property insurance – Avant-Garde Insurance Advisors

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.

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 28^th 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!

LLCs, Trusts, and Estates

Recently, I had a client call me regarding the purchase of a new property.

I went through the typical questions I would ask…

What’s the address?

Do you have a settlement date?

Is it a business or personal property?

How do you plan to use the property?

Who will reside at the property?

Who will own it?

It is not uncommon to get all green lights until you get to the last question. Business entities are a tricky business in the personal insurance arena. They are not impossible just tricky.

Insurance companies get a little crazy when you start talking business entities owning personal properties. A business has a different kind of exposure or risk and therefore has different insurance needs. Personal insurance policies are not designed to meet those needs and ultimately a business entity could put an insurance company in quite a pickle if a claim happens.

An LLC can sometimes be done if the LLC is formed solely for the purpose of holding a single residential property. The LLC should not conduct any other business and should not employ anyone. There may be tax benefits to an LLC but you need to weigh the tax benefits against the issues that arise when it comes to insuring the property in the name of an LLC.

Trusts can also be done but every insurance company is different. Some will name the trust as Named Insured, some as Additional Insured, some require a special endorsement for naming the trust. Only your insurance company will be able to tell you how the trust can be named.

Estates are tricky in that typically the estate was developed to hold assets for a person that has passed away. An insurance company would shy away from this type of situation because it is unknown who will live in the home, who will take care of the home, will the home be vacant, is it for sale, how long will the estate exist? The answers to these questions have an additional amount of risk associated with it and the insurance company may not want to take on that risk.

Regardless of what your plans are, you should always consult with your insurance agent on what your plans are before committing to them. You may not be able to get the coverage you thought you could or need.

Pamela

Occupied… Rented… Unoccupied… Vacant…

I have several clients right now that have properties up for sale. All of them hope to have a favorable offer and sell the property quickly but that is not always possible.

As winter starts to approach the real estate market starts to cool down a little. So for clients hoping that their property will sell they may face the prospect of holding onto it through the winter season.

This type of situation begins the conversation I must have with clients that are facing the unknown but hoping for the best.

Are you still living at the property? Is it occupied? Do you plan to rent it? Is the home vacant? Does any one visit the property? What is your plan? When do you feel you can rent it or sell it?

Some of these questions can be challenging for a client.

Here is a brief definition of each scenario…

Occupied: It’s occupied by you or by another immediate member of your household; spouse, daughter, son, etc.

Rented: The property is rented out to an unknown individual or distant relative either temporarily until the home sells or permanently. There is a written lease agreement of some type. However, most insurance companies ask that the property be rented on an annual lease agreement.

Unoccupied: No people live at the property. It may be fully or sparsely furnished. It may only house a few items or used for storage. Any one that visited the property would be able to tell the home is not furnished for daily use. This type of scenario may lead an insurance company to believe the property is vacant.

Vacant: The property is absent of people and all contents. No visitors or occasional visitors. This is a big red flag for insurance companies and could result in swift termination of the policy.

If a client holds onto a property that is unoccupied or vacant they run the risk of not having coverage when a loss happens. The policy will specify what occupancy is acceptable under the policy. The policy will also define when coverage starts to fall away if the property is unoccupied or vacant.

No one thinks it will happen to them but during the cold months the number one cause of loss is frozen pipes bursting. If pipes burst when the home is unoccupied or vacant the claim may be denied.

I understand the strain my clients are under when they are forced to hold onto a property longer than they wish. That being said there are insurance products out there to address each of these situations.

Always err on the side of caution and call your agent to discuss your situation.

The Value of An Insurance Agent

Recently, I have been seeing the same quote over and over again in my daily readings. It’s in my trade journals, my social media posts, and my daily business readings. It is stirring up several thoughts and feelings that I need to voice.

As of right now, insurance agents are in an uphill battle to gain more ground as a necessity in the insurance industry. I, we are battling against the major insurance giants that spend millions of dollars on advertising to gain market share.

What few fail to realize is that not all insurance is created equal. Every insurance company is different. An insurance company has several different types of policies for the same purpose. And pricing is specific to the person requesting coverage. Insurance is not a one size fits all.

Can you imagine if your underwear was a one size fits all? What if cars were sold as, one size fits all?

Sounds kind of crazy doesn’t it? So why would insurance be one size fits all?

That being said, how is the discerning insurance buyer suppose to know what they need and execute the appropriate policy on their own? They wouldn’t and they shouldn’t have to.

That is where insurance professionals like myself come into to play. We don’t have millions of dollars to create fancy ads using a lizard with an Australian accent. What we have is knowledge and experience and your best interests at heart. We live and breathe insurance on a daily basis. Our job is to help you determine your needs and get you the right policy at a price you can afford.

So what is this quote that is bring all of this to the forefront…

“Premium is what you pay, value is what you get.”

What value is your insurance company providing you?

Insurance for Older Homes

I visited Evergreen Museum yesterday. I was able to take a self-guided tour of the museum. It was amazing to see the details of the home up close and personal. The design of older homes is just amazing.

As part of the tour I learned why you should consider Chubb Insurance Group to insure your older home.

Do you know the differences between a Georgian home versus a Queen Anne home? The appraisers at Chubb sure do. Not only do they know the difference but they can also tell you alot about the architects and designers of those types of home, and the cost to replicate the home today. They are truely experts in their field.

If you have an older home you should consider Chubb. Call me for more information.

Chubb Insurance Group: http://www.chubb.com/personal/

Evergreen Museum: http: http://www.museums.jhu.edu/evergreen.php

Pamela

Home Inventory

Do you know how much stuff you have in your home?

Would you remember every item you currently own after a major loss?

What about the value of each of those items?

These are some pretty tricky questions, which are even tougher to answer after you experience a home fire or other catastrophe.

In an effort to help you recover after a loss you should have a home inventory or listing of all of your personal property in your home. So when a loss does happen you can relieve some of your stress and get back to normal quicker.

Insurance Information Institute (III) has come up with software that can be used via your iPhone or Android to document your personal property, and it’s free!

This software should even be used by individuals that own a condo or rent. The value of your personal property is the driving force of policy premium. Having an idea how much stuff you have will help narrow down a premium faster.

Information on conducting a home inventory, and instructions on getting the software can be found by visiting, http://www.knowyourstuff.org/iii/login.html.

Check it out today!

Coach… yummy!

It’s official… I have my first Coach purse! It looks so pretty and it has that new smell. Its so sleek and stylish. Eeeek! See for your self.

Are you jealous? I would be if I were you and didn’t have a Coach purse. Lol!

Truth be told and I am a fashion nut. I subscribe to like 5 fashion magazines. And when I receive them I go through them religiously. My husband always teases me about my expensive taste, which means I have to remind him of his expensive taste. He did pick me, right? And you can’t forget his collection of fishing rods, reels, and the several tackle boxes full of fishing gear. (Baby, see I’m learning the lingo…)

So now I have another purse but not any purse… A Coach! She will go right next to my Guess and Jessica Simpson purses.

Now here is the lesson….

This precious purse is an investment, despite the fact that I got it 80% off. I would like to protect my investment. I know a major way do to so… homeowners insurance. Your homeowners insurance policy should have replacement cost coverage for contents, so that when my precious Coach bag is lost or damaged my homeowners policy will pay the full price to replace it.

Time to go show off my new stylish, Coach purse.

Pamela