In the last post on Natural Catastrophe insurance I am going to be highlighting property that will be excluded in this type of insurance policy. Just like home insurance there will be an exclusion for land, land values, soil, water, air, or any interest or right therein. Home insurance policies only provide coverage for the dwelling or any other structures on the property, the same goes for this type of coverage. This policy does not provide remuneration for any destroyed land unless there is a structure sitting upon it.

The Natural Catastrophe policy will not also provide coverage for any buildings and other structures used in whole or in part for any commercial, farming or manufacturing purposes, other than residences on the premises held for rental. Did you understand that? Here it is in non-insurance speak. If you are a landlord and have this coverage for your rental home you are safe. If you are operating a commercial business out of your home your not going to have coverage.

Other areas where you will not have coverage under this insurance will be with retaining walls whether or not the wall is used for the continuing stability of any part of the premises, and whether or not it is attached to any part of the structure. Your also not going to have coverage for fences, trees, shrubs, lawns, plants, and pretty much most landscaping costs.

Following this series on Natural Catastrophe insurance I am going to discuss flood insurance policies and provide you with terms and conditions that are specific to flood insurance.  If you have additional questions about this insurance coverage please give me a call or drop me an email.

What would be an insurance policy be without exclusions, right? Buyer of insurance beware, lose the mentality thinking "it's covered".  You need to take the responsibility to read what is and what is not going to be covered so you have no surprises. Always contact your agent or advisor if you have questions as they have the resources or at least should have the resources to address your questions or concerns.

A few of the types of losses excluded in a Natural Catastrophe insurance policy include the following:

1. No coverage for a loss out of nuclear reaction, nuclear radiation or radioactive contamination.  You will find this similar exclusion on a home insurance policy.

2. No coverage for a loss out of war; invasion, acts of foreign enemies, civil war, rebellion, insurrection,  military or usurped power or martial law or confiscation or nationalization or requisition or destruction of or damage to property by or under the order of any government or public or local authority. That's quite a mouthful but as you can see anything close to being considered of an act of war is not going to be covered. Again, you will find an exclusion similar to this on your home insurance policy.

3. No coverage for loss or damage arising out of normal settling, shrinking or expansion of land, buildings, structures or foundations; or erosion, gradual subsidence or the processes of erosion that take place over time, or any other gradually occurring loss whether caused by Earthquake Shock, Flood or Landslide or not, or any loss or damage which commenced prior to inception of this policy. The event has to be sudden and accidental, as stated above anything that happens over a period of time is going to be excluded from coverage.

Again, these are only a few of the exclusions that are found in a Natural Catastrophe policy. You need to review the policy for yourself to get an understanding of where you might not have coverage.

My next post on Natural Catastrophe insurance will speak about types of property that are excluded in this type of insurance policy.

The wet weather forecasted for this week brings more bad news about the potential of more floods & landslides for local homeowners. I thought I would spend a few posts talking about the different types of insurance options that are available to protect your home against both a loss due to flood and landslide.

I will start out discussing landslide insurance options since I have been talking to clients today about an option that are available for them. The type of policy that provides insurance protection against a loss due to landslide is sometimes called a 'Difference in Conditions' policy or a 'Natural Catastrophe' insurance policy.

This type of insurance policy provides protection against a loss due to earthquake, flood, & of course landslide. The Natural Catastrophe policy defines each as:

1. Earthquake Shock means earth movement due to natural, seismic disturbance, caused by a sudden movement of the earth's crust, and including as a direct and immediate result of Earthquake Shock, landslide, mudflow, earth sinking, earth rising, or earth shifting.
2. Flood means a general and temporary condition of partial or complete inundation of normally dry land areas above the surface of the ground, caused by the overflow of a body of water including rivers, streams or lakes, waves, tidal water, surface water or spray from any of these, whether or not driven by wind.
3. Landslide means the natural and sudden fall, slipping or displacement of earth or rock, including mudflow and land collapse other than that arising out of Earthquake shock.

The deductible for this type of insurance policy works as percentage rather than a dollar amount. For example, rebuilding your home after a landslide, earthquake, or flood you would be responsible for 5% of the insurance replacement cost of your home. If the insurance replacement cost of your home was $355,000 this would equate to $17,750.

Like all insurance policies this type of insurance has exclusions and you always need to read the exclusions. My next post on landslide insurance will speak to some of the exclusions that can be found in this type of insurance policy.

There is no shortage of flood and landslide headlines in The Oregonian due to the after effects of the rain and snow that has dumped over the Portland area the past couple of weeks. Just last week Lake Oswego officials advised homeowners to take preacautions against flooding prior to the landslides that just occured over the past day. Based on the article Houses in peril, but owners are unaware published in today's Oregonian you would think that town officials would take heed in their own warning? Could these landslides have been averted?

The article states that  after landslides killed five people in 1996, the state launched a safety initiative that called for landslide hazard maps. I haven't seen these landslide hazard maps have you? I doubt it because the article states that the state never formally adopted these maps after some city and county officials complained that the maps represented a regulatory headache that might restrict development. Brilliant. It is absolutely fantastic when the local government bypasses the safety of its residents and issues permits to build in high risk areas to generate revenue for the town.

So the main culprit of these recent landslides is not just due to improper drainage but the fact that many of these homes should not have been built where they currently are situated in the first place. As I have previously posted home insurance is going to exclude damage and loss due to a flood or landslide. A flood insurance policy is not going to provide the protection you need because it will exclude damage due to landslide, a flood insurance policy will only provide protection for mudflow. The only type of insurance available for protection due to landslide is what is called a Natural Catastrophe Insurance Policy. Having a Natural Catastrophe Insurance Policy will protect your home and personal property against a loss from earthquakes, landslides, and floods. If you are homeowner and face the potential risk from any of the above you need to consider a Natural Catastrophe Insurance Policy.

Other than having the right insurance in place the best risk management to have in place for the protection of your home would be the following:

1. Address drainage problems. Rain and melting snow will stream itself into channels and if you don't divert this water from your home you will take on the potential for water damage.
2. If you build or purchase a home on, above, or below a hillside you take your chances. Make certain that the property site adheres to the state building codes from the setbacks from slopes.
3. Don't live on, above, or below a hillside. Consider the odds for a loss. The three ingredients of landslides are steep slopes, loose soil and water. We live in prime landslide areas.

To see how your home is rated for landslide risk, go to the Oregon Coastal Atlas and zoom to your property's location.

Today's Oregonian has an article that reports updated maps of Cannon Beach show that a major tsunami generated off of the Oregon Coast could inundate an area larger than previously believed. What does this mean if you live either full time or part time on the Oregon Coast. Yikes!

Reading this article addresses the number one concern that I often get from clients who have homes on the Oregon Coast, that question is whether or not their home insurance policy will provide coverage for damage due to a tsunami. The answer to that is no because home insurance policies are going to exclude coverage from water damage. Further definition of this means that the home insurance policy is not going to provide coverage for floods, surface water, waves, tidal water, TSUNAMI, overflow of a body of water, or spray from any of these, whether or not driven by wind.

The way to protect your Oregon Coast home from the potential damage of a tsunami will be with a flood insurance policy. For those home owners who once thought their home would not be affected by the potential damage of a tsuami now need to reconsider their risk. The article states the new maps reveal that a tsunami could reach more than a half-mile farther up Ecola Creek and flood more residential and commercial areas than earlier tsunami maps had recognized. You can click here to see the new tsunami maps and safety brochure.

An interesting point in the article is that it highlights there are two different types of tsunamis that would hit the Oregon Coast. One type of tsnuami would be triggered by a distant earhquake in an area such as Alaska or Asia and another would be triggered by a major subduction zone earthquake off of the Oregon Coast. Click here to learn more about Oregon earthquakes and fault zones.

If your home is considered to be in a tsunami inundation zone you need to have a flood insurance policy in place if you want to be reimbursed due to damage. If you have questions about home or flood insurance please contact me so I can provide you with a comprehensive review of your insurance and address your questions.

Since I have been living in Oregon I have been told that the rain & flood season officially runs from Halloween through early spring. I'm not a meteorologist but I feel safe by saying that the rains have officially arrived. If you have not been outside (smart thinking) not only are you dry and safe but if you turn on the TV set you will see widespread reports of flooding in Tillamook, Seaside and other communities on the Oregon Coast and flooding within certain areas of Portland.

It was around this time last year that flooding took place in Vernonia. The anomoly about the Vernonia flood last December was that it was the 2nd 100 year flood to hit the community within the past 11 years. The lesson that needs to be learned from the potential flooding that could occur in this type of weather is not just to be prepared and protect your property with flood insurance but to consider your safety.

Here are a few facts & tips that I pulled from the website of the National Weather Service.

• Most flood deaths occur in automobiles.
• Never drive your vehicle into areaswhere the water covers the roadway as flood waters are usually deeper than they appear.
• Just one foot of flowing water is powerful enough to sweep vehicles off the road.
• Excessive runoff from heavy rainfall will cause ponding of water on highways, streets, and underpasses which will make them unpassable.
• When encountering roads make the smart choice and turn around.

As someone who advises my prospects and clients I make everyone aware that damage caused by flood is not covered by a standard homeowners insurance policy and that a separate flood insurance policy is needed to protect against this risk. If you have questions about flood insurance or would like a flood insurance quote please give me a call.

Today's Oregonian reported a woman embezzeling $10,000 from a deli where she worked. As a business owner you want to trust that your employees are honest, although as in this case there are employees who will steal. The first question that business owner will as is "does my business insurance cover this?"

Most business insurance policies will include Crime Insurance, which is also known as Fidelity Insurance. This type of business insurance coverage will provide you protection against a dishonest act by an employee in which your business might suffer a loss of money, securities, or property other than money and securities resulting from a crime.

Typical Crime insurance claims allege employee dishonesty, embezzlement, forgery or alteration, robbery, safe burglary, counterfeiting and other criminal acts. Claims usually fall into two types of categories:

1. Theft (Inside/Outside) this pays for money and securities taken by burglary, robbery, theft, disappearance and destruction. The crime can take place on your premises (inside) or away from your property (outside) at a bank or at a fundraiser, for example.
2. Employee dishonesty coverage pays for losses caused by dishonest acts of your employees or volunteers, such as embezzlement, forgery or theft.

What you should take with you from the business that suffered the loss in the Oregonian article that it is necessary to have controls in place to try and eliminate theft that might occur against your business. Here are a few suggestions:

• Do you have someone other than the person responsible for reconciling bank accounts either make deposits, make withdrawals, or sign checks? If not, your should.
• Is a countersignature of checks required? If so, what is the dual signing limit?
• Are all incoming checks stamped "for deposit only" immediately upon receipt?
• Is a physical count of inventory conducted at least annually?
• Are inventory records computerized?
• Do you perform any of the following on candidates for new employment:
  • Verification of prior employment
  • Drug testing
  • Education verification
  • Credit history
  • Criminal history

If you are uncertain if your policy has Crime Insurance coverage in place contact me for an insurance review of your business so we can help you eliminate from a loss due to employee dishonesty.

Many people overlook the need to properly insure their expensive jewelry, believing that it is automatically covered by their homeowners policy. While homeowners policies do cover jewelry, this insurance usually is subject to a much lower limit than the overall contents coverage. This reduced limit is called a "sublimit" or "special limit of liability", and a typical sublimit ranges from $1,500 - $5,000 for loss by theft of jewelry, watches, and precious and semiprecious stones. If your jewelry is worth more than the sublimit in your homeowners policy, you should consider purchasing specific insurance called a rider or schedule to cover it. The following is a good process to follow.

• Arrange an appointment with us to review your jewelry coverage. Bring as much information about your jewelry portfolio as possible, including any appraisals.
• If your high-valued jewelry has not been appraised within the last 3 years, consider obtaining an appraisal from a reputable jeweler. Insurance companies often require an appraisal on more expensive jewelry from a graduate of the Gemological Institute of America (GIA). The Institute's G.G., G.J., or A.J.P. designations at the end of an individual's name indicate that the jeweler has achieved a high level of professionalism with an education backed by a respected nonprofit organization.
• Make sure the appraisal has a description of the diamond's four C's --(a) carat, (b) cut, (c) clarity, and (d) color. The "carat" refers to the weight of the diamond. The quality of the "cut" of the diamond results from the way light enters the stone and is reflected back. "Cut" is also used to refer to the diamond's shape, such as round or pear-shaped. The "clarity" refers to the prevalence of minor spots, lines, bubbles, or other natural imperfections within the diamond. The "color" denotes the tint a diamond may possess. Remember that the better the appraisal, the fewer problems you will encounter with the insurer if you ever have to make a claim.
• Purchase the rider or schedule for your jewelry via an endorsement onto your homeowners policy. This endorsement (also available as a separate policy) provides much broader coverage than the limited protection found on the unendorsed homeowners policy.
• Consider keeping any valuable jewelry you rarely wear in a safety deposit box at your bank.

Review your jewelry protection with us at least every 2 years or whenever you sell or purchase high-value jewelry.

The following content has attribution to IRMI.

National Fire Prevention Week is October 5th - 11th

• Did you know that cooking fires are the #1 cause of home fires and home fire injuries?
• Did you know that heating fires are the second-leading cause of home fires?
• Did you know that the top five days for home candle fires are Christmas, Christmas Eve, New Year's Day, New Year's Eve, and Halloween?
• Did you know that working smoke alarms cut the risk of dying in reported home structure fires in half?

Learn more about how you can protect yourself, your family, and your home!  Check out the facts at the National Fire Protection Association.

Defective electrical wiring systems cause approximately 40,000 residential fires annually, according to a United States Consumer Product Safety Commission (CPSC) study. In addition, electric cords and plugs are involved in about 7,000 fires annually. The National Electrical Safety Foundation offers numerous tips to safeguard the home against electrical fire and related losses, including the following.

• Verify that outlets and extension cords are not overloaded.
• Examine electrical cords to ensure they are not frayed, damaged, or placed under rugs or carpets.
• Verify that the proper wattage bulbs are being used in light fixtures and lamps.
• Consider installing ground fault circuit interrupters (GFCI) in bathrooms, utility rooms, and kitchens. This device protects people against electrocution by shutting down the electrical system if it detects any imbalance in the electricity.
• Take steps to safeguard electrical appliances from power surges. A power surge is a sudden rise of current or voltage in an electrical circuit that can last up to several seconds and can ruin electrical appliances and equipment, such as computers. You can purchase surge protection devices to safeguard against the problem.
• Consider updating the entire electrical system if the home is over 40 years old. Older homes are more susceptible to electrical fire. For example, many older homes contain aluminum wiring, which is much more susceptible to starting fires than the copper wire required by modern building codes.
• Install child tamper-resistant electrical outlets to prevent a child from inserting something into the outlet holes.
• Install arc fault circuit interrupters (AFCI) to avoid fires caused by arc faults. An arc fault is a discharge of electric current across a gap. This can be caused by improper electrical connections, pinched wire insulation, and overheated wires.

The following loss control tip has been provided by the Institutional Risk Management Institute (IRMI)