Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Florida homeowners’ insurance specialists are reporting continued performance deterioration and a decline in capitalization levels, despite the most severe losses from the record 2020 hurricane season occurring outside of the Florida market, Fitch Ratings said in a recent report.

According to the rating agency, underwriting losses rose sharply for a group of 28 property/casualty (P/C) insurers focused on Florida homeowners’ insurance business, accounting for 60% of direct state market share for the $10 billion of direct premiums written in the state. The specialists had an aggregate combined ratio of 131% through 9M20 versus 111% at year-end 2019.

Florida homeowners’ insurance premium rates are rising in response to these poorer underlying loss trends and past catastrophe losses. Requested base rate increases in excess of 10% were common across Florida specialist carriers’ 2020 annual rate filings.

Fitch said carriers have cited rapid growth in litigation from non-catastrophe water damage claims as a driver of higher losses, as the pace of property damage claims that result in a lawsuit in Florida remains elevated relative to the broader U.S. market. Litigated claims tend to settle at values well in excess of those without a lawsuit, from both higher indemnity payments and defense costs.

Recovery in underwriting results from rate increases have been offset by higher reinsurance costs, with Florida-focused mid-year 2020 renewals showing a second year of sizable reinsurance rate increases, in some cases as much as 30%-35%.

Florida homeowners’ insurance specialists have business profiles characterized by limited scale and concentration in a volatile product segment, with further poor segment performance potentially leading to market exits and consolidation, Fitch said. Combined with less favorable risk-adjusted capital levels, high dependence on reinsurance and the recent poor profitability trends, the large majority of these companies would be rated below ‘BBB’ by Fitch.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

After extending the moratorium on cancellations and nonrenewals put into place at the start of the pandemic, Citizens Property Insurance Corp. has announced it will resume processing these as of Feb. 1, 2021.

The Florida insurer of last resort said in a bulletin to agents that the board of governors at its December meeting approved lifting the temporary moratorium established in March 2020 to ease the burden on policyholders due to the COVID-19 health risk.

Cancellations and nonrenewals for policies that had exceptions made due to the COVID-19 health risk will be processed on Feb. 1. After that date, Citizens will only make hardship exceptions to those policyholders who continue to be affected by loss of employment, diminished wages or business income, or other monetary loss realized during the state of emergency and directly impacting the ability of the policyholder to make payments.

The company said this is a standard similar to that used in Gov. Ron DeSantis’ executive order that narrows criteria in prior orders for relief from foreclosures and evictions.

Citizens will continue to offer temporary payment arrangements to impacted policyholders to select by Jan. 31, 2021. Quarterly payment plans will continue to be available to policyholders as of Feb. 1. After Jan. 31, new payment arrangements would be offered only to policyholders who continue to experience a loss of employment, diminished wages or business income, or other monetary loss.

Citizens has begun mailing invoices for each policy term to list-bill (mortgagee-billed) and direct-billed policyholders with a past due premium of $5 or more. The total past-due premium is due on Jan. 31, 2021. Citizens said it would email affected agents a list of their past-due policies that are direct-billed and list-billed before Jan. 31, 2021, with more information.

Citizens said that as of Nov. 30, 2020, payment exceptions had been made on 30,799 policies (6.04% of policies) for a total of more than $24 million. The insurer also made 25,857 underwriting exceptions for 10,678 new business policies and 15,179 existing policies.

Citizens had originally planned to end its moratorium last summer but reversed its decision after Florida CFO Jimmy Patronis urged the insurer not to cancel customer policies during hurricane season and the ongoing COVID-19 pandemic.

“Hurricane season is just beginning to heat up and we are in the middle of an unprecedented health and economic crisis. This is not the time to cancel Citizens’ home insurance policies,” Patronis said on July 24.

Citizens’ program for alternate documents and deferrals, as outlined in the April 3 Update on Response to the Coronavirus Health Risk, also will end on February 1.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

For the first time in more than a decade, personal auto insurance rates will decline in the U.S., according to ValuePenguin.com, which anticipates a 1.7% drop across the U.S.

New York and Indiana are the only states expected to see increases, which should be marginal, according to the site.

The declines are attributed to fewer motorists on the road and a reduction in claims during 2020 because of the pandemic. This has resulted in the average cost of auto insurance in 2021 to sit at $1,636, the personal finance site reported.

The lowest rates are in Maine, North Carolina and Indiana, according to ValuePenguin, while Arkansas, Ohio and Michigan saw the biggest year-over-year decreases.

Rates are expected to go back up in 2022 as more Americans return to normal routines. Further, increasing incidents of distracted driving and more expensive claims from technology-laden vehicles will drive up rates.

Although auto insurance rates have come down, policies still remain 106% more expensive when compared to a decade ago.

Insurance has major influence on the buying process

Research from DealerPolicy found car insurance can play a major role in customer satisfaction, spending power and dealership profitability. In fact, 71% of consumers said they would like insurance information at the time of purchase, and more than 60% would use those savings on a nicer car or F&I products such as prepaid maintenance, gap insurance and anti-theft equipment.

However, less than half of car shoppers reported dealers helping them consider insurance options during the buying process, despite 93% of dealers saying they do so, according to DealerPolicy.

The survey also found that 71% of consumers simply add new cars to their existing policies rather than shopping around.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

In recent years, there have been a number of unprecedented catastrophic losses that have negatively affected the capital held in reserve by insurers and reinsurers, creating a hard market for many lines of business. (Photo: gopixa/Shutterstock)

According to Willis Towers Watson’s 2021 Insurance Marketplace Realities Report, hard market conditions are expected to continue into 2021, with rate increases in almost every line.

The most affected lines will be property, umbrella, directors and officers (D&O), and fiduciary, followed closely by cyber insurance. Non-challenged properties are predicted to see increases of 15% to 25% in 2021, while umbrella increases will stagger from 30% for low-moderate hazard to 150% for high hazard excess. All categories of D&O are expected to see double-digit increases in 2021, with some as high as 70%.

Cyber insurance rates are expected to increase by 10% to 30%, while general liability rates are expected to increase by 7.5% to 15%.

Workers’ compensation rate decreases are flattening, according to Willis, with a slight increase in response to high severity/excess losses. Unsurprisingly, workers’ compensation remains the casualty line with the most COVID-19 claim activity.

Some moderation in property rates is anticipated by mid-2021, following two cycles of rate increases by that point, per the report.

A bright spot on the horizon may be found in the following statement by Joe Peiser, global head of broking at Willis Towers Watson: “However, our experience in this hard market is that there is a wide range of results; renewal results are not huddled around the mean. This means underwriters are underwriting, and there is the opportunity to differentiate your risk.”

What makes a hard market?

A hard market may also be referred to as market tightening. This is because insurance availability, usually of a particular line, becomes more difficult to obtain and often may be more expensive. This typically happens in the commercial property and casualty markets as a result of catastrophic losses, large jury verdicts, or other factors affecting the profitability of insurers and reinsurers.

In simple terms, the insurance industry takes in premiums to pay losses. A certain portion of their premiums typically go to reinsurers to offset catastrophic losses or to free up capital, and another portion gets set aside in reserve funds. Insurers invest the premiums they take in to make money off the investments. The amount set aside in reserve is determined by actuarial calculations that consider previous loss history and earnings, and actuaries use this to make predictions about losses and the rates necessary for the company to maintain a profit.

The actuarial predictions are not just for the current year but usually for five or maybe ten years. If the insurer doesn’t set aside enough reserve funds, they get downgraded as to their financial stability by rating agencies such as A.M. Best and Standard & Poors. Therefore, insurers must take in enough premium to cover the losses that happen in the current year and have enough in reserve to cover unexpected catastrophic losses that were not accounted for in the actuarial predictions.

When policyholders start seeing their rates increase or with higher deductibles required in a hard market, some policyholders may decide to self-insure their risks to keep premiums lower. By self-insurance, they may decide not to purchase insurance for some risks and simply go bare — meaning that the entity will pay for its own losses; or they may self-insure all or part of their deductible.

In a hard market, policyholders look for new ways to insure their risk. Groups of policyholders with similar exposures may create an insurance pool, where each member contributes to the premiums and losses.

Another way entities insure their risk is through captive arrangements. In a hard market, you are apt to see a lot more captives being formed. The continuing hard market and captive growth is the subject of this discussion.

The role of captives

A “captive insurer” is generally defined as an insurance company wholly-owned and controlled by its insureds. Its primary purpose is to insure its owners’ risks, and its insureds benefit from the captive insurer’s underwriting profits.

A recent survey by Marsh noted that the firm formed a record number of new captives in the first seven months of 2020, with 76 new captives, a 200% increase compared to the same period last year.

With premium increases and commercial insurers cutting back on their limits, many organizations are expanding their captives. Those without captives are looking to get captive feasibility studies done, as reported by Jim Swanke, head of captive solutions, North America for Willis in Minneapolis.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Many drivers consider that car insurance is too expensive or they deny its importance. Disregarding a service that can potentially save drivers thousands of dollars is a huge mistake. If the price is the problem, check the following tips for lowering the costs.

  • Check all available discounts. Insurance companies provide a wide range of discounts. It is wise to check the discounts offered by each company before signing a contract. When getting online quotes, the user can easily check for how many discounts he is eligible for and how much he will save. The most common discounts include low mileage, safety devices, safe driver, homeownership, and paying-in-full.
  • Paying in advance will help drivers save around 10%. Drivers are asked how often do they want to make payments. Paying for the entire policy in advance will help drivers save a lot of money. The driver can save around 5%-10% just by paying the full value. Some companies are more generous and offer a 15%-20% discount. In this case, the value of the discount will be higher than 1 monthly premium.
  • Ask for higher deductibles. The policyholder is able to set the deductibles. By selecting a higher deductible level, he agrees to pay more when he files a claim. Deductibles range from $250 up to $1000 or more. In many cases, the recommended value for both comprehensive and collision coverage is $500. When getting online quotes, the client is able to set the deductibles to some predetermined values. After each change, the prices are updated and the user can view how deductibles influence the total cost.
  • Bundle policies under the same company. Placing multiple vehicles or multiple belongings can be really beneficial. Besides having access to discounts, the policyholder will have to deal with less paperwork. Multi-insurance discounts vary by provider, with some companies offering as much as 20% discount for combining home and auto insurance.
  • Compare-autoinsurance.org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

The Federal Emergency Management Agency (FEMA) has once again procured private sector reinsurance from more than 30 carriers for the National Flood Insurance Program (NFIP) to protect the government program from large losses.

Under the 2021 reinsurance program, FEMA transferred an additional $1.153 billion of the NFIP’s financial risk to the private reinsurance market. This annual reinsurance agreement is effective throughout 2021.

The 2021 reinsurance placement covers portions of NFIP losses above $4 billion arising from a single flooding event. FEMA said it paid a total premium of $195.8 million for the coverage.

The agreement is structured to cover:

  • 9.43% of losses between $4 billion and $6 billion.
  • 28.084% of losses between $6 billion and $8 billion.
  • 20.168% of losses between $8 billion and $10 billion.

“We value the role of private insurance companies and investors in assuming a portion of the NFIP’s flood-risk exposure from catastrophic flood events, which improves long-term financial outcomes for FEMA, the U.S. Treasury and federal taxpayers,” said David Maurstad, FEMA’s senior executive of the NFIP..

Reinsurers Participating in 2021 NFIP Program

  • Allied World Insurance Company
  • Convex Insurance UK
  • Everest Reinsurance Company
  • Fidelis Underwriting Limited
  • Hannover Ruck SE
  • Liberty Mutual Insurance Company
  • Lloyd’s Syndicate 2001 Amlin
  • Lloyd’s Syndicate 1274 Antares
  • Lloyd’s Syndicate 1969 Apollo
  • Lloyd’s Syndicate 1910 Ariel
  • Lloyd’s Syndicate 1414 Ascot
  • Lloyd’s Syndicate 2987 Brit
  • Lloyd’s Syndicate 1084 Chaucer
  • Lloyd’s Syndicate 0435 Faraday
  • Lloyd’s Syndicate 0033 Hiscox
  • Lloyd’s Syndicate 4472
  • Liberty Specialty Markets
  • Lloyd’s Syndicate 2791 Managing Agency Partners
  • Lloyd’s Syndicate 1458 Renaissance Re
  • Lloyd’s Syndicate 4444 Canopius
  • Lloyd’s Syndicate 2003 XL Catlin
  • Lloyd’s Syndicate 2010 MMX Lancashire
  • Lloyd’s Syndicate 2623 Beazley
  • Lloyd’s Syndicate 623 Beazley
  • Lloyd’s Syndicate 4000 Hamilton
  • Munich Reinsurance America Inc.
  • Navigators U.S.
  • Odyssey Reinsurance Company
  • QBE Reinsurance Corporation
  • RenaissanceRe Europe AG
  • SCOR Reinsurance Company
  • Swiss Reinsurance America Corporation
  • The Cincinnati Insurance Company

He said the NFIP reinsurance program helps the NFIP better prepare financially for potential losses from significant flooding events similar in size to hurricanes Harvey (2017), Sandy (2012) and Katrina (2005), bolsters its claims paying capacity and reduces the reliance on the need to borrow from the U.S, Treasury in the event of large losses.

The NFIP’s Treasury debt is currently about $20 billion

Combined with the three capital markets reinsurance placements in 2018-20, FEMA has transferred $2.35 billion of the NFIP’s flood risk to the private sector.

FEMA’s 2020 traditional reinsurance placement was worth $1.33 billion in coverage and in 2019 it was for $1.32 billion.

If a named storm flood event is large enough to trigger all reinsurance agreements, FEMA will receive qualifying payments. For named storms resulting in NFIP claims exceeding $10 billion, FEMA will receive the full $2.35 billion of reinsurance coverage from the private markets.

FEMA contracted with reinsurance brokers Guy Carpenter, a subsidiary of Marsh & McLennan, and Aon Reinsurance Solutions, to assist in securing the reinsurance placement.

FEMA received authority to secure reinsurance through the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014. FEMA’s 2021 reinsurance placement builds upon its previous reinsurance placements as further development toward a stronger financial framework.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Sarasota homeowner Richard Lipov got an unpleasant surprise when he received his property insurance bill last month.

His insurer, Edison Insurance Co., had increased the premium from $1,000 to $1,545 for his home, which was built in 2003 and is valued at $360,000. Lipov said neighbors in his Villa Rosa subdivision and other friends in Sarasota were reporting similar increases. He reached out to his agent but had not heard back.

Edison was the first of several insurers in the state to apply for a rate increase. The Florida Office of Insurance Regulation approved a 21.9% average increase in December. The new rates go into effect Feb. 15 for new policies and March 24 for renewals, according to the Insurance Journal

Property owners throughout Florida are seeing their insurance rates soar, as companies had rate increases approved ranging from from 12% to 31%. Insurers point to high rates for reinsurance, which is basically insurance to back up insurers, and claims for water damage from leaks that are not hurricane-related.

Another factor cited was that claims still were rolling in from Hurricane Irma in 2017 and Michael in 2018. Policy holders have a three-year window to submit wind damage claims. Insured losses from Irma totaled $17.44 billion while Category 5 Michael generated $7.9 billion in claims for insured losses, according to FOIR.

Alexis Bakofsky, director of communications for FOIR, said the state’s insurance market is one of the most complex in the world.

“The market is currently facing significant challenges as the frequency of claims increases and those claims become more expensive,” Bakofsky wrote in an email. “These challenges are largely due to increased litigation, exacerbated by higher catastrophe claim losses as a result of multiple hurricanes over the past several years and rising reinsurance costs as a result of a hardening reinsurance market.

Sticker shock

The FOIR calendar has been full of hearings for property insurance increase requests. 

Some of the higher requests for average rate increases include:

  • Centauri, 31.9%, requested, pending; 
  • Southern Fidelity, 31.1% requested, approved;
  • Capitol Preferred, 26.2 requested, approved;
  • Edison, 21.9%, approved.

Insurers noted that the rate increases can vary based on the age of the home. A number of major insurers are scaling back coverage in South Florida or are dropping homes over 10 years old. Higher premiums and dropped coverage are forcing homeowners to seek policies from Citizens, the state-run company that was created to become an insurer of last resort.

Homeowners who have a mortgage are required to have property insurance. Some who own their homes outright choose to self-insure to avoid high premiums but would shoulder the full cost of repairs and rebuilding should their homes be damaged or destroyed by a hurricane or tropical storm.

Citizens balloons

Citizens Property Insurance has been trying to cull its rolls for years. Citizens peaked at 1.5 million policies in 2012 and had been trying to move policies back to private insurers.

But the stressed private market is forcing homeowners back to the state-run insurer.

A healthy number of policies for Citizens is considered to be 420,000 policies, which is about what it had in 2019. Citizens grew to more than 540,000 policies in 2020, accounting for about 5% of the market. 

“The growth is becoming extraordinary,” Citizens President and CEO Barry Gilway said at a Dec. 16 board meeting covered by News Service of Florida. “And you can gloss over these numbers, but the impact they have on the overall operations is significant.”

Carlos Beruff, the Manatee County homebuilder who is chairman of the Citizens Board of Governors, predicts that the insurer could grow to nearly 700,000 policies in 2021. He also called Citizens “the 800-pound gorilla” in Florida’s property insurance market.

Citizens is looking to increase its rates to discourage new growth, but the company’s rate hikes are capped at 10% per year. On Dec. 16, the board was scheduled to approve a request for an average 3.7% rate increase but decided to wait until a Jan. 26 meeting to make a final decision on a rate filing. The FOIR has to approve any rate increase.

“This is exacerbated because nobody’s leaving (Citizens) because there’s no capacity in the overall marketplace,” Gilway said at the board meeting. “We know that a healthy private market reduces Citizens’ size, and in an unhealthy private market we’re going to grow.”

Last year, Citizens received a statewide average increase of 8.2% for renters and for policyholders who own homes and condos.

Citizens is Florida’s second-largest insurer with nearly 472,000 policies and $962 million in premiums, as of June 2020. The state-run insurer trailed only Universal Property & Casualty Insurance, which had 696,207 policies totaling $1.151 billion in premiums, according to FOIR.

Like many property owners, Lipov said he was frustrated both with the amount of the increase and the lack of information he received about Edison’s rate hike request hearing.

“It would be nice if the Florida Office of Insurance Regulation offered some public transparency or outreach on these large increases so consumers would not be blindsided,” Lipov wrote in an email.

Bakofsky said the office is doing what it can to protect consumers.

“OIR thoroughly reviews all filed auto insurance rate filings to ensure they comply with applicable laws and are not excessive, inadequate or unfairly discriminatory,” she wrote. “OIR’s main focus is to foster a stable and competitive insurance market and make sure that insurance is available, reliable and affordable for Florida consumers.”

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Former Secretary of the Florida Department of Corrections Julie Jones has been appointed Deputy Chief Financial Officer within the Office of Chief Financial Officer, according to a statement from the Florida Department of Financial Services.

As Deputy CFO, Jones will be responsible for divisions encompassing sworn law enforcement, including Investigative and Forensic Services, Public Assistance Fraud and Workers’ Compensation, which all work to prosecute insurance fraud. Jones will replace Jay Etheridge who is retiring following his completion of the Deferred Retirement Option Program (DROP).

Jones, who was appointed by CFO Jimmy Patronis, most recently served as secretary of the Florida Department of Corrections from 2015 to 2019. During Jones’ tenure, the Department of Corrections added over 200 more correctional officer positions and worked to increase the agency’s budget to bolster safety and improve recidivism rates, DFS said. Prior to that role, Jones served as executive director of the Florida Department of Highway Safety and Motor Vehicles from 2009 to 2014.

Additionally, from 2002 to 2009, then-Colonel Jones served as director of Law Enforcement of the Florida Fish and Wildlife Conservation Commission.

Patronis said with increasing insurance rates resulting from fraud, he’s directed Jones to coordinate with all of DFS’ divisions to “crack down on fraud, waste and abuse.”

“Through her decades of executive-level leadership, coupled with her experience in law enforcement, we’ll need her out-of-the-box thinking, and her relationships with local prosecutors and law enforcement agencies, to take the fight against the criminal elements that are stealing from hardworking Floridians,” Patronis said.

Patronis also praised the retiring Etheridge for his work with the department since 2012, including:

  • Creating the Division of Investigative and Forensic services to merge all law enforcement into one division
  • Leading the creation and implementation of the Investigative Strategy for the Division of Public Assistance Fraud.
  • Originating and leading the effort to obtain legislative funding for the establishment of the Florida Fire Fighter Grant Program, providing needed funding to support Florida’s volunteer fire departments.
  • Created Florida Disaster Assistance Strike Teams, combatting fraud against Floridians and insurance companies after a natural disaster
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Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

More Americans turned their attention to life insurance, wills and trusts last year as the coronavirus pandemic made the reality of death unavoidable.

The number of life insurance applications from people under age 44 increased by more than 7 percent in 2020, according to the MIB Group, a data sharing service for insurance companies, which tracks life insurance applications.

Life insurance applications for the age group had been mostly down over the last several years, so “for that young age group to be up that much is very impressive,” said Andrea Caruso, MIB’s chief operating officer. “That’s a pretty significant climb.”

While several factors contributed to the spike, experts pointed to the pandemic and the insurance awareness it brought on.

“People are looking at mortality like they’ve never looked at it before, especially that younger age group,” said Faisa Stafford, president of the nonprofit Life Happens, which promotes awareness about life insurance. “People were probably feeling invincible, but Covid made people realize that we’re all mortal.”

More than 22 million jobs disappeared during the early stages of the pandemic, and only 12 million were recovered, forcing many workers to leave behind their employer-paid life insurance through their employee health benefits packages.

About 54 percent of Americans had life insurance earlier this year, most of them through their employers, experts said.

“If you leave your job, that life insurance goes away. People who were losing their jobs or being furloughed were losing their insurance coverage and looking for ways to replace it,” Stafford said.

The exact number of applicants filing for life insurance isn’t known, as some have applied more than once and others have been denied.

Experts in the estate planning industry estimate that the number of people drafting wills and trusts is also on the rise because of the pandemic, which has “raised awareness and put the fear of God in people,” said Evelyn Zohlen, national chair of the Financial Planning Association.

Association.

A recent LegalZoom.com survey found that 32 percent of people ages 18 to 34 drafted wills because of Covid-19, according to CNBC. Twenty-one percent of that group drew up the paperwork because they knew someone who had contracted the virus.

William Kirchick, the incoming president of the National Association of Estate Planners & Councils, said the pandemic and the presidential election were factors.

Like the terrorist attacks of Sept. 11, 2001, the pandemic “was an event that made people face their mortality,” Kirchick said. “It’s making people think about getting their affairs in order.”

Experts acknowledged that preparing for death can be cumbersome. Kirchick said estate planning, which includes wills and trusts, can involve estate planning lawyers, accountants, trust officers who manage accounts for clients, insurance and financial advisers and philanthropic officers in charge of leaving money to charities. While the work can be done by a lawyer with estate planning experience, it’s not necessary in many states.

As part of the life insurance process, applicants may be required to get copies of their medical records or have their vital signs checked.

Life insurance applicants typically fall into three categories: those 44 years old and younger, those ages 45 to 59 and those over 60. The percentage of applications in the youngest group skyrocketed by 18.9 percent in July and by 12.4 percent in August as the pandemic worsened, according to MIB.

Overall, insurance applications for all three groups are up by 4 percent this year.

“I would assume that the coronavirus had made people much more aware of their mortality. It made them really think about what could happen. They realized that they need to protect themselves in one way or another,” Caruso said.

More education contributed to the youngest age demographic’s buying life insurance, Stafford said, adding that there are many misconceptions and preconceptions about policies, such as high costs.

The average 30-year-old with no long-term health issues applying for a $250,000 policy spanning 20 years would pay about $160 a year, experts said.

“It’s less than a Netflix subscription,” Stafford said.

Carla Whittingham, a Primerica insurance agent in Queens, New York, agreed.

“A big part of it is leaving generational wealth for a company or loved ones. It’s not just to pay for funeral costs,” she said.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

To say it’s been an unpredictable and interesting year for homeowners would be a massive understatement. Western states had some of the worst wildfires in modern history and the 2020 Atlantic hurricane season earned the distinction as the busiest hurricane season on record.

And then, of course, there’s the pandemic.

Despite all that, low mortgage rates and high home prices shattered records and the 2020 housing market outperformed the 2019 market in both price and volume.

It was also a year when many homeowners decided to spruce up their place. About 62% of homeowners said they planned a maintenance or renovation project, according to a 2020 Home Renovation Consumer Survey by Farmers Insurance.

While we won’t be so bold as to dust off our crystal ball and predict any trends in home buying and renovation projects for 2021, what we can do is offer you practical advice to keep your homeowners insurance up to snuff so you’re in good shape for the unexpected.

Keep Track of Your Stuff

One of the most important homeowners insurance coverage types is your personal property coverage. That coverage pays to repair or replace your belongings—your clothes, jewelry, furniture, pots and pans, musical instruments, electronics, books, art, and even the decorations and knick-knacks you keep on your bookshelves.

And let’s face it. You probably have a lot of stuff. So much stuff that you forget some of what you own. If you want to keep track of it, you really need a home inventory. A good home inventory can both speed up an insurance claim and help maximize your claim payment. It’s one of the smartest and easiest things you can do to prepare for unexpected home insurance claims.

Don’t Assume You’re Covered for Natural Disasters

A standard homeowners insurance policy excludes coverage for certain disasters, like floods and earthquakes. If you live in a disaster-prone area, you might need to bolster your home insurance with endorsements or additional policies to make sure you’re fully covered.

For example, a good hurricane insurance policy is often a mix of homeowners and flood insurance. In some parts of the country, such as coastal Texas, you may also need a separate windstorm insurance policy.

Before you buy another policy or add an endorsement to your home insurance, it’s a good idea to speak with your insurance agent. That’s because policies for natural disasters can have complex limits (such as different limits for categories of property), exclusions and high deductibles.

Buy Coverage That Absorbs a Spike in Home Repair Costs

Your dwelling coverage pays to repair or rebuild your home if it’s damaged by a problem covered by the policy, like a house fire.

Your dwelling coverage amount should be based on what it would cost to rebuild your home based on the local construction and labor costs. But certain situations, like a tornado that flattens entire neighborhoods, can cause a spike in rebuilding costs. Suddenly your dwelling coverage amount could be insufficient.

Fortunately, some home insurance companies offer what’s called “guaranteed replacement cost” or “extended replacement cost” to help absorb a spike in construction costs when they go above your dwelling coverage amount.

It’s a good idea to add this to your policy if your insurer offers it, especially if you live in a disaster-prone area.

Companies that offer extended or guaranteed replacement cost coverage include AIG, Chubb, Cincinnati, Erie, Farmers, Hanover, Lemonade, Nationwide and QBE.

Bump Up Your Liability Coverage
With so much focus on your house and personal belongings, it’s easy to overlook liability coverage within a home insurance policy.

Liability insurance pays for a legal defense, judgments and settlements if someone sues you over injuries or property damage and you’re legally responsible. For example, if someone takes a bad fall at your house, a lawsuit would fall under your homeowners liability coverage.

A good rule of thumb is to buy enough liability coverage to cover your assets, or what you could be taken from you in a lawsuit.

Another option to ensure you have adequate liability coverage is to purchase an umbrella insurance policy.

Understand Your Home Insurance Deductibles
If you haven’t reviewed your policy and some of the finer details, now is a good time to get to know your deductibles. If you wait until you file a claim, you might learn the hard way what your policy actually covers.

The deductible is the amount of money deducted from an insurance claim check. For example, if you have a $1,000 deductible and $10,000 in damage, you’ll get a $9,000 insurance check.

Special deductibles might be hidden in your policy’s pages. For example, hurricane deductibles can range from 1% to 5% of the insured value of your home, meaning if your house is insured for $200,000 and you have a 5% deductible, your insurance check would be reduced by $10,000.

Did You Know There are Sub-Limits for Some Items?

Another thing to understand are sub-limits, also known as “special limits.”

Sub-limits typically apply to high-value items. For example, your policy might only cover $1,500 for stolen jewelry. So if your $3,000 diamond bracelet gets stolen, your policy will only pay $1,500.

If you have valuable items, you can pay more to “schedule” them so they’re insured for their full value.

Home Insurance Makeovers Should Be Part of Your Renovation Plan

If you have a home project in mind, make sure you understand the home insurance implications before you start swinging the sledgehammer. That’s because certain home renovation projects (like an addition) can increase the amount of home insurance you’ll need.

Shore Up Your Water Damage Coverage

Your home insurance covers water damage and leaks, but not all types of water damage.

A standard home insurance policy excludes water damage caused by earth movement, floods, hurricanes, tsunamis, sump pump failure, leaks from a swimming pool and seepage through a foundation.

You can sometimes add coverage to account for these issues. For example, you can typically add water backup and sump pump failure coverage as an endorsement to a home insurance policy. And you can buy flood insurance through the National Flood Insurance Program (a federal program) and private insurers such as Wright Flood.