Friday, December 26, 2008

Gap Insurance: Four Reasons You Could Benefit From Gap Insurance For Your Car

If you have a serious car accident, or if your car gets stolen, Gap Insurance could save you thousands of dollars. Gap Insurance could also be called “totaled or stolen” car insurance.

Gap Insurance “closes the gap” between what your auto insurance company pays if your car is totaled or stolen, and the payoff balance of your auto loan.

In other articles, I’ve written about how insurance companies will “lowball” even their own policyholders when it’s time to total out a car. Often, it gets even worse if you’re not at fault, and the other driver’s insurance company is settling your claim. So, one of the ways that you can get some piece of mind...and all the money you are entitled to to buy Gap Insurance.

Here’s an example. You buy a new car for $25,000. No money down, financed for 60 months. Two months later, your car is stolen. The adjuster makes his WAG (wild-a** guess) on depreciation and determines that your car is only worth $20,000, having lost 20% of its value. The finance company tells you that with tax, title, and license fees, your payoff is $27,000.

What will you do to payoff the car when the insurance company will only pay $20,000, and you owe $27,000? If you have Gap Insurance, no problem.

There are basically four reasons that you might benefit from Gap Insurance:

1. Leased cars – Many times when you lease a car, the leasing company will require you to buy Gap Insurance. If you exceed the mileage in your lease term, the vehicle might have a lower value at the end of the lease term. Many companies will allow you to buy Gap coverage any time during the lease period.

2. New cars – If you are putting 20% or more as a down payment on your car, you might not need Gap coverage. However, if you’re like many these days, and signing 0% down finance deals, your car will depreciate a bunch in the first year, and you’ll never get the value of that car at damage or theft.

3. Used cars – You could find that you paid more for a used car than it’s worth. Many Gap Insurance companies will allow you to buy coverage if the used car is less than 2 years old.

4. “Upside down” or “underwater” – Terms that mean you owe thousands more than the value of the car. This often happens when a person trades in a car and owes more than the value of the car he’s trading in. The finance company allows you to add the unpaid balance of the trade-in to the financed amount of your new car loan. But then you’ll likely always be “upside down” in the loan, and you’d be in deep financial trouble without Gap Insurance.

Keep in mind that most insurers will require you to have Collision and Comprehensive coverage for the Gap Insurance to apply. Most insurers will also require you to continue making your car payments until the coverage pays its benefits.

You can shop for Gap Insurance through various car insurers. Contact your own insurance company to see if they offer it. Otherwise, you could search on the Internet for companies that sell Gap Insurance. There are many from which to choose.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Renter’s Insurance: Do You Know How High Your Risk Is?

Renter’s insurance is one of the most important insurance products sold on the market today. Yet, surprisingly, only a small percentage of renters actually buy renter’s insurance.

Here in suburban Atlanta, Georgia, the Atlanta Apartment Association is a giant association of apartment owners and property management companies. Currently, AAA represents over 1,400 members consisting of 400 companies managing 320,000+ apartment homes in the Atlanta metro area. It is widely reported that there are over 6,000 apartment complexes in the Atlanta metro area.

I interviewed Russ Webb, Operations Manager of the Association. He stated that they estimate that only about 25% of renters purchase Renter’s Insurance. He also stated that here in Atlanta, we average two major apartment fires PER WEEK. A major apartment fire is one in which a multi-unit apartment building is damaged or destroyed by fire.

Think about that. A fire starts in one apartment, and potentially all of the tenants in the building end up with damaged personal property and no place to live.

Think about the risks that are involved for a renter. When I moved to Atlanta in 1992, I rented a first floor apartment in an eight-unit apartment building. So, in my building, there were seven other tenants. There is eight times the chance for a loss in that one building. I could have been the most model, safest tenant who ever lived, but still I could have had all of my personal property wiped out by one of the other tenants who was negligent and started a cooking fire.

Compare that risk to a single family kitchen, one family, limited visitors.

What about the risk when your apartment is in a 12 unit building? A 15-unit building?

Renters have the same needs for insurance that homeowners do, minus the building they live in. They need to protect their personal property and their liability exposures.

Renter’s policies

The standard Renters policy is a "named peril" policy and covers losses from any 17 named perils. If your property is lost or damaged as a result of one of these perils, your insurance company pays you for your loss. The covered perils are as follows:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil disturbance
• Aircraft
• Vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water
• Sudden and accidental tearing apart
• Freezing
• Artificially generated electrical charge

The Renter’s Policy also covers the liability risks you have for bodily injury or property damage from claims of others in and around your apartment.

The policy also has Additional Living Expense, which provides coverage in case you are unable to live in your apartment due to a covered peril. Remember, someone else in the building could have a loss (like fire or water damage) that could make your apartment unlivable.

Available Endorsements

Replacement Cost: means replacing Actual Cash Value for Contents with replacement cost coverage.

Scheduled Personal Property: this coverage provides a set amount of insurance for valuables like jewelry, watches, furs, fine arts, etc.

Computer Coverage: covers hardware and software for any direct physical loss, due to theft, electrical disturbance, magnetic, or erasure. In essence, changes the covered perils for computer losses from Named Perils to All Risks. Still excludes computers used for business.

Medical Payments: Provides first dollar coverage (no deductible) for injuries to others due to your negligence, up to a stated limit. Sometimes called “good neighbor” coverage.

Renter’s Insurance is very inexpensive. I’ve seen rates on a $25,000 policy as low as $15.00 per month, or $180 annual premium.

Don’t risk financial ruin by being a renter without Renter’s Insurance. Show what a smart consumer you are by calling a local insurance agent TODAY!

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Aetna Rolls Out Pet Insurance

Aetna, the health insurance giant, may soon be insuring Fluffy the kitty or Fido your pooch.

Pets Best Insurance is the new pet insurance company under the Aetna banner. They began underwriting policies last week in six states, and plan to sell in all 50 states before long.

Pets Best intends to trade on the market visibility of Aetna and sell its policies through the 40,000-plus veterinarians in the United States. The policies will also be offered through the company website. Policy premiums will range between $300 and $500 per year per pet, based upon the chosen coverage.

Should you buy Pet Insurance?

About 60 percent of American households have a pet and spend over $10 billion a year on veterinary care.

The policies will pay 80% of costs, subject to a deductible, for each illness. Routine checkups, lab tests, prescriptions emergency room visits and other services are covered.

Pet Best’s policies are comparable to those that have been on the market since about 1998. Some insurers exclude hereditary and chronic conditions, others don’t.

If a pet lives an average of ten years, you could shell out between $3,000 and $5,000 on premiums for each pet. Without insurance, you might not ever spend that much on medical treatment. But if you are the kind of person who will do anything to take care of your pet, then medical insurance for your pet might make sense.

One of the things you might consider next time you’re shopping for a pet...remember that dogs are in veterinary offices twice as often as cats. So, if you’re a person on a budget who can’t stand the thought of life without a pet, consider a cat. Also, do some reading about the health problems inherent in the cat or dog breed you want to own.

Tuesday, December 23, 2008

Low Speed, Low Impact Car Wrecks: Ten Things The Adjuster Will Do After A Car Wreck

Drivers and passengers in moving vehicles regularly get injured in low speed, low impact collisions. The best example is a rear-end collision while in slowly moving traffic. Many times, the injuries are soft tissue injuries, like neck injuries, that are hard to diagnose and take time to treat. Insurance adjusters, whether independent or company adjusters, have a difficult time believing that you could have gotten injured in a low speed, low impact car wreck.

They think you’re lying.

So, if you’ve had a car wreck that could be considered low speed or low impact, know that the adjuster is going to start out at best skeptical, and at worst committed to proving that you weren’t injured.

Low speed accidents are self explanatory. But if you're traveling at 45 mph and are struck by car going 55 mph, there's only a 10 mph difference between cars, so that's low impact.

Back in October 2004, I had a rear-end collision accident. The driver behind me wasn’t watching carefully when we slowed before a red light, and he struck me from behind. The impact drove my car’s front bumper into the car in front of me. The driver behind me got a ticket. The collision damage totaled $3,474.13, and my soft tissue neck injuries settled for $2,640.00, for a total of $6,114.00.

There is a lot more to the story than just that I got a settlement. I actually got $1,640.00 more than my insurance company initially offered. These are strategies you can learn.

But let’s get back to your accident. If you got rear-ended, the other driver is at fault to some degree. If he is uninsured, or if his insurance company will not accept liability, you might consider submitting a first party claim. If you’re making a first party claim, which is you making a claim to your own insurance company, your Collision coverage will cover damage to your car. That’s pretty clear-cut. Your injuries will be covered by your health insurance, not your car insurance. Your insurance company will then “subrogate,” or ask the other driver’s insurer to reimburse them for your claim.

The adjuster for the other driver is going to do an investigation, consisting of:

1. Photos of all four sides of your vehicle to document the damage, but also to determine if there was pre-existing damage.

2. Vehicle appraisal of damages

3. Recorded statement from you. The other adjuster is going to ask you questions meant to get you to say something that could allow them to deny your claim. Understand that you do not have any legal obligation to give a recorded statement to the other driver’s adjuster. If you decide to grant a recorded statement, ONLY do it in the presence of your own attorney. And, you should include your attorney’s bill in your insurance claim.

4. Witness interviews and statements.

5. Background information. The adjuster will run your name through several databases, including ISO Claimsearch and the National Insurance Crimes Bureau to see if you’ve filed previous insurance claims. Don’t give your Social Security number to the adjuster. That just makes his job of getting your background information easier.

6. Collect your medical bills and medical history. The adjuster will likely present you with a Medical Authorization Form for your signature. READ THIS FORM VERY CAREFULLY!! Most times, the form is so vaguely worded that you give them permission to collect medical information for your entire lifetime. Only sign an authorization that permits them to have the medical records and bills for this single incident, not your life history. Have your attorney read the form before you sign it.

7. Have experts evaluate your damages. The reason insurers hire experts is to find ways to deny or minimize claims, not help you prove your claim.

8. Waiting and delay. The greatest tool in the hands of the insurance companies is delay. They can certainly afford to wait, even though you may not be able to wait. Delay leads to compromise and compromise very often leads to lower claim settlements.

9. Negotiate your settlement with you or your attorney. Please understand that adjusters are not intimidated by personal injury attorneys. They actually prefer to deal with them, since they won’t have to deal with you anymore. It also adds more delays to the claims process, which puts financial pressure on YOU.

10. Settlement. Low speed/low impact claims usually have a low price tag, many times below $25,000. It doesn’t usually make economic sense for a personal injury attorney to litigate a case this small, as it could cost them $5000-$10,000 to litigate. So, if the adjuster makes a “take it or leave it” offer of $15,000 (on a $25,000 case), your attorney will likely take it. That saves a ton of money for the insurer, and the adjuster gets to close another file and look good to his boss.

Remember, friends...this claims process is all about the money. It is not about truth, or justice, fair or unfair claims practices.

It is all about the money.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Sunday, December 21, 2008

Insurance Claim Supplements: How To Submit Claim Supplements

A claim supplement is a claim for additional repair or replacement costs. Supplements are commonplace in the claims process. However, if you are a policyholder unaware of your policy rights, you could be walking away from hundreds or thousands of dollars that you are entitled to collect.

Claim supplements usually occur after a policyholder submits a claim, gets paid and gets the repairs or replacements completed. Then, additional damage is discovered some time later.

Many people erroneously think that, once the claim is closed, it cannot be re-opened. And, insurance companies and their adjusters usually don’t rush to tell you how to submit a claim supplement. So, what to do? Let’s look at car insurance claims and property insurance claims.

For any kind of supplemental claim, you must contact your insurance company and give them your original claim number. The best way to notify the company is in writing, sent Certified Mail. That way, you’ll know who signed for the letter. The insurer will have to re-open the claim. You might get the same adjuster as before, but maybe not.

Car Insurance Supplemental Claims

Lots of supplements happen when cars are getting repaired. Many times, hidden damages are discovered when the body shop begins dismantling the car. So, while the insurance company may have issued payment to the body shop from the original repair estimate, they will issue a second check for the supplemental repairs. Happens all the time, no big deal.

However, sometimes post-repair problems don’t show up right away. A good example is the Air Conditioning system. If you have a car wreck in July, you might not notice that your heater is malfunctioning until fall or winter. But when any damages are discovered that can be directly related to the original insured loss, you can submit a supplement. Simply document the damages and their cause and send the supplement to the insurance company. No additional deductible is assessed, since you already paid it once.

Property Insurance Supplemental Claims

Homeowners, Renters or Business insurance claims can find a need for a supplemental claim for some of the same reasons found in car insurance claims. Seasonal issues can bring up damages related to the original loss. But, some other issues might present themselves. You may have an expert’s report that shows additional damage attributable to the original loss. Your contractor may have found hidden damage that must be repaired. In any event, carefully document your claim and submit it to the insurance company.

Be sure that you are collecting all the money you are entitled to collect. Use supplemental claims whenever your claim requires it.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Property Claims: Overhead And Profit Disputes in Property Claims

If you do not know how to handle overhead and profit (OHP) issues in your insurance claim settlement, you could lose tens of thousands of dollars that you are entitled to collect.

Yet, many policyholders find themselves forced to use savings or borrowed money to complete repairs. It should almost never be so.

In any property or insurance claim, if you have to come out of pocket more than your deductible for repairs or replacement, your claim has not been handled correctly.

There have been disagreements over how to handle overhead and profit between insurance companies for years. I have handled claims for insurers who mandated that OHP must be removed on all repair estimates. Some insurers will pay OHP, but limit it to 10% overhead and 10% profit. Some pay OHP, but will only pay it when the policyholder provides a signed contractor repair contract.

But you should know that OHP is a legitimate expense of repair in a property loss, and your insurance company should not dispute OHP. Contractors have to manage sub-contractors, get building permits, pay their labor, materials and the rent, and get the work done while earning a profit.

Traditionally, in a homeowners, renters or business policy, insurance companies will consider OHP when there are three or more building trades involved in the repairs. For example, when there are carpenters, electricians and plumbers doing repairs, OHP is paid. However, if you only had a painter and a wallpaper hanger, most insurers would not pay OHP costs.

But consider how much this could affect your claim. If you had a fire claim with a $50,000 repair estimate with a general contractor handling the loss, 10% overhead is $5,000 and 10% profit is another $5,000. Together, that’s $10,000 more money owed to you.

So, if you submit your repair estimate and it has OHP built into it, make sure that the insurance company pays the OHP. It could be the difference between getting all your repairs paid for, and you having to pay some repairs yourself.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Saturday, December 20, 2008

Dog Bite Law: Six Things To Do After Your Dog Bites Someone

The newspaper has a story today about a 60-year-old Southern California man who was mauled to death by two pit bulls. Seems the man was standing in his own back yard having a cigarette when the attack occurred. These dogs belonged to his grandson, and the victim was familiar with the dogs. Neither dog had been neutered.

Perhaps these dogs were radical non-smokers. Doubt it, though. But this is certainly a story of a family tragedy. But, if you have one or more dogs at your home, you could have a tragedy waiting to happen.

Pit Bulls and Rottweilers are the two most fatal attackers. Next are the Akita and Chow. Dogs that are tied up are very dangerous, and male un-neutered dogs are the most dangerous.

Dog bite law is an unusual area of the law, and can affect you and your home or business quite negatively if you own a dog. How?

Depending upon your circumstances, you could be subject to both civil and criminal charges if your dog bites someone. Compare that to having the postman slip and fall on your sidewalk, which could only involve simple negligence on your part.

The law consists of both civil and criminal law, and varies widely between state and local jurisdictions. The reason it varies is the interpretation of the old “One-Bite Rule.” That rule, with its basis in English common law, protects a dog owner until he gains knowledge that his dog is vicious or dangerous. Once the owner learns this, he becomes strictly liable for injuries the dog causes.

Most all states hold the dog owner liable if injuries are caused by negligent handling, or violating a leash law. In almost two-thirds of the states, the owner is statutorily liable, meaning he is liable simply because he owns the dog.

Here are six tips on what to do after your dog bites someone:

1. Stay calm and be nice to the victim. Don’t argue about who is at fault. Don’t accuse the victim of anything. Remember that this person is going to make a decision now about whether to hire a lawyer to sue you.

2. Take the victim to a doctor or hospital and get medical attention. Pay for it yourself, no matter whether you have insurance or not.

3. Take precautions to protect other people from your dog.

4. Secure the name, address and phone number of ALL witnesses to the incident.

5. Do not make ANY statements to ANYONE but your own attorney about the incident.

6. Call your homeowners, renters or business insurance company and immediately report the incident. If the victim decides to pursue a damage claim against you, the insurance company will likely have to provide legal counsel and defend you in the lawsuit. If you do not report the incident right away, they might deny your claim for late reporting.

When you’re shopping for new insurance, most insurance companies will ask you the breed of the dog you own. Most insurers will either charge you higher rates for certain breeds, or refuse to insure you at all.

If you’re interested in reading more about dog bite law, go to the website of Attorney Kenneth Phillips at:

Kenneth Phillips is the nation’s leading authority on dog bite law. His Beverly Hills, California law practice is unique in that he only represents dog bite victims. Mr. Phillips has done hundreds of radio and TV interviews, and featured in scores of print articles over the years. He represents clients all over the United States.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Another Insurance Company Scam: Denying Payment on Deaths From Fire

In March 2007, a disgruntled nurse set fire to a six-story atrium office building in Houston, Texas. The building suffered extensive damage, and three people died from smoke inhalation.

The primary insurance company with a $1 million policy on the building has accepted liability. However, there is another insurance company involved.

Great American Insurance Company has Excess coverage on this building over and above the underlying $1 million policy up to a limit of $25 million. They have appeared in the courtroom of US District Judge Lee Rosenthal and argued that the deaths were caused by “pollution,” which in their view, is the smoke generated by the fire.

Most all policies have a coverage exclusion for Pollution, which is meant to exclude coverage for seepage or discharges of pollutants that cause damages. But the Pollution Exclusion also mentions smoke, fumes and soot.

And that is where Great American is hanging its hat.

Great American is arguing that coverage for the property damage and deaths should be denied because the smoke from the fire qualifies as “pollution,” and as such the claim should be denied.

In my opinion, this argument violates the intent and clear words of the Pollution Exclusion.

I hope that you are as outraged as I am over this travesty unfolding in a Houston courtroom. But, stop for a moment and consider how smoking mad the families of the three victims of the fire must be. There’s no question how these people died. Smoke inhalation is one of the most common causes of death in fires, much more common than injuries from flame. And the reason is that the building materials of today create deadly toxic fumes when they ignite. Many times, it only takes one breath of these fumes to kill a person.

I pray that the judge will use common sense and rule against Great American. It’s too bad that the judge cannot punish them for violating Unfair Claims Practices regulations here. But, proffering a bogus motion in court is likely not enough to qualify as bad faith.

But, wouldn’t you agree that this effort by Great American is as close to Bad Faith as possible?

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed here.

Friday, December 19, 2008

Uninsured Motorist Coverage: Why Are More Drivers Uninsured Today?

The worsening recession and mounting job losses are causing an unexpected increase in uninsured motorists.

Hundreds of thousands of people all over North America are canceling their car insurance or allowing the policies to lapse. One reason is the increasing unemployment rate. As people lose their income, they begin to cut back on their expenses. Tragically, one of the things they cut is their car insurance policies.

However, some drivers are just trimming their coverages, lowering their coverage to the minimum liability level that keeps them legal drivers.

Even in good times, insurance studies show that about 15% of drivers nationwide are driving without insurance. In states that have a large immigrant population, it can be as high as 25% uninsured drivers.

What happens to you if you are in an accident with an uninsured driver? If the accident is the uninsured driver’s fault, you will not have his insurance to pay for your damages or injuries. Statistically, those who drive without insurance have very few assets. So, even if you file a lawsuit to recover damages, the uninsured driver is likely not collectable.

What can you do to protect yourself and your family? Make sure that your car insurance policy includes Uninsured Motorist AND Underinsured Motorist coverages. Choose the highest liability limits available through your agent. UM coverage also protects you from hit-and-run accidents and injuries if you are a pedestrian. And Underinsured Motorist coverage protects you from those drivers who have chosen minimum coverage.

If you are thinking about dropping your car insurance, know that people who allow their policies to cancel for any reason can face surcharges of 25% to 50% when they try to buy insurance again. The companies consider them to be high risk drivers, which they are!

Many states require drivers to buy Uninsured and Underinsured Motorist coverage. Driving without insurance is illegal in 48 states. Only Wisconsin and New Hampshire will allow drivers to file a financial responsibility form with the state to drive legally.

If you have experienced a loss, whether car wreck, fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

Now, I'd like to offer you two special reports at no cost. One is "5 Things To Do When Shopping For Car Insurance," and the other is "5 Things To Avoid When Shopping For Car Insurance." Each one is a $9.95 value, but free to you when you sign up for my newsletter at the website address below.

Ed McMahon and Toxic Mold

I was reminded of Mr. McMahon’s mold experience when I read a story about him today in the newspaper. Seems that Mr. McMahon took a fall a few years back and fractured his neck. Since then, he has been unable to work, and as a consequence, his home was subject to foreclosure. That’s a sorry state of affairs for an 85-year old man who has made a fortune during his lifetime. But that’s where he finds himself right now. Other wealthy individuals, like Donald Trump, have come to his rescue so he doesn’t get thrown out into the street.

Remember Ed McMahon? He is best known as the sidekick to Johnny Carson of the Tonight Show on NBC. In 2002, McMahon sued his insurance company, American Equity Insurance Co., for more than $20 million. His lawsuit asserted that toxic mold sickened him and his wife Pamela, killed their dog Muffy, and made their Beverly Hills house uninhabitable.

A pipe had broken in the six-bedroom home, flooding the family room. Mold spread throughout the house, even spreading into the heating and air conditioning ducts. The cleanup contractors just painted over some of the mold.

The suit was finally settled in 2003 for $7.2 million. This settlement is the highest published recovery in the United States by an individual filing for property damage in a mold lawsuit.

Everlasting shame goes to the insurance industry for what they have done about toxic mold. Prior to 2003, policyholders submitted about as many mold claims as fire claims each year. The insurance industry saw that mold claims were increasing in numbers, and they forecast that toxic mold losses would soon overwhelm them. The reason for their fear is that the mold claims were not just for repairing the physical damage to the structure, but also involved the illnesses and deaths that the toxic mold was causing.

So, very quietly, they simply stopped insuring mold losses.

Most insurance companies have added a Mold and Microorganism Exclusion to their policies since 2003. Check your policy to see if mold is covered or excluded.

If it is excluded, start NOW finding coverage for Mold Damage.

If you had a water damage loss that ended up with mold, you should still be able to collect for the damage that the water did to your property BEFORE the mold grew. Don’t just sit idly by and accept a mold claim denial from an insurance company. Go ahead and prove that the water damage happened FIRST, and get your claim paid. Even if you have to file a lawsuit, it could be worth it.

If you have experienced a property loss, whether fire, wind, flood or even toxic mold, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

Thursday, December 18, 2008

The Insurance Industry’s Latest Scam: The Anti-Concurrent Causation Clause

Everyone remember what happened all over the South when Hurricane Katrina hit in 2005? The insurance companies denied thousands of claims because they said that the damages were due to flood, not wind. So, for those who did not have flood insurance, their claims were denied. The insurance companies paid smaller claims for the wind damages.

Well, the insurance companies got busy since then and have convinced 48 of 50 state Departments of Insurance to approve new policy language. So, understand that this new ripoff is brought to you with the blessing of your state’s Insurance Commissioner.

The Anti-Concurrent Causation Clause is just technical-sounding enough to begin getting your eyelids to slam shut. But don’t leave me! This is one of the worst policy amendments that the insurance industry has ever done.

The new policy language is a part of the language and forms of the Insurance Service Office (ISO), the organization that submits standard policy language to the regulators. Companies like State F*arm Insurance have already filed their own language, but it’s almost identical.

Here’s what the Clause basically says: If any percentage of the damage is caused by a covered peril (like wind) and any smaller percentage of the damage is caused by a peril not covered (like flood), the insurance company can DENY THE ENTIRE CLAIM!!

Here is the exact language from the policy, found under the “Exclusion” section of a homeowners policy:

We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such losses regardless of (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to product the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these.

Then, the policy lists a number of exclusions.

Look at this example. If you live along the Gulf Coast, and hurricane winds caused 90% of your damage, and 10% was caused by the storm surge (not covered in a homeowners policy, the insurance company can and will deny all coverage for all of the damage!

So, for those homeowners living in states where hurricanes, tornados, blizzards, or any kind of severe weather occurs, your policy may not provide you any coverage.

What can you do to fight back?

1. Shop for a policy that does not have this new policy language in it.
2. If you can’t find a policy in your state without that new language, contact your Insurance Commissioner and submit written objections and complaints.

High Cost Home Insurance: The Top Ten Most Expensive States For Homeowners Insurance

High cost home insurance penalizes everyone, but really takes a toll in states where there a lot of different kinds of losses.

The concept of insurance was created to spread risk of loss among a large group of people, so that each person bore a small portion of the risks. So, when we are discussing the kinds of risks that drive up homeowners insurance costs, that means that the person who pays premiums for his home in upper Michigan is partially subsidizing the person who has a home in coastal Louisiana.

Hurricanes and tornadoes are just big wind storms. But they are not the only disasters that make insurance premiums rise. Fires, hail and floods all work to drive up premiums, and insurance companies pay out more claims each year for the combined smaller risks than for hurricanes.

One huge risk that the insurance companies no longer fear is mold. Up until 2003, policyholders submitted about as many mold claims each year as fire claims. And, the trend on mold claims was increasing. But, after the September 11, 2001 tragedy, insurance companies quietly convinced all of the insurance commissioners in America to allow them to exclude mold claims for coverage.

But, despite the insurance companies getting rid of most mold exposures, they still have to insure the other risks to homes. So, here are the Top Ten most expensive states in which to insure a home. We’ll start with the least, and proceed to Number One.

10. Kansas – Author Frank Baum placed the book “The Wizard of Oz” in Kansas for a good’s considered “tornado alley.”

9. Alabama – This state experiences tornadoes, hail, big thunderstorms and hurricanes. Plus, its building codes are more strict than its neighbors, driving up repair costs.

8. Rhode Island – Small state, long coastal exposure. So, hurricanes that sweep up the Eastern Seaboard pound this state.

7. California – “Earthquake Central”, plus wildfires, mudslides and coastal storms make this state an expensive place to insure a home.

6. Florida – sticks out into the Caribbean like a sore thumb, and gets smacked by hurricanes often. One of the big reasons insurance is so expensive here is that scores of insurers have pulled out of Florida. The biggest player in the market there is Citizens Property, a high-risk fund operated by the state. Their numbers are not added into the Florida totals, or it would likely be Number One.

5. Mississippi – lax building codes increase risks, as well as being a coastal state with hurricanes, tornadoes, hail and floods.

4. District of Columbia – Building costs in DC are higher than most places in the nation, as well as being considered Ground Zero for terrorism risks.

3. Oklahoma – Big winds plus big tornadoes make this state one of the highest priced states.

2. Louisiana – shares the same challenges as Mississippi, but adds a large population center below sea level.

And, in First Place (or Worst Place!)...Texas! Here, you can find all of the disasters in one place. Hurricanes, floods, hail, windstorms, and earthquakes all make it rough for insurance companies to stay profitable writing business in Texas.

But, take heart, insurance company fans! With new policy language called the “Anti-Concurrent Causation Clause,” insurance companies can now deny ALL claims where two or more risks cause damage. To learn more, read “The Insurance Industry’s Latest Scam” at this forum.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

Wednesday, December 17, 2008

Business Insurance: Four Basic Principles for Those Starting a New Business

Business insurance is vital for a new business. If you are in the planning stages for starting a new business, you’ll need to plan for your insurance coverage. You likely already have insurance for your home and automobile. But the insurance needs for a business are somewhat different and you must address all of your new business exposures.

Here is a list of the four basic components of a business insurance policy:

1. Property:
a. The building you own. If you’re leasing a building, your lease may require you to insure the building.
b. Your business personal property, including your furniture, machinery, computers, office equipment, inventory and raw materials.
c. Your vehicles.

2. Liability: If your business will be dealing with the public, there is a chance that you will cause a loss to others due to negligence. This covers errors you may make and personal injury or property damage to others.

3. People: If you will have employees, Workers Compensation insurance will be necessary. You might also consider Health Insurance and/or Life Insurance for your employees. “Keyman” life insurance protects the business from loss of a key owner or employee. Worker’s Compensation is mandatory, other coverages are optional.

4. Income: The lifeblood of any business is its income. If that income is interrupted or stopped, the business will likely not survive. Business Interruption coverage provides replacement of the lost income due to a covered peril.

When you are preparing your business plan for your new business, you should be able to generate the information necessary, such as property values, number of employees and anticipated revenue. Share this information with your insurance agent so that together you can design a business insurance policy for you that meets all your needs.

If you have experience a Business Insurance loss, whether property, liability, people or income, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed under my photo.

Tuesday, December 16, 2008

Home Safety: Is Your Home Safe? Take This Simple Quiz

Home safety is easy to overlook. Is your home safe? I’ll bet you’ve never looked at home safety through the eyes of an insurance adjuster. But it will benefit you to think about all of the ways you could have an insured loss at your home.

Here’s a simple quiz. If you have done all of the tips after the question, you can answer “Yes!” If not, you’ve got some work to do.

1. Is your home secure?
-Install deadbolt locks on all exterior doors.
-Install outdoor lights next to all exterior doors, and make sure the bulbs are working. Connect the outdoor lights at doors to motion detectors that go off when someone approaches.
-Install a monitored security system that has sensors at every opening, including second story windows.
-Install curtains or blinds on windows so people outside cannot easily see what’s inside.

2. Is your home safe?
-Install one smoke detector on each level of the home.
-Install a radon gas detector in the basement.
-Keep the areas in front of doors, and sidewalks cleared of leaves and snow.
-Make sure there is a fence around any outdoor pool.
-Place a home fire extinguisher in the kitchen, one in the garage, and one in another room.
-Clean out the lint filter on your dryer every time you use it.
-Get your fireplace chimney cleaned once a year.
-Get your furnace checked once a year.

3. Are you living safely?
-When you have guests in your home, monitor their alcohol consumption, and don’t allow them to drive if they’ve had too much to drink.
-Be extremely careful when working outside on ladders. A fall can seriously injure or kill you.
-Insist that any workers on your property provide you with their certificate of insurance. No exceptions.
-Be extremely careful when working inside. Use a safe small ladder or solid stool, don’t jump up on a chair to reach overhead.
-Keep your staircases clear. Don’t stack stuff on stairs and then try walking around it.
-Don’t start to cook on the stove and then walk away. Cooking fires are number one for home damage.
-Don’t plug a bunch of electrical devices into a cheap extension cord.
-Don’t cover extension cords with rugs or run them under carpet.

If you were able to answer “Yes” on all three questions....CONGRATULATIONS!! You will likely never have to have an insurance adjuster visiting your home!

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to my website at:

Sunday, December 14, 2008

Ice Storm: Top Ten Tips On How To File Your Ice Storm Insurance Claim

A massive ice storm hit New England on the December 12, 2008 weekend, leaving millions of homes and businesses without electrical power. Thousands of homes and vehicles were damaged as ice-laden trees and branches fell.

Now, you’ll begin the cleanup, recovery and repair process. Many of you will be submitting insurance claims for damage to your home, business or vehicle. Let me share a few strategies to help you add hundreds or even thousands more dollars to your claim settlement.

Vehicle Damage Claims

1. Remember that when something falls on your vehicle, it will be covered by the “Other Than Collision” or “Comprehensive” coverage, not your Collision coverage. Make sure you know what your OTC deductible is.

2. Take your damaged vehicle to the body shop of YOUR CHOICE, not the choice of the insurance company. It’s YOUR vehicle, not theirs.

3. Insist on Original Equipment Manufacturer (OEM) parts, not cheap aftermarket parts. The insurance company has a legal duty to return you car to its pre-loss condition. Cheap aftermarket parts are not as safe as OEM parts.

4. Perform a very careful inspection and test drive of your vehicle after repairs are completed. If you need to, have a qualified mechanic do the inspection for you. Document any uncompleted repairs, and make sure they get done right then.

5. If your vehicle is a total loss, get written appraisals from dealers of your choice to be sure that the insurance company pays you all that you are entitled to collect.

Building Damage Claims

1. Mitigate your damages...board up and tarp the home or business if necessary. The costs are covered.

2. Call a restoration contractor, not just a remodeling contractor.

3. Get your chosen contractor to meet with the insurance adjuster and agree on the scope of damages. Don’t just accept an estimate written by the adjuster.

4. If your home is too damaged to live in, your policy may have Additional Living Expense coverage. Carefully document all your expenses over and above your normal expenses while you’re living in a hotel or apartment.

5. If you have heavy damage to your home or business, consider consulting with a Public Adjuster to help you with your claim. They are claims professionals, and can customarily help you maximize your settlement amount.

If you have experienced a property loss, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to my website at:

Wednesday, December 10, 2008

Cash Value Life Insurance: Five Reasons Why Cash Value Life Insurance is Death to Your Financial Future

Cash value life insurance is the most widely sold life insurance product in the world today. It is also the life insurance product that is WORST for your Finances.

These products are also known as:

• Whole Life
• Universal Life
• Variable Life
• Interest Sensitive Life
• Non-Participating Life (no “dividends”)
• Participating Life (pays “dividends”)

Why are cash value products a bad choice for your insurance needs? I could write a book about this, but here are five simple reasons.

1. Too expensive. All life insurance is priced at a cost per thousand dollars of coverage. Cash value life insurance is high priced. Term life insurance is very low priced per thousand. Better to buy term life insurance to make sure you have enough coverage.

2. Borrowing your own cash value. After you’ve paid a few years of premium into your policy, it starts to accumulate some stored-up money, which the insurance company calls “cash value” or “surrender value.” It is the amount of extra premium you have paid ahead that has not been used to cover your pure insurance costs. If you want your cash value, you must either surrender your policy and lose your coverage, or borrow the money from the insurance company and pay it back.

3. The insurance company keeps your cash value when you die. Your beneficiaries can’t have both your cash value and your death benefit. So, if you had paid into your $100,000 cash value policy for 40 years, and had accumulated cash value of $25,000, the insurance company pays $100,000 and keeps the cash value.

4. Surrender and cancellation penalties. In the first 1-10 years of many cash value policies, the cancellation penalties are so high that you cannot get out any cash value at all...or only a small percentage.

5. Generally life insurance “dividends” are tax free and you do not report them on your tax return. That's because life insurance “dividends” are not true dividends at all, like what is paid when you own a share of common stock. In life insurance, the term “dividend” is used to deceive policyholders into thinking that life insurance is a comparable investment to securities. The IRS says that insurance “dividends” are a return of premiums that you previously paid for the life insurance policy.

I’ve tried to keep this as simple as possible. These five reasons should be enough to convince you that cash value life insurance is a poor product. If you need life insurance, look first at term life insurance. It is very inexpensive and allows you to buy the amount you need.

Car Insurance Claim Scams: How Rear-End Collisions Can Be Car Insurance Claim Scams

Car insurance claim scams happen in cities and rural areas. They happen at both day and night. They happen in sunshine and rain, at rush hour and on quiet roads. You need to know that there are people out on the roads that are planning and looking for someone just like you to catch in their scams. It’s all about filing fraudulent claims and collecting money from you and your insurance company.

Here’s just one example of a claim scam...The Staged Rear-End Collision.

A driver will quickly merge into your lane of traffic directly in front of you, then slam on their brakes. They are hoping that your car will hit their car in the rear end.

It doesn’t matter if they have Collision insurance coverage on their car, because if you hit their car, you’re at fault. Here in the state of Georgia, a traffic ticket for “failure to yield” is almost a certainty if you rear-end another car for any reason. And, if you’re ticketed, your insurance company is going to have a hard time proving that it wasn’t your fault.

The Car Repairs Scam

The other driver will collect money from your insurance company for repairs to his car. He may take his car to the body shop of his choice. Sometimes, the body shop is a partner in the scam, writing a huge estimate for repairs that may or may not ever get done. This part of the scam happens pretty quickly, and settlement usually happens pretty fast.

The Bodily Injury Scam

The driver will usually fake an injury. If there are other people in the car, it is likely that all of them will fake injury. These rear-end collisions are perfect for scammers, since injuries like whiplash are soft-tissue injuries and very difficult to prove. So, they might drag out an injury claim for months. Sometimes, the driver/claimant’s doctor, chiropractor or attorney may be part of the scam. The medical bills will mount up and the attorney will make a settlement demand, usually far in excess of the medical bills alone. For example, the claimant’s medical bills might total $10,000, and the attorney will make a demand for $50,000.

Another part of the Bodily Injury Scam is loss of income for the claimant. They might try to hit you for partial disability, either temporary or permanent. They might even try total disability. Remember, in this scam, ALL of the passengers will make the same claim for damages.

Can you see how fast the claim can go from a fender-bender to a huge claim with a demand of hundreds of thousands of dollars?

You can prevent this type of scam befalling you. Here are some tips:

• Keep plenty of distance between you and the car ahead of you AT ALL TIMES.

• Stay alert while driving, don’t allow yourself to be distracted inside your own car.

• Keep cell phone use while driving at a minimum. People develop “attention blindness” when they’re using their cell phones.

• Make sure you have a disposable camera in your glovebox at all times. If you do find yourself in a rear-end collision, use your disposable or cell phone camera to take plenty of photos of the damages on both cars. Take photos of the driver and all passengers.

Only YOU can protect yourself from being a victim of a Car Insurance Claim Scam.

If you have experienced a car insurance loss, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

Vehicle Theft: Five Tips To Protect Yourself From Vehicle Theft

Vehicle theft is the number one property crime in the United States, and it costs consumers more than eight billion dollars a year. Much of that cost is borne by insurance companies, and they pass along the costs in the form of higher insurance premiums.

Let’s face it. If a criminal wants your car, he’s likely going to get it. But there are things you can do to lower your chances of a car highjacking.

1. Be aware of your surroundings. Notice the physical area around you. When you park in the daylight, and you know you’ll be coming back to your car after dark, try to park in a well-lighted area.

2. Be aware of the people around you. Notice if anyone is following you, or coming toward you from any angle. Look at them directly! Criminals are cowards. They would rather not deal with someone who can give police a good description of them.

3. Keep your car doors locked when you are driving. If you are at an isolated stop light, you are vulnerable to a highjacking. At least a locked door will slow a highjacker down a bit. But if ANYBODY taps on your window, drive away immediately.

4. Here’s a HUGE TIP for the ladies, but this scam works on men, too. One of the oldest tricks is that a highjacker drives up behind you and runs into the rear bumper of your car...just enough so that you feel it. Both of you stop your cars. If anybody from the other car gets out of that car and comes to your window, DO NOT ROLL DOWN THE WINDOW! Immediately drive to a well-lighted, high traffic location, like a convenience store, gas station or the closest fire or police station. If you have your cell phone with you, call the police and tell them what you’re doing.

5. Final tip. Buy a handgun, get a concealed weapons permit, and learn how to shoot your gun. Then you will be able to protect yourself and your property with a firearm. Remember that criminals are cowards. But if the criminal is the only one with a gun, your future doesn’t look to good.

Follow these five tips, and you’ll likely never have to deal with a vehicle theft.

If you have experienced an auto theft loss, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

Christmas Fire Safety: 14 Tips for Christmas Fire Safety

According to the United States Fire Administration (USFA), fires occurring during the holiday season claim the lives of over 400 people each year, injure 1,650 more, and cause over $990 million in damage. By following these tips, you can be sure of a safe and happy holiday.

Holiday Decorations

• If you use an artificial Christmas tree, be sure it is flame retardant.

• Don’t use flammable decorations.

• Keep decorations away from heat vents and other heat sources.

• Don’t burn gift wrapping paper in the fireplace. Wrapping paper tends to burn hotly and fast, and can throw off sparks that could start a chimney fire.

Christmas Tree Care

A Christmas tree on fire can quickly fill a room with fire and deadly toxic gases. Take special precautions when you bring a live tree into your home.

• Picking a tree: Needles should be green and not easy to be pulled from the branches. The trunk of the tree should be sticky from sap. When you’re picking a tree, stand it upright and bounce the tree trunk on the ground. If needles fall off, it’s probably too dry to buy.

• Tree care: Never stand a tree near a heat source, like a heat vent or fireplace. Heat will dry out the tree and make it a fire hazard. Keep the tree stand filled with water. Don’t keep a Christmas tree in your home longer than about two weeks.

• Tree disposal: Don’t burn it in the woodstove or fireplace. Best to take it to a local recycling center, where they will run it through a wood chipper. You might even be able to scoop up some wood chips and take them home for landscaping.

Holiday Lights

• Before you install lights: check each strand of lights for cracked wires, frayed wires, broken light sockets or kinks in the wires. Lights are really cheap. When in doubt, throw out the old lights and buy new.

• No overloaded electrical outlets. Connect all your strings of lights to an extension cord, and then plug the extension cord into the electrical outlet. Come back a little later and check the lights. If you feel the cords or plugs and they are warm to the touch, unplug them and change outlets. Plugs and wires should never be warm.

• Don’t leave holiday lights unattended. I handled a claim for some people who placed those single electric candles in each window. It sure was beautiful...but one of the candles caught the drapes on fire and burned the house down. Hundreds of house fires happen each year from unattended decorative lights.


• There are few things as pretty as lit candles. But only use lit candles when you’re present to care for them.

• Make sure the candles are in candle holders that are stable, and not placed where they could easily be knocked over.

• Never use lit candles on a Christmas tree. Never.

• Never leave the house when candles are burning.

Finally, make sure you have working smoke alarms installed on every level of your home. Test them once a month and keep them clean. Make sure they have fresh batteries at all times. Then, Have a Merry Christmas!

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to my website at:

Christmas Thefts: Are You Protecting Yourself From Christmas Thefts?

Holidays are happy times...for criminals. Your property is far more vulnerable to theft than you realize during the holiday season. Let me show you some ways you can get ripped off, and how you can prevent it.

1. Christmas shopping. Many people go to malls and other shopping centers, and park their cars in the expansive parking lots. Shoppers take their packages back to their cars so they can shop more. Criminals watch this behavior and target those cars. If you leave your packages inside the car...even if it’s’re only a quick smashed window away from stolen packages. Put your packages in the trunk. I’m not saying that your packages are completely safe in the trunk. I’ve seen motivated criminals pop a trunk and get the loot within seconds. But you have a better chance if your stuff is in your trunk.

2. And while you were Christmas shopping....other criminals are stalking your neighborhoods looking for houses that look like nobody’s home. When you spend all day at a mall on the weekend, you might get a surprise when you arrive home. So, make sure that you have a monitored security system at home, and make sure it’s armed while you’re gone.

3. And when you went to Grandma’s house for a couple of days...the criminals might notice that your home is dark. Make sure you have the mail held at the Post Office, and tell your paperboy to stop delivery while you’re gone. Ask your neighbors to check on your home each day while you’re gone. Finally, call your local police and tell them the dates you will be out of town.

4. Remember that personal items stolen from your car are NOT COVERED by your auto insurance. You'll have to submit any claim through your Homeowners or Renters insurance.

The year-end holidays can be wonderful times of family closeness, joy and deep religious meaning. Be careful, vigilant, and you stand a much better chance that your holiday won’t be spoiled by theft or burglary.

If you have experienced a property theft loss, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to my website at:

Monday, December 8, 2008

Winter Insurance Claims: Will You Have Less Insurance Claims In Winter?

Winter insurance claims happen with different frequency, and for different reasons, than claims in other seasons of the year.

Spring and summer bring thunderstorms, tornadoes, heavy rain and wildfires. Hurricane season lasts until November 30th.

In Autumn and Winter, people begin to think about staying warm. So, heating-related insurance claims rise in frequency, like

• Central heating systems – be sure you have a Heating, Ventilating and Air Conditioning (HVAC) contractor come check out your heating system to prevent fires that are caused by system malfunctions.

• Fireplaces – who doesn’t like the scene of a quiet, romantic fire in the fireplace? But before you build that first fire, have a chimney sweep clean the chimney. It will help prevent chimney fires, which are terribly destructive. Logs in the firebox can also roll out onto the floor, and flying sparks can start fires which can spread to the whole house. So make sure that you use a firescreen or some other fireguard for protection.

• Heating Appliances – I’m talking about kerosene and propane heaters, electric baseboard heaters, portable electric heaters...even electric blankets. Remember that when you pull these appliances out to be used, they haven’t been used for months. Take the time to check them carefully. Look at electrical cords and plugs, heating elements, and fuel reservoirs. Make sure everything works safely. Also remember that these appliances should not be left on for extended periods of time, nor placed near flammable goods.

Take the danger out of keeping warm by practicing simple safety measures.

The opposite of heating claims is the frozen pipe loss. Cold temperatures can cause plumbing systems to burst, causing water damage that can be as extensive as a fire claim. For those who live in the North and spend their winters in the South, please take extra precautions that heat remains on in your northern house while you're away. Have someone check on your house weekly.

What about winter transportation? Slippery and icy roads make driving hazardous. Here are a couple tips about driving in winter:

• Drive a little slower.

• Keep more distance between your vehicle and the vehicle ahead of you. Stopping distances are much longer on slippery roads.

• Turn your headlights on every time you use the car. Daytime running lights increase your visibility by about 70%.

Winter doesn’t have to include an insurance claim for you! Be safe and be aware of the perils around you. Then, you can enjoy winter with peace of mind!

If you have experienced an insured loss, whether auto, business, fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website at:

Monday, December 1, 2008

Office Party: Here Are 13.5 Tips To Avoid Lawsuits After A Holiday Office Party

The annual holiday office party can be joyous, festive, memorable...and hazardous to the financial health of the business. But without careful planning, you could end up getting sued for what happens at your party...or what happens AFTER your party.

I’m defining “office party” as an employer-sponsored party, including parties where business associates, employee spouses or “significant others” are invited. As an insurance adjuster, I know many vendors, such as accounting firms and fire restoration contractors, that invite adjusters and insurance company personnel to their parties. The adult beverages flow freely at these parties.

If you are hosting a business holiday party, here are Top Tips to keep you out of a lawsuit.

1. Before holiday parties, send out interoffice memos, do bulletin board postings or have meetings in which you urge moderation, and gently explain the measures that will be taken to ensure a safe and successful party. It would be a good idea to distribute your party plan in writing to all employees and invitees.

2. Schedule the party on a weekend or after normal business hours.

3. Hold the party at an offsite location. Better if problems arise away from the business premises.

4. Don't require employees to attend as a condition of their employment.

5. Don't take attendance at the party.

6. Make the party a family event, including spouses and children.

7. Assign certain supervisors or managers as “hosts” to oversee the event.

8. Don't pay for drinks. Guest will drink less if they have to pay for drinks themselves.

9. If you feel you must furnish alcoholic beverages, consider a drink voucher system to limit the number of drinks served. Or, serve alcohol for only a short period.

10. Don’t sell alcoholic beverages at the party. No cash bar arranged by the employer. If your party is at a location that has its own liquor license, and guests buy drinks at their bar, so be it. But you still must make sure they arrive home safely.

11. Hire a separate bartender or caterer to serve alcohol. He will know better when to say ‘No’ to a guest who’s had one too many. The hired bartender should have his own liability insurance and provide you a copy of his insurance certificate BEFORE the party. Instruct the bartender/caterer to notify an appropriate event manager if he finds someone who’s had too much to drink.

12. Serve plenty of non-alcoholic beverages: water, sodas, juices, coffee, tea.

13. Arrange transportation for intoxicated employees. Call a cab, use designated drivers, or provide discounted or free rooms if the party is held at a hotel.

Remember that even if you carry adequate insurance, known as "host liquor liability insurance coverage," it will likely not afford coverage for your business if alcoholic beverages are being sold at your party. You should purchase additional liquor liability insurance coverage before the party.

13.5 Another huge potential problem is dealing with a sexual harassment lawsuit because of an incident at the party. Alcohol lowers inhibitions, and you could have an employee or guest who files a grievance or lawsuit against another employee and the business...or even against another guest...for unwanted sexual advances at YOUR party.

Mention this potential problem to your party “hosts,” and have them be alert for guests or employees who are "too friendly" with other people at the party.

Lastly, make sure you investigate ALL complaints. If you just ignore or shrug off complaints, your business could be in worse trouble than if you just deal with it.

In closing, don’t look at this article as a “buzz kill.” Consider that I’m the lighthouse on the shore, alerting you to the rocks and shoals. Avoid them, and your “voyage” will be a happy one!

Holiday Party: Top Ten Tips To Avoid a Lawsuit After a Holiday Party

A holiday party can be festive, joyous...and potentially hazardous to your financial health. You want to enjoy the company of family and friends. But, if you’re not very careful, you could end up getting sued for what happens at your party...or what happens AFTER your party.

If you are hosting a private non-business party at which alcohol is served, here are Ten Tips to keep you out of a lawsuit.

• Before the date of the party, read your homeowners, renters or condo-owners insurance policy and discuss the party with your insurance agent. Be certain it specifically provides enough liability coverage for events from the negligence of the policyholder, which is YOU.

• Consider buying a Liability Umbrella policy to supplement your regular coverage. Premiums for $1 million of coverage run about $300 to $500 annually. Be certain there’s no gap between the existing policy and coverage provided by the umbrella policy. For example, if your homeowners insurance has liability limits of $300,000 and your umbrella policy covers costs above $400,000, you’d have to make up the $100,000 difference if you have a claim. Got $100,000 just lying around?

• Consider making guests hand over their car keys when they arrive. They are more likely to hand over the car keys before they start drinking than they will be after a few party beverages.

• Don't serve alcohol to ANYBODY under the legal drinking age in your state. If you are sued, your insurance policy might not provide coverage.

• Don't let your guests behind the bar. Consider hiring a professional bartender for your party. He will know better when to say ‘No’ to a guest who’s had one too many. The hired bartender should have his own liability insurance and provide you a copy of his insurance certificate BEFORE the party.

• Serve plenty of food. This will help keep guests from drinking on an empty stomach. However, consider avoiding salty and spicy foods which make people thirsty. Why do you think bars set out pretzels and popcorn?

• Serve lots of non-alcoholic beverages.

• Stop serving alcohol at least one hour before the party ends. Forget the old wives’ tale about serving coffee to drunks. Caffeine doesn’t sober a person only makes for a wide-awake drunk driving a car.

• If someone obviously has had too much to drink, drive them home, make up a bed, or call a cab. But keep them from getting behind the wheel. They may insist that they’re sober enough to drive, but don’t you believe it. Use the final tip!

• Spend about $50.00 and buy a home breath analyzer. They’re listed all over the ‘Net, including Amazon. Then, make each person leaving the party blow in the breathalyzer to see what they blood alcohol level is. Too high and they don’t drive home. PERIOD.

Follow these Top Ten Tips, and you’ll have a happy holiday party!

Friday, November 21, 2008

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

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 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:

Car Insurance: Five Things to Avoid When Buying Car Insurance

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:

Copyright 2008, Russell D. Longcore.

Saturday, November 15, 2008

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

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: .

Thursday, November 13, 2008

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

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


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:

Saturday, November 8, 2008

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

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!