Download Tips for Personal Lines Interest Group

International Risk Management Institute, Inc.
Dallas, Texas
12222 Merit Drive, Suite 1450
Dallas, TX 75251
972–960–7693
Copyright © 2013
1
December 2012 Tips for Personal Lines Interest Group
Eliminate Your Ice Dams
An ice dam is an accumulation of frozen water in the gutter system and at the roof edge that
prevents subsequent drainage of melting snow from leaving the roof/gutter system. Ice dams are
common in areas that receive heavy snow buildups.
In most cases, ice dams begin inside the house, when heated air leaks up into the unheated attic.
In the winter, the roof above the unheated attic is cold. When warm air leaks into the attic, it
creates warm areas on the roof, which cause the snow on the exterior of the roof to melt. The
melting snow moves down the roof slope until it reaches the cold overhang, where it refreezes.
The process continues, causing ice to build up along the eaves and form a dam. Eventually, this
dam forces the water to back up under the shingles and sometimes into the ceiling or wall inside
the home. This phenomenon may cause structural framing members to decay, metal fasteners to
corrode, and mold to form in the attic and the wall surfaces. Few homeowners insurance policies
pay for ice dam removal. Interior or exterior damage, however, caused by an ice dam on the roof
is typically covered under a special perils homeowners form.
There are measures that home owners in colder climates can take to reduce the chance of ice
dams, including the following.

The services of a professional should be employed to remove heavy snow from your roof.
This eliminates one of the ingredients necessary for the formation of an ice dam.
Professionals are also able to address emergency situations in which water is flowing into
the house structure. This is accomplished by making channels through the ice dam to
allow the water behind the dam to drain off your roof. However, the channel becomes
ineffective within days and is only a temporary solution to ice dam damage.

Your ceiling/roof insulation should be increased to reduce heat loss by conduction. Some
state codes require an R-value of 38 above the ceiling for new homes. In narrow spaces,
insulation products with high R-value (6–7) per inch are recommended. It is imperative
that the ceiling be made airtight to prevent warm air within your home from flowing into
the attic space.

Verify that there are sufficient soffit and gable end vents in your attic. These help to
quickly vent any of the warm air that does get into the attic out into the atmosphere.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
2
Properly Protect Your Manufactured Home
Manufactured homes offer great bargains for many consumers due to a much lower price as
compared to site-built homes. And some independent appraisals are now confirming that these
homes can appreciate in value just like other forms of housing.
Manufactured homes, however, can often pose higher chances of loss from a variety of perils,
such as fire and windstorm. This is where safety and sound loss control practices come into play.
The following are some fire loss control tips to consider for your manufactured home.

Don't overload electrical outlets. Manufactured home fires are caused by problems in the
electrical system twice as frequently as in site-built homes. Protect yourself by
monitoring your electrical use. When one powerful electrical appliance is in use, for
example a microwave, keep the use of others to a minimum.

Make sure you have an adequate number of smoke alarms and regularly check the
batteries. You should have a smoke detector in each part of the home in which people
will be sleeping.

Contact a licensed technician to inspect your furnace at least once a year. The blower and
filters should also be regularly cleaned to prevent overheating.

Make sure that your wiring and appliances are maintained in good working order. Faulty
wiring is one of the leading causes of manufactured home fires.

If you have a natural gas or liquid propane line coming into your home, make sure you
know where the shutoff valve is and how to operate it.

Verify that your lot is clearly marked since the fire department will need to be able to see
the numbers on your home in case a fire or other emergency occurs.
Other perils to consider are windstorms and tornadoes, since manufactured homes are
particularly susceptible to high winds. The following are some wind-related loss control tips to
consider for your manufactured home.

If you don't already have one, consider installing a longitudinal tie-down system at the
front and rear of your home. These systems rely less on ground anchors; they also reduce
the effects of corrosion and rust on wind uplift resistance.

Replace straps or ground anchors that are loose or ones that show signs of rust or
corrosion. You should also check for proper installation of ground anchors and stabilizer
plates.

Install sliding storm shutters on all windows.
3
Prior to severe weather, get together with the other residents at your manufactured home park
and your park owner/manager to designate a safe shelter area in the park or community. When
severe weather threatens, go quickly to this designated site.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
Verify That Your Dwelling Limits Are Adequate
One of the painful aftermaths of fires and tornadoes that decimate homes may be the crushing
realization that the home is dramatically underinsured. According to one of the largest residential
building cost data companies, Marshall & Swift/Boeckh, 64 percent of U.S. homes are
undervalued by an average of 19 percent. If this figure is applied to a home with a replacement
cost of $400,000, it might be insured for only $324,000, a shortfall of $76,000.
This underinsurance results in a potentially huge coverage gap, particularly if the home is not
insured with a guaranteed replacement cost provision. A survey by United Policyholders, a
consumer advocacy group, said 75 percent of California home owners affected by the 2007 San
Diego wildfires were underinsured by an average of $240,000.
Here are some general tips to consider to reduce the likelihood of your home being underinsured:

Make sure your home has been physically inspected. This will increase the likelihood that
it is insured for its replacement cost value. Ask for periodic reinspections of your home
(particularly high-end ones) to ascertain whether the dwelling limits are adequate.

Consider guaranteed replacement cost (or guaranteed rebuild) coverage; an alternative
would be to procure coverage that offers a 30 to 50 percent cushion above the dwelling
limit (extended replacement cost coverage).

Increase the ordinance or law coverage (10 percent of dwelling limit for many
homeowners policies) to a higher percentage of coverage. Note that this recommendation
is particularly important if you have an older home.

Keep the insurance company informed about any remodeling at your home, since
remodeling can dramatically increase the need for higher dwelling limits. Americans
spend more than $170 million annually on home improvement projects, according to the
National Association of the Remodeling Industry.
4

If building costs are rising rapidly, an inflation guard endorsement is worthy of
consideration. This endorsement increases the dwelling limit of insurance (along with
other coverages) to reflect increases in values due to inflation.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
Select the Appropriate Self Storage Facility
More and more Americans are storing their excess personal property in self storage rental units.
In fact, the Self Storage Association indicates that approximately 11 million households in the
United States rent some type of storage unit.
The first consideration, after deciding to rent a storage unit, is which self storage facility to
select. The following are some tips for selecting the appropriate storage facility.

Select a rental company that has adequate security, such as proper lighting, formidable
fencing, coded security pads, and 24-hour video surveillance cameras.

Look for a unit that you can access any time of the day.

Consider your need for a climate-controlled environment—particularly important if you
are storing items that could be damaged by damp, cold, or hot weather such as
upholstered furniture and archived items.

Choose a unit that is well-maintained, clean, and pest-free.

Ascertain the reputation and history of the rental company through referrals and the
Better Business Bureau.

Select a rental company that offers competitive rates for insurance for your property in
order to give you more options; the rental company should also have its own commercial
general liability insurance if someone gets hurt on its premises.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
5
Check Your Suability Factor
Some individuals, particularly wealthier ones, have a higher than normal loss exposure to
lawsuits. This tendency is often referred to as a suability factor. How suable you are can be
determined by examining the following:

Size of your savings account and stock portfolio

Size of your real estate holdings

Family income

Profile in the community and media

Leadership activities on not-for-profit boards

Leadership activities in home owners' associations

Future income
People with a low suability factor should still strongly consider procuring a personal umbrella
policy with at least $1 million in liability limits. People with a high suability factor nearly always
need a personal umbrella policy with at least a $3 million to $5 million limit. Remember that this
is a relatively inexpensive policy that provides excess liability coverage over your homeowners
and personal auto insurance policies. In some cases, it provides broader liability coverage than
that found in the underlying policies.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
Protect Your Older Home
Older homes (i.e., greater than 40 years old) present extra risks for home owners; thus, special
insurance needs may arise. The following are some factors and tips for you to consider when
purchasing insurance for your older home.

Increased construction costs. In some cases, building ordinances can increase rebuilding
costs by 30 percent or more. Thus, an ordinance or law increased limit (HO 04 77) or
similar endorsement is worthy of consideration. This endorsement provides higher limits
for rebuilding an older home when an ordinance will increase the cost.
6

Difficulty in estimating replacement cost. Older homes are often constructed with
materials and using techniques that are either no longer available or extremely expensive
to duplicate, making it quite difficult to accurately forecast what the cost would be to
rebuild following a loss. As a result, there is a risk that the value for which your home is
insured is too low. Sometimes a guaranteed replacement cost endorsement is available to
protect against this contingency. With it, the insurer will pay the actual replacement cost
to entirely rebuild your home after a total loss, even if it is much higher than your
dwelling limit. If guaranteed replacement cost coverage is unavailable, consider extended
replacement cost coverage, which might allow an additional 20 percent or 30 percent of
the dwelling limit in the event of a total loss to your home.
Historic homes pose even more challenges for home owners as they are typically subject to
historical renovation regulations. Here are some recommendations worthy of consideration for
your historic home.

You should avoid any type of functional replacement cost endorsement because this
allows less costly construction materials and methods to be used to repair your home.
These materials and methods may reduce the value of your home.

If you want to replicate custom or historical features of your home, such as stained-glass
windows, antique wood floors, ceiling moldings, or hand-carved banisters, ask us about a
restoration cost homeowners policy or about adding an endorsement onto your policy
providing this coverage.

If you are planning any type of restoration to your home, make sure you hire contractors
and architects that specialize or have experience in restoring historic homes. Note that the
local historical commission typically has to approve any renovation plans.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2013
International Risk Management Institute, Inc.
7