Gov. Scott pushing lawmakers on insurance issues

By BRENT KALLESTAD
Associated Press

TALLAHASSEE, Fla. -- Gov. Rick Scott winds up his first year in office wanting lawmakers to fix a pair of insurance consumer issues that are costing Florida hundreds of millions of dollars.
The major insurance issue facing Floridians is the rising cost of personal injury protection coverage required for drivers licensed by the state. In some areas of Tampa and Miami the coverage adds several hundred dollars a year to auto insurance premiums and virtually all of it is a result of rampant fraud.
Florida is one of only a dozen states that require the controversial insurance, which is most often referred to as PIP.
Although PIP is on the front burner when lawmakers hit town Jan. 10, they could also deal with problems surrounding the state-backed Citizens Property Insurance Corp.

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.
We have introduced a new commenting system called Disqus for our articles. This allows readers the option of signing in using their Facebook, Twitter, Disqus or existing MiamiHerald.com username and password.

Unoccupied Property Insurance: Why is it so Difficult to Source?

Uninhabited properties are a headache for their owners and for property insurance teams. Perhaps counter-intuitively, uninhabited properties are a far bigger risk than fully residential houses. In this article we'll be looking at why unoccupied property insurance is such a risk for insurance companies, and giving you some pointers which might help you find good insurance for unoccupied property quotes.

Why Insurance Providers are Concerned about Vacant Property Insurance?

So why are insurance groups so nervous about insurance for unoccupied property? Well actually, insurance companies are unwilling to provide vacant property insurance for the exact reasons that it is so vital to get protection for your unoccupied house the the first place.

Vacant properties are highly vulnerable to all manner of risks which makes them difficult to insure. In the meantime, their vulnerability of Uninhabited buildings is the exact reason that they should be insured. Here we give you a handful of the key reasons why unoccupied property insurance is tricky to come by:

1. Uninhabited buildings are prone to neglect
By their very nature, vacant buildings are not ususally going to be checked on frequently. Insurance companies are aware of this and it generally makes them less keen to offer vacant property insurance as they have no real picture of how well cared-for your empty property will be. To give accurate vacant property insurance, groups have to really understand each individual empty property, its location and the amount of care you will provide it with.

2. Empty properties are targets for vandals and squatters
There are over 20,000 squatters in the UK and, although lots of them are harmless, and even helpful, there are some who will create damage. Thieves, vandals and other criminals can target uninhabited homes and use them for crime or even strip them of their materials. Thegeographical location of your vacant home is a big factor in how probably this is to happen and insurance insurance groups who understand this will be able to give you a more personally-tailored insurance for unoccupied property quote.

3. Empty propertiesare more liable to develop electrical malfunctions and leaks
In empty properties, any problems or faults are likely to create far bigger issue. Since empty properties are not frequently checked over, tiny hiccup can become vast, expensive issues extremely quickly, particularly when electricity is involved.

Naturally, there are other, more specific reasons that insurance providers are sometimes unlikely to supply insurance for unoccupied property, but these are the central three factors. Probably unhelpfully, they are also the top reasons that you need to get hold of good, accurate vacant property insurance.

"So Where can I Source Unoccupied Property Insurance?"
If you are attempting to get your vacant home insured you will most likely need to look for a specialist provider. These specialists have the experience and knowledge needed to give you the most comprehensive and realistic quote possible to insure your property. It is also an extremely good idea to track down a provider who knows just what they are talking about.

Hanover Insurance 3Q profit beats expectations

Hanover Insurance Group Inc. on Wednesday said its third-quarter profit rose 5 percent, topping Wall Street expectations, on investment gains and improving results from personal lines of property and casualty insurance.

For the July to September quarter, Hanover reported net income of $52.3 million, or $1.15 per share, up from a profit of $49.7 million, or 97 cents per share, in the same quarter a year ago.

The latest quarter included investment gains of $5.7 million, or 12 cents per share.

Analysts polled by Thomson Reuters, on average, expected profit of 93 cents per share. Analysts typically exclude one-time items from their estimates.

Net premiums written rose 17 percent to $803.7 million.

In its personal lines, the Worcester-based company reported pretax income of $43 million, compared with $27.4 million in last year's third quarter.

That gain offset a decline in commercial lines pretax income to $35.1 million from $38.7 million.

Hanover's combined ratio improved slightly to 97 percent, from 97.6 percent.

Combined ratio reflects an insurance company's losses and expenses. A ratio above 100 means that for every premium dollar taken in, more than a dollar went to cover claims and other expenses. A figure below 100 means the company made a profit on its insurance operations.

Hanover Group reported third-quarter results after its shares fell 10 cents to close at $45.90. The stock has traded in a 52-week range of $40.22 to $47.22

Imperial Sugar to Record Gain From Insurance Claim

By Thomas Black

Dec. 28 (Bloomberg) -- Imperial Sugar Co., the third- largest U.S. sugar processor, said it will have a first-quarter gain after settling a property-insurance claim for the 2008 accident at its Port Wentworth, Georgia, refinery for $345 million.

The company expects a pretax gain of about $278 million in its first quarter ending Dec. 31 because of the settlement, Sugar Land, Texas-based Imperial Sugar said in a statement.

The settlement was announced after regular Nasdaq Stock Market trading, and Imperial Sugar rose $1.43, or 9.7 percent, to $16.15 at 5 p.m. The shares rose 2.6 percent this year through today’s official close of $14.72.

Imperial Sugar said it will receive a final payment of $45 million in January, adding to the $300 million of advance claim payments from the insurers. Production resumed at the plant earlier this year following the February 2008 explosion that killed 14 people.




--Editors: Kevin Miller, Brenda Batten



To contact the reporter on this story: Thomas Black in Monterrey at +52-81-8124-0145 or tblack@bloomberg.net



To contact the editor responsible for this story: Kevin Orland at +1-312-443-5946 or korland@bloomberg.net.

There is money in the bank

Avia Collinder, Business Writer

While they are not the cheapest source of funds, local commercial banks do offer a range of solutions for small businesses in need of cash or credit for business support.

It's a good idea to shop around in search of the loan solution which best fits your needs. But, be warned: the banks sell credit at rates of up to 25 per cent or more, but they also have facilities that are way cheaper, at about 8.625 per cent - the lowest quote that surfaced in a Sunday Business survey.

making money

You should know that commercial banks, as other financial entities, are in the business of making money and might not - at first blush - tell you about the product that is cheapest. So ask.

Instead, they will look at what you can afford and might tell you about the product from which they will make the most profit.

It is your responsibility to probe deeply and so secure for yourself the best deal, based not only on what you can afford, but also on what is best for your business at this time.

Make sure to ask, as well, about each bank's commitment fees and equity requirements - that is, the money it takes to 'buy' the loan and which must come from your pocket - and which might be required for the loan to be disbursed. Compare charges across banks. They can be steep, running into tens or hundreds of thousands, depending on the size of the loan.

A $2 million loan, for example, can incur fees of $40,000 to $50,000, which the borrower has to pay upfront before the funds are disbursed by the bank.

You may also be entitled to special interest rates and other concessions based on your credit history with the bank or on the nature of your business operations.

'MSME Alliance'

For example, financing for small- and medium-size enterprises (MSMEs) is available if you are part of the 'MSME Alliance' - a group comprising 22 member associations, including the National Association of Hairdressers and Cosmetologists, Hardware Merchants Association, Jamaica Wood Products and Furniture Association and the National Association of Taxi Operators.

For this network, the Bank of Nova Scotia offers registered and paid-up members a maximum of J$5 million and a minimum of $1 million in credit.

Depending on the risk profile, interest rates will range from 8.625 per cent to 10.875 per annum. The more likely you are to repay the loan without default, as determined by the bank, the lower the interest charges are likely to be.

The loans are for five years.

In association with the Development Bank of Jamaica, National Commercial Bank of Jamaica (NCB) offers to small business operators a special line of credit with maximum loan amount of $15 million.

Interest is fixed at 10 per cent per annum for the duration of the loan for producers of goods and services established and operating in Jamaica. The repayment period is up to seven years, including a maximum of 12 months moratorium on principal payments only.

deal-breaker

Since your business plan - which sets out your target market, location, the costs of inputs, overheads, your cash flow and possible profits - can be a deal-breaker when searching for a loan, it might be a good idea to get this done by an expert or obtain assistance from an agency like the Jamaica Business Development Corporation (JBDC) in its production.

Documents which you might need to get before getting a loan include details of the proposed project or a business plan and your current audited/draft financial statements. Others are cash-flow projections with supporting notes and assumptions; a valid Tax Compliance Certificate; where applicable, evidence of ownership of collateral, for example, title for property or car; and insurance over collateral offered.


Now for the footwork on the best small-business loans



1. First Global Bank

First Global Bank offers between $100,000 and $500,000 to small and medium entities (SMEs), repayable over four years. The interest rate varies; 9.75 per cent variable or 10.75 per cent fixed for three years. Commitment fees will amount of two per cent. After the first year, there is an annual review fee of 1.5 per cent.

In conjunction with the Ex-Im Bank and DBJ, it also offers loans of a maximum US$500,00 over four to 10 years at the following rates of interest:

Manufacturing - 10-12%

Agro Processing - 12%

Agriculture - 7.875%

General Trade - 16%

2. Bank of Nova Scotia

Bank of Nova Scotia offers

$100 million for start-up businesses called Scotia Running Start at a rate of 9.875 per cent; $100 million for the MSME Alliance - the ScotiaMSME Alliance Fund - at a rate of 8.625 per cent to 10.875 per cent; and $200 million for new and existing enterprises - the ScotiaBusiness Builder - at a rate of 8.625 per cent to 12.125 per cent.

ScotiaRunning Start is intended for borrowers who are classified as small to medium-size businesses, operating for less than two years. These are businesses with a maximum of 25 employees and J$105 million in projected annual revenues. Beneficiaries of this fund can use it to acquire new capital equipment, finance working capital, purchase inventory and cover short-term cash needs and accounts receivable, and build business management capacity.

Scotiabank will finance up to 90 per cent of the start-up costs, up to a maximum of J$7.5 million and a minimum of $2 million per business. Interest rate will be fixed at 9.875 per cent for a maximum loan term of seven years. A moratorium on principal will be considered for a period of two years with repayments in 10 semi-annual instalments over five years as an option.

3. National Commercial Bank

For NCB, SME card merchants who have been settling with NCB for at least 12 months, and who have realised total debit and credit card volumes of at least J$500,000 or US$8,000, there are several loans available to support their operations, either for working capital support or capital expenditure.

The minimum loan amount is: J$100,000 or US$2,000. The maximum is nine times your monthly credit card sales, up to a maximum of J$5 million or US$80,000. The repayment period is 36 months.

NCB also offers overdrafts and credit cards which are limited to 100 per cent of your average monthly point of sales or electronic device channel transactions for the last 12 months, up to a maximum of J$2.5 million or US$40,000, at the following rates of interest:

JMD loan - 25.45%

JMD Overdraft - 21.45%

USD loan - 14.45%

Another NCB product is Business Grow, which is intended for business expansion or restructuring and capital expenditure on machinery, equipment, building acquisition or development projects. The minimum you can apply for is J$1 million or US$20,000. The maximum is J$15 million or US$250,000.

The repayment period is up to eight years, inclusive of a moratorium period of six months on principal payments only. Interest charges range from 21 per cent to 21.75 per cent.

NCB's Development Access Facility is a product intended for registered SMEs engaged in manufacturing, hotel/tourism, agriculture/agro-processing, craft, mining, IT and Intellectual Property industries. This is to be used for working capital support, equipment/machinery purchase, fixed asset acquisition/improvement, business expansion projects.

Loan amounts range from minimum J$800,000 or US$10,000 to a maximum of J$40 million or US$500,000.

The interest charged by NCB for JMD facilities is 18.50 per cent, and for USD loans 10.75 per cent. Those rates are available to customers of the bank. Non-customers pay interest of 20.50 per cent on JMD loans, and 12 per cent on USD credit.

avia.ustanny@gleanerjm.com


Some loans on offer from local banks:


'You may also be entitled to special interest rates and other concessions based on your credit history.'

Senior's home saved from foreclosure

By PAMELA YIP / The Dallas Morning News
pyip@dallasnews.com

Forrest Brannon has great faith in God, but it was sorely tested recently when he faced losing his Dallas home to foreclosure.

Brannon, a 79-year-old veteran, said his mortgage payment more than doubled in a year from $379 a month to more than $800 because of late fees and an increase in the adjustable interest rate.

He got behind on his mortgage and then received a notice of impending foreclosure.

Texas' fast-track foreclosure process, which is the quickest in the country, left Brannon with only about a month to save his home.

But that was enough time for John Thurston, a mortgage broker at Acceptance Capital Mortgage Corp. in Dallas, to get involved.

After reading about Brannon in The Dallas Morning News in December, Thurston contacted Brannon and offered to help.

Brannon's home had been set for a foreclosure sale Jan. 6, but Thurston got that extended to Feb. 3. He got another extension to Feb. 10.

In the meantime, Brannon obtained a reverse mortgage from the federal government's Home Equity Conversion Mortgage program and paid off his original mortgage.

The program enables seniors who are homeowners to tap their home's equity through a lump sum, a monthly amount or a line of credit.

Under the program, the borrower doesn't have to repay the reverse mortgage until he moves, sells the home or dies.

When the loan must be paid, the borrower or the heirs will owe no more than the value of the home if they sell it to repay the loan.

The best part about Brannon's situation is that while his new loan totaled about $54,000 – short of the estimated $73,000 he owed on his mortgage – First Franklin Loan Services, which processed Brannon's mortgage payments, agreed to accept a reduced payoff, Thurston said.

So Brannon "will never have to make another payment on his mortgage," he said.

"All he has to do is to make sure he keeps insurance in force on his property and pay any taxes that are due," Thurston said.

First Franklin spokesman Bill Halldin said privacy concerns prevent him from commenting on Brannon's case specifically.

"Generally, we attempt to work in all situations to reach a resolution whenever possible that allows the homeowner to remain in their home," he said.

Brannon said he'll be forever grateful to Thurston.

"John did his Christian, American duty, and I haven't had to give him any money," he said.

"This is the way America was established. We are helpers of one another," he said.

Brannon said he knew God would take care of him.

"If I'm to keep the house, the Lord will make a way," he said.

"If I'm not able to keep it, the Lord will have something else for me."

Lloyd's weathers the storm

Few industries have suffered as much through the economic crisis of the past six months as the insurance industry. But Lord Peter Levene, chairman of Lloyd's of London, the storied insurance market founded in 1688, feels his organization is in good shape to survive and prosper. He is less certain about how long the crisis will last or how individual investors should respond to the market crash. Levene, who has worked in the defense industry, overseen turnarounds in railroads and commercial real estate, and served the British government in various capacities, recently spoke with Globe reporter Jeffrey Krasner.