For beauty business news, beauty store owners turn to Beauty Store Business. Beauty business trends, beauty business profiles and more!
Issue link: http://beautystorebusiness.epubxp.com/i/141850
Flood-Insurance Premiums Why is flood insurance so expensive? "Typically, the only people who buy flood insurance are those who expect a flood," says Michael Sapourn, a Satellite Beach, Florida-based attorney who has dealt extensively with flood-damage insurance and litigation. "So you don't get the spread of risk necessary to keep premiums from escalating." Subsequently, private carriers generally don't offer standard flood insurance. The federal government through FEMA is the ultimate underwriter for the first $1 of flood-insurance policies. "Because the federal government has taken major losses in this area in recent years, rates have been rising," says Sapourn. The federal government has set limits on how much it will write. For commercial property, those limits are $500,000 per building and $250,000 on inventory. (Coverage is half those limits for residences.) "However, you can get excess flood insurance through the private market, negotiating what limits and premiums you can," notes Sapourn. Bonus tip: Find a broker experienced in flood insurance. "Any broker can sell the standard flood-insurance policy through the National Flood Insurance Program," says Sapourn. "While many brokers have licenses to write flood insurance, many might not write it very often. As a result, inexperienced brokers may misquote your flood-insurance premium based on an incorrect reading of the FEMA flood-insurance rate map. extensively with flood-damage insurance and litigation. "Those who own buildings located in areas vulnerable to such events should purchase flood insurance. Much litigation results from the difficulty in distinguishing between water damage caused by windstorm (which is covered by standard property insurance policies) or from other causes such a tidal surge. Carriers often litigate the gray areas where windstorm ends and tidal surge begins." Mortgage lenders will require you to buy flood insurance if you are located in a flood zone, as defined by FEMA. "Businesses which have paid off their mortgage often drop flood insurance since they no longer have a lender who requires it," says Sapourn. "That's a mistake." Finally, don't make the common mistake of being underinsured. "Don't try to save money by lowering limits. Get the coverage limits you need to protect you from a total loss." Flood-insurance policies are typically not available on a replacement cost basis, so you will need to estimate what you need to rebuild. If you have an older building, you may not be able to get the policy limit you want from FEMA, so you may end up going into the private market for excess insurance. Once you have your recovery plan and your insurance policies in place, you are in a much better position to survive should you be hit with a disaster. But don't just toss your recovery plan in a desk file and forget about it. Advisers suggest that you review the program annually. "Disaster-recovery planning is an evergreen issue that is never done," says Williams. "People change jobs, functions change, mobile phone numbers change. Keep revisiting your plan." You don't want to be caught without a lifeline when a crisis hits. ■ Phillip M. Perry is a New York City-based freelance writer. COME VISIT US AT COSMOPROF NORTH AMERICA July 14-16, 2013 I Booth #D - 13137 Orders: 800 627 5839 80 August 2013 | beautystorebusiness.com salonproducts@americandawn.com