As you know, insurance and the DMV go hand-in-hand. Proof of liability insurance is required to do a number of things at the DMV, including obtaining a driver’s license or registering a vehicle. Because what we do is so often tied into the reasons that you go to the DMV, we are trying to get the word out about a new initiative – the NC REAL ID – that you can take care of the next time you visit the DMV.

Beginning in October of 2020, federal agencies will start enforcing tougher security standards at airport check-ins, federal buildings, military installations and nuclear sites. The federal identification standard is changing, and a state-issued driver’s license will no longer be sufficient for those who want to fly, enter a federal building like a courthouse, or visit a military base.

The REAL ID Act was passed by Congress in 2005 in response to recommendations from the 9/11 Commission following the 2001 terrorist attacks. The NC REAL ID is a REAL ID Act-compliant driver’s license that is just like a traditional license or ID but has a gold star at the top. Driver’s licenses and IDs without a gold star are noted “Not for Federal Identification.”

The NC REAL ID is completely optional. You will not need an NC REAL ID driver’s license or identification card to do any of the following:

Drive; Vote; Apply for or receive federal benefits (e.g., Veterans Affairs, Social Security Administration, etc.); Enter a federal facility that does not require an ID (e.g., a post office); Access a hospital or receive life-saving services; Participate in law enforcement proceedings or investigations (e.g., serve on a federal jury, testify in federal court, etc.).

An NC REAL ID, however, will be helpful for anyone who frequently:

Boards a commercial airplane; Visits nuclear sites; Visits military bases; Visits federal courthouses, federal prisons or other federal facilities.

An individual without an NC REAL ID or U.S. passport will still be able to board flights or make visits to the facilities mentioned above, but they will have to provide additional documentation with their traditional license or ID.

The cost of the REAL ID is the same as a normal renewal if obtained within six months of your current license expiration. If you are obtaining the REAL ID outside of the renewal period, the cost is the same as a duplicate ($13). A new photo will be taken, but no tests are required.

Even though the federal law is not effective until Oct. 1, 2020, anyone can get an NC REAL ID now. Simply bring the following documents (no photocopies) to a driver’s license office:

One (1) proof of identity/date of birth​: certified birth certificate or unexpired U.S. passport

One (1) proof of full Social Security Number: Social Security card, W-2 or 1099

Two (2) proofs of current physical address: driver license, vehicle registration card, voter registration card, utility bill, cable bill, bank statement

Proof of name change (if applicable): certified marriage license, divorce decree and/or court document indicating the name change (number of documents depend on number of name changes) Additional documents, as well as more information on the initiative, are available at NCREALID.gov

Courtesy of the Insurance Federation of North Carolina, here are some commonly perceived myths about homeowners insurance in North Carolina, as well as the facts to dispel those myths.

 

MYTH: North Carolina coastal homeowners pay among the highest insurance rates in the country.

FACT: North Carolina’s average annual coastal homeowners insurance rate is the lowest in coastal states from North Carolina to Texas. [Source: Property Insurance Plans Service Office (PIPSO)]

 

MYTH: North Carolina homeowners insurance companies are highly profitable.

FACT: Property insurance requires a long-term investment by insurers, with profits needed in most years to offset the inevitable catastrophic losses. Over the last 25 years, North Carolina’s homeowners insurers have experienced a negative cumulative return on net worth (-2.3%). [Source: National Association of Insurance Commissioners (NAIC)]

 

MYTH: Current “consent to rate” rules don’t adequately protect the consumer.

FACT: Consumers always have the freedom to evaluate their options and select the best combination of coverage, service and price for their individual needs.

Consent to rate is a transparent and necessary byproduct of North Carolina’s unique regulatory system, which has been in effect for over 35 years. Unlike every other state in the country, North Carolina’s rates are set using a process that collectively sets AVERAGE RATES through the Rate Bureau.

Since the Rate Bureau’s average rates ultimately serve as the maximum rate for each consumer, rating flexibility is necessary to ensure market availability and achieve adequate rates for above average risks. State law permits insurance companies to charge higher than average rates for some lines of insurance, provided the consumer consents to the higher rate.

 

MYTH: North Carolina has a low risk of hurricane damage.

FACT: Since 1960, three of the most hurricane-prone counties in the country are in North Carolina (Carteret, Dare and Hyde). The state has more than $163 billion in insured values along its coast.

In addition to population growth, the average claim severity has increased more than 155% over the past 15 years. [Source: U.S. Census Bureau; AIR Worldwide (AIR) – a respected provider of risk modeling software and consulting services used throughout the country; Fast Track Monitoring System]

 

MYTH: Catastrophe models are used by insurance companies to justify rate increases.

FACT: Computer simulated models help provide loss predictability by combining historical losses with current demographic, building, scientific and financial data to project future losses for a certain geographic area.

Catastrophe models do not calculate rates. They are simply one component that helps insurers predict and evaluate probable losses for particular concentrations of risks. Adequate rates are essential to sustaining a viable insurance market in North Carolina. [Sources: NAIC, U.S. Census Bureau, AIR]

UPDATE effective April 1, 2018: The North Carolina Reinsurance Facility surcharge is increasing again from 11.45% to 13.24% due to higher sustained losses in the Reinsurance Facility. Per state law, the surcharge is combined with BI/PD premiums and charged to all policyholders with all companies across the state.

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“Why have my insurance bills gone up?”

It’s one of the most common questions we get asked when clients receive their renewal offers and see that their premiums have risen despite not having made any changes to their coverage. This can be due to any number of reasons – the easiest of which to comprehend are claims for accidents, or speeding tickets that may have been acquired during the previous year.

However, a common culprit for premium increases that most people don’t know about is something called a “recoupment charge,” which may appear on your policy labeled as “NCRF Clean Risk Allocation.” It can sound complicated but we’ll explain it to you as best we can.

As you probably know, North Carolina requires every driver to carry liability insurance, no matter how high of a risk they may be to insure. Because everyone needs coverage by law, insurance companies are not permitted to turn away high risk drivers who are seeking the required coverage. To prevent any one company from taking on too much risk, in 1973 the North Carolina Reinsurance Facility (NCRF) was created to ensure that all eligible drivers are able to purchase a policy.

The goal of the NCRF is to distribute losses proportionally across all member companies to offset the high-risk policies that some companies may take on. Insurance companies may pass, or cede, certain high risk policies to the NCRF to avoid the potential losses. The amount of state drivers covered by the NCRF can hover around 25 percent, and when many of those drivers prove to be the risks they were thought to be, the NCRF loses money. Because the NCRF typically operates at a deficit each year, the “recoupment charge” was created by the North Carolina Rate Bureau (NCRB) to help balance this out. This charge is added to all North Carolina auto policies with all companies. It increased from 4 percent to 9 percent in October 2016, and was again increased to 11 percent on April 1, 2017.

How is this rate calculated? Again, there a number of factors. One of the main reasons is inflation. The cost to repair vehicles damaged in accidents has increased dramatically, while medical costs have risen for accident injury victims. The population continues to grow in North Carolina, and with more people comes more accidents and claims.

Here are some facts from the NCRB:

-In 2015, the most recent year available, fatalities increased 8.1 percent from 2014, injuries increased 11.8 percent and reported crashes were up 11.1 percent.

-Mileage driven in 2015 was up 13 percent from the average of the preceding five years.

-Inflation in 2016 has increased vehicle repair costs by 2.4 percent and total medical care costs by 3.8 percent.

-The NCDMV estimates that there were 7 percent more crashes in 2015 due to distracted driving and 13.2 percent more alcohol related crashes.

All of these factors are considered when there is a rate increase, and clients will start to see those rate increases reflected in the premiums as renewal dates come around.

Here at Brown-Phillips, we’ll certainly do anything we can to help you offset these increases by finding other ways to reduce your premium. Are you interested in reducing your coverage or raising your deductible? Are you able to pay your premium in full as opposed to installments? Would you like to bundle the policy with a homeowner’s or renter’s policy? Sometimes these things can enact discounts that could help counteract the rising costs.

On the bright side, it’s also key to note that in spite of these changes, North Carolina drivers still enjoy the fourth-lowest auto insurance rates in the entire country. Thanks again for the chance to review and service your insurance needs.

Thanks to you, our valued clients, Brown-Phillips was recently named by Three Best Rated as one of the Top 3 Insurance Agents in Raleigh!

This is all decided by customer reviews, so we are are honored – thank you!

Check it out: https://threebestrated.com/insurance-agents-in-raleigh-nc

Whether your customers are chaperoning little ghouls and goblins around the neighborhood, hosting trick-or-treaters or going to a costume party, we’ve put together some tips to ensure the biggest risk they’ll face is a candy-induced cavity.

 

Safety tips for trick-or-treating

Don’t let your ghosts be invisible – Ensure your kids are visible while trick-or-treating by creatively decorating their costume and candy bags with reflective tape or stickers. Glow sticks and flashlights (with new batteries) will also make children more visible to drivers.

Hospital visits are horrifying – Be sure to avoid masks that obstruct vision and check that costumes fit correctly. Stick to well-lit streets and never cut through dark yards or alleys. This can prevent serious injuries from trip and falls.

It’s ghastly going alone – Until they reach the age of 12, children should be accompanied by a responsible adult. Even after that, they should not trick-or-treat alone. They should only go to houses with the front-porch lights on. Let them know to never enter a house or car to get a treat.

Plan your haunting beforehand – For children that are old enough to trick-or-treat alone, plan an acceptable route and agree on a time they should return before they leave the house. If possible, they should also carry a cell phone so they can stay connected.

 

Making your home safe for Halloween

Get your sidewalk neat before they trick-or-treat – Walk the path from the street to your door and clear anything that trick-or-treaters could trip over or slip and injure themselves. This includes gardening equipment, hoses, toys, potted plants, lawn ornaments and even Halloween decorations that block the path to your front door.

Make your yard spooky, not dangerous – Be sure to clean up before candy-fueled children charge through your yard. Remove dead branches, sticks and acorns, rake up the leaves, fill in holes and trim your hedges to prevent any injuries.

A well-lit driveway can still be scary – There’s nothing scarier for a homeowner than seeing a masked trick-or-treater blindly stagger up your dark driveway. Help them out by turning on all of your exterior lights and lining your driveway and sidewalk with lights or luminaries. Never use any open flames, which could lead to disaster and injury. Instead, use LED tea lights or other decorative Halloween lights to prevent a fire. These should also be used in jack-o-lanterns in lieu of candles.

Keep your beasts in the dungeon – It doesn’t matter if you’ve got a vampire bat or a kitten as a pet, a constantly ringing doorbell can be too much excitement for your animal. To keep your pet from sprinting out of your open front door and possibly injuring someone, keep them confined to another room in the house.

 

Safe driving tips for Halloween

No speed demons allowed – If you are driving through a residential area, drive as slow as possible. Avoid passing stopped vehicles in case they are dropping off children. You should also be especially cautious when entering and exiting driveways.

The horrors of distraction – On Halloween, neighborhoods are filled with children unexpectedly darting out into the street. Put away your cell phone and don’t look away from the road to ensure you don’t injure any trick-or-treaters. You should also never drive while wearing a mask.

Turn signals aren’t terrifying – Communicate your intentions to pedestrians and other drivers by using your turn signals. If you’re dropping off trick-or-treaters, pull over and use your hazard lights.

Drinking on Halloween can be a nightmare – It doesn’t matter if you’re driving or walking, drinking on Halloween can be a deadly choice. The combination of alcohol and the increased number of people walking in the streets at night makes Halloween the most dangerous night of the year for pedestrians.

Your home should not put your safety at risk. Skipping home maintenance and necessary repairs can increase the likelihood that you or someone you care about may injure themselves on your property or in your home. Unintentional injuries can result from electrical shocks, cuts, fires and more in or around the home. How can a homeowner do their utmost to prevent such accidents?

Regular maintenance can help homeowners keep family members and guests safer on their property. Understand what to include as part of the routine maintenance tasks and repairs to reduce potential injury risk in and around a home.

Electrical Issues

Older homes may require extensive electrical work and replacing old wiring or a circuit breaker may be necessary to insure the safety of the electric system. However, new construction homes may also experience an electrical problem over the years and a minor shock is not the worst of the issues that may occur when an issue goes ignored. When purchasing a new home, a thorough inspection is important for finding any hidden issues like these before moving in. Flickering lights and outlets that are not working properly may be signs of a problem. It is important for homeowners to know which electrical problems they may be able to safely handle themselves and those that should be turned over to be addressed by a licensed electrician. Electrical shocks and electrical fires can be deadly.

Broken Windows

Windows may break and a homeowner may need to spend an hour or two to replace a broken window pane and remove broken glass. This will help prevent the likelihood that someone in the home will be injured by coming into contact with a sharp shard of glass. But this is not the only reason to repair a broken window. Other aspects of older windows, such as broken latches, may make it easy for an intruder to get inside a home. Address such problems as part of a home’s regular maintenance. Remember to wear long gloves and cover any exposed skin when repairing a window and dealing with broken glass.

Mowing and Landscaping

It is important to address the exterior as well as the interior of a home in order to prevent an accident. Mowing the lawn regularly, trimming back bushes and trees, raking and snow removal are all important aspects of regular home maintenance. Keeping paths clear of debris and addressing uneven steps or pathways can help a homeowner avoid experiencing a slip and fall on their own property.

Do a Walkthrough

Walk throughout the rooms and entryways of a home to make note of any areas that may pose a potential hazard. Those homes with elderly residents may require additional attention to reduce the potential of a fall, such as the installation of grab bars and non-skid pads in showers. Make repairs to warped wooden floors, loose floorboards and railings to reduce the possibility of an accident. For homes that may be visited by those with mobility issues, extra precautions with rugs and exposed wiring may need to be taken to prevent an injury. Performing a safety inventory of a home should take into account the needs of and potential risks posed to all occupants and visitors, such as elderly parents, young children and pets.

Hurricane Irma, a potentially catastrophic Category 5 hurricane, may pose a serious threat to Florida and parts of the Southeast beginning this weekend. We wanted to quickly reach out to you and make sure that you and your family are up to date and fully prepared for any potential weather conditions that may strike your area.

Basic Preparedness Tips

• Know where to go. If you are ordered to evacuate, know the local hurricane evacuation route(s) to take and have a plan for where you can stay. Contact your local emergency management agency for more information.
• Take photos or a video of everything inside your home.
• Stock up on water and non-perishable food items.
• Prepare an emergency kit in a waterproof container or bag. Include your insurance documents, other important documents (e.g. birth certificates and vehicle registrations), flashlight, batteries, cash, first aid supplies, phone chargers and prescription bottles. Keep this kit with you.
• Click here to access your insurance policy information and a list of all our carriers and their claims numbers. (Scroll to the bottom for the list)
• Designate an out-of-area contact that your family members can call in case you are separated.
• If there is time, board up windows and place sandbags around your property.
• If you are not in an area that is advised to evacuate and you decide to stay in your home, plan for adequate supplies in case you lose power and water for several days and you are not able to leave due to flooding or blocked roads.
• Make a family emergency communication plan.
• Many communities have text or email alerting systems for emergency notifications. To find out what alerts are available in your area, search the Internet with your town, city, or county name and the word “alerts.”

Preparing Your Home

• Turn off breaker boxes prior to evacuating: This will help prevent electrical surges from destroying your appliances. Also, in the event of water infiltration, it prevents shorts that can lead to fires.
• Never drive through standing water. Underlying currents could carry your vehicle away or trap you in rising floodwaters. Find an alternate route. Know your evacuation route and follow the direction of your state and local officials.
• Hurricane winds can cause trees and branches to fall, so before hurricane season trim or remove damaged trees and limbs to keep you and your property safe.
• Secure loose rain gutters and downspouts and clear any clogged areas or debris to prevent water damage to your property.
• Reduce property damage by retrofitting to secure and reinforce the roof, windows and doors, including the garage doors.
• Purchase a portable generator or install a generator for use during power outages. Remember to keep generators and other alternate power/heat sources outside, at least 20 feet away from windows and doors and protected from moisture; and NEVER try to power the house wiring by plugging a generator into a wall outlet.

Hurricane Watch

Hurricane watch = conditions possible within the next 48 hrs.

Steps to take:

• Review your evacuation route(s) & listen to local officials.
• Review the items in your disaster supply kit; and add items to meet the household needs for children, parents, individuals with disabilities or other access and functional needs or pets.

Hurricane Warning

Hurricane warning = conditions are expected within 36 hrs.

Steps to take:

• Follow evacuation orders from local officials, if given.
• Check-in with family and friends by texting or using social media.
• Follow the hurricane timeline preparedness checklist, depending on when the storm is anticipated to hit and the impact that is projected for your location.

Next Steps

To see the full overview of recommended hurricane preparedness tips, visit ready.gov/hurricanes.

As always, you can count on us to be there to answer any coverage questions you may have!

 

With all the storms that have been hitting the state of North Carolina recently, damage to your property caused by water may be fresh on your mind, making it a good time to review what is and isn’t covered by most homeowners policies.

First and foremost, it’s key to remember that water damage must be sudden and accidental. Anything resulting from unresolved maintenance issues that gradually causes damage is usually not covered.

There’s more to it than that, however. Our friends at Safeco have outlined some guidelines of what to expect when your home is affected by unfriendly H2O.

Occurrence: Toilet or shower drain gets clogged from an obstruction on the premises. It overflows, causing damage.

Is it covered? Yes, by the homeowners policy.

Occurrence: Tree root in the property’s yard blocks a drain and causes overflow.

Is it covered? Yes, by the homeowners policy.

Occurrence: Sewer line in the street backs up and causes an overflow through a drain in the household.

Is it covered? Yes, but only by an optional endorsement.

Occurrence: A sump pump gets overwhelmed and causes an overflow into a home’s basement.

Is it covered? Yes, but only by an optional endorsement.

Occurrence: Flooding. River overflows or dam breaks, causing water to flow over the surface into the house.

Is it covered? No, not covered by the homeowners policy or the optional endorsement.

Occurrence: Overflow originating off-premises. Sewer line breaks in the street and causes water to flow over the surface into the house.

Is it covered? No, not covered by the homeowners policy or the optional endorsement.

Occurrence: Sub-surface water. Swimming pool or sprinkler system leaks underground and causes water to seep through the foundation.

Is it covered? No, not covered by the homeowners policy or the optional endorsement.

Safeco’s homeowners policy provides coverage for water that backs up through sewers or drains as long as it originates on premises. The optional endorsement expands the coverage to provide better protection. This optional endorsement is called “Escape of Water from a Sump, Sump Pump or Drain on the Residence Premises,* and does two things. It provides a “give back” of coverage for overflow originating on premises from a sump pump or similar system that is otherwise excluded in the base contract. Also, coverage is expanded to include backup or overflow from causes originating off premises as long as the backup or overflow itself occurs on premises.

The key words to remember in any case are “on premises” or “off premises.” A simple question to ask yourself is “Are my neighbors affected by this water as well?” If the answer is no, then there is a good chance you might be covered. If the answer is yes, then you more than likely do not have a claim.

Floods are the most commonly excluded occurrences from home insurance coverage and damage resulting from flooding is only covered by a flood policy through the government’s National Flood Insurance Program.

Something else worth pointing out is that most insurance policies will not cover the source of the water damage without a specific endorsement. For example, damage caused by a busted washing machine will be repaired but the claim will not pay for a new washing machine.

As we always mention in these blog entries, every company is different, as is every occurrence. As they say in the commercials, “results may vary.” If the water source is not clear, an inspector may be sent to determine the cause of the water damage, and ultimately, if the claim is covered or not. Coverage is fact-driven and each claim will be evaluated on its own merits and circumstances for coverage determination. Decisions are ultimately left up to the adjusters at your respective insurance company.

You may have heard of – or even been asked to sign – what is called a Consent to Rate (CTR) form as it pertains to your auto or home insurance. The more you read about it, the more confusing it can sound, so we’ve tried to simplify it for you.

North Carolina has a Rate Bureau that sets the rates for all the insurance companies in the state for auto and property. The Rate Bureau sets a “suggested” rate for physical damage (your comprehensive and collision coverage). This suggested rate is similar to a Manufacturer’s Suggested Retail Price (MSRP) that you come across when buying a new car. Though there is a sticker price for the car, the dealer can sell it for a different amount that best suits their business.

This is kind of how it works with an insurance company. If they charge a rate that is beyond the suggested amount, then they must retain the CTR form with your signature to continue charging said rate. Their rates may be higher for any number of reasons but it usually relates to the amount of risk a driver presents based on their driving history, location or vehicle usage. While the state suggests the rates for physical damage, they don’t actually offer physical damage coverage (they only deal with the required liability coverage when they are ceded a policy) and therefore, insurance companies argue that the state’s suggestions don’t accurately reflect the risk involved.

The CTR form is usually included among the other paperwork that needs to be signed when a new policy is started, but it may arise at renewal time if you’ve had any claims or tickets during the previous term, or if you’ve added coverage that you didn’t previously have.

It’s not against the law for insurance companies to charge rates that are higher than the Bureau’s suggested rates, but it is against the law for them to do so without your acknowledgement. That is why the insurance companies are so strict when they send you this form. If you do not sign it in a timely fashion, they will remove the physical damage coverage from your auto policy, or even cancel the policy altogether in the case of homeowner’s insurance.

The language on a CTR form can sound intimidating. After reading it, you might ask, “Why would I agree to let them charge me more than the state says they should?” It’s a legitimate question, but there are two key things to keep in mind.

For one, you already agreed to the rate when the company provided you a quote and you decided to move forward with it. If you hadn’t already decided that quote was reasonable for your needs, you wouldn’t be getting the CTR form. Signing the form is just the formality of acknowledging the rate that the company quoted in the first place and finalizing the contract.

Secondly, signing the form does not mean the insurance company will immediately start charging you more. Your rates will not increase during a policy term unless you make change requests that alter the coverage in some way. Of course, your rates may rise at renewal time, but that is common for all policies and is oftentimes for other reasons as described here.

To make a long story short (and to put it bluntly), you don’t have much of a choice when it comes to signing the CTR form. If you want maintain the coverage on your vehicle or home without interruption, you need to sign the form (continuing with the premium you already agreed to!). If you don’t sign it, the insurance company will remove your coverage (not because they want to, but because they have to) and your property won’t be fixed in the event of a claim. Your third choice is to go shopping for a new insurance company, but the CTR is a state-wide mandate and even if you find cheaper insurance, your savings might be offset by the fees you will incur with the current company by cancelling early, as described here.

Again, your premium will not change from what you were quoted upon signing the CTR form. If it does once your renewal date rolls around, give us a call and we will review your file to make sure you are with the best company for your needs.