of a data analyst at the Department of Veterans Affairs. The laptop contained the sensitive personal information of over 26 million veterans and military personnel. The FBI said that the laptop was recovered after an informant “snitched,” motivated by a $50,000 reward.

But it’s not just organizations that deal with consumer data that are concerned about thefts. Companies whose employees have laptops are naturally concerned with the value of the computer when it is the company that owns the laptop.

The Ponemon Institute, a privacy risk management think tank, released an extensive study in June 2008 entitled “Airport Insecurity : The Case of Missing and Lost Laptops.”** They studied laptop security at 106 American airports and found that there is an average of 12,000 laptops lost, missing or stolen at American airports PER WEEK! The airport with the worst record is Los Angeles International, with about 1,200 per week. The nation’s busiest airport, Atlanta’s Hartsfield, was in eighth place with 450 per week.

Further, the study found that only 33% of the laptops within the airport’s Lost and Found Departments are ever reclaimed! That means that the remaining 67% of unclaimed laptops are either sold or disposed of by airport authorities. Can you imagine the amount of sensitive personal and business data contained in those laptops? No one knows what happens to that data, but it is ALL at risk. The Identity Theft risks are astronomical.

Safeware’s policy covers business electronics for the hazards the homeowners, renters or business insurance policy does not cover.

Education Coverage

Students face a higher risk of damage or theft than a normal adult user. Students can experience accidents when they’re putting their stuff into their locker, or accidentally get bumped in a busy hallway, or when they’re running to the bus. A soft drink could be spilled on the keyboard, or they could sit their laptop bag down somewhere and later find it missing.

This policy protects students’ computers against Accidental Damage, Theft, Vandalism, Power Surge, and Natural Disasters at any location within the USA, Canada and while in transit.

Small Business Coverage is for any sized business with electronics property values up to $49,999, covering Accidental Damage, Theft, Fire, Vandalism, Power Surge and Natural Disasters.

Commercial Coverage is a group plan for organizations that have electronics property values in excess of $50,000. Coverage can be one of the following: Comprehensive (Accidental Damage, Theft, Fire, Vandalism, Power Surge, and Natural Disasters); Theft ONLY, or Accidental Damage ONLY.

The Commercial policy can benefit organizations such as:

• Schools and colleges that want to make their student’s notebook computers more safe and less at risk.
• Corporations issuing notebooks and laptops to their workers, and wishing to minimize their risk of capital loss.

In these organizations, the equipment is owned by the corporation or school and used by the employee or student. Experience has shown that if an individual does not own the computer, he or she is likely to take less care of the item than if they owned it themselves. Schools and businesses need to insure their equipment against the perils that could turn their expensive equipment into unusable junk.

Safeware Insurance policies do not depreciate for age and condition of your electronics. If you have a claim that requires replacement of your equipment, they pay for like kind and quality of the equipment you had. That’s a HUGE difference from the Homeowners and Renters policies, and could mean thousands more dollars to you in a claim.

Worldwide Coverage is an endorsement that adds global coverage to your policy for a very low price. Standard coverage is for the USA, Canada and Puerto Rico.

Mobile Advantage insures PDAs and smartphones. You likely purchased your unit at a big discount when you signed up for a service plan. If your device is damaged or stolen, you’ll have to pay full retail for another unit. However, with Mobile Advantage, you’re only responsible for the $50 deductible per incident to get a brand new device.

For more information about Personal Electronics Insurance for your student, yourself, your business or your school, contact Safeware Insurance at: http://www.safeware.com

LAPTOP RECOVERY COVERAGE

Can you get your stolen laptop back?

There is a way that you can protect your laptop, and then retrieve your laptop after it’s been stolen.

Three burglary suspects were arrested on February 1, 2008 by Albuquerque police, thanks to a stolen computer loaded with tracking software. The software is called LoJack for Laptops™, developed by Absolute Software. The tracking software told the police exactly where to find the suspects. The police were also able to recover thousands of dollars in other stolen property at the location.

Absolute Software is the leader in Computer Theft Recovery, Data Protection and Secure Asset Tracking™ solutions. It works this way: You install the LoJack for Laptops™ software and register it at the LoJack website. If the laptop is stolen, you notify your local police and notify the LoJack Recovery Team. The next time your computer is connected to the Internet, the laptop secretly notifies the Monitoring Center of its whereabouts. The Recovery Team can track its location, and provide police with the information they will need to get a search warrant and recover your laptop.

Pricing for LoJack for Laptops™ starts at only $39.99 per year.

My friend here in Atlanta, Cole Harrison, had his laptop stolen from his car recently. He had the Lojack system on the laptop, and notified them immediately when he discovered the theft. Lojack located the laptop the next day…in Thailand.

If you want protect your laptop so you can get it back after it’s been stolen, check out: http://www.lojackforlaptops.com Lojack boasts a 90% recovery rate for stolen laptops.

CONCLUSION

For only a small price, you can have the proper coverage you need to protect all your personal and business electronics. Be the smartest person on your block with the right protection. Be the hero to your business with the best coverage. YOU CAN DO IT!!

** To read the entire study, go to: http://www.dell.com/downloads/global/services/dell_lost_laptop_study.pdf


Deer-Vehicle Collisions: Top Seven Ways to Avoid Hitting A Deer

November 8, 2008

Fatalities from vehicle crashes with deer and other animals have more than doubled over the last 15 years, according to a new study by an auto insurance-funded highway safety group.

The National Highway Loss Data Institute found that there are approximately 1.5 million Deer/Vehicle Collisions resulting in over 300 human deaths (the deer nearly always die) and 30,000 injuries. Texas has the highest number of deaths, followed by Wisconsin and Pennsylvania. The damages cost the insurance companies over $1 Billion each year.

“Urban sprawl means suburbia and deer habitat intersect in many parts of the county,” said Kim Hazelbaker, of the Highway Loss Data Institute. “If you’re driving in areas where deer are prevalent, the caution flag is out, especially in November.”

November is the beginning of the mating season for deer, and they’re moving around a lot during this season. Insurance claims for crashes are three times higher in November than from January through October.

I lived the first 37 years of my life in Michigan, a state with a huge deer population. We learned as teenagers to always be alert for deer along roads and highways. We all knew someone who had hit a deer with their vehicle at some time. I remember driving back from Traverse City to Whitehall one fall evening, which was a trip of about 100 miles. I counted 46 times I slowed when seeing deer standing near the road on that one trip.

So make sure that, no matter what state you live in, you are aware that animals can be a serious danger when you’re driving.

About a month ago, I handled a claim for a trucker in Pennsylvania who swerved to miss a deer, lost control of this rig, and overturned onto his right side. His tractor, trailer and his cargo were all total losses, costing the insurance company over $100,000. When the police officer arrived on the scene, he gave the driver a ticket because there wasn’t a dead deer at the scene! I recommended to the driver that he fight that ticket.

Here are the Top Seven Ways to Avoid Hitting a Deer When Driving (per the National Safety Council)

1. Be vigilant in early morning and evening hours, the most active time for deer.

2. Use your high beam headlights, which reflect in the deer’s eyes, to see the deer better. Remember, it normal to see reflectors along roads on mailboxes and fences. But if a reflector moves, it’s likely a deer’s eye.

3. Slow down and blow your horn with one long blast to frighten the deer away.

4. Brake firmly when you notice a deer in or near your path. Do not swerve. It can confuse the deer as to where to run. It can also cause you to lose control and hit a tree or another car.

5. Be alert and drive with caution when you are moving through a deer crossing zone. Highway departments don’t put those signs along roads just for decoration.

6. Always wear your seatbelt. Most people injured in deer/vehicle crashes were not wearing their seatbelts.

7. Look for other deer after one has crossed the road. Deer seldom run alone.

There is a small, bullet-shaped device called SAV-A-LIFE Deer Alert, that can be easily mounted on the front bumper of a vehicle. As the vehicle reaches a speed above 30 mph, air rushing through the device emits an ultrasonic signal up to a quarter mile away, literally stopping animals in their tracks. The sound emitted by the device cannot be detected by passengers in the vehicle and not perceptible to people on the roadside.

The SAV-A-LIFE Deer Alerts have been in use for over 30 years, and are used by individual drivers, truck fleets, State Troopers and wildlife agencies. It costs less than $25.00 in stores all over America, or go to: http://www.sav-a-life.com/Deeralert_intro.htm

If you are one of the unfortunate people who experience a deer/vehicle collision, you’ll need to know how to handle your insurance claim so that you maximize your recovery. You will need to know how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, check out the website shown below in the Resource Box.

Stay Alert and Stay Alive!!