Insurance Quotes & Advice

Hurricane season might be over but that doesn’t mean you should let your guard down.  With the onset of winter, homeowners in the Northeast and Mid Atlantic regions still need to be wary.

Snow storms moving up the coast, or so called Noreasters have been famous over the years for their record amounts of snow accumulation and blizzard like conditions.  Although not as severe as it would be with a hurricane, there are at times tropical force winds accompanying these storms.  With these high winds comes the possibility of storm surge and the subsequent consequence, coastal flooding.

It is very important to make sure you have proper flood coverage.  Recent government studies have estimated that as many as one third of all Americans still mistakenly believe that flooding is covered under their normal homeowner’s policy.

Normally property insurers don’t cover flooding in there regular plans, especially in high risk areas.  As most of the country found out after Hurricane Katrina, insurance companies have a narrow view on what constitutes wind damage, which they do cover and flood damage, which they don’t.

Residents living in qualifying communities can purchase flood coverage through the National Flood Insurance Program which was instituted by Congress in 1968 and is run by FEMA, the Federal Emergency Management Agency.

For the past few years the stock market and the rest of the economy have been on a nice little run but the good times may be over.  As every day passes the scope of the mortgage crisis seems to grow larger with even the federal government finally beginning to take notice.

Many analysts feel that we may be entering a period of increased volatility in the stock market.  Last month we saw large movement swings on a day to day basis with the overall outcome being the largest one month loss for the market in five years.  Credit concerns as well as volatility in the price of oil has Wall Street acting like a yo-yo.

This can have a large impact on your retirement planning and you should be concerned.  There are many different choices out there from mutual funds, life insurance, and annuities.  With the growing concern that the economy may be on a downward trend and its added elements of risk what you choose now could affect you for the rest of your life.

Should you go with a variable annuity and the possibility of higher returns or stick to the safe choice of a fixed annuity?  For the most part a variable annuity would act like a mutual fund in that it is a diversified portfolio with the stock market as it’s underlying investment.  A fixed annuity would be more like a diversified bond fund.

The variable annuity is a rather recent financial product that insurance companies came up with to combat the growing popularity of mutual funds.  In effect it’s almost like a microcosm of the mortgage market.  Fixed mortgages were around forever but then adjustable rate mortgages were introduced and became popular because of their so called “teaser” rates.

When the stock market was going up, the variable annuity seemed like the no-brainer but that’s not the case anymore.  Some people  may be wishing now that they had gone with the safe and steady fixed annuity and it’s guaranteed rate of return.  Kind of like the people with ARM’s that wish they had gone with a fixed mortgage and it’s set payment schedule.

Although weather forecasters were predicting a busy hurricane season this year, only a single category 1 hurricane actually made landfall.  However, homeowners along the gulf coast won’t be seeing the benefits in lower rates next year.  In fact, many companies actually filed for rate increases with their state insurance boards.

With another year of strong profits, consumer groups and government officials have been quick to criticize the proposed rate increases.  In Florida especially, insurance companies have been receiving a lot of bad press recently.  That state’s legislature passed a bill earlier this year to fund a program to provide cheaper reinsurance for companies and expected some of those savings to passed on to the consumer.

Insurance companies insist that it is this type of moderate season that allows them to increase their claims paying ability for future need.  They have been quick to latch on to some weather experts’ prediction that the country is in the midst of a stronger cycle of hurricanes for the next decade.  There is also the claim that they are still recovering from previous losses.

And while it’s true that the last two years were very mild and not typical of your normal hurricane season, it could also be argued that the years of 2004 and 2005 were at the other extreme.  Who could forget those years, it seemed like every week that we looked at the news, another hurricane was about to hit the country.

So with insurance companies on one side and the consumer on the other, it’ll be up to state insurance regulators to decide what will be fair for both.