Building codes change constantly.  If your home is ten years old, it probably does not meet current codes; in fact, with all the latest “green” code changes,  it’s possible that your home won’t make it even if it is just five years old.  That means if something happens to your home, you’ll be required to bring it up to code when you repair it.  Is your home insurance policy big enough to cover that? 

Read the rest of this entry »

The Michigan Court of Appeals has decided that insurance companies can no longer use credit scores to determine premiums for auto and home insurance.  Some are celebrating that this means lower rates for people with poor credit, but ultimately it could cost every Michigan resident even more for insurance. 

Organizations like the Property Casualty Insurers Association of America and the Insurance Institute of Michigan maintain that low credit scores show a pretty direct relationship with things like car accidents and homeowners claims. 

Read the rest of this entry »

Jonathan was angry that he was being evicted, so he planned revenge.  Once he’d moved out all of his belongings, he stopped the kitchen drain, then turned the water on in the sink, locked the door and left.  By the time Tom, the landlord, came to clean the place the next day, thousands of dollars in damage had been done.

Read the rest of this entry »

Are you renting your home?  87 million Americans are now, especially as the number of foreclosures increases.  But while homeowners are required to purchase home insurance  as a mortgage requirement, renters aren’t forced to buy renters insurance. 

Only 40% of renters have the coverage they need.  As a result, over 50 million people are unprotected from loss of their personal property.

Renters insurance usually is pretty cheap because it only protects your stuff, like your clothes, TV, computer, camera, etc. 

Read the rest of this entry »

One factor which affects your home insurance rates is the quality of your local fire department.  The Insurance Services Office (ISO) assigns each fire district a Public Protection Classification rank on a scale of 1 to 10.  A Class 1 rank is the best there is, while a Class 10 means local protection doesn’t even meet minimum criteria.

This matters to you because it will directly determine the quote your home insurance company offers for coverage.  Insurance rates are all about risk, and having a great fire department means that if there’s an incident, the fire could be put out quickly, thus minimizing damage and consequently risk. 

There are three primary factors involved in rating each fire district.

• The local communication system – things like fire alarms, telephone systems, staffing and dispatching, basically how fast can the people who need to know find out about a fire.  This represents 10% of the total classification.
• Fire department resources, such as equipment, training, staffing, and the location of each company in relation to concentrations of population, homes and buildings to determine the potential quality of the initial response.  This factor, which accounts for 50% of the rating, looks at specific things like pumping capacity and the equipment on each fire vehicle within each engine company.
• The condition and maintenance of the water supply system.  Representing 40% of the analysis, this factor involves hydrant size, type, installation and condition.

Very few fire protection districts are awarded Class 1 distinction.  Most fall within Classes 4 to 8, with the majority at Class 6.  To see how the fire departments in your state have ranked, visit the ISO website and select your state.  I checked out Colorado, and found as a state we’re pretty average.

As a homeowner, if you live in an area with an average rating or less, make sure your homeowners insurance company knows that you are doing what you can to reduce the risk of a fire.  Install smoke detectors on every floor, keep a fire extinguisher in your home, and keep your property clean and well maintained.  These are some of the easiest ways to save money on home insurance.  If a vote comes up to increase taxes for the fire department, consider it carefully. Wouldn’t it be better to spend the money on local firefighters than on higher home insurance rates?

South Carolina residents should be very proud of their insurance commission.  In June new laws were passed concerning notification of non-renewal of South Carolina home insurance policies, which can be a huge issue for residents.  Since South Carolina is so vulnerable to hurricanes and tropical storms, not having home insurance is a risk no one can afford to take!

The new law increased the amount of notice that South Carolina home insurance companies must give announcing they are not renewing a policy.  Now a 60-day notice is required for policies which will expire from November 1 – May 31, and 90 days for policies ending June 1 – October 31.  The previous law required only a 30-day notice, regardless of the time of year, which left some homeowners high and dry during hurricane season.

South Carolina home owner insurance providers must also give the reason they are choosing not to renew a policy holder’s coverage, though almost any reason is acceptable.  The only exception is using your claims history as the cause, if all your claims were the result of Acts of God, such as storms.

Of course non-payment is a huge reason for immediate cancellation, which is permitted in South Carolina with just a 10-day notice.

Though South Carolina home owner insurance rates have been climbing steadily for the past few years, and are forecast to continue doing so, there are many ways to save money on home insurance.  We have included several money saving insurance tips in our article on South Carolina home insurance.

The National Fire Protection Association just released final data on residential fires for 2006, and the total showed an increase of 4.2% over 2005.  The good news is that deaths due to fires were down 11.7%, just 3245 in 1.6 million fires, which is the lowest amount since the NFPA began recording totals in 1977. The scary part is that the financial loss from these fires was $6.9 billion dollars – just one more reason for having home insurance.

Every 76 seconds a residential fire occurs somewhere in the US.   By doing everything you can to avoid becoming a statistic, you’ll not only protect your family, but you can lower your home insurance rates as well. 

The first thing to do is install working smoke detectors on each floor of your home, including the basement.  Make sure that you change the batteries every six months and test each regularly to confirm they are working properly. 

Keep a fire extinguisher in the kitchen.  In fact, it would be great to have one on each floor, and make sure that each member of the family knows how to use it.  We actually received a fire extinguisher as a wedding shower gift along with a card that our friend wanted to make sure we were always safe.  I thought that was a terrific idea.

Develop a fire escape plan so that each family member knows how to get outside the house quickly in case of emergency.  If you have a multi-story home, determine a way for those with bedrooms upstairs to escape in case the stairway is blocked.  Place stickers on the window identifying each bedroom and the number of children inside.  In fact you can even get stickers announcing pets in the family too.

When you apply for homeowners insurance, each insurance company will ask whether you have smoke detectors and a fire extinguisher, and give you a discount for doing so.  They’ll also ask how far your home is from the nearest fire hydrant and fire station.  By the way, these are just a few ideas for saving money on home insurance.

The most expensive, but safest way to protect your home is having a monitored service, which ties into your alarm system and notifies the fire department if an alarm goes off.  Unfortunately some home insurance companies do not offer much of a discount for this type of service, but make sure to ask about it anyway as you obtain home insurance quotes.

Hurricane Katrina caused many insurance companies to re-examine the exposure they had from existing home insurance policies.  As a result, many have modified the language in their policies in subtle but critical ways.  So it’s time to ask – did your homeowners insurance policy change?

One of the biggest changes concerns damage from windstorms.  Now, instead of identifying deductibles for this incident in a dollar amount, they are frequently shown as a percentage of a policy’s total value.  Thus, instead of paying your normal deductible of $250 or $500, you could pay $10,000 on a $200,000 policy before the insurance company starts to bear the cost.  If you live in an area that’s subject to windstorms or hurricanes, call your homeowners insurance company or insurance agent to confirm the exact details of your policy. 

Also be on the lookout for an “anti-concurrent causation” clause.  This clause gives home insurance companies a way out if coverable damage occurs at the same time as non-coverable damage.  For example, if the wind blows the roof off your house (a covered incident), and the home then floods from rain or hurricane (a non-covered incident), then companies can reject the claim under the provisions of this clause.  Again, check with your insurance company or agent to see if this is part of your policy. 

Depending on where you live and the perils you are normally subject to, these items may not impact your homeowners insurance policy, especially if everything else about the policy is great.  Home insurance isn’t a one-size-fits-all commodity, so you have to decide whether your individual policy meets your needs.  At least now you know a few more things you need to find out about your home insurance policy first.

If the line supplying water to your home broke, would your home insurance policy cover it?

What about if termites started eating your basement – would the insurance claims adjuster be there tomorrow?  How about mold in the walls?

Surprisingly, the answers to all of these questions is “no.”  None of these items would be repaired through a standard home insurance policy, though over a third of all homeowners think these situations would be covered.

After all the controversy over flood insurance following the hurricanes, most home owners now know whether they live in an area eligible for flood insurance.  But when these or other situations arise, most people face an expensive surprise. 

The best way to avoid these situations is to study your insurance policy, and ask many “what if” questions as you compare quotes on standard home insurance coverage from different insurance companies.  Ask about specific items which concern you, such as mold, if it is a particular issue in your community.  The only way to be covered for everything is to purchase an all-peril policy, which is much more expensive, and could be more coverage than you really need.  That’s something only you can decide.

Just so you know, other perils that aren’t covered include:

• Stolen or damaged cars, boats or motorcycles
• Broken sewer line connecting your property to the municipal sewer system
• Stolen or injured pets
• Earthquakes
• Infestations by vermin (mice, rats, etc) or insects
• Damage due to property neglect

So read your home insurance policy, know what’s covered, and remember, taking good care of your home is your best insurance.

Since Hurricanes Katrina and Rita slammed into the Gulf Coast in 2005, home insurance has become a huge issue for states like Louisiana, Mississippi, Texas and Florida.  In fact hurricane concerns even plague New York, where experts say a storm is long overdue to slam Long Island.  Now the question arises between personal rights and personal responsibilities – who pays the enormous insurance costs for people living along the coastline?

Thousands of homes were destroyed by the storms, and now insurance companies are reticent to insure those areas again because there is little that can be done to mitigate the risk.  Subsequently coastal economies are threatened.  “As you know, if you can’t insure it, you can’t finance it,” Mississippi Gov. Haley Barbour told the Associated Press, “And normally, if you can’t finance it, you can’t build it.” 

State-sponsored insurance pools have stepped in with hundreds of millions of dollars to help insurance companies underwrite the cost of home insurance in many states.  This has worked well most recently in Florida, where a huge pool of funds enticed eight additional insurance carriers back to the Sunshine State.  But the state pools still aren’t enough, and many are pushing for an expensive federal program.

Here’s the rub – in many areas, like exclusive parts of Texas, the coast is lined with expensive homes that regularly get destroyed and replaced by the flood insurance program at taxpayer cost.  It’s the same case in Florida and other coastal states.  As William Berkley, chairman of the board and CEO of W. R. Berkley Corp said, “It’s just plain silly to provide subsidies to insure million-dollar-plus houses along the oceans and the bays.”    Is it right for me, as a taxpayer in Colorado, to subsidize the replacement of expensive homes I can’t even dream about, just because someone wants to live there?  To carry this further, since there is no way to prevent another hurricane from devastating New Orleans, should all those homes be rebuilt?

I understand that for many people, those ravaged areas are home, and they want to go back.  Yet the fact remains that they lived in a very fragile, vulnerable area, and it’s simply too great a risk for the government to accept when there are so many other demands on our economy.  I would rather put that same money into things like education or health care, rather than rebuild in a problem area.  Government funds – translation: tax dollars from you and me – are not inexhaustible.  We must spend them as wisely as possible, and asking the government to subsidize the risk of rebuilding in danger zones is not wise. 

This is a free country, and people have the right to live wherever they want.  People do not have the right, however, to ask someone else to pay for it.  If you can afford to pay your own way and live on the coast, enjoy.  If you cannot afford to pay your own way, you may need to find a new home somewhere else.  Sometimes you just have to walk away.  This could be one of those times.