Jonathan Edewards

Southern California Earthquake Risk Increases; Most Homeowners Uninsured

A sudden flurry of minor earthquakes at the tip of the San Andreas Fault has seismologists worried that the “Big One” could be triggered, the Los Angeles Times reports. In any given week, the normal risk of a major quake that would cause homeowners and commercial property owners in Greater Los Angeles to lose their properties is about 1 in 6,000, scientists estimate. This week’s swarm of quakes dramatically increases the risk of a major (7.0+) quake occurring within 7 days to as low as 1 chance in 100. Read the Los Angeles Times article here.

 

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Despite the annual warning notices that insurance companies mail to homeowners, most property owners have let their earthquake insurance policies lapse or have never purchased coverage, and would lose their home or business if an earthquake levels it. For the past decade, there have been few options to purchase earthquake insurance, and policies came with such high deductibles (15%) that homeowners were discouraged and opted to forgo coverage and take the risk.

In recent months, new earthquake insurance policies have become available with improved coverage.

Under the previous offerings, a 15% deductible meant that a home insured for $500,000 had to sustain at least $75,000 in damage for the policy to pay a claim; faced with the thought of having to pay the first 15% of their home’s insured value, many homeowner preferred to ignore the risk altogether.

(Notice that fine point: the earthquake deductible applies to a % of the insured value, not a % of the damage.) For example, if an earthquake hits a home insured for $500,000, and the earthquake causes minor cracking of the foundation and walls, and also results in water damage from a burst pipe, and that damage costs $100,000 to repair, the claim would be settled like this:

$100,000 repair cost – (15% x $500,000 insured value) = $25,000 claim payout.

New Earthquake Insurance Policies are closing the gaps in coverage that older policies contain.

The new earthquake insurance policies now offer lower deductible options: 5% or 10%. That means that homeowners can sleep better at night! It’s much more comforting to know that your earthquake insurance policy will pay the cost to rebuild or repair your house in the event of an earthquake without having to take a out a loan to cover the policy’s deductible.

In addition, some of the new earthquake policies now include substantial coverage for swimming pools, walkways, driveways, patios, and retaining walls. Most earthquake policies limit coverage on those items to just $3,000 or so. Clearly, $3,000 would not be sufficient to replace a swimming pool or a lot of paving/decking. The new policy options can take care of those items, too, if you are careful to purchase a policy that specifically provides that coverage.

For advice and help obtaining earthquake coverage for yourself or your business, contact Jonathan Edewards at Citrust Insurance at 626-765-4495 or GetHelp@Edewards.com.

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For advice and help obtaining earthquake coverage for yourself or your business, contact Jonathan Edewards at Citrust Insurance at 626-765-4495 or GetHelp@Edewards.com.

 

How President Abraham Lincoln obtained a last-minute insurance policy the night before leaving for Washington D.C. to be inaugurated.

 

Like any American homeowner, Abraham Lincoln was rightfully proud of his home in Springfield, Illinois, the only home he ever owned. All of his children had been born there, and he made many improvements, even adding a second floor to accommodate his growing family.

On February 10th, 1861, on the eve of Lincoln’s departure for Washington DC for his first inauguration, his home in Springfield was buzzing with friends and well-wishers.  But there was work to be done that night, and Lincoln had asked his old friend, Hartford insurance agent James J. Hill to help, because he was planning to rent out his home while he was living in the White House.
Lincoln sought the protection and security of a fire policy from The Hartford.  Carefully measuring the rooms, and even providing a discounted premium for Lincoln’s new wood stoves, Agent Hill worked long into the night to diligently write the $3,200 insurance policy that Lincoln would sign the next morning before departing for Washington DC.
Jonathan Edewards is an independent insurance agent in Pasadena, California who is proud to continue the work of insuring homeowners and business owners, and represents quality insurance companies such as The Hartford, Safeco Insurance, QBE, and others.

What do you need Liability coverage for?

The liability coverage on your homeowners or renters insurance policy covers you for your responsibility for property damage or bodily injury. It’s not always easy to think of an example, but here is a news article in which a homeowners insurance policy paid $100,000 to a man who broke his spine in the course of a search and rescue attempt.

http://www.latimes.com/local/orangecounty/la-me-0117-hiker-rescue-20150117-story.html

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.

Making your home earthquake safe – Retrofitting

Earthquake Insurance for homes and condos typically carries a requirement that the dwelling be bolted to the foundation.  Many older homes were not built this way and require a specialized contractor to retrofit a home for earthquake safety. A recent article in the Pasadena Star News interviews one such contractor:

Highlights:

  • Typical cost to retrofit a home for earthquake safety is: $4,000
  • Many homes in San Marino and Beverly Hills already are bolted, but most other areas are not.
  • Bolts should be space 6ft apart for one-story dwellings, and 4ft apart for 2 story dwellings.
  • Foundations made of brick or river rock (as opposed to concrete) may require a new secondary foundation, which costs much more, ~$25,000.

Greg Sylvis retrofits homes to make them earthquake safe – SGVTribune.com.

Earthquake Insurance can be quite costly, often equal to or more than the homeowners policy, but some rates are decreasing.

The California Earthquake Authority (CEA) has announced that its statewide rates will decrease on average 12.5%, effective Jan. 1, 2012, for new and renewal CEA policies. 

The California Earthquake Authority (CEA) is a publicly managed, largely privately funded organization that provides catastrophic residential earthquake insurance through private insurance companies, including to Safeco’s property insurance customers.

There are other alternatives to the CEA, including GeoVera Insurance Company, Travelers Insurance, and CIG Insurance companies, and rates vary widely between companies depending on the specific address of each home.

Identity Theft: Who’s on Your Side?

A Case Manager In Your Corner

Maybe I fret too much, but as a consumer who uses credit cards for all my purchases and buys online from eBay, Groupon, Amazon, etc, I worry a lot about Identity Theft.  It’s relatively easy these days for crooks to get ahold of account information and open up new lines of credit in a victim’s name.  Those false unpaid accounts can swiftly wreck years of solid credit history, and undoing the damage isn’t easy.  It can take hours and hours of phone calls and letter-writing to the three credit bureaus and to creditors to clear your record.

That’s why I often recommend Safeco Insurance to my clients. As part of a standard homeowners or renter’s insurance policy, Safeco (and almost all other insurance companies) offers Identity Theft Coverage, to reimburse you for losses related to Identity Theft.

Safeco, however, I think is special, because Safeco provides a case manager who will assist you in clearing your record, and save you valuable time.

Safeco’s Identity Theft Coverage features:

  • Case manager – At no additional charge, a dedicated case management company works directly with your customer to work through the claim process.
  • High annual limit – Expense reimbursement up to $25,000 annually for expenses incurred after identity theft.
  • Lost wages and child or elder care expenses – Up to $250 per day up to a limit of $5,000.
  • No adverse premium impact – Any claims made under this coverage option will have no impact on future premiums.
  • Just $12 a year or $1 a month

 

 

iPickpocket? Identity Theft, Credit Monitoring, and Insurance

Cash has always been king in my family.  At the store, my parents are always fumbling around with envelopes of dollar bills. My grandmother once carried around $30,000 of uncashed checks in her purse.  She was afraid of banks.  Me?  I whip out the plastic at every opportunity.

It’s hard to believe how fast and how drastically our world has changed in the last 20 years.  When Reagan and Bush the First were president (remember them?), we paid with actual currency, or we wrote a personal check.  Nowadays, many stores don’t accept checks, and for many of us, cash is now for emergencies only.  Our paychecks get automatically deposited in the bank.  Bills are paid EFT. Groceries, gas, clothes, toys, and all the other junk we buy is paid for with credit or debit card.

In the old days, when folks were walking around with cash, it was pretty easy to notice when you got robbed.  Wham! A blow to the head, you’re shoved to the ground, and some thuggish type is running off with your purse or wallet.  Or, you’re in a crowd, a stranger brushes by, and a few minutes later you realize that a pickpocket has deftly made off with your wallet.

In our electronic age, however, theft can now easily go undetected. The only symptom of electronic theft is a difference in numbers displayed on a computer screen or printed on a bank or billing statement.

Electronic theft and Identity Theft is now common. Just this December, the FBI caught a gang of thieves skimming from jimmied card readers at 99 Cent Stores in the San Fernando Valley.  Over Christmas, a thief stole $62,000 from over 200 customers who swiped their cards at a gas station in Sierra Madre .  The theft amounts were small, and many victims were unaware until they heard about it on the news.

Skimming is the new pickpocketing; theft amounts are small and often go unnoticed. But, once the crooks have your card number and PIN, those small thefts can be repeated, adding up to a large loss over time.

Identity Theft, on the other hand, is the new robbery.  By getting a line of credit in your name, a crook can steal large amounts that’ll hit you over the head when the bill collectors start calling.

There are a few common sense precautions to avoid Identity Theft: pay with credit, not debit; don’t respond to incoming emails or phone calls that fish for your info; ask for your free credit report on a quarterly basis.

And, of course, there are credit monitoring services, which make a buck by tracking your credit record.  The problem with credit monitoring services is that they actually make a LOT of bucks doing that.  Offers that I’ve received seem awfully pricey to me, averaging $15-$30 per month.  That adds up fast.

However, one little-mentioned option is Identity Theft Protection that can endorsed onto your standard Homeowner’s or Renter’s Insurance Policy.  Almost all insurance companies offer this protection as an add-on.  And it’s cheap; typical cost is $12 to $20 in additional premium.  Per Year. That’s more affordable than a credit monitoring service.

The coverage and limit of Identity Theft Protection varies by insurance company.  Usually, it’s limited to $25,000.  If the theft involves a credit card, your liability is limited by law; the real damage will involve your credit score and your lost time.  Identity Theft Protection may reimburse you for the time you spend trying to undo the damage.  The time that a victim spends writing letters and making phone calls (imaging the time spent on hold and navigating automated phone systems!) to credit companies, in an effort to clear their record, can amount to thousands of dollars of lost wages, and lots of frustration.  As part of the Identity Theft Protection, one of my insurance companies (Safeco) assigns a case manager to their insureds.  The case manager can help you, so that you can avoid frustration and lost time in an effort to undo the damage and get your credit history cleared.

Renters, who are often uninsured, can get Identity Theft Protection by purchasing a Renter’s Insurance Policy, and adding on the Identity Theft Protection coverage. 

Like Homeowners Insurance, a renter’s insurance policy covers loss to Personal Property (your “stuff”).  Since the dwelling itself is not covered (the landlord is responsible for insuring his building), the cost of renter’s insurance is very affordable, usually $150-250 per year on average.  In addition, most insurance companies will give renters a multi-policy discount on auto insurance, which could amount to real savings.  If you are a renter, you can protect your possessions and mitigate your losses in the event of Identity Theft, and reduce your auto insurance premium by qualifying for a multi-policy discount.  That’ll give you the confidence to keep swiping those credit & debit cards with style.

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.