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home insurance premiums going up

Why Your Home Insurance Premiums Are Going Up

You haven’t even made it all the way inside from your mailbox, and you’re already frustrated!

It seems like every year when that homeowner insurance renewal comes, it’s asking for more money. You haven’t had a claim since you bought the home 15 years ago; it just doesn’t seem fair.

Well, when it comes to one of the biggest causes for home insurance premium increases, you’re right. It’s not fair.

 

When Homeowners Become Victims

The State of Florida is currently faced with a major insurance crisis.

It comes in the form of widespread fraud…specifically fraud perpetrated by crooked contractors and public adjusters responding to claims caused by alleged water damage and hail storms. Homeowners become victims when they fall for a too-good-to-be-true offer from the scammer.

Let’s take a look at some examples of how this fraud is committed.

Example #1: Water Damage Claims

It’s 8:00pm on a Sunday. You just got home from a weekend trip out of town. You walk inside and find that your water heater broke about 10 minutes after you left on Friday afternoon and water has been pouring into your home for 2 days.

You quickly search for a Water Mitigation vendor on your phone and call the first one you see. They arrive within an hour. So far so good, right?

They shove a contract in your hand and say, “Sign this so we can start pumping out the water, drying things out, and making repairs. If you don’t sign, we don’t work.” You want this water to stop pouring out, so you sign it. Your house is dry. Your cabinets and walls are repaired.

You don’t discover the real problem until about a year later. That’s when you find out that there is a contractor’s lien against your home. Your credit, ability to sell your home, and dignity are all shot. How could this happen?

Example #2: Hail Damage Claims

It’s May 1. There’s a knock on the door.

The nice gentleman from the roofing company says there have been multiple reports of hail damage in your neighborhood. Several of your neighbors have gotten new roofs for free through their insurance. He asks if he can go on your roof to inspect for damage.

Everything spirals downhill from here.

Little did you know, the roofing contractors you hired to “fix” your roof actually faked the hail damage just so they could file a claim! Major network news specials in the last 18 months have exposed roofers trampling on roofs with sports cleats (shoes with spikes on the soles) and even using coins to push hail sized marks into shingles.

There weren’t any hailstorms recently? No problem. They just look up on the internet when the last one was. Even if it was more than 6 months ago, a claim can still be made. They have you sign the same type of form and get started on the work.

The story is quite similar to the one above, because both shady contractors had you sign an “Assignment of Benefits” (AOB) form.

 

Assignment of Benefits is the Enemy!

You signed the Assignment of Benefits form just to get your home back to normal. It sounded so reassuring when the contractor said, “Don’t worry. You won’t have to do a thing. Don’t even worry about calling your insurance company. We’ll take care of it all.” Little did you know, it also stripped you of ALL of the rights in your Homeowner Insurance Policy.

In fact, it transferred them exclusively to the contractor.

Here’s what really happened: The contractor filed a claim on your behalf. They also began the dry-out, demolition, and repairs almost immediately. This was so your insurance company’s adjuster never had time to see or assess the physical damage for themselves.

The contractor then billed your insurance company for $20,000. Your insurance company knows this price is inflated, because they had a few dozen other customers in your general area file similar claims. These other homeowners had the same repairs as you, but their costs ranged from $4,000 to $8,000.

Your insurance company decided to be generous in their offer and told your contractor they’d pay $8,000, which was at the upper end of what the repairs should cost. Your contractor took the $8,000 but then filed a law suit against the insurance company for remaining $12,000.

The end result, even though your insurer did the right thing, is the contractor filing a $12,000 lien against your home.

 

How Fraud Affects Your Home Insurance Premiums

We’ve shown you how this contractual highway robbery can affect you personally, but how could it affect your home insurance premiums if you’ve never filed a claim?

Imagine going into a store and paying $10.00 for a 12oz soda that typically costs less than $2.00. The insurance company literally heads towards going broke because they calculated your home insurance premiums on the $2.00/soda rate but were made to pay $10.

They have to pass that cost on to you at the next renewal, or they won’t have enough money to play claims.

Never had a claim? It doesn’t matter.

Insurance is “risk pooling.” Simply put, it’s sort of like socialism. Every homeowner puts a dollar in a bucket. Most won’t need to take any money out. That’s the point. When everyone contributes, there will be enough money for the few that do. But when costs are falsely elevated, more money is coming out of that bucket; everyone has to put more into the bucket so that fires, windstorms, and other damages can be fixed.

 

So, What Can You Do?

What can you do? The Golden Rules are 1) IF IT’S TOO GOOD TO BE TRUE, IT IS and 2) THERE IS NO FREE LUNCH.

  • Choose contractors wisely. Never use a contractor that finds you. Only use firms that you find or are referred to by a reputable source.
  • Always read contracts before signing and avoid Assignment of Benefits clauses at ALL costs. If a contractor asks you to sign one, do not hire them.
  • If you think you have a claim, call your independent insurance agent first. Discuss the situation with them and ask if they can refer you to reputable contractors.
  • Call your insurance company to see if they have a preferred contractor network, as you’re thinking about having some work done on your home. Very often, preferred networks offer better warranties too!
  • Call, write and visit your local legislators. That means your State Senators and Representatives. Unfortunately, Florida is a particularly hard state to advance insurance-related legislative change in. This for many reasons, including that many of the members of our House and Senate are active participants in the legal framework that defrauds insurers of millions of dollars each year. They don’t want to cut off their economic source, and they’ve certainly given up on the integrity and dignity of their public office. Which leads me to my last tip….
  • Vote in state and local elections. The people making laws to regulate the insurance industry are put in office by everyday voters like you.
insuring a home based business

Insuring a Home Based Business

“Do I need liability insurance for an e-commerce store? What should I consider when insuring a home based business?”

There are approximately 14,000,000 home-based businesses in the U.S. Many people choose this type of business because they love the flexible hours, the lack of commute, the comfort of working in their pajamas, and the added benefit of saving money.

“Since I don’t have a warehouse or storefront,” they determine, “I can spend less on rent, taxes, and insurance. Right?”

Unfortunately for these uninformed business owners, that is simply not true.

Home-based businesses—whether the customers come to you, you go to them, or the business is completely done online—are not exempt from needing insurance.

And if you think you’re off the hook because you have insurance on your home, think again.
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Does your business need insurance even if you run an LLC out of your home? Yes!

Does Your Business Need Insurance?

Let’s say you run a small business from your home. You don’t have employees; customers don’t come into your store (so no risk of them slipping on a wet floor and suing you); and your custom-designed hair bows aren’t going to injure anyone. Does your business need insurance?

In short, yes.

No matter how safe your business is—or how careful you are—there’s no such thing as a “risk-free” business.
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What Are Commercial Bonds?

What Are Commercial Bonds and Why Would I Need One?

Many times a client will come to me questioning why someone is requiring them to have a commercial bond. This article will provide some information to help explain what commercial bonds actually are, who they are protecting, and what types of commercial bonds are most commonly written.

Bonds function much like insurance in that they guarantee that obligations are fulfilled. If a promise is breached, the bond will pay to fulfill the promise. There are generally 3 parties: The bond holder (principal), the party for whom the work is being done (obligee), and the company providing the bond (surety company).

The two most common bond types are Surety Bonds and Fidelity Bonds. The basic difference is that a surety bond protects the public. A fidelity bond is employee dishonesty insurance coverage. In a nutshell, if someone is requiring you to provide a bond, you are looking for a surety bond. If no one is requiring the bond, you are more than likely looking for a fidelity bond.

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Think your small business won't be affected by cyber crime? Think again! Find out how to protect your small business from data breach and cyber ransom.

How Data Breach and Cyber Ransom Threaten Your Small Business

When it comes to insurance, most people think about protecting physical objects from loss or harm, but there’s something else—something vital—that your small business needs to put under lock and key: your data.

“But Data Breach and other types of cyber crime only happen to giant firms like Dairy Queen and Target. I don’t have the kind of records the bad guys want. Plus, who would even think to target little ol’ me?”

Every day, insurance professionals hear comments like this from their clients. But the truth is, data breach and cyber ransom issues effect an ever-increasing number of small businesses (that is, firms under 100 employees) in the United States. Often, these victims are “Mom & Pop” operations with under 20 employees. In fact, small businesses are actually the perfect target for cyber criminals.
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medical payments in auto insurance

What Are Medical Payments and Why Are They On My Auto Insurance Coverage?

Sifting through all of the different coverages that are part of insurance policy can be a very confusing task. There are things that pay for injuries to you. There are parts that pay for injuries to others. There are coverages that pay for damage to your belongings. There are elements that pay for damage to other peoples’ things. The list goes on and on. Today we’re going to look at Medical Payments and how they can help you avoid costly fees after an accident.
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Are You Hurricane Ready?

Even though Hurricane Matthew’s exact path is still uncertain it is better to be prepared than to be caught without a plan! Harry Levine Insurance is here for you if and when the storm strikes. As insurance professionals our job is more than just showing up to the office every day. Our job is to be there for our clients when they are in their most difficult moments.

We urge you to adopt a Hurricane Preparedness Plan (see below). We urge you to monitor the storm. We urge you to take photos of your home and belongings and to find your insurance policies. Keep them dry and safe! You will find a listing of all of our insurance company partners’ claims contact information here on our website. Please make a note of your carrier’s contact information.
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Workers Compensation – The Pitfalls of Trying to Cut Costs

As Workers Compensation rates in Florida soar, with more potential double digit rate increases looming, small businesses are trying to find creative ways to cut their costs on workers compensation coverage.  The end result can be very costly for the business owner. Some people are trying a new, creative way to cut costs and that is to report lower than actual payroll, so that the initial cost will be lower. There are agents out there that will allow this, and will sometimes encourage it to get your business in the door.  Don’t do it. It is a trap!
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Windshield Repair Fraud

If it’s too good to be true, then it is!

A problem that not many people talk about in the insurance world is windshield repair fraud. If your automobile glass cracks or gets chipped, it is very important to get it fixed. The State of Florida even makes it easy by requiring that insurance companies waive deductibles for windshields if you have Comprehensive Coverage as part of your car insurance policy. That’s right, if you have coverage, then you have an automatic deductible of zero for your windshield. Repairing or replacing a damaged one can be free!
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