Property & Casualty Insurance Review

If your home and automobile insurance policies have been renewed since Hurricane Harvey, you may have noticed a greater than usual increase in your premiums. According to the last update from the Texas Department of Insurance, they estimate Harvey’s paid claims will total $15.7 billion. Most of the covered losses are from flood and auto claims. This event has triggered a ripple effect of higher premiums in a post-Harvey environment. For the Houston area, most of this impact has been felt on the auto insurance side.

Given these recent insurance premium increases, it is prudent to review all your property and casualty coverages to ensure that you are receiving the “best bang for the buck” while making sure you are adequately covered. The following are some tips to keep in mind:

• Consider raising your home and auto insurance deductibles to significantly reduce the premiums. Doing this will have the most impact on lowering your premiums and is recommended for most families.
• On your homeowner’s policy, it is best to have replacement coverage, not just actual cash value coverage. Additionally, review the coverage levels to ensure they are optimal for your home’s current replacement value (not including the land).
• If you have valuable personal items (e.g. jewelry, artwork) make sure they are individually scheduled on your homeowner’s policy and/or you purchase a supplemental policy as most standard homeowner’s policies don’t cover these items.
• Make sure that you have uninsured/underinsured motorist coverage and adequate liability coverage on your auto policy. We recommend at least (100/300/100) coverage levels.
• For a nominal cost, consider raising your coverage levels to (250/500/100), which will also enable you to purchase an umbrella policy (a/k/a excess liability policy). These policies usually provide at a minimum of an extra $1 million of personal liability coverage. They are relatively inexpensive and highly recommended.
• Ensure that you are not paying for multiple Roadside Assistance/Towing programs (e.g. via your auto insurance, AAA, cell phone provider, car manufacture) as we find many clients are.
• If you are retired and/or have plentiful resources, consider opting out of Personal Injury Protection (PIP) and/or Medical Payments coverage to help reduce your auto insurance premiums as these benefits are capped.
• Consider obtaining all of your property and casualty insurance policies from the same carrier or agency in order to receive significant multi-line discounts.

For now, flood insurance premiums for FEMA-backed policies have remained unchanged. For those who may have “private” flood insurance, it is highly likely that you will not be able to renew and will need to obtain FEMA-backed flood insurance. If you are a renter, please note you need a “renter’s flood policy” in order to cover your personal property as a standard renter’s policy does not cover flood damage.

WJ highly recommends that all families who reside along the Texas coast have flood insurance, regardless if you are located in a “flood-zone”. It is important to note much of Hurricane Harvey’s property damage occurred in areas that were not in “flood-zones”. In fact, over 80% of all Harvey related damage was not even covered by insurance, which is primarily due to the lack of flood insurance coverage by those who sustained flood damage. Now that hurricane season is here, do not delay obtaining flood coverage as there is a 30 day waiting period before coverage actually starts.

WJ is happy to review your policies and make recommendations. Additionally, we can refer you to an independent insurance agency that will best suite your needs, who can ensure that you receive the best pricing for the recommended coverage levels.