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SIMPLE KEYS TO UNDERSTANDING HOMEOWNER’S INSURANCE

To make sure you have the right type, and right amount of homeowner’s insurance, you need to understand what it does, and doesn’t, cover. Regular homeowner’s insurance will cover damage from tornadoes, fires, and burglary; but it will not cover the calamity of hurricanes, floods, terrorism, or nuclear meltdowns.

Basic Principles

*Make sure to get enough coverage to re-build your home from bottom to top.

*Choose “replacement cost” instead of “actual cash value.”

*Regularly inventory your possessions and their replacement costs. Consider a special rider for valuables such as jewelry, furs, and family heirlooms.

*Understand “loss of use” provisions. These provisions will dictate how long your insurer will pay rent while your home is rebuilt or repaired.

Best Offerings

*Look at on-line quotes and shop around, in general. Do some research to make sure the company is financially sound.

*Consider the possibility of raising your deductible to keep rates low.

*Get discounts by purchasing homeowner’s and auto insurance from the same company.

*Consider an umbrella policy to protect against lawsuits.

*Ask if special discounts are available. Some companies offer discounts to longtime customers, seniors, and non-smokers.

*Monitor and maintain a good credit score

*Unless you plan to file a claim, don’t report damages.

What Isn’t Covered

*Home office equipment

* Damage from neglect and poor maintenance practices

*Losses caused by pests such as insects, rodents, and pets

*Sewer backups and mold

In Case of Disaster

*Get in touch with your insurance company as soon as possible.

*Begin checking for damage and take photos to document calamity. Make quick fixes and temporary repairs to mitigate further damage.

*Be cautious of repairmen charging exorbitant rates and con artists impersonating insurance adjusters.

*Read the fine print before signing anything! Be careful not to sign away future compensation upon receipt of the first check.

*If a settlement offer is clearly unfair, don’t accept it.

Learning a few simple principles in advance can save you a bundle, should disaster strike.  Speak with your insurance agent to gain a better understanding of your homeowner’s insurance needs.

FIVE THINGS YOU SHOULD KNOW ABOUT YOUR CONDO ASSOCIATION’S INSURANCE

A condominium unit-owner usually has her own insurance policy that covers her for loss of her personal belongings, parts of the building that the condominium agreement makes her responsible for insuring, the additional cost of living elsewhere after a fire damages her unit, and her legal liability for injuries or damages suffered by others. In turn, the condominium association has its own policy, which may cause some unit-owners to wonder why they have to buy separate insurance. Doesn’t the association’s insurance cover the same things that her policy does? Depending on the property at issue, the answer is maybe yes and maybe no. Insurance companies designed the two types of policies to complement each other in some cases and to overlap in others. Here are five things unit-owners should know about their associations’ insurance.

The association’s policy covers the building. Depending on the wording in the contract between the association and the unit-owner, the word “building” may mean several different things. If the contract requires the association to insure them, “building” can include fixtures, improvements and alterations that are part of the building and that are within a unit. For example, if a unit-owner installs new track lighting or an attached island in the kitchen, the association’s insurance would cover the cost of repairing or replacing them after a loss. Also if the contract requires, the association’s insurance will cover various appliances such as refrigerators, stoves and dishwashers.

The association’s policy covers personal property “owned indivisibly by all unit-owners.” Furniture in the building’s lobby, hand carts and other moving devices, and exercise equipment in an exercise room available to all residents are examples of the types of property that the association’s policy insures.

The association’s policy does not cover the unit-owner’s personal property. A unit-owner must buy her own insurance to cover her furniture, electronics, clothing and other belongings. Assume, for example, that the condominium contract requires the association to insure appliances. If fire damages a unit-owner’s space, the association’s insurance will cover the refrigerator but not the sofa. The unit-owner’s policy will cover the sofa. The association’s policy also does not cover an individual unit-owner’s legal liability for injuries or damages suffered by others. The unit-owner needs her own insurance to provide for her legal defense and to pay any judgments.

It is possible that both policies may apply to the same item of property. In the above example, both the association’s and unit-owner’s policies may cover the refrigerator. In that situation, the association’s policy will apply first; if it does not completely pay for the repair or replacement, the unit-owner’s policy will cover the balance. For example, if the cost of replacing the refrigerator is $5,000, and for some reason the association’s policy covers only $4,000, the unit-owner’s policy will pay the other $1,000 (the example doesn’t include deductibles that may apply.)

The association’s insurance company will not try to get its money back from a unit-owner. Suppose a unit-owner left a candle burning overnight and the unwatched candle caused a fire that damaged part of the building. Many types of insurance policies would allow the insurance company to pay its customer for the damage, then try to recover its payment from the person who caused the damage. However, a condominium association policy specifically states that the company waives its right to recover from a unit-owner. It still has the right to seek recovery from a person who is not a unit-owner and is responsible for the damage.

While comprehensive, the association’s policy is no substitute for a unit-owner’s own insurance. Unit-owners should work with professional insurance agents to ensure that they have the proper coverage.

HOME BUYERS: MAKE SECURING HOMEOWNER’S INSURANCE A TOP PRIORITY

At long last, your loan package has been approved, your closing date is just days away, everything you own has been packed, and all that remains is a quick call to your insurance agent to line up a homeowner’s policy. That’s when the bad dream can begin.

Your agent may inform you that your new home is uninsurable because of a history of insurance claims filed by the previous owner. Despite home inspections and various required real estate disclosures, this could happen to you.

Securing homeowner’s insurance used to be one of the last tasks a buyer undertook before closing. In reality, it should be one of the first.

Before issuing a policy, insurers always check a property’s claims history. Water damage claims are red flags, of course, but homeowners can also set off alarms simply by inquiring about their coverage, without ever filing a claim.

Most insurance companies research past claims through a shared database called CLUE, which stands for Comprehensive Loss Underwriting Exchange. When you apply for homeowner’s insurance, the insurer will request a CLUE report to ascertain whether you or the seller have filed any claims during the past five years. Even if you currently own a home and have a squeaky-clean claims history, if you buy a house with multiple claims filed against it, you may not be able to obtain insurance coverage.

Regrettably, you cannot order a CLUE report if you are not the homeowner. However, you can ask the seller to order a copy of the report as a contingency to your offer.

If you are ever denied insurance because of past claims, you can request a free copy of your CLUE report. In the event of a dispute with your insurer, you have the right to ask that your account of the events be included in the report. If you are simply curious about your home’s history, you can order a copy from ChoicePoint, the company that manages the CLUE database.

It pays to spend the time and effort to educate yourself about homeowner’s insurance when seeking affordable coverage. Consider the following ideas:

  • Learn the rules regarding homeowner’s insurance renewals in your state. Regulators of some states exercise   control over when an insurer can refuse to renew your coverage.
  • Pay for small losses yourself. Insurers take notice of customers submitting frequent small claims.
  • Think twice before calling your agent or insurance company. When you place a call, the insurer opens a claims file on you regardless of whether you actually file a claim.
  • Increase your deductible and consolidate insurers. To reduce your homeowner’s insurance premium, consider raising your deductible. Also, most insurers offer discounts if you insure both your car and home with them.
  • Examine your credit record. In addition to your past claims history, insurers often use your credit score to determine whether to issue you a policy.

3 Ways to Protect Yourself From Home Invasion While You Are On Vacation

Finally getting away for some r&r should be a great feeling – and it can be when you take the necessary steps. Here are three great ways to help keep your home safe while you enjoy some much needed time away.

1. Social media
Believe it or not this is one of the quickest ways to invite burglars to your home. While you may be smart enough to not post that you are sipping a Mai Tai with your toes in the sand thousands of miles from home, your kids might not be.

There are a ton of apps out there that specifically market to kids. And even though you may have thought you did your job and set child locks on your childs phone, a conversation can be more effective.

We were recently at the lake house where I had committed to no technology (finally!). My nine year bounced down the stairs and sat next to me. He was on one of his apps, one we set up together that I normally monitor. He had been posting pics of our trip and since I hadn’t checked my phone, I was unaware. I knew to turn off his geo on his phone previously but still, his photos with hashtags were advertising we were away.

I wanted to delete all of the apps and save myself the headache but at the end of the day, that is a bandaid. So we talked about it again instead. We talked about hashtags and what they do. We talked about sharing and when it’s appropriate. And we removed the photos he had posted.

If you do plan to share photos of your trip be sure to include that you are now home in your post ex: “What a great vacation we had but it’s nice to be home”.

2. Be Neighborly
In our neighborhood we make an effort to know each other, to support each other and to look out for one another. Your neighbors are one of your best defenses. Especially the ones who are home all day and night.

Next time you see your neighbor, be sure to say hi. Make an effort and know that you are helping each other. Less crime can help keep the value of your home higher and let’s not forget how much better you will sleep without the experience of a home invasion.

3. Lighting
If a burglar has a choice between a well lit home and a dark home, which do you think he will choose? Automatic lighting or a house sitter are great ways to give the idea that someone is paying attention at home. Outside motion sensor lighting, in the backyard as well, can also be helpful.

We hope you found these tips helpful. If you have more to add – please reply or comment.

Homeowners Policies & Jewelry

After receiving valuable jewelry, it’s important to contact an insurance agent immediately. It’s important to keep in mind that most homeowners policies place limitations on coverage for personal valuable items. This means that owners of these valuable items may not receive the full value if any of the items are stolen or lost. As a general rule, most homeowners policies provide coverage for possessions up to 50 percent of the total coverage amount chosen. This means that a person who has a $600,000 policy would enjoy coverage as much as $300,000.

However, most policies place limitations on certain types of personal belongings. For example, a policy provider may offer to cover $1,500 or more for all jewelry if theft occurs or the jewelry is damaged. There are several other categories of personal belongings that have limited reimbursement terms. Firearms, stamps, furs, coins and silverware are examples of such items. Homeowners should be sure to read the section of their homeowners policies regarding contents and additional coverage. It’s important to remember that accidental loss is not usually covered. This means that a woman who loses her engagement ring will not receive payment from the homeowners insurance company.

Homeowners who want to raise their coverage limit to ensure protection for loss and theft cases should contact an agent immediately. It’s best to ask the agent to schedule the particular jewelry item or add a special rider to an existing policy. In some cases, a written appraisal may be required, so it’s best to ask an agent if this will be necessary. Usually a detailed receipt is sufficient proof for the value of the item. After a value schedule is assigned to the item, the owner has full protection for the total amount if the item is lost, destroyed or stolen. This makes the claims experience more simple since there isn’t a need for an investigation about the item’s value. In addition to this, there is no deductible assigned to the items.

Since additional coverage is so affordable, it’s best for all homeowners who have valuable jewelry or other special items to speak with their agent. Agents are able to make an assessment of what should be insured and provide valuable advice. As a general rule, homeowners policies don’t assign specific limits on electronic devices aside from the overall limit for possessions. It’s best for homeowners to insure their valuable items in such a way as to ensure that replacement-value coverage is in place. To learn more about the various types of riders and affordable coverage options, contact an agent today.

Dealing with Homeowners Policy Exclusions

Property exclusions exist in Sections A and B of a homeowners insurance policy. The following are some of the most important exclusions to be aware of:

 

Collapse If a home collapses, there is no coverage provided unless the cause is included in the list of additional coverage inclusions section.

 

Flood – This is one of the most important exclusions to be aware of. In the eyes of insurers, there is a large difference between water damage and flooding. It’s important to keep in mind that flooding hasn’t been covered in homeowners policies since the 1960s. In 1968, the government implemented the National Flood Insurance Program. Even those who don’t reside in flood zones should have this valuable coverage. Heavy rains and hurricanes often cause flooding in areas that usually don’t see it.

 

Freezing – If heating, air conditioning or plumbing systems freeze, the damage is excluded from a homeowners policy if the dwelling has been vacant or is in the process of construction.

 

Homes Under Construction – When thieves steal property or materials from an unfinished home, the loss is not covered by a homeowners policy.

 

Retaining Walls, Foundations & Nonbuilding Structures – Damage to swimming pools, fences, docks and similar structures from thawing, freezing, weight or pressure of water is not covered by a homeowners policy.

 

Mold, Wet Rot & Fungus – Damage caused by these issues is not covered if it’s due to a sump pump, sump or similar equipment. It also isn’t covered if it’s from a gutter, roof drain, downspout or equipment that is similar.

 

Risks Of Direct Physical Loss – This is the section of a homeowners policy that lists any other exclusions. Some examples of common exclusions are smog, rodents, birds, wear and tear or owned animals. It’s important to read it carefully to fully understand it. If there are any questions or concerns, contact an agent to clarify the terms.

 

Concurrent Causation Exclusions – Homeowners policies explain how loss is handled if a specific cause is covered but another is not.

 

Malicious Mischief & Vandalism – If the dwelling has been vacant for a period exceeding 30 consecutive days prior to the damage or loss, this exclusion exists.

 

Coverage sections A, B, C and D have several exclusions. Loss from any events that take place as a result of law enforcement on the property are excluded. However, endorsements are available to be added to a policy to provide this coverage. Damage or loss from earthquakes or landslides is also excluded. Power failure, neglect, water damage and war are also causes of damage that are excluded.

 

Sections E and F of a homeowners policy provide liability coverage. However, there are several exclusions in those sections to be aware of. Intentional injuries to other people are excluded. The business of an insured person is not covered by a homeowners policy. Premises held for rent, professional services, locations not listed on the homeowners policy, watercraft and motor vehicles are also not covered under a homeowners policy. Liability damages from war, owned aircraft, sexual molestation, abuse, communicable diseases and controlled substances are not covered. Coverage for home day care is very limited under the property section of the policy but is excluded under the liability section.

 

Although these exclusions exist, there are many add-on options available from insurers to provide coverage for such areas. There are also separate insurance policies for some exclusion. Flooding is one example. However, there are some exclusions that simply aren’t covered under insurance policies or additional coverage purchases. Harm to others from controlled substances is an example. The best way to avoid such problems is to take the proper preventative measures to avoid being in a position to suffer loss from any exclusions. The first step to getting coverage for exclusions is to speak with agent. An agent will be able to provide valuable information about extra coverage options and a list of ways to avoid suffering loss from issues that aren’t covered by insurance.

Insurance Checklist for Home Buyers

There are many different issues to consider when looking for the perfect home to purchase. One of the most overlooked issues is insurance coverage. However, it is one of the most important aspects about home ownership. It’s essential for those who are shopping for a home to factor in the cost of insurance. Before going out to look for a home, consider all of the expenses the purchase will incur. There are several other things to do before preparing to sign the final documents.

Get A Credit Report

Everyone is entitled to one free annual credit report. It’s important to review the report for inaccuracies and derogatory information. Dispute any inaccuracies immediately. If a creditor can’t verify a debt, it will be erased from the report. Having good credit makes it much easier to obtain a good interest rate. Good credit also helps individuals qualify for an insurance discount. If a credit report isn’t good, it’s important to take the necessary steps to improve scores and eliminate derogatory information.

Get Renters Insurance

Anyone who is shopping for a home but is currently renting should get renters insurance. It’s important to keep this coverage until a home is purchased. Renters insurance provides protection for renters from the liability of injuries sustained by others while they’re on the property. It also awards compensation if personal belongings are stolen or destroyed.

Research The Nearby Fire Department

One factor affecting insurance that most people don’t think of is the nearby fire department. If the location has permanent staff and has high ratings, the home will cost less to insure. Homes that have nearby fire hydrants also cost less to insure. Adequate water supply, trained firefighters and ample equipment are all important aspects of determining home insurance rates.

Consider Natural Disasters & Bad Weather

Although homes along the coastlines are more desirable, they’re more expensive to insure than inland homes. It’s important to plan on a windstorm or hurricane deductible for a home on a coastline. This amount is not a flat cost. It is a percentage of the estimated cost to rebuild the structure if it is destroyed. These percentage variables usually differ from one state to another. Even if the home is located in a state that doesn’t have a coastal border, it’s important to consider other natural disasters. Flooding and earthquakes are important issues to consider. Be sure to investigate the area’s history of flooding and earthquakes. Keep in mind that these coverage options must be purchased separately.

Know The Home’s Age

While older homes have their own unique beauty, they’re more expensive to insure than newer homes. Since some of the ornate features of older homes are more difficult to replace, the insurance premiums are higher. In addition to this, their plumbing, electrical or gas systems may be old enough that they’re considered risky. If this is the case, they result in a higher insurance premium.

Consider Swimming Pools & Other Features

Homes with swimming pools usually cost more to insure. Since a swimming pool is expensive to replace and poses a safety risk, it is considerably more expensive to insure a home that has one. Hot tubs, saunas and any other features that may pose a liability issue require careful planning for insurance. It may be best to purchase an umbrella policy to ensure liability protection.

There are several other things to consider when looking for a new home. For example, a roof that is new can positively affect insurance rates. However, an older roof that needs repair will cost more to insure. Homes that aren’t up to code also cost more to insure. It’s important to speak with an agent before agreeing to purchase a home. Agents are happy to look over the property’s details to determine how much of a risk the home is. When the time comes to purchase the perfect home, an agent can help arrange ample insurance coverage for the future. 

Filing a Homeowners Claim

It’s necessary to file a claim with the insurance company if a home is destroyed by a storm or a visitor is injured. It’s important to keep in mind that a homeowners policy is a contract held between an insurer and an individual. This means that there are specific procedures and rules to follow. It’s important to thoroughly read an insurance policy to completely understand individual responsibilities. There are a few pointers that every homeowner should remember.

Immediately report all crimes to the police.

It’s important to notify the police of any vandalism, burglary or other crime. Homeowners should also obtain the names of any police officers involved in the report or investigation. It’s also important to write down the names of all law enforcement officers after speaking with them on the phone.

Make all necessary temporary repairs.

Don’t shell out thousands of dollars for full repairs to a damaged property. It’s best to pay only for supplies to temporarily repair or sustain something. For example, if a window is broken, it’s best to pay for boards and nails or tape and cardboard to temporarily repair it. It would be pointless to pay for an entirely new window until after the claim is honored. Homeowners should save all receipts of items purchased for making temporary repairs.

Call an agent immediately.

After calling the police for any crime-related issues, it’s important to call an insurance agent. If the nature of the claim doesn’t involve a crime, phone an agent immediately after discovering the issue that will become a claim. Since there are time limits for some claims, it’s important to follow this advice. Ask the agent what steps must be taken. Agents are also able to provide advice regarding how long the claims process will take.

List all damaged items.

Don’t discard any items that are damaged before the insurance adjuster is able to survey them. Photographs and videotapes are also acceptable forms of proof in most cases. After making an inventory, make a copy for the insurance adjuster.

Obtain the necessary claim forms.

After receiving notification of a claim, an insurance company must send the proper forms to an individual within a specific time period. The best way to avoid delays is to ensure that the paperwork is filled out correctly.

Keep all receipts after relocating. 

Not everyone has to relocate after filing a claim. However, if the dwelling is uninhabitable, it’s important to remember that homeowners insurance has provisions for living expenses to some extent. It’s best to keep receipts in order to show written proof of expenditures.

Homeowners should carefully follow each of these steps. After filing a claim, it’s best to have an insurance adjuster come out as quickly as possible to survey the damage. Most insurance companies arrange for adjusters to visit a residence. To learn more about this process or to obtain answers to other questions, contact an agent.

Protecting a Home from Mold

It’s important to have a plan and routine in order to protect a home from mold. This involves constantly looking for watermarks on ceilings or walls, signs of mold growth and musty smells. If mold is caught early enough, it can be removed with a simple cleaning solution of bleach and water. However, preventing mold from growing again requires that the source of moisture be eliminated. The area where the mold started growing must also be dried properly. In some cases, the surface or area may simply need to be replaced. After cleaning the mold and attacking the source, be sure to place all rags, clothing, materials, paper and other debris affected in a plastic bag to be thrown in the garbage.

Mold is similar to insect infestations and rot in the respect that it is usually not covered under a homeowners insurance policy. Standard policies afford coverage for sudden or accidental disasters. However, they don’t offer coverage for cleaning or maintaining a home. If the mold is a direct result of a burst pipe or other covered peril, the insurance company may cover the cost to eliminate the mold.

Since mold is also dangerous, it’s important to tackle the problem immediately if it arises. Mold can cause family members in the home to become sick. Symptoms are usually similar to allergic reactions or hay fever. The best way to avoid all of these problems is to take steps to prevent mold. The following steps can be taken to prevent mold from growing.

Reduce Humidity Level
It’s best to keep the humidity level between 30 percent and 60 percent by utilizing dehumidifiers and air conditioners. Be sure to place exhaust fans in all bathrooms and kitchens. If carpet is desired, avoid installing it in bathrooms or kitchens. It’s best to have carpet only in rooms that aren’t exposed to moisture on a regular basis. Another important thing to remember is to avoid letting water pool and collect under house plants.

Check & Replace Hoses
Be sure to regularly inspect pipes, fittings and hoses. It’s best to replace hoses to appliances that use water every five years. At about $5 or $10 per piece, the cost of replacing hoses is much less expensive than dealing with a major mold problem.

Use Mold-Reducing Products
Clean all bathrooms in the home with bleach and water regularly. There are also several other cleaning products available that are designed to kill mold. It’s a good idea to add mold inhibitors to paint before applying it to the walls or doors.

Exercise Caution After Water Damage
If at any time a large amount of water comes into contact with the home’s interior, it’s important to ensure that carpets, upholstery and any other surfaces that hold water are dried thoroughly and promptly. Everything should completely dry within 24 to 48 hours following the initial water contact. Items that can’t be dried should be discarded. If there is standing water, remove it promptly. In addition to promoting mold growth, standing water is a prime breeding ground for microorganisms. After all areas have been dried, wash and disinfect them well. This includes the surfaces of appliances, closets, walls, shelves, floors, heating systems and cooling systems.

Check The Roof & Gutters
Another way to prevent mold is to check the roof and gutters frequently. Clear the gutters of any debris. If there are any leaks in the roof, have them repaired immediately to avoid water seeping into the home.

While mold is problematic, it can be prevented with proper care. For any questions about mold and the specific terms of an individual homeowners insurance policy, contact an agent.

How to Avoid Post-Disaster Scams

Homeowners must exercise caution after their homes are destroyed by fires, tornadoes or other disasters. There are many dishonest scam artists and service providers who are ready to take advantage of distressed homeowners. They know that individuals who have just experienced such a great loss due to disaster are in a panicked state of mind. Since homeowners in such situations aren’t thinking clearly, scam artists are able to get the money they want. In order to avoid such a fiasco, simply avoid making rash decisions by talking to an agent immediately following a disaster to get a list of reliable service providers. When disaster strikes, this will make it easier to know who to turn to. In addition to obtaining a list from an agent, consider the following tips for hiring service providers.

Builders & Roofers
Avoid rushing when hiring a builder or roofer. It’s better to obtain business cards and written estimates from several service providers before making a decision. Make sure to ask for references and check them. Research the track records of the companies or individuals being considered for the job. It’s best to use professionals who have good reputations. One way to find a list of such individuals is to contact the Better Business Bureau. Individuals earn a place on this list by being honest and providing quality work. One scam that is common in building and roofing involves a service worker asking for an extremely large deposit to begin working. After starting the job, the individual or company will disappear. Never do business with anyone who asks for a large sum of money upfront.

It’s also important to beware of contractors who are pushy about spending a lot of money for temporary repairs. The purpose of temporary repairs is to provide a cheap and temporary fix. Payments for temporary repairs are covered in the total settlement from the insurance company. Homeowners who pay service providers large amounts of money for temporary repairs usually find that they don’t have enough to cover the cost of permanent repairs. A good service provider will offer reasonable rates for temporary and permanent repairs. Whether obtaining temporary or permanent work, be sure to keep receipts for services received in a safe place. Always ask an agent when in doubt about repair quotes.

Attorneys & Public Adjusters
Never make hasty decisions about hiring someone to handle an insurance claim. It’s especially important to be careful about individuals who offer their services by door-to-door soliciting following a catastrophe. Never let any company or individual use scare tactics to encourage a quick signature for immediate services. If such people surface in the aftermath of a disaster, they will likely victimize anyone who is willing to agree to their terms. These individuals usually offer quick or immediate service, which homeowners feel desperate for after a disaster. However, their efforts to make quick money usually leave victimized homeowners without enough money to pay for permanent repairs. Keep in mind that quality repairs take time to obtain after a major disaster.

Another thing to remember is that it’s best to settle a claim directly with the insurance company before considering using the services of a public adjuster or attorney. Insurance companies provide their adjuster’s services to policyholders for free. Be sure to ask an agent to help with filing a claim, and never hesitate to ask questions. Individuals who agree to work directly with the insurance company still retain the right to hire a third-party professional for help, so there is nothing to lose by working directly with the insurance company. If the claim is complicated and the services of an attorney are desired, make sure the individual selected is qualified. Ask around the community for advice about which attorneys are best. Another place to check for reliable advice about which attorneys are reliable is the county’s Bar Association. Keep in mind that attorneys ask for about 30 percent of the settlement, and public adjusters usually require 15 percent. The key idea to remember after any disaster is to contact an agent before making any decisions.

Are You Prepared for a Sewer Backup?

While many homeowners assume otherwise, their insurance policies do not cover a sewer backup. However, there is separate coverage available. In comparison with the cost of dealing with the aftermath of a sewer backup, coverage is a true bargain. Homeowners are responsible for repairing and maintaining the portion of pipeline that connects their home with their city’s sanitary sewer main. Since this pipeline is actually owned by the homeowner, any parts of it that extend into the public right of way or street are also included. Working on these pipes is a costly chore, so it is important for all homeowners to know how sewer backups are caused. The following three types of blockages are the most common causes of backups.

Tree Roots Blocking Pipelines
Trees thrive on water, so their roots often gravitate toward cracks in sewer lines. While the growth starts with a few tiny roots penetrating the pipe, they eventually get thicker and expand. They often enter pipelines near the joints, which results in major blockages. Unfortunately, tree roots can eventually span the entire length of the pipe and cause a complete clog. If trees owned by the city are suspected of causing problems, contact their cleanup department immediately. They will often sample the roots to determine who is responsible for cleanup. In some situations, a combination of city trees and privately owned trees are to blame. When this happens, the city and the property owner must split the cost of cleanup and repairs.

Heavy Rains Clogging Storm Sewers
If a sanitary sewer or storm sewer is unable to contain the amount of rain falling, a backup may occur. Water typically enters the home through washtubs, toilets or sump wells in the basement. While damage is most common in the basement, it may occur anywhere in the home. To help avoid this problem, make sure there is a sump pump to drain the water and a generator that will run the pump if the power goes out.

Sanitary Main Blockages
Several types of blockages are possible in the sanitary main. Blockages result in sewage backing up into the home itself. Fortunately, this occurrence is gradual, so there is time to call a plumber before the house is overtaken with sewage. In some cases, there may be a rapid flow of water coming in through the basement. When this happens, it is important to call the city’s public works office immediately.

Each of these events can be very costly. Sewage and standing water can also be hazardous to human health. In addition to this, they destroy nearly every tangible object they meet in a home. A simple calculation of the cost of replacing damaged items and comparing it to the cost of insurance is enough to clarify the importance of adequate coverage. To learn how to obtain protection from sewer backups, discuss available options with an agent today.

How to Protect a Vacant Home

When the summer season approaches, many families and couples start planning their vacations. Whether the destination is near or far, it is important to make sure the home is properly protected. Locking the door and setting the alarm is not enough. The following five tips provide useful information for making a vacant home look less attractive to criminals.

1. Make the house look occupied. Although the home will be vacant, it is important to make any unwanted visitors think twice. If criminals think someone is home, they are much less likely to break in. Purchase timers for several wall outlets. By plugging lamps into these timers, it is possible to program the lights to turn on and off randomly throughout the day. Many DVR systems turn the television screen on when they begin a scheduled recording. If this is the case, set the DVR to record random movies and shows. Another way to make the home less attractive is to set up music to play at different times.

2. Have a neighbor check on the house. Everyone should make friends with at least one person or family in the neighborhood. Since most homeowners want to make their surrounding environment as peaceful as possible, they are usually willing to keep an eye on a vacant property. In addition to watching for burglars, they can watch for smoke or other serious problems with the home.

3. Keep windows, doors and all openings closed and locked. While this tip may seem like it would fall under the category of common sense, many homeowners forget to close a window or lock a door before leaving. Even a window that is slightly open may attract a criminal. When the home is vacant, there is no reason to leave any windows or doors unlocked. If a neighbor will be feeding a pet or bringing in the mail, supply that individual with a key. Never leave even a side door unlocked. Burglars also know that keys are hidden in fake rocks, under doormats or on windowsills, so avoid leaving extra keys out.

4. Hold mail and package deliveries. I:t is best to request a hold for packages and regular mail. A package sitting on a doorstep for a long period of time will look very attractive to a thief. Many criminals look through mailboxes for cards containing money, statements with personal information or any other items of interest. It is possible to fill out a convenient hold form online for regular mail.

5. Activate the security system. If the home does not currently have one of these systems, get one before leaving for vacation. In addition to sounding sirens and alerting law enforcement, they detect carbon monoxide and several other problems in the home. There are also wireless systems, which will still alert law enforcement officials if power cords are cut.

Vacations provide great opportunities for families or couples to enjoy time together. However, burglaries and disasters in the home have the potential to cast a pall on these happy memories. They also create needless hassles and expenses. Before taking off for vacation this year, be sure the house is ready.

How to Properly Prepare for a Wildfire

In the U.S. today, many homes are being built in wooded areas. Rural plains, forests and mountains are all becoming popular construction sites. Although homeowners in such areas enjoy fresh air and beautiful scenery, they also face the risk of wildfires. Some homes survive wildfires, but many are destroyed each year. However, homes that survive are almost always the result of prepared homeowners. By preparing now, homeowners in every risky area can protect themselves, their families and their homes.

Always practice wildfire safety. Avoid leaving fires unattended, and never start an outdoor fire pit on a windy day. Cigarettes should be disposed of in approved containers. To learn more ways to prevent wildfires at home, contact the local health department, fire department and forestry office. Make sure emergency vehicles have easy access to the home. Signs, addresses and home names should be displayed clearly. When someone else is doing something that may start a fire, report the activity to the fire department. Keep all matches out of the reach of kids, and be sure to teach them about fire safety. Families should also make an emergency escape plan, review it often and post it in a visible area with emergency phone numbers. It is crucial to talk to neighbors about fire safety. If all neighbors are vigilant and informed, it is easier to report flames before they become out-of-control blazes.

Make a safety zone around the house. When designing a home or landscape theme, be sure to select materials and vegetation that help contain a fire instead of spreading it. Non-combustible building materials and water-containing vegetation are helpful aids. Keep grass watered, and avoid letting any vegetation dry out. Keep in mind that conifers are more likely to burn than hardwood trees. When creating this safety zone, make sure it is about 30 feet to 100 feet in length, and it should encompass the entire home. Here are a few additional tips:

-Remove all dead leaves, trees or limbs from your property.
-Trim any tree branches hanging over the home or near chimneys.
-Have the power company remove branches near power lines.
-Remove vines from the home’s exterior walls.
-Clear the areas surrounding propane tanks or grills, and put a screen over the grill.
-Never stack firewood next to the home.

Protect and maintain the home. If there are any chimneys, have them inspected at least twice each year. They should be cleaned annually, and dampers should be in good condition. Have chimneys fitted with spark arresters. For more information about specifications for these products, contact the local fire department. The following steps are also helpful:

-Clean the roof and gutters regularly.
-Keep ladders and fire tools in accessible places, and teach family members how to use them.
-Use mesh screens below floor areas, decks, porches, attics and roofs.
-Make sure a functional dual-sensor smoke alarm is installed on each floor.
-Install fire-resistant shutters and drapes.
-Keep valuables and important documents in a fire-proof safe.

Plan ahead for water needs. Anyone who lives in a wooded area should have access to a small pond, a well, a cistern or a swimming pool. Installing a hydrant is also a good option. Make sure there is a hose long enough to reach from the home to an outdoor faucet or pump. If the home is in an area that freezes during the winter, be sure to purchase freeze-proof outlets.

If conditions seems favorable for wildfires, have a bag packed and ready to go. Have a radio or television on at all times. When evacuation orders are given, follow them immediately. Even if those who stay behind may not feel in danger of catching on fire, the smoke can be just as dangerous. Have a vehicle ready to go. If the garage has an automatic door, open it and disable the automatic function. Be sure to have any medications for family members or pets ready to go. Make arrangements for temporary housing at a hotel, a friend’s house or an emergency housing location. Be sure to call neighbors who might be concerned. Call a family member or friend, and tell that individual about any temporary relocation plans.

Keeping Your Home Safe During Vacation

Vacation is a time every family, couple or individual looks forward to. However, home invaders can easily ruin vacations. When a person gets a call from the authorities about such an incident, it often cuts the trip short. Leaving a home with broken windows or doors can only invite more trouble, so homeowners usually find themselves on the next flight home. Fortunately, there are several simple steps people can take to reduce the chance of a burglary in a vacant home.

1. Make sure all windows and doors are locked. Construct a checklist to make sure each door and window is checked twice before leaving. Every shutter, blind and drape should be drawn shut.

2. Make the home look occupied. There are several ways to go about this task. A cute note letting neighbors know the family is on vacation may seem like a good idea, but it is the same as putting an invitation on the door for burglars. Set timer switches for lamps to turn on and off randomly. If there is a DVR, set it to record shows randomly and turn the television on during the process.

3. Have a neighbor keep watch. Give a trusted neighbor a spare key. Have that individual pick up the mail every day and check on the home. If it is not possible to set timer switches for lamps, have the neighbor turn lights on and off randomly.

4. Make sure the garage is closed and locked. Leaving the door open is the same as putting a bright flashing sign in the front yard notifying burglars that the home is vacant. Keep the door locked. If there are windows, cover them up to keep burglars from seeing inside.

5. Never leave spare keys in the yard. That cute little rock disguised as a key holder may seem clever, but burglars are very familiar with every form of key enclosure. If a key must be left behind, make sure it is in the hands of a trusted neighbor.

6. Arrange for lawn care. Do not tell lawn care professionals that the home will be vacant. Pay them in advance, but instruct them to clean up well. Keeping the yard groomed and leaving some toys or accessories scattered around on the porch makes the home look occupied.

7. Discontinue regular delivery services. If newspapers, milk or other regular deliveries are arranged, put holds on them. Never leave notes on doors for delivery personnel.

8. Do not make vacation plans public knowledge. Never post plans to travel on social media sites. Do not tell any unfamiliar people in the neighborhood about the trip, and make sure local newspapers do not publicize any plans. Only trusted neighbors, close friends or family members should know about travel plans.

9. Have the mail held. If a trusted neighbor cannot pick up the mail every day, have it held. This can be arranged online or by visiting a local post office.

10. Invest in a home security system. This solution may not be compatible with every person’s budget. However, it is a good investment for those who can afford it. Many companies offer free installation as a promotional special. New technology allows homeowners to monitor activities from the Internet or their smart phones. Another option is to hire a house sitter. If this is the chosen option, make sure the individual knows self-defense techniques and has adequate means to practice them.

Preventing Water Damage & Dealing With Flooding

When spring arrives each year, many homeowners are reminded that flood damage is not covered under a homeowners policy. However, water damage is covered under a homeowners insurance policy. It is important to understand the difference between water damage and flooding. Water damage is defined as damage that comes downward from the top. Although this is not completely accurate in all situations, it is a good rule to remember. If the water is above ground level, the incident is probably covered. However, there is an exception. If damage is caused by a pipe that is letting water drip slowly into the home, it is not covered.

When it comes time to file a claim, it is important to know how the water damage occurred. To prevent further destruction, it is important to clean up the water immediately. Take pictures first, soak up the water and try to dry the area. Although water damage can leave surfaces looking unsightly, neglected areas can leave behind mold with the moisture. Mold is harmful and can ruin sinks, walkways, walls and carpets quickly.

Anyone who has ever tried to clean black mold off of a bathroom surface knows just how important prevention is. Check caulking and sealant around tubs and sinks frequently. If it starts to crack or appears reddish, reapply new sealant. Keep water off the floors by using bathmats. After taking a shower, hang the bathmat up to dry. It is also important to check pipes frequently. A tiny leak can result in thousands of dollars in damages. Even minor plumbing work is not something everyone can do. It may seem easy, but it is very precise work. Anyone who does not have experience should enlist the help of professionals.

Water damage cannot always be prevented. However, homeowners can take several steps to greatly reduce the likelihood of damage by following the suggestions in the previous paragraphs. It is also helpful to check the roof frequently. Water seeping into the walls from the roof can create entire colonies of harmful mold. Unfortunately, there is no way to prevent flooding in some areas. People who have beautiful riverfront properties enjoy some great views, but they may also face the risk of severe flooding. Anyone who lives in a waterfront area or a region where flash floods and rain are common should look into specialized flood insurance. In comparison with the cost of compensating for flood damages upfront, the cost of a specialized policy is very affordable. To obtain this valuable coverage, discuss the details with an agent.

How to Fight & Prevent Mold Growth in the Home

It is important for homeowners to take the right steps to prevent mold and mildew growing in the home. If there is already mold growing, it is important to remove it immediately. Moisture in the basement, attic, kitchen or bathroom creates an ideal place for mold to grow and spread. If mildew is left untreated, it can ruin furniture, fabric and walls. It can also trigger allergic reactions and other physical illnesses in family members. Battling mold growth is an ongoing challenge, but there are a few helpful steps homeowners can take to keep their living spaces free of this annoying fungus.

1. Find the cause of any moisture buildup or leak. To find leaks and moisture buildup, look over the entire house frequently. Be sure to look in places that do not see much foot traffic. For example, closets, empty rooms and corners are all places homeowners should check. Cracks, crevices and folds of drapes are common hiding place for mildew. If there is moisture, find out where it is coming from.

2. After finding a leak, patch it up immediately. Leaks that originate outdoors should be treated when the house is dry. Windows, roofs and exterior cracks should be fixed as quickly as possible. When improper ventilation is found to worsen the problem, consider purchasing air conditioning units, exhaust fans or dehumidifiers. If necessary, install extra insulation.

3. Remove mold or mildew from any surfaces. If there is mold in the carpet, vacuum it up. When doing this, use the brush attachment. This may not be the best way to clean mold if the vacuum itself is difficult to clean. Many newer bag-free models are easy to clean, but older vacuums with bags may hold smells for a long time. Another option is to use a stiff brush to remove mold from carpeted surfaces.

4. Clean the affected area well. Bleach is the best chemical to use for battling mold and mildew. After cleaning away the fungal growth, use a solution of one-fourth cup of bleach to one gallon of water. Never use hot water with bleach. While cleaning, be sure to wear rubber gloves. Use a sponge, mop or spray bottle to distribute the solution throughout the affected area. Rinse the surface with fresh cool water. Set up fans to dry the area thoroughly.

5. Use mold-resistant paint. After cleaning mold or mildew from a wall, it is best to paint over the area. Choose a mold-resistant paint to prevent future incidents. This paint can be found at any major home improvement store or paint retailer. There are also some mold-resistant wood stains available.

6. Air out moldy furniture and fabrics. Furniture, upholstery and drapes that cannot be put in the washing machine should be put outside to air out. Sun exposure will also help, so try to leave them out during the brightest hours of the day.

7. Wash fabrics to remove mold or mildew. Any clothing, curtains, bedding or other fabrics that have mold or mildew should be washed in hot water. Use laundry bleach in the wash cycle. Be sure to follow each item’s washing instructions. If it cannot be washed in hot water, take it to a professional cleaning company that specializes in mold removal.

The best bet for battling mold is proper preventative techniques. Following the first three steps in this paragraph on a regular basis is a great start. Be sure to keep the house properly ventilated at all times. Rugs, towels and other items that get wet frequently should be washed regularly. After using bath rugs, hang them on towel racks or over the shower to prevent mildew buildup on the bottom surface. If bathrooms or rooms frequently exposed to moisture have carpet, consider replacing the carpet with tile. 

Insurance & Lawsuit Considerations for Homeowners with Dogs

More than 30 percent of homeowners insurance claims result from dog bites. In 2011, insurers paid out more than $450 million for dog bite claims. Research shows that the average payout for a dog bite claim was about $29,000 in 2011. That number reflects more than a 12 percent increase since 2010. Between the years of 2003 and 2011, the average cost of a dog bite claim increased by more than 50 percent. This increase was due to rising medical costs and larger settlement award policies. However, awards have risen far above the normal rate of inflation. This information should have every homeowner who owns a dog concerned.

There are three types of laws regarding dog owner liability, but not every type of law applies in each state.

One Bite Rule
In some states, a dog’s first biting incident does not mean an owner will be held liable. However, the second incident will not be excused. Owners will be liable for dogs showing vicious propensity, which means such dogs repeatedly show aggressive behavior and try to bite others. Although some states still allow one bite to go unpunished, many states are doing away with this rule and holding owners liable for all incidents.

Dog Bite Statute
This law states that dog owners are liable for all injuries or damages resulting from a dog bite, and provocation of the dog is not considered.

Negligence Laws
Some states rule that dog owners are liable only if they are careless in controlling the dog. For example, a person who is bitten after entering a yard uninvited may not have a case, but a neighbor who is bitten when the owner is present and fails to restrain the dog will have a case. In almost every state, dog owners are not liable for injuries of trespassers who are bitten. This is especially true if the owner displays signs warning others that a dog is on the premises.

When owners are liable for dog bites, they must reimburse the injured party for lost wages, medical bills, property damage and pain or suffering related to the bite. Although some people buy dogs to protect their properties, security systems and deadbolt locks can be less expensive. In addition to this, these features can actually lower insurance premiums.

This does not mean homeowners should take their beloved pets to the pound. There are ways to stay properly insured and avoid costly legal battles. Most liability policies cover between $100,000 and $300,000, so homeowners are responsible for any amount beyond that. Keep in mind that the no-fault medical coverage is also awarded. Although most insurers are willing to work with dog owners, they will issue a higher premium after the first biting incident. In some cases, the dog may be excluded from coverage. Some policies exclude certain breeds that are known to have vicious tendencies. Not all insurers will drop the dog, but some may require dog owners to take behavior classes with their pets.

Since many lawsuits exceed the maximum insurance allowance, it is best for homeowners with dogs to buy an umbrella policy. This type of insurance is similar to a safety net. When the maximum benefits in the homeowners policy are spent, the umbrella policy covers additional expenses up to a certain amount. Umbrella liability usually ranges between $1 million and $10 million. In addition to being properly insured with homeowners and umbrella policies, it is wise to take steps to prevent dog bites. The following tips are helpful:

– Purchase a muzzle for the dog to wear when introducing it to new people. Many pet stores sell muzzles that flex enough for the dog to drink water, breathe or vomit, so they are not dangerous to the animal.

– Keep the dog confined while guests are present. Dogs can stay in crates, other rooms or outdoors.

– Never leave the dog alone with visitors’ children. Dogs think differently than humans and may bite fearful children or timid adults.

– Enroll the dog in professional behavior training and socialization classes.

– Have the dog spayed or neutered to reduce hormones related to aggression.

Your Mortgage, Your Homeowners Insurance and Forced Placed Coverage

When you take out a mortgage, part of the agreement is that you will purchase adequate homeowners insurance coverage. Adequate coverage usually means that you are insured for the replacement of your home to 100% of replacement value or that your home has enough coverage to address the amount of the loan. While the latter may mean that the mortgage company wants enough coverage to pay the outstanding loan balance, most homeowners policies do not cover the loan amount, just the rebuilding of a home. In a nutshell, the mortgage company wants to make sure that they are protected if your home suffers an insurable loss such as fire or water damage. If you are in a flood zone, they will require you to get separate flood insurance, as regular homeowners policies exclude damage caused by flood and ground water.

Your mortgage company will, at a number of times, prompt you to provide proof of home insurance. This typically happens when:

  1. Your first purchase your home; this will be done through your title company.
  2. At the annual renewal; however most homeowners policies automatically send the lender a copy of the renewal.
  3. When you refinance and there is a new lender, this is done by the title company.
  4. When a policy is cancelled, either at the renewal or for non-payment.

When you get a request, you should always forward the request, along with any instructions, to your homeowners insurance agent. If a title company is involved, you should always provide your agency information, phone number, fax and email address to the title company. If you are purchasing a new home, you should always contact your broker at least 3 weeks prior to make arrangements for a policy and notify your title company as soon as you can. Getting the request to your agency right away will allow for fewer problems and a quick resolution to complying with your homeowners insurance requirements.

Should there be any gap in your homeowners insurance, the mortgage company will force place coverage on your home and have the right to do this since it is in the mortgage agreement. This forced placed coverage is usually very expensive and more likely than not will protect the mortgagee’s interests, not your interests. The bottom line is, the coverages are probably very basic, will probably not protect you to the degree a regular homeowners policy would protect you and probably does not include liability insurance. The reason why these policy premiums are very expensive is the policy is not underwritten, and because of this there may be an assumption that you cannot get coverage on your own and that your property may be high risk.

To avoid this expensive forced placed coverage, attend to your lenders homeowners insurance requirement right away. Even if you have a three-day gap in your homeowners insurance, they can still come back and charge you for those three days, and it’s not cheap. Your agent is here to help you avoid things like this from happening. Maintaining good communication, either via email or phone, is the key for things to go as smoothly as possible.

Will Your Insurance Cover That Water Spot on Your Ceiling?

Most people who buy homeowner’s insurance tend to think about protecting themselves from financial loss should the house burn down. A much more common cause of damage to homes, though, is water. Leaky roofs, broken pipes, and blocked drains can produce a mess that is expensive and difficult to clean up and repair. However, insurance coverage for these losses is not always certain.

The standard homeowner’s policy may cover rain damage, depending on how rain enters the home. If a storm damages the roof or a window and allows rainwater to enter, the policy should cover the cost of repairing the damage. However, if the roof has no apparent damage but instead has suffered normal wear and tear, the policy will not cover the loss.

The policy will normally cover damage caused by water leaking from pipes, with some restrictions. If a pipe breaks and floods a few rooms, the policy will cover the cost of repairs to the rooms but not the cost of replacing the pipe. However, the policy will not cover the damage caused by a burst frozen pipe unless the homeowner has used reasonable care to either maintain heat in the building or shut off the water supply and drain the pipes and appliances of water. People who leave for warmer climates during the winter must make sure these steps are taken.

One lesson that many people learn the hard way is that homeowner’s policies do not cover damages caused by flooding. The standard policy does not pay for damage caused by floods; water on the surface of the ground; waves; tides; overflows of bodies of water; or water spray whether the wind drives it or not. It also will not pay for damage caused by water or floating debris that backs up into the home through sewers or drains or which overflows or discharges from a sump or sump pump. Finally, it will not cover damage to structures such as driveways, sidewalks or foundations from water pressure under the ground. A flood insurance policy from the National Flood Insurance Program may cover some of these types of losses. Also, many insurance companies may offer a small amount of coverage for damage resulting from sewer, drain or sump backup for an additional premium.

When a water loss occurs, it is very important to stop the water flow and begin the drying process as soon as possible. Broken windows and holes in roofs should be boarded up and water shut off to broken pipes. If the water is allowed to accumulate, mold and mildew may grow in the area. The longer the affected area remains wet, the longer and more expensive the repairs will be.

A good restoration contractor can help contain the damage and speed up the repairs. He can perform emergency work, such as removing carpets, installing fans and dehumidifiers, and vacuuming up the water. He will also protect furniture by setting it on blocks so that the legs are above the water. Because the wet carpet pad may produce a foul odor, the contractor will remove and dispose of it and replace it with a new one. This may save the carpet, thus holding down the total repair cost.

Homeowners who suffer water-related losses should work closely with their insurance agents and companies. Cooperation with the company may result in a fairer settlement; the agent can be the homeowner’s advocate with the company. Most importantly, the homeowner should act quickly to limit the damage and protect undamaged property. More than anything else, this will reduce the cost and inconvenience of the loss.

How Much Homeowners Insurance Do You Need?

Because your home is probably the biggest investment you’ll ever make, you’ll want to take measures to safeguard that valuable investment. The best way to protect your home investment is through homeowner’s insurance.

However, you shouldn’t settle for just any policy. The type and amount of insurance you need depends on your specific home, what’s in it and your personal requirements. But how much insurance is enough? Here are a few ways to you determine just how much insurance coverage you need:

Market value may not be enough

While you may be tempted to purchase just enough homeowner’s insurance to cover the market or resale value of your home, this may not be enough. While the market value may be enough coverage for some homeowners, that’s typically not the case.

Your home’s market value is not the same as what’s known as its “replacement cost.” The replacement cost of your home is the amount of money you would need to rebuild your home to its previous condition if a loss were to occur. This amount is different from your home’s market value, purchase price or the outstanding amount of your mortgage loan.

Especially right now, when property values are falling throughout much of the nation, the market value of your home is probably much lower than its replacement value. Therefore, you should not use the market value to determine how much insurance coverage you need.

Calculate the replacement cost

So, how do you figure out the replacement cost of your home? Your homeowner’s insurance company can calculate how much it would cost to rebuild your home based on the following:

  • Square footage of your home
  • Type and quality of your home’s construction
  • Any updates, special features or add-ons to your home
  • Quality and cost of materials used in your home

Read the fine print

Before you purchase a policy, read all the fine print so you know exactly what the policy covers. Homeowner’s insurance generally covers damages to your home and “other structures” on your property, such as a shed, detached garage, gazebo or pool.

In most policies, the amount of insurance coverage you receive for other structures is 10 percent of the amount of coverage you receive on your home. For example, if your insurance policy covers $100,000 on your home, the coverage you would receive for your other structures would be $10,000 combined. If you believe that the structures on your property are worth more than 10 percent of your home coverage, you may want to request additional coverage.

Take a look at your personal liability coverage

Most homeowner’s policies also include personal liability and medical expense coverage. Generally, your homeowner’s insurance company will pay up to $100,000 on a legitimate civil claim against you for an injury that occurred on your property.

However, this still may not be enough to cover a major lawsuit. You might consider purchasing a separate personal umbrella liability policy, which can offer additional protection. This type of policy offers a higher level of liability coverage and ensures that you and your family’s assets will be protected if someone sues you for damages. Umbrella policies typically pay up to a predetermined limit, which is usually $1 million, for liability claims made against you and your family.

Protect your valuables

If you have particularly valuable jewelry, artwork or collectibles in your home, you may want to opt for even more homeowner’s insurance coverage for additional protection. You may assume your valuables are fully covered by your homeowner’s insurance, but that’s not always the case. It all comes down to what’s called the “sublimit”-this is the limit on the amount the insurance company will pay for specific types of personal property. Although your policy’s total personal property limit may be $75,000, the sublimit for jewelry may be as low as $1,500.

Read through your contract and find your policy’s sublimit for artwork, jewelry and collectibles. If your valuables are worth more than the sublimit, you may want to purchase additional insurance to cover them. You can purchase what’s called a “floater” and have this worked into your homeowner’s policy. Insurance floaters typically cover one specific item, so if you have multiple valuables, you may need to purchase floaters for each item you want to insure.

Talk to a professional

Discuss your unique homeowner’s insurance needs with your insurance agent. He or she can help you determine what kind of policy will best fit your needs and whether or not you may require additional coverage.

Common Sense Tips to Avoid a Home Burglary

When driving down a street at night looking at houses, you are most likely drawn to the house with exterior lighting, neatly trimmed landscaping, and lights on inside. That’s because the house looks inviting and well cared for. Now imagine a burglar is driving down the same street. The things that drew you to the previous house are the same things that will turn that burglar away, looking for better opportunities.  A property with no exterior lighting, overgrown landscaping, and possibly no one at home, invites criminal activity.

It is important to note that burglary is a preventable crime. Common sense dictates some of the steps you can take toward making your home safer and less attractive to burglars. The following are some general tips you should incorporate into your routine that can make the difference between the burglar stopping at your house or passing it up for another one further down the road.

The first line of defense between you and a burglar is to properly secure your home. Make sure your yard, driveway, and all entrances to your home are well-lit. Consider the use of lights on a timer or photocell, which turns lights on automatically at dusk and shuts them off at dawn. Trees and shrubs around windows should be cut back so you don’t give a burglar a place to hide while preparing to enter your home.

If you are going to be away from home for a period of time, leave a light on. Lights left on indoors, especially those on a timer that turn on when it gets dark and shut off at bed time, can be a large deterrent to a burglar. The goal is to make it look as if you are home.  Ask a neighbor to pick up your newspapers and bring in your mail. Along the same lines, if you will be gone for an extended period, arrange for your lawn to be maintained. Permitting your grass to grow high or get dry is a sign of neglect and can invite unwanted attention. If you have a garage – use it. Parking inside your garage on a regular basis makes it more difficult for a burglar casing your home to know whether or not you are really there.

Burglars will usually spend about five minutes trying to get inside your home. Make that task as difficult as possible by doing the obvious – lock your doors and windows! If you forget to lock your back door, this can be viewed as an invitation by a burglar looking to get in to your home quickly. In addition to the obvious, avoid spring bolt locks. It takes only a credit card to push open the bolt and allow access to the inside. Deadbolt locks should be installed on all exterior doors. The American National Standards Institute (ANSI) has established testing and ratings for deadbolt locks. Grade 1 locks are the best, with Grade 3 locks being easier to penetrate. Look for Grade 1 locks when shopping for a deadbolt. A key lock or pin-type lock work best for patio door, or any door with glass that could be easily broken to access a knob on a deadbolt. Heavy-duty strike plates should also be used to prevent a burglar from successfully kicking in your door.

When purchasing a new home, make sure all locks have been changed. Also, think about calling a reputable locksmith who can advise you on proper locks for doors and windows. Carefully preparing your home, including adequate locks, lighting, and regular maintenance, can make the difference between a burglar deciding to make a stop at your house or to keep driving.

What Can You Do to Lower Your Homeowner’s Insurance Premiums?

There are several steps you can take to ensure you are getting the best homeowner’s insurance rates possible for the coverage you need:

  • Before purchasing a home, it is wise to learn about its insurance loss history.  If there have been past losses, be sure to closely inspect the home to determine if proper repairs were made.  The CLUE and A-PLUS databases enable insurers to check the claim history of the property as well as that of the homeowner. 
  • Raising your deductible is a great way to reduce your premiums. Higher deductibles on your homeowner’s insurance could produce savings of 25 percent or more.
  • Consider upgrades to your home. Do you need to modernize your heating, plumbing and electrical systems to reduce the risk of fire and water damage?  Are there upgrades you could make that would reduce the risk of damage in windstorms and other natural disasters? You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them more capable of withstanding earthquakes. If you do make home improvements, be sure to make your insurer aware of the changes.
  • Improve your home security. You can typically get premium discounts of at least 5 percent for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that signals the police, fire department and other monitoring stations. These systems are not inexpensive and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost, and how much you would save on premiums.
  • Buy your home and auto policies from the same insurer. Some companies that sell homeowner’s, auto and liability coverage will take 5 to 15 percent off your premium if combine policies with them.

Maintain a good credit rating. Most insurers use credit-based insurance scores to determine homeowner’s and auto coverage premiums. All else being equal, a person with a good credit score will pay much less for insurance than someone with a lower score. 

Is Your Home Protected Against Devastating Flooding?

Don’t wait until the weather forecast calls for prolonged heavy rains before buying flood insurance. While this practical insurance can be purchased anytime, the policy does not take effect for 30 days. As the most common natural disaster in the country, flooding ruins millions of dollars of homes and property every year. Even so, flooding is not commonly covered in your typical homeowner’s insurance policy, making it necessary to purchase additional coverage for this costly, devastating disaster.

If you are in a high-risk flood zone, a federally regulated lender will require a would-be borrower to buy flood insurance in order to qualify for a mortgage loan. To satisfy the lender, flood insurance must be purchased in an amount that sufficiently covers the loan.

A homeowner should also buy flood insurance if he or she resides in a flood plain with no failsafe controls, such as a dam. Flood policies even pay off if the President does not declare the area a federal disaster area, which can prove to be invaluable. Because the nation’s Chief Executive Officer rarely issues such a declaration, protecting yourself is extremely important. Besides, you have to repay the federal aid you receive for home repairs related to a natural disaster so providing your own protection is the only way to ensure financial recovery suffered from flooding.

Not all homes qualify for flood coverage. For instance, flood insurance for beachfront or ocean-side property may not be available for the obvious reasons.

The Federal Emergency Management Association (FEMA) reports that more than 20,000 communities have agreed to tighter zoning and building measures to control floods. Residents of these communities can buy flood coverage from the National Flood Insurance Program (NFIP), which FEMA oversees. As of 2009, NFIP had 5.7 million flood policies inforce nationwide.

Premiums for flood insurance vary widely, depending primarily on individual risk. In determining price, flood insurance underwriters consider several factors including the property’s elevation, proximity to bodies of water, and whether the dwelling has a basement. Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters.

Have You Tested Your Home’s Fire Alarms Lately?

A recent study from the National Fire Protection Agency, or NFPA, found that around 95% of U.S. homes have one or more smoke alarms installed throughout the house. Unfortunately, that same study revealed that the number of homes with nonfunctioning smoke alarms vastly outnumbered the amount of homes with no alarms at all. This shows that many homes are relying on broken and battery-less alarms to save their lives in the event of a fire. By following the advice of experts and maintaining a testing schedule, you can make sure your alarms will be ready when you need them the most.

Fire safety begins with purchasing the right type of smoke alarm, as dictated by your building code’s power requirements. The common types that are required vary from standard battery-operated alarms to ones that are wired into the home’s electricity. For individuals who have difficulty hearing, smoke alarms with flashing lights and devices called “bed shakers” are used along with audible alarms. Always purchase alarms that have been listed or approved by Underwriters Laboratories (UL), or a similar independent tester.

How Many is Safe?

The NFPA publishes the Life Safety Code 101 to inform people of the regulations and best practices when it comes to fire safety, and in this case, the amount of smoke alarms to install. It recommends having at least one alarm on each floor, including basements and attics, and within 15 feet of bedrooms. Place smoke alarms inside of bedrooms if family members usually sleep with the door closed. Remember, the strategic placement of smoke alarms is just as important as keeping them powered.

The building codes that govern homes built in the last few years are significantly trying to improve residential fire safety. Most require hardwired alarms that are interconnected, meaning that all alarms will sound if one detects smoke or intense heat. Also, the new codes require the installation of smoke alarms in every bedroom of the house.

Installing the usual store-bought smoke alarm is really quite simple and will require only a drill and a screwdriver. Hardwired and interconnected alarms should be installed by a qualified electrician. Battery back-up should also be used with electrically powered alarms, as well.

Fire safety experts offer more installation advice:

* When installing a wall-mounted alarm, locate it between 6 to 12 inches below the ceiling.

* Ceiling-mounted alarms should be installed more than 6 inches away from any wall.

* On sloped and vaulted ceilings, located the alarm at the highest point.

* In open stairways, alarms should be placed near the top of the staircase.

* In closed stairways, like basement steps, the alarm should be placed at the bottom of the staircase.

* Do not install alarms in drafty areas of the house, like near windows, ceiling fans, or forced-air registers.

If you have any questions about installing fire alarms, call or email your local fire department. They will be happy to help you better protect your home against fires and show you the optimal places to install your smoke detectors.

Choosing a Home Improvement Contractor with Confidence

Whether you’re looking to do to some major remodeling or if your home just needs some basic repairs, deciding on a contractor for your home improvement project can be difficult. It’s certainly not a decision you should make in haste.

Most homeowner’s insurance policies include four basic types of coverage:

* Repairs to the home because of damage caused by specified disasters

* Replacement of items lost due to theft or damaged by specified disasters

* Liability coverage

* The cost of temporary housing in the event that a specified disaster causes significant damage to the house

While all these protections are equally important in the long run, when it comes to home improvements, your liability coverage will take the forefront. This form of protection will insure you against any injury claims made by uninsured workers, as well as property damaged during the project. Liability protection will also pay for the cost of your legal defense in any related court cases and will cover any money awarded to injured workers, as defined by the terms of your policy.

Of course, your home insurance shouldn’t come into play if you’ve selected a highly qualified contractor to get the job done. Before you make the hire, set up an interview so you can ask some of these questions:

* How long has the business been around?

Businesses that have withstood the test of time generally do good work and have enough customer reviews to back it up. Look for reviews on the internet and use a consumer protection agency, like the Better Business Bureau, to check up on their complaint history. Remember to take internet posts with a grain of salt, and that BBB records don’t always tell the whole story.

* Do they hold a state license?

Most states license plumbers and electrical contractors, but just 36 states have a license or certification for contractors and home remodelers. You can find out what types of contractor’s licenses are available in your state by contacting your local building department. If your state requires home contractors to be licensed, do not hire anyone without seeing proof of their licensure.

* Are they bonded and insured?

Only hire a contractor who carries insurance that covers against damages to your property, personal liability, and worker’s compensation coverage. If you hire an underinsured contractor, your insurance will be making up the difference if something should happen.

* Will subcontractors be used during the project?

Subcontractors are not necessarily a bad thing, just make sure to meet them first so you can check out their credentials. Subcontractors are also a good source of honest information about the prime contractor. A little known fact for many homeowners is that a “mechanic’s lien” can be placed against your home if the contractor does not pay their subcontractors, so ask them if the contractor makes prompt payments. While negotiating the terms of your home project, ask the contractor and all subcontractors to sign a lien waiver or release statement that keeps subcontractors from coming after your money if bills go unpaid.

The Federal Trade Commission has issued a warning to homeowners to help spot disreputable contractors and scammers are out there looking for your business. Here are a few telltale signs of a shady contractor:

* Goes door-to-door soliciting business

* Wants the names and phone numbers of your friends who may need service

* Offers a discount for using “leftover materials”

* Only takes cash payments

* Unable to get the proper building permits

* Has an unlisted phone number

* Considers your project a “demonstration job”

* Uses high-pressure and intimidating sales tactics

* Offers guarantees without any paperwork to back them up

* Wants the payment up-front and in full

* Offers financing through a “personal friend” of the contractor

Remodeling can make you feel like your home is brand new and can add thousands to its resale value, but without doing your homework before hiring a contractor, you could be left regretting your decision for years to come.

Insure Home Improvement Projects to Ensure Success

Although we all understand the importance of homeowner’s insurance, many homeowners never think about insuring their home improvement projects. Before you invest a boat load of money in home renovations, it’s critical that you insure your project. Otherwise, you could leave yourself vulnerable to some serious financial stress.

Before you don your hard hat and get to work on that home improvement project, take these four simple steps to make sure you’re protected:

1. Give your insurance agent a call.

There are so many things that can go wrong during a home improvement project. For example, what if your beautiful new kitchen cabinets are stolen from your backyard before you’ve had a chance to install them? What if a rainstorm causes damage to your floors during a major re-roofing project?

Your plain vanilla homeowner’s policy may not cover any damage done to your home during renovations. This is why it’s so important to call your agent and find out what’s covered during the construction process. You may find that you’ll need to change your insurance coverage temporarily until the renovations have been completed.

Tell your insurance agent exactly what kind of home improvement project you have planned. He or she can walk you through your short-term coverage options to make sure you’re fully protected.

You probably won’t need any additional insurance coverage if the project is relatively small. For example, if you’re simply switching out a couple of appliances in your kitchen or replacing fixtures in your bathroom, there’s probably no need to call your agent. However, if you’re spending more than $25,000 on a home renovation, you should definitely call.

2. Work only with insured contractors.

If you’re planning on hiring a contractor to work on your home renovations, you’ll need to look for more than just an experienced company. You’ll also want to make sure the company has general liability insurance as well as workers’ compensation for its employees. Ask the contractor for a certificate of insurance to confirm their coverages.

While you may be tempted to hire a cheaper contractor who lacks insurance, remember that you’re taking a huge risk in doing so. If something goes awry during the project, you could be stuck with a hefty bill. On the other hand, when you hire an insured contractor, you will not be held liable if a worker is injured during the project. Plus, you’ll be covered if the contractor causes any damage to your home during the project.

3. Obtain the proper permits.

Depending on where you live, you may need to obtain building permits before you begin your home renovations. Typically, permits are required if you are altering the structure of your home, such as adding on a room or a deck. Contact your city or county government offices to find out whether or not your home improvement project requires a building permit.

If a building permit is necessary, you or your contractor will need to apply for the permit and adhere to the specified building codes. Once the job has been completed, a building inspector will come by to check out the renovations and ensure that everything is up to code.

It’s extremely important to obtain the proper permits when necessary. If you add a room to your home and it does not meet your local government’s building codes, your insurer may not cover the extra room.

4. Update your insurance policy.

Once you have finished your home improvement project, contact your insurer to determine how much value the change has added to your home. This is extremely important. If you do not notify your insurance company about an expensive addition, you’ll be grossly underinsured if something happens to your home.

Ten Ways to Lower the Cost of Your Homeowner’s Insurance

While most states don’t legally require you to carry homeowner’s insurance, just about every mortgage lender is going to require proof of coverage for the term of your loan.  Regardless of whether you are required to or not, homeowners should carry insurance on their homes because it’s often the largest asset they own. Don’t be fooled into thinking it’s too expensive. You can find the right amount of coverage to suit your needs at affordable rates if you follow these guidelines:

  1. Shop around – Talk to a number of insurers, and ask about rates and services offered, especially when it comes to handling a claim.
  2. Raise your deductible – A deductible is the amount of money you are responsible for paying in the event of a loss. The higher your deductible, the more money you can save on your premiums. Keep in mind that if you live in an area susceptible to natural disasters, your insurance policy may have a separate deductible for certain types of damage.
  3. Don’t confuse what you paid for your house with rebuilding costs – The land your house sits on isn’t at risk from theft, windstorm, fire or any other peril covered in your homeowner’s policy; so don’t include its value in deciding how much coverage to buy.
  4. Buy your homeowner’s and auto insurance from the same insurer – Some insurance companies will take 5 to 15 percent off your premium if you buy two or more policies from them.
  5. Make your home more disaster resistant – You may be able to reduce your premiums by adding storm shutters, or reinforcing your roof. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
  6. Improve your home security – You can usually get discounts for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by 15 to 20 percent if you install a sprinkler system and a fire and burglar alarm that rings the police and fire station nearest you. Before you buy such a system, find out if your insurer offers a discount, and how much it will save on premiums.
  7. Ask about other discounts – If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent from your insurer because you are at home more. Being in the house a lot means you are less likely to be burglarized, and more likely to spot a fire before it gets out of control.
  8. Maintain a solid credit record – Insurers use credit information to price homeowner’s insurance. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
  9. Stay with the same insurer – If you keep your coverage with a company for several years, you could receive a special discount for being a long-term policyholder.
  10. Review your policy once a year – You want your policy to cover any major purchases or additions to your home, but you don’t want to spend money for coverage you no longer need.

Consider Four Key Areas When Buying Homeowner’s Insurance

You buy homeowner’s insurance to protect your biggest asset, so it’s important to purchase enough coverage to suit your needs. By looking at a few key factors, you could end up saving yourself a lot of money and heartache should you ever have to make a major homeowner’s insurance claim. Be smart and ask yourself the following four questions when considering how much coverage to purchase.

How much will it cost to rebuild?

When you’re figuring out the cost to rebuild your home, use current construction prices. Don’t add in the cost of the land, and don’t base your cost estimates on how much you originally paid for the house.

Even though your mortgage lender may require you to have homeowner’s insurance, you still may not be adequately protected. In most cases, the policy limit is the amount owed on your mortgage, which may not be enough to rebuild at current prices.

To estimate the amount of insurance you need, multiply the total square footage of your home by the building costs per square foot. You can get information about local building costs by calling your real estate agent or home builders association.

You should select an extended replacement cost policy for several reasons:

  • It pays for your home to be repaired with materials that are similar in kind and quality to what was originally used.
  • There is no deduction for depreciation or wear and tear.
  • If the demand for materials and construction workers exceeds the supply because of a widespread disaster, and prices skyrocket, an extended replacement cost policy will pay whatever is necessary to restore your home to its original condition.

How much will it cost to replace my personal possessions?

Most homeowner’s insurance policies cover your personal possessions for 50 to 70 percent of the total coverage amount on your home.

Conducting a home inventory will help you determine if this is enough. Create a detailed list of everything you own and how much it will cost to replace these items should they be stolen or destroyed. If you feel you are underinsured, ask you agent about increasing the coverage limits for your possessions.

Will I have any additional living expenses as a result of an insured disaster that damages my home?

When a disaster strikes, you may be forced to live somewhere else while your home is being repaired. Standard homeowner’s policies covers hotel bills, restaurant meals and other living expenses incurred while you are living away from home. In addition, if you rent out the property that was damaged, this coverage will reimburse you for any rent you would have received from tenants while the home is being repaired.

Additional living expenses coverage varies among companies. The standard is 20 percent of the total amount of coverage on your house. There are also policies that cover unlimited additional living expenses for a specific period of time.

Ask your insurance agent to tell you how much coverage you have and how long the coverage stays in effect. If you don’t feel you have sufficient coverage for additional living expenses, consider increasing it.

How much coverage do I have in the event I am named in a lawsuit for bodily injury or property damage caused to others?

The standard homeowner’s policy covers you, your family members, and your pets in the event of injury caused to others. The coverage extends to both the cost of defending the case in court and any damages you are required to pay.

The majority of homeowner’s insurance policies provide $100,000 worth of liability insurance; however, you can get higher amounts. Conventional wisdom says that homeowners should carry at least $300,000 to $500,000 worth of liability protection.

Your Mortgage Balance: The Wrong Way to Determine Your Insurance Needs

Although the housing market is in the midst of a prolonged slump, some experts believe prices are still higher than they should be. At least in the short term, homebuyers will take out large mortgages against their homes. Unfortunately, the mortgage amount sometimes brings the lender into conflict with the homebuyer’s insurance company. For example, the mortgage may be for $200,000, but the insurance company may be willing to insure the home for only $175,000. The lender will often threaten to not hold the closing if the borrower does not buy an insurance amount equal to the amount of the mortgage. This obviously leads to a very anxious homebuyer who has many other things to worry about. Who is correct here?

Most insurance policies provide coverage for the home on a “replacement cost” basis. This means that, if a covered cause of loss damages the home, the company will pay the cost to repair or replace it without deducting any amounts for depreciation. However, the company will pay the least of:

  • The amount of insurance covering the building;
  • The cost of replacing the damaged portion of the building with materials of similar kind and quality and for similar use; or
  • The necessary amount actually spent to repair or replace the damaged building.

Assume that a fire completely destroys the home mentioned previously. The homeowner bought $200,000 coverage to equal the mortgage amount. The most the insurance company will pay is $200,000 (the amount of insurance) or the reasonable cost of labor and materials to rebuild the house, whichever is less. If the contractors can rebuild it to a state reasonably similar to its prior state for $175,000, that is the amount the company will pay.

The mortgage, however, is based at least in part on market value. Market value reflects what someone is willing to pay for the house and related structures (garage, swimming pool, gazebo, etc.) and the land they sit on. The price someone is willing to pay for a building may be very different from the cost to rebuild it, because that price contemplates factors (school district, proximity to workplaces and shopping or bodies of water, etc.) that have no relationship to the cost of labor and materials. In addition, market value includes the value of the land, something no homeowner’s insurance policy covers, since land does not burn, explode, or otherwise suffer insurable damage.

While it is understandable that the lender wants to see its investment protected, requiring a borrower to insure up to the mortgage amount helps no one other than the insurance company. The lender and the homeowner will never collect more than the cost of rebuilding no matter how much more insurance the homeowner buys. The insurance company, however, gets to collect the premium for $200,000 worth of coverage but will never have to pay out more than $175,000.

Many states have laws or regulations that prohibit mortgage lenders from requiring borrowers to buy amounts of insurance greater than the cost of replacing the house. Arizona, California, Florida, New York, Tennessee, North Carolina and Virginia are just some of the states that restrict lenders’ insurance requirements. New York’s regulation, for example, prohibits mortgage lenders from requiring a borrower to “obtain a hazard insurance policy in excess of the replacement cost of the improvements on the property as a condition for the granting of a mortgage loan.”

Homeowners should review the amount of coverage on their homes with their insurance agents at least annually. The importance of having enough coverage continues long after the home purchase. However, it is equally important not to buy more coverage than necessary.

Do You Need a High-Value Homeowner’s Policy?

Standard homeowner’s insurance policies offer sound financial protection for most people. However, those who own large homes that would cost upwards of $500,000 to rebuild may have special coverage needs for which the standard policies were not designed. Such homeowners may own expensive jewelry or have costly business equipment at home, or they may be involved in public activities that make them targets for lawsuits. People with these exposures to financial loss may want to consider buying a high-value homeowner’s insurance policy.

Some of the additional coverages that insurance companies provide in high-value homeowner’s policies are:

Extended rebuilding cost. If a fire destroys the home and the policy limit does not cover the entire cost of rebuilding, this coverage will pay for the additional amount. Some policies pay as much as an extra 100 percent of the insurance on the home.

No requirement to replace or rebuild. A standard policy may not pay the entire replacement cost of damaged structures or contents unless the owner rebuilds or replaces them. High-value policies may waive this requirement and pay the replacement cost regardless of what the owner decides to do.

Demand surge coverage. After a major disaster like a hurricane, labor and materials for rebuilding are often in high demand. As a result, the cost of rebuilding a home jumps. This coverage provides additional amounts of insurance to pay for the increased costs.

Rebuilding to code. If building codes have changed and increased the costs of rebuilding the home, this coverage will pay for those costs above the amount of insurance on the home.

Deductible waiver. Some policies waive the deductible if the amount of a property loss exceeds a certain level, such as $50,000. However, the waiver might not apply to losses from certain causes such as earthquake or a windstorm.

Excess flood coverage. Most homeowner’s policies do not cover damage caused by flood waters. The National Flood Insurance Program offers this coverage, but the most insurance it offers is $250,000 on a home and $100,000 on contents. A high-value homeowner’s policy might provide as an option additional insurance that applies after the NFIP insurance is used up.

Backup of sewers and drains coverage. Standard homeowner’s policies do not insure against damage caused when a drain, such as a sump, backs up, though often the owner can buy this extra coverage. A high-value policy may include it automatically.

Electronic data. Some high-value policies may pay for the cost of restoring computer files and for costs resulting from theft of the policyholder’s identity.

Food. Unlike standard homeowner’s policies, a high-value policy may pay for refrigerated food that spoils when a covered cause of loss disrupts the power supply.

Lawsuits. Standard homeowner’s policies cover the costs of lawsuits and attorney fees only if they result from bodily injury or property damage the policyholder may have caused. High-value policies may go beyond that, covering alleged acts of libel and slander.

Higher amounts of coverage. High-value policies may cover some of the same things that standard policies cover, but for higher amounts. For example, these policies may provide more coverage for valuables, such as jewelry, furs and collectibles. They may provide more coverage for the expense of living elsewhere while the home is being repaired, more coverage for loss assessments from a homeowner’s association resulting from an accident, and more coverage for business property kept in the home.

Homeowners who think they may need this kind of additional coverage should consult an insurance agent. Many insurance companies are now offering high-value policies. It may well be worth a few minutes to review insurance needs and protect thousands of dollars worth of hard-earned property.

Maintaining Your Home’s Fire Alarm System

One of the most important household safety techniques you can implement is the purchase and proper installation of an adequate number of smoke alarms in your home. The National Fire Protection Association (NFPA) offers the following facts regarding smoke alarms and fires.

* One-half of home fire deaths occur in the 6 percent of homes without smoke alarms.

* Homes with smoke alarms typically have a death rate that is 40 to 50 percent less than the rate in homes without alarms.

* In three of every ten reported fires in homes equipped with smoke alarms, the devices were not operational.

The NFPA offers safety tips regarding smoke alarms for you to consider.

* New batteries should be installed in all smoke alarms annually or when the alarm chirps to warn that the battery is weak.

* Smoke alarms should be tested monthly.

* Smoke alarms should be placed outside each sleeping area and on each floor of the home, including the basement.

* Smoke alarms should be interconnected, so if one goes off, they all go off.

* Smoke alarms should be replaced every 10 years.

Three Questions to Determine Whether Your Home Is Properly Insured

Homeowners are always being advised to update their property insurance annually because any home alteration or lifestyle change, such as marriage or divorce, can affect the amount of coverage needed. While it is important to complete that yearly review, it is equally important to know what questions you should ask your agent to ensure you have the right coverage for your circumstances.

According to the Insurance Information Institute (I.I.I.), there are three key questions you should always ask:

1.   Do I have enough insurance to rebuild my home? – Buying just enough insurance to meet your mortgage lender’s requirements could mean that you are inadequately covered should you need to rebuild your home at current prices. To have real protection, you need to consider the following types of coverage:

§      Replacement Cost Policy – A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.

§      Extended Replacement Cost Policy – This extends your coverage another 20 percent or more above your stated policy limits. This additional insurance can be extremely important if your home is one of many damaged in a disaster, because a widespread disaster can result in increased costs for building materials and labor.

§      Inflation Guard – This coverage automatically adjusts the policy limits for rebuilding costs as construction costs rise.

§      Ordinance or Law coverage – If your home is badly damaged and requires rebuilding under new building codes, ordinance or law coverage will pay a specific amount toward any additional costs involved in meeting the new code requirements.

§      Water Backup – This coverage insures your property for damage from sewer or drain backup. 

§      Flood Insurance – Standard home insurance policies do not include coverage for flooding. Flood insurance is available through the federal government’s National Flood Insurance Program (https://www.floodsmart.gov), but can be purchased from the same agent who provides your homeowner’s insurance. Make sure to purchase flood insurance for the structure of your house, as well as for the contents.

2.   Do I have enough insurance to replace my possessions? – Most insurers provide coverage for personal possessions equal to 50 percent to 70 percent of the amount of insurance on the dwelling. The best way to determine if this is enough coverage is to conduct a home inventory. A home inventory is a list of everything you own and the estimated cost to replace these items if they were stolen or destroyed.

You can insure your possessions in one of two ways:

a.            Cash Value Policy – This coverage pays the cost to replace your belongings minus depreciation.

b.            Replacement Cost Policy – This coverage pays the full cost of replacing your belongings at current prices.

3.   Do I have enough insurance to protect my assets? – Homeowner’s insurance provides you with basic liability coverage. This protects you against lawsuits for bodily injury or property damage that you, your family, or your pets may cause to other people. Liability insurance pays for the cost of your legal defense and for any damages a court rules you must pay, up to the stated limits of your policy. Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability insurance. If the standard liability coverage isn’t sufficient, you may need an excess liability policy, which provides additional coverage over and above what is covered by your homeowner’s insurance policy.

Don’t Wait Until It’s Too Late to Dust Off Your Homeowner’s Policy

If you’ve never thoroughly reviewed your homeowner’s policy, you could find yourself out of luck at your time of need. When you bought your policy, you assumed it would provide the necessary funds needed to recover from a disaster.  However, if you are unfamiliar with your policy’s terms and conditions, you may not have as much protection as you think.

The standard homeowner’s insurance policy includes four basic types of coverage:

·   Coverage for the structure of your home – If your home is damaged or destroyed by fire, lightning, windstorm, or other peril listed in your policy, your insurer will pay to repair or rebuild your home subject to the terms of your coverage. However, if the damage is caused by a flood, earthquake or mudslide, there would no coverage unless you had purchased a separate policy for these risks.

Most standard policies also cover detached structures such as a garage. Coverage for these structures is automatically provided at 10% of the amount of insurance you have on the structure of your home.  You can purchase additional coverage if necessary.

Do you know if your policy would provide enough coverage to rebuild your home?

·   Coverage for your personal belongings – Furniture, clothes, and other personal items are covered if stolen or destroyed by fire, wind or other insured disaster. Most companies provide personal belongings coverage equal to 50 to 70 percent of the amount of insurance you have on the structure of your home.  

High-ticket items like jewelry are covered, but only at minimal dollar limits if stolen. To insure each of these items for their full value, you would need to add a special personal property endorsement to your basic policy.

Trees, plants and shrubs are also covered under standard homeowner’s insurance for theft, fire, lightning, explosion, vandalism, and riot. They are not covered for damage by wind or disease. Limits are usually $500 per item.

·   Liability protection – This protects you against lawsuits for bodily injury or property damage that you or your family members cause to others. Liability coverage also pays for damage caused by your pets. Your insurer pays the cost of defending you in court and any court awards, up to the policy limit. You are also covered not just in your home, but anywhere in the world.

Liability limits start at about $100,000, but you should purchase more coverage. You can also purchase an umbrella or excess liability policy, which provides broader coverage, including claims against you for libel and slander.

Your policy also provides no-fault medical coverage if a friend or neighbor is injured in your home. Your insurer pays the individual’s medical expenses without a liability claim being filed against you. You can generally obtain $1,000 to $5,000 worth of this coverage.

·   Additional living expenses – This pays for any additional costs in the event you are temporarily unable to live in your home because of a fire or other insured disaster.  Many policies provide coverage for about 20% of the insurance carried on the structure of your home.

In addition to reviewing your homeowner’s coverage, you should keep updated records of your property in a safe location that is easily accessible. The Insurance Information Institute offers free software you can download to create a home inventory. Log on to www.knowyourstuff.org.

Finally, try to review your homeowner’s policy with your insurance agent annually. Your agent can help you determine if your coverage is still adequate for your needs.

Simple Keys to Understanding Homeowner’s Insurance

To make sure you have the right type, and right amount of homeowner’s insurance, you need to understand what it does, and doesn’t, cover. Regular homeowner’s insurance will cover damage from tornadoes, fires, and burglary; but it will not cover the calamity of hurricanes, floods, terrorism, or nuclear meltdowns.

Basic Principles

*Make sure to get enough coverage to re-build your home from bottom to top.

*Choose “replacement cost” instead of “actual cash value.”

*Regularly inventory your possessions and their replacement costs. Consider a special rider for valuables such as jewelry, furs, and family heirlooms.

*Understand “loss of use” provisions. These provisions will dictate how long your insurer will pay rent while your home is rebuilt or repaired.

Best Offerings

*Look at on-line quotes and shop around, in general. Do some research to make sure the company is financially sound.

*Consider the possibility of raising your deductible to keep rates low.

*Get discounts by purchasing homeowner’s and auto insurance from the same company.

*Consider an umbrella policy to protect against lawsuits.

*Ask if special discounts are available. Some companies offer discounts to longtime customers, seniors, and non-smokers.

*Monitor and maintain a good credit score

*Unless you plan to file a claim, don’t report damages.

What Isn’t Covered

*Home office equipment

* Damage from neglect and poor maintenance practices

*Losses caused by pests such as insects, rodents, and pets

*Sewer backups and mold

In Case of Disaster

*Get in touch with your insurance company as soon as possible.

*Begin checking for damage and take photos to document calamity. Make quick fixes and temporary repairs to mitigate further damage.

*Be cautious of repairmen charging exorbitant rates and con artists impersonating insurance adjusters.

*Read the fine print before signing anything! Be careful not to sign away future compensation upon receipt of the first check.

*If a settlement offer is clearly unfair, don’t accept it.

Learning a few simple principles in advance can save you a bundle, should disaster strike.  Speak with your insurance agent to gain a better understanding of your homeowner’s insurance needs. 

Home Buyers: Make Securing Homeowner’s Insurance a Top Priority

At long last, your loan package has been approved, your closing date is just days away, everything you own has been packed, and all that remains is a quick call to your insurance agent to line up a homeowner’s policy. That’s when the bad dream can begin. 

Your agent may inform you that your new home is uninsurable because of a history of insurance claims filed by the previous owner. Despite home inspections and various required real estate disclosures, this could happen to you.

Securing homeowner’s insurance used to be one of the last tasks a buyer undertook before closing. In reality, it should be one of the first.

Before issuing a policy, insurers always check a property’s claims history. Water damage claims are red flags, of course, but homeowners can also set off alarms simply by inquiring about their coverage, without ever filing a claim.

Most insurance companies research past claims through a shared database called CLUE, which stands for Comprehensive Loss Underwriting Exchange. When you apply for homeowner’s insurance, the insurer will request a CLUE report to ascertain whether you or the seller have filed any claims during the past five years. Even if you currently own a home and have a squeaky-clean claims history, if you buy a house with multiple claims filed against it, you may not be able to obtain insurance coverage.

Regrettably, you cannot order a CLUE report if you are not the homeowner. However, you can ask the seller to order a copy of the report as a contingency to your offer.

If you are ever denied insurance because of past claims, you can request a free copy of your CLUE report. In the event of a dispute with your insurer, you have the right to ask that your account of the events be included in the report. If you are simply curious about your home’s history, you can order a copy from ChoicePoint, the company that manages the CLUE database.

It pays to spend the time and effort to educate yourself about homeowner’s insurance when seeking affordable coverage. Consider the following ideas: 

  • Learn the rules regarding homeowner’s insurance renewals in your state. Regulators of some states exercise   control over when an insurer can refuse to renew your coverage.
  • Pay for small losses yourself. Insurers take notice of customers submitting frequent small claims.
  • Think twice before calling your agent or insurance company. When you place a call, the insurer opens a claims file on you regardless of whether you actually file a claim.
  • Increase your deductible and consolidate insurers. To reduce your homeowner’s insurance premium, consider raising your deductible. Also, most insurers offer discounts if you insure both your car and home with them.

Examine your credit record. In addition to your past claims history, insurers often use your credit score to determine whether to issue you a policy.

Vulnerable Homeowners Negligent About Flood Insurance

Quite a bit of attention is being paid lately to floods and the devastation they leave behind. In the wake of Katrina, more and more questions have been raised about what kind of preventative measures would have lessened the catastrophic effects of such an event.  How well equipped are individual homeowners to handle financial consequences on their own, as opposed to relying solely on agencies like FEMA to provide them with economic assistance? Are Americans taking advantage of the nation’s flood insurance program?

That’s what FEMA wanted to know. The agency worked through the American Institutes for Research (AIR) to commission a study. AIR is a not-for-profit organization that conducts research on social issues and provides technical assistance in the fields of health, education, and workforce productivity. AIR coordinated the study, which was conducted by the Institute for Civil Justice and the Infrastructure, Safety and Environment division of the RAND Corporation. It was intended to be part of an overall evaluation of the flood insurance program.

In the course of their work, the researchers discovered that most homeowners buy flood insurance only because it is required. Only 20% of homeowners living in the areas most vulnerable to floods buy federal flood insurance when they are not required to do so. The study went on to reveal that just 1% of Americans living outside designated flood zones buy federal flood insurance even though the possibility of being victimized by flood is a real threat.

Only 50% to 60% of the 3.6 million single-family homes in the most highly affected areas are legally required to buy federal flood insurance. The remaining homeowners in these areas and the nearly 76 million single-family homes outside these areas are not required to buy flood insurance.

The study put the greatest emphasis on exploring the demographics of flood insurance purchasers. About 63% of homeowners living in areas subject to coastal flooding purchase flood insurance. Approximately 35% of homeowners living in areas that are only affected by river flooding buy flood insurance. The researchers surmised that the disparity might be the result of a perception of having less risk or that coverage available for basements is limited, and basements are prevalent in inland areas subject to river flooding. The report recommended that this aversion to flood insurance by those living in inland areas be studied, to search for an explanation or possible causes.

The study also looked at purchasing habits along geographic breakdowns. In the South, 75% of homeowners who carry flood insurance also have contents coverage. Only 16% of homeowners with flood insurance in the Midwest and 49% in the Northeast have contents coverage.

Clearly homeowners everywhere need to reassess their exposure to flooding.  If you have questions about obtaining flood insurance for your property, please give us a call.

Protect Your Home from Power Surges This Summer with Surge Protectors

The arrival of summer can mean several welcome events: a return to outdoors living, an opportunity for vacation, and more time with the family. One of the issues people may not associate with summer are the power surges that often occur due to the tremendous demand for energy, especially to cool homes. A power surge is a brief spike in electrical power. While on the surface it may not seem like much to be concerned about, power surges can cause serious damage by burning up electrical circuits inside appliances. They can also damage electrical outlets, light switches, light bulbs, air conditioner components, and even garage door openers.

You can protect your valuable electrical appliances from the damaging effects of power surges. The most cost effective way is by purchasing surge protection strips. You can plug in your television, DVD player, and stereo into the strip and it should provide adequate protection against most surges. It’s a good idea to pick up a surge protection strip for the kitchen counter so that you can protect small electrics like the toaster, blender, food processor etc. You can also find surge protectors that fit into electrical outlets that will protect your phone and answering machine. You can buy most types of surge protectors in any local hardware store.

When it comes to your PC, however, you will have to be a bit more selective about protection, because of the delicacy of its internal components. Back-up power packs that are specifically designed to protect your hardware can be found in stores that sell computer accessories as well as in many electronics chain stores. They can be somewhat expensive, but are certainly less expensive than replacing your entire system.

Before you purchase any surge protector, there are certain features you need to look for. The first feature to look for is a surge protector that is labeled with the Underwriters Laboratories (UL) logo. The UL logo tells you that the unit has been tested to determine if it meets certain standards. Any product that is UL tested will be labeled as a “transient voltage surge protector,” which means that it meets or exceeds the minimum standards required to be an effective deterrent against power surges.

A surge protector’s performance is rated in three ways. The first is clamping voltage, which is the level of voltage surge that has to occur before the surge protector kicks in and diverts excess voltage from the item being protected. You want to find a surge protector that has a low voltage number so that it takes less of a surge to activate it. Look for a protector with a clamping voltage of less than 400 volts.

The second way to rate a surge protector’s performance is response time: the amount of time it takes for the surge protector to respond to the surge. You should look for a unit with a response time of one nanosecond or less.

Just like any other appliance in your home, your surge protector will eventually wear out. The third performance-rating factor is energy absorption, or how much energy the unit will absorb before it fails. For the longest lasting performance, look for a unit rated between 300 and 600 joules. Remember, the higher the number, the longer the life of the surge protector.

What Coverage Limits Do You Need for Homeowner’s and Auto Insurance?

Most people avoid thinking about scenarios that would cause an insurance claim – our homes damaged by fire or tornado, someone injured on our property, or family members hurt in an auto accident.  However, it is necessary to give some thought to these upsetting possibilities to ensure that you are adequately prepared and protected in the event of a catastrophe.  Reviewing your insurance coverage will also clarify if there’s a need for an additional umbrella policy for extra protection.  So, let’s try to summarize some of the basics on coverage limits.

Homeowner’s Insurance

Homeowner’s insurance covers three areas:  damage to the home, damage to the contents of the home (personal property), and your liability for injuries to others.

Prior to obtaining homeowner’s insurance, it’s a good idea to stop and consider exactly what you want the insurance to cover.  You may want coverage just to pay off the mortgage in the event you can no longer occupy your home.  It’s more likely you’ll want to continue living in your home after a claim or sell it at market value, so you will want your insurance to pay for repairs caused by wind, fire or some other covered peril.  In most cases, reconstruction means you will need insurance that actually covers more than the home’s market value.

Replacement value, which is the cost to reconstruct a damaged home, is typically higher than the cost of buying a similar home on the market due to the specialized nature of reconstruction as opposed to new construction.  For example, in reconstruction there is an initial cost of debris cleanup.  New construction starts at the bottom and builds up, but with reconstruction it is often necessary to take off the roof and build down, which is more expensive.  Additionally, after a natural disaster, construction costs may rise due to increased demand.  Keep in mind that your insurance can cover not only the costs to rebuild, but also the costs for you to live elsewhere, if necessary, while the home reconstruction is completed.  An experienced insurance agent can help you assess your coverage needs as well as determine available coverage based on the age and condition of your home. 

Also, you will need to consider whether you want replacement coverage for clothing, furniture, appliances, and other personal property inside your home.  Without replacement coverage, your coverage for personal property is depreciated by the age and wear of the items lost.  Due to depreciation, the computer you paid $500 for three years ago may be valued at only $150 or $200, which is all the insurance company would pay if you don’t have replacement coverage.

Some insureds will need more coverage for personal property (contents) than their policy provides. The amount of personal property coverage is usually limited to 70% of the coverage limit for the structure.  For instance, if you have an art collection, antique furniture, jewelry, or other valuable possessions, talk to your agent about supplemental coverages, such as fine arts or scheduled property endorsements, to adequately protect your investment in these items. The cost is modest for the extra protection.

Liability limits generally start at about $100,000; however, some experts recommend that you purchase at least $300,000 worth of protection, which covers personal liability for damage to property or personal injury caused to others.  The additional coverage also help to protect your assets in the event you are found liable in a personal injury lawsuit.  Additionally, you may want to consider purchasing a separate liability umbrella policy (discussed below).       

Auto Insurance

There are six different types of auto insurance coverage.  Three relate to liability, two for damage to your vehicle, and one provides specific coverage for accidents involving you and an uninsured or underinsured driver.

Collision coverage covers the costs of damage to your vehicle caused by collisions with other cars or objects; comprehensive coverage covers theft or damage to the vehicle caused by events other than a collision with another car or object.  The amount of coverage you need depends on the value of your vehicle.

Auto liability insurance is required in most, if not all, states, but the liability limits that drivers are required may not be enough to protect your assets.  Even one serious injury caused by an accident for which you are liable could cost into the six figures, or more in extreme cases, just for medical expenses.  And the amount only increases if there are more injured people.  It’s easy to see that the $50,000 of per accident liability coverage required in many states would not be enough to pay all the costs of property damage and bodily injury.  Auto insurance companies recommend that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your personal net worth is more than $300,000, consider buying additional liability auto insurance.

What About an Umbrella Policy?

Unfortunately, even with our best intentions and efforts, accidents may happen for which we are legally at fault.  Medical costs can skyrocket.  If someone were permanently disabled by an accident, the expenses of lifetime care could be astronomical.  If someone killed left behind survivors who were depending on that person for support, you could be liable for damages to the survivors.  Be aware that any costs not covered by insurance will come out of your pocket.  Hence, you could be forced to sell property or to turn over part of your earnings for years to come, perhaps the rest of your working life, to an injured party.

There are limits on the amount of liability coverage available as part of your homeowner’s and auto insurance policies.  If you have total assets valued at more than these limits – including, say, your vacation home, investments, rental property, boats and vehicles — or if you have a high income, an umbrella policy offers a great deal of protection for a relatively low premium.  

In addition to the assets you want to protect, you may want to consider your risk of being sued.  Do you live in a state that is particularly friendly to plaintiffs?  Do you have frequent guests on your property?  Do you have a swimming pool, trampoline, swing set, or other sports equipment in your yard?  Do you have a dog that is overly protective of your property?  Are you or any of your household members aggressive, fast, or careless drivers?  If so, your risk is greater that someone may be injured, perhaps very seriously, and you would be legally at fault.  In fact, any situation that could result in serious injury, long-term physical impairment, psychological damage or death could put your financial well-being at risk.

Once the liability limits are exhausted on your home or auto policy, your umbrella policy takes over and provides another layer of liability protection.  Policies typically start at $1 million with coverage available up to $10 million.  Premiums start at around $300 a year – less than a dollar a day for a great deal of protection.

The best way to determine whether you need an umbrella policy is to discuss your financial status, lifestyle, and current and future assets with your insurance agent.   Ask him or her to review the liability limits in your current policies and suggest the best strategy to ensure protection of your assets in the event of an injury for which you are legally liable.

Safety Experts Say Smoke Alarms Are Decreasingly Effective

In early 2006, a federal jury ruled that the design of ionization smoke alarms was defective in a fire that trapped 56-year-old William Hackert Jr. and his 31-year-old daughter Christine in their house near Albany in 2001. However, even before this ruling, safety experts were already questioning whether this type of smoke alarm is adequate to deal with the threat of fast-burning synthetic materials prevalent in American homes.

Ionization alarms, which use radioactive material to detect smoke, react earlier in fast-burning flaming fires. Photoelectric alarms, which detect changes in light patterns, react earlier in slow smoky fires. Experts agree that both types save lives. However, a problem arises because the time needed to escape has shortened significantly because of fast-burning synthetics used in furniture and carpets. Smoke alarm use standards may need to change to accommodate this phenomenon.

In 2001, Consumer Reports recommended that homeowners install at least one of each type of alarm on every level of a house to provide sufficient warning time for different types of fires. A recent report from the Public/Private Fire Safety Council noted that some test escape times were “tight or insufficient” with either alarm for bedroom or living room flaming fires. The group suggested that Underwriters Laboratories (UL) modify its standard to require faster detection of smoldering fires. Current UL smoke alarm standards require alarms to respond within 4 minutes of a flaming fire and in a smoldering fire before smoke obscures visibility by more than 10 percent per foot.

In today’s homes, the synthetics in furnishings, fabrics and carpeting smolder longer, but burn faster than natural materials like wood and cotton, which char as they burn. Synthetics melt and pool which produces significantly more energy when they burn. This has shortened the time between first flames and combustion of an entire room due to accumulated heat and gases to approximately 2 to 4 minutes. The average time between first flames and complete combustion 30 years ago when the UL standard was developed was 12 to 14 minutes.

In February of 2006, UL began studying the smoke characteristics from 40 materials commonly found in homes in the effort to make alarms more effective. Also under study are the byproducts of today’s smoke, which can be lethal. Results of these studies are expected by the end of the year.

Another reason for UL concern is the increase in U.S. fire fatalities in the past 12 months to a rate of about 3,500 annually. One likely factor is the increasing use of candles as mood lighting. Candles now cause about 18,000 fires a year, triple the number five years ago.

Is Your Homeowner’s Coverage a Mystery to You?

If you feel in a quandary when you look at your homeowner’s insurance, take heart; you are not alone. In fact, a recent study conducted by Harris Interactive for Travelers Insurance shows that a large number of American homeowners are unsure of their coverage specifics. Many of these homeowners are underinsured and the smallest disaster could send them into a financial hardship.

The researchers questioned more than 1,300 homeowners to determine exactly what they knew about their coverage. They also asked the study participants how often they reviewed their policy to ensure they maintained appropriate coverage and how they conducted their review.  According to the survey data, more than 44 percent of those surveyed had not examined their insurance coverage in the past year. Some respondents had not reviewed their insurance policy in the last 10 years.

The “Travelers In-synch Homeowner’s Insurance Study” also indicated that nearly 27 percent of these homeowners weren’t sure whether their policy would cover the cost of rebuilding their home. Thirty-six percent didn’t know whether their policy would cover damage caused by a hurricane. Forty-two percent were unsure if they had earthquake coverage. Twenty-six percent didn’t know if they had coverage against flood damage, and 37 percent didn’t know whether their policy would cover a prolonged hotel stay if their home were damaged.

Many items impact the amount of homeowner’s coverage you need. That’s why it is important to review your coverage frequently. Here are some criteria to use in your review:

·   Have you recently remodeled your home?
If you’ve improved your home, chances are you’ve increased its estimated replacement cost.

·   Has the inflation rate increased since your home was last appraised?
Certain conditions, such as severe weather, can increase the demand for labor and materials, which raises costs beyond the normal inflation level. It is important to update your coverage each year to account for changing inflation.

·   What factors influence building costs in your area?
Replacement costs are directly proportionate to factors, such as the availability of labor, the current demand for labor, and the cost of construction materials. Adjusting your coverage regularly can ensure your policy will provide the money you need to rebuild.

To determine whether you have adequate coverage you should know your home’s estimated replacement cost. Keep in mind that your replacement cost could be higher or lower than your home’s market value. You should also consider the building materials used to construct your home. The more difficult the building materials are to find, the higher your replacement cost. Your coverage needs to reflect these increased costs.

The best way to stay ahead of changing costs is to contact your insurance agent annually to discuss your current coverage and your changing needs. They can help you manage risk by updating your coverage so there won’t be any surprises should your home be damaged.

Does a Homeowners Policy Cover Your Home-Based Business?

With both technology and the internet, more and more people are running home-based businesses, either full-time or part-time. But will a homeowner’s policy cover the risks of a home-based business? In nearly every case, the answer is no. The only exception to this might be if a homeowner’s policy has a special endorsement, such as an endorsement to run a day care operation from your home. Yet fewer and fewer companies offer such endorsements. Additionally, some policies may give a very limited amount of coverage for business property, such as a computer. The bottom line is, nearly all homeowners policies clearly exclude business operations and not having a proper coverage in place can leave you with uninsured exposure. This is why you need separate business insurance to cover your home-based business risks.

Home-based business owners may feel that they do not need coverage because nobody steps foot on their premises. The problem is that liability claims often happen away from the business premises. This can include a number of scenarios, including someone taking action for information on your website or someone getting injured from the product or service you provide. Most business policies include coverage for personal injury lawsuits, which means someone takes legal action against you for things like libel or slander. Competitors and customers both can sue a business owner for personal injury. A business policy also covers off-premises injury, such as if someone trips on, slips on, or is injured by any kind of property you take out in the field. It will also cover you during trade shows and usually meets the insurance requirements that some trade shows may require.

From a property standpoint, any business property you may have in your home is usually excluded or has very limited coverage under a homeowners policy. Getting coverage to protect your computers, equipment, furniture, inventory and any other physical assets helps keep your business in operation with minimal disruption and financial loss. A business policy also usually covers loss of income, which is payment for income you did not earn as a result of a loss covered under your policy. Policies may also include coverage for things like valuable papers, damage to property of others, property coverage off-premises and a number of other additional coverages.

A business owner’s policy includes the coverage described above, and is specifically designed to protect the unique interests and property of a business owner. This package policy includes nearly all, if not most, of the coverage you need. However, if you are providing some kind of professional advice, consulting, or other non-tangible professional services, you may also need a professional liability policy. This is also known as Errors & Omissions Insurance. In addition, if you have any employees, you are probably required by law to get Worker’s Compensation insurance. Depending on the type and size of business you own, you may have further insurance needs.

Hoping that your homeowner’s policy is going to cover you in the event of a claim will leave you frustrated if your business experiences a loss. Businesses have a much higher risk than a homeowners policy allows for, and homeowners claims adjusters will quickly deny coverage for business-related claims in the event of a loss. Talk to your insurance agent today to explore your business insurance needs and options. 

Steps Homeowners Can Take to Limit the Effects of Natural Disasters and Expedite Recovery

As the fun and sun of summer arrives, so does the threat of many natural disasters. Happenings like earthquakes are always a threat, but floods, wildfires, hurricanes, tornadoes, and such are more apt to strike in the warmer summer months. There are three very important steps you can take to limit the effect natural disasters have on your life and property and expedite your recovery process.

1. Planning

There are some basics that any natural disaster plan should include:

* Always have several escape routes mapped out. Each family member should know where to meet, who to call for help, and where to call to signal their safety to other family members. Your family safety plan should be posted in a central location and the escape route and emergency contact numbers should be reviewed every six months.

* If possible, store irreplaceable items and documents like birth, marriage, death, and divorce certificates; passports; deeds; social security cards; expensive jewelry; and heirlooms in a safety deposit box during high-risk seasons if you live in an area frequently hit by natural disasters. You may also put video or photo documentation, a listing of serial numbers, appraisals, and receipts for these items in your safety deposit box.

* Scan your photos to your computer. You can store your photos with an online storage service or make a CD to place in your safety deposit box.

* You should have an emergency overnight bag ready to go for every person and pet in your family and always keep a credit card, emergency cash supply, and personal identification with you during high-risk seasons.

As far as disaster-specific planning goes, here are some key points:

Flood planning

Many people live in possible flood areas and don’t realize it. For example, those living in areas that recently had a wildfire and those living downstream from a dam could have problems with flash flooding. Those living in or near a construction area could find their risk of flooding increased due to changes in water flow patterns. You can assess your risk of flooding by contacting your local building authority and your insurance agent.

Since basements aren’t usually covered by typical flood insurance policies, those with a basement need a plan on moving their valuables to upper-levels. Do make sure that you have an escape plan, as discussed above, in place for your family.

Hurricane planning

Most people in areas prone to hurricanes are already on high alert during hurricane season, but do keep in mind that hurricanes and the stormy remnants are often unpredictable. The flood planning from above is applicable to hurricane planning. Additionally, you’ll want to have a supply of nails and plywood ready to go so that you can board-up your home before evacuation.

Remember, if your local authorities issue an evacuation, then you need to heed it.

Wildfire planning

Wildfires can begin unnoticed and spread rapidly with little forewarning. An effective evacuation plan is vital in many cases. If you do have forewarning, then stay tuned to the emergency broadcasts and follow the evacuation directions from local authorities. Remember to take your emergency evacuation bag with you.

If you’re under a warning, but haven’t been advised to evacuate yet, then you might have time to turn off your gas lines and propane tanks, soak your roof and shrubs with water, move flammable furniture to the center of rooms, and move large valuables to the safest location possible.

Tornado planning

Unlike many other disastrous events, leaving your home during a tornado warning is seldom a wise move. Everyone in your family should know where they should go during a tornado warning. While a basement is ideal, not everyone has one. You can use a central room; preferably one that doesn’t have windows or overhead objects. Be sure your emergency kit and phone numbers are in your designated room.

Earthquake planning

Follow the directions from tornado planning. You might also want to place an emergency kit in your vehicle and at your place of employment. Check to make sure your child’s school is also well-prepared.

2. Prevention

Aside from living in an area not prone to natural disasters, there isn’t much you can do to avoid them. However, unlike most other natural disasters, wildfires can sometimes be prevented. You can personally prevent fires by being careful when using open flames, maintaining your chimney flue, and not throwing cigarettes outdoors. Of course, wildfires can happen regardless of your personal care with fire.

You can help to prevent flames from impacting your home by creating a defensible space. In fact, some insurers are now inspecting properties for defensible space before issuing or renewing policies. Your insurance agent, local agricultural organizations, and federal agencies like the American Red Cross and FEMA are valuable information sources on creating defensible spaces.

The damage of flooding can also be limited by planning water diversions and landscaping as protective devices.

3. Insurance

Last, but certainly not least, you should make sure your existing insurance is providing adequate protection. For example, your regular homeowner’s policy most likely won’t provide coverage if a boulder falls or rolls into your home since such would be considered an earth movement and need to be covered by earthquake insurance. Another example would be your regular homeowner’s policy not covering damage from a water or sewage system outside your home breaking, or damages from a flash flood, as these would fall under flood insurance. If you obtain flood insurance, keep in mind that the coverage won’t become effective for 30 days and your basement usually still won’t be covered.

Homeowners Insurance & Social Gatherings

Many homeowners enjoy throwing parties for holidays or special events. If a party is in the near future, be sure that individual homeowners coverage is adequate. Guests who are injured may need to file an injury claim if their vehicle is damaged, if they fall down or if a pet bites them. Research shows that about 75 percent of adult homeowners who plan social gatherings in their homes do not have a personal umbrella policy. This makes them more vulnerable to lawsuits stemming from guests who suffer injuries. The same research study showed that the remainder of the homeowners surveyed did not know what type of coverage they had. This means it is likely that the percentage of homeowners who do not have adequate coverage is more than 75 percent. However, they should have this extra coverage to protect themselves from lawsuits. Although dog bites and falls are common, alcohol is one liability issue that is often overlooked but is very risky.

Alcoholic drinks are viewed as a way to relax and enjoy socializing. However, there is one sobering fact that many homeowners who plan to serve these drinks should know. In 30 states, homeowners may be responsible for damages arising from any auto accidents caused by their intoxicated guests who choose to drive home. In a research survey, more than 50 percent of homeowners said they agreed that party hosts should be responsible for their guests’ safety. However, very few took any steps to obtain adequate insurance coverage. The research study concluded that most people avoid purchasing a personal umbrella policy because they are under the impression that their regular homeowners coverage provides adequate protection for such matters. Since many lawsuits include large awards and medical costs, it is easy for one incident to exceed the homeowners liability limits.

Homeowners must take two steps to ensure they are protected. First, it is imperative for them to contact a personal agent to discuss umbrella policy options. It is also important to take the agent’s advice to avoid facing a costly lawsuit. The second step homeowners must take is to read the following suggestions, which are designed to reduce their risk of lawsuits from intoxicated party guests:

-Instead of having the party at a personal residence, reserve space in a restaurant or bar that has a liquor license.

-Ensure that there are filling food options and non-alcoholic beverage choices available.

-To avoid trouble from party-crashing strangers, limit invitations to friends or familiar people.

-For guests who appear drunk, provide transportation or overnight accommodations.

-Avoid serving alcohol to guests who appear intoxicated.

-Plan activities that draw attention away from drinking alcohol.

-If several guests are expected at a home party, consider hiring an off-duty police officer to handle problems and discreetly monitor guests’ alcohol consumption.

-Take away all alcoholic drinks at least one hour before the part is supposed to end.

Homeowners Insurance & Lawsuits

It is common for neighbors to disagree. For example, one person may think that their outdoor dog barking at people passing by is an asset for keeping them safer from intruders. However, a neighbor who enjoys peace and quiet would think the dog is a nuisance. Another neighbor may enjoy listening to his or her music at a loud volume, but others who live in the neighborhood will likely find it annoying. Some situations may not be about noise. People who live in neighborhoods with a uniform appearance may hassle a new homeowner who decides to paint his or her house a clashing color. Whether the source of the problem is noise or something else, disagreements between neighbors can escalate into lawsuits. Before this happens, it is important to know what types of provisions a homeowners policy provides for legal issues.

Many people think that a homeowners insurance policy covers most types of lawsuits filed against them. For this reason, people are usually not as careful as they should be about preventing them. For example, consider a new homeowner who moves into a subdivision, replaces the existing fence with higher boards and paints them contrasting colors. If the subdivision has rules about the permissible colors and acceptable maximum height of fences, they will try to get the new homeowner to comply. Homeowners who refuse may find themselves facing a lawsuit for violating the subdivision’s code. The courts will likely favor the subdivision’s rules, and a homeowners policy will not provide coverage for the legal battle. Therefore, it is important to understand exactly what legal issues are covered under the policy.

Loud noises, eyesores and changes are all issues that do not physically harm another person. While they may be annoying, they are not issues that would be covered by a homeowners policy if they escalate into a lawsuit. Always remember that a homeowners policy offers protection for two types of liabilities, which are property damage and bodily injury. If the family dog bites someone on the property, a guest falls off a broken step or one of the kids breaks a visitor’s car window, a homeowners policy covers such issues.

Since coverage is limited to two types of physical damage, it is important to work as hard as possible to settle disputes with neighbors. For example, if neighbors complain about a barking dog, it may be best to enroll the dog in training or purchase a no-bark citronella collar. Trim overgrown shrubs or trees that neighbors may complain about. Many people get angry and frustrated when a neighbor makes accusations or complains. Anger is usually what causes people to be stubborn and refuse to compromise. Always listen to what neighbors have to say, and try to understand the situation from their perspective. Use common sense to arrive at a solution that is favorable to both parties. However, the best way to avoid anger and confrontation is to fix possible nuisances before neighbors complain. For additional information about avoiding problems and lawsuits with neighbors, discuss the issues with an agent.