Extreme insurance

The assault on our homes and property
from natural and manmade sources
appears to be without end. Extreme risks demand extreme measures, and
Florida’s insurance industry has responded
with several packaged products to properly protect you, your family and your substantial assets.

“Considering the exposure to hurricanes
and so many legislative changes, a lot of
insurance carriers simply pulled out of
Florida,” says Marla Intoppa, AAI, personal
lines sales manager, Gateway Insurance,
Fort Lauderdale, Fla. “Two new packages
aimed at the high-net-worth market have
been a savior for people who otherwise
have been underinsured or forced to go to
alternative excess and surplus lines carriers.”

Smart Business recently spoke with Intoppa about certain unique insurance
exposures and some policies that should
be considered by high-net-worth individuals.

Are beach homes covered for storm surge?

Homeowners with beach property often
carry homeowners and windstorm insurance but don’t carry flood insurance. They
don’t understand that storm surge is actually a flood event, and floods are specifically excluded by homeowners insurance.
Those who do purchase a basic flood policy may still be grossly exposed. The national flood program only provides up to
$250,000 of coverage on the dwelling and
up to $100,000 on the contents. Meanwhile,
the typical homeowners policy in Florida is
written for approximately $400,000. That’s
a substantial gap. It’s very important to buy
an excess flood policy to avoid this potentially huge exposure that is not covered
under your other policies.

Does an umbrella policy cover lawsuits
brought by domestic workers?

An umbrella policy covers events like car
accidents where you are sued for a $1 million and your underlying policy limits are
only $250,000 and $500,000. Most standard
umbrella policies are for third-party claims
and exclude coverage for domestic employees. Nannies, housekeepers and
drivers can present significant exposure
because people often terminate employees
for the wrong reasons or say inappropriate
things in their presence. Employer
Practices Liability Insurance (EPLI) is very
important because domestic workers on
your premises are employees, but they are
not covered through any workers’ compensation or for labor reasons. Insurance
packages designed by AIG and Pure offer
EPLI coverage for people who have
domestic employees on their premises,
and it’s very out of the ordinary.

How should families best insure their teen
drivers?

Florida insurance writers use credit and
prior insurance as a stability factor. Florida
law also makes parents legally responsible
for everything our teens do until they are
no longer dependants of the household. If
they get in a serious car accident and injure
other people, the family is exposed to their
liability. When parents place a 16-year-old
on his or her own policy, he or she doesn’t
have the stability factors, so it is very
expensive. In the long run, it’s better to list
the teen on the family’s policy because the
parents can stay in control of the policy to make sure it doesn’t lapse, and the coverage limits will be higher. It’s usually less
expensive because they may qualify for the
family’s multicar discounts, and the teenager’s risk is spread out over the entire policy.
Additionally, there’s a smaller chance of
having some type of uncovered claim.

Is there any difference between Citizens and
a standard insurance carrier?

The main differences are the coverage
and response time. Citizens was designed
for homeowners who can’t go anywhere
else for coverage because their homes are
older with more exposure or are not well
protected. Citizens doesn’t include theft
away from premises coverage and loss-ofuse protection is limited to just 10 percent
of the coverage.

The biggest difference is service. A perfect example of this occurred as Hurricane
Katrina headed for New Orleans. AIG had a
client with a large fine arts and jewelry
schedule, and the owners were not home.
They actually sent in, by helicopter,
Blackwater Security Company to guard the
house, and movers were dispatched to
remove the artwork until the security systems were restored. They subsequently
sold a lot of policies to neighbors who were
impressed by the security personnel who
were dressed in black and carrying rifles.

Will a homeowner’s policy pay for jewelry if
a house is burglarized?

Standard homeowner policies are limited
to between $1,000 and $5,000 of theft coverage for jewelry. If you’re burglarized,
that’s the maximum the insurance company will pay out unless you schedule the
items. When jewelry is scheduled there is
no deductible and coverage is broadened
to include mysterious disappearance and
other losses. The coverage is worldwide. It
only takes a phone call to schedule these
items and it’s definitely worth it.

MARLA INTOPPA, AAI, is personal lines sales manager,
Gateway Insurance Agency in Fort Lauderdale, Fla. Reach her at
[email protected] or (561) 253-1627.

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