Tuesday, June 25, 2019

As Runaway Litigation Spreads, Florida Passes AOB Reform

The controversial 'hot' topic of Assignment of Benefits (AOB) is a decades-old practice throughout the insurance world, and the countdown has officially begun for its much-needed insurance reform. Taking effect July 1, 2019, the new, revamped, and consumer-friendly legislation signifies the end of a seven-year battle between the insurance industry and reform advocates.

AOB Abuse by the Numbers
AOB is a legal contract that allows a property owner to sign over his coverage and grant contractors permission to directly collect a claim payment from insurance companies for services rendered. Once an AOB is in place, the insurance company can no longer discuss the claim with the property owner, and the contractor can invoice and sue on the policyholder's behalf, without consent or knowledge.

While AOB may seem convenient for policyholders, it is an expensive headache for all involved, thanks to widespread, systematic, and fraudulent abuse. Over the years, many contractors have padded or falsified claims, such as residential water-damage, to collect money from insurance companies.

In 2000, there were roughly 1,300 filed AOB lawsuits throughout Florida. In 2013, there were more than 79,000. In 2018, the number of lawsuits filed significantly increased to approximately 153,000. That is a 94 percent increase in five years. These massive volumes of lawsuits and inflated claims have led to less coverage and skyrocketing insurance rates. For example, auto and homeowners rates rose $2.5 billion over 12 years. That does not even count the billions more in excess claim settlements. And consumers often do not even know that these claim settlements are driving cost increases. The abuse acts as a hidden tax.

New Legislative Benefits
In Florida, AOB abuse has fueled an insurance crisis. Reforming how AOBs are executed in property insurance should have a significant impact in Florida. The new legislation seeks to address and alleviate the rampant problem and protect residential and commercial property owners from predatory insurance practices, escalating fraud, and excessive litigation. It will also make it harder for contractors to convince property owners to sign over insurance claim benefits.
The bill allows property owners to have 14 business days to opt out of an AOB agreement and requires contractors to provide insurance companies ten business days before filing an AOB suit on a claim. Additionally, it incentivizes insurers, contractors, and restoration companies to come to the table with reasonable offers of settlement and creates a system that effectively limits attorney fees in AOB lawsuits.

With the passage of this law, Florida will see a new litigation landscape in the area of AOBs and the greedy, abusive methods found within the system will begin to fade.

Wednesday, May 29, 2019

Natural Disasters: What You Need to Know Before, During and After a Storm

Summer is officially upon us, and you know what that means -  thunderstorms, hurricanes, and floods. The more you know about these types of severe weather, the more effectively you can prepare before, during, and after a storm. Do not be caught off guard.

All thunderstorms are dangerous due to lightning and can lead to flash floods.

Before the Thunderstorm
  • Build an emergency kit and make a family communications plan.

During the Thunderstorm
  • Remain indoors and stay away from windows and doors for 30 minutes after hearing the last clap of thunder.
  • Do not use items that plug into electrical outlets. Power surges from lightning can come through the cords. Faucets also conduct electricity; therefore, do not wash your hands or take a shower.
  • Do not touch or stand near “lightning rods” or metal outside – flagpoles, bikes, playgrounds, or fences.

After the Thunderstorm
  • Stay away from areas damaged by the storm or flood waters, and avoid loose or dangling power lines.

The National Oceanic and Atmospheric Administration (NOAA) predicts a “near-normal” hurricane season in 2019. What does that mean for you? From June to November, you can expect about nine to 15 storms to form including four to eight hurricanes and two to four major hurricanes that reach Category 3 to Category 5.

Before the Hurricane
  • Know your area’s risk of hurricanes and evacuation routes.
  • Gather relevant documents and needed supplies for at least three days. Keep in mind each person’s specific needs, including medication. Do not forget about pets.
  • Protect your property by decluttering drains and gutters, installing check valves in plumbing to prevent backups, and considering hurricane shutters. Also, remember to review your insurance policies.

During the Hurricane
  • Listen to safety authorities for current emergency information and instructions. If told to evacuate, do so immediately.
  • Stay inside and away from windows and glass doors. If need be, take refuge in a closet or room without windows.
  • Do not open the refrigerator or freezer. In case you lose power, you want the cold air to stay in! Remember to use a generator or other gasoline-powered machinery outdoors only and away from windows.
  • Do not go outside when the rain or winds stop.

After the Hurricane
  • Be careful during clean-up. Wear protective clothing and work with someone else.
  • Do not touch electrical equipment or wires that are loose or dangling, especially if wet or you are standing in water. If it is safe to do so, turn off electricity at the main breaker or fuse box to prevent electric shock.
  • To communicate with family and friends, text. Phone systems are often down or busy after a disaster. Save your calls for emergencies only.
  • Be careful during clean-up. Document any property damage with photographs. Contact your insurance company for assistance.

Flooding is the most common natural-weather event and occurs in every state. Some floods develop slowly, while others build within a few minutes. People living in low-lying areas – near water or behind a levee – are at a higher risk.

Before the Flood
  • Know the types of flood risk in your area, sign up for your community’s warning system, and plan your evacuation route.
  • Build an emergency kit with needed supplies. Put essential documents in a waterproof container and purchase extra batteries and charging devices for phones.  
  • Purchase or renew a flood insurance policy. It typically takes up to 30 days for the coverage to go into effect. Homeowners’ policies do not cover flooding.

During the Flood
  • Listen to authorities and safety officials for current emergency information and instructions. If told to evacuate, do so immediately.
  • Do not walk, swim, or drive through flood waters. Always turn around. Do not drown!
  • If there is a possibility of flash flooding, move immediately to higher ground. Never climb into a closed attic. You may become trapped by rising water.

After the Flood
  • Avoid wading in flood water. Just six inches of fast-moving water can knock you down, and one foot of moving water can sweep your vehicle away. It can also be contaminated or contain dangerous debris, substances, or animals.
  • Be aware of the risk of electrocution. Underground or downed power lines can electrically charge the water. Do not touch electrical equipment if it is wet or if you are standing in water. If it is safe to do so, turn off the electricity to prevent electric shock.

Although there is often little that can be done to prevent a natural disaster, you can take steps to reduce the effect that it has on yourself and your property. Not only will this save your property from excessive damage, but it may also help to save the lives of loved ones.

Monday, April 29, 2019

Distracted Driving Month: The Most Common Distractions Behind the Wheel

Chances are, you see absent-minded, distracted and inattentive drivers each time you hit the road. Unfortunately, distractions are easy to come by and prevalent while driving, especially with the addition of new gadgets and technology. According to the National Highway Traffic Safety Administration (NHTSA), distracted driving is any activity or action that diverts attention from driving and poses a danger to the driver and others.

In honor of Distracted Driving Month, it is time to look at the most common reasons why fatal distracted driving accidents occur.
  • Texting
  • Eating
  • Drinking
  • Reaching for your phone
  • Talking to another passenger
  • Turning knobs in your car, such as adjusting your temperature controls
  • Checking and adjusting your GPS/navigation system
  • Adjusting the radio station
  • Reaching for objects

Texting may be the most alarming, according to the NHTSA. Reading or sending a text tends to take about five seconds. At 55 mph, that equates to driving an entire football field with your eyes closed. In 2016, texting behind the wheel led to 3,450 deaths. Unfortunately, measuring these types of behavior can be difficult; therefore, this number is much, much higher. 

Distracted driving can easily lead to an accident. Focus on the road and remember to take another look in the rearview mirror.

Monday, March 4, 2019

Spring Cleaning: Preparing the Exterior of Your Home for the Season

Start fresh this spring by tackling some necessary home maintenance projects. Just like a car, certain parts of your home need regular upkeep to maintain their excellent condition. Here are several tips that will help you prepare the exterior of your home for spring.

Roof and Gutters

  • Remove accumulated debris from gutters, check for potential clogs and ensure all the downspouts steer away from your home. Taking these precautions will help you avoid water backing up toward your home and causing havoc when the spring rain arrives.
  • Inspect your gutter system for damage, such as holes or cracks.
  • Visually check the condition of your roof by scanning for damaged or missing shingles. Also, inspect your attic for any signs of leaks or moisture. If you find any problems, you will want to have them repaired.
  • Use caution when working on your gutters or roof, especially on a ladder. Contact a professional for help if you are not comfortable inspecting and cleaning these parts of your home.

Air Conditioning System

  • Inspect the panels enclosing the electrical system to ensure each is secured and has not sustained damage.
  • Remove leaves, twigs and other vegetation around and inside the air conditioning unit. If not removed, debris can limit its efficiency and effectiveness. 
  • The HVAC system’s air filter may have gathered debris and dust during winter. It is a good idea to swap in a new one before you turn on your home’s A/C for the season and change it out regularly.
  • Although you may be able to perform some maintenance yourself, it may be wise to hire a professional to check your unit for unforeseen issues.

Home Exterior Maintenance

  • Inspect the exterior walls of your home to determine if any cracks, holes or rifts need to be repaired. If you can fit a nickel into any crevices, you should have a professional check the area. Also, monitor for peeling or cracked caulk around the seals and repair as necessary.
  • Repair siding that is extremely weathered or cracked. If you have painted wood siding, peeling or loosening paint should be scraped off, sanded and repainted.
  • Trim shrubs, trees and other landscaping away from your home to help prevent your siding and outdoor air conditioning unit from becoming scratched or damaged.
  • Consider resealing or replacing your wooden deck if it shows age, deterioration or loosened boards. At a minimum, it should be treated every six years. Also, fix screens with holes to prevent bugs from entering your home.

By setting aside time to prepare your home for spring, you can ensure any potential problems following the winter season have been remedied, offering you more freedom to appreciate the new season ahead. And remember, contact your insurance agent to see if your homeowner’s policy covers any repairs you may need.

Tuesday, February 5, 2019

Premium Savings: Homeowners Discounts You Might Not Know About

Homeowners Insurance is often a forgotten cost when people begin shopping for a home. After purchase, most homeowners pay their insurance premium from their mortgage escrow accounts, so they still may not give the annual cost much thought. As premiums increase over time, and new discounts become available, here are three ways to minimize your Homeowners Insurance costs: 

  • Ask about Windstorm Mitigation Credits: Brand-new homes usually receive automatic discounts for wind-resistant roof and window features. For homes that are a little older, those features may exist but need proof to obtain discounts. Here is where a Wind Mitigation inspection is useful. Ask your agent whether a “Wind Mit” is likely to reduce your premium, and be sure to mention if your roof and windows have been replaced. The savings could be as much as 35 to 40 percent!

  • Consider a Higher Deductible: Your deductible is the amount you are responsible for at the time of a loss. Generally, increasing your deductible will also reduce your premium. For example, raising your non-hurricane deductible from $1,000 to $2,500 may save you as much as 5 to 10 percent or more on your annual premium.

  • Inquire about Other Discounts: Homeowners Insurance companies provide many discounts, some of which you may already qualify. Ask your agent about discounts for:
    • Claims-free
    • Favorable Credit / Insurance Score
    • Senior / Retiree
    • Multi-policy
    • Alarm Systems
    • Water Loss Prevention Systems
    • Gated or Single Entry Community
    • Accredited Builder

Your agent can best advise you on which discounts may be applicable to your policy. He or she may also switch your coverage to a different insurance company who offers better rates or more discounts for your home. By being proactive, you can help keep your home insurance costs down without sacrificing coverage.

Monday, August 27, 2018

Flood Insurance Liability Issues for Real Estate Professionals

As real estate professionals, you already inform your clients when flood insurance will be lender-required for closing. But what about when flood coverage isn’t mandatory?

Eighty percent of homes flooded during Hurricane Harvey were not protected by flood insurance. As those devastated by the damages sought help to recover, many homeowners wondered how this could have happened. They pointed to the fact that their realtors, lenders, and builders had assured them at the time of closing that they “didn’t need flood insurance”. And then the lawsuits ensued.

The National Flood Insurance Program’s (NFIP) risk mapping system has failed to keep up, with both risk assessment technology, and with the sheer volume of communities that need to be remapped. Many communities throughout the nation are 20-30 years overdue for revised flood mapping. At this time, FEMA’s flood zone maps are just not an accurate predictor of flood risk.

Here’s the good news: homes in the NFIP’s low-to-moderate risk zones can be protected against flooding for premiums of $450 per year or less. That’s $1.23 per day. By contrast, just one inch of water in a 1,500 sq ft home costs an estimated $14,250 in damages. Foregoing flood insurance is just not worth it, especially here in Florida.

At Viera Insurance Agency, we offer flood coverage three ways:
  1. NFIP (FEMA) policy: $450 per year or less for low-to-moderate risk zones
  2. Private policy: Usually lower premiums and better coverage than the NFIP
  3. Endorsement to the homeowners policy: Several home insurers are now offering optional flood coverage. The cost to add flood to a homeowners policy could be as little as $100 per year.
Here are some talking points to help you inform your clients about flood risk:

  • Floodwaters don’t stop at a line on a flood map. You may not be required to buy flood insurance, but you should consider financially protecting your new home.
  • Almost 25% of flood claims come from homes outside of high-risk flood areas. This doesn’t include flood-damaged homes that have no coverage, and can’t file a claim.
  • FEMA disaster assistance is a loan that must be repaid with interest, and is not a substitute for flood insurance.
  • Talk to your insurance agent about options for flood insurance, even if coverage is not lender-required.
You’ve worked hard to build your business, and you care about your customers. Protect yourself and your clients by recommending flood insurance. Call us at 321-259-2228 with any questions.

Friday, November 17, 2017

Roof-Overs: Should You Install a New Roof Over an Old Roof?

New roofs are expensive, and a roof-over might seem like a good way to reduce the cost. Unfortunately, there are several reasons why it is best to remove your old roof before installing a new one.

The #1 reason to avoid a roof-over is that you may have trouble retaining your current homeowners insurance policy, or shopping for a new one. Homeowners insurance carriers generally do not allow roof-overs.

In a conventional roof replacement, the old shingles are removed, and the roof decking is thoroughly inspected for leaks, wood rot, or other damage. Once the deck is sound, a water barrier underlayment is installed, and the new shingles are installed on top. 

With a roof-over, the roof deck cannot be inspected. The water barrier also cannot be installed, as it needs to adhere directly to the roof deck. The new shingles will not lay properly, as designed, and installing new shingles over old ones usually voids the warranty on the new shingles. A roof-over also adds about 400 pounds of extra weight per 100 square feet of roofing, putting additional strain on the deck, which may already be rotting or in disrepair.

For these reasons, your homeowners insurance company may cancel your policy if you install a new roof over your old one. Please contact us with any questions.