Edward O’Hare over at The Rough Notes Company Inc. wrote a wonderful piece on Live Asset Growers Insurance for the October 2008 publication of their online and print Rough Notes magazine:

Rough Notes is a great trade communication for the insurance industry, so having this coverage is a wonderful way for us here at Live Asset Insurance to be able to get the word out. With such a new, but necessary and worthwile,  insurance program the biggest challange has been getting the people who would require such vital natural disaster insurance coverage for their nurseries, tree farms, and landscaping especially in the wake of all these distrubing climate changes.

This article should prove to be an excellent resource allowing us to explain what we do and the value of Live Asset Insurance at a glance. It’s worth a read especially if anyone has the slightest bit of confusion over what we do and how we do it. Just follow the link below to access the whole article:

Protecting Clients’ Live Assets -New Insurance Program Covers the Substantial Values of Trees, Shrubs and Plants

Thanks to Ed and the folks at Rough Notes!!

Flood zones: love them or hate them, it doesn’t matter, you live in one. But what does it really mean to live in a flood zone? How are they determined? What is the difference between zone A and zone X? Do you really need flood insurance? Without getting too detailed, let’s visit some key areas in the “wet and wild” flood insurance world to answer three important questions: how are flood zones determined, what do the different zones mean, and most importantly, are you covered?

Flood zones are defined by the Federal Emergency Management Agency (FEMA). They describe a specific area of land in terms of its flood risk. The National Flood Insurance Program (NFIP) then uses these different FEMA flood zones to determine one’s risk. However, different zones indicate different levels of risk and have a direct impact on lender’s flood insurance requirements.

Understanding the phrase ”major flood” is vital in comprehending how the flood insurance industry functions. A major flood is defined as “a flood with a 1% annual chance of occurring.” In other words, there is a 1% chance of a 100 year flood occuring every year. A 100 year flood describes the peak stream height above normal levels a stream, lake, river, etc. would reach, which statistically, is supposed to occur once every 100 years. This is determined by the recurrence interval, a tool used to predict the probability and severity of floods in any given year. That’s everything you need to know about flooding in the context of flood insurance but to understand more on flooding, please view this website.   More on floods

Low-to-moderate risk zones are defined as having minimal exposure to major flooding.  These zones are Zones B, C, and X. These zones include all areas outside the 1% annual flood risk floodplain. Hence, these areas are outside the 100 year floodplain. In these areas lenders don’t require property owners to carry flood insurance. 

High-risk zones are categorized into zones A and V with numerous subdivisions in each zone. The zone A’s include all areas with a 1%, or greater, annual flood risk. In other words, areas that are located within the floodplain of a 100 year flood are zone A. The zone V’s include the same type of areas, but with the additonal hazard of storm waves. In these zones, all property owners are required to obtain flood insurance in order to get a loan from a federally regulated lender.

Live Asset Insurance offers flood insurance in low-to-moderate risk zones but not in high-risk zones. But how do you know if you need flood insurance? There are many variables to consider when making this decision. At the same time, many policies are very vague at explaining what exactly does flood insurance protect. To more thoroughly investigate whether or not you need flood insurance you can visit the NFIP website or call your local insurance broker who can help you determine your flood zone.

Surprise! This year there’s an estimated record number of natural catastrophes predicted to occur in the United States. It seems this is becoming old news. Summer arrives with twenty some odd large Atlantic storms, 12-16 becoming hurricanes, and 6-8 expected to make landfall causing “significant damage”. At the same time, the forecasts are proving to be accurate. The number of hurricanes we’ve had in the past few years is very significant. Can’t think of any recent hurricanes? Ask somebody from New Orleans about Katrina. With potential catastrophes on the way and potential damage inevitable, what does this mean for the insurance industry?

First, according to Carl Hedde, head of risk accumulation for Munich Re America, the number of incidents in the United States will result in record losses for the industry. The number of incidents reported for the first half of 2008 (109 in total) exceeds all years dating back to 1980. The direct economic loss from natural disasters  has been $8.1 billion from thunderstorms and $30 billion from wildfires in 2008 alone. www.propertyandcasualtyinsurancenews.com

The insurance industry has openly stated global climate change is a contributing factor in causing these extreme weather patterns. They have even cited human activity as a factor for worsening the situation. Interestingly enough, however, industry experts don’t see these events inducing a “marketwide turn from soft pricing”. In other words, premiums are following a downward trend and not expected to rise! Even though a record number of losses, of both insured and uninsured property, are anticipated to occur this year the prices are going to remain relatively static or even go down. What’s wrong with this picture?

I don’t know, but understanding the cyclical nature of the business, the rebound effect will happen. When it does the prices for insurance will be ascending toward our ever-changing atmosphere. Enjoy the calm before the storm!

Anybody in the tri-state area would be able to tell you about the hectic weather we had this past June. Sweltering heat, severe thunderstorms, and everything in between wrecked havoc in our daily lives, or so it seemed. While I found myself on a quest for air conditioning one week, the following week I found myself scampering out of the rain in search of shelter. I bet many others have felt the same way I have, however, from what I have witnessed; people have not been the only ones being affected by this extreme weather.

While reading the June 18th New York Times I came across an article that discussed the tree damage in Central Park during a mid-June storm.New York Times In total, the park lost 33 trees, including a handful of trees that were three to four feet in diameter. There was a considerable amount of maple trees damaged, as well. At the same time, I saw dozens of trees down in my town of Stamford, CT. I even had to change driving routes three times one night due to road blockades as a result of fallen trees! However, the extreme weather damage in the tri-state region paled by comparison to nationwide events.

Flooding in the Midwest dominated the news; displaced thousands, and will end up costing billions of dollars. According to a study done at Ball State University the total crop damage could reach $2.7 billion. The following week, it was the ballooned Mississippi River that we saw all over the news. On June 19th CNN.com reported that eleven levees, both natural levees and man-made, on the Mississippi have been breached around St. Louis. The number of overflowed levees was up to twenty in Iowa and Missouri alone. CNN.com The damage caused by the flooding of the Mississippi had already ruined 25,000 acres of crop in Adams County, Illinois, while flooding in Oakville, Iowa, covered over 20 square miles of crop fields.

While the trees lost in Central Park were miniscule in dollar value to the crops lost in the Midwest, each loss could have been remedied through Live Asset Insurance. For example, the trees in Central Park could have been insured and replaced with replacement trees of the same size and species. Crops lost from flooding in the Midwest could have been replaced as long as they were inventories insured under our live asset policy.

The trees in Central Park are gone and farmers in the Midwest are left to rely on their Federal Crop Insurance policy. However, they are going to suffer greatly due to its high deductibles and nominal protection. With Live Asset Insurance, the covered live asset would be subject to replacement from the tornadoes and flooding. The trees in Central Park could be replaced, along with the covered crops in the Midwest. Unfortunately, they are lost forever.

While Live Asset Insurance is not yet available nationwide, these natural disasters show how a catastrophic loss can effect the lives of so many. Don’t get caught in Mother Nature’s crossfire! Protect your important live assets.

I don’t think anyone is ever ready to handle what Mother Nature will do if she gets angry and decides to let loose. It also doesn’t make it easier when the National Oceanic and Atmospheric Administration announces that they are laying odds from 60% to 70% that there will be 12 to 16 named storms, with a 90% chance of a “near normal or above normal hurricane” season this year for the Atlantic Basin.

Hurricane season, officially from June 1st to November 30th, happens to coincide perfectly with the growing season.

The American Nursery and Landscape Association, which represents growers, greenhouses and landscapers nationally, is collectively growing more anxious about significant weather events. Many of their members have suffered dramatically from recent freeze, wind and hail losses. Now hurricanes loom on the horizon.

With almost certain landfall potential for these predicted storms, there will be significant losses for hundreds of thousands of residents in coastal areas. For families that earn their living from the land; such as farms, nurseries, greenhouse, golf courses, vineyards, orchards, etc, these whirlwinds of disaster can do more than damage homes. Even a weaker hurricane has the potential to economically destroy the very foundation from which they have built their lives.

Live Asset Insurance can’t stop the wind, but it can help you rebuild after a loss happens. Enthusiastically endorsed by the ANLA, our policy provides important coverage for wind, flood, freeze, fire, hail, and other named perils associated with these nasty weather events. Our policy could be just the “hedge” you and your family need to beat the odds.

Our “natural disaster” insurance policy, called Live Asset Insurance, will respond when Hurricanes and Mother Nature destroys “live asset” inventory; field grown, containerized or greenhouse grown plant material.

If you are a golf course with signature trees, this policy is the only one of its kind in the nation that will respond with replacing your trees with the same like, kind and quality. We also include debris removal.

The beauty of the policy is that it can be used as a stand alone policy; covering all trees, shrubs, vines, and flowers, or, as a supplemental policy; used to fill the coverage gaps or vacancies in the government crop insurance policy. This makes us uniquely positioned to help protect the Green Industry in ways never commercially available before from a private insurance source.

If someone has purchased a “Catastrophic” Crop Insurance Policy, it only covers approximately 25% of the total exposure.

Live Asset Insurance can provide 75% coverage to eliminate that portion that is self insured. The same scenario applies for those who have bought the governments increased or “buy up” limits. The government’s crop insurance policy is a subsidized, taxpayer supported program and 100% coverage is unavailable. The most anyone can purchase is approximately 75% coverage. We can provide coverage for the remaining 25% for near complete coverage.

This 1/4 coverage gap may not seem like a big deal, but when you are talking about 10 million or more at risk from a storm, and a quarter of that will have to come directly out of the owner’s pocket before the other policy even responds, then that gap becomes a 2.5 million dollar deal breaker. Even for a much smaller investment, a great portion of people cannot fork over the first 75% of any loss and then wait to get the other 25% back. Not when they have no way of earning income while they dig out of storm rubble and floods, it’s just too much.

No one can stop a hurricane or the damage they bring, but together we can minimize the long term effects of their losses and try to make it right again.

Almost 100 years ago, at the beginning of the Industrial Revolution, one of the countries’s first true risk management firms offered information and expertise about risk and how to avoid it, minimize it or transfer it. It is that same firm that is again leading the way with the exciting and revolutionary Live Asset Insurance program for the Green Revolution of today. This progressive and forward thinking behavior is why The JLS Group, Inc. is the proud parent company of Live Asset aiming to provide solutions for another 100 years.

We do best when we work with what nature intended us to be. Farmers and growers stick to their roots, and wait for things to grow organically, relying on nature and the elements as they have for centuries. Hurricanes have no choice, but to do what they were created to do and they are natural disasters, made to destroy. The hurricanes will come this season and the two will clash, but JLS and Live Assets are also doing what comes naturally to us as well: We have created the perfect risk management solution again.

So let the winds and rains of the hurricanes come; Live Asset Insurance will allow you to rest easier.

As families moved from the cities to the suburbs and planted “beautiful” trees in the same spots that farmers removed “nuisance” trees a hundred years before, the “Live Asset” movement started to take shape. New trees were viewed as welcome additions to the family. They became a part of our lives and connected us in ways we probably never thought about until now. They were always around, but we never saw their true value or never really appreciated them as a true asset. Now that we have grown and the trees have too, we have a deep affection for them, but it has been historically difficult to establish the commercial value of trees.

If you have ever suddenly lost a tree to a storm, and experienced the deep sense of loss, and the “what do we do now?” thoughts and feelings, then you understand the impetus behind our product from an emotional perspective. If you have ever lost a significant tree and only felt anger at the prospect of having to remove the debris, or were thankful that “nature’s natural pruning” didn’t hit your house or damage your car, then you will appreciate our debris removal coverage. If you have ever bought a new mature tree, paid more for a property with landscaping, or witnessed the improvements of a barren plot of land with the planting of various flowers and shrubs, then you can appreciate that live assets are assets, not liabilities.

Anyone who has purchased significant landscaping understands that as well.A 2007 Wall Street Journal Article reports that “homes with colorful flowers and tall palms typically sell for 10% to 15% more than those without these features and that overall; a lot with trees adds about 7% to a home’s price……. Nearly 20% of buyers say they consider landscaping to be a “very important” factor in their decision to buy a house, according to a new study by the National Association of Realtors.” The article then goes on to discuss the lack of professional and uniform method of valuing, insuring and protecting living things such a large live oak tree.

The cost of extensive landscape can be more money than a car or even a house, but these live assets are almost always uninsured. How many people would plunk down $40,000 dollars on a new car or truck and not insure it? How many would build a new addition on a house for $200,000 and not insure it? Yet, all across the country people will spend hundreds of thousands of dollars on live plantings and then pray that a strong wind or freeze does not wipe out their investment.

Over the past 50 years the insurance industry has been unable or unwilling to insure “Live Assets” because they were “living”. The industry felt that it was incapable of determining the “existing health condition” of the live asset in question, and therefore the industry chose not to deal with the issue. This is where we believe the paradigm is shifting from ignoring trees to acknowledging them as live assets; to be protected and insured, not ignored and left unprotected.

After speaking with hundreds of professionals in the Timber, Landscape, Nursery, Vineyard and Greenhouse industries we discovered a dire need to protect “Live Assets” in a way that did not previously exist. The problem is: natural disasters happen everywhere around the globe. Living organisms like trees, shrubs, vines and flowers are extremely vulnerable to the elements. Picture yourself standing alone outside 365 days a year in one spot with no clothing depending on the right amount of sun, water and general avoidance from bugs and other nasty forces trying to attack you. Now you understand the problem, and also why insurance has been hard to find.

While Live Asset Insurance was establishing our “ecocredentials” in the industry in 2007, we discovered that our new and exciting natural disaster insurance policy (covering trees, plants, shrubs, flowers and vines destroyed by Mother Nature’s wrath) was going to invoke a significant paradigm shift; one which we believe will encourage conservation, natural resource renewal, and reduce the tax burden of farm subsidies, all while protecting living organisms in ways that were never done before. We believe our product will stimulate awareness of the value of live assets in general, and will help spawn “live asset businesses” that will be formed specifically to grow replacement inventories; now that there is insurance to pay for the lost live asset.

The “paradigm shift” from trees as “non entities” to true “live assets” will happen as these live assets get replaced with an exact duplicate tree, because there was insurance money to pay for the debris removal, the purchase of a like, kind and quality replacement, and the cost to reinstall the replacement tree in the same spot as if nothing had ever happened.

Everyday across the country thousands of businesses and individuals are self insuring their “live Assets”. Once they learn about our insurance product they will transfer that risk for pennies on the dollar. Please spread the word about Live Asset Insurance.  Hug a tree, better yet insure it.

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Subject: Earth

“Earth, Wind, Fire and Water are Mother Natures best attributes; sometimes.

When the earth “quakes”, and the wind “screams like a freight train”, and fire and water are raging out of control, it conjures up memories of the margarine commercial where mother nature says, just before she unleashes her fury, “It’s not nice to fool Mother Nature”. When Mother Nature is angry there is no telling what she do, and it is best to get out of her way until she calms down. [d1]   Sometimes that is not possible, and that is where Live Asset Insurance has found its place in the green revolution.

Many readers are unaware our Government has a taxpayer subsidized insurance program for “growers”. This important insurance program has seen many variations over the years. It supports and protects our agricultural way of life in the context of regular natural disasters that annually destroy crops. Insuring crops is similar to being asked to insure a burning building. It is not a matter of will there be a claim, but how big will it be?

The cost for the “catastrophic” insurance policy from the government is $100 a year. The majority of people buy this policy because it is “virtually free” insurance, until you have a claim.

Let’s assume a “grower” has 10 million dollars of nursery stock at risk. On a total loss he or she would be uninsured for the first 5 million. How many can absorb a 5 million deductible? Then on the next 5 million the government pays 55% of the remaining loss or $2,750,000. The grower would pay $7,250,000. For the small cost of $100 dollars, you get what you pay for.

Our program would pay $9,990,000 of the 10 million dollar claim and replace the destroyed nursery stock. Our deductible is only $10,000.

The government does have the ability to increase the coverage, but the most they can insure, at prices that are 3 to 4 times ours, is 75% of the exposure. Using the 10 million dollar claim example; the first $2,500,000 is still uninsured.

We support the decision to purchase the $100 dollar policy, but strongly caution against thinking it will be adequate protection in the event of a claim.

The wildfires in California, the floods in Missouri, the freeze in Tennessee, and the wind damage in Atlanta should be reason enough for people to understand the need for protection. When we started this insurance program the only market insuring against natural disasters was the government. No one else is insuring live assets like we are.

Most attempts at insuring weather related claims for live asset risks were previously based on a flawed assumption that the fruit and the trees, bushes, shrubs and vines all needed to be insured together. We studied the data and found that claims could be quantified separately. This alone is the reason we put the program together. We found that insuring live asset was like insuring ourselves for health and life insurance. We get hurt, we lose limbs, and we sometimes die, maybe not always from old age. We wanted to create a “death” insurance program for living assets which included “destruction” coverage for trees, bushes, shrubs, plants and vines whose diagnosis is terminal after being injured by natural disasters.

Lenders request “live asset” insurance coverage for wind, lightning, fire, freeze, flood, earthquake, hail to protect their investments, like they request home insurance.

Live Asset Insurance will be updating our “What’s New” blog with valuable information and resources for the Live Asset Insurance Industry.  We welcome any comments and feel free to send us any questions you might have.

We will be posting a monthly newsletter and keeping you up to date on what is happening around the Live Asset Insurance Industry. 

 We look forward to hearing from you.

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