Tuesday, June 26, 2012

Wildfire And Your Home Insurance, Important Things To Know

With a large number of wildfires burning throughout the state and a number of my clients under a mandatory evacuation of their homes, this seems like a good time to share a few pieces of information about your home insurance in regards to wildfires. As I'm writing this, the entire north-east side of Colorado Springs is covered in smoke from the Waldo Canyon fire. If you find that the fire is moving in your direction or your ordered to evacuate your home, here are some things you should know (and do):
  1. Home Inventory: There's no time like the present to update your home inventory. Although many insurance companies do not REQUIRE a home inventory, it is very wise to document what personal property you have in your home. You can run a vide camera through each room, take pictures or fill out a home inventory record (print one here: https://docs.google.com/open?id=0B3jkfR37iTC3ZDZhMjA0YzYtNzA1OS00NWIwLWExZmQtOTdiZGU5NTNmZmZi ). Whichever method you choose, keep it somewhere off primses. Preferably, send it to your insurance agent and have them store it at their office.
  2. Mandatory Evacuations: Most insurance companies WILL cover the expenses incurred from a mandatory evacuation, such as hotel and food costs. However, you must reach your deductible first. If you have a $1000 deductible and you incur $800 worth of addidtional living expenses, you would most likely not be reimbursed by your insurance company because the amount is below your deductible (your deductible is the amount of the claim you are required to pay). Keep all of your receipts for your extra living expenses in case you need to file a claim. If you get home and find you have other damages, such as smoke damage, it would be added into the same claim and be covered under the same deductible.
  3. It Is Probably Too Late To Change Your Coverage: Once a neighborhood has a wildfire moving in it's direction, it is most likely too late to make any changes to your home insurance. Raising coverage, lowering deductibles and adding special items such as art or jewelry is usually prohibitted by the insurance company after a wildfire has been declared in the area. Presently in Colorado Springs, most insurance companies have issued a non-bind order for any property west of I-25, meaning there are no increases in coverage allowed and no new home insurance policies can be written until the non-bind status is removed. My advice, review your coverage with your agent BEFORE your area is affected! An insurance checkup should be done every 12-24 months to make sure your coverage is set up properly.
Hopefully the Waldo Canyon fire here in Colorado Springs and the rest of the wildfires burning across the state of Colorado will be brought under control soon with minimal loss to property and no loss of life. Hopefully, you will never find yourself in a mandatory evacutaion situation. Just keep in mind that if you are facing an evacuation or damage to your property, you do have help available from your home insurance company.

Good luck to all of the fire fighters out there and thank you for your hard work and efforts to keep us safe.

Sunday, June 24, 2012

Be Prepared For Emergency Evacuations

I've just spent about 2 hours watching the most recent forest fire to hit Colorado spread at a very rapid pace. Forest fires are always a scary thing, but this one  - right at the edge of Colorado Springs and threatening many, many homes - really drives home how important it is to be fire safe and evacuation ready if you live anywhere near a wildfire or high-tree area.

The pictures I'm using for this post were taken by my wife and I, from my driveway and areas right around my home. Fortunately no homes have burned so far, but with mandatory evacuations taking place across the front range, our city is getting first-hand experience of just how dangerous and fast-moving a wildfire can be.
The first thing to do is make sure you're signed up for emergency notifications with your local 911.  Registering your cell phone for emergency notifications will help insure you get the message if you need to evacuate your home and head towards a safer area. In El Paso and Teller counties, you can register your phone at http://www.elpasoteller911.org/.
If you do receive the call (or just feel it's the prudent thing to do) to evacuate your home, here are some important tips and things to remember to keep your family safe:
  1. Know how you are going to get out: The first step is to make sure everyone in your family knows the escape route from your home as well as your neighborhood. If you have a home fire, everyone should know the quickest way to get out of your home, and if your neighborhood has a disaster, everyone should know the best way to leave the area. Take the time to practice, as a family, your escape route and have a backup route in case your first way out is blocked.
  2. Know what you are going to take: Have an evacuation preparedness bag ready for everyone in your family. Keep a few days worth of clothes and medications inside so you don't forget them if you are in a hurry. Have a gallon of water for each person as well as a bit of non-perishable food ready in case it takes a longer amount of time to get to a safe area. Know where your important financial and family documents are and be ready to gather them up if needed. If time allows and you are wondering which items from your home you should take, start with things that are irreplaceable. Your insurance policy will help you replace your TV if it is destroyed, but your old photo albums, baby books and mementos are a completely different story.
  3. Know what you will do with your pets: Make sure your pets are ready for travel as well. Have a few days worth of pet food ready to go and have a plan for pet shelter in place in case your pet or animal is unable to stay with you.
  4. Know where you are going to meet: If your family is not together when an evacuation happens, everyone should know where they will be meeting, and it should be somewhere that is a safe distance from your home. If local phone service were interrupted or cell phones were down, you may not be able to reach everyone in your family at the time of an evacuation.
  5. Know when it's safe to go back: Stay informed with local authorities to know what is happening in your area. Phones, TV and power may all go out in an emergency, so keep a hand-held radio with your emergency kit. If your radio is battery powered, keep an extra set of batteries on hand as well.
Natural - or man made - disasters can happen at any time. Being alert and prepared to deal with an emergency will help keep your family safe and protected. Have the conversation about emergencies with everyone in your family as soon as possible (before an emergency happens) and practice dealing with an emergency 1-2 times per year. Evacuations can be scary for kids but if you practice and prepare for what to do they'll handle things much better if a real emergency were to occur.

For a complete list of items to keep in your evacuation bag and other tips on emergency preparedness, visit the Red Cross emergency preparation page at http://www.redcross.org/www-files/Documents/pdf/Preparedness/checklists/Be_Red_Cross_Ready.pdf

Tuesday, June 19, 2012

Dealing With The Insurance Company When Your Car Is A Total Loss

My daughter recently crashed her 2002 GMC Envoy, damaging the left door, front left quarter panel and front bumper. I thought the damage would be repairable (which it is), but the insurance company decided to total the car instead of repairing it. As you can see from the picture, the car does not look totaled. The estimate for the repairs came in at about about $6000.  The truck is worth about $9,500, so why would the insurance company choose to total it instead of repairing the damage? I'll answer that question and give you a few tips if you find yourself working with a claims department on a vehicle they consider a total loss.

Why would they total the car if it's cheaper to repair it? Insurance companies always choose the route that will cost the company the least amount of money. If a car needs repairs reaching 65% or more of the vehicles total value, it is often times less expensive to actually total the car instead of repairing it. The reason for this is the salvage value of the car. Once an insurance company pays you for the loss of your car, they turn around and sell it for it's salvage value, recouping a portion of the amount they paid you. When you subtract the salvage value from the amount paid out, it is often times less expensive than actually repairing the car. For example, if the salvage value on my daughter's Envoy is $3,500, the insurance company's cost is back down to $6,000. Then add in other factors like storage costs of a car before and after repair, rental car costs during repair and the possibility of finding more damage once a car is torn apart and you can see how they can save money by actually totalling a car instead of repairing it.

Tips for dealing with a totaled car: If you do find yourself in the unfortunate situation of a totaled car, there are some things to remember that will help you get the most accurate payout from your insurance company. Chances are you won't like the first offer made to you for your car, so it's your job to help the insurance company give you the right amount. Here's how:
  1. You're in this together: Remember that the claims adjuster you're dealing with is human, and wants to be treated as such. Lots of people forget that the claims adjuster is on your side and they really do want to be fair with you. It's not you against the insurance company and the claims adjuster is not looking to cheat you. Kindness and common courtesy can go a long way! Your claims rep is probably dealing with a hundred or so claims in addition to yours. They've got a lot of work to do and they probably have a lot of people yelling at them. It's a stressful job and they really appreciate dealing with clients who show a little patience and understanding.
  2. Do your homework: These days, insurance companies don't just look at the book value of your vehicle. In fact, the book value is one of the lesser considerations when determining what your car is worth. Claims adjusters will be shopping online for a car just like yours to see what you could buy it for today. Make yourself a log of every car for sale within 75 miles that matches your vehicle. Check on Ebay, Craig's List, Autotrader, Kelly Blue Book and maybe even the local classifieds. Keep track of which site each car came from, the price and mileage of the car, the model (in case it is different than your's) and any differences that would make your car worth more or less. This may sound like a lot of work, but it should take you no more than an hour, and that hour will probably put some extra money in your pocket! When I was researching 2002 GMC Envoy's to replace my daughter's, I found 11 within a 75 mile radius.
    1. Make sure the adjuster is using the right information: Claims reps have a lot of work to do and they may forget to add in features that your vehicle has, or they may pick the wrong model all together. They're not doing it on purpose, but they are working fast and they are not as familiar with your car as you are. Make sure you tell them about any thing they may have overlooked, like a sun roof, 6 disc changer, power seats, etc. My claim adjuster picked the wrong model of Envoy and the original estimate for my payoff was $2000 less than the final amount.
  3. Don't forget the extras: If you've recently replaced the tires, gotten a tune up or an oil change or done other service work to the car, make sure your claims rep knows about and takes it into consideration. The same is true of any extras you've added to the car like after market rims or stereo systems (some insurance companies require that you add in the extras to your policy in order for the to be covered. Check with your local agent for the specifics on your policy).
  4. It's okay to negotiate: The first offer they bring you may not make sense to you, but there's no reason you have to accept it right away. The claims adjuster will break down the offer and give you a detailed explanation of how they came up with the amount your vehicle is worth. If it doesn't sound right (or fair), let them know you'd like to take a day and research things a little bit. Let them know that you appreciate their work but things sound a little low. You're not required to accept the offer they make you, but keep in mind, if you cannot reach an agreement you will most likely have to go to mediation.
  5. You can still keep the car: If you decide that the damage causing your car to be a total loss is just cosmetic and you'd like to keep the car (or even if it's not cosmetic but you'd like to keep the car and repair the damage yourself) the insurance company will allow it. There have been plenty of hail storms here in Colorado lately that leave a car pitted, but otherwise in perfect driving condition. If you don't mind the hail dings, just let the insurance company know you'd like to keep the car. They'll adjust their offer to you by subtracting out the salvage value (the money they would get for selling the car to a salvage yard) and pay you the rest. Keep in mind, the car will not be allowed to have comprehensive and collision coverage because it has already been deemed a total loss, but you can still keep it insured and drive it for as long as you'd like!
It's never fun dealing with an insurance claim, but it doesn't have to be a bad experience either. Remember the positives, hopefully no one was seriously hurt in the accident (the most important thing) and you've got an insurance company working with you to help get you back to where you were before the accident. Yes, there will be some out of pocket expenses, like your deductible, but it's a whole lot better than if you had no insurance at all. Keep a good attitude and you'll be back on the road before you know it.

Robert Edgin