Hurricane Preparedness Includes Hurricane Insurance!

Hurricane Preparedness Means Awareness!

Hurricane preparedness does not mean just tuna and crackers for emergency preparedness necessities; it also means good insurance including flood insurance that in the US is through a government agency. You can have all the emergency preparedness plans in the world but unless you have put aside money for significant damages as well as purchased necessary hurricane insurance you could be sadly out of luck in the hurricane recovery process. I know that hurricane insurance has gone up considerably in the last few years thanks to Hurricane Katrina etc. I also realize that families are stretched to the max in just ordinary living expenses. I also know the economics of having the necessary and appropriate hurricane insurance coverage to help get you back on your feet after a disaster. You need BOTH hurricane insurance as well as flood insurance.

It is important to get as much disaster preparedness information as possible so that you can be as prepared physically as well as on a solid knowledge basis as to what is best in your area to help protect your family and home in the case of a disaster.

Many feel that 2007 Hurricane Season is pretty much over. If the hurricane season is over~ then great!

In the time between now and the start of 2008 Hurricane Season is the time to see about that insurance and to see what your government officials are doing about the hurricane insurance situation in your community and in your state.

Imagine if you could get even 5-10 families in your area to ban together and go to the different insurance agents locally and say to them “hey WE are here and we want hurricane insurance”. What will YOU do for US to give us group rate or a professional discount since we are bringing YOU Mr. or Ms. Insurance Agent so much more money and contracts?

Get the insurance agents to bid on your group plan. Get policy proposals from as many insurance companies and insurance agents as possible – even beyond your local area. They may try to tell you that such actions are not done. That sort of statement is a quick and often a great way to try to discourage you and encourage you to give up the ‘power in numbers’ idea. But if enough people did that sort of grassroots negotiating I bet dime to donut that sooner or later a hungry for sales insurance agent will find someway to help get some sort of discount for your group.

Imagine the insurance agent who is willing to step outside of the traditional box of sales promotions and stock prices on policies and get out there and get groups to buy their hurricane insurance. Wow they could mop up. No insurance agent in their right mind will want to turn down 5 -10+ family hurricane insurance policies. OR for that matter an elementary school PTA group.

Figure this out even further, if those 10 families then told 3 families each about the fantastic reduction they got on their hurricane insurance that may end up in at least 30 more families knowing about that a particular insurance agent’s willingness to help others and their own bottom line. Imagine how many sales they could make not only in hurricane coverage but also in life insurance, auto insurance, homeowner’s and renter’s insurance etc.

The list goes on and on! HhhhMmmm I’m sure there are agents that would be willing to help find a way. Remember --If there is a will --- there is a way!

Besides, there is a built in discount for all insurance agents who purchase insurance for themselves. If the insurance agents and the insurance companies still make a profit off that deduction to their employees, then why not offer some kind of a discount to a grass root group who brings them accounts? Entice the insurances agents with an agreement that your group will willingly offer testimonials etc on their website for the outstanding cooperation and service received at such a more reasonable insurance price. That is advertising for them and a discount for you! Your testimonial, name and face in a local community can mean big bucks for them. Use it to your advantage.

Though all of this make sure you check with a lawyer to insure that what you are suggesting is legal in your community as well as what the insurance agent is proposing is also to you and your group’s best interest as well. Don’t sign on a dotted line unless an independent lawyer has read and approved everything above that signature line!

There are no guarantees that this strategy might work in your area, but if enough families and groups did this sort of collective insurance bargaining or banded together then the almighty dollar will hopefully go in your favor. Will you get a 75% discount on your insurance plan? I doubt it seriously, but if you could negotiate a 5-10% discount that is a significant saving and a great help should a hurricane come down your street.

The money you save from your collective negotiated hurricane plan may go to help offset the high premiums or to go towards helping to prepare an emergency preparedness kit that is on your emergency preparedness checklist of activities to do this year.For more hurricane preparedness tips check out my new book Train For A Hurricane.

COMMENTS WELCOMED!

Please share your thoughts, emergency preparedness tips and stories here on this blog.

All I ask is that everyone be respectful and sensitive of each other and that identifying information about a person who is not the author be limited to protect their privacy.

Be Safe

Terrie

www.trainforahurricane.com

New York Proposes Hurricane Insurance Fund

http://www.nytimes.com/2007/10/09/business/09insure.html?ref=business

By JOSEPH B. TREASTER

Published: October 9, 2007

New York regulators are proposing that insurance companies set aside extra money to pay for damage in the event of a significant hurricane, seeking to ease, at least in the state, the soaring premiums faced by millions of Americans along the Atlantic and Gulf Coasts. But insurers have expressed reservations.

In 1985, Hurricane Gloria did extensive damage to Long Island. The storm was the last significant hurricane to hit New York.

Under the New York plan, insurers would for the first time be required to use money that now goes directly to profits to create contingency funds to pay for hurricane losses. Then, when a big storm hits, money would already be designated to pay for much of the damage. The financial shock would be eliminated or reduced, the regulators say, and there would be no justification for raising premiums sharply.

The state Senate’s insurance committee is holding a hearing on coastal insurance problems at 10 a.m. today at the western campus of the Suffolk County Community College in Brentwood.

Consumer groups and insurance companies have long advocated creating special funds for significant hurricane damage. And the consumer advocates said New York’s proposal could lead to the introduction of similar plans in other hurricane-prone states along the coast.

“Other states may look at this and say, ‘Why don’t we have this sort of requirement,’” said J. Robert Hunter, the director for insurance of the Consumer Federation of America. “If every state had a reserve like this, they could actually work together so that the money could flow to wherever a hurricane struck. This would help stabilize prices and might even lower prices.”

After Hurricane Katrina and other big storms, prices began rising sharply along the coasts from Texas to Massachusetts. To lower their chances of big payouts, the insurers have refused to renew coverage for hundreds of thousands of homeowners and have stopped selling new policies in the areas most threatened by storms.

Responding to appeals from insurers, members of Congress have introduced several bills that would provide for the federal government to pay for much of the damage from a destructive hurricane. Government backing, the insurers argue, would help make insurance more affordable and more widely available.

The insurers have so far been unwilling to put money aside to pay for hurricane damages unless they were able to deduct it from federal taxes as a business expense. Most money set aside for claims receives the tax credit, but because so many variables are involved, claims related to hurricanes and other natural disasters do not.

Under the New York plan, which is to be presented to insurers as a draft of a new regulation in the next few days, the insurers would be required to set aside the portion of their annual premiums that is designated to cover hurricane damage. Regulators estimate that to be about $250 million.

New York has no ability to change federal tax law. So the regulation would require the insurers to set aside the money after they had paid taxes on it. They would receive a tax deduction after they paid for hurricane damage. But in the meantime, they could not use the money for other purposes.

In Long Island, as much as 25 percent of the annual premium is now designated to pay for hurricane damage, said Eric Dinallo, the superintendent of insurance in New York. If there are no hurricanes, which is usually the case in New York, the companies simply keep the hurricane portion of the premium as profit. With no hurricanes in the country last year, the insurers reported record profits.

Despite dire predictions, this year has also been quiet, and the insurers are headed for another year of high profits. The last significant storm to hit New York was Hurricane Gloria in 1985, at a cost of more than $780 million in today’s dollars. But New York has nearly as much coastal property as Florida, and the insurers say that the recent increase in hurricane activity raises the potential for heavy losses.

As for why the insurers might be willing to accept the new regulation, Mr. Dinallo said that reducing financial shocks to the companies could make them more attractive to investors. But insurance experts said the industry is likely to fight the new regulation.

“No one wants to be at loggerheads over this,” said Robert P. Hartwig, the president and chief economist at the Insurance Information Institute, a trade group in New York. “But this becomes very difficult. The insurance department is basically asking business to spend hundreds of millions of dollars that they will not be able to record as an expense for perhaps many, many years.”

Allstate and State Farm, the two largest home insurers in the state, were far from enthusiastic. “We need to know more to determine if this is the right approach,” said Krista Conte, a spokeswoman for Allstate. At State Farm, Jonathan Freed said, “it’s not clear how workable” Mr. Dinallo’s plan might be.

But some insurance executives said they welcomed Mr. Dinallo’s plan. At Travelers, for example, Jay S. Fishman, the chief executive, said the new regulation would not add significantly to his costs and was “a great first step” toward reducing volatility in insurance prices and perhaps making coverage more available.

Mr. Dinallo said he hoped the new regulation would go into effect by early next year. But he said he was open to compromise. “I believe you’re going to see other states agreeing with this,” he added. “I hope this is the beginning of a national model.”