State Insurance Commissioners Warn on Keeping Vacant Homes Insured

Posted by Benji Riggins on August 30, 2010 under Insurance Requirements | Be the First to Comment

As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the National Association of Insurance Commissioners (NAIC).

The Pending Home Sales Index, released by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 – another sign of the stagnant housing market.

“In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market,” said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. “Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy.”

The Added Risks of Vacant Homes

Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days.

In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.

Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:

Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around – unkempt lawn, full mailbox, no lights on – that can tip off burglars to an easy target.

No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem – such as a small electrical fire –can turn into a much larger, more costly disaster.

Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.

Keeping Vacant Home Properly Insured

The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied.

Many homeowners policies have a “vacancy clause” that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.

Cline and the NAIC are advising homeowners to speak with their insurance agent or company before they decide to leave a home unoccupied for a period of time.

“Be honest about your situation, because while an extra policy might cost more, it could save you money down the road should there be an accident or damage to the home,” the advisory from NAIC tells homeowners.

Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need.

The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.

Read more: http://www.insurancejournal.com/news/national/2010/08/09/112285.htm#ixzz0wDohssrq

Auto Insurance Requirements for North Carolina

Posted by Benji Riggins on May 6, 2009 under Insurance Requirements | Read the First Comment

The state of North Carolina began registering vehicles for the first time on July 1, 1909. Since that time, the North Carolina highway system has become the largest state-maintained road system in the nation. During the same period, the number of uninsured vehicles grew so rapidly that in 1957 North Carolina became one of the first states to adopt a compulsory insurance law.

A license plate must be surrendered whenever insurance has been deleted for any reason.

LIABILITY INSURANCE REQUIREMENTS:

The Vehicle Financial Responsibility Act of 1957 requires that all motor vehicles registered in the state must be covered by an automobile liability insurance policy and that the insurance must remain in effect with continuous coverage until the registration is terminated.

When titling/registering your vehicle you will need to provide proof of insurance.

Acceptable proofs of insurance include:

  • Owner provides insurance company name and policy number (Self Certification)
  • Or a Certificate of Insurance (FS-1), obtained from an Insurance Company that is licensed to do business in North Carolina. 

Minimum Liability Insurance Requirements for Licensing:

The minimum requirements of liability insurance for a private passenger vehicle is $30,000 for bodily injury for one person; $60,000 bodily injury for two or more people and $25,000 property damage. North Carolina law requires each company to notify the DMV when coverage has been cancelled.

INSURANCE COMPANIES:

Liability coverage must be continuously maintained with a company licensed and authorized to do business in this state.

LAPSE OF INSURANCE COVERAGE:

If you change insurance carriers or you have a lapse of coverage, your insurance company is required by law to notify the Division of Motor Vehicles. When the Division receives this information, they are required to send Form FS 5-7 Notice, and you are required to respond within 10 days.

If there has not been a break in coverage:

You must enter your correct insurance information on the Form FS 5-7 and return it to the Division within 10 days from the date on the FS 5-7 Notice.

If there has been a break in coverage:

You must re-certify with the correct insurance information and submit the listed penalty amount within 10 days from the date of the letter in order to retain your license plate.

Failure to respond within the required time can result in the loss of your license plate for 30 days.

Re-licensing after loss of license plate:

In order to relicense after 30 days, you must:

  1. Provide proof of insurance coverage Form FS-1 (which you can obtain from your insurance agent);
  2. Pay a civil penalty fee of $50.00, $100.00 or $150.00 (depending on how many prior paid lapses you have General Statute 20-311).
  3. Pay a $50.00 service fee;
  4. And pay the appropriate license plate fee.

WRONGFUL TERMINATION OF INSURANCE COVERAGE:

If you feel the termination of your insurance is unjustified you do have a recourse:

An insurance hearing may be requested when you feel the action is unjustified or when circumstances were beyond your control. You may call 919-715-7000 to set up a hearing. (An FS-1 is required for this option)