Do I need Other Structure coverage on my home insurance?

This is a common question which I often hear from my clients. This question often comes up when we are reviewing a policy to save money. This question may also occur when someone is buying their first home. While you may feel you don’t need the coverage it can be invaluable at the time of a claim.

In order to understand to important of this coverage it is worth looking at how we define what is the Dwelling and what is Other Structures.

A typical definition for dwelling is, “The dwelling on the “residence premises shown in the Declarations, including structures attached to the dwelling.”

The typical definition for Other Structures is, “We cover other structures on the “residence premises” set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection.”

Based on the above definitions, Other Structures could be a fence, garage, shed, pool, cabana, patio, etc.

You may feel you don’t have any structures on your property that meets the definition of Other Structures but here is the catch – Other Structures is automatic coverage on the policy and is already built into the price. It does not cost you additional money or added to the policy to bump up the cost.

The amount for Other Structures is based on a percentage of the Dwelling amount listed or primary structure value which may be 10%, 20% or 30% of the Dwelling amount listed based on the insurance company.

That being said you may want more coverage than is automatically provided. This is important to discuss if you have several Other Structures or Custom Structures on your property. This often is the case with farm properties which are no longer an active farm. Also, water front properties that have boat lifts, docks, boat houses, etc.

While you may feel you do not have anything that qualifies as Other Structures, you may in the future. You could build a pool, a garage, a fence that meets the definition of Other Structures. It is always best to have more coverage than you think you need than to not have enough coverage at the time of a claim. Other Structures is a valuable coverage which you should give careful consideration and be discussed with your insurance agent when reviewing your home insurance for adequate coverage.

9 home insurance coverages you should have and 2 you should discuss with your insurance agent

Homeowners insurance is kind of like cars. You have the base year, make, model and then you have add-ons. A car can come with a package or a group of features or you can add features a la carte. Homeowners insurance is similar, but more complex. A home insurance policy comes with the basics which I cover in this video. You should never purchase the basic policy without looking into the add-ons. If you are not sure what home insurance coverage you should have, here is a list of the top 9 coverages or endorsements you should have in your home insurance policy and 2 you should ask your insurance agent about.

Special Coverage for Dwelling –Insurance professionals may call this allrisks or open perils but it refers to the same coverage. A basic home insurance policy is typically written to include only 16 types of claims. However, if you add this coverage or endorsement it will open the policy to cover home claims, excluding 11 types of claims. Essentially you can have a policy that only covers claims that are listed or have a policy with 11 exclusions.

Special Coverage for Personal Property – Like the coverage for dwelling you can have either specific claims covered or specific claims excluded.

Replacement Cost for Dwelling – Without Replacement Cost coverage the policy would settle claims based on actual cash value. Most home owners want to be put back to their original home condition versus less. Furthermore when you have Replacement Cost coverage on your dwelling you should have an additional limit or cushion available should you need more than the dwelling amount for a total rebuild of your home. I recommend at least 150% to start.

Replacement Cost for Personal Property – Without this coverage claims would be settled on a depreciated value basis. Most people do not want to buy used personal items or shop at Good Will. If you want new for old then you will need this coverage.

Water Back-Up coverage – a homeowners policy does not include coverage for the back-up and overflow of drains inside your home without adding this coverage to the policy. Any drainage systems inside your home can back-up and overflow causing damage to not only the interior of your home but also to personal items. According to iPropertyManagement the average amount for a home water claim is $10,000.

Personal Injury – While many of us would not purposely attack another person you could be potentially accused or sued for it. This coverage may include slander, libel, defamation of character, invasion of privacy, mental anguish, assault, etc. Without this coverage you would be out of pocket for an attorney to defend you whether the accusations were true or not.

Identity Fraud – This type of event is so common place today that we are almost immune when it is announced that there was data breach. That being said such an event can be damaging to any one, with long term financial consequences. This coverage is minimal cost and worth having.

Service Line Coverage – Our homes are connected to an infrastructure of water lines. There are some areas of Baltimore and Maryland that are older and more susceptible to failure. A water line on your property that collapses causing water to back flow into your home can damage not only the inside of your home but personal items as well. The local community, city, and county will not fit the bill. Ultimately the home owner will if this coverage is not added to your home policy.

Equipment Breakdown – Homeowners insurance is not a warranty program. If an internal appliance, such as the HVAC system fails, the homeowners insurance will not pay to repair or replace the system. Insurance companies have gotten wise to the issues that come with home ownership and the cost of new appliances today. Without this valuable coverage you will be out of pocket to repair or replace your appliances should they fail.

Bonus Coverages:

Loss Assessment – It is very common for communities to have homeowners associations. If a severe weather event were to occur and damage portions of the community the by laws of the homeowners associations may allow them to charge back to home owners in the community an amount to cover damages. Without the appropriate amount of coverage you could be out of pocket thousands of dollars.

Ordinance & Law –  Following on Loss Assessments homeowners associations may also require that your home have a certain esthetic look; roof type, siding, etc. This is common in golf communities. Also for homes located in coastal areas, mountainous terrain, etc. you may need to build to a certain code dictated by the city, county or state.

While this is not an all-inclusive list these are the coverages or endorsements that are added and/or discussed with my clients when reviewing their home insurance policy or quoting alternative options. Some of these coverages are new and were created as a result of the changing times. Some of these coverages have always been available but not used by agents. Regardless, as a home owner you should be aware of the various options available and discuss with your insurance agent on the best ways to protect your home.

If you haven’t reviewed your home insurance policy recently its time to call your insurance agent. A good agent will not only review your current policy for coverage gaps but discuss ways to fill those gaps.

Googling homeowners insurance could spell disaster for you.

Have your ever Googled your symptoms even though you know you should’nt only to find out you are dying in the next five minutes?!?

I have done it. I was recently diagnosed with a difficult form of eczema but had convinced myself after Googling my symptoms that I had skin cancer. After hemming and hawing I decided to put on my big girl pants and talk to a professional – my dermatologist. She quickly settled my nerves and told me that greasy lotion was my new best friend and that feeling like a greased pig was a new way of life now.

That’s like Googling home insurance and going with the first website that promises you cheap home insurance. It may seem easier and less stressful to do it yourself but you don’t really know what you need or what’s available. Only an professional can do that.

According to a study completed by JD Power in 2016 74% of new insurance purchasers will begin the buying process online. Of those consumers 25% will purchase insurance online. The rest use other methods, such as insurance agents or insurance company call centers. Now consider that 60% of homes in the US are under insured as stated by Marshall & Swift/Boeckh, and per Insurance Information Institute 1 in 20 homes will have a home claim each year. Those are some scary statistics from my perspective.

I know asking for help is difficult sometimes. My husband easily comes to mind when it comes to asking for help, asking for directions, or visiting a doctor. Hearing, “Honey, you were right.” always feels good. There is a reason there are doctors and there is a reason why there are Insurance Agents. It’s because we need them.

You may think by Googling and searching through a couple options that you have the right insurance. You can’t tell from seeing a few websites what you are getting until you are knee deep in a claim and you are hearing the word “denial” from your claim adjustor when you realize you may need a professional.

You are not paying extra money by using an Insurance Agent. You are asking for some one to build a relationship and trust with you. You are asking for an Insurance Agent to help you insure your home and auto adequately and to educate you about what is available to you. So ask for help and don’t go it alone. You will be glad you have some one to call if and when something happens.

11 Reasons to Work with Avant-Garde Insurance Advisors

For 20 years I worked tirelessly for insurance agencies receiving little appreciation for my contribution to the agency or the industry. I dazzled their clients and bonded with their prospects like no insurance agent could. I aspired to continue to grow, improve, and give back while insurance agencies were unwilling to create necessary change within the agency and the industry. A year ago I struck out on my own to create an insurance agency different from others. An agency that challenges how people view insurance; as a commodity, as a necessary evil, as a conspiracy. Avant-Garde Insurance Advisors is not another insurance agent, we are an Insurance Advisor. Below is why Avant-Garde Insurance Advisors is not an insurance agent.

  • I will challenge the thought that insurance is a commodity every day. Insurance is not a one size fits all. Every policy is different. Each insurance company has its own appetite for the preferred policyholder. Reading an insurance policy requires an insurance and/or legal background. Not all insurance claims are covered and/or go smoothly.
  • I will continue to learn about insurance every day. Not because the state of Maryland says I must but because I want to give you the most up to date information that is available to me. Yes, continuing education sucks but it is a necessary evil in order to give you my best. The insurance industry constantly changes, and I want to be at the forefront on behalf of my clients.
  • I will share with you my insurance knowledge. I am not a gatekeeper of insurance knowledge but I do live and breathe insurance each day and I want to help you better understand insurance so you can make a more informed insurance decision.
  • I will provide consistent oversight over your account and make you aware as soon as possible of issues or concerns. I will also provide you options on how to handle your insurance needs. I will steward your account as if it were my own.
  • I will advocate on your behalf with the insurance company to treat you fairly. The insurance company needs to make a profit. You need to maintain your livelihood.
  • I will communicate the timeline for completing your request and I will stick to it. Insurance does not happen at the push of a button – if done right.
  • I will be honest with you. If I make a mistake, I will tell you. I will also tell you how I am working to correct it. I am only human, but I value you as a person.
  • I will tell you how it is and not sugar coat if you are jeopardizing your insurance future. It is not in your best interest or my best interest if we are not open with each other.
  • I will not bend rules or lie to another party for a client. I cannot in good conscious jeopardize my livelihood or my family for another person.
  • I will not offer you the cheapest insurance program just to beat your current insurance program. Any one can offer you a cheaper policy by cutting coverage or not give you all the information. My job is to give you the best coverage for you.
  • I will work to earn your business every day. Insurance is a relationship business, not a sales business. Tell me about your work, your spouse, your kids, your hobbies. I want to know who you are.

If you want more than an insurance agent, if you want more than an insurance transaction, if you want something different start working with an Insurance Advisor at Avant-Garde Insurance Advisors today!

Halloween Fun & Safety!

Tomorrow is officially Halloween 2019. Many kids are eagerly awaiting this big day. In preparation below are some tips for keeping the holiday fun and safe.

Tips for home owners:

  • Keep walk ways clear of debris and leaves to reduce the chance of slip and falls.
  • Have the walk way to your home clearly marked and if possible lit.
  • Keep pets crated or in another room to reduce the chance of your pet escaping or a child being injured if your pet nips or jumps.
  • When giving out candy to small children you may wish to confirm with the parent if the child can have hard candy that may cause choking and/or candy with peanuts or milk that could cause an allergic reaction
  • When traveling go extra slow in communities and where you see trick or treaters.

Tips for trick or treaters:

  • Keep costumes at ankle length or shorter to prevent trips and falls.
  • Wear a light or other device to make others aware of your presence when walking sidewalks, walkways, driveways, roads, etc.
  • Remove face masks and covers when walking from home to home to reduce injury.
  • Make sure you monitor your small children with their candy to make sure they do not consume it before you have had the chance to inventory it.

The photos above are my minions over the years. I am excited to capture an image of them for my collection tomorrow. Stay tuned!

What you need to know about selecting a home deductible.

When looking at insurance quotes our eyes automatically drift to the bottom line premium quoted. But what about all the stuff above it? Not all home quotes and/or policies are created equal. One of the key parts of a home quote and/or policy is the deductible. Below is a list of things to keep in mind as you consider a home quote and/or policy.

  • Some deductibles are flat and some deductibles are percentages. Percentages are typically used in coastal areas where there is a higher probability of wind, hurricane, etc. A percentage deductible is based on the dwelling value listed in the policy. If the dwelling value increases the deductible increases as well.
  • Some deductibles are specific to a type of coverage; Water Back-Up, Water Damage, Hurricane, Tropical Cyclone, Named Storm, Wind/Hail, etc. You may also see the term All Other Peril which means where a specific deductible is not identified the All Other Peril deductible applies.
  • A home policy can have multiple deductibles which can be a problem if a claim triggers more than one deductible. Understanding how each deductible applies at the time of a claim is important.
  • Some deductibles are dictated or required by the insurance company. This decision can be based on where the home is located, such as coastal. One insurance company may require a higher deductible than another insurance company.
  • Some home policies waive the deductible for large claims or a total loss claim. Knowing when a deductible waiver applies is important. This can be beneficial in deciding on a high deductible.
  • Some companies offer a reducing deductible if you remain claim free.

It is important when you are reviewing a home quote that you be aware of the deductibles. While a high deductible will reduce the policy premium, a high deductible can be detrimental if you can not afford the deductible at the time of a claim or the losses that occur are below the deductible. An insurance agent can help you review all the deductibles applicable to a quote and/or policy. An agent can also help you select a deductible that fits your financial situation while providing you the most advantageous premium.

National Insurance Awareness Day, June 28th

This Friday, June 28th is National Insurance Awareness. The day was created to encourage everyone across the nation to review their insurance policies.

Below are some tips to help you observe the day:

Home:

  • Review the home value. The value of the home should be based on current construction costs, not market value. You should review the home value every 3 to 5 years.
    • Review the home credits. If you have installed an alarm or have turned your alarm service off you should update the home policy accordingly.
    • Review the deductible. The higher the deductible the lower the premium. Also a higher deductible will discourage you from filing small claims which can impact your ability to obtain coverage in the future.
    • Review the endorsements included in the policy. If you have switched insurance companies recently a coverage may have been dropped during the process.

Auto:

  • Review drivers listed on the policy. All licensed drivers residing in your home should be listed on the auto policy. Failure to do so could result in a denied claim for unlisted drivers.
    • Review ownership of the vehicle. If the loan or lease agreement has been satisfied update the policy. This will prevent delays in payment at claim time. Any change in titled ownership should also be reflected on the policy or a new policy purchased for the vehicle.
    • Review deductibles. Insurance companies continually increase the price breaks for higher deductibles. As with the home insurance a higher deductible will save you premium and discourage you from filing small claims.
    • Review usage of each vehicle. Vehicles used for Uber or Lyft services do not have coverage while being used for this purpose. Vehicles used for business purposes may also not have coverage if used for business at the time of a claim.

Schedule:

  • Update items to be listed along with values. Appraisals should be completed every 3 to 5 years to keep up with market values. Use an inventory such as Collectify to manage your collection easily.

Umbrella:

  • Update properties, vehicles, drivers, recreational vehicles, boats, etc. at each renewal. Failure to update could result in no coverage under the umbrella.
  • Make sure the underlying insurance policies for each of the above meets the minimum liability requirements to avoid a coverage gap.
  • If you do not have coverage for the underlying insurance policy for each of the above obtain it at your earliest convenience.

With the help of a Trusted Insurance Advisors they can help you review your policies at any time, not just this Friday or at renewal. A Trusted Insurance Advisor is there to help you every step of the way. Call your agent today!

Why is my credit score used when buying insurance?

This is a common question with clients and it is never an easy conversation. Like many of my clients my gut goes sour when I need to discuss or request information regarding credit reporting. There are a few things to know.

  • State of Maryland has approved the use of credit as a rating factor for auto insurance. Credit is not used for home insurance in Maryland. Almost all insurance companies doing business in Maryland will want to obtain a credit report in order to provide an auto insurance quote. There is only 1 or 2 insurance companies in Maryland that do not.
  • Your insurance agent will never see a credit score or credit report when quoting your auto insurance. For this reason your insurance agent will also not be able to provide specifics about what was contained in the report, and will direct you back to the insurance company quoted to obtain more information.
  • Your insurance agent will not know specifically how your credit impacted your auto quote. Insurance companies have rating structures based on hundreds of rating factors. As information is entered into an insurance company’s quoting system the rate changes. Credit score is only one factor for rating.
  • The process of obtaining your credit report will not impact your credit score. Unlike when you are applying for a loan or line of credit, we are not looking to confirm if you are a good applicant. For this reason you can not be turned down for auto insurance based solely on your credit score.

While the thought of your credit score being run for an auto insurance quote has you sick to your stomach, your insurance agent is doing their best to meet your insurance needs. Your insurance agent will not pry into your financial situation but will guide you on the best auto quote for you. Maintain an open dialogue with your insurance agent and voice your concerns to help settle your nerves.

Call your independent insurance agent for more information on the auto insurance quote process.

Diamonds Are A Girl’s Bestfriend!

It is that time of year where many of my client’s will give or receive a very sparkly gift from Santa.

I can’t deny that I get a little excited when a client calls to provide the specifics on their new diamond encrusted whatever.

That being said, now is also the time to start talking about insurance for those beautiful items.

I recommend everyone have at least some type of jewelry schedule or jewelry insurance. It should be a given when talking about homeowners insurance.

There are two ways to do a jewelry schedule, a blanket or an agreed value. Blanket requires less effort but agreed value will provide more definitive coverage.

If you are unsure which direction you should go you need to look at your jewelry collection.

Go home and pull out all of your jewelry pieces and lay them out on the bed. Decide which is your most inexpensive piece? Which is the most expensive piece? What items do you wear regularly? Do you keep any of the items in a safe? Knowing what you have will help you decide what is more important.

You can even do a combination of blanket and agreed value. The one thing I don’t recommend is no jewelry schedule.

Keep in mind that if you have no jewelry schedule, coverage will be found under your homeowners insurance. The missing item would be subject to the policy deductible. The minimum deductible with most insurance companies is $1,000. Also, you have to account for any limitation in the homeowners policy for lost or misplaced jewelry. The policy may limit coverage to $2,500 or $5,000, less the policy deductible. That can really hurt when your heirloom engagement ring disappears.

Before you go and buy your next piece of jewelry go get some type jewelry insurance in place. It is always better to be safe than sorry.

Pamela

Thanksgiving Day Safety

Thanksgiving is my favorite holiday of the year. Probably thanks in no small part to the fact that turkey is one my favorite foods. Needless to say I will be getting my fill in the coming days.

However, the Thanksgiving Holiday has one of the highest counts of home fires than any other day of the year. Statistics show that home cooking fires are 3 times more likely to happen on Thanksgiving than any other day.

Below are some quick tips to reduce your chances of a home cooking fire this Thanksgiving…

  • Never leave your food unattended while cooking.
  • Use a timer and routinely check whatever you’re cooking.
  • If frying or deep-frying, keep the fryer outside, away from walls, and free from moisture.
  • Never use a glass casserole or lid on the stove or burner, as it may explode from the heat.
  • Ensure that pot holders and food wrappers are a safe distance— at least 3 feet—from warmed surfaces.
  • Position pot handles to the back of the stove to avoid anyone bumping into them.
  • Avoid dangling accessories or loose clothes while cooking.
  • The stove will be hot, keep children 3 feet from the stove at all times.
  • Be sure electric cords from electric knives, coffer makers, plate warmers, and mixers are not dangling off the counter in reach of children.
  • Never douse a grease fire with water, as the fire can thus spread. Turn off the burner, smother the flames with a lid, or douse with baking soda or a fire extinguisher if it’s getting out of hand.
  • Keep a fire extinguisher handy in the kitchen, and know how to use it.
  • Ensure your smoke alarms are connected and working.

I hope everyone has a safe and happy Thanksgiving Holiday!

Gobble! Gobble!

Pamela