With the start of the new year and the holiday season behind us, you don’t want to forget to insure expensive gifts so they can be enjoyed for years to come! To avoid the possibility of financial loss, consider purchasing a separate valuable items policy. Here’s what you need to know.
Although a standard homeowners policy protects your home and what’s inside, there’s usually a limited amount of coverage on valuable items such as jewelry, art, wine, antiques, and other collectibles. It’s recommended to purchase a separate valuable items policy to protect these items in the event they are lost, stolen, or damaged. You can purchase a blanket coverage for valuable items which are not itemized.
For scheduling coverage, the first step to take is inventorying your valuable items and determining if they exceed your homeowners policy limits. If you’re unsure the value of your items, it is recommended to get them appraised. A trusted advisor can recommend a reputable appraiser if needed. If this is your first time getting a valuable item appraised, you should consider having heirlooms and other previously purchased valuables appraised as well. Expensive items can go up or down in value.
You will need to forward a copy of the receipt to your insurer so that the company knows the current retail value of the item. Keep a copy for yourself and update your home inventory. Get into the habit of keeping a visual record of all of your personal possessions. Include information such as date of purchase, place of purchase, serial number, and original value. This helps to document your loss and speed up the claims process, particularly for claims involving antiques and rare pieces of jewelry.
A separate valuables policy is a great way to have broader coverage and protect your valuable items against potential hazards. Remember to properly insure any expensive gifts you may have received this holiday season!
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Why are insurance carriers continuing to remain under a moratorium for placing new policies?
- While most insurance carriers remain under a moratorium and are not willing to place new insurance policies in Collier and Lee Counties, a few have reopened. Most carriers continue to uncover the extent of hurricane damage which occurred in our area and are not expected to reopen in the immediate future. The driving force for remaining closed in the immediate future hinges on the carrier’s ability to secure and maintain reinsurance for their long-term financial strength.
When is the moratorium expected to end?
- Insurance carriers are waiting until 01/01/23 to negotiate their re-insurance contracts to determine the cost and availability of Property insurance. We are expecting to see the market establish more concise guidelines and adequate rate filings at that time.
Are rates expected to increase due to Hurricane Ian?
- While we have been in a “Hard Market” for several years, analysts are predicting this hard market will continue for some time with higher rates and fewer options due to Re-Insurance costs and limited capacity.
How can buyers who are under contract secure proper insurance at this time?
- Buyers should confirm if the property has been affected by Hurricane Ian. Homes which sustained water damage require the necessary water mitigation steps have been taken and documentation of the condition of the property via inspection.
- While NFIP Flood markets are open, Homeowners and Condo markets continue to be very limited. The few Home and Condo markets which are open may have less desirable terms and conditions with water and mold exclusions. Be sure that that your buyers have reviewed the terms carefully and are aware of any policy limitations.
What if the property sustained damage which the buyer intends to address after closing?
- Homes which experienced damage will need to be insured under a Builder’s Risk policy until the necessary repairs have been completed. Once the work has been completed, the policy can be rewritten to a Homeowners Form including contents.
- Ideally, if the seller addresses the necessary repairs prior to closing, buyers will have a better chance of securing proper Home and Condo coverage.
If the seller files a claim, can the new buyer secure insurance?
- Homes with open claims will not be eligible for a new policy until the claims are closed. Claims must be closed for new home buyers to secure proper coverage.
Is it true that if a homeowner files a Flood Claim, the Flood Insurance on that property goes up?
- The NFIP will not surcharge for one flood loss; however, after a second flood claim of $1,000 or more in a 10-year period, the property is considered a Repetitive Loss Property and will surcharge.
What is the difference between Flood and Wind claims?
- Flood claims are as a result of rising waters and storm surge. Flood adjusters will look at the water mark on the interior and exterior of the home to determine the extent of flooding.
- Wind claims are as a result of hurricane force winds which can cause wind driven rain, damage to the roof and structure where rainwater enters the home.
- Some homeowners have experienced a combination of the two, with homeowners and flood carriers paying their proportionate amount of the claim.
Tips
- While your buyers may be tempted to pay cash and close on a new property without insurance, please keep in mind they may have unrealistic expectations of insurance costs once the market re-opens. Additionally, we are still in hurricane season and will be self-insuring in the event of another storm.
- Obtaining Wind coverage on high valued properties is very limited. Homes which are mitigated with high impact windows or shutters, and properties which are maintained exceptionally well, will have the best results when shopping the market.
- Citizens is open and operating business as usual and will write homes and condos with a replacement value up to $700k.
- Time will tell how Hurricane Ian claims will impact the insurance market long-term. Stay tuned!
Andrea Pelletier, CPRIA, CPIA is Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Andrea works with successful individuals and their families on creating and customizing package insurance solutions in the areas of luxury homes, car collections, jewelry, fine arts, watercraft, and personal excess liability. Comments and questions are welcome at apelletier@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
While most insurance companies cater to the broader needs of the general market of consumers, for homeowners who maintain luxury homes, there are preferred insurance markets that offer policies with higher property coverage limits and better overall protection of assets. These preferred markets generally carry a financial stability rating of “A” or higher, meaning they perform at the top of the industry in terms of creditworthiness. While the Florida homeowners’ insurance market is financially stressed, we are seeing less volatility with these preferred markets.
Gulfshore Insurance represents these top-rated and most preferred insurance companies that specialize in insurance protection for high value homes including AIG, Berkley One, Chubb, Cincinnati, PURE, and Vault. Our preference is to place our clients’ personal risk management programs with these Admitted Carriers that have received superior financial ratings from the national rating agencies. We value their financial stability, breadth of coverage, loss prevention services, and their track record of settling claims promptly and fairly.
To qualify for one of these preferred markets, there are usually several factors that need to be considered, including:
- Home replacement value of $2 million or more
- Full opening protection on all windows and doors
- Roof newer than 2002 and Florida Building Code compliant
- Minimal claims history
- Package program with all insurance policies bundled into a “packaged” policy structure with one carrier; this helps create a more meaningful relationship with that insurance company and typically leads to preferred status. The package policy approach also ensures protection by consistent policy language and more robust coverage at time of loss.
In situations where preferred specialty markets are not the right fit for our clients, our agency represents up to 20 other companies, allowing us to find appropriate solutions to fit our clients’ needs.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
After a hurricane hits, it’s important that you keep your safety in mind before you begin assessing the damage that was done to your property. Pay attention to local officials for information and special instructions. Once confirmed that it is safe to return to your home, keep the following in mind as you begin the recovery process.
Upon return, it is important to survey the property for damage. Do not turn on electrical power until you have inspected the property and evaluated all possible risks. Check for damage inside and outside the property, and document any property damage with photographs, inclusive of your contents. Keep a journal of these damages and report them to your insurance company as soon as you can. Provide a general description of the damage and have your policy number handy if possible.
If your home has sustained damage, it is never a good idea to repair it yourself. However, there are a few things you can do until a professional is able to fix the problem. Remember, do not proceed with permanent repairs or remove debris until the insurance adjuster has had the opportunity to inspect the resulting damages. Save all of your receipts as the insurance company will ask for them at a later date.
- Cover damaged roofs with tarps.
- Cover broken windows with plywood or plastic.
- Use lumber or 4-by-4s to brace sagging ceilings. Remove any wet insulation.
- If possible, restore your air conditioning systems or run fans to prevent mold.
- If mold has already started to grow, clean it up with a mixture of bleach and water.
For decades, Gulfshore Insurance has helped our clients manage the aftermath of devastating hurricanes. We have taken extra steps to ensure we will be there for you following a hurricane or other natural disaster.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Hurricane Season can be a time of turmoil for property owners and real estate professionals alike. The short-term effects of a hurricane can occur both before and after a storm.
Before a Hurricane
Between June 1st and November 30th, Florida enters Hurricane Season, and real estate professionals should be aware of possible restrictions regarding securing insurance for a home purchase. If there is a named storm (typically a Tropical Storm, Hurricane Watch, or Warning) that develops and is threatening our area, most insurers will temporarily close for new policies until the threat passes. In other words, a buyer won’t be able to obtain insurance. This has the potential to impact a home’s closing. If the buyer is financing the home purchase, their lender typically won’t grant a loan commitment without homeowner’s insurance. To prevent this, it is critical to advise buyers to look into securing their insurance as soon as possible, and before the closing date. Buyers should contact their insurance agent and purchase a policy as early as possible during Hurricane Season.
In addition, standard homeowners’ policies typically exclude the peril of flood. All properties are located in a flood zone. Realtors should advise buyers to seek guidance from a local insurance advisor to perform a flood zone determination and confirm if the property is located within a Special Flood Hazard Area.
Recently, there have been numerous legislative and rate changes for flood policies by the National Flood Insurance Program (NFIP). Most recently, FEMA implemented Risk Rating 2.0 thereby transforming a pricing methodology that had not been updated in 50 years. As of April of this year, all policies are now subject to the new rating methodology. Current NFIP rates are not grandfathered in; however, if a buyer confirms the seller has an existing NFIP flood policy, a new policy can be written using the seller’s Glide Path. The seller will need to provide a copy of their current policy Declarations page; the minimum information needed includes the flood insurance carrier, policy number, expiration date, and original policy date. We recommend confirming the seller has a flood insurance policy in place through the NFIP and obtaining a copy of that policy which will enable the buyer to obtain preferred pricing for their new flood policy. If the seller does not have a flood policy in place, in addition to coverage through the NFIP, new home buyers can purchase their coverage through Private Flood markets which have been competitive for a good number of property owners in our area.
Even policy information from the seller for the property may not always be reliable due to flood zone changes and rating errors. It is best to consult an experienced Florida insurance professional at the very start of the due diligence process with any property, to get an accurate flood insurance quote and explanation of flood zones.
After a Hurricane
Insurance carriers carefully review properties for prior losses and open claims and will inspect homes after a new policy is placed, as well as spot-check the home over the life of the policy. In most cases, homes with existing damage are uninsurable if repairs are not made prior to the home closing or in a timely manner following the closing. All insurance carriers will require photos of the affected damaged areas, contractor receipts, and any applicable permits to show that the repairs have been completed. It is not uncommon for insurance carriers to cancel coverage if issues are discovered that were not disclosed on the application. It is important to understand that overall, it is very challenging to bind a new policy for a home that has an open hurricane claim.
Following a catastrophic hurricane or other natural disaster, insurance companies may struggle to keep up with higher-than-expected losses, and subsequently, homeowners may see increases in rates. Average home insurance rates have risen in every state in the last decade, mainly due to natural disasters, and Florida’s average rate is the highest in the nation. Florida tends to have most of its damage caused by hurricanes, such as Hurricane Irma, which hit the state in September 2017 and caused $11.1 billion worth of damage, with the vast majority of that to homes.
No area in the country, or arguably the world, has a stretch of coastline as expansive and hurricane-prone as Florida. This susceptibility to hurricanes puts homeowners and insurance companies in a risky situation. Real estate professionals should always advise homeowners to seek the advice of a local insurance agent on coverages needed. Just as insurance companies have different contracts by state, the contracts can also vary greatly within a state. A local agent will be able to help navigate through these differences and identify the bigger gaps in coverage/contracts.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
