Top 10 Questions and Answers You Should Know About Home Owners Insurance
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<<First Name>>,
Almost daily, as a Multi-Line Insurance advisor, I consult with new home buyers: My conversation usually starts with, "how can I help you and what questions do you have?" The response I typically receive is, "I need insurance and.....I don't know what else to ask?" First of all, this is okay that a new home buyer does not know what to ask. There is so much going on with buying a house and insurance is usually a box to check off in the process. However, this is the perfect time for a Home Buyer to seek out a trusted professional in this complicated world of insurance. Here are the top 10 questions and answers you should know prior to purchasing a policy:
10. Do I need a fire policy And a home owners policy?
These are one and the same. Lenders, Escrow, Insurance agents and Realtors all call home insurance by different titles. Fortunately, these are the same.
9. What does "Walls in" insurance mean?
Walls in, is a term used by lenders when dealing with condo insurance. Most Home Owners Associations (HOA) cover the exterior of the condo and the client purchasing the condo needs to insure the interior (meaning, inside the walls; drywall, paint, fixtures, flooring, sometimes plumbing and electrical).
8. How much "Walls in" coverage do I need? Typically, lenders require 20% of the purchase price or appraised value. For example, a condo purchased for $500,000 requires $100,000 in coverage. This is usually enough coverage to replace the walls in.
7. How much personal property is required?
Most insurance carriers have a minimum limit: $15,000-$40,000 included in the policy. If you own more than the minimum, you can increase it and you should.
6. What is Loss Assessment?
Loss Assessment coverage is protection that condo owners can use on claims involving the exterior of their buildings or common areas of the HOA. This can help you avoid paying out-of-pocket expenses when a common area loss requires a special assessment due to a claim.
5. Loss of Use; what is that?
For example, when you have a fire in your home, your mortgage company still expects to get paid. You will need additional money to live elsewhere while your home is being rebuilt. The money from your insurance company will help you cover the additional living expense is loss of use coverage.
4. How much jewelry coverage do I have?
Most policies include $1500-$5000 for your jewelry collection. For example, if you own a ring, watch, necklace or earrings that are more valuable, you should consider a jewelry rider. This will individually insure that item for theft, fire, even mysterious disappearance.
3. Is mold included in my home owners policy?
Sometimes... Not all insurance companies offer mold coverage. It is automatically included for some and not offered with others. Ask if the insurance company you have selected offers it.
2. How much will I save if I increase my deductible?
Approximately 20% when changing your deductible from $1000 to $2500. This may not always make sense though. If your policy costs $1000/year and you raise your deductible to $2500/year you will save $200/year. Keep in mind, you need to go 7 1/2 years without a claim to truly keep the savings.
1. How much will my rate increase if I have a claim?
Typically 20%. When you submit a claim, your rate will increase at renewal for the next three years. My advice is to make sure the claim is worth submitting and to calculate out the cost over the next three years. Claims should be made for significant losses, not for smaller problems.
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My wife, Elizabeth, is a Mom, an amazing wife and an incredible chef. She trained at the California Culinary Academy in San Francisco. She shares a helpful tip below.
It's time to get fit for the summer. Cut back on red meat and try a fresh Turkey Burger.
Ingredients:
Ground Turkey, lean 93%
1 clove garlic, chopped fine
4 scallions, chopped
1/4 cup Dijon mustard
1/4 cup dried bread crumbs
1/2 cup Gruyere cheese
Mix the ingredients together in a bowl. Form patties and grill to perfection. Salt and Pepper to taste.
Eat on a whole wheat bun or Butter lettuce, protein style. Enjoy! |
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