FIRST CO-INSURANCE RESPONDERS
We want to protect you . So when the unexpected occurs , you can expect your insurance to work for you . So , what do we really mean by co-insurance ? Simply put , it is a joint payment between two parties , the insured and the insurance company . Maintaining proper coverage ensures that you receive the full value of the claim without participating in the cost .
For example : If your building has a current reconstruction cost of $ 1,000,000 and the policy contains a 90 % co-insurance clause , then $ 900,000 is the minimum limit of insurance allowed in order to receive the full value of repair or replacement . If the insured value on the policy was actually below $ 900,000 then a co-insurance penalty would apply .
Determining whether or not a penalty applies is a fairly simple task . Just divide the amount of insurance on the policy by the amount of insurance needed ( the reconstruction cost ). As long as that percentage meets or exceeds the specified co-insurance requirement , no penalty applies . If the percentage is below the specified requirement , a penalty would apply .
At Deeley , we operate on a “ no surprises ” basis , which is why we want you to understand the potential risk of not carrying the proper amount of coverage .
CHANGING VALUES
While property values can fluctuate up and down often in response to market conditions , building costs are consistently on the rise regardless of business type or location . Reconstruction costs are trending up in excess of 9 % since January 2020 , with lumber prices alone rising 54 %. Making improvements to your property is likely to increase the reconstruction cost , as well . This can even affect you at home . ( See Fixer-Upper on page 29 )
THE TAKEAWAY :
Revaluate your property , reassess your policy with a trusted advisor , and adjust coverage to meet your needs . Be Sure your insurance will protect your property . +
BY : MATT JONES SALES MANAGER
Matt Jones is the Sales Manager at Deeley Insurance Group , and a third-generation agent , following in the footsteps of his father and grandfather . He lives in Salisbury with wife Kelly , two sons and two daughters . 410.213.5628 mjones @ deeleyinsurance . com
FLOOD INSURANCE
Changes Are Coming October 1
New rates for all properties insured through the National Flood Insurance Program ( NFIP ) will go into effect nationwide on October 1 , 2021 . FEMA is pairing state-of-the-art technology with NFIP ’ s mapping data to establish a new risk-informed rating plan — Risk Rating 2.0 , the largest change to the program in 50 years .
Risk Rating 2.0 uses the latest actuarial practices to set fairer , risk-based rates that better reflect a property ’ s true flood risk . All NFIP policies — including single-family homes , multi-unit , and commercial properties — will change over to the new rating system .
BUDGETING FOR 2021 AND BEYOND
On April 1 , 2021 , business and condominium policies rated in the A Zone saw an increase of 1.5 %– 3.0 %.
On January 1 , 2022 , the Preferred Risk Policies rated in the X Zone will see an increase of 13 %.
The new rating plan will comply with statutory caps , preventing significant premium increases by offering a glidepath discount to existing policyholders and new homeowners buying homes from existing policyholders . We ’ ll share information as it becomes available to help you make informed decisions about protecting your property . +
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