Flood-damaged vehicles from Hurricane Sandy could end up rusting on a used car lot near you

As waters recede and lives are put back together following the devastation of Hurricane Sandy, car buyers are urged to take precautions when buying a used vehicle in the coming months. Although the East Coast is far from the Pacific Northwest, flood-damaged vehicles from Hurricane Sandy that should go to the junkyard will likely end up on local car lots to be sold by unaware car dealers to unsuspecting buyers.

Vehicles sold with pre-existing damage are not covered under a standard Auto Insurancepolicy.  If you buy a used vehicle and later discover that it was damaged from being submerged in flood waters, your Auto Insurance will not cover the cost of needed repairs. 

A ‘flood vehicle’ is defined as a vehicle that has been completely or partially submerged in water to the extent that its mechanical components and electronic subsystems have been damaged or destroyed. Unscrupulous people buy the vehicles, clean them up to hide the flood damage then ship them to states unaffected by flooding to be sold as normal used cars.

The scam artists also do not disclose the damage on the title document, which is a crime called “title washing.

You have to invest some time to find a reliable used car,” said Karl Newman, NW Insurance Council president.  Checking VIN numbers is a great start, but, whenever there is wide-spread flooding, you have to take extra precautions to avoid getting stuck with a car that falls apart around you.

If you are planning to buy a used vehicle, it’s important to know how to look for flood damage.  NW Insurance Council, NICB and the Insurance Information Institute  (I.I.I.) offer the following suggestions on how to spot a flood car:

·       Choose a reputable car dealer.  Check with the Better Business Bureau or Chamber of Commerce to find several in your area.

·       Look for mildew, debris and silt in places where it wouldn't normally be found, such as under the carpeting in the trunk, or around the engine compartment.

·       Check for rust on screws and other metal parts.

·       Look for water stains or faded upholstery as well as discoloration of seat belts and door panels.

·       Inspect the vehicle for dampness in the floor and carpeting and moisture on the inside of the instrument panel.

·       Check for a moldy odor or an intense smell of Lysol or deodorizer being used to cover up an odor problem.

For more information about how to spot a flood car, visit the NICBwebsite for more tips. Also, the National Motor Vehicle Title Information System offers an online tool for consumers to access important vehicle history information.
For more information about insurance, contact NW Insurance Council at (800) 664-4942 or visit www.nwinsurance.org.
NW Insurance Council is a nonprofit, public-education organization funded by member insurance companies serving Washington, Oregon and Idaho.

Swimming pool safety and insurance can help keep your summer afloat  


A swimming pool can be an oasis of fun and relaxation during hot summer days, but a good time can turn tragic if you don’t exercise safety and responsibility. If you have a pool, NW Insurance Council encourages you to implement safety measures in and around your pool and ensure you have adequate insurance if something goes wrong.

More than 3,500 people drown each year, averaging 10 deaths per day, and one in five drowning victims is a child 14 years old or younger, according to the Centers for Disease Control and Prevention. To raise public awareness, pool safety events are being held nationwide this week as part of the Consumer Product Safety Commission’s (CPSC) Pool Safely Campaign.

Injuries to guests using your pool are covered by your Homeowners Insurance policy up to the limits of your Liability Coverage. Your Liability Coverage also will pay your legal defense costs, up to the coverage limits, if you are sued because of an injury to a guest. 

Standard Homeowners Insurance policies provide a minimum of $100,000 Liability Coverage.  Most insurers offer Liability Coverage up to $500,000 per incident. If you need more coverage, ask your agent or insurance company about an Umbrella Liability Policy.  Umbrella policies offer additional liability protection of $1 million to $5 million.

NW Insurance Council and the Insurance Information Institute offer the following safety tips to help you, your family and guests enjoy the pleasures of a swimming pool:

  • Never leave small children unsupervised – even for a few seconds.
  • Install fencing around the swimming pool area to keep young children and others from using your pool without your knowledge.
  • Keep children away from pool filters.  The suction force may injure them or prevent them from surfacing.
  • Make sure everyone using your pool knows how to swim.  Novice swimmers should be accompanied by good swimmers.
  • Inspect the pool area regularly for glass bottles, toys or other potential hazards.
  • Never dive into an above-ground pool and always check the water depth before plunging into an in-ground pool.
  • Don’t swim in the rain or during lightning storms.
  • Keep electronic equipment away from the pool and wet pool decks.
  • Don’t swim alone.
  • Don’t allow anyone who has been drinking alcohol to swim in the pool.
For more information about swimming pool safety or other insurance issues, contact the NW Insurance Council at (800) 664-4942.
The NW Insurance Council is a non-profit, public-education organization funded by member insurance companies serving Washington, Oregon and Idaho.

Get a CLUE: Before you buy, understand a home’s claims history

The home-buying season is here and many people are viewing potential new homes.  However, Homeowners Insurers encourage buyers to take a cautious approach when evaluating houses.  Without knowing a home’s claims history, buyers could get stuck living in a money pit instead of a dream home.

If you're in the market for a new home, NW Insurance Council encourages you to obtain a
Loss History Report from the seller before making an offer.  Loss History Reports give potential buyers the ability to review up to five years of a home's claims history and verify that any prior damage was repaired correctly.

“New tools have become available in recent years that help a prospective homebuyer evaluate the condition of a home and the likelihood of burglary or vandalism in the neighborhood,” said Karl Newman, NW Insurance Council president. 
Homeowners who are unaware of these tools can be left with structural problems, substantially higher insurance rates or have difficulty finding coverage because of past claims filed by previous owners.

Checking a home’s claims history is similar to examining a car’s Vehicle History Report from CarFax, AutoCheck or ConsumerGuide, and allows you to make a well-informed purchasing decision.
How can you find out the history of a home before you buy?  Ask the seller to provide you with the Loss History Report.  If the current homeowner filed a claim in the past five years, including claims for water-damage, fire or theft, the Loss History Report will show it.

If you’re considering buying a new home, NW Insurance Council offers the following facts and tips to help you examine a home’s claims history:
·       Loss History Reports are a powerful tool for both buyers and sellers.  Buyers can request a Loss History Report from the seller as part of the real estate transaction.  The reports can identify potential problems for the buyer’s inspector to investigate.

·       A Loss History Report is simply a record of past claims.

·       70 to 80 percent of homes have clean Loss History Reports.

·       There are two types of Loss History Reports available to homeowners:
      CLUE– Comprehensive Loss Underwriting Exchange, developed by ChoicePoint, Inc., Atlanta, Ga. (now owned by LexisNexis).  This report is a five-year history of claims filed by all past and current owners of the property.

A-PLUS– Automobile-Property Loss Underwriting System, developed by Insurance Services Office (ISO). The A-PLUS report is a history of the current owner’s claims up to five years.  If the seller has owned the home for less than five years, the report will not include claims filed by past owners.

·       Homeowners, insurance companies and insurance agents have access to Loss History Reports.

·       A homebuyer cannot access a Loss History Report until a real estate contract is signed, due to the “permissible access” rules of the Federal Fair Credit Reporting Act (FCRA).  The seller can obtain loss History Reports for less than $20.

·       CLUE Reports are available online or by mail at (800) 869-0751 for $19.50.

·       A-PLUS reports are available at (800) 709-8842.  The first report is provided at no cost.

·       Consumers adversely affected by their Loss History Reports can get free copies of their reports from CLUE or A-PLUS.

For more information on Homeowners Insurance and Loss History Reports, visit NW Insurance Council or call (800) 664-4942.
NW Insurance Council is a nonprofit, public-education organization funded by member insurance companies serving Washington, Oregon & Idaho.

Lowering your insurance to match reduced market values is a bad move

Home & Commercial Building Prices Down, Rebuilding Costs Up

In a difficult economy it may be tempting to save a few dollars by reducing your Homeowners Insurance or coverage for your commercial building to match decreased market values. 

Homeowners Insurance and insurance for commercial buildings is designed to cover the cost of rebuilding, not the market value of a home or commercial structure.  Recent studies show that rebuilding costs have climbed during the recession, even as market values plummeted.

In past decades, market values were always ahead of rebuilding costs. That trend has reversed. Homeowners and business owners are encouraged not to lower their insurance to match market values. If your home or business is destroyed in a fire, you could be stuck paying the difference between your  insured amount and the actual cost to rebuild.

Instead work with your agent or insurance company annually to determine the cost to rebuild and insure accordingly.

Research from Xactware, a leading rebuilding cost estimator for the construction and insurance industries, reveals that between 2006 and 2011 average reconstruction costs rose 17.55 percent in Washington, 13.92 percent in Oregon and 13.81 percent in Idaho.

During that same time period, data from the National Association of Realtors shows median home sales prices fell 25.9 percent in the Seattle-Tacoma-Bellevue area and 14.13 percent in the Spokane area. The only areas that experienced a net increase in median home sales price were the Yakima area with prices rising 28.13 percent and Kennewick-Richland-Pasco prices rising 16.14 percent. 

In Oregon, median home sales prices fell 22.04 percent in the Portland-Vancouver-Beaverton area, 30.34 percent in the Salem area and 18.3 in Eugene-Springfield. In Idaho, median home sales prices fell 43.58 percent in the Boise City-Nampa area.

According to Xactware, the national average cost to rebuild rose 15.17 percent between 2006 and 2011. The national median home sales price fell 21.6 percent, according to the National Association of Realtors.

A 2008 survey by Marshall & Swift showed that 64 percent of homeowners in the United States don’t have enough insurance to rebuild their homes if they are destroyed.  Of those without enough coverage, the average homeowner only has enough insurance to rebuild about 81 percent of the home. 

Although most insurance companies periodically update your replacement cost coverage amount, it is your responsibility to make sure you have enough coverage for your home or business and its contents. 

NW Insurance Council offers the following tips to help you keep your insurance coverage up to date: 
  • Contact your agent or insurance company annually to evaluate the current replacement cost of your home or commercial building. Be sure to include any large remodel projects or additions that could add a substantial amount to your rebuilding costs. Also ask about special coverage for high-value items such as jewelry, art, antiques and coin collections.
  • Marshall & Swift offers homeowners an affordable way to check home replacement costs using their online Accucoverage tool. For $7.95, Accucoverage evaluates your home and gives an estimated rebuilding/replacement cost.
  • Consider separate optional flood and earthquake insurance.  Flood and earthquake damage is specifically excluded from standard Homeowners insurance policies and most business insurance policies. Keep an up-to-date home inventory with Free Home Inventory Software from the Insurance Information Institute.
  • Prepare your business to survive a disaster, get Open For Business from the Institute for Business & Home Safety. 

    For more information on Homeowners and business insurance, visit NW Insurance Council or call (800) 664-4942.
The NW Insurance Council is a non-profit, public-education organization funded by member insurance companies serving Washington, Oregon and Idaho.