Things To Know

What is Personal Property Insurance?

Personal property insurance, also known as "contents insurance,"reimburses you in the event that your possessions within the home (whether you own or rent) are damaged, destroyed, lost or stolen.

  • Personal property is the contents of your home and your personal possessions.
  • Furniture (sofa, chair, ottoman, table etc.)
  • Appliances (stove, mixers, blenders, refrigerator, washer, dryer, etc.)
  • Clothing (shirts, pants, skirts, socks, underwear, dresses, skirts etc.)
  • Computers (monitors, desktops, laptops, software, etc.)
  • Dishes (pots, pans, silverware, bowls, plates, etc.)
  • Artwork (pictures, statues, etc.)
  • Rugs, window treatments
  • Sporting goods and toys
  • Wine and spirits and
  • Misc. items Etc.

What is Homeowners Insurance?

Homeowners insurance provides you with financial protection in the event of a disaster or accident involving your home.

Standard homeowners insurance protections

A standard homeowners insurance policy: insures your home's structure (house,) and your belongings in the event of a destructive event, such as a fire. In addition, homeowner’s insurance policies are generally "package policies." This means that the coverage includes not only damage to your property, but also your liability—that is, legal responsibility—for any injuries and property damage to others caused by you or members of your family (including your household pets).

Insurance for condominiums and co-op- apartments: generally covers your belongings, liability and certain parts of the interior structure as defined in the by-laws or proprietary lease.

Renters insurance: provides similar property and liability protections to those who don't own their home.

All forms of home insurance also provide additional living expenses (ALE) coverage for the extra costs of living away from home if it is uninhabitable due to damage from an insured disaster.

What is not covered by a standard homeowners policy

While homeowners insurance covers many types of disaster related damage, there are exceptions. For example, flood insurance and earthquake insurance are both separate types of policies, which may be desirable depending on where you live.

Important definitions to know:

REPLACEMENT COST COVERAGE / ACTUAL CASH VALUE / DEPRECIATION

When you purchase homeowners, renters or condo insurance policy, you'll  typically have to choose between two types of personal property coverage.

Replacement cost value usually reimburses a policyholder for the cost of replacing a damaged item with one of similar type and quality. Replacement cost coverage would likely provide enough coverage for you to purchase a replacement item.

Actual cash value coverage usually applies depreciation of the item your claiming, therefore your will only receive a percentage of what you paid for the item.

Depreciation
Policyholders are often frustrated by the low dollar amount the insurance companies apply on personal property when applying depreciation. You have the right to challenge excessive depreciation applied by insurance company by documenting the condition and value for your personal property. Depreciation amounts are subjective and very negotiable. There is no uniform or legally binding schedule or set standard for how much insurers can depreciate the value of your personal property.

Water Damage From Storms, Tornadoes, Floods

Water damage (from floods, tornadoes, broken pipes) is one of the most common types of property damage claims. The costs associated with reconstruction and remediation of water infiltration is usually very high.

To make matters worse, there are many instances when the insurance company will not cover a water damage claim. To find out if your insurance company covers your particular kind of water damage is best to review your own policy. If it sounds unclear, you should contact your insurance agent.

Most homeowner insurance policies provide coverage for additional living expenses (ALE) incurred as the result of a covered peril. ALE coverage reimburses the policyholder for expenses that are above normal household living expenses required to maintain a comparable standard of living. While some homeowner insurance policies have no limit for ALE coverage, others may limit the ALE coverage to a certain percentage of the dwelling coverage, ranging from 10% to 50%, depending on your homeowners policy. Most policies also have a time limitation, generally from 12 to 24 months.

Following a disaster, a most important step for the insured is to review the language of their homeowners policy carefully, to understand its benefits, but also its monetary and time limitations. In some policies, ALS benefits are not mentioned at all on the declarations page, but coverage is provided.  Other policies mention the benefits on the declarations page, but the time limitation some other place. Some policies offer the option of an upfront lump sum payout for certain circumstances following a catastrophic loss. It’s therefore essential that homeowners employ the help of their insurance agent or the help of a qualified public adjuster to clarify the “Additional living expense” and “Loss of use” benefits and limitations.

Some examples of household expenditures that are generally reimbursable as an additional living expense or loss of use benefit include:

  • Housing costs while the home is being cleaned or renovated. If the cleaning and renovation process takes more than a few days, it is a good idea to look for affordable housing and stretch the value of the ALE benefits if they have a monetary limit.
  • Food expense that are above your regular costs. For example, if you have to stay in a hotel and eat out, the extra costs you pay for food will be covered.
  • Additional transportation costs that are the result of the loss of use of your home. For example, if the temporary housing is farther from your work, kids schools, or place of worship, the additional cost of gas and transportation is covered under ALE.
  • Kennel costs while in temporary housing. If you have pets that need to be placed in a kennel while your home is undergoing cleaning or renovations, you are allowed to submit the cost for reimbursement.
  • Storage costs for furniture and household goods, moving costs, costs for relocating computers, phone lines, and more.

 

An important factor in being properly reimbursed for the expenses incurred as a result of the use of loss of your home is proper documentation. You must save all your receipts and track all purchases that qualify for ALE benefits. If your temporary housing stretches for some time, it may be helpful to set up a separate bank account that you use just for this purpose.  When your claim is not properly documented, your insurance company may deny payment and you may have to pay out of pocket for expenses that would have been otherwise covered.

Wildland fires

According to the Insurance Information Institute, as many as 90 percent of wildland fires in the United States are caused by people, according to the U.S. Department of Interior. Some human-caused fires result from campfires left unattended, the burning of debris, downed power lines, negligently discarded cigarettes and intentional acts of arson. The remaining 10 percent are started by lightning or lava.
According to Verisk’s 2017 Wildfire Risk Analysis 4.5 million U.S. homes were identified at high or extreme risk of wildfire, with more than 2 million in California alone. Losses from wildfires added up to $5.1 billion over the past 10 years.

 

Wildfires by Year

Insurance Information Institute reports:
2018: From January 1 to November 30, 2018, there were 52,303 wildfires, compared to 56,186 wildfires in the same period in 2017, according to the National Interagency Fire Center. About 8.5 million acres were burned in the 2018 period, compared with 9.2 million in 2017.

The Mendocino Complex Fire broke out on July 27th in Northern California and grew to be the largest fire in state history with 459,123 acres burned.
The Carr Fire, which broke out on July 23 in Northern California, is the 6th most destructive fire in the state’s history. Seven fatalities are attributed to the fire and 1,604 structures have been destroyed.

Insured residential, commercial and auto losses from the Carr and Mendocino Complex Fires topped $845 million, according to the California Department of Insurance. Destruction from the two fires resulted in damaged or destroyed more than 8,800 homes, 329 businesses, and more than 800 private autos, commercials vehicles, and other types of property. More than 10,000 claims have been filed.

The Camp Fire broke out in Butte County, Northern California on November 8 and became the deadliest and most destructive fire on record. At least 88 people perished. About 153,000 acres were burned and 18,800 structures have been destroyed, according to Cal Fire statistics. The fire burned almost 14,000 residences and about 530 commercial structures. The remainders were minor structures.

Further south two other major fires, the Hill and Woolsey Fires, also caused considerable damage. Both fires started on November 8. The Woolsey Fire burned about 97,000 acres according to Cal Fire. It destroyed about 1,600 structures and killed three people. The Hill Fire burned about 4,500 acres and destroyed four structures.

2017: In 2017, there were 71,499 wildfires, compared to 65,575 wildfires in the same period in 2016, according to the National Interagency Fire Center. About 10 million acres were burned in the 2017 period, compared with 5.4 million in 2016. 2017 acres burned were higher than the 10-year average.

Beginning October 6 and continuing until October 25, eight counties in Northern California were hit by a devastating outbreak of wildfires, which led to at least 23 fatalities, burned 245,000 acres and destroyed over 8,700 structures.

In December five major fires in Southern California destroyed over a thousand homes and buildings. One of the fires, the Thomas Fire, became the largest wildfire ever recorded in California. Loss estimates are not yet available from the Property Claims Services (PCS) unit of ISO, but it has provided relative rankings for the Atlas, Tubbs, Mendocino Lake and Thomas fires as the costliest wildfires in the United States. All four are estimated to have caused more than $2.8 billion in insured losses. The California Department of Insurance reported that insurance claims from the October-December fires add up to almost $12 billion, which makes the 2017 fire season the costliest on record. However, the 2018 Camp and Woolsey Fires are likely to become the most costly fires in U.S. history when insured loss data are compiled.

2016: There were a total of 5.5 million acres burned by wildfires in 2016. On May 1 of that year, a wildfire broke out in the Alberta city of Fort McMurray. The fire was the costliest ever-Canadian natural disaster for insurers, with 1,600 buildings destroyed and more under threat. Two fatalities are attributed to the fire and the entire populations of about 90,000 were evacuated. The smoke from the fire could be seen as far south as Iowa.

Hurricane Facts & Statistics

The official Atlantic hurricane season runs from June through November, but occasionally storms form outside those months. September is the most common month for hurricanes making landfall in the U.S., followed by August and October, according to an analysis of 1851 to 2015 data by the National Oceanic and Atmospheric Administration. No hurricanes made U.S. landfall before June and after November during the period studied.

The 2018 Hurricane Season

2018: During the 2018 Atlantic hurricane season eight hurricanes had formed in the Atlantic region. Florence became the third hurricane of the 2018 Atlantic hurricane season and reached Category 4 status on September 10. Hurricane Florence made landfall on September 14 near Wrightsville Beach, North Carolina, as a Category 1 storm. It became a slow-moving storm that brought hurricane-force winds, life-threatening storm surge, and freshwater flooding and at least 30 inches of rain in parts of North Carolina and claimed at least 42 lives in the Carolinas and Virginia. The storm set a record in North Carolina for rain from a hurricane. The previous record was 24 inches caused by Hurricane Floyd in 1999. Catastrophe modelers have estimated that insured losses from Hurricane Florence would range from $2.5 billion to $5.0 billion, excluding National Flood Insurance Program losses. In addition, between 70 percent and 85 percent of flood losses are estimated to be uninsured.

Hurricane Michael became a strong Category 4 storm on October 10 and made landfall near Mexico Beach, Florida in the Florida panhandle. Hurricane Michael, which struck Florida with wind speeds just under a Category 5 storm, may be the strongest hurricane to ever hit the Florida Panhandle and could be the strongest hurricane to make landfall in that region since Hurricane Dennis in 2005. Unofficial reports put the death toll from Michael at about 40. According to CoreLogic there were 57,000 homes at risk of coastal storm surge totaling more than $13 billion in reconstruction cost value (RCV) across Florida alone. Other catastrophe modelers estimated that insured losses from Hurricane Michael could range from $6 billion to $8 billion.

The 2017 Hurricane Season

The hurricane season of 2017 broke several records, as 17 tropical storms formed in the Atlantic Basin, with 10 of these, Franklin, Gert, Harvey, Irma, Jose, Katia, Lee, Maria, Nate and Ophelia, becoming hurricanes. Six hurricanes became major storms, Category 3 and above—Harvey, Irma, Jose, Lee, Maria and Ophelia. Two hurricanes, Irma and Maria, reached Category 5 strength. The 2017 Atlantic hurricane season was the first time three Category 4 hurricanes—Harvey, Irma and Maria—made landfall in the United States and its territories in one year, according to the Insurance Information Institute (I.I.I.).

On August 25 Hurricane Harvey made landfall in Texas as a Category 4 storm. Harvey was the first major hurricane to hit the U.S. mainland since Hurricane Wilma in 2005, and the first Category 4 hurricane to affect Texas since Hurricane Carla in 1961. The last time a hurricane made landfall in Texas was in 2008 when Hurricane Ike, a Category 2 storm, struck the state. Harvey brought unprecedented flooding from rainfall to Texas and Louisiana. About 50 inches of rain fell in portions of the Greater Houston area and the upper Texas coast, breaking records. On August 30 Harvey made landfall west of Cameron, Louisiana, as a tropical storm, continuing to bring rain to Texas and Louisiana. Tens of thousands of people were displaced due to floods, with thousands of homes and businesses destroyed. At least 68 direct deaths related to Hurricane Harvey have been reported in Texas. Harvey was the deadliest U.S. hurricane in terms of direct deaths since super storm Sandy in 2012, and the deadliest to hit Texas since 1919, according to the National Oceanic and Atmospheric Administration (NOAA). Loss estimates are not yet available from the Property Claims Services (PCS) unit of ISO, but it has provided a relative ranking for Harvey as the sixth costliest hurricane to hit the United States, excluding flood damage covered by the federally administered National Flood Insurance Program. PCS estimates that insured losses from Hurricane Harvey will top $14 billion.

Hurricane Irma made landfall at Cudjoe Key in the Lower Florida Keys as a Category 4 hurricane on September 10, and a second landfall in Florida on Marco Island in Southwest Florida as a Category 3 hurricane. The storm brought high storm surge to Naples and widespread, damaging winds across most of Florida. Hurricane Irma was one of the most powerful and costliest hurricanes in the Atlantic Basin, and the first major hurricane to make landfall in Florida since Hurricane Wilma in 2005. At its peak it was a Category 5 storm, and was the strongest hurricane to make landfall in the U.S. since Katrina in 2005. Complete devastation was reported in the Northern Leeward Islands and Virgin Islands.

According to NOAA, the Florida Keys were heavily impacted, with 25 percent of buildings destroyed, and 65 percent significantly damaged. Irma brought record storm surge to parts of the Southeast coast, including Jacksonville, Florida, with significant coastal flooding extending into the Carolinas. Irma caused 10 direct deaths in the United States, three in the U.S. Virgin Islands, and the remainder on mainland United States, according to NOAA. The Florida Office of Insurance Regulation reported that as of November 14, 2018 about 1,002,800 claims were filed in the state from Irma, resulting in $11.1 billion in insured losses.

To date, 92 percent of claims have been closed, either paid or unpaid. Loss estimates are not yet available from the Property Claims Services (PCS) unit of ISO, but it has provided a relative ranking for Irma as the fourth costliest hurricane to hit the United States, excluding flood damage covered by the federally administered National Flood Insurance Program. PCS estimates that insured losses from Hurricane Irma will be more than $20 billion.

Maria became a Category 5 hurricane on September 18, passing over St. Croix in the Virgin Islands and later made landfall as a Category 4 hurricane in Puerto Rico. Maria was the strongest hurricane to make landfall in Puerto Rico since a Category 5 hurricane hit the island in 1928. Maria caused 65 official direct deaths and catastrophic damage too much of the island. Maria brought up to 37 inches of rain, with widespread flooding and mudslides, according to NOAA.

The government of Puerto Rico later estimated that the number of deaths was 1,427 due to delayed or interrupted health care, and raised that tally to 2,975 after a study was conducted by George Washington University. Loss estimates are not yet available from the Property Claims Services (PCS) unit of ISO, but it has provided a relative ranking for Maria as the second costliest hurricane to hit the United States, surpassed in losses only by Hurricane Katrina, which caused about $50 billion in insured losses in 2017 dollars. PCS estimates that insured losses from Hurricane Irma will be more than $25 billion.

Hurricane Nate made a first landfall as a Category 1 hurricane on October 7 near the mouth of the Mississippi River, and a second landfall near Biloxi, Mississippi, on October 8. Nate was the fourth hurricane to make landfall in the United States in 2017, the first year the United States has had four landfalls since 2005.