Jonathan Edewards

Santa Ana Winds Topple Pasadena Trees, Insurance Claims Result

How a personal insurance agent can help you recover from a personal or commercial loss.

The fiercest winds in 50 years caused a lot of damage in Pasadena and Los Angeles on Wednesday.

This unlucky Volvo was crushed by a toppled tree

On the street where I live, I saw at least 2 cars that had been crushed by huge tree limbs that fell on them, smashing the roof and windows.  “Comprehensive” auto insurance coverage, also known as “other-than-collision,” is devised to help an insured recover from just such a loss.  It also provides coverage from theft. Home owners and business owners whose awnings blew away, or whose roofs were damaged, or windows broken, or who lost business due to a power outage, should be able to recover the loss from their property insurance. Businessowners’ policies even typically provide some coverage for plants, shrubs, and trees (usually limited to $2,500 or less per plant), and may be able to include the cost to replace the trees that were torn from the ground in their claim. The fastest and easiest way to report a claim is to call the insurance company claims hotline directly.  My Safeco Insurance clients should call 800-332-3226. Insureds who have bypassed an agent by purchasing insurance online, or directly from the insurance company, must call their claims hotline, and have no other alternative. However, an insurance agent provides a second alternative to contacting the insurance company directly and dealing with the claims hotline.  My clients know that they can always call me for assistance with the claim. Having an agent is valuable for (at least) two reasons: an agent has a personal, continual relationship with you and should be familiar with your special situation already.  Less time is spent gathering information and correcting misunderstandings.  Secondly, an agent is familiar with the “inside contacts” within an insurance company, and can help a client “go up the ladder” if a problem arises and the claim is not handled to the client’s satisfaction. For example, I recently assisted a business client who had experienced an costly auto accident.  The dealership, where the Mercedes had been taken for repair, was backed up and not cooperating with the claims department.  After several non-responses, and an estimate that was close to the car’s value, the insurance company moved to declare the vehicle a total loss, rather than proceeding with repair.  The insured preferred to repair the vehicle. I intervened with both the dealership and the claims department, pointing out to the dealership that they were about to lose the repair business unless they offered better terms to the insurance company.  On the claims side, I contacted the manager of the claims department, reviewed the valuation report, noted that the vehicle’s condition was better than the report indicated, and thus a total loss would require a larger settlement than previously thought.  The vehicle was repaired, and my client was pleased. The insurance companies that I represent have excellent, fast, and friendly claim departments, and claims are handled to the customer’s satisfaction the first time around, which is why I recommend that clients make their initial report directly to the insurance company. But if the case goes awry, I’m available to assist. Pasadena will be green again, and the residents and businesses who are properly insured will be able to recover from their loss relatively painlessly.  That’s what insurance–and an insurance agent–is for.

Catastrophe in Japan raises Earthquake, Flood Concerns in California

As Californians watch the news coverage and YouTube videos of the devastating earthquake and tsunami that occurred in Japan, many have started to wonder, “Are we vulnerable, too?”

The geology off the coast of Japan is very different from the California coast, so an exact repeat isn’t likely.  However, California is certainly an earthquake zone, and much of Southern California and Central California is vulnerable to flooding.

The fact is: almost all property insurance excludes coverage for earthquake and flood.  That means that your homeowners or businessowners insurance policy will not reimburse you if an earthquake or flood (including tsunami) causes damage to your home or business.

And that exclusion extends to resultant damage, too.  For example, if an earthquake causes your property’s gas lines to rupture, or causes an overload to your electrical system, which sparks a fire, the resulting damage–burned buildings and burned contents–will not be covered by insurance.  The cause of loss in that example is earthquake.  The earthquake caused the fire, and the fire caused the damage to property. Even though fire–by itself–is normally covered, the fire was caused by the earthquake, and therefore all the damage falls under the earthquake exclusion.

Ditto for resultant damage from a flood.

Earthquake insurance can be purchased as a separate insurance policy in addition to your homeowners or businessowners policy.  Although earthquake insurance is very expensive (expect to pay about as much as your standard property insurance policy, or more), and typically will carry a high deductible, an earthquake insurance policy will offer you the reassurance that you won’t lose everything when the “Big One” hits.

Flood insurance, on the other hand, is very inexpensive, and every property owner should purchase a policy, even if the risk looks minimal.  The fact is that every property is located in some kind of a flood zone — it is just a question of whether it is a in a moderate-to-low zone or high risk zone.  About 25% of all flood insurance claims are from moderate-to-low risk areas.

Many property owners believe that in the event of an earthquake or flood, the government will step in and provide disaster assistance.  This is true, but only if the President declares a disaster, and even so, Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, the monthly payment would be around $240 a month ($2,880 per year) for 30 years, in addition to the mortgage loan that is still owed on the damaged property.

Insurance can be purchased quite easily, and it’s the best way to protect the time, energy, and money that you’ve invested in your property.

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