What Is Force-Placed Homeowners’ Insurance?

November 25th, 2011 by admin | Comments Off | Filed in Information And Tips

As homeowners continue to struggle with high unemployment and upside down mortgages, many seeking to save money have let their homeowners insurance lapse. If you’re toying with this idea, we urge you to consider other cost-cutting strategies like eating cat food casseroles instead. For starters, if you drop your homeowners coverage, you will be stuck with any repair or replacement costs. More important, your mortgage contract requires that you carry homeowners insurance. What you may not realize is that your lender will be only too happy to buy it for you if you fail to keep up your end of the bargain. This is called force-placed insurance, and trust us, you do not want force-placed homeowners insurance.

Force-placed insurance (sometimes called forced place insurance) is homeowners coverage purchased by your mortgage holder to protect their investment.  If you have any doubts about their right to do this, better read your mortgage again.

So what’s so wrong with this picture? Two things: you’re still going to have to pay for the force-placed insurance; and it’s not going to be cheap. Your lender is under no obligation to shop for competitive homeowners insurance quotes. In many instances, the lender will buy the policy through a high-risk insurance carrier where the rates are exponentially more than they would be through a conventional insurance company. That’s because you’re now seen as a bad risk, and in the insurance world, bad risks are charged higher premiums.

It gets worse. If you fail to carry or pay for your required homeowners coverage, even if you’re making your mortgage payments on time, your lender can refuse to accept it or put your payment into a hold account. In the meantime, late fees may be tacked on and you could end up in default of your mortgage.

Your lender can also secure a force-placed policy if you live in a high-risk flood zone (defined by the federal government as any place with a 1% chance of flooding annually) and fail to carry flood insurance. They’re required by law to do so if your mortgage is insured by the federal government (and most are). But they only have to purchase enough flood insurance to cover the outstanding balance on your home loan. So now you’ve got force-placed flood insurance that won’t pay to rebuild your home and you’re paying a whole lot more for it than you would if you’d voluntarily purchased a policy.

In the long run, you’re far better off to shop for competitive homeowners insurance online. If you need to save money, go with a higher deductible and take advantage of every available discount such as multiple-policy discounts and anti-theft discounts.

Also, always read everything your mortgage lender sends you and keep copies of your correspondence with them in case you have to dispute a charge.

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NFIP extended through Dec. 16; insurers call for long-term extension

November 22nd, 2011 by admin | Comments Off | Filed in News

WASHINGTON—Congress has accepted an additional short-phrase extension of the National Flood Insurance coverage System, which was slated to lapse Friday.

The extension was component of a spending bill that was approved Thursday to fund federal government, like the NFIP, by means of Dec. 16.

The preceding extension of six weeks was authorized in October as element of stopgap funding bill.

Assistance, aggravation from insurance coverage groups

Insurance groups, which have been pushing for a prolonged-phrase extension, hailed Thursday’s vote, but they stressed the need for a longer-phrase answer for the NFIP, which has been permitted lapse many instances in current many years as the Home and Senate wrangled above regardless of whether the program should also cover wind risks.

Even though this kind of an expansion of the NFIP no longer is an concern amongst the two chambers, the Residence and Senate have however to agree on how the program ought to be reformed.

“Congress has fortunately averted a lapse in the National Flood Insurance Program with the continuing resolution, but once more we discover ourselves waiting for actual reform,” mentioned Jimi Grande, senior vp-federal and political affairs in the National Assn. of Mutual Insurance coverage Cos.’ Washington workplace, in a statement. “This most recent quick-phrase extension is specifically frustrating given how close reform legislation is to turning out to be law. The Home has done their portion by passing reform legislation with overwhelming, bipartisan support, and legislation in the Senate would be authorized right now if they’d only vote on it.”

“Continuing to maintain this important program by means of brief-phrase extensions is unacceptable,” he said. “As it stands, the plan owes a lot more than $ 18 billion to the taxpayers, and trying to keep the NFIP ‘as is’ only dangers adding to that burden.”

Certainty, reform essential

“We’re pleased the NFIP is not going to lapse,” Tom Santos, vp-federal affairs at the Washington-based mostly American Insurance Assn., mentioned in a statement. “However, this will be the third brief-term extension in as numerous months. More certainty is essential and as this kind of, AIA encourages Congress to pass a extended-term extension with meaningful reforms that aim to strengthen the program.”

Required reforms including moving to chance-based mostly premiums and decreasing price tag subsidies, Mr. Santos said. “The 5.6 million policyholders dependent on the NFIP for their protection against floods deserve the peace of mind that a prolonged-term extension of the program will offer.”

“We are pleased that Congress was ready to avert yet another lapse in the flood program,” Tom Litjen, vp-federal government relations for House Casualty Insurers Assn. of America, mentioned in a statement. “While we carry on to urge a long-term reauthorization for the NFIP, our 1st priority is avoiding a program lapse.”

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Home Security Tips for Holiday Travelers

November 22nd, 2011 by admin | Comments Off | Filed in Information And Tips

Three in 10 Americans will be traveling during the 2011 holiday season from Thanksgiving through New Year’s, according to the American Express Spending and Saving Tracker. Many will be taking an average of two trips. Happy holidays, enjoy your destination and drive safe if you’re going by car. But before you head out the door, give a little forethought to what you’re leaving behind. Protect your home from thieves and vandals while you’re away with these security tips. They might also help you avoid having to file a homeowners insurance claim when you return. (By the way, thieves don’t care if you’re actually a
homeowner; they’ll steal from renters, too. Renters insurance is a real insurance bargain and something you definitely should have.)

  • Burglaries tend to spike this time of year and thieves are always on the lookout for easy targets. A home or apartment that screams “nobody’s coming home for a few days” is just the ticket. Create the illusion that your home is occupied. Install timers that will randomly turn on interior and exterior lights at staggered times.
  • Call the newspaper and post office and suspend delivery while you’re away.
  • Ask a trusted neighbor to gather up any unsolicited flyers that may otherwise pile up on the porch. If it’s a really good neighbor, ask them to put out and bring in your empty trash cans out on trash day.
  • If you have a Homeowners Association or are part of a Neighborhood Watch program, let them know your departure and return dates.
  • If you live in snow country, arrange (and pay someone) ahead of time to shovel your walk and driveway.
  • Install deadbolt locks on all entry doors. Experts advise that tapered deadbolts offer the best protection.
  • Secure all windows and sliding doors with pins or bars that prevent them being opened or lifted out of the frame. Sure, a motivated thief can always break the glass, but most aren’t that ambitious. They’ll just look for an easier house to break into.
  • Winter weather can wreak havoc on your unoccupied home, too. Set your thermostat at around 65 degrees to prevent pipes and plumbing from freezing. If you’ll be gone more than a day or two, consider shutting off the water at the main supply valve.
  • Unplug small appliances (toaster, microwave, computer, tv, etc.).

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Climate scientists: More extreme weather coming

November 21st, 2011 by admin | Comments Off | Filed in News

WASHINGTON – Top international climate scientists and disaster experts meeting in Africa had a sharp message Friday for the world’s political leaders: Get ready for more dangerous and “unprecedented extreme weather” caused by global warming.

Making preparations, they say, will save lives and money.

These experts fear that without preparedness, crazy weather extremes may overwhelm some locations, making some places unlivable.

The Nobel Prize-winning Intergovernmental Panel on Climate Change issued a new special report on global warming and extreme weather after meeting in Kampala, Uganda. This is the first time the group of scientists has focused on the dangers of extreme weather events such as heat waves, floods, droughts and storms. Those are more dangerous than gradual increases in the world’s average temperature.

“We need to be worried,” said one of the study’s lead authors, Maarten van Aalst, director of the International Red Cross/Red Crescent Climate Centre in the Netherlands. “And our response needs to anticipate disasters and reduce risk before they happen rather than wait until after they happen and clean up afterward. … Risk has already increased dramatically.”

The report said “a changing climate leads to changes in the frequency, intensity, spatial extent, duration, and timing of extreme weather and climate events, and can result in unprecedented extreme weather and climate events.” And it said that some — but not all — of these extreme events are caused by the increase of man-made greenhouse gases in the atmosphere.

“We face many challenges in the future,” another study lead author, Chris Field of Stanford University, said in a news conference. Those include floods, drought, storms, and heat waves. Field said scientists aren’t quite sure which will be the biggest threat to the world because disasters are weather extremes interacting with economics and where people live. Society’s vulnerability to natural disasters, aside from climate, has also increased, he said.

Field told The Associated Press in an interview that “it’s clear that losses from disasters are increasing. And in terms of deaths, “more than 95 percent of fatalities from the 1970s to the present have been in developing countries,” he said.

Losses are already high, running at as much as $ 200 billion a year, said Michael Oppenheimer of Princeton University, a study author.

“Global warming is increasing the risk of disaster and already makes dealing with several types of disaster, like heat waves, more difficult. The risk will become greater as the future gets hotter,” he said.

Science has progressed so much in the last several years that scientists can now attribute the increase in many of these types of extreme weather events to global warming with increased confidence, said study author Thomas Stocker at the University of Bern.

Scientists were able to weigh their confidence of predictions of future climate disasters and heat waves were the most obvious. The report said it is “virtually certain” that heat waves are getting worse, longer and hotter, while cold spells are easing.

What that means is the nasty heat wave that used to happen once every 20 years by mid-century will be once every five years and by the end of the century will be an every other year scorcher, Field and Stocker said.

The report said there is at least a two-in-three chance that heavy downpours will increase, both in the tropics and northern regions, and from tropical cyclones.

The 29-page summary of the full special report — which will be completed in the coming months — says that extremes in some unnamed regions at some point in the future can get so bad that they may need to be abandoned.

Unless the world changes the way it deals with vulnerability disasters and climate change, “there’s going to be an increasing number of places where dealing with these disasters is going to be more and more difficult,” van Aalst said in a telephone interview. And in those cases, sometimes the most sensible option, he said, “may be to leave those places.”

Such locations are likely to be in poorer countries, he said, but the middle class may be affected in those regions, which aren’t specifically identified in the report. And even in some developed northern regions of the world, such as Canada, Russia and Greenland, cities might need to move because of weather extremes and sea level rise from man-made warming, van Aalst said. In places like van Aalst’s native Netherlands, citizens will have to learn how to handle new weather problems, in this case heat waves.

Scientists emphasized that governments have to be more prepared.

“Governments are not doing a good job now protecting us from disaster in the current climate,” Oppenheimer said.

And it’s not just the big headline grabbing disasters like a Hurricane Katrina or the massive 2010 Russian heat wave that studies show were unlikely to happen without global warming. At the Red Cross/Red Crescent they are seeing “a particular pattern of rising risks” from smaller events, van Aalst said. Of all the weather extremes that kill and cause massive damage, he said, the worst is flooding.

There’s an ongoing debate in the climate science community about whether it is possible and fair to attribute individual climate disasters to manmade global warming. Usually meteorologists say it’s impossible to link climate change to a specific storm or drought, but that such extremes are more likely in a future dominated by global warming.

The panel was formed by the United Nations and World Meteorological Organization. In the past, it has discussed extreme events in snippets in its report. But this time, the scientists are putting them all together.

The next major IPCC report isn’t expected until the group meets in Stockholm in 2013.

2011 The Associated Press. All Rights Reserved.

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