Personal Lines

Aviation

provide liability and physical damage to owners of private or commercial aircraft.

Condominium

provide coverage to condo owners personal property as well as to buildings under the control of the private owner.

Dwelling Fire

provide personal property (fire and extended coverage) on residential property exposures, as well as providing liability for the landlord.

Farm Owners

covers the farms for loss to buildings, contents, crops, equipment, livestock and loss due to bodily injury or property damage on or off premises and for products sold by the farm.

Homeowners

provide coverage for homes, personal property and personal liability coverage on residential property exposures.

Mobile Home and Motor Home

provides property and/or liability coverage on mobile homes and travel trailers

Motorcycle

provide liability and physical damage to the motorcycle owner in the same fashion as the personal auto policy.

Personal Automobile

offers personal auto insurance underwritten by our companies. Multi-tier rating enables us to write a range of preferred and standard auto insurance customers. We offer a full range of services including quoting, thorough underwriting, quality customer service, and 24 hour claim reporting. Coverage is provided through an ISO Personal Auto Policy with a broad range of vehicle and driver discounts. Liability coverage and physical damage coverage are available.

Personal Excess Liability

offers personal excess liability coverage, underwritten by our carriers to our customers. This product is provided only as an accommodation line to our automobile and homeowners policyholder. The policy provides excess liability coverage at limits up to $1,000,000.

Watercraft

Watercraft liability and physical damage coverage is underwritten much as a personal auto policy and provide similar benefits.

Now More Than Ever:

The Importance of Insuring Your Home

To its Reconstruction Cost

Current global economic conditions are greatly impacting everyday life in this country. Americans are making adjustments to their discretionary spending, and some have even decided to place renovation and construction projects on hold. Many assume there is a corresponding decrease in residential construction costs. Thus, as home market values have plunged as much as 30% in parts of the country, some homeowners think insurance premiums should decrease too.

Contrary to popular belief, however, while home market values continue to plummet nationwide, construction costs remain strong and are even on the rise, although at a slower rate than in the past. The Engineering News-Record Construction Cost Indices calculated a 4.9% increase in construction costs from Dec. 2007 to Dec 2008.

Market value vs. replacement cost

As a result of increased construction costs, approximately 58% of U.S. homes are underinsured by an average of 21%, according to Marshall and Swift/Boeckh, a leading provider of building cost data. Many homeowners don’t realize that insurance premium is based on the replacement cost to rebuild a home in the event of a major loss, not market value, or what the house would sell for today.

MARKET VALUE VARIABLES    vs                   REPLACEMENT COST VARIABLES

Subprime loan crisis implications                           Trends in materials cost

Foreclosure rates                                                      Fluctuating fuel costs

New housing starts                                                   Labor costs and availability

Housing shortages in some locations                    Changed construction codes

Location factors                                                        Changed construction standards and practices

Land Values                                                              New technology

Key factors that contribute to rising construction costs

•           Fluctuating energy costs.

•           Rise in the cost of skilled labor.

•           Reduced competition as some builders goes out of business.

•           Increased overseas demand for raw materials and building products.

•           Price increases for roof shingles and wallboard.

Building materials cost increases from Dec. 2007 to Dec. 2008

Construction Cost Component                    ANNUAL % INCREASE

Millwork (windows, doors, cabinets)           2.1%

Appliances                                                     4.0%

Concrete Block and Brick                            4.7%

Hardware                                                       12.5%

Asphalt Roofing                                             58.0%

Concrete                                                        3.9%

Gypsum Producers (drywall)                        7.5%

Paint                                                               16.7%

(Sources:       Engineering News-Record, Marshall and Swift/ Boeckh, and Reed Construction Data, 20O9)

Reconstruction costs more than new construction

When rebuilding a home after a loss, contractors must work with and match existing materials, which requires skilled labor that costs more. Plus, when a contractor rebuilds a single home, there are no economies of scale. i.e. cost to rebuild is always higher than the initial cost to build.

Varying profits for general contractors and subcontractors

The replacement cost for a home includes the builder’s profit and overhead, which averages 10-20% of the building cost on even larger, more ornate houses. Architectural fees for additions and renovations add another 10-15% of building cost.  Decorator fees can be as much as 20% added to the total cost, since custom interior designs have to be replicated and integrated.

U.S. environmental factors

Recent natural disasters such as hurricanes in coastal regions, floods in the Midwest, and wildfires in the West have contributed to shortages of building materials and overall cost increases. For example, following Hurricane Katrina in 2005, the costs of materials like concrete, steel and copper increased at double-digit rates, while the cost of lumber more than doubled, also, a heightened emphasis on building “green” with environmentally friendly materials and ultra-efficient technology has contributed to rising construction costs.

Rebuilding custom and historic homes

The materials used to reconstruct custom homes or restore historic homes are more expensive than those used to build average homes due to finer quality and the fact that specialized homebuilders buy these materials in relatively small quantities. Also, fewer craftsmen specialize in custom construction and historic renovation, and greater demand for these specialists has led to increased skilled labor costs.

Our commitment to insurance to value

We take great pride in our local marketplace knowledge arid ability to work with homeowners to help determine appropriate replacement cost values. Construction cost trends are fluid and dynamic, and we will continue to monitor these trends and their impact on home replacement cost valuations throughout 2009, just as we have for well over two decades.