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    Tucson Insurance Blog


    3 Big Changes in Home Insurance That Can Cost You Big Money!

    There are 3 Big Changes in Home Insurance that can cost you big money! If you are like most homeowners you buy a home policy when you close on a new home and stick it in the drawer. Perhaps you take a glance at it when it renews each year, but for the most part you do not pay much attention to home insurance. It stays the same pretty much right? Not exactly.

    There are 3 big changes that you may not be aware of about your home insurance. Either the current policy has been endorsed with new changes or amendents - those pretty much went in the round file (trash) or you have been re-written a new home policy when you called your insurance agent to inquire about why your home insurance is so high.

    The first change and a doozy is the endorsement added to many Arizona home policies. The ROOF REPLACEMENT SCHEDULE. As professional independent insurance agents in Arizona we know there are 1000’s of homeowners insured with a roof schedule and they are not even aware of it. They find out in the worst way and that is when they file a roof claim. 

    It goes something like this: “Mr. Jones we have your check ready to send out for your recent micro-burst roof damage. The total damage for repairs comes to $25,000. Your policy has a roof schedule, your roof is approximately 10 years old and according to the roof schedule we will be depreciating $1500 for each year. Your check for $10,000 is being sent today.” 

    And this is where you say “What…I thought I would get a brand new roof!” Nope. This is the roof schedule boogy man. The roof schedule boogy man typically gets you a check for about 1/2 of what it takes to repair or replace your roof. Now, in all fairness home insurance companies are in the for-profit business, so the roof schedule helps mitigate losses on old and outdated roofs. 

    However, this does not mean that you have to buy a home insurance policy with a roof schedule. All home insurance companies in Arizona have different underwriting and rating rules. Chances are great if you use an agent with access to 1 single company you might have a roof schedule by default - as in there were no other options presented to you because, well, there were no other options. 

    The 2nd Big Home Insurance Change that can cost you big money is: Water Backup. Typical home insurance pays for water damage from sudden and accidental escape of water from a broken pipe or burst appliance line. While this water damage is horrible it is not the worst. The worst is “black water” or “sewer backup water” and this is typically excluded from your home policy. You can add it to your policy but it will cost you. However, with more water backup claims being presented, several home insurance companies represented by independent agents are offering at a minimum $5000-$10,000 in standard water backup coverage for no extra charge. It is much harder to clean up yucky, stinky, toxic backup water than regular water. Read your home insurance declarations to see if water backup is on your current policy or call us for a review at 520-444-8607.

    The last big change in home insurance that can cost you big money is pretty sneaky! Your REVISED HOME INSURANCE DEDUCTIBLE. You may have received your Arizona home insurance renewal a few years back and noticed that you could renew for a price of X if you agreed to a 1/2% or 1% deductible. This again was done in an effort to reduce the home insurance companies exposure. As professional risk managers we’re all for higher deductibles to save money and prevent you from making small claims that will negatively impact you. However, what the average home insurance consumer does not realize is that they can keep a lower deductible ie $1000.00 instead of having to agree to say a $3000 deductible (1%) on a $300,000 home.

    At Tucson Insurance and Pacific Insurance Agency we are looking for ways to save you money, protect you properly against the risks you face, and take out a bunch of “Gotcha’s” like roof depreciation schedules, water backup and big jumps in your home insurance deductibles.

    If you are like most homeowners, you buy a home policy and it renews automatically with your home mortgage escrow year on year and don’t give it much thought. Even when the insurance company sends renewals with endorsements and adjustments, most just assume it’s all good. If you have an independent agent you’ll have more options available to you and in the long run save more money - in both premiums paid and risk management. 

    You can get a free professional review of your insurance needs from one of our agents today - call 520-444-8607, submit a request for an agent to contact you, or get secure online home quotes here.


    The Best Defense Against Mold Is a Good Offense

    Recent natural disasters like Hurricane Katrina have once again put mold in the spotlight.  And since flooding can occur in the winter due to the abundance of melting snow and heavy rains, homeowners need to familiarize themselves with the steps to eliminate mold from their homes.

    First, it is important to understand the reasons to keep your home mold free.  According to the Centers for Disease Control, exposure to mold poses a potential health risk.  People with mold sensitivity can find themselves with a stuffy nose, irritated eyes, wheezing, or skin irritation.  Those with mold allergies can have difficulty breathing and experience shortness of breath.  If someone with a weakened immune system or chronic lung disease is exposed to mold, they can develop mold infections in their lungs.  The point is to eliminate the problem before it becomes a health issue.

    As we know, mold develops because of excessive moisture, so the key to prevention is to identify and eliminate moisture from developing in the first place.  The Insurance Information Institute recommends that homeowners take the following precautions:

    Reduce humidity in your home


    • Keep the humidity level in your home between 30 and 60 percent by using air conditioners or dehumidifiers.
    • Use exhaust fans in kitchens and bathrooms.
    • Never install carpets in damp areas, such as basements or bathrooms.
    • Never let water accumulate under houseplants.


    Use mold-reducing products


    • Clean bathrooms with bleach or other mold-eliminating products.
    • Add mold inhibitors to paint before application.


    Keep your home and belongings dry


    • Fix leaky pipes, faucets and hoses.
    • Keep gutters free of leaves and other debris.
    • Maintain your roof to prevent water from seeping into your home.


    Be careful after a flood or other water damage


    • ·Properly dry or remove soaked carpets, padding and upholstery within 24 to 48 hours after a flood to prevent mold growth.  Anything that cannot be properly dried should be discarded.
    • Remove standing water as quickly as possible.  Standing water is a breeding ground for microorganisms, which can become airborne and inhaled.
    • Wash and disinfect with bleach, or other mold-eliminating products, all areas that have been flooded.  This includes walls, floors, closets and shelves, as well as heating and air-conditioning systems.


    If you find that despite your best efforts you have mold problems, there are two options to remediate the situation.  The first is to clean it yourself.  If you choose this option, you should limit your own exposure to the mold and its spores.  The Environmental Protection Agency recommends that you wear certain protective gear during cleanup, most importantly an N-95 respirator, which can be purchased at most hardware stores.  Some N-95 respirators look like a paper dust mask with a nozzle on the front, while another popular style is made of plastic or rubber and has a removable cartridge that traps the mold spores.  No matter what style you use, in order to be effective, the respirator must fit properly.

    The second item the EPA recommends is a pair of long gloves that extend to the middle of your forearm.  If you are using a mild detergent, ordinary household rubber gloves are fine.  If you are using a disinfectant, chlorine bleach, or other strong cleaning solution, you should use gloves made from natural rubber, neoprene, nitrile, polyurethane, or PVC.  The third protective piece of equipment you should wear are goggles without ventilation holes. 

    If there are still signs of mold after cleaning or if the mold returns, you should choose the second option and have the area cleaned by professionals who specialize in mold removal.


    Helping Employees Make Their Comeback After a Work-Related Injury or Illness

    The fallout from an extended injury or illness can devastate employees and their families financially, physically and mentally.  Trying to live on decreased income from a workers’ compensation claim, coupled with family members having to take on additional responsibilities the disabled person cannot perform, can put a real strain on relationships.  As time passes, the additional problem of becoming increasingly isolated from their former life raises tension levels in an already highly charged situation.

    This scenario occurs more often than you might think. According to the U.S. Bureau of Labor Statistics, in 2002, a total of 1.4 million injuries and illnesses in private industry required recuperation away from work beyond the day of the incident.  What’s even more surprising about the Bureau’s findings is that injuries and illnesses to workers aged 20 to 44 accounted for 64 percent of all injured workers.  Workers aged 65 and over accounted for only 1.7 percent of total injuries and illnesses.  The fact that the majority of workers on extended leave are workers who will need to return to work clarifies how important setting the stage for their comeback really is.

    Leslie Yerkes, an organizational behaviorist and president of Cleveland, Ohio-based Catalyst Consulting Group, Inc. notes, “Finding and keeping good people provides a competitive advantage for organizations.  So, keeping the bond strong when employees are on family leave, working virtually or out on workers’ compensation is critical to not losing that employee to a competitor and to facilitate a rapid and smooth transition back into the workplace.”  She recommends the following steps for maintain a strong connection and facilitating a smooth re-entry:

    • Clarify expectations with the employee early on as to what they can and want to do.  If job reassignment will be necessary upon their return, let them know that you are willing to explore possible options.  Get a feel for the kinds of jobs they might be interested in and realistically explore how and where they can fit in.
    • Assign a communication buddy to the individual who can commit to having a regular weekly update conversation with the absent employee.  Make sure that the employee has a means to receive critical information while absent from the organization.
    • Include the absent employee via phone teleconferencing in key events that will affect them directly.  This is critical when it comes to changes in company/departmental policies or revisions in work floor procedures.  You don’t want an employee to return to work only to be reprimanded the first day back for violating a policy change that they were unaware of.  It increases the feeling that they have been left behind.  Those negative feelings might continue to grow until the employee feels compelled to find another job.
    • Encourage the work group to stay connected and communicate to the disabled employee that they care about their recovery.  It’s like Hallmark always says, “When you care enough to send the very best.”  Make sure an absent employee knows that they are truly missed by their co-workers. And most importantly, make sure the employee knows that their bosses are among those people!

    The lesson to be learned from all of this is simple.  Transitioning back into the workplace begins as soon as the employee starts their leave.  If you plan for their re-entry from the outset, it will be as seamless as it should be.


    Are You at the Insurer's Mercy If You Total Your Car?

    You treat your car like you would a child. You take care of it inside and out and no one could ever tell it recently celebrated its tenth birthday. Over those ten years, you and your auto have had some great times together, but now the unthinkable has happened and your car has been “totaled.” Does that mean that the two of you have to say good-bye?

    Totaling your car means that you have wrecked it badly, so much so that it is up to your insurer to decide if it is worth fixing. The insurer’s decision is based on the car’s worth. Minor damage to a very old auto could result in your carrier deciding to total it, while major damage to a brand new one might not. Auto insurance claims adjusters typically determine a car’s cash value through their company’s proprietary database of prices.

    The decision to total a car varies with insurers. Some companies will total a vehicle if after the accident it is only worth 51 percent of its cash value. Others will decide to total the car at 80 percent. The insurance company pays you the car’s actual cash value less any deductible and your car is sent to a salvage yard to be auctioned off. The end result is usually an auction bidder buying the car for parts. The insurance company keeps the auction money, which offsets any costs over the amount they have collected in premiums.

    If you feel your car has been unjustly condemned to salvage, do you have any way to protest the decision? You do have some rights, but they are limited. You enter into a contract with your insurance company when you buy car insurance. That contract states that you can’t coerce your insurer to pay out more than your car is actually worth. However, your carrier is obliged to ensure that you are “made whole.” That means the company is required to put you in the same condition you were in before the accident happened.

    If your car has been wrecked but you want to have it repaired, you should be able to do so. Tell your claims adjuster right away that you want to keep the car. Keep in mind that you will have to pay for the repairs yourself, but your insurer still has to pay you the car’s actual cash value, less the deductible and less whatever the car would have brought at auction.

    Before you decide what to do with the car, think it through. If you give up your car but later change your mind, it will be difficult to buy it back when auctioned. In most cases you cannot attend the auction without an auto salvage or auto dealer’s license. Newer model cars bring higher prices at auctions because their parts are highly desirable. That amount is probably more that what the company paid for your claim, so don’t be surprised if your carrier decides to send it to salvage in spite of your objections.

    Remember, if you keep the car and it is seriously damaged, you will only have a small part of the money needed to repair it. If it isn’t repairable, you will be left with having to dispose of the vehicle.

    If you go ahead with repairs, be sure the car is completely repaired. When the insurer deemed your car to be totaled, your state’s department of motor vehicles (DMV) was notified. That’s because your policy expired with the loss of the vehicle. Insurers can refuse to completely underwrite a car that’s been totaled and repaired if the vehicle doesn’t pass a DMV inspection. As long as it passes, however, you should have no problem buying liability insurance, although buying comprehensive and collision insurance may be more difficult. Keep in mind, some insurers won’t provide this type of coverage for a previously totaled car.


    Taking the Worry Out of Using the Internet

    Asset protection is a major consideration for any business.  As you well know, assets come in both the tangible and intangible variety.  And when you talk intangibles, the first thing that usually comes to mind is data.

    The majority of companies doing business today rely upon the Internet.  While it has opened up global-sized opportunities, it has also exposed businesses to proportionate risk.  Understanding what the risks are and managing them is crucial to a company’s survival.

    Depending upon your exposure, your standard property and commercial general liability insurance may not adequately cover the risks of an external cyber attack or network security failure due to natural causes.  If your business is heavily dependent upon Internet usage or if your company performs the majority of its basic functions electronically, you may want to consider specialized cyber-risk coverage as a stand-alone policy.  Each policy is geared to specific company requirements, including the technology being used and the level of risk involved; and both first- and third-party coverages are available.

    Typical aspects of coverage include:

    • Loss/Corruption of Data - This coverage deals with damages to or destruction of vital information resulting from viruses or malicious code.
    • Business Interruption - If a company’s network is attacked and that attack limits its capability to conduct business, the loss of income is covered.  Coverage also includes extra expenses, forensic expenses and business interruption losses.
    • Liability - This coverage includes legal defense costs, settlements, judgments and, in certain circumstances, punitive damages that a company may suffer as a result of breach of privacy due to theft of data; transmission of a computer virus which causes financial loss to third parties; a breakdown of security which results in network systems being unavailable to third parties; providing IT professional services; and allegations of copyright or trademark infringement, libel, slander or defamation in the company’s Web site.
    • Cyber Extortion - This covers the resolution of an extortion threat against a company’s network, and the cost of hiring a security firm to track down and negotiate with blackmailers.
    • Public Relations - This covers those costs associated with restoring public confidence in the company after a cyber attack.
    • Cyber Terrorism - This coverage includes terrorist acts covered by the Terrorism Risk Insurance Act of 2002 (TRIA) and, in some instances, it may cover terrorist acts beyond those stated in TRIA.
    • Identity Theft - This provides access to an identity theft call center to report stolen customer or employee personal information.

    The cost for coverage varies with the type of coverage required. A company can purchase a policy that covers a limited number of threats to its system’s integrity for a few hundred dollars, or it can spend thousands of dollars on a policy that covers the gamut of high-tech dangers.  It is generally believed that cyber insurance policies will become less expensive as they become more widely needed.

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