Fema is strongly warning homeowners to get flood insurance this year. Heavy snows and cold winters, hint at spring flooding. Check it out at FloodInsurance.Net
Archive for December, 2008
Winter Snow Means Spring Flooding – Are You Insured
Wednesday, December 24th, 2008Can Santa Claus Sue You if He Falls Off Your Roof
Wednesday, December 24th, 2008One of the key components of your homeowners insurance policy is your premises liability coverage.
Premises liability involves your responsibility as a property owner to maintain safe conditions for people while on your property. As a homeowner, you can be held liable for injuries which occur in or around your home. (or in this case on your roof). If a person slips, trips, or falls as a result of a dangerous or hazardous condition, you might be considered to be fully responsible. Property owners are generally held responsible for falls as a result of ice, snow or wet surfaces. Any abrupt changes in flooring, holes, protrusions, sharp corners, debris, poor lighting, or a hidden hazard. How much responsibility you have often depends on the nature of the visitor who is injured.
Invitees
Where a homeowner, by express or implied invitation, induces or leads others to come upon the premises for any lawful purpose, a duty to exercise ordinary care arises to keep the premises safe. The invitation may be express, implied from known and customary use of portions of the premises, or inferred from conduct actually known to the homeowner. Workers or contractors are typically considered invitees.
LicenseesA licensee is a person who has no contractual relation with the owner of the premises but is permitted, expressly or implicitly, to go on the premises. A social guest at a residence is normally considered a licensee. The homeowner is liable to a licensee only for willful or wanton injury. It is usually willful or wanton not to exercise ordinary care to prevent injuring a licensee who is actually known to be, or is reasonably expected to be, within the range of a dangerous act or condition.
TrespassersSurprising to many homeowners is the fact that a duty is also owed to those without permission to be on the premises. A trespasser is a person who enters the premises of another without express or implied permission of the owner, for the trespasser’s own benefit or amusement. The duty of the owner to a trespasser is not to prepare pitfalls or traps for the trespasser nor to injure the trespasser purposely. Once the owner is aware of the trespasser’s presence or can reasonably anticipate such presence from the circumstances, (EVIDENCE of skateboarders in an unfinished swimming pool would fall into this category) then the owner has a duty to exercise ordinary care to avoid injuring the trespasser.
Homeowner’s Insurance policies cover this form of legal liability in the event that anyone suffers an injury while on the insured property. The extent of your liability, and the extent of your coverage will have a lot to do with what category Santa falls into. Since he is bringing you presents for your kids, and is clearly on your property for your benefit rather than his own, he is clearly not a trespasser. If you are Jewish, Muslim or staunchly secular and don’t believe in Santa, you might have a clearer shot at having your carrier classify him as a trespasser.
If Santa is like a meter reader, he is welcome to come onto your property for his own benefit and on his own schedule. He’s not there because you invited him, but because it comes with the job. He’s the guy regulating the whole naughty/nice thing and you don’t really have much of a say. In that case, you just can’t show wanton disregard for his safety or willfully harm him. Lighting a fire in the fireplace is probably a no no. But if he trips over your rooftop inflatable reindeer and takes a tumble it probably isn’t your responsibility.
But if you put out a plate of cookies and milk, watch out. You’ve probably made Santa an invitee and you need to exercise reasonable care to provide him with a safe environment. No black ice on the roof, no hard to see cables or satellite dishes that might catch up the sleigh or the reindeer. Its up to you to make sure that he can enter and leave safely.
Generally, even if you do have liability for an injury to a visitor, if you have reasonable homeowner’s insurance your are going to be covered under your premises liability coverage. If you aren’t sure about your coverage, check out our homeowners insurance quote system here.
And remember, even if you do get sued by Santa Claus, your insurance carrier probably has a responsibility to defend you in courth. Its one of the Clauses in your policy.
Read more about premises liability coverage here
America Cools Down – Arson is down by Half from 1998 to 2007
Tuesday, December 23rd, 2008Are we a more mellow nation these days? Over the 10 year period from 1998 to 2007 the number of arson fires in America is down by 50%. Is it a sign of a calmer society? Or is it just a reflection of a society growing richer year by year. It will be interesting to see if the mortgage meltdown will find a correlation with a new rise in arson as desperate homeowners and businesses torch their properties and hope that their insurers will “show [them] the money.”
* An estimated 32,500 intentionally set structure fires occurred in 2007.
* Intentionally set fires in structures resulted in 295 civilian deaths.
* Intentionally set structure fires also resulted in $733,000,000 in property loss.
* 20,500 intentionally set vehicle fires occurred, no change from 2006, and caused $145,000,000 in property damage, an increase of 8.2% from 2006.
The following table shows the number of fires, deaths, and dollar loss due to intentionally set structure fires that occurred from 1998 to 2007. Note: Injury data for intentionally set structure fires are not reported to NFPA.
Arson Fire Statistics Year Fires Deaths Direct Dollar Loss In Millions
1998 76,000 470 $1,249
1999 72,000 370 $1,281
2000 75,000 505 $1,340
2001¹ 45,500 330 $1,013 (excluding 9/11)
2001² - 2,451 $33,440 (including 9/11)
2002 44,500 350 $919
2003 37,500 305 $692
2004 36,500 320 $714
2005 31,500 315 $664
2006 31,000 305 $755
2007 32,500 295 $733
How Time Bomb Loans Destroyed America
Wednesday, December 3rd, 2008In 2005 the comptroller of the currency, John C. Dugan, was among the first to sound the alarm that interest only and negative amortization loans were a looming threat to the stability of the mortgage banking system. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn’t even be able to sell their way out of the mess.
Flexible payment loans, called Option ARMs are adjustable rate mortgages with several flexible payment options. Generally they allow a homeowner to make a full payment according to a standard payoff schedule, or to pay only the interest with no payment towards the loans principal, or even a lesser “negative amortization” amount which would allow some of the interest owed to add to the original principal. These loans existed for only one reason, to create a lower initial payment structure to allow a buyer to acquire a property that she couldn’t afford. Unfortunately, the low payments always had a sunset provision, in the case of many homeowners, a true drop dead provision. At the end of two years or perhaps three, the loans would reset to the higher full payoff paced payment which the borrower generally couldn’t afford. The only possible salvation to a homeowner in these time bomb loans was to refinance or sell. In a down market, with tight credit, these homeowners are facing a perfect storm with no way out. The risk was never a mystery, it was just ignored.
Warnings came from all sides of the mortgage market.
We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products,” Kevin Stein, associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.
But bankers, afraid of having their opportunities limited fought the regulations. “To conclude that ‘nontraditional’ equates to higher risk does not appropriately balance risk and compensating factors of these products,” said Lilian Gavin, the Chief Investment Officer of Downey Savings which carried over 50% of its loan portfolio in these products. Downey insisted these loans were safe — maybe even safer than traditional 30-year mortgages.
In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:
_Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.
_Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.
_Regulators proposed a cap on risky mortgages so a string of defaults wouldn’t be crippling.
_Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.
_Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.
Those proposals all were stripped from the final rules. None required congressional approval or the president’s signature.
“In hindsight, it was spot on,” said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.
Unfortunately for the rest of us, the regulators bent to the banks and the financial fallout has trashed everything.
Read more about Home Loans and Refinancing at Refinance.Net