EITC and PIRP. Perfect Together | Brooklyn Covered

Tell you what, let’s apply the same penalties to everyone who’s ever claimed to attend and participate in a six-hour Point and Insurance Reduction Program class, but didn’t. They would lose both the 10% discount on their auto insurance, and the reduction of up to four points on their drivers license. And they would not qualify for either benefit for a period of no less than ten (10) years.

Let’s Apply EITC Penalties To PIRP

You may be wondering why I think EITC and PIRP ( Earned Income Tax Credit and Point and Insurance Program, respectively) share any similarities. Well, they don’t. At least not yet.

Under the current personal income tax law, if you claim the earned income tax credit, and it is later disallowed because you made a fraudulent claim, you lose the right to claim the EITC for ten, count ’em, ten years. Which means by the time you’re able to legitimately claim the EITC again, you’ll either be too old, or the children you would’ve used to qualify for it have children of their own.

What Types Of Penalties Should We Impose?

Tell you what, let’s apply the same penalties to everyone who’s ever claimed to attend and participate in a six-hour Point and Insurance Reduction Program class, but didn’t. They would lose both the 10% discount on their auto insurance, and the reduction of up to four points on their driver’s license. And they would not qualify for either benefit for no less than ten (10) years.

Even better, for those we catch engaging in fraudulent actions, let’s give them two (2) points for the first infraction, three points for the second, license suspension for a period of not less than six months for the third, and license revocation for no less than a year for the fourth infraction for as long as they have the privilege of a New York State Drivers license.

If they’re crazy enough to try it more than four (4) times? Well, you can’t fix stupid.

Mandate that those so caught must actually attend an actual  PIRP class at least once every three (3) years, without the benefit of getting either point reduction or a discount on their insurance. Talk about your new assessment!

Wait, you supposedly attended a class, and you claim to have never heard about assessments?

Are you sure you attended a full six-hour class?

So why am I venting about this today? Well, as a NYS-certified PIRP Delivery Agent and Instructor, I take great pride in making sure everyone who attends one of my classes leaves feeling;

  1. Empowered by the knowledge they’ve acquired,
  2. Confident in their ability to “survive the driving experience” or,
  3. Afraid to drive ever again. And wondering how the heck they’ve lived this long.

What really drives me nuts is when I talk to clients about an upcoming class, and they tell me they did it the easy way. They are not ashamed to tell me they go to certain agencies where they pay about $100.00, copy the answers to the driving test, fill out a few forms.

No six-hour class. Heck, I’m surprised if it takes more than six (6) minutes to “complete” a course this way. This is dangerous for you and anyone else near the road. For insurance companies, they are losing premium dollars. For the driving and walking publics, you’re sharing the road with people who shouldn’t legally have drivers licenses. And the United States Treasury loses because these crooks require payment in cold, hard, cash. Just imagine how much taxable income is not being declared.

Isn’t it just amazing how I can make my wild titles work out at the end?

How Do We Prevent This Type of Fraud?

In my next post, I’ll outline the methods I’d use to stifle the growth of this felony activity.

What Ever Happened To The Series On Force-Placed Homeowners Insurance?

Not only will that series continue, I’ve got some new wrinkles for you. Stay tuned.

My Homeowners Insurance Policy, Part 2 | Brooklyn Covered

When the economy was blasting away like a furnace in a steel mill, homeowners actually spent money, copious amounts of money, on the regular maintenance of their homes. This investment, a direct reflection of the pride of homeownership, came with a accompanying benefit: Because of the amount of care and attention paid to keeping their homes in tip-top shape, there were fewer claims impacting, for example, my agencys results. And, the claims which were submitted were smaller in size. Less cost, less frequency.

(In our last exciting segment of “Dude, Where’s My Homeowners Insurance Policy?”, we learned submitting a claim during the first 60 days after applying for homeowners (and auto) insurance is akin to bringing a vampire out in the daylight. Without the special sunshade.

Today’s installment will continue the study of claims and how they affect your ability to purchase homeowners insurance from preferred companies.)

Where’s My Homeowners Insurance Policy, Part 2

Let me start by saying in all my over 29 years in the insurance business, I’ve never seen claims come across my desk with the frequency and size the like of which I’ve seen in the last 20 years. You can blame Hurricane Irene and Tropical Storm Lee all you want. Truth is, too many people are simply not investing any real money and energy in maintaining their homes.

I blame the sin and disease of deferred maintenance.

Home Maintenance, The Economy, Deferred Home Maintenance

I believe there is a direct correlation between the state of the economy and home maintenance.

When the economy was blasting away like a furnace in a steel mill, homeowners actually spent money, copious amounts of money, on the regular maintenance of their homes. This investment, a direct reflection of the pride of homeownership, came with an accompanying benefit: Because of the amount of care and attention paid to keeping their homes in tip-top shape, there were fewer claims impacting, for example, my agency’s results. And, the claims were smaller. Less cost, less frequency.

Sounds like an old television commercial. The kind I really like.

The Years The Music Died

Then came 2006, 2007, and (why, oh why Lord?), 2008 and 2009, 2010, and 2011.

When once non-existent claims found life, and once-small claims became huge. When diamond rings began to “disappear,’ and water damage claims once averaging $3,000 to $5,000, suddenly ballooned to $10,000, $20,000 and beyond.

In one case, a clients home suffered interior water damage from a heavy rainstorm, caused by a leaky roof, caused by deferred maintenance, caused by reduced family income, further exacerbated by the family purchasing a home which was overpriced and in poor condition, inspected by an appraiser who over-appraised the property, accompanied by an equally unaffordable monthly mortgage committment.

The company I’d insured them with paid the claim. The check they received, less their deductible, should have been used to repair the defective roof, and replace water-damaged furniture, rugs and clothes . This way, when the raindrops fall in the future, no more leaky roof, no interior damage.

Your Homeowners Insurance Policy Is Not A Piggy Bank

Guess what? The next year, after a heavy rain, the same homeowner submitted yet another claim for the same cause of loss! Even the insurance company’s claims department was shocked they’d submit the same claim two years in a row.

I called the client, basically asking “What the hell? Why are you submitting the same claim two (2) years in a row? Why didn’t you repair the roof with the money you received last year?”

Their reply? “We used the money to catch up on the mortgage.”

Oy.

So, the company paid the claim, again. When policy renewal time rolled around, though, they got a different letter from the insurance company. Basically it read, “Your policy is being non-renewed for the following reason: Negative claim history.”

When you receive a letter like this from most voluntary companies, your options are few. You are done. End of story.

Now, this particular story could have had a happy ending, were I able to place them with another preferred company.

No one wanted them. Well, that’s not entirely true. One company did. At a premium of over $9,000 each year. (Don’t get all self-righteous and indignant. You want to dance to the band, you’ve got to pay the man, or in this case, the insurance company.)

So, once the bank learned their voluntary homeowners insurance policy lapsed, they graciously agreed to place a force-placed policy on the home. At a premium of $4,800 each year.

Heck, it was cheaper than the other policy I offered them.

(Our next post will address why home maintenance is important to individual homeowners and the communities they live in. Also, for the first time in the history of BrooklynCovered.com, referrals to home maintenance professionals! And please, take a minute and subscribe to BrooklynCovered.com by entering your name and email address at the top of the column on your right.) 

Dude, Where’s My Homeowners Insurance Policy? | Brooklyn Covered

Her first thought was to call the builder. You know what the builder said? He told her call me to put in a claim with her insurance company. I told her if she did that, with a brand-new house, I could almost guarantee her brand-new policy would be rejected. I reminded her of her homes ten-year warranty, which included the roof. I told her to inform the builder to have a roofer install a brand-new roof on the house, or her next call would be to the New York State Attorney Generals Office, followed by calls to Housing Preservation and Development, the Kings County District Attorneys office, etc.

She had him at the Attorney General of the State of New York.

(This post will begin a blog arc of posts surrounding the issues concerning what would cause a homeowner to lose their homeowners insurance policy issued by a preferred insurance company. While we’ll continue to return to the subject of Force-Placed hazard insurance, we’ll also examine issues surrounding claims, and  underwriting changes, just to name two.

If you are a victim of Force-Placed hazard insurance, and want to share your story, please drop me an email at eustace@brooklyncovered.com . Don’t worry, your identity will stay a secret. We just don’t want this shameful practice to remain in the shadows. We just need your stories to bring the dirty little secret out of the closet and into the light.

We’ll also examine some of the ins and outs of filing your income tax return this year, and planning tips for a more successful result on your income taxes next year.

So, while it may seem we’re running along different tangents, ours will , over the life of this blog,  converge. The convergence point? Your fuller understanding of things insurance, taxes and even defensive driving.

Thanks for joining us on the best ride in the carnival, BrooklynCovered.com !)

Where’s My Homeowners Insurance Policy?

Remember the movie “Dude, Where’s My Car?” Yeah, well neither do I. For this blog post the title works well since homeowners all over the downstate area of New York State (The five boroughs, Nassau, Suffolk and Westchester) are asking the question, “Dude, Where’s My Homeowners Insurance Policy?”

I’m thankful for referrals to me by my clients and real estate professionals for the different insurance and income tax preparation services  I offer. Lately though, the homeowners insurance policy conversations usually start with one of three questions:  

  1. “Why did my company cancel my policy?” 
  2. “Why didn’t my insurance company renew my policy?”
  3. And there’s my all-time favorite, “Well, what the heck do I do now?”

There are several reasons why your insurance company would choose to not renew your homeowners policy. We’ll cover this topic over the next two (2) posts. Let’s begin with;

  1. Claims:

Let’s start with the claims you submit to your homeowners insurance company. As an example, if you submit two (2) claims for water damage within five (5) years of each other, you’re cancelled. Why? Multiple plumbing leaks are a sure sign of deferred maintenance. Too many people think it’s the job of the insurance company to make normal repairs. Read your policy. Home maintenance is your job, not the insurance companys.

This also applies to interior water damage caused by old and worn-out roofs, windows which weren’t properly fitted or sealed, and even a next-door neighbor whose boiler explodes, flooding his/her basement, and yours.

Mold, anyone?

Don’t think new homes are immune to these types of problems. New homes usually come with even more problems than homes built before 1970.  Remember when new homes started springing up all over Brooklyn back in the mid-90s to 2007? I watched the last group of three-family homes in Atlantic Center as they were built. They dug a hole on Monday,  erected the concrete form on Tuesday, poured the foundation floor on Wednesday, and poured the foundation walls on Thursday and Friday.

On Saturday and Sunday, they rested.

Come Monday morning, the pre-fab modules would start rolling in. Jump down, turn around, pick a losing Lotto number, and the house was done. Soon the proud, new homeowners would take possession of the brand-new home.

And that’s when the fun began.

I’ll never the forget the conversation I had with a client who just purchased a brand-new home in another development after suffering through her first rainstorm. Her upstairs tenant called her and said, “I hate to bother you, but it’s raining heavier in my apartment than it is outside.” And when my client reached home, she found the leakage was so bad her first floor apartment, with the new rug and furniture, and well everything was ruined. 

Submit A Water Damage Claim In The First 60 Days? For A Defective Roof? Kiss Your Policy Goodbye.

Her first thought was to call the builder. You know what the builder said? He told her call me to put in a claim with her insurance company. I told her if she did that, with a brand-new house, I could almost guarantee her brand-new policy would be rejected. I reminded her of her homes ten-year warranty, which included the roof. I told her to inform the builder to have a roofer install a brand-new roof on the house, or her next call would be to the New York State Attorney Generals Office, followed by calls to Housing Preservation and Development, the Kings County District Attorneys office, etc.

She had him at the Attorney General of the State of New York. A new leak-free roof was installed, and she joyously anticipated the next rainstorm.

Until the walls around the windows leaked.

Let’s just say the builder spent a great deal of time repairing every defect in her home and most of the other homes like hers. Had she submitted a claim during the first 60 days of her new policy, the insurance company could have rejected her application. Why? Remember this: Every homeowners and auto insurance company in New York State, has the right to reject your policy for underwriting reasons during the first 60 days after your coverage goes into effect for underwriting reasons. That’s one reason why top-tier companies want to have your date of birth, social security number, and last address when you apply for a homeowners insurance policy. They run a Comprehensive Loss Underwriting Exchange (C. L. U. E.) report on you and your future home, detailing just  every reported claim you’ve had in the last five (5) years, whether as a renter or a homeowner. They also review your credit report to see exactly which “rating tier” to assign you to.

Also, most companies arrange for a company home inspector to come to your home during those first 60 days to guarantee the house meets their requirements. I’ll never forget the first time the New York Property Insurance Underwriting Association (N.Y.P.I.U.A., a.k.a. “The Fair Plan”), rejected an application because the house had outstanding violations and was in lousy condition.

And when the Fair Plan refuses to cover you, you’ve got it bad. Force-placed insurance, anyone? 

Think about it: Why go to all the trouble and cost to issue a policy, only to reject it for underwriting reasons.? Better to underwrite before issue and before a claim.

Our next post will expose other reasons why you lost, or could lose, your homeowners insurance policy with a preferred company.