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Augusta, Maine -

Insurance Superintendent Mila Kofman announced on Thursday that Maine’s Bureau of Insurance is joining other states and the National Association of Insurance Commissioners (NAIC) in a concerted effort to urge consumers to prepare for severe weather and natural disasters by taking simple steps that could save lives, minimize property losses and speed recovery.

Citing wind, flooding and fire as major causes of summertime damage, Superintendent Kofman is calling on Mainers to review their current homeowner or renter policy, to evaluate the benefits of flood insurance, to complete a home inventory checklist, and to assemble an emergency supply kit.

“With warmer weather arriving, the possibility of property losses from certain types of severe weather events and natural disasters increases,” Kofman stated. “As residents on the west coast have recently experienced with fires, spring and summer present new challenges and remind us all of the need to be prepared. Now is the time to review insurance policies, to purchase additional coverage if needed, to develop a list of home furnishings, equipment and other valuables, and to stock up on emergency supplies.”

Superintendent Kofman said a survey conducted by the National Association of Insurance Commissioners (NAIC) last year revealed that a majority of homeowners in the United States are largely unprepared for disasters. Many consumers do not have the coverage necessary to protect themselves from specific types of losses that are not reimbursed under standard policies. The survey found that:

• Nearly 50 percent lack an inventory of their possessions
• 65 percent do not have flood insurance
• 56 percent do not have insurance for a water line break
• 55 percent do not have insurance for a sewer line break

Kofman encouraged residents to read their current policy and to consider the benefits of additional coverage. She said many victims don’t realize until it’s too late that standard homeowner policies don’t provide coverage for damage caused by rising flood waters and other circumstances.

Residents of communities qualified through the National Flood Insurance Program are eligible to purchase flood insurance. Due to a 30-day waiting period for coverage to take effect, quick action is needed for a policy to be in place for the height of this year’s hurricane season. Details are available at the National Flood Insurance Program by calling 1-800-427-2419 or online at www.floodsmart.gov. The website includes tools to help homeowners assess their risk for flood damage.

Kofman also highlighted the need for consumers to know whether your policy includes coverage for “replacement cost” or “actual cash value” in case of a loss. Actual cash value (ACV) is the amount it would take to repair damage to your home or to replace its contents after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace your home and its contents with similar quality materials or goods, without deducting for depreciation.

In addition to reviewing policies and considering additional coverage, Kofman urged Mainers to create an inventory of home items. She emphasized that the checklist can be enormously helpful in establishing a claim. Although a copy of the inventory can be kept at home, a second should always be maintained with insurance policies, medical records, and other important documents in a safety deposit box or other secure location. Kofman said the inventory should include photos and a videotape of the property. She invited Mainers to visit the Bureau’s website (www.maine.gov/pfr/insurance) to download a free checklist and to view a new public service announcement regarding an inventory’s importance in recovering quickly from a property loss.

Finally, the Superintendent stressed the need for residents to establish an emergency supply kit. It should include several days of drinking water (at least one gallon per person per day), non-perishable packaged or canned foods, a non-electrical can opener and cooking utensil. The kit should also contain first aid materials, necessary medications, basic tools, a battery or crank-operated radio and flashlights, extra batteries and any supplies needed for pets. Additionally, it’s wise to maintain a list of important names and phone numbers, including insurance company contact information.

A listing of Disaster Preparedness Tips from the National Association of Insurance Commissioners accompanies this press release.

Disaster Preparedness Tips for Homeowners and Renters from the NAIC

• Take an inventory of your valuables and belongings. This should include taking photographs or a video of each room. This documentation will provide your insurance company with proof of your belongings and help to process claims more quickly in the event of disaster.
• To enable filing claims more quickly, keep sales receipts and/or canceled checks. Also note the model and serial numbers of the items in your home inventory.
• As you acquire more valuables — jewelry, family heirlooms, antiques, art —consider purchasing an additional “floater” or “rider” to your policy to cover these special items. These types of items typically are not covered by a basic homeowners or renter’s insurance policy.
• Remember to include in your home inventory those items you rarely use (e.g., holiday decorations, sports equipment, tools, etc.).
• Store copies of all your insurance policies in a safe location away from your home that is easily accessible in case of disaster. You may want to store your policies and inventory in a waterproof, fireproof box or in a safe, remote location such as a bank safe deposit box. Consider leaving a copy of your inventory with relatives, friends or your insurance provider and store digital pictures in your e-mail or on a Web site for easy retrieval.
• Know what is and is not covered by your insurance policy. You might need additional protection depending on where you live. Make sure your policies are up to date. Contact your insurance provider annually to review and update your insurance policy.
• Keep a readily available list of 24-hour contact information for each of your insurance providers.
• Find out if your possessions are insured for the actual cash value or the replacement cost. Actual cash value is the amount it would take to repair or replace damage to your home or possessions after depreciation while replacement cost is the amount it would take to repair or replace your home or possessions without deducting for depreciation. Speak with your insurance provider to determine whether purchasing replacement coverage is worth the cost.
• Speak with your insurance provider to find out if your policy covers additional living expenses for a temporary residence if you are unable to live in your home due to damage from a disaster.
• Appraise your home periodically to make sure your insurance policy reflects home improvements or renovations. Contact your insurance provider to update your policy accordingly.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

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Last Updated: October 28, 2009 1:28 PM