Business Property Insurance

Update: Maine Flood Insurance Re-Authorized until May 31

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For the second time in a month, The National Flood Insurance Program lapsed on March 28 due to lack of continued federal funding. The Senate left for Easter recess until April 12 without addressing HR4851, which would have offered an extension. This leaves anyone looking to buy Maine flood insurance – or in any other state – high and dry, in the height of flood season.

If You’re Buying a Home and Need Flood Insurance
Flood insurance servicing companies are collecting applications, but cannot accept them or bind coverage until the NFIP is re-authorized by the Senate. If your lender requires proof of flood insurance, this may delay your closing. Talk to your lender for more information. You literally can not buy flood coverage without an act of Congress.

If You Already Have Flood Insurance, and Need to Make a Claim
Claim payments  will be continued as usual for all policies currently in effect.

If You Have Flood Insurance and Need to Increase Your Coverage
Coverage cannot be increased on existing policies until the NFIP is reauthorized. This may delay a loan closing if you are refinancing or taking out a home equity loan.

If Your Flood Policy is About to Renew
Renewal policies can not be issued during the lapse. Many companies sent renewal bills prior to March 28. If you received a bill and paid it, your coverage should be in force. If your premium was not paid before March 28, coverage cannot be bound until after the NFIP is reauthorized by Congress.

What You Can Do
The NFIP is the only primary flood insurance available for residential properties. Many insurers have a servicing contract to issue business on behalf of the NFIP, but it is a government program. Without reauthorization, the program is essentially shut down. Call or email your senator to let them know what this lack of funding means to you. While there’s no guarantee, the NFIP reauthorization will likely be retroactive to March 28 – once it’s finally passed. That’s usually what happens in these cases.

Even during normal operation, the National Flood Insurance Program operates differently than most insurance programs. There are waiting periods and underwriting rules and requirements that are unique to this program. It’s impossible to advise you about your individual situation with a blog post like this. Call a Maine homeowners insurance agent for advice about your own insurance.

UPDATE:
As of April 15, 2009, Congress passed, and the President signed into law, a bill reauthorizing the National Flood Insurance Program (NFIP) until May 31, 2010.  The extension included retroactive funding to cover two gaps in the program (March 1 – 2 and March 29 – April 15, 2010). The program will expire again on May 31 unless it is further extended. Stand by!

Is the City Responsible for Your Sewer Backup in Maine?

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There are few nightmares for Maine homeowners more unpleasant than a sewer backup in the basement. We don’t need to go into details about sewer backups. Suffice it to say, we hope you’ve never seen one, and never will. Unfortunately, they’re all too common in heavy rains.

What Causes Sewer Backup?

  1. Sewer lines become full of groundwater or storm water, and back up, usually through basement drains.
  2. Line blockages in the street cause a backup.
  3. Tree roots or some other obstruction on your property blocks the line from your home to the street.

How Can I Prevent a Sewer Backup?

The most common protection is to install a backflow valve. This is designed to allow sewage to flow out of your home (“the good way”), but not from the street into your home (“the bad way”). These are sometimes called check valves or flap valves. Gate valves are manually operated, and completely seal the pipe leading from your home to the street. A plumber can recommend the best solution for your home.

What if I Have a Sewer Backup?

  1. Call your city’s sewer maintenance department.
  2. They will check the line in the street near your house.
  3. If the line is not found to be blocked, you should call your plumber.
  4. We do not recommend trying to clean your own home after a sewer backup. Call a qualified remediation contractor. Search for “sewer or water cleanup contractor”.

Is the City Responsible for My Property Damage?

Probably not. The Maine Tort Claims Act holds your city responsible only if they were negligent in maintaining the lines. Most municipalities have strong maintenance programs for their systems. They’re not responsible for people dumping inappropriate items into the system, such as grease, non-flushable items, or debris. If you think that the damage was caused by your municipality’s negligence, contact their legal department.

Does My Homeowners Insurance Cover Sewer Backup?

“Off the shelf” Maine homeowners insurance policies do not cover property damage from backup of sewers or drains. Optional coverage is broadly available from your Maine insurance agent. For more information about sewer backup insurance, homeowners insurance or other storm insurance, contact Noyes Hall & Allen Insurance at 207-799-5541.

February 25 Maine Wind Storm Damage Update

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Our Maine insurance agency has been very busy taking claims and reporting them to insurance companies, and keeping our clients informed of the progress of their claims.

So far, the damage that’s been reported to us has been mostly concerned with homeowners insurance: trees falling on property and wind damage to buildings, followed by water backup into basements. Many Mainers lost power, which caused their sump pumps to fail, allowing water to back up into their homes.

pie chart of claims reported to Noyes Hall & Allen Insurance

What kind of damage did you have to your property?

Buying, Selling or Renting? Better Know About Maine’s New CO Detector Law

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  Beginning November 1, 2009, a new Maine law requires smoke detectors and carbon monoxide detectors in every rental property, and in any residence purchased after that date.

 

As always, insurance companies will allow Homeowners insurance discounts for smoke detectors and other protective devices.

Detectors Required

    • Must be 120V with battery backup and powered by the building’s electrical system.
    • Plug in units are acceptable, as long as they have a battery backup.
    • Detectors must be in each unit, near bedrooms for apartments or rental homes – even seasonal or occasional rentals.
    • Must be photo-electric type if located within 20′ of a kitchen or bathroom.

 

Buying a Home?

Buyers (not sellers) must certify that these detectors are in the property in order to close on a purchase & sale agreement. The Maine Dept. of Public Safety is drafting a certification form which will be used for this purpose.

For more information:

 

3 Things Every Coastal Maine Homeowner Should Know About Flood Insurance Changes

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As the Press Herald reported in this September 5 story, FEMA is updating its current flood hazard maps for much of the southern Maine coast. These maps are used to determine insurance costs in the National Flood Insurance Program (NFIP), the only flood insurance available for most properties. Maine business property insurance,  homeowners insurance and condo insurance do NOT cover flood damage.

FEMA proposes to change the zoning of much waterfront property in South Portland, Portland and Cape Elizabeth. The cities of Portland and South Portland are challenging the new zoning, but there’s no guarantee that they will be successful.

The Zone Differences

FEMA’s zone classification system defines an area that has a 1 percent chance of being inundated by flood waters in a given year a “special hazard area”. There are two categories of “special flood hazard areas”, “A” and “V”.

The difference is that “A” zones are low-lying areas subject to flooding, while in “V” (velocity) zones, the water is more likely to flow with the increased hazard and damage of wave action. Many of the proposed changes would switch local oceanfront property from an “A” zone to a “V” zone; some may extend “A” zones to properties not previously considered to be in a “special hazard zone”.

How This May Effect You

Compared to properties not in a “special hazard zone”, Properties in an “A” zone:

  • Pay higher flood insurance rates.
  • Are required by FHA lenders to be insured for flood.
  • Require an “elevation certificate” – a special survey that the property owner must pay for and provide to the flood program.

In addition to these conditions, properties in a “V” zone:

  • Pay even higher flood insurance rates
  • May be unable to purchase flood insurance if they’re on piers or wharves that are over water.

What You Can Do

View local flood maps at your local planning office.

If your property is proposed to be re-located into either an “A” or “V” zone, call your insurance agent immediately. Since the maps are not yet effective, property owners can take advantage of cost-saving options that allow them to “lock in” at their current zone. Depending on your property’s value and location, this could save you thousands of dollars per year.

For more information, contact Noyes Hall & Allen Insurance at 799-5541, or the FEMA Map Assistance Center at 877-336-2627.

* * * UPDATE * * *

The Portland Press Herald  reported on September 21 that FEMA is delaying implementation of the new flood maps, and will re-start the appeal process, likely in early November. The agency cited technical errors in the notification process, not any methodological errors, as the reason for the delay.

Easy Money

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Everyone’s looking to tighten up their budget these days. Many people prefer to  spread the cost of their insurance throughout the year by paying in monthly installments. But insurance companies charge an “installment charge” to cover the expense of sending those monthly bills, and to replace investment income they forgo by not collecting your premium up-front. The average “installment charge” is $5.00 per bill. That means if you pay your Maine auto insurance in monthly installments, you’re paying $50.00 or $60.00 extra a year.

Quick and Painless Savings

Instead of having the insurance company send you a bill, sign up for Electronic Funds Transfer (EFT) – automatic monthly withdrawal of your premium payments from your checking account. Most companies waive the installment charges completely for EFT customers. That saves you an extra $60.00, plus the cost of stamps, checks, and the time it takes to pay the bill.

Clients of our Maine insurance agency who are snowbirds or travel frequently love EFT. They don’t have to worry about bills being forwarded, or accumulating unpaid while they’re away.

One added benefit of EFT: no more risking cancellation notices by forgetting to pay your bill. Because your payments are automatically withdrawn, they arrive on time every month, without any action on your part.

For more information about insurance discounts, contact Noyes Hall & Allen Insurance at 207-799-5541.

EVERY Property is in a “Flood Zone”

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Many people fail to purchase flood insurance when they buy a property. Some believe that their Maine homeowners insurance will cover flood damage. It won’t. Others think that because their lender hasn’t required them to buy flood insurance, they’re not in a “flood zone“.

Every Property Can Sustain Flood Damage
Some properties are more flood-prone than others, of course. Ocean- or river-front property is more likely to flood than homes located on higher ground. The good news is that it’s relatively inexpensive to buy flood insurance if you live in a low risk area.

What is a Flood?
The word “flood” conjures up images of rising rivers and streams, or ocean storm surges. Those are floods of course, but so are: snowmelt runoff; dam breaches; heavy rains; and flash floods. All of those things can and do occur in Maine. Here’s a list of past flood disasters in Maine, which doesn’t include some notable recent events.

Remember the heavy rains of August, 2008 that flooded several southern Maine areas? Many property owners in the affected areas had never experienced flooding before.

Mandatory 30 Day Waiting Period
Let’s say you’ve heard weather forecasts of heavy runoff from snowmelt. Concerned about your property, you call to buy flood insurance to protect your home. The government knows that many people who would buy such coverage may be in imminent danger. That’s why they require a 30 day waiting period for coverage to take effect – unless you’re buying property and coverage is required by your lender.

That means now is the time to think about buying flood coverage – not when the river’s rising.

Flood insurance is only available through the National Flood Insurance Program, a government program managed by FEMA, and available through virtually any Maine insurance agency. Contact Noyes Hall & Allen Insurance for a quote. For more myths and facts about flood insurance, download this brochure.


Wind, Rain, Loss of Power Threaten Area

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Today’s forecast calls for high winds in the Greater Portland area, along with 1.5 to 2 inches of rain. The west side of South Portland lost electrical power this morning, forcing school officials to dismiss students early. 

The combination of heavy rain and no electricity is a recipe for flooded basements, as sump pumps are literally powerless to remove groundwater that may back up through basement drains. This type of damage is NOT covered by most Maine homeowners insurance policies, unless you buy a separate endorsement. Although it may be too late for you today, check your policy and talk to an agent about adding this coverage. Also, general flooding is not covered by homeowners policies. Coverage is available via separate flood policy. Talk to an insurance agent for details. 
Our Maine insurance agency is ready to respond to any insurance claims caused by today’s storm. Contact Noyes Hall & Allen Insurance at 207-799-5541.

Inheriting Property in Maine – Does the Estate’s Insurance Policy Protect Heirs?

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2466829142_3c71a3e808_oMany clients ask us how to insure Maine property that they inherited. There are so many scenarios that it’s hard to generalize. Here are three we see often.

If Your Parents’ Property is Insured

When someone dies, their property in Maine becomes part of their estate. Most insurers will continue their Maine homeowners insurance or condo insurance until the policy expires. The insurance company wants to know who is looking after the property and protecting it from loss.

If the estate isn’t settled before the insurance policy expires, many insurers will refuse to renew. In that case, heirs must buy a new policy in the estate’s name, often with a surplus lines insurer. If the insured property is a vehicle, the Maine auto insurance company will ask where it is, if anyone is driving it, and what the plans are for the vehicle. They will make an underwriting decision accordingly.

If Your Parents’ Property is Not Insured

Too often, heirs or probate attorneys discover that one of the estate’s largest assets, the home, is uninsured. Insurance companies aren’t eager to insure previously uninsured properties. Homes without continuous insurance pose higher risks of damage. The policy may only be needed for a short time. Both scenarios are unattractive to insurance companies. Often a surplus lines insurer is the only available market.

If Probate is Cleared and You Have Inherited the Property

If you are the sole owner, simply insure it as you would your other property or autos. If you plan to use it as income property, you can buy a Dwelling Fire or business property insurance policy. If you intend to use it as a seasonal or secondary home, you can usually insure it on a personal policy.

Sometimes several members of the same family inherit property. Other times they create a trust to own inherited property. Some insurers will provide a personal policy in the name of a trust. If siblings inherit shared ownership, one buys a policy and includes the others as “additional insureds”. They all share the policy to protect their property interest and liability exposure.

Each Estate Situation is Different

Consult an attorney familiar with estate law, as well as your Maine insurance agent. Together, they will help you protect your interest and obligation in the property. If you want to insure property that you have inherited in Maine, contact a Noyes Hall & Allen Insurance agent in South Portland. We can help you evaluate your insurance options.