Flood insurance premiums may rise in US - The News-Press

An extension to the National Flood Insurance Program could mean stability to home buyers, but brings with it the possibility of much higher premiums.

"The first thing it does, and this is very important, is it brings stability to local real estate sales," said Joan LaGuardia, spokeswoman for the Lee County Department of Community Development.

For years the flood program has gone through periods of being on the brink of expiring, before Congress renews the program for a few months — only for the deadline of expiration to return again. President Barack Obama signed a bill Friday that included a five-year extension to the flood program.

But under the new law, premiums could increase up to 20 percent a year instead of the previous limit of 10 percent. Also some homes with a history of flood risk and vacation homes could see premiums go up by as much as 25 percent in one year.

Florida has the most flood insurance policies in the country — just over 2 million. Locally, unincorporated Lee County has nearly 88,000 policies, followed by unincorporated Collier County at nearly 58,000 policies and the City of Cape Coral with about 34,000 policies.

Flood insurance — through the National Flood Insurance Program — is mandatory in FEMA flood mapped areas that are considered hazardous or recommended for other potential flood areas that are not considered hazardous. Homeowners who don't have a mortgage are not required to carry flood insurance.

Stability is important in Southwest Florida, where much of the economy is based on real estate sales.

"There were some periods where people waiting to purchase a home and who needed flood insurance, would find themselves briefly unable to get flood insurance," said LaGuardia. "Realtors have been following this very closely, and I think all of them will breathe a sigh of relief that long-term stability has come to the program and that's important for our economy."

The new law attempts to put the program on better financial footing by giving the government greater flexibility to raise rates. The program was generally self-sustaining until Hurricane Katrina and other hurricanes struck in 2005. The program now owes the Treasury nearly $18 billion dollars.

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Ken and Diana Marino, Fort Myers residents who live in San Carlos Park, said they currently pay about $250 a year in flood insurance – an expense they can't afford as retirees on a limited income.

"About $250 is not real expensive," said Ken Marino. "But we're retired and living on Social Security and all of a sudden you're hit with another $250. It figures to about $20 a month, but you pay it all at once and it's just one more thing we don't need."

Marino said he and his wife have lived in their San Carlos Park home for about eight years, but it was about five years ago that they were placed in the "preferred flood zone."

"We're closer to (Interstate 75) than we are to (U.S. 41)," said Marino. "And there's one little creek about a mile from our house and they say because of that creek, probably 10-feet wide at its widest, is why we're in a flood zone."

Even after going through Hurricane Charley a few years ago, Marino said his home never flooded, however he doubts he can fight the cost.

"We don't feel it's justified," said Marino. "But fighting the government is like fighting City Hall — there's nothing you can do except pay for it."

Lewis Knickerbocker, 76, of Fort Myers said he pays about $300 a year in flood insurance for his home. Although his insurance isn't mandatory, he doesn't mind the current price or the potential for his premiums to increase.

"It's for protection," said Knickerbocker, adding that he's never had a flooding problem at his home near Pine Lake. "I live near the lake and it's gotten high in the last 20 or so years, so it's a protection thing. That's what you have all insurance for. Everything else goes up, so why shouldn't it go up."

Tim Shaw of Fort Myers-based Tim Shaw Insurance Group said flood insurance is highly recommended for this part of Florida, which is subject to high winds and flooding.

"You want to be prudent in the event of that once in a hundred year storm," said Shaw. "Our job is to advise people to protect their assets, so if you want to protect your assets, you can do that for roughly $400 or $800 a year. It's highly recommended no matter what zone you're in here in Florida."

A $250,000 home with six inches of water could cost homeowners as much as $150,000 in damages without insurance, Shaw said.

Lee County small business owners and homeowners receive about $15 million in discounts every year that stays in the local economy, instead of going off into flood program policy premiums, LaGuardia said, adding that the discounts come from local governments entering into agreements with the national program about how flood plans are managed.

"(The extension) also stabilizes how local government can get discounts for policy holders and these local discounts are important, because for unincorporated Lee County we have about (88,000) policy holders," said LaGuardia.

Wildfire Damage Is Generally Covered by Homeowners' Policies - New York Times (blog)

Wildfires that destroyed hundreds of homes in Colorado have been reported under control, and residents are being allowed to return to their charred properties to assess the damage — and meet with insurance adjustors dispatched to evaluate the losses.

Generally, homeowners' insurance policies consider damage or destruction of houses by fire, including wildfires, a "covered peril," says Michael Barry, a spokesman for the Insurance Information Institute, an industry group. The destruction of personal belongings is also typically covered, as is temporary housing while your home is repaired or rebuilt (keep receipts to back up your claim). Coverage limits, as well as deductibles — the amount you must pay before insurance pays — vary by policy. Damage to cars is generally covered under the "comprehensive" portion of your auto insurance policy.

The Rocky Mountain Insurance Information Association has published a brochure explaining the claims process after a natural disaster like a wildfire.

Dry conditions in parts of the South, Midwest and the West mean a continued risk of dangerous fires this summer, according to the National Interagency Fire Service. As a result, some communities have canceled fireworks displays for the Fourth of July holiday.

The Rocky Mountain association recommends steps that can be taken to reduce the likelihood of damage from fire. (Some insurers are increasingly requiring homeowners in high-risk areas to take such steps to secure coverage.) They include creating a safety perimeter around your home, by cutting back trees and shrubs, and laying down stone or gravel, to create a buffer around the house, and locating wood piles and propane tanks at least 30 feet from the home. State Farm offers an interactive tool with additional tips.

As is the case with any disaster, creating a home inventory ahead of time can also smooth claims for loss of your personal property. The Insurance Institute offers a free downloadable version of home inventory software on its Web site.

Have you ever filed a homeowners' claim because of damage from a wildfire? What was your experience?

Colorado wildfire: Thousands of Colorado insurance claims filed in the wake of ... - Denver Post

COLORADO SPRINGS  — Charred and contorted metal strips formed a stark barrier around piles of blackened rubble that used to be a two-story ranch style home at 5533 Majestic Drive.

"These were our beige gutters," said Michael Fender , nudging the metal with his right foot. "I just don't know ... I don't know what it is anymore."

Fender and his wife lived in the three-bedroom home for 13 years, and on Thursday afternoon began preliminary inspections for what can be a painful and lengthy claims process in the wake of the Waldo Canyon fire. Aerial photographs show their street and

a planned neighborhood known as Parkside lost at least 139 of their 178 homes in the blaze.

"It's a rough situation," said Mark Nix, an insurance property adjuster with Allstate who worked with couple. "In this first meeting, I just needed to measure the foundation and driveway and take some pictures."

Since arriving in Colorado Springs earlier this week, Nix said he's inspected about a dozen properties destroyed by the fire.

Following the initial site visit, the adjuster will then meet with residents a few days later to go over their personal property lost in the disaster.

"There's a number of stages that it takes," Nix said. "Eventually we hope to write them an estimate to get them rebuilt."

Nix, based in Texas, travels all over the country — he has seen the damage wrought by floods, tornadoes and hurricanes.

"They're all bad," he said. "It's heartbreaking."

Colorado's two largest property insurers reported Thursday that they received 1,449 claims for wildfire losses or expenses. The claims include total structural losses as well as damage from smoke and fire and requests for temporary living expenses from property owners displaced by fires.

Officials with State

Farm said it had received 150 claims from northern Colorado's High Park fire and 390 claims for the Waldo Canyon fire. Farmers Insurance representatives said the company has received 909 claims from all Colorado wildfires, with the majority from High Park and Waldo Canyon.

Both companies expect the numbers to grow as more fire damage is discovered and reported.

With a heavy thunderstorm forecast for this weekend, monsoon season likely to arrive in late summer and hillsides stripped of vegetation by the flames, residents in the area face another danger: Mud.

"Many homeowners do not realize the standard homeowners insurance policy typically excludes mudflow type losses," Christopher Hackett, a director for the Property Casualty Insurers of America, said in a statement.

Across Majestic Drive from Fender's home, Eugene and Cheryl Keckritz stood in their concrete driveway fixated on the foundation where their 2,200-square-foot home of 18 years once stood.

"It was Navajo white, with Zeus green trim," said Cheryl. "We lost a lot. My dad's old tool box ... he died four years ago, and that's what I kept as a memory of him. Now it's gone."

The Keckritzes said they're fully insured and estimated their home was worth $240,000.

"I want to rebuild. We hope to rebuild, but right now it's just too early," Cheryl said.

Staff writer Steve Raabe contributed to this report.

Kurtis Lee: 303-954-1655, klee@denverpost.com or twitter.com/kurtisalee

Copyright 2012 The Denver Post. All rights reserved.

How to insure your home against disaster - CBS News

(MoneyWatch) If you ask people who lost their homes in the recent Colorado wildfires if they expect their insurance to cover rebuilding costs, don't be surprised if the answer is a resounding "no."

It's not that most folks are burdened with lousy policies from bad insurers -- it's that they don't have enough insurance. Nearly 6 of 10 American houses are underinsured, with most homeowners having only enough insurance to pay about 80 percent of the costs to replace or rebuild their homes, according to property data provider MSB.

Most people have insurance that provides what is known as "extended replacement coverage." That means if their home is damaged or destroyed as a result of some covered calamity, their policy will pay out no more that up to 120 percent of the so-called dwelling limits in the policy, and not a penny more. The problem is that it could cost a lot more to rebuild or replace your home, and if your policy limits are insufficient you will end up paying the difference.

For example, say you own a home with a market value of $200,000, but the dwelling limit in your policy is $180,000. If you suffer a total loss on your home, then your policy would pay up to $216,000 toward rebuilding it. But the rebuilding costs could be far in excess of what the policy will pay, leaving many underinsured for a variety of reasons.

Why so many homes are underinsured

Most people buy and set the limits on their insurance when they buy their home. The amount of dwelling coverage is typically an estimate of the market price at any given time, which may or may not be a good starting point.

The mistake many people make is that once they buy home insurance, the only thing they keep up with is paying the premiums. They don't closely review their policy, including comparing the coverage limits to current reconstruction costs to determine if their policy limits are adequate. This "set it and forget it" thinking is what leaves so many homeowners underinsured. And unfortunately, most policy holders only discover their inadequate coverage when they experience a loss, by which point it's too late to take out more insurance.

So what should you do? Start by completing an estimate of the reconstruction cost of your home, and set your policy dwelling limit to this amount. Also review the amount of coverage on your home every few years. Remember, you can't increase your coverage when danger is imminent. Insurers generally place a moratorium on coverage changes in areas that are in the path of an incoming wildfire or storm, typically several days before a disaster is expected to strike.

In addition, contact your insurance agent to update your coverage when you remodel and improve your home. Even if you don't make improvements, you can be sure that it will cost more to replace it today compared with when you bought it. The reason: The surging price of building materials, energy and labor, all which have increased replacement costs up by more than 7 percent a year since 2001. (As a result, many policies offer a rider that automatically adjusts coverage every year by an indexed amount or a set percentage.)

Higher costs in tornado alley

If your home is located in an area prone to severe weather, such as tornadoes or hurricanes, then your rebuilding costs could also be pushed higher because of new building codes that require shutters, foundation supports, and other features designed to protect against wind damage or floods.

If you have a home insurance policy that costs $2,000 per year and are still underinsured, you could be wasting your money. Instead, increase your dwelling limits and increase your deductible. The savings from the higher deductible often offsets the cost of increasing the coverage.

The upshot: It is the homeowner who is responsible for selecting the proper policy coverage limits. In other words, if you find out after a loss that you are underinsured, don't expect the insurance company to take responsibility and make up the difference. According to the laws in many states, it's not their responsibility to advise you on the limits to set in your policy.

Insurance companies send crews to protect homes - CBS News

COLORADO SPRINGS, Colo. — When firefighter Eric Morris shows up at wildfires across the West, locals battling the flames sometimes look at him and wonder who sent him.

The answer isn't a public agency. It's an insurance company.

Morris is among a group of private firefighters hired in recent years to protect homes with high-end insurance policies. In a wildfire season that is one of the busiest and most destructive ever to hit the region, authorities and residents say their help is welcome.

"There's curiosity the first time they work with us," he said. "After a while of explaining and making some calls to the right people, they let us right in."

Morris and his nine-man crew helped protect 35 homes in Colorado Springs in the most destructive fire in the state's history. It killed two people and destroyed 346 homes.

There are no numbers available for how many homes these firefighters save and, given the unpredictable nature of fires, few are willing to take credit.

For insurers, hiring their own crew is worth the cost. They spend thousands on well-equipped, federally rated firefighters, potentially saving hundreds of thousands, if not millions, of dollars to replace a home and its contents.

Insurance companies began sending crews to wildfires around 2006, said Paul Broyles, former head of fire operations at the National Interagency Fire Center, which coordinates federal firefighting efforts from Boise, Idaho. Land use changes in the past two decades have allowed more homes to be built in or near wildfire-prone areas, prompting the insurance companies to offer such a service, said Michael Barry of the New York-based industry funded Insurance Information Institute.

"They got a job to do just like we do, and it's a legitimate response by the insurance companies," Broyles said.

Morris' crew worked for Chubb Personal Insurance, which provides coverage for homes typically valued between $400,000 and $3 million, said Kevin Fuhriman, the company's personal lines catastrophe manager.

"It's an added layer of protection for our clients," Fuhriman said. "From a business perspective? It's an extremely advantageous business proposition."

Other companies offer fire protection services, typically for higher-end clients, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.

"Just because you don't have this type of policy doesn't mean you don't have fire protection," Walker insisted. "That's what people pay taxes for, and (public) firefighters do a wonderful job protecting homes. I mean, they saved hundreds of homes on this fire."

C.J. Moore, who was digging through the ashes of her home in the hard hit Mountain Shadows subdivision, said she would have bought a policy with fire protection if she could afford it. She noted, however, that sometimes having money isn't enough to save your home.

"The fire went through this neighborhood so fast there was no hope for these houses," she said. "The fire burned so hot that the driveways look like they were hit by a jackhammer."

Morris works for Wildland Defense Systems of Red Lodge, Mont. It has worked alongside the federal firefighting system for years, responding to more than 80 wildfires since 2008, said the company's president, David Torgerson.

Wildland has 50 engines and about 100 firefighters strategically located in 11 Western states, the Dakotas and Texas.

The private crews work closely with &#8212 and report to &#8212 incident commanders at the scene. Their presence means other firefighters can focus on other structures, said Greg Huele, a spokesman with the federal team in charge of the Colorado Springs fire.

"We can't be in there freelancing," Morris said. "Everything we do is coordinated."

Morris and his crew deployed from near Ruidoso, N.M., to Colorado Springs hours after the fire erupted June 23.

Morris showed up at the fire with three so-called brush trucks, each capable of carrying 450 gallons of water, and a tanker truck that carries 1,200 gallons. Their main focus was protecting homes by reducing the number places a fire can take hold.

They close doors and windows left open by fleeing evacuees. They move flammable materials away from Chubb-insured homes &#8212 patio furniture, shrubs, even pine needles collected in gutters &#8212 that can ignite. They also use inflatable water tanks to feed sprinkler systems to wet down the house and surrounding area.

The crews also carry 5-gallon tubs of a fire retardant gel that when mixed with water can coat a house with a thin wet layer to keep flying embers from igniting the house.

It's a last ditch effort to protect homes that Morris' crew had to employ three times before they evacuated the Cedar Heights neighborhood for their safety.

The crews focus their efforts on insured homes that are facing the greatest threat from the wildfire without regard for the home's value, Fuhriman said.

Chubb, Wildland or Morris would not take credit for all of Chubb's insured homes surviving the blaze. They point instead to the effort of more than 1,500 firefighters.

In some instances, only one or two home survived on a street while the rest burned to the foundation. That can be attributed to the random nature of fire, which left some homes in a smoldering heap while sparing trees and shrubs, even mail inside a mailbox.

In other instances, homes survived because it's where public firefighters were able to safely defend the home, Colorado Springs Fire Chief Rich Brown said.

"Having your home burn to the ground is devastating," said Bill Simmons, whose home survived and who does not have an insurance policy offering individual home protection. "I hope everybody would appreciate any help that you have."

Insurance Companies Send Crews to Protect Homes - ABC News

When firefighter Eric Morris shows up at wildfires across the West, locals battling the flames sometimes look at him and wonder who sent him.

The answer isn't a public agency. It's an insurance company.

Morris is among a group of private firefighters hired in recent years to protect homes with high-end insurance policies. In a wildfire season that is one of the busiest and most destructive ever to hit the region, authorities and residents say their help is welcome.

"There's curiosity the first time they work with us," he said. "After a while of explaining and making some calls to the right people, they let us right in."

Morris and his nine-man crew helped protect 35 homes in Colorado Springs in the most destructive fire in the state's history. It killed two people and destroyed 346 homes.

There are no numbers available for how many homes these firefighters save and, given the unpredictable nature of fires, few are willing to take credit.

For insurers, hiring their own crew is worth the cost. They spend thousands on well-equipped, federally rated firefighters, potentially saving hundreds of thousands, if not millions, of dollars to replace a home and its contents.

AP

Firefighters from Wildland Defense Systems Inc., debrief after a day on the Waldo Canyon wildfire west of Colorado Springs, Colo., Friday, June 29, 2012. Wildland Defense Systems Inc., is a private company that provides firefighters for insurance company Chubb Personal Insurance, one of a handful of insurance companies that send in firefighters during wildfires to protect homes as part of high-end insurance policies. (AP Photo/Chris Carlson) Close

Insurance companies began sending crews to wildfires around 2006, said Paul Broyles, former head of fire operations at the National Interagency Fire Center, which coordinates federal firefighting efforts from Boise, Idaho. Land use changes in the past two decades have allowed more homes to be built in or near wildfire-prone areas, prompting the insurance companies to offer such a service, said Michael Barry of the New York-based industry funded Insurance Information Institute.

"They got a job to do just like we do, and it's a legitimate response by the insurance companies," Broyles said.

Morris' crew worked for Chubb Personal Insurance, which provides coverage for homes typically valued between $400,000 and $3 million, said Kevin Fuhriman, the company's personal lines catastrophe manager.

"It's an added layer of protection for our clients," Fuhriman said. "From a business perspective? It's an extremely advantageous business proposition."

Other companies offer fire protection services, typically for higher-end clients, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.

"Just because you don't have this type of policy doesn't mean you don't have fire protection," Walker insisted. "That's what people pay taxes for, and (public) firefighters do a wonderful job protecting homes. I mean, they saved hundreds of homes on this fire."

C.J. Moore, who was digging through the ashes of her home in the hard hit Mountain Shadows subdivision, said she would have bought a policy with fire protection if she could afford it. She noted, however, that sometimes having money isn't enough to save your home.

"The fire went through this neighborhood so fast there was no hope for these houses," she said. "The fire burned so hot that the driveways look like they were hit by a jackhammer."

Morris works for Wildland Defense Systems of Red Lodge, Mont. It has worked alongside the federal firefighting system for years, responding to more than 80 wildfires since 2008, said the company's president, David Torgerson.

Wildland has 50 engines and about 100 firefighters strategically located in 11 Western states, the Dakotas and Texas.

Thousands of Colorado insurance claims filed in the wake of fires - Denver Post

COLORADO SPRINGS  — Charred and contorted metal strips formed a stark barrier around piles of blackened rubble that used to be a two-story ranch style home at 5533 Majestic Drive.

"These were our beige gutters," said Michael Fender , nudging the metal with his right foot. "I just don't know ... I don't know what it is anymore."

Fender and his wife lived in the three-bedroom home for 13 years, and on Thursday afternoon began preliminary inspections for what can be a painful and lengthy claims process in the wake of the Waldo Canyon fire. Aerial photographs show their street and a planned neighborhood known as Parkside lost at least 139 of their 178 homes in the blaze.

"It's a rough situation," said Mark Nix, an insurance property adjuster with Allstate who worked with couple. "In this first meeting, I just needed to measure the foundation and driveway and take some pictures."

Since arriving in Colorado Springs earlier this week, Nix said he's inspected about a dozen properties destroyed by the fire.

Following the initial site visit, the adjuster will then meet with residents a few days later to go over property lost in the disaster.

"There's a number of stages that it takes," Nix said. "Eventually we hope to write them an estimate to get them rebuilt."

Nix, based in Texas, travels all over the country — he has seen the damage wrought by floods, tornadoes and hurricanes.

"They're all bad," he said. "It's heartbreaking."

Colorado's two largest property insurers reported Thursday that they received 1,449 claims for wildfire losses or expenses. The claims include total structural losses as well as damage from smoke and fire and requests for temporary living expenses from property owners displaced by fires.

Officials with State Farm said it had received 150 claims from northern Colorado's High Park fire and 390 claims for the Waldo Canyon fire. Farmers Insurance representatives said the company has received 909 claims from all Colorado wildfires, with the majority from High Park and Waldo Canyon.

Both companies expect the numbers to grow as more fire damage is discovered and reported.

With a heavy thunderstorm forecast for this weekend, monsoon season likely to arrive in late summer and hillsides stripped of vegetation by the flames, residents in the area face another danger: Mud.

"Many homeowners do not realize the standard homeowners insurance policy typically excludes mudflow type losses," Christopher Hackett, a director for the Property Casualty Insurers of America, said in a statement.

Across Majestic Drive from Fender's home, Eugene and Cheryl Keckritz stood in their concrete driveway fixated on the foundation where their 2,200-square-foot home of 18 years once stood.

"It was Navajo white, with Zeus green trim," said Cheryl. "We lost a lot. My dad's old tool box ... he died two years ago, and that's what I kept as a memory of him. Now it's gone."

The Keckritzes said they're fully insured and estimated their home was worth $240,000.

"I want to rebuild. We hope to rebuild, but right now it's just too early," Cheryl said.

Staff writer Steve Raabe contributed to this report.

Kurtis Lee: 303-954-1655, klee@denverpost.com or twitter.com/kurtisalee

Copyright 2012 The Denver Post. All rights reserved.