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Fidelity National


Wildfire Coverage Issues

College Bound

13105 Northwest Freeway, Suite 1230
Houston, TX  77040

Volume 1, Issue 3

October 3 , 2011

SIM is proud to introduce you to our newest carrier partner,

Fidelity National!


Fidelity National’s property and casualty division operates in all 50 states.  They are a nationwide provider of a broad range of personal insurance products.  The company has an A.M. Best Rating of A- , which is considered excellent.


·   Products – Auto, Home, Dwelling Fire, Umbrella and Flood

·   Appointments open in Texas

·   NO Tier 2 business

·   Tier 1 Property available without wind coverage

·   NO Tier 1 Auto business

·   Monoline Home, Dwelling Fire, and Umbrella available

·   Homes up to 50 Years Old

To obtain more information or get started with an appointment, please contact your sales representative.


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Send your topic suggestions to Irene Tsounakas at Look for our next issue in January!



Wildfire damages to homeowners could exceed $100 million, a record high for the state, according to Mark Hanna, spokesman for the Insurance Council of Texas.”  

Page 2

Wildfire Coverage Issues: ALE, Power Outages,
Insurance to Value
By: David Surles, IIAT Insurance Agency

Texas wildfires over the Labor Day weekend have destroyed hundreds of homes and thousands of families have been displaced due to mandatory evacuations from the threatened areas. (See the TDI Wildfire Resource Page and the Governor's Wildfire Information Page for the latest information and helpful resources to share with your customers.) Insurance agents and companies will be addressing several coverage issues for the families affected by the wildfires and other concerned customers.

Additional Living Expense: County officials imposed mandatory evacuation orders on communities threatened by the wildfires. Some property owners will return to their homes and find total devastation, while others will find their homes intact. Are additional living expenses incurred during the evacuation covered by standard homeowners policies? There is no question that ALE coverage applies when the home has been destroyed, or damaged to such an extent that the residence premises is wholly or partially

untenantable. For those who return to an undamaged home that is fit to live in, the Texas homeowners policy provides no coverage. The ISO homeowners form contains Civil Authority coverage under the Loss of Use extension, providing coverage when a "civil authority prohibits you from use of the residence premises as a result of direct damage to neighboring premises by [fire]…"

Power Outage: Electric power was shut off in affected areas, either as a direct result of fire damage to transmission lines or intentionally by power companies to protect firefighters. Residents who return to find their homes untouched by fire will likely find spoiled food in their refrigerators and freezers. The Texas homeowners policy covers such losses up to $500 (after the deductible) under the consequential loss extension when the power failure results from fire damage to transmission lines. The ISO homeowners policy excludes such losses unless the power was interrupted due to damage on the residence premises. Endorsement HO 04 98 (Refrigerated Property Coverage) provides $500 coverage (subject to a $100 deductible).

Insurance to Value: It's too late for property owners who have already lost their homes to the wildfires, but this is a great time for insurance agents to encourage customers to review their coverage amounts. The "Insurance to Value" article in the Client Communications section of InfoCentral can be dropped into an agency newsletter or a targeted mailing to your customers. And remember: some companies offer their own enhanced homeowners forms that may provide additional coverage for one or more of these issues.


Page 3

College Bound
By: Jim Galvin, IIAT

It happens every year at about this time. You get a call from a customer who has a child going off to college asking if there is insurance for the personal belongings that will be in a dorm or apartment. The ISO homeowners program: (1) includes in the definition of "insured" a student enrolled full-time as defined by the school if the student is under the age of 24; and (2) provides a 10 percent extension for personal property at other residences. So, you answer, yes, and move on to the next crisis.

There is another option that may be better for your customer and for the agency. You should consider offering to write a tenant policy on the student's belongings for a number of reasons.

First, the tenant policy will have a lower deductible than the homeowners and with the popularity of percentage deductibles the difference can be significant. Second, the separate policy eliminates the coverage gap

that occurs when a student drops a number of classes and is no longer carrying the number of required hours to be considered full-time. It also eliminates the potential residency problem if the student signs a 12-month lease and attends summer school – are they still a resident under the homeowners policy if they have an annual lease in another city? These problems can be eliminated for less than the cost of a dorm refrigerator.

Finally, the separate policy gives you the opportunity to develop a new customer. The separate policy allows you to contact the student annually to determine what changes need to be made. You should consider using e-mail or texting to communicate requests to contact you about changes. The personal contact and attention to their needs will show your value and cultivate a personal relationship. As time passes you may be able to watch a simple tenant policy grow into a significant personal lines account.


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