MAINE ASSOCIATION OF REALTORS E-NEWS
Tuesday, September 17, 2002
In this issue:
* MAR Interview with Maine Insurance Industry President
* MAR Broker Workshop Price Increases Tomorrow
* Kennebec Valley Board Golf Tournament Rescheduled
* MAINE ASSOCIATION OF REALTORS TALKS WITH MAINE INSURANCE INDUSTRY PRESIDENT:
MAR understands there are changes in the availability and cost of homeowners
insurance (as well as other insurance products) and the impact it is presently
having on costs and closings. The National Association of REALTORS is also
aware of this issue nationwide, and is forming a Work Group to provide
recommendations as to what can potentially be done to address the
problem/crisis. MAR contacted Kristie Rowell, CPCU, who is the President of the
Maine Insurance Agents Association to learn what their industry recommends and
is currently doing about homeowner insurance issues. Kristie owns an
independent insurance agency in Hallowell, Maine.
MAR: When did the availability of insurance, the price of premiums, and the
level of areas with problems tighten in a significant way?
Rowell: Our Association noticed a tightening of the market in March. We did a
survey of our members to identify the areas of greatest concern. We formed a
committee that has been meeting monthly since May to monitor the situation and
identify potential solutions. We have also met with the Superintendent of
Insurance to keep him alerted to these insurance problems. Another meeting is
scheduled for mid-October.
MAR: What are those areas of concern with insurance?
Rowell: Many areas -- multi-family properties, rentals, island/coastal, homes
with 60 AMPs, diving boards, vicious dogs (including mixed breeds),
trampolines, age of home/roof, and a wide range of systems areas including the
roof, wiring and heating systems - and others. In addition, the
insurance industry has access to a database named CLUE that tracks historical
information on claims made by an insured or on specific property. Properties
with a claims history will be problematic for future buyers. In addition, some
vendors are now using credit scoring, bad pay on prior policies, bankruptcy, and
history of filing claims as additional underwriting tools.
MAR: What is causing this?
Rowell: Several factors - loss of investment income by the insurance firms due
to the stock market (many companies claim they have never made money from
premiums), impact of industry due to 9-11 claims, the resulting bankruptcy of
several reinsurance companies, and the business decision of insurance firms that
they need to take less risk. Claims cost and the legal climate are also
factors. Underwriters are not flexible or creative on many issues.
MAR: Any other problems?
Rowell: Because of increasing situations where standard insurance carriers are
unable or unwilling to provide coverage, the surplus lines market is
being accessed more frequently. At first they were handling the volume of
business sent their way well, but as the requests to that market have
increased, so have delays getting quotes. And in some circumstances, even the
surplus lines market is unable to provide coverage.
MAR: Do you have recommendations for real estate licensees?
Rowell: As soon as a property goes under contract, the buyers needs to contact
their insurance agent. It is essential that a buyer agent inform
their clients to begin the insurance search at once. Next, the information
insurance agents are provided can be erroneous which leads to other problems.
There are important facts needed by insurance agents that will impact
insurability of property that may not be provided by the sellers. For
example, the age of the house, updates to the systems in the house (wiring,
roof, heating, plumbing). Also only one heating appliance may be vented into the
same flue so if there is a woodstove and furnace vented into the one flue,
adequate time needs to be allowed to correct that problem. If the
house has 60 AMP fuses, an update to 100AMP circuit breakers will need to be
made. The sooner the buyer is aware of these problems, the smoother their
closing will be.
MAR: Any final advice?
Rowell: If you have current coverage, don't switch carriers. Don't pay
premiums late. Inquire about increasing the deductible, for example consider
a $2500 or $5000 deductible. And if your're buying new property, start early.
* MAR BROKER WORKSHOP FEES INCREASE TOMORROW: If you're planning to attend the
MAR Broker Workshop, being held Wednesday, September 25, register today by fax
using your credit card or put your registration form and check in the mail today
to ensure you pay the lowest price. In addition, lunch is ONLY included with
the fee for those who register prior to September 18th. The course is being
held at the Sheraton South Portland Hotel (across from Maine Mall) and offers up
to 5 hours continuing education credit. Morning program is legal issues related
to independent contractors, employees, teams, agents who incorporate, personal
assistants; the afternoon program is about changes to the MAR standard forms for
2003, including the new change on heating systems effective 1/1/02 by MREC, and
updates to MAR's sample office policies
on agency. A registration form is posted on the MAR website at
http://me.realtorplace.com. The
courses will be repeated at the MAR
Convention as part of the convention registration fee.
* KENNEBEC VALLEY BOARD GOLF TOURNAMENT RESCHEDULED: The 4th Annual Charity
Golf Tournament sponsored by the Kennebec Valley Board of REALTORS originally
scheduled for Monday, September 16 had to be rescheduled for Tuesday, October 15
due to rain. Registration remains at 7:30 a.m. and tee off at 8:00 at the
Belgrade Lakes Golf Course. Call tournament director Paul Fecteau at 622-9000,
ext 103 if you have any questions.
MAINE ASSOCIATION OF REALTORS
http://me.realtorplace.com
http://me.living.net
info@mainerealtors.com or
cindy@mainerealtors.com