June 2014 - Susman
Home / Blog


The American Family and the Vehicles We Love

Summertime is all about ice cream cones, fireworks, ballgames, cook-outs and the most anticipated of all summer activities … road trips to the beach.

It’s also about family. Whether planning activities for kids who are home for summer vacation or who’ve been away at college, summer’s a great time to bring everyone together for some family bonding time.

To celebrate summer’s official start, I’d like to offer some fun family activities. (See if you notice a pattern.)

Host a tailgate party at your favorite ballpark. While the exact origins of the tailgate party aren’t well-documented, the practice started in the U.S. at a football game and has since become a tradition before college and professional sporting events, and concerts too.

This summer, round up your closest friends and family and purchase a package of tickets to the Dodgers or Angels game. Then pack your vehicles with coolers of ice, soft drinks and water, lawn chairs and snacks, and head to the venue a couple hours before the game to spend some quality time with your favorite people.

Familiarize yourself with the venue’s policies on open containers ahead of time, if you opt to have alcoholic beverages on-hand for the over-21 crowd. Also, assign a designated driver for each vehicle in your party. Driving under the influence is dangerous and, according to insurance providers like Mercury Insurance, can greatly impact the cost of your auto insurance premium or your insurability if you’re convicted of a DUI offense.

More ambitious tailgaters should pack a grill and other essentials to enhance the experience (condiments, bins for trash, lawn games, etc.). Once the pre-game celebrating concludes, be sure to properly dispose of hot coals and allow time for the grill to cool down before you pack things up and head into the game.

Be safe, smart and responsible, but, most of all, have fun and cheer loudly for the home team!

Visit a drive-in movie theater. June marks the 61st anniversary of the drive-in movie theater, the first of which opened on June 6, 1933 in Camden, N.J. An icon of American culture, drive-ins were most popular during the 1950s and 1960s, with nearly 5,000 theaters located across the country. Now, fewer than 500 remain, so it’s a rare treat to see the latest blockbuster from the comfort of your vehicle. Usually less expensive than a regular theater, you also have the added bonus of not contending with distractions from other audience members and can keep your attention on the screen.

Drive-ins.com is a good resource for locating drive-in theaters in your area.

Go car camping. Many of today’s vehicles have evolved to include the luxuries of home, like rear-seat entertainment screens and DVD players, as well as mini-fridges, but car camping doesn’t literally mean you have to sleep in your car. Unlike backpacking, driving to your campsite allows you to bring more equipment (e.g., air mattresses, coolers, plenty of water, pillows, camping chairs, etc.) to allow for a comfortable trip while experiencing nature first-hand.

Time at the beach with the car
Time at the beach with the car

Car camping is allowed at state and local parks throughout the country, but you can also research privately-owned campgrounds. Before setting out for your destination, Mercury Insurance recommends the following tips to keep you and your vehicle protected.

· Inspect your first-aid kit before you leave. Be sure your supplies aren’t too low and haven’t expired since you last used the kit.

· Purchase a bear-proof container in which to store and hang your food, or check your campsite to see if has bear-proof, locked boxes available. Storing your food in the car is a bad idea because enterprising bears can break car windows, or worse, to get to your stash. This could leave you without food for your trip, as well as a potentially expensive repair bill. (Comprehensive insurance coverage is necessary to protect against this type of incident and would cover vehicle damages, subject to your deductible. Talk to your local agent to make sure you’re properly protected.)

· Clear your fire pit of debris and maintain an eight- to 10-foot radius from tents, chairs and low-hanging branches. Make sure to keep water nearby, and extinguish all flames before going to bed.

If you haven’t picked up on the pattern (as if the title didn’t give it away), these activities all revolve around cars. We love our cars, often nicknaming them and treating them as part of the family. We love our cars so much so that, throughout history, we’ve relished activities in which they play an instrumental role. So be kind to your four-wheeled friends and enjoy your time with your whole family this summer

Flood Insurance

Homes-Buildings_Disaster_FloodedHouseFlooding is the most common and costly natural disaster in the United States, causing an average of $50 billion in economic losses each year. Most U.S. natural disasters declared by the President involve flooding.

There is no coverage for flooding in standard homeowners or renters policies or in most commercial property insurance policies. Coverage is available in a separate policy from the National Flood Insurance Program and from a few private insurers. Despite efforts to publicize this, many people exposed to the risk of floods still fail to purchase flood insurance.

The widespread flooding associated with Hurricane Katrina in 2005, the Mississippi floods of 2011 and Hurricane Irene and superstorm Sandy in 2012 set in motion a debate about how to improve the federal program.


  • National Flood Insurance Reform: In March 2014 Congress rescinded many of the rate increases called for by The Biggert-Waters Flood Insurance Reform Act, passed two years earlier. The original act sought to make the federal flood insurance program more financially self-sufficient by eliminating rate subsidies – discounts that many property owners in high-risk areas receive.
  • According to the New Orleans Times-Picayune, the 2014 law prevents any policyholder from seeing an annual rate increase exceeding 18 percent. It calls on the flood program’s administrator, the Federal Emergency Management Agency, to “strive” to prevent coverage from costing more than 1 percent of the amount covered. In other words, if the policy offered $100,000 of coverage, the premium would not exceed $1,000.
  • The law also reinstates a practice known as grandfathering, meaning that properties re-categorized as being at a higher risk of flooding under FEMA’s revised maps would not be subject to large increases.
  • It also ends a provision in Biggert-Waters that removed a subsidy once a home was sold. People who purchased homes after Biggert-Waters became law will receive a refund. Many lawmakers in coastal states were concerned that the higher cost of flood insurance would have a negative impact on the real estate industry.
  • The subsidy will now be covered by a $25 surcharge on homeowners flood policies and a $250 surcharge on insurance for non-residential properties and secondary (vacation) homes.
  • According to data from FEMA, most current flood insurance policyholders (81 percent, or 4.5 million) pay rates based on the true risk of flood damage and so were not affected by Biggert-Waters or the subsequent rollback. Properties most affected by the rate hikes were in high-risk flood zones; were built before communities adopted their first Flood Insurance Rate Map; or were second homes; or are second homes that have not been elevated. Others affected include businesses and those who live in homes that have been repeatedly flooded.
  • In June 2014 Florida enacted a law that encourages private companies to offer flood insurance. The legislation permits four types of flood coverage – a standard policy, which resembles National Flood Insurance Program coverage, and three enhanced policies. To encourage market growth, the law allows insurers to file their own rates until October 1, 2019. After that, rates will be subject to regulatory approval.
  • Policies in Force: While the number of flood policies in force is growing, a significant portion of the population at risk of flooding still is not insured for flood damage, as the flooding in the Midwest in the spring of 2008 and from superstorm Sandy in 2012 revealed. The latest available data show that in 2013, there were nearly 5.6 million policies in force, compared with 5.0 million in 2005, the year of hurricanes Katrina and Rita. Premiums grew to $3.5.billion in 2013, from $2.2 billion in 2005. In 2013, 16,854 claims were paid, compared with 148,448 claims in 2012 and 213,290 in 2005. The cost of claims was $441 million in 2013, compared with $8.8 billion in 2012 and $17.8 billion in 2005.
  • Flood Re in the U.K.: In June 2013 the British government adopted a new approach to flood insurance, ending a longstanding voluntary agreement with the Association of British Insurers to supply flood insurance through the private market. The private market will continue to write flood insurance, but premiums will be capped. The highest-risk policies will be reinsured by Flood Re, an industry-run, not-for-profit organization. All U.K. household insurers will pay an assessment to fund excess Flood Re losses.


The National Flood Insurance Program: Before Congress passed the National Flood Insurance Act in, the national response to flood disasters had been to build dams, levees and other structures to hold back flood waters, a policy that may have encouraged building in flood zones.

The National Flood Insurance Act created the National Flood Insurance Program (NFIP), which was designed to stem the rising cost of taxpayer funded relief for flood victims and the increasing amount of damage caused by floods. The NFIP has three components: to provide flood insurance, floodplain management and flood hazard mapping. Federal flood insurance is only available where local governments have adopted adequate floodplain management regulations for their floodplain areas as set out by NFIP. More than 20,000 communities across the country participate in the program. NFIP coverage is also available outside of the high-hazard areas.

The law was amended in 1969 to provide coverage for mudslides and again in 1973. Until then, the purchase of flood insurance had been voluntary, with only about one million policies in force. The 1973 amendment put constraints on the use of federal funds in high-risk floodplains, a measure that was expected to lead to almost universal flood coverage in these zones. The law prohibits lenders that are federally regulated, supervised or insured by federal agencies from lending money on a property in a floodplain zone when a community is participating in the NFIP, unless the property is covered by flood insurance. The requirement for flood insurance also applies to buildings that receive financial assistance from federal agencies such as the Veterans Administration. However, because the initial mortgage on the property is frequently sold by the originating bank to another entity, enforcement of this law has been poor.

Legislation was enacted in 1994 to tighten enforcement of flood insurance requirements. Regulators can now fine banks with a pattern of failure to enforce the law, and lenders can purchase flood insurance on behalf of homeowners who fail to buy it themselves, then bill them for coverage. The law includes a provision that denies federal disaster aid to people who have been flooded twice and have failed to purchase insurance after the first flood.

Buildings constructed in a floodplain after a community has met regulations must conform to elevation requirements. When repair, reconstruction or improvement to an older building equals or exceeds 50 percent of its market value, the structure must be updated to conform to current building codes. A 2007 NFIP study on the benefits of elevating buildings showed that due to significantly lower premiums, homeowners can usually recover the higher construction costs in less than five years for homes built in a “velocity” zone, where the structure is likely to be subject to wave damage, and in five to 15 years in a standard flood zone. The Federal Emergency Management Agency (FEMA) estimates that buildings constructed to NFIP standards suffer about 80 percent less damage annually that those not built in compliance.

How It Works: The NFIP is administered by FEMA, now part of the Department of Homeland Security. Flood insurance was initially only available through insurance agents who dealt directly with the federal program. The “direct” policy program has been supplemented since 1983 with a private/public cooperative arrangement, known as “Write Your Own,” through which a pool of insurance companies issue policies and adjust flood claims on behalf of the federal government under their own names, charging the same premium as the direct program. Participating insurers receive an expense allowance for policies written and claims processed. The federal government retains responsibility for underwriting losses. Today, most policies are issued through the Write-Your-Own program but some non-federally backed coverage is available from the private market.

The NFIP is expected to be self-supporting in an average loss year, as reflected in past experience. In an extraordinary year, as Hurricane Katrina demonstrated, losses can greatly exceed premiums, leaving the NFIP with a huge debt to the U.S. Treasury that it is unlikely to be able to pay back. Hurricane Katrina losses and the percentage of flood damage that was uninsured led to calls for a revamping of the entire flood program.

Flood adjusters must be trained and certified to work on NFIP claims. NFIP general adjusters typically reexamine a sample of flood settlements. Insurers that fail to meet NFIP requirements must correct problems; otherwise they can be dropped from the program.

As with other types of insurance, rates for flood insurance are based on the degree of risk. FEMA assesses flood risk for all the participating communities, resulting in the publication of thousands of individual flood rate maps. High-risk areas are known as Special Flood Hazard Areas or SFHAs.

Flood plain maps are redrawn periodically, removing some properties previously designated as high hazard and adding new ones. New technology enables flood mitigation programs to more accurately pinpoint areas vulnerable to flooding. As development in and around flood plains increases, run off patterns can change, causing flooding in areas that were formerly not considered high risk and vice versa.

People tend to underestimate the risk of flooding. The highest-risk areas (Zone A) have an annual flood risk of 1 percent and a 26 percent chance of flooding over the lifetime of a 30-year mortgage, compared with a 9 percent risk of fire over the same period. In addition, people who live in areas adjacent to high-risk zones may still be exposed to floods on occasion. Ninety percent of all natural disasters in this country involve flooding, the NFIP says. Since the inception of the federal program, some 25 to 30 percent of all paid losses were for damage in areas not officially designated at the time of loss as special flood hazard areas. NFIP coverage is available outside high-risk zones at a lower premium.

Flood insurance covers direct physical losses by flood and losses resulting from flood-related erosion caused by heavy or prolonged rain, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties. Homes are covered for up to $250,000 on a replacement cost basis and the contents for up to $100,000 on an actual cash value basis. Replacement cost coverage pays to rebuild the structure as it was before the damage. Actual cash value is replacement cost minus the depreciation in value that occurs over time. (Excess flood insurance is available in all risk zones from some private insurers for NFIP policyholders who want additional coverage or where the homeowner’s community does not participate in the NFIP.) Coverage for the contents of basements is limited. Coverage limits for commercial property are $500,000 for the structure and another $500,000 for its contents.

To prevent people from putting off the purchase of coverage until waters are rising and flooding is inevitable, policyholders must wait 30 days before their policy takes effect. In 1993, 7,800 policies purchased at the last minute resulted in $48 million in claims against only $625,000 in premiums.

Proposals for Change: In a final report published in 2006 by the American Institutes for Research (AIR), which conducted an evaluation of the federal flood insurance program, AIR said that although much had been accomplished, the program fell short of meeting its goals in part because the NFIP did not have the ability to guide development away from floodplains and cannot restore beneficial floodplain functions once they have been impaired. In addition, AIR said, many people still are not covered or not adequately covered for flood damage. AIR also noted that the NFIP was hampered in reaching its goals by insufficient Congressional funding, lack of pertinent data, misperceptions about the nature of the program and the breakdown in coordination among its three major sectors.

A report published by FEMA in 2007 suggests that development patterns should be changed to protect environmentally sensitive areas and that communities in the flood program should be encouraged or required to ban development in these locations.

Another criticism of the NFIP is that it does not charge enough for coverage. Among the reasons for the premium shortfall is that the cost of coverage on some dwellings is subsidized- those that were built before floodplain management regulations were established in their communities. As a result, the premiums paid for flood coverage by the owners of these properties reflect only 30 to 40 percent of the true risk of loss.

Over time. lawmakers considering legislation to renew authorization of NFIP have proposed many changes that would have increased the NFIP’s future income, including making owners of property subject to repetitive flooding pay premiums that more closely reflect the true cost of their losses and gradually eliminating the flood insurance subsidy for vacation and second homes. In addition, they would have allowed higher premium increases to make the program eventually self-sustaining.

Flood Coverage in Other Countries: There are two basic methods of providing flood insurance in developed countries. Under the first, the optional system, insurers extend their standard policy to include supplemental coverage for flood damage on payment of additional premium. The coverage tends to be expensive due to the fact that only those most likely to be flooded, and therefore to file claims, purchase it, a situation known in the insurance industry as adverse selection. Among the countries with optional coverage are Germany and Italy. The other method is “bundling.” Under this system, flood coverage is combined with coverage for other perils such as fire and windstorm, thus spreading the risk of flood losses across a large geographical area and greatly increasing the percentage of the population covered for flood damage. Countries that have adopted this method include the United Kingdom, Spain and Japan. In addition, in some countries such as France and Spain there are government compensation programs for major disasters, including flooding, that take effect when the cost of a disaster reaches a certain level. The system in the United States is unique in that the government underwrites the coverage and private insurers act as administrators bearing no actual flood risk.


The National Flood Insurance Program Community Status Book


Source: Insurance Information Institute, “Flood Insurance” http://www.iii.org website. Accessed June 27, 2014. http://www.iii.org/issue-update/flood-insurance

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Before, During & After A Flood

Homes-Buildings_People_GirlAndDestroyedHomeFloods are one of the most common hazards in the United States, however not all floods are alike. Some floods develop slowly, while others such as flash floods, can develop in just a few minutes and without visible signs of rain. Additionally, floods can be local, impacting a neighborhood or community, or very large, affecting entire river basins and multiple states.

Flash floods can occur within a few minutes or hours of excessive rainfall, a dam or levee failure, or a sudden release of water held by an ice jam. Flash floods often have a dangerous wall of roaring water carrying rocks, mud and other debris. Overland flooding, the most common type of flooding event typically occurs when waterways such as rivers or streams overflow their banks as a result of rainwater or a possible levee breach and cause flooding in surrounding areas. It can also occur when rainfall or snowmelt exceeds the capacity of underground pipes, or the capacity of streets and drains designed to carry flood water away from urban areas.

Be aware of flood hazards no matter where you live or work, but especially if you are in low-lying areas, near water, behind a levee or downstream from a dam. Even very small streams, gullies, creeks, culverts, dry streambeds or low-lying ground that appear harmless in dry weather can flood.

Before a Flood

What would you do if your property were flooded? Are you prepared?

Even if you feel you live in a community with a low risk of flooding, remember that anywhere it rains, it can flood.  Just because you haven’t experienced a flood in the past, doesn’t mean you won’t in the future.  Flood risk isn’t just based on history; it’s also based on a number of factors including rainfall , topography, flood-control measures, river-flow and tidal-surge data, and changes due to new construction and development.

Flood-hazard maps have been created to show the flood risk for your community, which helps determine the type offlood insurance coverage you will need since standard homeowners insurance doesn’t cover flooding.  The lower the degree of risk, the lower the flood insurance premium.

In addition to having flood insurance, knowing following flood hazard terms will help you recognize and prepare for a flood.

To prepare for a flood, you should:

  • Build an emergency kit and make a family communications plan.
  • Avoid building in a floodplain unless you elevate and reinforce your home.
  • Elevate the furnace, water heater and electric panel in your home if you live in an area that has a high flood risk.
  • Consider installing “check valves” to prevent flood water from backing up into the drains of your home.
  • If feasible, construct barriers to stop floodwater from entering the building and seal walls in basements with waterproofing compounds.

During a Flood

If a flood is likely in your area, you should:

  • Listen to the radio or television for information.
  • Be aware that flash flooding can occur. If there is any possibility of a flash flood, move immediately to higher ground. Do not wait for instructions to move.
  • Be aware of stream, drainage channels, canyons and other areas known to flood suddenly. Flash floods can occur in these areas with or without typical warnings such as rain clouds or heavy rain.

If you must prepare to evacuate, you should do the following:

  • Secure your home. If you have time, bring in outdoor furniture. Move essential items to an upper floor.
  • Turn off utilities at the main switches or valves if instructed to do so. Disconnect electrical appliances. Do not touch electrical equipment if you are wet or standing in water.

If you have to leave your home, remember these evacuation tips:

  • Do not walk through moving water. Six inches of moving water can make you fall. If you have to walk in water, walk where the water is not moving. Use a stick to check the firmness of the ground in front of you.
  • Do not drive into flooded areas. If floodwaters rise around your car, abandon the car and move to higher ground, when water is not moivng or not more than a few inches deep. You and the vehicle can be swept away quickly.  If your vehicle is trapped in rapidly moving water, stay in the vehicle. If the water is rising inside the vehicle, seek refuge on the roof.
  • Do not camp or park your vehicle along streams, rivers or creeks, particularly during threatening conditions.

After the Flood

Your home has been flooded. Although floodwaters may be down in some areas, many dangers still exist. Here are some things to remember in the days ahead:

  • Use local alerts and warning systems to get information and expert informed advice as soon as available.
  • Avoid moving water.
  • Stay away from damaged areas unless your assistance has been specifically requested by police, fire, or relief organization.
  • Emergency workers will be assisting people in flooded areas. You can help them by staying off the roads and out of the way.
  • Play it safe. Additional flooding or flash floods can occur. Listen for local warnings and information. If your car stalls in rapidly rising waters, get out immediately and climb to higher ground.
  • Return home only when authorities indicate it is safe.
  • Roads may still be closed because they have been damaged or are covered by water. Barricades have been placed for your protection. If you come upon a barricade or a flooded road, go another way.
  • If you must walk or drive in areas that have been flooded.
    • Stay on firm ground. Moving water only 6 inches deep can sweep you off your feet. Standing water may be electrically charged from underground or downed power lines.
    • Flooding may have caused familiar places to change. Floodwaters often erode roads and walkways. Flood debris may hide animals and broken bottles, and it’s also slippery. Avoid walking or driving through it.
  • Be aware of areas where floodwaters have receded. Roads may have weakened and could collapse under the weight of a car.
  • Stay out of any building if it is surrounded by floodwaters.
  • Use extreme caution when entering buildings; there may be hidden damage, particularly in foundations.


A flood can cause physical hazards and emotional stress. You need to look after yourself and your family as you focus on cleanup and repair.

  • Avoid floodwaters; water may be contaminated by oil, gasoline or raw sewage.
  • Service damaged septic tanks, cesspools, pits and leaching systems as soon as possible. Damaged sewer systems are serious health hazards.
  • Listen for news reports to learn whether the community’s water supply is safe to drink
  • Clean and disinfect everything that got wet. Mud left from floodwaters can contain sewage and chemicals.
  • Rest often and eat well.
  • Keep a manageable schedule. Make a list and do jobs one at a time.
  • Discuss your concerns with others and seek help. Contact Red Cross for information on emotional support available in your area.


  • Turn off the electricity at the main breaker or fuse box, even if the power is off in your community. That way, you can decide when your home is dry enough to turn it back on.
  • Get a copy of the book Repairing Your Flooded Home (737KB PDF) which is available free from the American Red Cross or your state or local emergency manager. It will tell you:
    • How to enter your home safely.
    • How to protect your home and belongings from further damage.
    • How to record damage to support insurance claims and requests for assistance.
    • How to check for gas or water leaks and how to have service restored.
    • How to clean up appliances, furniture, floors and other belongs.
  • The Red Cross can provide you with a cleanup kit: mop, broom, bucket, and cleaning supplies.
  • Contact your insurance agent to discuss claims.
  • Listen to your radio for information on assistance that may be provided by the state or federal government or other organizations.
  • If you hire cleanup or repair contractors, check references and be sure they are qualified to do the job. Be wary of people who drive through neighborhoods offering help in cleaning up or repairing your home.

Source: FEMA, “Floods,” http://www.ready.gov website. Accessed June 27, 2014. http://www.ready.gov/floods

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Resources: Flood Facts

  • Icons_HousesIn the past 5 years, all 50 states have experienced floods or flash floods.
  • Everyone lives in a flood zone. (For more information, visit our Flood Zones FAQs.)
  • Most homeowners insurance does not cover flood damage.
  • If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance. (To find your flood risk, fill out the Flood Risk Profile.)
  • Just a few inches of water from a flood can cause tens of thousands of dollars in damage.
  • Flash floods often bring walls of water 10 to 20 feet high.
  • A car can easily be carried away by just two feet of floodwater.
  • Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding.
  • New land development can increase flood risk, especially if the construction changes natural runoff paths.
  • Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
  • Homes and businesses may qualify for the low-cost Preferred Risk Policy, with premiums starting as low as $129 for a home and its contents and $643 for a commercial building and its contents.**$129 residential annual premium provides $20,000 building and $8,000 contents coverage. $643 commercial annual premium provides $50,000 building and $50,000 contents coverage.
  • You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.
  • In most cases, it takes 30 days after purchase for a policy to take effect, so it’s important to buy insurance before the storm approaches and the floodwaters start to rise.
  • In a high-risk area, your home is more likely to be damaged by flood than by fire.
  • Even though flood insurance isn’t federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file nearly 25% of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.
  • From 2003 to 2012, total flood insurance claims averaged nearly $4 billion per year.
  • When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium discount of up to 45% if you live in a high-risk area and up to 10% in moderate- to low-risk areas.
  • Since 1978, the NFIP has paid more than $48.1 billion for flood insurance claims and related costs (as of 7/8/13).
  • More than 5.5 million people currently hold flood insurance policies in more than 21,800 communities across the U.S.
  • The two most common reimbursement methods for flood claims are: Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to at least 80% of the building’s replacement cost.

For more policy and claim statistics, visit the National Flood Insurance Program.

Source: National Flood Insurance Program, “Resources: Flood Facts,” https://www.floodsmart.gov website. Accessed June 27, 2014. https://www.floodsmart.gov/floodsmart/pages/flood_facts.jsp

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Residential & Non-Residential Building Fire Estimates

Disaster_HouseFireFire Estimate Summaries present basic data on the size and status of the fire problem in the United States as depicted through data collected in the U.S. Fire Administration’s (USFA’s) National Fire Incident Reporting System (NFIRS). Each Fire Estimate Summary addresses the size of the specific fire or fire-related issue and highlights important trends in the data.1

Residential Building Estimates

Definition of Residential Building
A structure is a constructed item of which a building is one type. The term residential structure commonly refers to buildings where people live. To coincide with this concept, the definition of a residential structure fire includes only those fires confined to an enclosed building or fixed portable or mobile structure with a residential property use. Such fires are referred to as residential buildings to distinguish these buildings from other structures on residential properties that may include fences, sheds, and other uninhabitable structures. Residential buildings include, but are not limited to one- or two-family dwellings, multifamily dwellings, manufactured housing, boarding houses or residential hotels, commercial hotels, college dormitories, and sorority/fraternity houses.

Nonresidential Building Estimates

Definition of Nonresidential Building
Nonresidential buildings are a subset of nonresidential structures and refer to buildings on nonresidential properties. Buildings include enclosed structures, subway terminals, underground buildings, and fixed portable or mobile structures. The term nonresidential buildings refers to those nonresidential structures that are enclosed.Nonresidential buildings include assembly, eating and drinking establishments, educational facilities, stores, offices, basic industry, manufacturing, storage, detached garages, outside properties, and other nonpermanent residential buildings. The term nonresidential also includes institutional properties such as prisons, nursing homes, juvenile care facilities, and hospitals, though many people may reside there for short (or long) durations of time.

Nonresidential Building National Estimates (2003-2011)

Cause Definitions


Related Content

Links of Interest

Source: U.S. Fire Administration, “Residential and Nonresidential Building Fire Estimates” http://www.usfa.fema.gov/. Accessed June 16, 2014. href=”http://www.usfa.fema.gov/statistics/estimates/index.shtm”>http://www.usfa.fema.gov/statistics/estimates/index.shtm

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Do I Need Business Interruption Insurance?

Signs_TemporarilyClosedSignBusiness interruption insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But too many small business-owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy.

A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential.

  1. Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
  2. Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate to get the business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in.
  3. The price of the policy is related to the risk of a fire or other disaster damaging your premises. All other things being equal, the price would probably be higher for a restaurant than a real estate agency, for example, because of the greater risk of fire. Also, a real estate agency can more easily operate out of another location.

Extra Expense Insurance

Extra expense insurance reimburses your company for a reasonable sum of money that it spends, over and above normal operating expenses, to avoid having to shut down during the restoration period. Usually, extra expenses will be paid if they help to decrease business interruption costs. In some instances, extra expense insurance alone may provide sufficient coverage, without the purchase of business interruption insurance.

Source: Insurance Information Institute, “Do I need business interruption insurance?” http://www.iii.org website. Accessed June 16, 2014. http://www.iii.org/individuals/business/basics/interruption/

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

A Vacant Home Still Needs Insurance – Don’t Be Caught Without Coverage

Homes-Buildings_Sign_SoldSignUnderstand the Insurance Implications of Leaving a Home Vacant or Renting It Out

A tough economic climate and slumping real estate market has resulted in more and more homes left vacant by their owners—and that could have serious insurance implications, according to the Insurance Information Institute (I.I.I.).

The U.S. Census Bureau reported late last month that 14.5 percent of all U.S. residences were vacant in the third quarter of 2009, reflecting a trend that is having a major impact on homeowners insurance.

“In today’s real estate market, it is not uncommon for homeowners to buy a new home without selling their old one first,” said Loretta Worters, vice president of the I.I.I. “With it taking much longer for a home to sell—particularly with tightening mortgage requirements for potential buyers—people are moving into their new home while their previous one remains vacant and that can cause significant problems for homeowners and insurers.

Insurers discontinue coverage on a home if it becomes unoccupied for over 30 days and no new residents have moved in. However, some insurers will grant a policyholder a vacancy permit, providing it is requested before the 30 days expire. This permit continues to provide coverage against some of the standard homeowners perils, such as fire and wind, but does not protect the house against perils such as theft, glass breakage or water damage. The coverage provided by a vacancy permit varies from company to company, so policyholders should check with their agent or company representative.

“Many insurers will not insure a vacant home because there is a greater possibility that something could happen to it,” Worters noted. “That’s because such occurrences such as theft, vandalism, fire, or water damage are far more likely to happen in vacant houses than in occupied ones and the resulting damage is likely to be worse because no one is around to report it or stop it.”

Some insurers do offer vacant home insurance, the I.I.I. noted. The premium depends on a lot of factors, such as whether a home has a central alarm system, deadbolt locks and/or smoke detectors. Insurers also may assess whether a policyholder has winterized their home to protect plumbing fixtures from freezing temperatures, and how long the house will be vacant.

“Arranging for someone to come by regularly to check on the place is may result in a lower premium,” said Worters. “But generally speaking, you could pay 50 or 60 percent more for a policy on an unoccupied home as compared to a regular homeowners policy.”


With slumping housing prices, more homeowners are renting out their homes rather than taking a loss on a sale or having them sit vacant. Homeowners who rent their property can protect themselves from financial loss by purchasing a landlord policy. A landlord insurance policy covers:

  • The house. Much like a homeowners policy, it usually provides coverage against hazards such as fire, lightning, falling objects, smoke, explosion, wind and hail, water damage, among others.
  • Other structures located on the property (garages, sheds, etc.). This coverage is often limited to 10 percent of the overall coverage on the house. For example, for a home with a $200,000 policy limit, no more than $20,000 would be paid to a policyholder to cover losses incurred to structures on the property but apart from the house itself.
  • Property contents. While landlord insurance policies do not insure a tenant’s belongings, they do typically cover any of the landlord’s personal property that might be used by a tenant, such as tools, landscaping equipment, appliances and furniture (either stored on site or provided by landlords for use by their tenants). The best way to be sure of having enough personal property coverage is to take an accurate inventory of the contents on the premises.
  • Lost rental income. This coverage reimburses a landlord for any lost rental income due to building damage. Typically it provides up to 12 months of lost rental income.
  • Legal fees and liability protection. Landlords may be liable if a tenant is injured on the property. Most landlord insurance policies cover the landlord’s legal fees should a tenant file a lawsuit. This type of policy would also pay out in the event of a judgment against a landlord, protecting his or her personal belongings and assets if the tenant prevails in court. The policy may also cover medical payments in the event that a tenant is injured.

Landlord policies generally cost about 25 percent more than a standard homeowners policy because landlords need more protection than a typical homeowner. There are many factors used to determine the price of a landlord policy, including:

  • The square footage of the house and any additional structures, such as a detached garage.
  • Building costs in the area.
  • The features of the home, and construction materials used to build it.
  • The crime rate in the neighborhood.
  • The likelihood of damage from natural disasters, such as hurricanes and hail storms.
  • The home’s proximity to a fire hydrant (or other source of water) and to a fire station; whether the community has a professional or volunteer fire service; and other factors that can affect the time it takes to put out a fire.
  • The condition of the home’s plumbing, heating and electrical systems.

When planning to rent out a home, it is important to take some basic precautions:

  • Require tenants to show proof of renters insurance for personal property, family liability, guest medical and additional living expenses. This not only provides them with protection, but will prevent tenants from trying to sue the landlord if there is a fire or other disaster.
  • Notify an insurance agent or company representative that the home is being rented out, and discuss the implications. Be aware that many insurance companies do not provide coverage for vehicles that are left at a landlord’s home and remain accessible to tenants.
  • Consider purchasing a personal umbrella policy. Umbrella insurance is designed to provide liability protection beyond the limits of homeowners, auto and watercraft personal insurance policies. With an umbrella policy, depending on the insurance company, the policyholder can add an additional $1 million to $5 million in liability protection. This protection is designed to “kick-in” when the underlying liability on other current policies has been exhausted.

Source: Insurance Information Institute, “A Vacant Home Still Needs Insurance – Don’t Be Caught Without Coverage” http://www.iii.org website. Accessed June 16, 2014. http://www.iii.org/press_releases/a-vacant-home-still-needs-insurance-dont-be-caught-without-coverage.html

© Copyright 2014. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

I Never Get Hurt!

Everyone has claimed at one point or another, “I never get hurt!” Once those words are uttered, Karma seems to take great pride in promptly proving you wrong. It never fails. What to us is a simple statement, turns immediately into a direct challenge for the universe to do its best to bring us crashing to our knees and hope to glory that we have enough insurance to cover our injuries.

In most cases, those of us who go without an injury for years begin to become complacent. We revel in the fact that we have been “smart enough” to not succumb to life’s little tragedies. It is at that point that Karma decides we need a wake up call. It’s rarely something small like a stubbed toe or banging an elbow against a cabinet. No, that would be way too simple and not nearly as funny to watch.

Do you ever get hurt?
Do you ever get hurt?nev

Karma inevitably gets us at our most vulnerable, when we are surrounded by the majority of our friends and loved ones and half of the neighboring community. We aren’t allowed to daintily trip and recover gracefully. Instead, we fall headlong into a tumbling roll that takes out Aunt Martha, the host of the party and several pieces of furniture along the way.

The best advice that can be given is that if you dare to utter the challenge, you better hope you have the type of insurance that will protect you if you happen to end up in traction or a body cast.

Dying but Need Life Insurance

Maybe you are one of the rare individuals who have tremendous luck at the casino and you always win big when you spin the wheel or throw the dice. Not too many people can beat the odds at the casino slots or table nor can they beat the odds at living forever, as you say you are able to do. You say you are invincible.

Life Insurance provides cash
Life Insurance provides cash

Have you ever said or heard someone saying, “I do not need life insurance, I can beat any odds. I am always in the right line and at the right place, at the right time. I am a smoker, and in excellent health, no lung cancer here. I was once a druggie and contacted HIV, but hay, I have no symptoms, no disabilities and I live my life normally to the fullest every day. I have never been sick a day in my life. I told the doc that in spite of all of this, I am one of the healthiest human beings alive. I am so healthy that I told the doc I would never get one of those so-called pre-existing conditions or become terminally ill from cancer or some other dreaded disease. I simply refuse to die. I will never need one of those long-term care places. I am too healthy and healthy people do not need s life insurance policiy.”

For heaven sake, life insurance is not for the dying it is for the family. When a person dies, life insurance will help pay the family’s bills, put food on the table and pay for a funeral. That is unless the family is going to bury you in the back forty because you did not have that insurance policy and they have no money. This is usually against the law anyway.

Every man has to make that appointment with death at least once in life. If you feel you are going to live-forever, which you will not, do not wait until you get information from the doctor that you are in the dying process before you intended. Set up that life insurance policy now at a considerably lower rate and protect the family.  I found life insurance available for people living with HIV here!

Insurance for My iPhone

Why in the world would anyone consider paying this ‘cheap price’ per year for iPhone insurance? If anything happens to my iPhone, I will just pull another $500.00 out of my pocket and buy a new phone. I have often thought that I paid a lot of money for my phone so I am not going to let anything happen to the phone, I do not need an extra bill for phone insurance.

My iPhone
My iPhone

This thinking is so wrong. Few people have enough money just come up with extra bucks for a new iPhone at a moment’s notice. I am no different from many other people. This phone is what keeps me in the loop, although sometimes it does cause me to be loopy and I have thought of getting rid of the thing, and then I come to my senses.

A cell phone is a necessary part of a business owner’s life and anyone’s life in fact. Remember the old pay phones, if old enough. Needing to make calls meant hunting down a pay phone on the next street corner or in a store, hoping that it no one was using the phone, there was change in the pocket to make the call and lastly the phone had no, “Out of Order”, sign hanging on it. A cell phone has changed society for good and the cell phone has become a necessity of life.

I have come to realize that all the important things in life, material possessions and people need insurance, and this is a smart thing.

My son has insurance on his iPhone. He uses this iPhone for pleasure and business, and one day my son and his wife went to an amusement park and on a roller coaster ride. My son stuck his iPhone in his shirt pocket. When the coaster went through the loopy de loop, the phone flew out of the pocket and fell to the ground. He got the phone back but the screen was shattered. Thank goodness for insurance.

My daughter the nurse felt she could not add one more bill to her list of debts so avoided insurance. One day her cell phone flew out of her pocket and into the toilet. She went into instant shock having to dip her hand into the toilet to get it and finding out from her dad that, yes, it was ruined sent her into depression. She had to wait one month so she could have enough money to replace the phone.

No one wants a cracked phone screen; admit loss, thief, malfunction, or drop their phone in a toilet but it happens at the most inopportune times. It is better to place insurance on the iPhone and protect yet another expensive investment.