Thousands of under-insured homeowners in the path of Hurricane Katrina learned first-hand the financial devastation of flooding. Every home in the United States has a one in four chance of experiencing some type of flood damage every three decades according to the Federal Emergency Management Agency (FEMA). With the increase in global warming, more intense storms with their severe flooding will alter the financial future of those with no or minimal insurance for rising waters.
Flood zones are categorized by FEMA by their likelihood to experience flooding based on a once-in-a-century model that states a flood having a one-percent chance of being equaled or exceeded in any year. Areas rated an “A” are at the highest risk and all potential mortgage lenders offering a loan in an “A” flood zone will require the borrower to obtain flood insurance. Locals labeled “B”, “C”, “D”, “V” and “X” carry lower risks and the possibility that mandatory insurance might not be required.
However, lower risk doesn’t mean that you shouldn’t diminish the opportunity for severe flooding. Evolving weather patterns offer areas that historically have predictable precipitation and storm patterns experiencing record rainfalls and flash flooding that haven’t implemented wide ranging flood control infrastructure. Flood damage can also be caused by overwhelmed storm sewer systems backing up into your home.
Rates for policies vary from two to seven hundred dollars a year, based on your flood risk level. Plans restrict coverage amounts to $250,000 for structures and $100,000 in personal property. Florida leads the country with the largest number of flood insurance policy holders. The visual images of the homes in the path of Katrina should offer a stark reminder of why flood insurance in a benefit not a cost.
Mark Nash is the author of five real estate books, new for 2007; Real Estate A-Z for Buying & Selling a Home. William J. Sittig, Chief of the Science, Technology and Business Division of The Library of Congress has invited Mark to make a presentation on 1001 Tips for Buying and Selling a Home to the members, public and staff of the Library on March 21, 2007. Nash has been featured on Bloomberg Video-on-Demand, CBS The Early Show, CNN, and The Today Show. He is a syndicated columnist for RealtyTimes.com and reviews books for MyShelf.com and The Midwest Review of Books.To subscribe to his free monthly ezine; Agent to Agent visit: http://www.AgenttoAgentezine.com.
By Mark Nash
Wednesday, February 14, 2007
Credit Card Insurance: Is It Overpriced?
The answer to the question of whether credit insurance is overpriced depends whether you are looking at it as a whole or whether you are looking at it in terms of what other credit card issuers are charging. Even if your credit card issuer charges more than that of another issuer, you have to look at the benefits that are part of the package before drawing any conclusions. For example, Credit Card Issuer A may only charge 1.5% for disability insurance but requires that you be out of work the usual thirty days but will only pay for six months, whereas Credit Card Issuer B charges 4%, still requires a thirty-day wait but pays for one year. You need to consider these things before you determine that your credit card issuer charges too much for credit card insurance, and as such, make the decision not to purchase it.
Credit card insurance is an open market, and you have to remember that the credit card companies themselves are not financing the insurance, but are contracting with an insurance company to provide the benefits. Because of this, there is going to be a fluctuation between different credit card issuers because they will be using a different insurance company in most cases. Even if they use the same company, there may be different reasons why rates are different with credit card issuers, one of the most likely be the amount of participation. One of the rating factors that insurance companies use for premiums is the number of participants in a group, meaning the more participants, the lower the rate will be. This is why group rates for any kind of insurance are lower than that of an individual policyholder. The amount of claims is also a contributing factor, which may be another reason different credit card issuers have different rates for credit card insurance.
Before making a decision based on the rates your credit insurer charges, make sure you consider all of the possibilities and look at what the future may hold for you if for some reason you need the insurance and it is not there. Remember, once you become ill or injured, you cannot suddenly decide to take the insurance in order to cover that incident. The insurance must be in force prior to the incident in order for it to be covered.
Mark Justice has developed many websites over the years in many different business areas. He has a free Blog on Credit Card Insurance Tips. Visit his blog at: http://creditcardinsurance.blogspot.com/
By Mark Justice
Credit card insurance is an open market, and you have to remember that the credit card companies themselves are not financing the insurance, but are contracting with an insurance company to provide the benefits. Because of this, there is going to be a fluctuation between different credit card issuers because they will be using a different insurance company in most cases. Even if they use the same company, there may be different reasons why rates are different with credit card issuers, one of the most likely be the amount of participation. One of the rating factors that insurance companies use for premiums is the number of participants in a group, meaning the more participants, the lower the rate will be. This is why group rates for any kind of insurance are lower than that of an individual policyholder. The amount of claims is also a contributing factor, which may be another reason different credit card issuers have different rates for credit card insurance.
Before making a decision based on the rates your credit insurer charges, make sure you consider all of the possibilities and look at what the future may hold for you if for some reason you need the insurance and it is not there. Remember, once you become ill or injured, you cannot suddenly decide to take the insurance in order to cover that incident. The insurance must be in force prior to the incident in order for it to be covered.
Mark Justice has developed many websites over the years in many different business areas. He has a free Blog on Credit Card Insurance Tips. Visit his blog at: http://creditcardinsurance.blogspot.com/
By Mark Justice
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