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Double Blog Update

June 19th, 2007 11:06 AM by Ron Mastrodonato

Survey: Consumers very confused about insurance coverage

KANSAS CITY, Mo. – June 6, 2007 – When it comes to homeowners insurance, what you don’t know could cost you. Even in the shadow of Hurricane Katrina’s losses, a survey finds that one-third of today’s homeowners believe that flooding is covered under their standard homeowners policy, according to the National Association of Insurance Commissioners (NAIC).

In fact, typical property and liability policies don’t cover home damage from floods, earthquakes, water line breaks, termites, mold and several other perils, large and small.

The survey found that 33 percent of U.S. heads of household, who own a home and have homeowners insurance, incorrectly believe flood damages would be covered by a standard homeowners or property and liability policy, despite extensive media coverage on Hurricane Katrina victims whose claims were denied because they lacked flood insurance.

“Many homeowners learned the hard way that their insurance policies did not provide flood protection,” says Walter Bell, NAIC President and Alabama Insurance Commissioner. “As we enter the 2007 hurricane season, we strongly encourage consumers in flood-prone areas to check whether they are properly covered.”

The NAIC survey also revealed other homeowner misunderstandings when it comes to common loss situations – none of which are covered by standard homeowners insurance policies – such as:

• 68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.
• 51 percent think damage resulting from a break of their property’s water supply line is covered; 37 percent think damage resulting from a break in the sewer line on their property is covered.
• 35 percent think damage from earthquakes is covered.
• 34 percent think damage from mold is covered.
• 31 percent think damage from termites or other infestation is covered.
• 22 percent think pets stolen or injured on their property are covered.

In addition, 24 percent of respondents believe they’re covered for the actual cash value  of losses, while 64 percent said their policies covered replacement cost. Another 12 percent said they did not know which type of coverage – actual cash value or replacement cost – they purchased.

Actual cash value is the amount it would take to repair or replace damage to a home and its contents after depreciation. Replacement cost is the amount it would take to replace or rebuild a home or repair damages with materials of similar kind and quality, without deducting for depreciation.

“It’s important that consumers understand this distinction,” Bell said. “In the event of a covered loss, an actual cash value payout could be thousands of dollars lower than a benefit calculated at the replacement cost.”

The NAIC survey also uncovered a growing concern among homeowners about being sued. Twenty-eight percent of respondents reported they were more concerned today than they were five years ago about being the target of a lawsuit.

“Consumers can better protect themselves from lawsuits by adding umbrella liability coverage to their homeowners policy,” Bell said. According to the NAIC survey, a majority of homeowners – 63 percent – lack this umbrella coverage.

The NAIC provides information, tips and considerations regarding homeowners insurance on its consumer education Web site, Insure U (www.InsureUonline.org). The entire site is also available in Spanish (www.insureuonline.org/espanol). Headquartered in Kansas City, Mo., NAIC is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories.

© 2007 FLORIDA ASSOCIATION OF REALTORS®
 
 
Foreclosure’s filthy aftermath

IRVINE, Calif. – June 6, 2007 – Malnourished and flea-ridden animals, feces-covered floors and urine-soaked furniture, piles of rotting garbage, swarms of diseased mosquitoes – these are the horrors that may await the ill-fated sheriff, property inspector, Realtor, or passerby making that first visit to a deserted home.

And with foreclosure activity well above last year’s levels and still on the rise in many parts of the country, nasty surprises have like these become more common. In April, there were 147,708 U.S. foreclosure filings – default notices, auction sale notices, and bank repossessions – down 1 percent from the previous month but still 62 percent higher than a year earlier, according to Irvine [Calif.]-based RealtyTrac.

“It’s almost every day now that we see a [foreclosed] house in awful condition,” says Scott Mitchell, president of National Property Inspections, a company that provides home inspections and assessments in the Las Vegas area. “We’ve really noticed it increasing in the last month and a half.” RealtyTrac estimates that Nevada had the highest foreclosure rate in the country in April, with one filing per every 232 households.

Nothing to lose

“They know they are going to lose their house, so they have no pride of ownership anymore,” Mitchell says. “They’ll leave the water on so there’s flooding and mold everywhere, they’ll tear the chandelier or the ceiling fan out of the ceiling, kick the doors and walls in. Then the critters start taking over – ants, scorpions, and Black Widow spiders.”

In and around Sacramento, Calif., mosquitoes that may carry the deadly West Nile virus are thriving in the thousands of uncared-for swimming pools on properties left vacant by slower home sales and rising foreclosures. With 30,505 foreclosure filings reported in April, California documented the largest foreclosure total in the country for the fourth month in a row, according to RealtyTrac. In Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo, and Yuba counties, more than 1,500 homeowners handed their homes over to the bank in the first three months of 2007, according to DataQuick Information Systems in La Jolla, Calif.

Sometimes, frustrated homeowners get creative. A man in Eagle Creek, Ore., recently put three 200-pound pigs in his repossessed home. They quickly tore up the place, ripping away the foundation and reducing the back porch to rubble. When police found the pigs, the animals were unharmed, if a little cranky.

Left for dead

Many animals are not so lucky. Pets are often silent sufferers during the foreclosure process. Homeowners in financial straits may make them a low priority to begin with, and when foreclosure leads to eviction, they are sometimes abandoned without food or water and left to breed uncontrollably. In the month of May alone, authorities found 23 abandoned animals in a house in Lake Carmel, N.Y.; three pigs trapped in an Oregon home; 20 birds in a Lorain [Ohio] house; 24 horses on a Bixby [Okla.] property; and more than 60 cats in a home in Cincinnati. All of these properties were in foreclosure, and most of the animals were injured, infected, dehydrated, and starved nearly to death.

“There are a lot of hoarders and neglected animals and people who just don’t realize how fast things can spin out of control,” says animal rescue worker Gail Silver, who discovered the foreclosed home in Cincinnati with more than 60 cats trapped inside.

On May 1, Silver was on her usual bike ride along the river when she decided, suddenly, to turn down a road she hadn’t been down in two years. “Something said I should go down this street,” she remembers. On the street was a house with a bunch of cats sitting on the porch. “They did not look good,” Silver recalls. Neighbors told her the owner had been evicted two weeks earlier and the local chapter of the Society for the Prevention of Cruelty to Animals [SPCA] was scheduled to come the next day to take the cats away and euthanize them. Silver decided to look inside the home.

“When I saw what was in that house, I was sick to my stomach,” she says. “They were everywhere, even tiny little babies that weren’t even weaned yet, with bulging eyes. The house was filthy, you could smell the disease. I had to wear a mask in there, it was so toxic.”

A bigger burden

Local rescues got involved, bargaining with the SPCA and the bank for more time to round up the cats and kittens. The house was scheduled to be cleared out completely in a week, on May 8, but Fannie Mae (FNM), the government-backed home mortgage giant, intervened and extended the date to May 25. “They had to. It would have created an overpopulation of animals that the community would have been dealing with for years and years,” Silver notes.

A national organization, United Animal Nations, provided a grant to assist with emergency medical expenses for the sickest cats. The Cincinnati SPCA donated $1,000. Eventually, the team was able to remove all of the animals. Six cats have died, others are living in shelters and foster homes, but the organizations still need more money and help.

Foreclosure activity in Ohio surged in April, up 39 percent from March and up 135 percent from April, 2006, pushing the state’s total to the third-largest in the nation. That’s 11,431 filings, or one filing for every 418 households – 1.9 times the national average of one filing for every 783 households. For the thousands of Ohioans and others struggling to find money for food and shelter, pet care is often the last thing on their minds. “They spiral down and financially and in their personal life, everything just falls apart for them,” says Anita Barron with Pet Alliance, the rescue group taking care of administrative work for Cincinnati’s “Foreclosure Cats.”

Resources for pet owners

If you’re facing foreclosure and are unable to care for your animals, call a shelter like Best Friends Animal Society. But spaying or neutering your pets is the simplest way to avoid having too many animals, even if money is tight. It will save you money in the long term: A female cat can have a litter of as many as seven kittens up to three times a year – that’s a lot of extra cat food. Spay/USA is a nationwide network and referral service for affordable spay and neuter services with a hotline [1-800-248-SPAY]. Surgery at one of the clinics in the network averages $50, about half of the average cost in a vet’s office.

“So many problems are very complex; this is a simple problem,” says Spay/USA founder Esther Mechler. “And it’s scary to think that with rising foreclosures, these animals will be some of the hidden victims.”

© 2007 The McGraw-Hill Cos. All rights reserved.
 
 
Who needs the city? Not the booming ‘burbs

ALEXANDRIA, Va. – June 6, 2007 – The traditional urban model of the central city serving as an economic and cultural center hub for the suburbs is fast disappearing in many areas of the country.

Instead, suburbs are growing into little cities of their own, building their own entertainment, shopping, and cultural outlets to support their booming populations, says Robert Lang, director of the Metropolitan Institute at Virginia Tech in Alexandria, Va.

Lang spoke at the Urban Land Institute’s recent spring meeting in Chicago. He outlined trends such as edgeless cities, megapolitans, and “boomburgs” shaping cities today.

What’s a Boomburg?

Boomburgs are towns that until recently have been more suburb than city. They are not the core city of a region – “think North Las Vegas, not Las Vegas,” says Lang – but they do have more than 100,000 residents and have experienced double digit population growth since 1970.

“That’s where the growth is,” Lang says. “Boomburgs have lots of new development, both Greenfield and infill, and they are the source of infrastructure investment ... light rail systems, regional rails, airports and freeways. Boomburgs are booming.”

Since they offer a mix of uses and housing choices, boomburgs are also an indication of a positive new dimension in land use. Rather than contributing to sprawl, boomburgs offer the potential of “remaking the American metropolis through more compact development that accommodates growth while conversing land,” Lang said.

Edgeless Cities

Another trend, according to Lang, is the emergence of edgeless cities, or metros with indeterminate boundaries sometimes covering up to hundreds of miles. A good indicator of edgeless city growth is the location of office space. Nearly 40 percent of U.S. office space is now located in edgeless cities; traditional downtowns account for 33 percent. Miami, which has 72 percent of its office space in edgeless areas, leads this trend. Boston, Denver, Detroit, and Philadelphia, all have more than half their office space in the outermost areas.

An offshoot of edgeless cities are megapolitans, which Lang describes as “two or more metropolitan areas with anchor principal cities between 50 and 200 miles apart in which residents from one city work in the other.”

Rising gas prices and growing “carbon consciousness” among consumers will add to the push for denser development in the suburbs, according to ULI Senior Resident Fellow John McIlwain.

Source: Realtor® Magazine Online, Camilla McLaughlin

© 2007 FLORIDA ASSOCIATION OF REALTORS
 
 
Posted in:General
Posted by Ron Mastrodonato on June 19th, 2007 11:06 AM

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