Flood Zone

6-fema_seal

There sure seems to be some good news for folks in Foster City about the flood zone changes that sure seemed to be coming from FEMA. It seems that Jackie Speier has sent a letter to FEMA asking that they officially delay the implementation of the new map to March or April of 2011 to give San Mateo time to complete the construction of levee updates needed.

Just in case you missed it, City of San Mateo property owners approved an Assessment district whereby they will be paying the construction costs of the levee improvements necessary to gain compliance. Even if there is some Federal stimulus money coming, they have a structure in place to pay for the improvements anyway through that new district.

Assuming Jackie’s request is granted that should prevent both San Mateo and Foster City residents from having to buy flood insurance. That’s real good news…especially if you live in a condo or townhouse in Foster City!

Insurance Pitfalls (Part 2)

 

life_insurance

 

Continued from yesterday…

 

Two weeks to the day of cancelling his policy, he felt a lump in his neck…….cancer.  He began undergoing extensive radiation and chemotherapy, with a very dismal prognosis.  He also became ineligible for any type of life insurance.  He and his wife were looking at a future well beyond their worst nightmares.  Their children will lose their father; this woman will lose her husband.  As devastating as this is in and of itself, there is no money to handle this type of situation.  I know many people who may not believe in life insurance, will say the wife can just sell their house and get a job.  Really?  Just sell your house?  Really, just get a job?  What happens in the meantime?  What if the house doesn’t sell and during this time you have to use equity?  What if you cannot get an equity line due to the decrease in your home value?  What if you have an equity line, but your lender has frozen it due to the market?  Really, she can just get a job?  She hasn’t worked outside of the home in 5 + years!  Where can she just get a job that will pay enough to pay the mortgage on the home that won’t sell? 

 

Let me tell you what actually happened to this family.  Sadly, the husband did indeed die.  The family did have some savings, but not enough to go past a couple of months, about the same time some of the medical bills started to roll in.  The wife did start to look for a job, but the reality is, with a full time job comes the issue of child care expenses.  The type of jobs she was qualified for, would not earn her enough to pay for childcare.  She was able to sell the house, along with so many wonderful memories, and of course at a loss.  She had to move back to her parent’s home, in another state, so they could help her get back on her feet.  You can imagine, this just added to an already traumatic situation for her little ones.  This was all over $45 a month…..

 

This woman has now become an advocate for Life insurance.  She wrote an incredibly moving and poignant letter to their agent thanking him for trying so hard to convince her husband not to cancel his policy.  I can tell you, this agent (my good friend) feels maybe he could have tried one more time to change his client’s mind; he also, will never get over this.  I forgot to mention, the wife did not know her husband had cancelled the policy until she called her agent to advise him of her husband’s death.  So what am I saying to you?

 

Yes, we may all have to cut back in some area of our lives to compensate for a salary reduction, or a lay-off, or unforeseen car repairs that have to take priority right now, but don’t make a decision regarding your life, a decision that will impact your family forever.  Remember, you will be dead, so you may not see the aftermath and destruction of your decision, but those that live, will deal with it forever.  Talk to your agent, there are always options.  This man could have reduced his coverage temporarily.  He could have increased the deductibles on his cars and home temporarily to off-set that $45.00.  Your families needs do not change when you are no longer in the equation, they just become greater because you are no longer there………

 

Insurance Pitfalls

insurance

 

“Making smart decisions that will not affect your family and their well-being in difficult times”

 

If you read the newspaper or turn on the television at all these days, it is impossible to escape the reports about the difficulties many people are facing today.  As an insurance professional, I have had countless customers coming into my office to cancel their homeowner policies due to foreclosures, short sales, etc.  This is not only gut wrenching for our customers delivering their sad news, but very difficult for myself and my staff.  These are policies we wrote and excitement we shared, when our customers purchased their 1st home. 

 

I know many people are having difficulty making ends meet each month, heck, each day, and I further realize people are looking for ways to cut back and save some money.  We are all feeling it in some area.  There is definitely a trickle down effect that transcends all industries and work places.  You may think of cancelling a certain service that seems like more of a “luxury” right now to save a few dollars, but what does it do to that small business owner who now has lost a customer?  He now may have to let a worker go, who now becomes unemployed and so on and so forth…..it is an inevitable situation, but there are some areas where we just should not take risks when trying to save money.

 

I have been taking at least a few calls a day with people wanting to “temporarily” cancel their life insurance.  I want to give you some perspective into a different type of “trickle down” theory that is not only very real, but one I have seen first hand just a month ago.

 

An agent friend of mine in another state had a customer who decided he just could not afford to pay his $45 premium for his life insurance right now.  The agent tried to talk him out of cancelling the policy and perhaps finding other areas to cut back, i.e. making coffee at home or brown bagging it to lunch, etc.  The customer was insistent, assuring the agent as soon as things were better financially, he would buy another policy. The policy was cancelled.  This was a $750,000 policy, purchased over 5 years ago.  The customer had 2 young children and a stay at home wife who has been out of the work force for 5 plus years.  The intent of the policy at the time of purchase, was to provide his wife enough money to handle their mortgage payments, continue to save some money for their kids education, and of course all other miscellaneous bills while maintaining some semblance of their normal life.  It was also meant to buy his wife some time to find a job (I won’t even open the can of worms about realistically trying to find a job in today’s climate, especially when one has been out of the work arena for a long time).

 

Continued tomorrow….

 

Am I Covered?

 

 

 

umbrella

 

If I live in a Condo or Townhouse, I don’t need any insurance because I have an Association…..

 

 

I am going to make this post relatively brief, which I assure you can be a daunting task for us “Minkey’s!”   If you own a condo or a townhouse (if you rent, see my previous post on renter’s insurance), you should have a separate policy for your unit, i.e. separate from your Association policy.  No, it is not required by the mortgage company, and no, it is generally not required by your Association’s master policy.  It is also not required that we have health insurance, but most of us who can afford it, still have it.  Just like your life is valuable, your investment in your home is just as valuable.

 

To clear up a few things, I will give you a bird’s eye view of what your Association policy typically covers; the overall structure of the building, such as the roof, the exterior, the siding, walkways, breezeways, often referred to as the “common areas.”  It also would cover the interior and exterior structures of any amenities such as work out rooms, rec rooms or pool areas.

 

What doesn’t it cover?  You have no coverage for your personal belongings.  You have no coverage for personal liability.  You have no coverage for the interior feature of your home, or improvements or betterments that were made by you or a previous owner.  You have no coverage for guest’s medical expenses if injured in your home.  You have no coverage for additional living expenses should you have to temporarily relocate due to a catastrophe, such as a fire in your unit. 

 

Generally speaking, an Association policy covers from the studs of the walls out, plus the above mentioned items.  You are responsible for the studs of the walls in, plus the above mentioned items.  I don’t think cost is usually a factor as to why so many customers I consult with don’t have this coverage.  It is usually because it was not something that was required at the loan document signing party as it is during a single family home purchase.  Once in the home, it becomes out of sight out of mind. So,  please make sure you have the protection you need if you are a condo or townhouse owner, as your Association will not be able to help you should a situation arise where you do not carry your own insurance policy!

 

How much is that doggy (or purse) in the window?

purse

How much is this worth? It’s covered right? Well, yes and no, not necessarily, it depends. How are these for answers? I get these questions a lot when I am reviewing coverage with an existing customer, or a potential customer. The truth of the matter is, when you are talking about your personal property, there are a lot of variables involved when it comes to insurance. The typical home, condo or renter’s insurance policy, does indeed have coverage that applies to your personal property, however, it is limited in scope and nature. Most policies have a specified dollar limit when it comes to certain items, such as, jewelry, home computers, tools, and other items depending on the policy. Another important issue, they are not only covered up to the limit specified in your policy, but they are only covered by named perils listed in your policy, think of the biggies, fire, theft, smoke damage.

This conversation comes up a lot when I happen to notice an inconspicuous diamond ring on a client’s finger. I comment on its beauty and then ask “is it insured?” 9 out of 10 times the answers are the same. Yes, it’s covered under my homeowner’s policy. I then ask if they ever provided an appraisal, had their agent inspect it, and they say “no.” Note, if you have not provided details to your agent to “schedule” your special items, i.e. provide details such as color, cut, clarity, etc., most likely it is not covered in the way you think it is. You may have up to $1500, or $2500, but that is it. Plus, it is only covered for the big listed perils above.

There are many other things that can be added to what we in the biz call a “Personal Articles Policy.” You can add antiques, rugs, electronic equipment, sporting equipment, i.e. golf clubs, art work, jewelry of course, and many other things. The beauty of these policies is, 1) the coverage is very broad, even covers earthquake and, 2) since the insurance company has an exact description, there is usually no argument as to the value and quality of the item should you have to open a claim.

I want to talk a little about claims involving your personal property, whether scheduled or not. If you haven’t done so already, I strongly suggest you do an inventory of your home. This can be done with many mediums, but I recommend a video, going room by room, and describing the contents as you go. You can also use a digital camera and photo specialty items and then mount them with a description and approximate value, plus any features you think may be important. All of this should be stored in either a safe deposit box at your bank, or some type of fire retardant safe in your home. This will not only help you in the claims process, but your claim representative will love you. If you have receipts, manuals, etc., store these in there as well.

I can tell you from personal experience, many of us don’t realize how much “stuff” we have until we actually inventory it. Are you are a lover of expensive shoes and handbags, ringing any bells ladies? You should definitely do this. These items can add up quickly. Years ago, my husband was working as a Fire Claim Representative. He came home after working on a fire and told me a lady had told him she had a purse worth over $1500. He said this mind you, with a look of almost disgust, as if to say, why would someone spend this type of money on a purse!. I said, “Hello, purses can cost thousands of dollars.” If he only knew………….

I know it may seem like a daunting and tedious task, but if you end up losing all of your belongings in a fire, believe me, you will thank yourself!

Flood Insurance in Foster City, still a HOT topic……


I’ve been asked to comment on a couple of scenarios that have recently been brought to Jim for discussion. The first is about those fortunate souls who find themselves in the enviable position of not having a home loan.  The question posed was whether or not they will have to purchase flood insurance when the Foster City change goes into effect.  The short answer, no.  Just as you are not required to carry a homeowner’s insurance policy, you will not be required to carry a flood insurance policy.  It is worth noting however, if your home is your largest asset and you may need to access your equity via an equity loan/line or a reverse mortgage, you would be required to carry insurance at that time.  If this were to be after the 2010 deadline (assuming nothing changes in terms of the flood zones), you would not be able to lock in the “preferred rate.”  Just like some who choose not to carry homeowner’s insurance once their loan is satisfied, you would be self-insuring for better or for worse.
The second question posed to Jim was regarding condo unit owners (the following comments also apply to town homes).Typically, in a condo situation there is an HOA (Homeowner’s Association). General rule of thumb is the association has what is called a “master” policy. In most cases, the master policy covers from the studs of the walls out, plus any common areas.  They do not cover the interior of the units or any liability issues that may arise within your unit.  In the event of a flood, if you do not carry a flood policy for the interior of your individual unit, you would not have coverage.  It is very important however, that you check with the company who handles the policy for your HOA to see what the policy covers.  Lenders usually do not require evidence (proof) of insurance for condo owners who are part of an HOA, as the exterior is covered under the master policy for most covered perils such as fire.  It would typically be the responsibility of the HOA to have its own flood policy for the exterior of the building plus any common areas.  If your HOA does not have a flood policy and later becomes required to carry one, you could find yourself in an assessment situation.  Do yourself a favor, check this out, or go to a board meeting and discuss this issue with your board members.

FEMA, Levees…and Flood Insurance

In the post Hurricane Katrina world FEMA, who took such a pounding for it’s response to the New Orleans disaster, is being extra cautious when the subject of levees comes up. That subject is certainly up when it comes to Foster City. On the 18th of this month FEMA released the preliminary drafts of their Flood Insurance Rate Maps and Foster City is being reclassified into a special flood hazard zone…and thus flood insurance will be required for all homes here.

Interestingly, the levee that’s the most problematic from the standpoint of FEMA is in San Mateo and thus there’s some amount of negotiating going on to get the levees repaired to a degree that will satisfy FEMA and prevent a final ratification of the Flood Map scheduled for 2010. Currently, San Mateo’s estimate for completion of construction of their problem levee will be after the FEMA deadline. I’ve heard from several insurance agents that buying flood insurance before the final date will save significant dollars per year on that type of policy. It’s a good idea to check with your agent and ask questions about adding flood insurance…don’t wait too long to do it. If you live in a condo or townhouse it’s doubly important because you don’t want your association dues to go up more that is absolutely necessary. Here’s a link to a press release from the City of Foster City about this topic:

FEMALevees&FloodInsurance

 

Our Homes; Our Largest Assets

Blood out of a Turnip

If you are one of the very, very fortunate families to own a home here in the Peninsula, you most likely have benefited from appreciation.  I understand the appreciation has slowed, but most of us still have positive equity.  When you put your money in a bank, most of us know at this point to look for FDIC backed banks to insure you have some type of protection for your money should the bank go under.  If you have an employer sponsored retirement plan, your employer is required to have some type of bond to protect some of that money too.  What do you have in place to protect your biggest asset, the equity in your home?  

Well, if you have a home loan, you are required to have homeowner’s insurance.  If you are a renter, you still have the need to protect your other assets (see prior BLOG entry on renter’s insurance).  Your liability coverage on both your home policy and your auto policy can turn out to be your best friend.  Your liability protection is in place to provide your insurance company with money to settle a claim in which you are liable.  Most people think of this in the context of an auto accident, people are killed in their cars more often than this insurance agent likes to think about…..BUT, people also slip and fall at peoples homes, children drown in their pools, children are hit with a baseball bat when someone is not monitoring the Piñata, it happens.  As a matter of fact, this last Saturday, my own daughter fell (or as she insists, was pushed), out of a jumpy and has a gash on her back and hit her head.  An accident yes, but had she been severely injured, is there a liability exposure for the homeowner, you bet there is.  

This is where your liability comes into play.  Your liability should have some direct correlation with your assets.  If you are one of those people who thinks the state required minimums on your auto insurance are adequate as you “don’t really drive that much,” you could be setting yourself up for a serious problem.  In case you are wondering what the state requirements are, here you go:  15/30/5.  That means your insurance company will pay a maximum of $15,000 per person for bodily injury, $30,000 total per accident for bodily injury and $5000 for property damage.  Better not total a Mercedes, BMW or a Ferrari for that matter!  If God forbid you kill someone in your car, they will pay $15,000, that is it.  How do you think the surviving family will react to this?  Do you think they will be happy with the $15,000 check your insurance gladly writes them?  Would you be? 

 If you have not looked into a Personal Liability Umbrella Policy, please do so now.  This type of policy will give your insurance company an additional $ 1 million of protection to help settle the claim.  This is a minimum amount; you may need 2, 3 or even 4 million to protect your assets.  This is something your financial planner, or your insurance agent can help you with.  For a nominal annual fee, would you rather have your insurance company write a check, or go into the equity of your home?    

This is an easy choice to make.  To make it an even easier choice, one of my employees just handed me a copy of a recent article in the New York Times, dated, March 18th.  Guess what the title is?  Umbrella Coverage for Preventing Your Ruin.  This is serious business folks. You can check out the article by clicking on this direct link: 

NYTimeslinkinsurance

Renter’s Insurance – Is It Worth the Cost?

For Rent Sign

As an insurance professional, I am asked often about renter’s insurance.  Usually, it is followed by, “isn’t it expensive?”  The short answer?  No.  An average renter’s insurance policy is only about $15 per month.  What is expensive, is not having renter’s insurance.  As a college student some moons ago, I had my apartment broken into twice in the city.  It was during Spring break both times, and all of what I considered my prized possessions were stolen. Did I mention twice??  Believe it or not, I actually had renter’s insurance as it was required by my landlord.   I was required to fill out some lengthy inventory forms, and within a week or so, I was sent a rather handsome check to replace my lost belongings.  As far as renter’s insurance claims, this was a fairly basic claim.  What many renter’s don’t realize is, the insurance not only covers you for theft like in my situation, but for a multitude of other things.  How about a few years back when there were fires at the newly built Santana Row.  Does anyone remember seeing these poor people on the news who lost everything?  We’re talking all of their clothes, furniture, stereo, t.v.’s, kid’s toys?  The majority of these people did not have renter’s insurance.  I know this because the news was reporting it and actually urging renters to go out and purchase policies.  Had these people had renter’s insurance, not only would it have helped them re-build their lives, it also would have paid to put them up in temporary housing.  Renter’s insurance also provides liability protection.  How many renter’s out there have animals?  Any idea how much it costs if your dog bites someone?  A lot!!  How about if you have a cocktail party and someone has a little too much to drink and slips and falls while doing the limbo on your kitchen floor?  What if that little fall causes a serious head injury, or worse?  Guess who may be liable for that?  I think you are getting my point here.  $15 to $20 per month, you tell me, is it worth it?  Keep in mind that renters insurance policies do vary from company to company, but most basic policies cover at least fire, theft and liability.  Your limits are based on your individual needs.  Liability coverage is there to protect your assets, so don’t think just because you don’t own a home that you have nothing to protect.  If you work and bring home a paycheck, you have something to protect.  You may also be eligible for a nice discount on your auto insurance by adding a renter’s insurance policy.  Often times, the discount almost pays for the renter’s policy.  Give your agent a call today and let them assess your needs. If you would like to talk to me about it click here:

Jen’s website

Flood Insurance

FEMAWay back in 2001 FEMA (Federal Emergency Management Agency) rewrote their flood zone maps and included the Shoreview and Sunnybrae neighborhoods in San Mateo…and as a result the residents there were forced to purchase flood insurance. FEMA conducted studies that concluded some risk for flooding could come from Bay tidal flows or from four or more streams carrying rain runoff through San Mateo and down to the Bay. As you can imagine, there was plenty of grousing. I sold a 89 year old lady’s home on 16th Avenue in Sunnybrae at that time and her house actually backed up onto San Mateo Creek. She was the original owner and had been in the home for over 50 years. She had no report of any pesky water intruding onto her yard at any time during her occupancy.

FEMA is again rewriting the maps and the word is that it will include Foster City by 2009. At issue appears to be the strength of the levee system that’s technically in San Mateo itself. The City of Foster City is attempting to work this out with both FEMA and San Mateo but it’s very possible that flood insurance could be mandatory in the future. Here’s what will happen: after FEMA etches this in stone your lender will be quick to react. You’ll receive a written notice that you’ll be required to carry, in addition to your current homeowners policy, a flood insurance policy. FEMA will offer a policy to you but it’s a great idea to contact your current homeowner carrier to see what they have to offer.

There’s an initial period of time when you’ll be able to purchase this insurace at a big discount. In San Mateo in 2001 it ranged from around $300.00 a year if you got in early to over $1000.00 if you didn’t. It’s my understanding that if you buy it early you’ll keep the lower rate going forward. Obviously it’ll be a good idea to stay in touch with your insurance professional to act early and to stay current on this situation as it effects so many Foster City residents. I promise to follow it closely too and blog about any changes. Here’s a link to a recent story about this fun topic:

Floodinsurancelink