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Archive for February 2010

National Flood Insurance Program lapses

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Hard to believe, but Congress let the NFIP lapse. It goes out 2/28/10 (Sunday) and our elected reps won’t take action by then.
This means the insurance companies which service the business can not issue new policies OR RENEWALS, or increase limits. Here’s a quote from Travelers insurance (they do try to be professional but this is astonishing with New Jersey insurance purchasers and the Northeast in general sitting in snow with Spring thaw coming):

“Therefore, we are now faced with at least a short-term lapse in statutory authority to issue or renew flood insurance policies pursuant to the NFIP. Based on past experience, this lapse means that we are unable to issue any new or renewal flood policies, or make coverage changes on existing flood policies.

FEMA has advised us to pend premium transactions received after February 28, 2010, until, and if, Congress passes and President Obama signs a bill that re-authorizes the NFIP. New and renewal policies or coverage changes will go into effect at the earliest date, which is consistent with the receipt of premium and waiting period rules of the NFIP and the expected extension of authority for the NFIP. For applications made in connection with a mortgage loan, if the extension of the authority to issue flood insurance policies under the NFIP is granted retroactively, new policies will be issued effective as of the date of the loan closing. Additionally, if Congressional extension is granted retroactively, any claim for insurable losses suffered from the effective date for the policy term will be honored by the NFIP, even if the authority is granted after the date of such losses.

Please note that policies or coverage changes will only be effective if the extended authorization of the NFIP becomes law, which is expected. If Congressional extension is not granted within a reasonable period, premiums will be refunded. In this event THE REQUESTED COVERAGE WILL NOT BE PROVIDED and NO PROTECTION of flood insurance existed during this period.”


Written by gbwinsurance

February 26, 2010 at 6:24 pm

Flood Insurance – NFIP – National Flood Insurance Program

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We received a two part question about floods and basements.
1) If the NFIP definition of flood requires 2 or more acres or 2 or more contiguous properties to be affected, does that mean that if my basement floods and my neighbor’s doesn’t, I don’t have coverage?

Probably not. And what the NFIP defines as flood is not necessarily what you and I would call a flood. For many water losses in basements, you would be better off with Backup of Sewer and Drain coverage. That’s cheap and available from your standard Homeowner’s Policy. Give us a call at 1-800-548-2329 to discuss the issue.

2) What does the NFIP cover in basements?

Not much. It covers damage to home systems, like the heating system, not movable furniture and stored items. Again, give us a call if you want to go over the details.  Our New Jersey insurance number is 1-973-426-1500

Written by gbwinsurance

February 23, 2010 at 10:16 am

Flood Insurance

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Flood is one of the most ignored insurance coverages. Therefore, when a flood happens, it is very likely to put a business out of business permanently, or damage a home that can not then be rebuilt.

The National Flood Insurance Program (NFIP) says that 25% of its claims are paid for buildings that are not in flood zones.  So every year many home and business owners are surprised to suffer flood damage, and most of them don’t have insurance coverage.  The NFIP defines flood as covering two or more acres or two or more contiguous properties.  So it doesn’t have to be the classic picture of a bursting dam.

Homeowners Insurance generally doesn’t cover flood damage at all, or most other “ground water” damage.

To get flood coverage, go to an agent representing the NFIP. If your house or business is not in an active flood zone, flood insurance is not very expensive compared to the value insured.  If it is in a flood zone, it is expensive but your bank will require it.

For homes, insurance for back-up of sewers and drains could be less than $100.   It covers just what it says, water coming into the house through sewers and drains.  That could happen in a situation where there was no flood by the definition of the NFIP.

For either coverage, insurance is a lot cheaper than the potential loss.


For quotes stop by our main site:  For Flood quotes:  For Business quotes:

More on health and disability price escalation

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Disability income insurance: Cost increasing
Here’s a link to a Wall Street Journal/Smart Money article on the problems of cost increases and cost control on Disability Insurance. Social Security disability claims have jumped 17%. In 2001 81% of employers paid all the costs of disability insurance, now it’s 45%


Written by gbwinsurance

February 16, 2010 at 3:09 pm

Price escalation in Health Insurance

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This has become a nightmare for small businesses. Our friend George Garris of RMG Consulting ( ) brought up some interesting points:
Medical Inflation – seen recent studies that Medical Inflation is coming down, Pharmacy (drugs) costs rising by 7%, and RMG healthcare provider putting thru 25% rate increase.
1) What is the real inflation rate?
2) Should Risk Managers become more aggressive on settling WC – Medical claims as soon as practical on retro rated policies?


Written by gbwinsurance

February 16, 2010 at 9:50 am

Recall insurance

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This has become a hot topic of late with Toyota’s woes.
It applies to small companies as well.

Recalls for tainted food have destroyed some small family owned companies in the last decade.

And the subject is very complicated for companies that sell outside the US and Canada.

For many small manufacturers, processors, and even distributors, this is a significant exposure now.

We’re working on a white paper on this and will post it as soon as it’s done.

Written by gbwinsurance

February 12, 2010 at 1:06 pm

Trends in Disability Insurance

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Here’s a link to a WSJ article on control of disability benefits. Discusses the problems for employees on disability and cost escalation for employers.

Written by gbwinsurance

February 10, 2010 at 2:20 pm

Posted in 1, Insurance

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