Archive for the ‘Home Insurance’ Category

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Mold and your Homeowners Insurance: What you need to Know

Thursday, January 7th, 2010

Mold - in particular, the highly unhealthy black mold variety - can be more than a nuisance in your home.  An infestation of black mold in your home can cause serious health issues and even death; which is why you need to: (a) have your home checked for mold; and (b) make sure your homeowner’s insurance policy covers the cost of mold removal.

The Birth of Mold in a Home

Some insurance companies have excluded mold damage from their policies, particularly in areas known for high mold counts.  Although the deadly black mold has been found in all 50 states, there are some states and areas of the country that have been affected more; likely because of the climates and rainfall amounts. However, there are other things that can cause mold infestation in your home, including leaking or burst pipes and leaking roofs. Unfortunately, many people have growing mold in attics, basements or behind walls that they are unaware of until they start becoming ill.

It is important to understand, however, that mold just doesn’t pose health problems; it can also cause severe structural damage to a home.

Ironically, it is the new construction that often breeds mold, as newer homes employ energy-efficient construction practices, including tight seals and thick insulation, which trap moisture that leads to mold.

Does your Policy include Mold Infestation?

Most homeowner’s insurance policies do not cover mold infestation, unless it is a result of a covered peril, such as a burst pipe. However, non-covered perils, such as a slowly leaking pipe, are considered to be home maintenance issues, and are therefore often excluded in most homeowner’s insurance policies.

Some insurance companies limit the amount of a mold claim, while other homeowner’s insurance companies have completely excluded mold claims, regardless of whether they result from a covered or non-covered peril.

Many insurance companies have begun raising premiums as a result of an influx of mold claims, while others have simply begun limiting the claims. Because of these factors, it is extremely important to understand your homeowner’s insurance policy so that you can be better prepared to deal with a mold-related claim if it arises.

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Factors that may Determine your Homeowners Insurance Rates

Wednesday, January 6th, 2010

Homeowners insurance rates are affected by multiple factors, many of which we may not be aware of. It isn’t uncommon, for example, to have very different homeowner’s insurance costs for two very similar homes.

The following factors that may influence the rates of your homeowner’s insurance policy:

  • Age of the home - Older homes typically have higher homeowners insurance rates than newer homes, mainly due to the age of the home’s structure and its features, such as the plumbing, the electrical and the roof, for example. An insurer will usually raise the rates for an older home because it is simply assumed that more problems exist with an older home.

  • Location of the home - Your home’s address will likely affect your homeowner’s insurance rates. From crime to location near public facilities and fire stations, the equation for determining the cost of your zip code varies greatly from one insurance company to the next.

  • Building materials - The materials used to construct your home may change your homeowner’s insurance rates. For example, wood shingles may be more costly to insure than vinyl siding because they catch fire more easily. When constructing or remodeling your home, check with your insurance agent to see which building materials may lower the rates on your homeowner’s insurance policy.

  • Home amenities - Some home amenities may lower the cost of your homeowners insurance policy (i.e. security system), while others may raise your rates (i.e. swimming pool, hot tub). Again, it is best to check with your insurance agent regarding amenities and how they affect your homeowner’s insurance rates.

  • Animals - Some dog breeds are considered higher risk because they have been associated with aggressive behavior and dog bites. Some of the most common dog breeds to earn this distinction include: Pitt Bulls, Dobermans and Rottweilers.

  • Personal possessions - If your home includes antiques and other valuable items, you may be paying more in homeowners insurance. Some of these valuable items may even need to be insured separately, thus raising your rates.

  • Liability coverage - Higher liability coverage equals higher premiums. Check with your insurance agent and ask about average liability coverage.

  • Deductible -Choose a low deductible and you’ll pay more in homeowners insurance; choose higher deductibles and pay lower rates.

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Homeowners Insurance: What’s Covered and What’s not

Monday, January 4th, 2010

Homeowner’s insurance policies are often a bit tricky to read and understand. There are some pretty bizarre things that are covered under a homeowner’s insurance policy, while other events that you might assume are covered are not. This is why it is crucial that you read and understand your homeowner’s insurance policy.

In other words, instead of stuffing your policy into a file cabinet and forgetting about it, take the time to review it annually so that you can decide if it is best suiting your needs. If your homeowner’s insurance policy falls short, consider switching to a more comprehensive policy or taking out specific riders that better protect yourself, your family, your home and your assets.

There are a few things that are generally always covered under a standard homeowner’s insurance policy, including:

  • Fire and smoke damage
  • Lightening strikes
  • Tornadoes and wind damage
  • Hail
  • Vandalism and theft
  • Falling objects

However, you may be surprised to find that there are a number of things that aren’t covered under a standard homeowner’s insurance policy, including:

  • Floods - You must purchase extra flood insurance, which is typically available through the federal government.
  • Earthquakes - Again, in order to be covered for earthquake damage you must have a separate earthquake policy, which is purchased from the federal government.
  • War and nuclear accidents
  • Home businesses
  • Any wear and tear on the home, including a home’s deterioration
  • Rodent and insect infestation
  • Unintentional damage
  • Theft from a home under construction
  • Vandalism to a vacant home
  • Any property belonging to tenants
  • Any damage caused by a domestic pet

Homeowner’s insurance policies become tricky when there are other circumstances involved. For example, if you go on an extended vacation and return to find that your home was vandalized or robbed, you are not covered, as most insurance policies consider a home vacant if you have not lived in it for 30 days.

If you have a small creek behind your house that swells and floods your home during a bad storm, your homeowner’s insurance policy will likely not cover the damages that results.

If you have personal property stolen from your vehicle, you are likely covered under your homeowner’s insurance policy, yet if a thief steals your home business computer equipment, you are not covered.

Sound a bit confusing? It is!

These examples are just some of the reasons why it pays to purchase a comprehensive homeowner’s insurance policy and to make it a point to read and understand every section of the policy.

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How to Lower the Cost of Homeownership through Lower Homeowners Insurance Rates

Monday, December 28th, 2009

New homeowners often fail to take into account the cost of homeownership when budgeting for a home. In particular, new homeowners think to budget for the cost of their mortgage, yet fail to consider how the cost of their homeowner’s insurance policy may affect their monthly budget.

As a new homeowner, you certainly don’t want to be faced with a tough budget that can feel downright overwhelming at times. To ease your financial stress, you will want to consider the many ways in which you can lower the cost of homeownership.

Perhaps the best way to lower your cost of homeownership is through your homeowner’s insurance rates. Many homeowners, for example, are under the assumption that homeowners insurance is similar from company to company, policy to policy, when nothing could be further from the truth.

From property value and geography to credit ratings and plan types, homeowners insurance can vary quite a bit in cost.

Credit Ratings

Your credit rating may play a big role when an insurance company determines your homeowner’s insurance rate. In short, insurance companies use an applicant’s credit history when determining insurance premiums, so the better your credit the better your homeowners insurance rates will likely be.

Insurance companies, much like any other company, determine rates based on risk; and the poorer your credit score, the more risk the insurance company is likely to assume. There are many reasons to maintain a good credit score; and even more reasons than you may not even be aware of.

Location, Location, Location

Your homeowner’s insurance rates may vary greatly, depending on the location of your home. For example, individuals who choose to live near the shore can expect to pay higher homeowners insurance rates than someone who lives inland. In other words, the idea of owning an oceanfront property may sound idyllic, but paying the costly homeowners insurance rates may just smash that idyllic image to bits.

Customization

Your homeowner’s insurance policy should not consist of a general, blanket coverage; instead, it should be customized to suit your individual needs and budget. For example, you may choose to raise your deductible on your policy to save money each month, or you may decide to take out a policy with a lower deductible to ensure that your next homeowners insurance claim won’t leave you broke. Either way, your policy should be customized to suit your individual preferences.

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Home Owners Insurance Deciphered

Tuesday, December 22nd, 2009

Home owners insurance can be a bit confusing for new homeowners. We all hear the horror stories: home owners not taking out enough coverage or the right kind of coverage and then not being protected when their house burns to the ground. It pays to educate yourself about home owners insurance so you won’t be one of those homeowners stressing out about their coverage on their most important asset. To understand how homeowners insurance works, you must first understand the primary components of a homeowner’s insurance policy:

Structure - This part of your homeowner’s policy protects the obvious: your home’s structure. The structure aspect of your policy is there to provide coverage in the event of fire, smoke, lightening, theft and extreme weather. There are some types of weather conditions, such as floods, that are not covered under a standard homeowner’s insurance policy, so read your inclusions and exclusions carefully to make sure your coverage is comprehensive.

    When choosing the coverage amounts for your homeowner’s insurance policy, make sure to take into consideration the fact that you are covering your home’s entire value - i.e. the cost of replacing your home if it were a complete loss. Your policy should not simply cover the remaining mortgage balance, as this would certainly leave you short if you needed to rebuild or completely renovate.

    Personal Property - The personal property section of your homeowner’s insurance policy covers your possessions and personal property in the event of damage or theft. It is important to make a detailed inventory of your home’s possessions, including any jewelry, artwork or antiques. Make a written list, as well as a video tape of your home’s possessions, and store it in a safe place, away from your home. Doing so will make the process of claiming losses easier. Reviewing your personal inventory is also a good way of determining if your policy is adequate and if you require additional insurance on any valuable items.

    Liability - the liability section of your homeowner’s insurance policy is incredibly important, as it provides compensation for liability claims and medical expenses. In other words, it protects you should someone become injured on your property.

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      Easy Ways to Save Money on your Homeowners Insurance

      Friday, December 11th, 2009

      How can you save on homeowner’s insurance? Perhaps the better question is: how can’t you save on homeowner’s insurance?

      The bottom line is that you should be paying the most competitive prices for homeowner’s insurance and, if you’re not, then you probably haven’t taken the time to thoroughly review your policy and explore all of the discounts that are available to you.

      Get Several Quotes

      It certainly comes as no surprise to most homeowners that rates can vary widely between insurance companies, so never, ever sign up for a homeowner’s insurance policy without first comparing the competition.

      Make it a point to get quotes from at least three different insurance companies so you can get a good idea of the differences in rates between companies.

      Remember Replacement Values

      Something to consider before deciding on a homeowner’s insurance policy is the policy amount. Your policy should include language that would cover the replacement cost of your home so that, in the event of a total loss, the policy would cover the cost to replace the home, not merely compensate you for the cost of the home according to when it was built.

      This is a very important point to pay close attention to, as many homeowners assume that they have replacement cost in their policy, when in fact they do not. And, unfortunately, they do not find out until they are caught in a situation where their home was badly damaged or destroyed.

      Auto plus Home Discounts

      Consider getting a quote from your auto insurance company for homeowner’s insurance, as many companies offer discounts if you carry both your auto and homeowner’ insurance through them. Sometimes the discounts can be as much as 10 percent, so make it a point to approach your current insurer for a quote on homeowner’s insurance.

      Raise your Deductible

      If, even after you checked out a few companies and compared quotes, you find that the premium amounts are too steep, consider raising your deductible. Often times, simply raising your deductible by $1,000 can offer you great discounts on your monthly premiums.

      Upgrading your Home’s Security

      Finally, consider making upgrades to your home to save on your homeowner’s insurance. Consider installing deadbolts, smoke detectors and a home security system so you can increase your home’s security and safety while saving on your monthly premiums.

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      Increase your Home’s Security and Save

      Thursday, November 26th, 2009

      How secure is your home? If you don’t have an answer to this question, then it probably isn’t secure enough!

      Many times, your homeowner’s insurance premiums can be lowered if you increase your home’s security. Therefore, it only makes sense to increase your home’s security so that you can protect your family and your belongings and, at the same time, lower your homeowner’s insurance premiums.

      From deadbolts to security systems, increasing your home’s security is the smart thing to do. Although the exact amount will differ, the fact of the matter is that most - if not all - homeowner’s insurance companies will offer discounts if you increase your home’s security.

      Ideas for Increasing your Home’s Security and Safety:

      • Deadbolts - Easy to install and generally inexpensive to purchase, deadbolts are your home’s first line of defense against intruders. It is best to install deadbolts on all of your home’s exterior doors.

      • Motion-Sensing Outdoor Lighting - Motion-sensing outdoor lighting is incredibly practical and can add another layer of security and safety to your home. Consider installing motion-sensing lighting near dark spots around your home and at each point of entry.

      • Carbon monoxide and smoke detectors - Both carbon monoxide and smoke detectors are inexpensive and easy to mount throughout your home, but both could easily save your life. Consider installing a carbon monoxide detector and smoke detector on each floor of your home.

      • Home Security Systems - Having a home security system installed is one great way to add safety and security to your home. It is also a great way to cut your homeowner’s insurance premiums by as much as 20 percent. An installed security system with monitoring service can save you even more.

      As you can see, it is not hard to increase your home’s security and safety. Plus, the savings on your homeowner’s insurance premiums often offset the cost of installing security and safety items! Home security should be one of the first things you think about when moving into a new home, and should be revisited at least every year to determine if you, your family and your home is adequately protected.

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      Water Damage: How to Increase Your Coverage Benefits to Avoid Drowning in Repair Costs

      Wednesday, November 18th, 2009

      If your home has fallen victim to the incredibly damaging effects of water or interior flooding, utilize the expert recommended tips and steps to avoid drowning in the costs for home repair.

      Step 1 - Assess the Damage

      The first step in responding to water damage involves taking a specific account of what damages have occurred.  To do this, start by turning off the main water supply to your home.  Additionally, turn off any natural gas outlets or supplies, as you should also be sure there are no exposed electrical outlets or wires.  Your key focus here involves making sure you home is safe from any ongoing damage.  As you begin taking an inventory of the damage, be sure to cautiously inspect areas that seem safe; do not enter areas that can be hazardous.  Specifically, don’t enter a room that has standing water in it, as standing water may pose the threat of electrical shock / electrocution.

      Step 2 - Communication with Your Provider

      Once you have an idea of what damage has occurred, contact your insurance provider to see what other measures you may be able to take.  As each policy has exclusions for coverage and reimbursements, an awareness of your specific damage and the terms of your policy will help home owners to remain well informed and proactive.  As all damage claims made to your provider require thorough evaluation and potential mitigation, your insurance company will need to be certain that you took responsible measures and efforts once the water damage occurred.

      Step 3 - Stop the Spread of Destruction

      Once you have assessed basic damages and contacted your provider, quickly respond to the damage by using dehumidifiers and / or fans to aid in the fast drying of water-logged areas.  If it is safe to do so, dry your furniture or move furniture to a safe and dry area.  This can help prevent wood from warping, erosion of paint, and other effects.  Adding to this effort, try to mop up or use a wet-vacuum to pull water from soaked carpets.  Oftentimes, a home insurance policy requires home owners to attempt salvaging carpet and carpet padding before agreeing to pay for any replacement flooring.

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      Are Your Home Insurance Rates Too High?

      Friday, November 13th, 2009

      Have you ever been suspicious of the cost of your home insurance coverage?  According to The National Association of Insurance Commissioners and The Dallas News, individuals in states select states may be paying hundreds to thousands of dollars more than owners in other areas.  According to reports, home owners in Texas have the highest insurance premiums, totaling an average cost of $1,409 per year.  Not far behind, Florida residents average $1,386, while Louisiana has the 3rd highest reported costs at $1,257 per year.

      Reasons for Rate Variations Across the Country

      As the National Association of Insurance Commissioners further reveals, the average cost of a common American home insurance policy was approximately $804 per year-which means that the average home owner in Texas is paying almost twice as much as the average American.  In examining the costs in Texas, some experts argue that the state’s insurance rates are caused by the area’s unstable and often dangerous weather.  Specifically, as Texas has experienced hurricanes, tornadoes, extreme heat, and even snow in the past several years, the shifts in weather can result in serious erosion and damage to home owners’ properties.

      Yet, aside from the weather, the sharp increase in insurance costs for Texans has been additionally blamed upon annual premium increases over the past several years, resulting in record profits on the part of insurance providers.  To address this increase, as well as similar increases seen in states across the country, the Legislature is planning to evaluate potential measures to increase the regulation of insurance companies.  Specifically, one potential regulation may involve mandatory state approval of all major insurance hikes before increases are sent to policy holders.

      As Texas residents, as well as home owners in other states, have reported record high premium costs while noticing a decline in their insurance coverage benefits, the Legislature is hoping to eradicate unjust insurance charges before this pattern continues to devastate policy holders.  As Texas leaders have already confronted insurance premium issues with insurance law reforms in 2003, citizens are eager to see if this more recent evaluation of insurance practices will result in more economic benefits and shifts.

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      Find Out Why Your Home Insurance Provider May Refuse to Continue Benefits

      Wednesday, October 28th, 2009

      Unfortunately, while all potential home buyers are almost always legally required to carry an up to date home insurance policy, some home owners ultimately find themselves without coverage once they begin paying their mortgage.  To avoid losing your home insurance coverage, be aware of key reasons that a provider may terminate your policy.

      Termination of Insurance Coverage

      Deterioration and / or Neglect

      Believe it or not, insurance companies have the option to cease coverage of your home if your property has been exposed or undergone extreme deterioration.  Essentially, when you purchase and agree to your home insurance policy, your contract will most likely contain information about the provider’s state of home standards.

      If your house is significantly deteriorated, then you may not be meeting your provider’s baseline qualifications.  Issues of deterioration may closely tie in with various clauses of neglect in your insurance contract as well.  If, on the other hand, you are still covered by your insurance provider while damage occurs to your home due to the home owner’s neglect, then the insurance company will almost certainly refuse to offer compensation.  Compensation is only provided when a policy holder in good standing reports damages are not caused due to issues of neglect or issues exempt from the contract.

      Unreliable History

      Adding to the potential problems associated with property deterioration and neglect, an insurance company may refuse to renew your contract upon the end of your agreement.  An insurance company may opt to refuse coverage if a policy holder has above average claim rates.  Generally, a home owner only submits claims to their insurance company one or two times per decade; thus, if you tend to send in claims every other year or more, then you may be viewed as a less reliable candidate for home insurance protection.

      Similarly, if you have a poor credit history, and / or if you have failed to pay for your home insurance premium as scheduled by the set due date, then your provider may also deem you as a less reliable client.

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