Saturday, March 26th, 2016
Homeowner insurance...........
If you own a home or condo, you have (or should have) homeowner insurance. However, what I find when I talk to people about their homeowner insurance is that they typically don't even look at their policy. It renews year after year, the mortgage company generally pays for the policy, which means that the homeowner doesn't think it really affects them directly. However, this couldn't be further from the truth.
Every year your policy keeps increasing in premium, your mortgage company in turn will keep raising your escrow to accommodate that payment. So even though the mortgage company sends the check to the insurance company, you, the homeowner, are sending the money to the mortgage company to begin with. Your homeowner premium directly affects how much your mortgage payment is.
So what exactly does your homeowner policy cover? Here are a few of things about your policy that you need to know.
1. The dwelling coverage (Coverage A) on your policy will increase on average 4% per year to keep up with inflation. Many times that's enough, but sometimes it's not enough and sometimes it's too much. Every 3 to 4 years minimum, you should be checking the amount of coverage on your policy. If your not sure how to figure out what you need, call your insurance agent and ask them to do a replacement cost estimate on your home. Remember, you are insuring to rebuild your home, not the actual value of the home.
2. All homeowner insurance policies are not equal. There are many coverage endorsements available to add to your homeowner policy. First and foremost is making sure everything is covered at replacement cost, not actual cash value. That's the difference between you replacing your furniture with brand new furniture or going to good will to find the equivalent of what you had. You want a policy that covers replacing your home and personal property as new and this is called replacement cost.
3. Another very important endorsement is extended replacement cost. Some policies don't include it at all. Others will give you 20%, 25%, 50%, 100% capped, 100% uncapped. What does this mean? Let's use an even number. Your home is insured for $400,000. You have a total loss fire and your house is gone. It ends up costing $600,000 to rebuild your home. Do you have enough coverage with $400,000 in coverage? If you don't have any extended replacement coverage the answer is no. With 20%, you would have $480,000 ($400 +20%=$480), so the answer is still no. With 25% you would have $500,000, so the answer is still no. With 50% you would have $600,000, so the answer from that point on would be yes. You wouldn't think that your $400,000 home would cost $600,000 to rebuild, but what happens if a tornado is the cause and your entire neighborhood is wiped out, as well as several neighborhoods nearby. The builders prices and building supply prices go up because they're in demand. The replacement cost can quickly increase when this happens.
5. Water back-up coverage (not to be confused with flood.) This is typically when your sump pump stops working and water backs up into your basement. Most policies don't automatically come with this coverage, however most agents will add it to the policy. Your coverage can be anywhere between $5,000 and coverage A (which is the limit on your entire home.) It's important to know what your limit is and figure out how much you need it to be.
6. Liability. Liability comes on every home policy. The limit can be between $100,000 and $500,000. The difference in premium between those two limits is typically around $20 per year. What people don't realize is that their homeowner liability limits are what follow them personally wherever they go. If you're on vacation, it's with you. If you're at work, it's with you. If you're walking down the street, it's with you. Oh! It also follows your children. For example: Your child gets on their computer and slanders someone and you get sued. Yes, your homeowner policy liability covers that. 20 bucks per year for half a million? Yes, please! Check your policy and call your agent for a quote to increase your liability if needed.
7. Loss of use. This is how much the insurance company is going to pay for you to live somewhere else while your home is being repaired or rebuilt. This can be anywhere from a dollar amount to unlimited. Some policies also set time limits.
There are many other coverage options available on your homeowner policy, I've only touched on some of the major ones. The main reason I bring all of this up is to make you aware that this is important coverage. It's not just something you purchase because the mortgage company made you. Home insurance policies are often confusing and cover so many things, but it's important that you know exactly what is covered and what isn't.
I can tell you exactly what is covered on my homeowner policy. How much coverage I have for each item from jewelry to water back up to loss of use. Yes, I'm an insurance agent, but I haven't looked at my policy in quite a while - I just know what coverage I have on it and beyond that I just randomly keep an eye on the dwelling coverage. I can't tell you how much peace of mind it gives me to know I have the right coverage on my home, regardless of what may come.
If you don't own your home, you should have a renters policy that gives you some of the above coverage options, as well as others to protect you and your personal property.
Many people don't have their home and auto insurance policies with the same company. If you don't it's a big mistake because insurance companies will give up to 35% account credit when you have both policies with them. If your policies are with different companies, call each company and get a quote for the package. Get explanations of coverage for both your home and auto policies. If you don't get the answers you want, find someone who can answer them. I personally advise you to find an independent insurance agent because they have many insurance companies to choose from and can shop your policies for you to find not only the best prices but also the best coverage. Independent agents are also usually licensed in many states so they can help you even if you move.
If your looking for an independent agent for quotes or have more questions, you can comment below or you can reach me through my company website, www.brocknorton.com.
I hope you found this information helpful.
MW
Copyright 2016
Homeowner insurance...........
If you own a home or condo, you have (or should have) homeowner insurance. However, what I find when I talk to people about their homeowner insurance is that they typically don't even look at their policy. It renews year after year, the mortgage company generally pays for the policy, which means that the homeowner doesn't think it really affects them directly. However, this couldn't be further from the truth.
Every year your policy keeps increasing in premium, your mortgage company in turn will keep raising your escrow to accommodate that payment. So even though the mortgage company sends the check to the insurance company, you, the homeowner, are sending the money to the mortgage company to begin with. Your homeowner premium directly affects how much your mortgage payment is.
So what exactly does your homeowner policy cover? Here are a few of things about your policy that you need to know.
1. The dwelling coverage (Coverage A) on your policy will increase on average 4% per year to keep up with inflation. Many times that's enough, but sometimes it's not enough and sometimes it's too much. Every 3 to 4 years minimum, you should be checking the amount of coverage on your policy. If your not sure how to figure out what you need, call your insurance agent and ask them to do a replacement cost estimate on your home. Remember, you are insuring to rebuild your home, not the actual value of the home.
2. All homeowner insurance policies are not equal. There are many coverage endorsements available to add to your homeowner policy. First and foremost is making sure everything is covered at replacement cost, not actual cash value. That's the difference between you replacing your furniture with brand new furniture or going to good will to find the equivalent of what you had. You want a policy that covers replacing your home and personal property as new and this is called replacement cost.
3. Another very important endorsement is extended replacement cost. Some policies don't include it at all. Others will give you 20%, 25%, 50%, 100% capped, 100% uncapped. What does this mean? Let's use an even number. Your home is insured for $400,000. You have a total loss fire and your house is gone. It ends up costing $600,000 to rebuild your home. Do you have enough coverage with $400,000 in coverage? If you don't have any extended replacement coverage the answer is no. With 20%, you would have $480,000 ($400 +20%=$480), so the answer is still no. With 25% you would have $500,000, so the answer is still no. With 50% you would have $600,000, so the answer from that point on would be yes. You wouldn't think that your $400,000 home would cost $600,000 to rebuild, but what happens if a tornado is the cause and your entire neighborhood is wiped out, as well as several neighborhoods nearby. The builders prices and building supply prices go up because they're in demand. The replacement cost can quickly increase when this happens.
5. Water back-up coverage (not to be confused with flood.) This is typically when your sump pump stops working and water backs up into your basement. Most policies don't automatically come with this coverage, however most agents will add it to the policy. Your coverage can be anywhere between $5,000 and coverage A (which is the limit on your entire home.) It's important to know what your limit is and figure out how much you need it to be.
6. Liability. Liability comes on every home policy. The limit can be between $100,000 and $500,000. The difference in premium between those two limits is typically around $20 per year. What people don't realize is that their homeowner liability limits are what follow them personally wherever they go. If you're on vacation, it's with you. If you're at work, it's with you. If you're walking down the street, it's with you. Oh! It also follows your children. For example: Your child gets on their computer and slanders someone and you get sued. Yes, your homeowner policy liability covers that. 20 bucks per year for half a million? Yes, please! Check your policy and call your agent for a quote to increase your liability if needed.
7. Loss of use. This is how much the insurance company is going to pay for you to live somewhere else while your home is being repaired or rebuilt. This can be anywhere from a dollar amount to unlimited. Some policies also set time limits.
There are many other coverage options available on your homeowner policy, I've only touched on some of the major ones. The main reason I bring all of this up is to make you aware that this is important coverage. It's not just something you purchase because the mortgage company made you. Home insurance policies are often confusing and cover so many things, but it's important that you know exactly what is covered and what isn't.
I can tell you exactly what is covered on my homeowner policy. How much coverage I have for each item from jewelry to water back up to loss of use. Yes, I'm an insurance agent, but I haven't looked at my policy in quite a while - I just know what coverage I have on it and beyond that I just randomly keep an eye on the dwelling coverage. I can't tell you how much peace of mind it gives me to know I have the right coverage on my home, regardless of what may come.
If you don't own your home, you should have a renters policy that gives you some of the above coverage options, as well as others to protect you and your personal property.
Many people don't have their home and auto insurance policies with the same company. If you don't it's a big mistake because insurance companies will give up to 35% account credit when you have both policies with them. If your policies are with different companies, call each company and get a quote for the package. Get explanations of coverage for both your home and auto policies. If you don't get the answers you want, find someone who can answer them. I personally advise you to find an independent insurance agent because they have many insurance companies to choose from and can shop your policies for you to find not only the best prices but also the best coverage. Independent agents are also usually licensed in many states so they can help you even if you move.
If your looking for an independent agent for quotes or have more questions, you can comment below or you can reach me through my company website, www.brocknorton.com.
I hope you found this information helpful.
MW
Copyright 2016
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