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American History Tellers Podcast Does Series On The Great Chicago Fire

The excellent American History Tellers podcast has just done a three-part series on the Great Chicago Fire of 1871. If you haven't listened to the show before, this is not a dry recitation of history. The host places the listener in the scene being described and relays the story of what happened from the viewpoints of people who were there.

The Chicago fire series barely mentions insurance, but it's a good reminder of why we have building and fire safety codes. In the fall of 1871, Chicago had all the key ingredients for a fire disaster:

• Thousands of wood frame buildings
• A drought
• High winds

Lumber Price Spike Means Your Homeowners Clients May Be Underinsured

Lumber prices are, if you'll pardon the pun, going through the roof.

Last Thursday, February 18, the price per 1,000 board feet of lumber on the Chicago Mercantile Exchange hit a record $1,004.90. By the close of trading Friday, it had retreated​ to $997.90, but this was up from $478.30 on October 29. One market watcher speaking to CNBC last week predicted another 30 to 35% increase from current prices. 

A boom in home renovation activity in the wake of state stay-at-home orders during the coronavirus pandemic has boosted demand for lumber and steel, experts report. At the same time, lumber mills expected mass job losses last spring to hurt demand, so they cut production. That coupled with other supply chain disruptions​ has combined to reduce available supplies, resulting in soaring prices.

Iron and steel costs are also rising, up more than 15% in the past year​, according to the Associated Home Builders and Contractors.

Two Minutes With Tim - COVID-19 Q&A #1

​I answer some of the questions I'm frequently receiving from Big I New York members about the insurace and regulatory implications of the coronavirus, in the company of an exceptionally itchy dog.

Reminder: It's Peak Hurricane Season

Lynne McChristian of the Insurance Information Institute has an important reminder today:

Peak hurricane season has arrived. ...

Mid-August through the end of October historically is when most hurricanes form. Remember HIM? Hurricanes Harvey, Irma and Maria made landfall between mid-August and the end of September in 2017. Two Category 4 storms and one Category 5 occurred in a matter of weeks in a season predicted to be slightly above average.Last year’s Hurricane Michael hit in late October. While this year’s latest prediction is for a “near-average season,” hurricane researchers will tell you that it only takes one hurricane making landfall near you to break the law of averages.

To that list, I would add:

Two Minutes With Tim - Is a Swimming Pool a "Detached Structure"?

Two Minutes With Tim: Is a Swimming Pool a "Detached Structure?" from Big I New York on Vimeo.

Submitted for your approval:

1. A home is insured for $512,000

2. By the terms of the Homeowners policy, "Other Structures" are insured for $51,200.

3. A swimming pool attached to a pool deck attached to steps attached to a patio attached to the house is damaged to the tune of $237,000.

Is the pool part of the dwelling (insured for $512,000) or is it an "other structure," insured for only $51,200? In this video, I answer that question based on a court's decision in Porco v. Lexington Ins. Co.

Think All Policies Are The Same? (Part 6)

It’s been awhile since a member sent me a juicy example of subtle policy wording that resulted in an uninsured loss. My thanks to a member in Suffolk County for providing this one. Here is the transcript of our correspondence, edited slightly for clarity. I will leave the name of the carrier and the publisher of its form anonymous.

Question from a Big I NY member: One of my friends has a Dwelling Fire policy with a NY carrier that uses non-ISO forms. He had a tenant who went through a divorce, lost his job and stopped paying rent on the house. The insured started eviction proceedings and had him evicted (which took months.) When they got in to the premises, they found vandalism damage and items removed. The tenant also stopped buying heating oil and when he left, some of the pipes had frozen and broken, causing more damage.

The carrier denied coverage citing Exclusion 4, Dishonest or Criminal Acts, stating that he “entrusted” the property to this tenant who caused this intentional damage.

Two Minutes With Tim: National Flood Program To Expire

​Here we go again. The National Flood Insurance Program is going to expire on Sept. 30, 2017 Dec. 22, 2017 Jan. 19, 2018 Feb. 8, 2018 March 23, 2018 July 31, 2018 Nov. 30, 2018.

Two Minutes With Tim: Expiration of the National Flood Insurance Program from Big I New York on Vimeo.

2 Minutes With Tim: Ordinance or Law

​All right, by now you should know that the whole "Two Minutes" label is metaphorical. But hey - at least it's not two hours, even if it may feel that way.

At any rate, the state building code may soon require certain buildings to have diaper changing stations installed. This is yet another reason to discuss Ordinance or Law Coverage with your insureds who own commercial properties. Which of these alternatives would you prefer?

• Be a hero in your client's eyes after a covered loss because you suggested this coverage
• Have your name be synonymous with the contents of a diaper because you didn't

Your choice. I explain it all in the video.

2 Minutes with Tim: Ordinance or Law from Big I New York on Vimeo.

Landlord's Appliances - Building or Contents?

 

Image courtesy of www.goedekers.com. Used under a Creative Commons Attribution 2.0 license.

Question from an IIABNY member: If a landlord of an apartment building is providing appliances to the apartment units, must the landlord have a separate personal property limit under their commercial real estate policy or this can be included under the building/property coverage? Same question goes for a condominium where the sponsor provided the appliances. Self-understood, we are talking about an All Risk policy form in New York.

Answer: It depends on the provisions in your client’s policy, but this is what the ISO Building and Personal Property Coverage Form says:

Does an Insurer Need the Client's Consent Before Inspecting Property?

Photo by Nicolas Raymond. Used under a Creative Commons Attribution 3.0 Unported License. ​

Question from an IIABNY member: I have a client that is upset that his insurance company completed an inspection of his property without his consent. He feels that this may be considered trespassing. I spoke with the carrier and they state:  "In insurance, there is implied consent to inspect property based on our contractual, insurable interest in the home." Just wondering if you have any research on implied consent to complete a property inspection. I did some internet research and didn’t see anything official but did see several times that the insurance company should have permission to complete an inspection.

Rocky Mountain High: Court Confers Cannabis Coverage For Colorado Company

How could I not write a post about this one? Growing, possession, sale, etc. of marijuana, as you may have heard, is illegal under federal law. Conversely, an increasing number of states have made it legal, at least for certain uses. New York is in the midst of implementing a temporary law that made use of medical marijuana legal.

Two states and the District of Columbia have legalized marijuana for its, um, traditional use. In Colorado, you can buy it in stores, not on street corners. This is the sort of use that Congress had in mind when it prohibited marijuana back in the 1930’s. Consequently, the U.S. has a classic federal-vs.-state conflict when it comes to the regulation of this substance.

This comes back to insurance. (Repeat after me: All things come back to insurance.) Property insurance policies do not cover “contraband.” “Contraband” refers to goods prohibited by law. Marijuana certainly seems to fit that definition, at least if one is referring to federal law. Suppose, though, that the insurance and the property are in a state that has taken a more tolerant legal attitude? Does the insurance cover it then?

A federal district court in Colorado decided this question two weeks ago, and it said, “Yes.”