Category Archives: Homeowners Insurance

Lightning claims topped $800 million last year

Every year the Insurance Information Institute (I.I.I.) and State Farm recognize Lightning Safety Awareness Week (June 18-24) by estimating the toll of lightning claims in the United States, writes the I.I.I. research team. Last year insurers paid out nearly $862 million in lighting claims to more than 100,000 policyholders, a 4.5% increase from 2015.

Damage caused by lightning, such as a fire, is covered by most homeowners insurance policies.

Florida—the state with the most thunderstorms—remained the top state for lighting claims in 2016, with 10,385, followed by Texas (9,098), Georgia (8,037) and Louisiana (5,956).

Homeowners Insurance Claims and Payouts for Lightning Losses, 2007 – 2016

The Lightning Protection Institute (LPI) encourages homeowners to install a lightning protection system in their homes. Per Kimberly Loehr, communications director for LPI: “Lightning protection systems that follow the guidelines of NFPA are designed to protect your home by providing a specified path to harness and safely ground the super-charged current of the lightning bolt.”

To learn more about an LPI-certified lighting protection system, click here or visit lightning.org/find-an-installer.

Bike to work with insurance

In honor of National Bike To Work Day here are some key facts for our two-wheeled transportation enthusiasts:

  • The number of cyclists commuting by bike increased by 64 percent between 2000 and 2012, according to the National Highway Traffic Safety Administration
  • An estimated 900,000 U.S. workers rode a bike to work in 2015, up from 730,000 in 2010, Census data reveals
  • Bicyclists accounted for 2 percent of all traffic deaths and 2 percent of all crash-related injuries in 2014. Bicyclist deaths occurred most often in urban areas (71 percent)
  • If your bike is stolen or damaged it will be covered under the personal property section of your homeowners or renters insurance policies
  • If you own a particularly expensive bicycle, you may want to consider getting an endorsement that will provide additional coverage, advises the I.I.I.
  • If you injure someone in a bicycle accident and you get sued, there is liability protection under your homeowners or renters insurance policy that will cover you up to the limits of your policy
  • Your homeowners or renters insurance also includes no-fault medical coverage in the event you injure someone

Check out additional I.I.I. information on bicycle safety and insurance here.

And for those living in NYC, Curbed NY has a handy guide to the city’s five best neighborhoods for cyclists.

The Cost Of A Dog Bite

When dogs bite homeowners insurers pay out an average of $33,230 per claim.

In fact, dog bites and other dog-related injuries accounted for more than one-third of all homeowners liability claim dollars paid out in 2016, costing in excess of $600 million, according to the Insurance Information Institute and State Farm.

The average cost per claim paid out by insurers actually decreased by more than 10 percent in 2016, but the average cost per claim nationally has risen more than 70 percent from 2003 to 2016 (see chart).

This is due to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, the I.I.I. reports.

Costs vary widely by state.

The state with the highest average cost per claim was New York, at a whopping $55,671 per claim.

For more state-specific information, go to the I.I.I.’s interactive map.

National Dog Bite Prevention Week® (April 9-15, 2017), is an annual event designed to provide consumers with information on how to be responsible pet owners while increasing awareness of a serious public health issue.

Watch this I.I.I. video for tips on preventing dog bites:

A Recovered Rockwell And The Art Of Coverage

Artwork and other valuable items like antiques and jewelry are often targets of theft which is why it’s important to have them properly appraised and insured.

Take this story of the Norman Rockwell painting “Boy Asleep with Hoe” (pictured below) which has been returned to the family of its original owners in Philadelphia more than 40 years after its theft.

In today’s I.I.I. Daily: the painting was taken in 1976 from a family home in Cherry Hill, New Jersey. The family then filed a claim to their insurer, Chubb. Chubb insured the painting, paid the claim and acquired the painting’s title.

As Antiques and the Arts reports, the 40-year art mystery was solved when a lawyer contacted the FBI’s art crimes division in October that a client had a painting that didn’t belong to him that he wished to return.

The estimated value of the recovered painting is put at between $600,000 and $1 million, significantly more than its value at the time of theft.

The family returned the 1970s claims payment to Chubb in exchange for the painting. Chubb will donate the funds to Norman Rockwell Museum in Stockbridge, Massachusetts.

I.I.I. tip: A standard homeowners policy offers only limited coverage for high value items. If you have belongings that exceed these limits, you should consider supplementing your policy with a floater, a separate policy that provides additional insurance. Before purchasing a floater, the items covered must be professionally appraised. Don’t forget to add these belongings to your home inventory.

Insurance And Your Tax Return

Answers to your tax questions in this guest post by Brian O’Connor, a freelance personal finance writer:

Can you ever deduct your homeowners or auto insurance premiums? And could you end up owing tax on an insurance payout?

The general answer is “No,” but like anything that involves taxes, the real answer is “It depends.”

“As a general rule, personal expenses are not deductible under the tax code,” says Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting practice. “If you use part of the home as a home office or rent out part and get rental income, then you can allocate a portion of the insurance cost to that business activity and it’s deductible against your business income.”

The same goes with your auto insurance payments. If you use your car for business or in a side gig, you can deduct some of that cost. The easy way on auto is to just claim the IRS mileage allotment of 54 cents per mile (you can do that with miles driven for charity work, too). That number covers gas, maintenance, insurance and other car expenses.

On your home, you can take $5 per square foot for your home office. That amount is likewise calculated to cover all your costs of home ownership, including insurance.

Or you go the complicated route, add up all your real expenses and then deduct them to the extent that your home or car was used for business. If it was 20 percent of the time, you can write off 20 percent of those costs.

In terms of an insurance payment, it typically won’t be taxable, unless you make a huge profit beyond what you paid for the property that was damaged, stolen or destroyed.  And if an insurance payment fails to cover your total loss? It’s a stretch but you take a big enough hit, you might have a deduction.

“You really have to be talking about a pretty big loss before you can write anything off,” explains Barbara Weltman, contributing editor of J.K. Lasser’s Your Income Tax 2017.

More information on tax filing and insurance from the I.I.I. website.

Catching All The Candy

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If your little monsters are determined to hunt down some spooky Pokémon on their trick-or-treat route this Halloween, be sure that the fun of finding Ghastly or Haunter doesn’t turn into a deadly distraction.

The National Highway Traffic Safety Administration reports that Halloween is consistently one of the top three days for pedestrian injuries and fatalities, and the Centers for Disease Control and Prevention estimates that children are four times more likely to be struck by a motor vehicle on Halloween than on any other day of the year.

Excited trick-or-treaters often forget about safety, the American Automobile Association (AAA) warns, so motorists and parents must be even more alert.

The AAA offers these tips to keep young ones safe on Halloween.

Meanwhile, Pokémon GO’s virtual Halloween update is reportedly drawing players back to the mobile app that took the world by storm earlier this summer.

While catching all the candy could be a healthy alternative to eating all the candy, there are also some side effects that could prove hazardous.

Researchers at San Diego State University and UC San Diego found about 113,000 total incidences of a driver, passenger or pedestrian distracted by Pokémon GO in their review of Twitter postings over just a 10-day period (July 10 through July 19, 2016).

There were also 14 unique crashes—1 player drove his car into a tree—attributed to Pokémon GO in news reports during the same period.

The researchers noted that by rewarding movement Pokémon GO incentivizes physical activity.

“However, if players use their cars to search for Pokémon they negate any health benefit and incur serious risk.”

The study was published in the Journal of the American Medical Association.

The good news is that injuries and property damage resulting from distracted Pokémon GO users are for the most part covered by insurance, according to the Insurance Information Institute (I.I.I.).

In its smart road tips for Halloween safety, Consumer Reports advises the public not to use a cell phone or other mobile device while driving and to pull over safely to check voice messages or texts.

Check out I.I.I. facts and statistics on highway safety and distracted driving here.

Wishing all our readers a safe and happy Halloween!

Home Fire Drill

My older son has a fire safety drill at school today and my younger son’s class field trip to the firehouse is next week, which is my personal reminder that it’s time to test our home smoke alarms.

In fact smoke alarms are once again the theme of this year’s National Fire Prevention Week,  and there are good reasons why.

National Fire Protection Association (NFPA) statistics show that three of every five residential fire deaths in the United States result from fires in homes with no smoke alarms or no working smoke alarms.

And almost 40 percent of fire fatalities that occur in the U.S. are in homes with no smoke alarms.

Being prepared in the event of a home fire is also critical.

Despite the fact that nine in 10 structure fires occur in the home, a recent survey by Nationwide found that only one in five parents regularly practice fire escape plans at home.

Nearly half of all parents surveyed (45 percent) also report that their children do not know what to do in the event of a home fire.

To raise awareness of this issue and encourage families to be more prepared, tomorrow Nationwide is launching Home Fire Drill Day as part of its Make Safe Happen program.

What can you do?

First, know where to go. Pick a safety spot that’s near your home and a safe distance away. Explain to your kids that when the smoke alarm beeps they need to get out of the house quickly and meet at that safety spot.

Test your smoke alarms with your kids so they know what they sound like. Then, do the drill and see if you can all make it out of the house to the safety spot in under two minutes. If not, do it again.

As Nationwide says: “We do fire drills at school. We do them at work. Now, let’s do them at home.”

Sounds like a plan.

The Insurance Information Institute has facts and statistics on fire losses here.

Brushing up on Terrorism Insurance

Multiple explosions over the weekend in New York and New Jersey as well as a knife attack by an individual at a mall in Minnesota come amid heightened concerns of terrorist attacks 15 years after 9/11.

Some 29 people were injured in the blast Saturday night in New York City’s Chelsea neighborhood, which is also reported to have caused significant property damage. Meanwhile, nine were injured in the Minnesota mall attack, where the suspect was killed by police.

Monday morning another explosion was reported near Elizabeth train station in New Jersey, where up to 5 devices were found, and as the FBI investigation intensified and security tightened around major transportation hubs, law enforcement officials arrested a suspect in the NY/NJ blasts.

While the unfolding events are unsettling, it’s good to know that if the home you own were damaged by an explosion and fire, personal insurance policies have you covered.

Standard homeowners insurance policies cover the homeowner for damage to property and personal possessions due to explosion, fire and smoke—the likely causes of damage in a terrorist attack, according to the Insurance Information Institute (I.I.I.), even if terrorism is not specifically referenced in the insurance policy.

Condominium or co-op owner policies also provide coverage for damage to personal possessions resulting from acts of terrorism, while damage to common areas of a building like the roof, basement, elevator, boiler and walkways would be covered providing the condo/co-op board has purchased terrorism coverage.

Standard renters insurance policies also include coverage for damage to personal possessions due to a terrorist attack. Again, coverage for the apartment complex itself must be purchased by the property owner or landlord.

If your car is damaged or destroyed in an explosion your auto insurance policy will cover the damage if you have purchased “comprehensive” coverage.

Commercial insurers are required to offer coverage against terrorist attacks and many owners of commercial property, such as office buildings, factories, shopping malls and apartment buildings,  have purchased the coverage.

Marsh estimates some 60 percent of U.S. businesses have purchased terrorism insurance, up from 27 percent in 2003.

However, losses are only covered by a commercial terrorism insurance policy if the government officially certifies an attack as an act of terrorism. Several criteria must be met for the certification to be made. If property/casualty losses do not exceed $5 million in the aggregate, the act will not be certified as an act of terrorism.

Acts of terrorism are excluded from most standard business insurance policies.

Workers compensation—a compulsory line of insurance for all businesses—covers employees injured or killed on the job and therefore automatically includes coverage for acts of terrorism.

Check out I.I.I. facts and statistics on terrorism.

Wildfire Smoke Travels

Two wildfires in California prompted officials to issue air pollution warnings almost 200 miles away in Nevada this week, reminding us that wildfire exposure reaches far beyond the flames.

The Soberanes fire which is located in the Monterey County area is currently 23,688 acres in size and is 10 percent contained. The Sand Fire, which began on July 22, quickly grew to more than 30,000 acres and is now 38,346 acres in size and 40 percent contained.

In the first six months of 2016 there were 26,510 wildfires across the United States, compared to 29,078 wildfires in the first half of 2015, according to statistics from the National Interagency Fire Center, as reported by the Insurance Information Institute (I.I.I.).

Over the 20-year period 1995 to 2014, fires—including wildfires—accounted for 1.5 percent of insured catastrophe losses in the United States, totaling about $6 billion, according to the Property Claims Services (PCS) unit of ISO.

Smoke, soot and ash produced by large wildfires present a risk to property and life in the fire zone, not to mention a potential health risk to residents living in the path of the smoke.

It’s important to recognize that even if a property doesn’t suffer direct damage from flames in a wildfire, it may be exposed to extensive smoke, soot and ash damage.

From the insurance perspective, damage caused by fire and smoke are covered under standard homeowners, renters and business owners policies and under the comprehensive portion of an auto insurance policy.

However, it’s important to notify your agent or insurer of this damage on a timely and proper basis.

Water losses or other damage caused by fire fighters while extinguishing a fire is also covered under these policies.

Here’s a visual of the smoke from the California wildfires, courtesy of NOAA and Weather Underground:

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Check out I.I.I. claims filing tips here.

Lightning Strikes, Insurance Responds

Next time you’re home when a heavy thunderstorm rolls in, take a moment to think about how damaging lightning losses can be and how insurance helps.

In fact, insurers paid out $790 million in lightning claims last year to nearly 100,000 policyholders, according to a new analysis by the Insurance Information Institute (I.I.I.) and State Farm.

Damage caused by lightning, such as fire, is covered by standard homeowners policies and some policies provide coverage for power surges that are the direct result of a lightning strike.

As James Lynch, vice president of information services and chief actuary of the I.I.I. says:

“Not only does lightning result in deadly home fires, it can cause severe damage to appliances, electronics, computers and equipment, phone systems, electrical fixtures and the electrical foundation of a home.”

It’s due partly to the enormous increase in the number and value of consumer electronics that the average cost per claim has continued to rise, Lynch explains.

There were 99,423 insurer-paid lightning claims in 2015, down 0.4 percent from 2014, but the average lightning claim paid was 7.4 percent more than a year ago: $7,497 in 2015 vs. $7,400 a year earlier.

The average cost per claim rose 64 percent from 2010 to 2015. By comparison, the Consumer Price Index (an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation) rose by 9 percent in the same period.

In recognition of Lightning Safety Awareness Week (June 19-25), the I.I.I. and the Lightning Protection Institute (LPI) encourage homeowners to install a lightning protection system in their homes. These systems are designed to protect the structure of your home and provide a specified path to harness and safely ground the super-charged current of the lightning bolt.

The growing market for smart home technology makes installing a lightning protection system even more important, noted the I.I.I. It is also an opportunity for designers, builders and code officials to include lightning protection systems in their plans.

Kimberly Loehr, director of communications for the LPI adds:

“Just as smart homes provide the ultimate in safety and comfort, lightning protection systems ensure that state-of-the-art home automation systems aren’t damaged by direct or nearby lightning strikes.”