Should I Purchase Flood Insurance If I’m Not in a Flood Zone?
Flood insurance covers direct physical loss to your home structure and belongings caused by flooding. If the area where you live is not in a flood zone, you may think you are safe from flooding. The fact is that flooding is the most common natural disaster in the country. Many flood-related insurance claims come from areas with a low to moderate flood risk.
What Does Flood Insurance Cover?
Two types of flood insurance are available through the National Flood Insurance Program (NFIP):
- Building coverage: This protects you against damage from flooding to your foundation walls, staircases, anchorage systems, furnaces, water heaters, electrical systems, plumbing systems, refrigerators, stoves, built-in appliances such as dishwashers, permanently installed carpeting, cabinets, paneling, permanently installed bookcases, window blinds, solar energy equipment, well water tanks and pumps, fuel tanks, and detached garages.
- Contents coverage: This insurance covers personal belongings, such as furniture, clothing, electronic equipment, washers and dryers, curtains, microwave ovens, portable and window air conditioners, carpets not included in the building coverage, and valuable items, such as furs or artwork.
Flood insurance will not cover damage that is not the direct result of flooding. For example, damage from sewage backup is not covered unless flooding directly causes the backup.
When Can You Buy Flood Insurance?
You can purchase federal flood insurance if your community participates in the NFIP. For properties located within the areas with the most significant risk of flooding, known as Special Flood Hazard Areas (SFHAs), under the National Flood Insurance Act, lenders must require borrowers to buy flood insurance to receive federally-backed loans. You can purchase flood insurance at any time. After you have paid the premium, there is a 30-day waiting period before the policy goes into effect, except when:
- The initial purchase of flood insurance is in connection with making, extending, increasing, or renewing a loan; or
- The initial purchase of flood insurance is made during one year following adoption of a revised Flood Insurance Rate Map for a community, in which case the waiting period is one day.
If you purchase flood insurance when you buy your home, there is no waiting period before coverage goes into effect.
What Type of Flooding Does NFIP Cover?
When the surface of normally dry land is partially inundated, and two or more adjacent properties or two or more acres are affected, it is considered flooding covered by NFIP. This can be caused by:
- Unusual, rapid accumulation of runoff of surface water from any source, such as heavy rainfall
- Overflow of inland or tidal waters
- Collapse or destabilization of land along a lakeshore or other body of water caused by erosion or the effects of waves
- Mudslides or mudflows comparable to rivers of liquid, flowing mud caused by flooding
- Water currents exceeding normal cyclic levels
Flood insurance is not only for people who live in flood zones. Our friendly agent can help you obtain a policy to protect your home from flooding.
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5 Things That Are Excluded From Your Life Insurance
The main reason for purchasing life insurance is to leave something behind for your loved ones when you pass away. You pay your life insurance premiums to ensure your beneficiaries will receive death benefits should something happen to you. Not everyone is aware that life insurance policies have certain exclusions that can prevent beneficiaries from receiving benefits. It is important to know what those exclusions are before accepting a policy.
Life insurance companies add exclusions to their policies to protect themselves from risks, as untimely deaths could mean early death benefits and more costs to the company. Common life insurance exclusions include the following:
- Suicide: Virtually every life insurance company has a death by suicide exclusion. It is usually a two-year clause. If the policyholder dies by suicide within two years of taking out the policy, then the exclusion applies, and the beneficiaries are not able to collect death benefits. In most cases, they get the premiums back, but not the benefits. This clause is in place to prevent people from purchasing life insurance when they are planning to commit suicide. Most insurance companies screen applicants for mental health conditions before approving them for coverage.
- Service in the military: Military service can mean a higher risk of death for policyholders. For this reason, it may be an exclusion in life insurance policies.
- Aviation accidents: Although it is rare for a policyholder to die in a plane crash, death caused by aviation accidents is a common life insurance policy exclusion.
- Acts of war: Life insurance coverage may be denied when a policyholder is killed as a result of wartime activities.
- Accidental death policy exclusions: Some life insurance policies only provide coverage for death due to accidents and will not cover causes of death related to illness or chronic health conditions. Accidental death life insurance policies may include exclusions for death caused by illegal activities, such as DUI automobile accidents; risky activities, such as rock climbing or skydiving; and death resulting from drug or alcohol abuse.
What Is the Contestability Period?
Providing false information on your application (misrepresentation), risky hobbies, or substance abuse could prevent you from getting life insurance coverage to begin with. Life insurance policies have a contestability period, which is typically one to two years from the effective date of the policy. During this time, the insurance company can investigate your application and deny claims against the policy. If you pass away during the contestability period and the insurance company determines that you provided false information or misrepresented yourself, it can void your coverage, in which case no death benefits will be paid to your beneficiaries.
Every insurance company is different. It is critical to know what your life insurance covers and what the exclusions are. Life insurance contracts can be complex and difficult to comprehend. If you are considering purchasing a life insurance policy, our knowledgeable agent can review the contract with you to help you understand the policy limitations.
6 Reasons to Get Business Insurance Now
If you are wondering when the best time is to get business insurance, the answer is now. The protection it can provide is essential for your business, and some types of coverage may be required by law. Working with a local Wisconsin insurance agent, such as ours at Procter Insurance Agency can be beneficial for your business insurance needs. We can guide you to find suitable coverage for your corporation. The following are six reasons to purchase a business insurance policy now:
Some Business Insurance Is Required by State Law
Most states require small businesses to carry some type of business insurance. The two types of business insurance most often required by state law are:
- Workers’ compensation insurance: If you have employees, most states will require you to carry workers’ comp insurance to cover the costs of work-related injuries and illnesses and provide disability benefits while employees are unable to work.
- Commercial auto insurance: Most states require commercial auto insurance for vehicles owned by a business. Coverage must be sufficient to meet your state’s auto liability insurance requirements. Commercial auto insurance can help pay for medical expenses, property damages, and legal costs in case of a lawsuit.
Business Insurance Protects Your Customers
Just as workers’ compensation insurance can help protect your employees, a Business Owner’s Policy (BOP) can help protect your customers. This type of policy can combine business property and liability coverage. If a customer slips and falls or is otherwise injured on your business property, a BOP can help cover medical costs. Data breach insurance included in a BOP can help cover identity protection solutions and liability if a security breach occurs.
Business Insurance Can Help Your Company Grow
Having the right business insurance builds credibility for your company. It shows customers and contractors that you are on top of managing risks. In fact, many contracts require insurance protection. You may need business insurance to lease building space, take out a business loan, and enter into various other contracts.
Business Insurance Can Help You Attract and Retain Top Talent
Currently, it is a job seeker’s market. Prospective employees are looking at the entire compensation package, not just salary, in a job search. Employer-sponsored health plans and life insurance are popular benefits that help attract and retain employees.
Business Insurance Can Provide Protection Against Natural Disasters
Natural disasters, such as fires, lightning, tornadoes, hurricanes, and flooding can happen nearly everywhere in the U.S. It is essential to have the right insurance coverage to protect your business assets in case of a disaster.
Business Insurance Can Help Protect You Against Lawsuits
We live and conduct business in a litigious society. Any company can be sued for any number of reasons. Lawsuits against businesses are brought for a variety of reasons, including breach of contract, employee claims of discrimination or harassment, accidents and injuries, and claims of intellectual property rights infringement. Business insurance can help cover your legal fees and costs associated with lawsuits.
One important reason to have business insurance is the peace of mind it can bring you. Meet with one of our local Wisconsin agents at Procter Insurance Agency to discuss an affordable business insurance package to suit your company’s needs. Give us a call at (414) 762-8900.
Home Insurance for Rental Properties: What You Need to Know
Many people who own homes today rent them out to others. If you are renting out your home, whether on a short-term or a long-term basis, it is essential to understand that your homeowners insurance may not cover losses incurred while the property is being rented. The following is information about insurance coverage for renting out a residence in different scenarios.
Short-Term Rentals of a Primary Residence
If you are planning to be away from your home and decide to rent it out on a short-term basis, the coverage you need will depend on your insurance company. With a homeowners or renters policy, some insurers may cover you for a short-term rental if you notify the company in advance. Other insurance companies may require you to purchase a rider or endorsement to your existing policy to have coverage while the property is being rented.
If you plan to rent out your primary residence on a regular basis to different guests, then it becomes a business, and your homeowners policy will not cover it. You will need to purchase a bed and breakfast or hotel business policy. Types of coverage available under the commercial bed and breakfast policies include:
- Commercial property: This covers the cost of repairing or replacing business-related property, such as the building, furnishings, equipment, and supplies, in the event of fire, theft, or natural disaster.
- General liability: This provides protection against losses for bodily injury, property damage, and personal injury.
- Innkeepers liability: This insurance covers the personal property of your guests.
- Loss of business income and related expenses: This offers protection in case a covered loss forces you to close down your business temporarily.
Long-Term Rentals of a Second Home or Investment Property
When two people who each own a home decide to marry or live together, they may keep both homes and rent one out. Some people have second homes in different parts of the country where they may stay only during vacations. Other people purchase residential properties as an investment for rental income.
When you rent out a home for a longer period of time, such as six months or a year, you will need to purchase a rental dwelling or landlord insurance. The cost of these policies is generally approximately 25% higher than the cost of standard homeowners policies. Landlord policies typically provide coverage for:
- Physical damage to the structure of the home caused by wind, hail, ice, snow, lightning, fire, and other covered perils
- Personal property left on site for tenant use or maintenance, such as appliances, lawn mowers, and snow blowers
- Liability for medical expenses and legal fees in case a tenant or guest is injured on the property
- Loss of rental income, in the event you are not able to rent out the property while it is being rebuilt or repaired due to damage from a covered loss
If you are renting out a home, our knowledgeable agent can advise you on the type of insurance coverage you need and help you find it at the best available rates.
The Importance of Updating Your Life Insurance Policy
If you are developing a career, accumulating assets, or starting a family, your life insurance needs could change. It is a good idea to review your policy from time to time to ensure it provides the coverage you need and reflects your current situation. As we age and achieve milestones, life insurance policies may need to be updated. Our knowledgeable agent can review your policy with you and make recommendations for any necessary changes.
When May You Need to Update Your Life Insurance?
We recommend reviewing your life insurance coverage at different points in your life, including when:
- You get married or divorced: When you marry, you want to make sure your spouse will be taken care of in case of the unexpected. In the event of a divorce, you may also want to review and modify your policy.
- A new child is born: As your family grows, you will need to update your life insurance to include all your children as beneficiaries. Raising children is expensive, and you may also want to increase your coverage.
- You purchase a home: When you buy a new home, it may be a good idea to change your life insurance policy to ensure the death benefits will cover the balance of your mortgage.
- Your job status changes: If you start a new job, get a raise, move from part-time to full-time, or go through any changes that affect your income levels, you should review your life insurance coverage.
- You take out a loan: We do not want to leave our loved ones with large debts. After taking out a loan, you may want to ensure your life insurance is adequate to cover the debt in case something should happen to you.
Why Should You Update Your Life Insurance Policy Periodically?
Most people tend to purchase life insurance and then put it on the back burner. They pay their premiums and assume they will not need the coverage unless something tragic happens. The truth is, like other types of insurance, life insurance needs to be updated and maintained for several important reasons:
- Circumstances do not stay the same: Couples marry, and children are born. Kids grow up and move out on their own. Couples divorce, and ex-spouses remarry. People leave the workforce and enter retirement. Changes in your life should be reflected in updates to your life insurance.
- Addresses change: People change addresses for a variety of reasons, including transitioning from an apartment to a house, purchasing a new home, or downsizing once the children are grown and on their own. When you or a beneficiary has moved, these changes should be recorded in your life insurance policy.
- More people are remarrying: Although marriage rates are down, remarriage rates are on the rise in the U.S. If the beneficiary on your life insurance policy is a former spouse, you may want to update your policy.
Our friendly agent can review your life insurance policy with you and help you make any necessary changes.