Own property in Florence’s path? Here’s what CDN’s need to know about hurricane insurance

The return of hurricane season in the U.S. has brought with it an all-too-familiar question: how can Canadians who own property in the U.S. insure their property during a hurricane or flood?

Hurricane Florence rose through the ranks from a tropical storm to a major hurricane over the past few days, prompting evacuation orders for over one million people in South Carolina, North Carolina and Virginia. While originally a Category 4, Florence was downgraded to a Category 3 Wednesday afternoon.

But it turns out many Canadian snowbirds may be impacted by the coming landfall.

A report by the National Association of Realtors from February revealed that between 2016 and 2017, Canadians were the second most active group when it came to buying American real estate, purchasing a total of US$19 billion in residential property.

Furthermore, Canadians looking to become U.S. property owners typically purchase properties that can be used as vacation homes.

Over the past few years, the east coast has become an increasingly popular vacation spot.

What are Canadians’ insurance options?

Most flood insurance in the United States is provided by FEMA through the National Flood Insurance Program. Homeowners in areas that are designated flood hazard zones must have insurance in order to qualify for federally backed loans.

Unfortunately, for Canadians who own property on the popular Myrtle Beach strip or elsewhere on the Carolina coast — which is directly in Florence’s path — U.S. citizenship or permanent resident status is required to qualify for federally backed mortgages.

This eligibility criteria likely excludes many Canadian snowbirds, Global News previously reported. Therefore, Canadian property owners would need to purchase non-government-backed flood insurance from a private broker.

Furthermore, according to Lynne McChristian, a representative for the Insurance Information Institute, whether or not your mortgage is required to include hurricane and flood insurance depends on the broker.

“This goes back to the mortgage company. If there’s a mortgage, (property owners are) required to have property insurance. If they live in a flood zone, the mortgage company may also require flood insurance,” she explained.

McChristian notes, however, that even if your mortgage provider doesn’t require hurricane and flood insurance, purchasing it anyway is “one of the smartest things somebody can do … if you live in any coastal area or any area where you can see the water or it can see you.”

However, if you haven’t purchased flood and hurricane insurance yet, McChristian says it’s too late for properties in the path of Hurricane Florence.

“What insurance companies typically do is when a storm has been named, they stop writing new coverage. It creates something that’s termed ‘moral hazard.’ Then people that more than likely expect to file a claim will get insurance because they expect something to happen … if somebody does not have property insurance right now, they would not be able to get it.”

She warns Canadians who own condo units in beachfront resorts that the insurance policies they’re paying into as part of their occupancy agreements only cover the structure of the condo. In order to be reimbursed for the contents of the unit, tenants must additionally purchase “contents insurance.”

“The condo association will pay for structural damage, but it’s up to the tenant to pay for anything inside the unit,” says McChristian.

Insurance companies located in the areas projected to be most affected by the storm had already evacuated when Global News reached out for comment.

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US: Closed ports, lost power: How storm could hurt area economy

By Paul Wiseman, Tom Krisher And Christopher Rugaber

THE ASSOCIATED PRESS

WASHINGTON _ Ports are closing. Farmers are moving hogs to high ground. Dealers are moving cars into service bays for refuge. And up to 3 million energy customers in North and South Carolina could lose power for weeks.

Across the Carolinas, Virginia and Georgia, businesses are bracing for the economic damage Hurricane Florence is expected to inflict on the area. Industries like tourism and agriculture will likely suffer, and the losses won’t be easily or quickly overcome.

Once it makes landfall, Florence is expected to lash coastal communities with high winds and to dump several feet of water. Flooding could prove devastating. The storm will likely damage homes and businesses, kill crops, drown livestock, wash away cars and suspend much of the area’s economic activity.

“These storms can be very disruptive to regional economies, and it takes time for them to recover,” said Ryan Sweet, an economist at Moody’s Analytics.

Sweet said he thinks Hurricane Florence could cause the U.S. economy’s growth to slow a few tenths of a percentage point, on an annual basis, in the July-September quarter. Michael Walden, an economist at North Carolina State University, calculates that Florence will deduct about $200 million of output a day from North Carolina’s $550 billion-a-year economy until business returns to something close to normal.

It could have been worse. Labor Day marked the end of the peak tourism season in the Outer Banks of North Carolina and other coastal getaways. There are now fewer tourists to send away.

In fact, as with the aftermath of previous hurricanes, the region could eventually receive an economic boost once construction crews come out to rebuild and repair damage and as insurance payments and federal disaster aid flow in.

“The ironic thing is, when there’s a rebuilding effort, that can energize local economies,” Walden said.

“Typically, we see a stimulus effect that creates jobs and raises incomes for South Carolinians,” said Joseph Von Nessen, a research economist at the University of South Carolina. Hiring is likely to be especially strong in construction and at retailers that sell building materials and supplies.

Hurricane Florence is slamming a region that is economically diverse as well as sizable. Combined, North and South Carolina boast an economy bigger than Saudi Arabia’s. High-tech auto plants co-exist with beachfront bed-and-breakfast inns and peanut farms. North Carolina’s Duplin and Sampson counties, just inland, sell more hogs and pigs than anywhere else in America.

Duke Energy warned that Florence could cut off power to anywhere from 1 million to 3 million customers in North and South Carolina, potentially leaving them without electricity for several weeks, said spokeswoman Grace Rountree.

Two big fuel pipelines stand in the hurricane’s path, but analysts say they think the storm is unlikely to disrupt the flow of gasoline or other products. Still, analysts for S&P Global Platts say it’s possible the Colonial and Plantation pipelines could be affected by power outages or damage to pump stations. Those pipelines carry fuel from the Gulf Coast to much of the eastern United States.

Analysts expect a temporary boost in gasoline demand as people flee Florence, followed by weaker demand during and immediately after the storm. But the damage to energy facilities is likely to be far milder than the devastation left by Hurricane Harvey, which last year battered Houston, the heart of the U.S. energy industry. Flooding closed refineries along the Texas and Louisiana coasts and caused gasoline prices to spike.

No ships were entering or leaving the Port of Virginia in Hampton Roads on Wednesday. And the port in Charleston, South Carolina, was suspending operations from Thursday through Saturday and possibly on Sunday.

And Florence will almost surely depress auto production in South Carolina, where Volvo already has closed a new factory near Charleston because it’s in an area under mandatory evacuation orders, said spokesman Russell Datz. Volvo is co-ordinating with parts suppliers so it will be ready to resume production, according to Datz, who said he wasn’t sure how long the plant would be down.

Three hours to the northwest in Spartanburg, BMW’s sprawling SUV factory remains open. But rail cars with vehicles bound for Charleston and export markets abroad have been moved to secure areas until the storm passes. Spokesman Kenn Sparks said BMW is monitoring parts supply plants, which could be affected by the storm.

At auto dealerships in 48 counties of Virginia and North and South Carolina, Florence could destroy about 125,000 vehicles, Citi Investment Research analyst Itay Michaeli estimated in a note to investors. It also could cut September auto sales by about 110,000 vehicles, which would have to be made up later, he wrote.

Analysts at Cox Automotive predicted that Florence won’t destroy as many cars as Hurricane Harvey did in the car-dependent Houston area. Though about 9 million vehicles are in Florence’s path, the area has only about 162 vehicles per square mile _ less than half the figure in car-crazy Houston. Many car dealerships on the coast were already closed Wednesday ahead of the storm.

But even inland dealerships are bracing for damage. Workers at Florence Toyota in Florence, South Carolina, plan to pull high-value luxury vehicles into the service bays on Thursday to protect them.

“We’ll probably move some of our bigger trucks in front of the building to try to stop some of the debris,” said Terrell Small, the new-car sales manager.

The city of Florence, about 70 miles northwest of Myrtle Beach, could absorb 70-to-110 mph winds and 3 to 6 inches of rain, according to the National Weather Service. The area is under tropical storm and flash flood watches into the weekend.

Small said the precautions have worked in previous hurricanes, but he said he remained wary of the flooding potential from the storm with the same name as his town.

Hub International Acquires Ontario-Based Clearwater Insurance Group Inc.

CHICAGOSept. 10, 2018 /CNW/ — Hub International Limited (Hub), a leading global insurance brokerage, announced today that it has acquired Clearwater Insurance Group Inc. (Clearwater Insurance). Terms of the transaction were not disclosed.

Headquartered in Toronto, Ontario, Clearwater Insurance delivers innovative insurance solutions to clients through customized programs and proactive health services. Alexander Eaton, President of Clearwater Insurance, will join Hub Ontario reporting to Curtis McCone, President, Wealth Management and Employee Benefits, Hub Ontario.

The move further demonstrates Hub’s ongoing Canadian employee benefits growth and services strategy to assemble best-in-class capabilities and entrepreneurial talent across Canada to develop a complete employee benefits solution.

About Hub’s M&A Activities
Hub International Limited is committed to growing organically and through acquisitions to expand its geographic footprint and strengthen industry and product expertise.  For more information on the Hub M&A experience, visit WeAreHub.com.

About Hub International
Headquartered in Chicago, Illinois, Hub International Limited (Hub) is a leading full-service global insurance broker providing property and casualty, life and health, employee benefits, investment and risk management products and services. From offices located throughout North America, Hub’s vast network of specialists provides peace of mind on what matters most by protecting clients through unrelenting advocacy and tailored insurance solutions. For more information, please visit hubinternational.com.

CONTACT: 

Media: Marni Gordon
Phone: 312-279-4601

SOURCE Hub International Limited

U.S. Startup launches insurance for Uber, Lyft passengers

By Sarah Skidmore Sell

THE ASSOCIATED PRESS

Grabbing a ride from Uber or Lyft? Now you can get an insurance policy from your phone for the ride too.

Startup SURE says it has partnered with underwriter Chubb to launch a new service that allows passengers to buy accidental medical, death and dismemberment insurance coverage for the ride.

While ride-hailing companies typically provide liability insurance coverage for U.S. drivers that would cover passengers in an accident, this product aims to fill in any potential gaps.

The program, called RideSafe, works by connecting a customer’s Uber or Lyft account to their SURE Insurance app, and once coverage is initially authorized, the passenger’s ride is automatically insured.

The company said Thursday that future versions of its RideSafe product will include coverage for passengers riding in autonomous vehicles used for ride-sharing.

Arthur J. Gallagher & Co. Acquires Majority Interest In Hesse & Partner AG And Hesse Consulting GmbH

ROLLING MEADOWS, Ill., June 11, 2018 /CNW/ — Arthur J. Gallagher & Co. today announced that it has acquired a majority interest in Zurich, Switzerland-based Hesse & Partner AG and Hesse Consulting GmbH. Terms of the transaction were not disclosed.

J. Patrick “Pat” Gallagher, Jr. – Chairman, President and CEO of Gallagher, global insurance brokerage, risk management and consulting services firm (PRNewsfoto/Gallagher)

Founded in 1997, Hesse is a commercial property/casualty broker and consultant offering coverages and risk advisor services primarily to industrial, manufacturing and construction clients with a particular specialism in the waste-to-energy industry. Guido Hesse, Tanja Jung and their associates will continue to operate from their Zurich location under the direction of Vyvienne Wade, head of Gallagher’s overseas division.

“Hesse brings us an outstanding team of specialists in the growing waste-to-energy industry and positions us for further growth in the region,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. “I am pleased to welcome Guido, Tanja and their associates to our growing Gallagher family of professionals.”

Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 34 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

Cyber insurance market sees steady growth as awareness increases

By Modestus Anaesoronye | Business Day

Cyber attacks were once again in the spotlight in 2017, with increasing frequency and severity, offering plentiful opportunities for growth of insurance, especially in small and medium-sized companies, according to A.M Best report.

The WannaCry and NotPetya ransomware attacks and the Equifax data breach received significant media attention and affected millions of people and businesses. The NotPetya attack in particular highlights the growing business interruption exposure associated with cyber risks. Also, in October 2017, Yahoo! updated its 2013 data breach tally from one billion to three billion of its accounts, potentially making this the most substantial, most extensive cyber breach ever recorded.

These events highlight the vital need for cyber insurance, but the market is bifurcated. On the one hand, national accounts and Fortune 500 companies seem to be embracing the need to partner with insurers and brokers as a way to counter cyber risks.

Financial institutions and healthcare companies are acutely aware of their cyber exposures and are increasing their coverage. Average policy limits are rising, with some of the largest companies’ coverage towers above the half-billion dollar mark.

On the other hand, the take-up rate for small to medium-sized enterprises (SMEs) remains in the low teens, presenting an area where insurers would like to see growth.

In 2017, cyber packaged policies in force increased 28 per cent, some of which was due to the addition of affirmative cyber coverage to packaged policies. This increase is significant, but this is still something of a fledgeling business, and an increase of this magnitude, while material, does minimal to close the protection gap. However, interest from SMEs does seem to be gaining traction, and capacity from insurers is ample.

In the short term, despite the inherent challenges in managing aggregations and pricing, we believe the cyber insurance market presents a favourable opportunity for insurers. Demand is expected to grow due to the accelerating adoption of technology and the increasing awareness of cyber risks, especially among SMEs. Given the abundant supply of capital and the cautious growth strategies of insurers, we expect the overall exposure of the property and casualty industry.

However, as insurers expand their cyber offerings, they will need to be prudent in establishing underwriting standards and limits, and exercise appropriate risk management and mitigation measures to ensure that these exposures remain aligned with the company’s risk tolerances and appetites.

The extent to which an insurer grows its cyber business should also lend to a broader understanding of this relatively new risk and a company’s ability to aggregate, monitor, and manage its exposure in various scenarios. Data quality is a crucial factor when insurers provide information to regulators, other stakeholders.

Overall, cyber insurance take-up remains low, as SMEs remain complacent about these risks, under two assumptions: that hackers target only more prominent businesses such as Target or Home Depot or that they already have coverage under another policy when they might not. However, this sentiment and tepid interest in cyber insurance among SMEs may be changing, in light of the near daily reminders of cyber-threats, attacks, and breaches feeding social media.

Pricing is another factor, as more business owners see the cost benefits and also realize their vulnerabilities due to their interconnectivity with vendors, suppliers, and customers.

A data breach is only one factor in cyber risk, however many SMEs may be underestimating business interruption risks, and the impact on smaller enterprises of business interruption could be much higher, as they may not be as resilient or diverse as national account clients.

Source: Business Day By Modestus Anaesoronye
Edited for ILSTV

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