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Steve Brooks Insurance Services eNewsletter
Phone: 800-915-3090 |
"Safeguarding the interests of you and your family"
December 2009 |
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Dear Friends,
We trust this eNewsletter finds you and your family well and in good health.
We are well into the "Holiday Season" now as we enjoy the parties, family gatherings, and festivities it brings us.
We wish all our clients, associates and friends a wonderful and meaningful Holiday, filled with quality time with friends and family and plenty of good cheer to carry us into the new year of 2010.
In this issue of our eNewsletter, we look at how many teens are ignoring texting laws, wirdfire victims get burned again, what is "loss of use" coverage, and some important holiday driving safety tips.
With kind regards and thoughts of safety,
Steve M. Brooks, CIC, CPIA
Founder/President
SPECIAL HOLIDAY OFFICE HOURS:
Dec. 18 close at noon - holiday party
Dec. 24 close at 3 pm
Dec. 25 closed
Dec. 31 regular hours
Jan. 1 closed
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| What Does "Loss of Use" Coverage Actually Cover? |
When You Can't Come Home, What Does "Loss of Use" Coverage Actually Cover?
Your homeowner's insurance policy will pay to repair damage to your home caused by a fire,
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windstorm or other covered cause of loss. But when you and your family incur expenses for moving out while repairs are made, who picks up the tab?
An often-overlooked but essential function of your homeowner's policy is "additional
living expenses" (also called "loss of use" or "Part D") coverage. Additional living
expenses coverage will pay the necessary increase in living expenses required to maintain
your family's current standard of living while the house is being repaired.
Examples of
expenses typically covered include the cost of hotel, food bills in excess of normal
grocery/restaurant bills, cooking supplies and the cost of moving property into storage.
The good news is that payment for these expenses usually does not stop if the policy
expires. Rather, they will continue to pay until the limit is used up, the home is repaired
to a habitable state, or you permanently relocate.
The bad news is that many homeowners erroneously believe that the policy covers 100
percent of additional living expenses until the home is habitable. Realistically, very few
policies do this. In most cases, home insurance companies place a limit or cap on loss-ofuse
payments. For example, many homeowner policies will only offer loss-of-use
coverage as a percentage of the limit of insurance carried on the dwelling; 20 percent is
common. Others may specify a flat dollar amount.
Usually, a covered loss must occur for any insurance dollars to be paid for additional
living expenses. The one exception is if your home is not accessible due to civil authority
or government mandate triggered by nearby damage. For example, in 2009, wildfires in
California triggered mandatory evacuations that prevented tens of thousands of
homeowners from going home. If homes in close proximity to yours are burning, there's
a chance the government will close roads and/or prevent you from entering your property
even though it has not yet suffered a direct loss. In this situation, additional living
expense payments are often limited to two weeks.
Homeowners who receive additional income by renting a portion of their home should
also pay close attention to the Part D limit. This limit also applies to replacing lost rental
income while the damaged house is being repaired.
Here's the important question: How do you know if your policy's Part D limit is
sufficient? The trouble is that important factors are variable. For example, how do you
know how long you will be out of your house? Building codes and permits cause
rebuilding efforts to proceed slowly in many parts of the country. Calling a local building
contractor to gain some idea is a good start but there is no exact prediction.
Further, how do you know what expenses you will incur? According to Hotels.com's
2009 hotel price index, the average hotel room in the U.S. costs $115 per night! Add this
and other expenses to a lengthy, unpredictable repair schedule and the possibility of
eclipsing your Part D policy limit before your home is habitable could become a serious
problem.
The last thing you want to hear is that your loss-of-use coverage has run out before you
can go home. Fortunately, Brooks Insurance Services understands this
exposure and can help you weigh your options, including those that may increase your
loss-of-use coverage limit. Please contact us for a thorough review of your homeowner's policy.
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| Driving Safely in Holiday Traffic |
With so many shopping during the holidays it is impossible to avoid the conjested roads. It is important to exercise safety when driving on a road full of vehicles.
Here are some tips:
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Patience. Don't go out and expect to get somewhere in a hurry while driving during the holiday season. It is difficult to get from point A to point B at the pace you are used to. If you are in a hurry and use unsafe driving ettiquite it could trigger road rage from other drivers. Slow down.
Anticipate. As when driving at any time, it is important to anticipate what other drivers may do. Someone who has been waiting to pull out onto the road from a parking lot for a long period of time, may use bad judgement for their timing due to lack of patience. Anticipate this happening and make sure you are not driving too fast in case someone does pull out in front of you or the driver in front of you has to slam on the brakes.
Take roads less traveled. Many cities have several ways to get through town. It may take a little longer, but using a less traveled road will be safer than taking a more common, but now over-driven road.
Don't drive too closely behind other cars. As mentioned earlier, more people will be pulling out of parking lots when they should not and following too close to another car may result in an accident. Remember, the driver who rear-ends another car is almost always considered to be at fault. This means a ticket and higher insurance rates.
Keep the inside of your car from being hectic and full of chaos. Make sure children are occupied with toys or games that will keep them from distracting your while you are driving. Turn the radio down and don't talk on the phone. If you are more aware of your surrounding while driving on a hectic road, you may be able to prevent an accident.
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Celebrities & Their Cars
Celebrities don't just get chauffeured from party to party, many of them actually own, take pride in, and drive their own vehicles.
Some of the cars celebrities drive are exactly what you'd figure, others are rather surprising. |
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Check out this list of celebrities and their cars (we offer this list as a fun sampling, not an exhaustive list, and subject to change at any time of course).
1. Jennifer Lopez/Marc Anthony drive an Aston Martin DB7 & Lotus Elise
2. Ryan Gosling - Drives a black Toyota Prius.
3. Pierce Brosnan - Owns an Aston Martin Vanquish.
4. Verne Troyer - Drives a custom Mercedes CLK.
5. Janet Jackson - Drives an Aston Martin Vanquish.
6. Simon Cowell drives a million dollar Bugatti Veyron.
7. 50 Cent - Drives a Rolls Royce Phantom.
8. Charlize Theron - Tools around in a Range Rover.
9. Brad Pitt and Angelina Jolie drive a BMW Hydrogen 7.
10. Jessica Simpson - Drives a white Escalade.
11. Julia Roberts - Drives a Toyota Prius.
12. Kevin Costner drives an Audi Q7 and Audi S8.
13. Matthew McConaughey drives a Lincoln MKX
14. Amy Winehouse drives a BMW 7 Series.
15. Kristen Cavallari - Drives a BMW 3 Series Coupe.
16. America Ferrera - Drives a Toyota Prius.
17. Nicole Richie/Joel Madden have a Bentley Continental.
18. Xzibit Drives a Lamborghini Gallardo.
19. Jerry Seinfeld owns a whole bunch of Porches.
20. JaRule - Drives a lime green Lamborghini Murcielago and Maserati Spyder.
21. Samuel Jackson drives a Maybach 57 S
22. Leonardo DiCaprio - Owns a Toyota Prius
23. Mary Kate Olsen drives a Porsche Cayenne.
24. Paris Hilton - Owns a Mercedes Benz SLR
25. Colin Farrell - Drives a black Ford Bronco.
26. Kirsten Dunst - Drives a trendy Toyota Prius.
27. Justin Timberlake - Drives a white Jeep Wrangler Unlimited.
28. Kate Moss - Drives around London in her vintage MG.
29. Ice-T- Drives a red Bentley convertible.
30. Ryan Seacrest - Drives around in an Aston Martin.
31. Shaquille O’Neal - Owns an H2 and Rolls Royce Phantom among others.
32. Missy Elliott - Drives several cars including an Aston Martin V12 Vanquish, Rolls Royce Phantom and Lamborghini Gallardo.
33. Jeremy Piven - Drives a Ford Bronco.
34. David Beckham - Drives a Cadillac Escalade.
35. Jim Carey - Drives a Mercedes S-Class.
36. Wyclef Jean - Drives a $350,000 Pagani Zonda C12-S, a Ferrari 360 Spyder, an F1 McLaren and a Mercedes G-500.
37. Josh Duhamel - Drives a Chrysler 300C SRT-8.
38. Seal drives a Ferrari.
39. Fergie - Owns an H2.
40. Madonna - Drives a Maybach 57.
41. Tom Cruise - Drives a Porsche 911.
42. Benji Madden - Owns a 1950 Ford Shoebox.
43. Tyra Banks - Drives a Lexus SC.
44. Kate Walsh - Drives a Range Rover Sport.
45. Britney Spears - Drives a Mercedes SLR McLaren and a CLK.
46. Pete Wentz - Drives a Range Rover.
47. Matthew Perry - Drives a Porsche convertible.
48. George Clooney - Drive the two seater electric Tango 600.
49. Kim Kardashian - Drives a Black Bentley Continental GTC.
50. Sienna Miller - Drives an Audi TT
51. TIGER WOODS - USED TO DRIVE A BLACK CADILLAC ESCALADE
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Teens ignore laws against texting while driving
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LOS ANGELES -
Karen Cordova, a 17-year-old high school student and part-time supermarket cashier, admits she sometimes texts friends while driving home from work late at night, lonely and bored.
The Arizona teenager knows it's illegal in Phoenix and dangerous. She once almost drifted into oncoming traffic while looking at her phone.
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But would a nationwide ban stop Cordova and her friends from texting in their cars? No way, she said.
"Nobody is going to listen," Cordova said.
With momentum building in Washington for all 50 U.S. states to outlaw text messaging behind the wheel, there is evidence that the key demographic targeted by such legislation, teen drivers, will not pay much attention.
At least one major study has found that, with mobile devices now central to their lives, young people often ignore laws against using cell phones or texting in the car.
The number of text messages is up tenfold in the past three years and Americans sent an estimated 1 trillion in 2009.
Some police agencies, while strongly in favor of such mandates, say its tough for officers to enforce them.
The California Highway Patrol has handed out nearly 163,000 tickets to drivers talking on hand-held phones since mid-2008. But it has issued only 1,400 texting citations since January in a state of 23 million drivers -- not for lack of trying.
"The handheld cell phone is relatively easy for us to spot, we can see when somebody has their phone up to their ear," CHP spokeswoman Fran Clader said.
"But with the texting it's a little bit more of a challenge to catch them in the act, because we have to see it and if they are holding it down in their lap it's going to be harder for us to see."
Already 19 states and the District of Columbia ban texting by all drivers, while 9 others prohibit it by young drivers.
TEXTING CAUSES ACCIDENTS
In July, Democratic Senator Chuck Schumer, citing a study that found texting drivers were 23 times more likely to be in an accident, introduced a bill requiring states to prohibit the practice or risk losing federal highway funds.
Since then, Senator Jay Rockefeller has offered his own bill that would achieve the ban through grants to states.
In October, during a three-day conference in Washington on distracted driving, President Barack Obama signed an executive order barring federal employees from texting behind the wheel.
A study by the Automobile Club of Southern California found that texting by drivers dropped after the state's law took effect, but it did not break down the data by age.
"What I would say is that texting and cell phone devices have become such a component of life for teens and for young people that it's hard for them to differentiate between doing something normal and doing something wrong," said Steven Bloch, senior research associate for the Automobile Club.
In 2007, Phoenix became one of the first U.S. cities to ban texting while driving, although Arizona still has no statewide law.
Out of a group of four high school students interviewed by Reuters in Phoenix, three admitted texting while driving and a fourth said he had stopped only after his cousin caused a serious traffic accident while sending a message.
Cordova's classmate, 17-year-old Anna Hauer, says she often texts her boyfriend when she drives and doubts she or her friends would stop because of new legislation.
"By the time they pull you over, the chances are you are going to be done with your text anyway so they can't exactly prove that you were texting," she said.
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| Underinsured wildfire victims feel burned again
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Some policyholders believe companies deliberately sold them less coverage than they would need to rebuild.
When Dave Wilder and his wife, Lynn, surveyed the remains of their Running Springs house after it
burned to the ground in a wildfire near Lake Arrowhead in October 2007, the thing that struck him most
wasn't the devastation, and it wasn't the loss of everything they owned.
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It was the sound his wife made - a mournful wail, almost a howl of despair, that echoed through the
charred trees on the hillside.
"It was something I'd never heard before, something from deep inside her," Wilder, 61, recalled. "I don't ever want to
hear it again."
He thought things couldn't get any worse. He was wrong. Wilder soon learned that the amount of insurance coverage
he had was nowhere close to the actual amount it would cost to replace his house.
With more than 1,000 homes lost to flames in recent days, other homeowners may find themselves facing similar
"underinsurance" problems.
According to the California Department of Insurance, nearly 39,000 claims were filed after the wildfires that swept
across Southern California last October and November. Just over 30,000 of those claims had been settled as of June
20, leaving almost 9,000 unpaid or disputed.
"There are a lot of different reasons why underinsurance can occur," she said. "This is right at the forefront. People
just don't want to have to spend more for insurance."
Miller said "human error" on the part of insurers might sometimes result in a policy failing to cover a home's full
replacement, but this is rare. By and large, she said, insurance companies want to sell customers as much coverage as
they can.
But Amy Bach, executive director of United Policyholders, said nearly three-quarters of 265 fire victims surveyed by
her group after last year's fires said they'd been underinsured.
She said insurance agents frequently offer customers less coverage than they actually need so the agent can come up
with a more competitive quote. At the same time, Bach said, some insurers try to limit their exposure to fire claims by
deterring people from purchasing higher levels of coverage.
"People might not even know they need more insurance," she said. "The agent says they're fine. Most people would
trust their agent."
Bach advised homeowners to take a close look at their policies and make sure that the square footage is accurate. She
also suggested crunching the numbers to determine whether the policy covers at least $200 per square foot -- the low
end of most homes' replacement cost.
"If you're insured for less than $200 per square foot, you're probably underinsured," Bach said.
If that cost comes in low after a natural disaster -- based on, say, an average of three rebuilding estimates from
licensed contractors -- the insurer would be required to make up the difference.
This should provide a strong incentive for insurance companies to offer customers the most comprehensive policies,
and to ensure that those policies are updated on an annual basis. Failure to report any improvements, of course,
would leave the policyholder liable for any additional costs.
Wilder said he bought his 1,758-square-foot house for $99,900 in 1984. It was originally insured by State Farm for
about $90,000, or $51 per square foot.
Over the years, Wilder and his wife made improvements to the property, raising the insurance level to $202,000, or
$115 per square foot.
"Each year, we always asked our agent if we had enough insurance, and he always assured us that we had good
coverage," Wilder said.
But the $202,000 check he received after losing his house fell far short of the actual replacement cost. Wilder said
estimates he received from contractors after the blaze were closer to $230 per square foot, or more than $400,000.
He believes State Farm was negligent in determining the actual cost to rebuild his home, and he's spent the past year
trying to gain a more favorable settlement.
Wilder paid $723 a year in insurance premiums. According to State Farm, covering an additional $200,000 in
replacement costs would have boosted Wilder's premiums by as much as $500 annually.
"You should never ask the insurance company what your replacement cost would be," Wilder said. "You tell them how
much coverage you want."
Some insurers will let you do this, others won't. But if an agent says you can get away with less coverage than you
think you need, get up and leave.
That's someone who may not be such a good neighbor when the smoke finally clears.
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| STEVE BROOKS INSURANCE SERVICES |
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Steve Brooks Insurance Services, Inc. is a full service, Independent Insurance Agency, offering California Automotive Insurance, California Homeowners Insurance, as well as Renter, Condo and Earthquake coverage.
We have access to the products and services of over 20 A+ Rated Insurance Companies.
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