Considering the Real Estate Market is solid, with quality Real Estate Agents, and builders in the process of mass production, our insurance companies are also ready to take on the responsibility. The growth in our area is increasing the need of HOMEOWNERS, FLOOD and UMBRELLA coverage. With the good fortune that we have had in the past few years’ homeowners are once again in a very fortunate position to have options. However Premiums are going up so EDUCATION is key.
For the hurricane –Beware Of The Box – Question and Answer Article please scroll down.
We recommend that when speaking to your local insurance agent, you take note on the care they take to educate you and answer all of your questions. We are your partners when it comes to finding the right coverage. The time to become educated on coverage’s and limitations is not at the time of a claim.
So how come premiums seem to be going up for most insureds? To simplify what could be a very long answer, the fact of the matter is that carriers generally user reinsurance to back up their claims. Claims are still being mitigated from as far back as three and four years ago so it has taken a toll and forced the re-insurers to increase their premiums. The item that is being looked at now is the fact that many people are being influenced by the market place to claim on their policies at a higher rate than previously. Although many of these claims are legitimate claims, many others may not be. The insurance companies are tending to all of these additional claims with due diligence as well as trepidation. The days of low home insurance rates may be a thing of the past.
Even tho it is an uphill change to budget for higher premiums, we must keep in mind that insurance simply allows you to go on about your every day life, with peace of mind. So let’s make that happen.
We are once again fortunate to be able to have the Homeowners Markets and options. Our goal is to advantage of the market place for our clients so that we may bring them the best possible value for their insurance dollar. To find as many credits as we can while not giving up valuable overages needed.
Working with Realtors, Mortgage Companies, Inspectors and Title Companies and Builders allows us to meet our clients home buying experience a relaxed process when it comes to Homeowners Insurance. Florida has some experiences that many other states do not face. Lightning Storms, Sink Holes, Hurricanes and a transient population. Having peace of mind while you are in or out of your home is also a primary goal of ours, not to mention making sure you have sufficient coverage for your assets such as umbrella policies.
A word of caution before moving on to additional education: When shopping for home insurance if you receive different quotes, and at time the difference in premium is large, make sure you look at all of the coverage’s, benefits, deductibles, exceptions, limitations and the value at which your property is covered for such as Cash Value or Replacement Cost. These are explained below.
We are hopeful that the information below will be helpful in ensuring your possessions and specially your peace of mind.
SHOPPING HOMEOWNERS INSURANCE: (Please Scroll to end of page for Hurricane Season Info. and Home Inspections Info.)
There are three major reasons to buy homeowners insurance:
- To provide property coverage – Homeowners insurance covers the physical structure of your home and your personal property if it gets damaged or destroyed.
- To provide liability coverage – If someone who isn’t covered under your policy is injured or killed, or their property is damaged or destroyed while they’re on your property, your homeowners policy will cover your personal legal responsibility. This coverage extends to cases where damage or injury happens adjacent to your property, such as when the limb of a tree on your property falls on a parked car on the street.
- To satisfy your mortgage lender – To get a mortgage from a bank, most lenders insist you have insurance as long as you have a mortgage; you also have to list the lender as the mortgagee on the policy.
Understanding Your Policy
In a 2010 survey by the Independent Insurance Agents & Brokers of America, more than a third of the respondents said they didn’t have, or didn’t know if they had, adequate homeowners insurance coverage
A. What’s Covered
- Fire, smoke, wind, hail, lightning, explosions, or civil unrest
- Theft or vandalism
- Trees and other falling objects
- Weight of ice, snow, sleet and freezing rain
- Rupturing and sudden overflowing of a plumbing, heating, air-conditioning appliance or sprinkler system
B. What’s Not
- Floods or sewers that back up into the home
- Land movement, including earthquakes, landslides and mudflows
- Acts of war, or overthrow of the government
- Damage from pets, birds, rodents or insects
- Pollution damage
- Deliberate damage to the home
- Normal wear and tear
How to Shop for Homeowners Insurance
- What is the claims history of the home I am considering?
- If I submit a claim, how will it affect my premium when I renew the policy? Could it end up costing me overall?
- How will my credit history affect my premium?
- What does the policy cover? What doesn’t it cover? What are the limits to the coverages?
- How much coverage do I need for my personal property?
- How much liability coverage should I buy?
- Should I buy flood insurance or earthquake coverage? Can an agent help me determine how much risk my home is at?
- What types of water damage are not covered? Is mold damage covered?
Stick with the Professionals MAKE SURE [AGENTS] ARE FULLY LICENSED.
Insurance companies generally use one of three methods to sell their products.
- Independent agents who represent several companies and can give you several quotes at once;
- Exclusive agents who only sell the products of one insurance company; and
- Direct market sales that are done over the Internet, by mail or by phone.
How Insurers Determine Your Premium
- The cost to rebuild your home; this is not the same as the purchase price, which includes the cost of the land. Your insurance agent might help you estimate replacement cost using information about your home and its contents.
- Whether your home is made of brick or wood; the premium is usually lower for homes that are primarily brick or masonry than for wood frame homes. . Items such as building materials in a thriving economy as opposed to a slow economy are to be considered
- The proximity of your home to resources and services, such as a water source or fire department and the quality of your community’s fire protection services
- The age and condition of your home; the premium is often higher for older homes and homes in poor condition than for newer homes and homes in good condition.
- The claims history of your neighborhood and community, particularly the homes immediately next to your address
- A wood furnace or wood stove in the home
- Owning high-risk outdoor amenities, such as a swimming pool, a trampoline or playground equipment that could cause injuries
- The types of pets you have. Some insurers won’t insure you if you own certain breeds of dogs that are known to be aggressive, such as, but not exclusive to:
MAKE SURE YOU GET ENOUGH
- Actual cash value (ACV) – This method would reimburse you for your lost or damaged possessions only after accounting for the age of each item and discounting for the wear and tear – or the depreciation that has occurred over the years to lessen its value. Usually, the ACV is lower than the market value, but premiums tend to be cheaper.
- Replacement cost value (RCV) – This would replace your possessions with similar items at their current market value so it does not factor into depreciation. The downside is that the annual premiums for RCV policies tend to be about 10 percent higher that ACV ones.
We have all heard of massive flooding occurring near the gulf, ocean, waterways and inlets. The item seldom thought about is inland flooding due to our heavy rainfalls. Understanding your property type and location concerns is very important to us.
Allow us to explain why you may want to consider the benefits of carrying flood insurance on one of your most valued property assets that may not necessarily be near a water way or large body of water.
Once again; We are hopeful that you simply call us or send us a simple email and allow us to do the shopping for you.
When Buying a home: If you are told that the house you are looking at is in an active flood zone, your immediate thought may be regarding the price of Flood Insurance. It is not practical to give a ballpark figure on flood insurance. The way to determine the cost of a flood insurance policy for a house that is in an active flood zone is to obtain an Elevation Certificate / pictured. We can plug in the information to come up with an accurate quote.
Why is this necessary to come up with a correct quote? On the elevation certificate there are very important numbers which paint the picture for the particular house you are looking at. The certificate is created by a licensed inspector. The flood plain for a particular area is important for it means that when the ocean or river or lake or drainage area close by reaches a certain number, you reach a flood stage and the community will begin to see widespread flooding. You also have a house elevation number. Depending on that number it could mean that the house could completely flood out when the community is not anywhere near reaching the flood stage. If that is the case the house would be considered a “High Risk”
If you are looking for a flood insurance quote for a home in an active flood zone and you do not have an elevation certificate to show to your insurance agent, then there is no certain way to tell if the house was constructed above or below the flood plain. The quote that you receive from an agency that does not have this information may be unreasonably high because it will reflect a worse case scenario.
The good news is that most people selling houses that are in an active flood zone know that they will be asked for elevation certificate and are ready to provide it to you. So if you are house shopping and you find your dream house in an active flood zone. Remember to ask the listing agent for an elevation certificate so that you can make sure you receive the best possible information.
This is not to say that if you are not in a flood zone you should not carry flood insurance. Always consult with your insurance agent. Many folks depend on the information from their neighbors, which could be correct but perhaps just overly optimistic. Flood insurance is a very affordable way to protect your investment.
HOW TO PREVENT WATER DAMAGE CLAIMS:
Carriers have reported water damage as the leading cause of claims in our industry. The Institute for Business and Home Safety recently reported homes over the age of 30 are more likely to experience plumbing or drainage problems. However, adopting a routine inspection/maintenance plan can prevent disasters from occurring.
By becoming familiar with all the sources of water which enter or can enter your home, plans can be implemented to prevent most water damage events. As such, below are a few preventative measures your customers can take to avoid a water loss.
1. Routinely inspect pipes, sinks, showers and toilets throughout your home for leaks, cracked tiles and corrosion. (Tip): Turn off your main water supply line while on vacation.
2. Inspect the water supply line hoses on your washing machine every few months to ensure the connection is secure and not showing any signs of corrosion or kinking, and replace every 5-6 years. (Tip): Only run your washing machine when someone is home.
3. Schedule an annual plumbing inspection of your water heater’s anode rod to avoid damage to the tank. (Tip): The chances of a water heater leaking or bursting increase dramatically after 5 years.
4. As the most frequent source of water damage, roofs should be inspected annually by a professional roofer. Repairs should be made to loose and/or missing tiles and shingles and deteriorated flashing should be replaced.
5. Make certain your icemaker supply line hose is properly installed and not leaking or crimping.
The protection of your safety and your home should be your first act. Calling your insurance carrier as soon as possible is always recommended. (Tip) Many insurance carriers have a dedicated water mitigation hot line.
Don’t get stuck IN THE BOX; During Hurricane Season:
It is always a smart idea to obtain your homeowners insurance before hurricane season. Don’t get stuck in “The Box” refers to the hurricane box. June 1’st is the beginning of Hurricane Season, and it lasts until November 30th. It will be difficult, if not impossible to buy some insurance coverages for windstorm or hurricane damage, as well as other type of policies, during a named storm.
If a named Tropical Storm or Hurricane enters approximately 16000 sq. mile box extending over Florida, the adjacent states and well into the Atlantic Ocean, then the insurance companies will suspend binding coverage. This occurrence is at times referred to as ” The Storm is in the Box”. The restrictions can also apply when a tropical storm or a hurricane watch or warning has been issued. The National Hurricane Center generally issues these warnings.
Each insurance company may have their own definition of “The Box”. If you live in Florida or are looking to purchase a home in Florida, you are or will be in sometime in “The Box”.
Avoiding The Box:
The key to avoid “The Box” is to lock in your insurance before your real estate closing date. If you are modifying coverage, try and do that before hurricane season or consider doing the modifications during good weather. Find out in advance how to bind your policy, as well as, what if any requirements are imposed. Your insurance agent should be able to very easily explain and help you with that.
A Conversation with Rick, “In Plain English”.
Beware of The Box
This month we look at what it means to be “In the Box” and how it relates to your property during a hurricane. It’s also referred to as The Hurricane Box. Q&A.
- Client: Rick, I heard of something called “The Hurricane Box”, what is that?
- Rick: “The Box” is a term that is referred to once a tropical storm is named or a Hurricane enters an approximately 16000 sq. mile box extending over Florida, adjacent states as well as the Atlantic Ocean. The insurance companies will suspend binding coverage. Binding Coverage relates to making a policy effective. During Hurricane Season, June 1st, through the end of November it may be difficult if not impossible to purchase certain insurance coverages for windstorm or Hurricane damages.
- Client, Do all insurance companies stop writing insurance at the same time?
- Rick: Different insurance companies may have their own definition of “The Box”.
Some companies may choose to set their own binding restriction timetables when it comes to hurricanes. Although it’s been our experience, once we see one insurance company starts suspending our writing abilities, most follow very quickly. Insurance companies don’t want to put themselves at additional risk immediately before a hurricane. The protection of assets, claims and policyholders is the priority.
- Client: Is it only during a hurricane that this happens?
- Rick: The restriction can also apply when a tropical storm or hurricane watch or warning has been issued by the National Hurricane Center.
- Client: So, as long as I have home insurance, it would be covered for hurricane damage. Correct?
- Rick: Generally, wind damage is covered, however water damage is something to watch for. There is a difference between falling water (rain), and interior plumbing water damage (pipe leaks and breakage) which are both generally covered, as opposed to rising water like a flood. Flood water damage is generally not covered under your homeowners insurance. In order to have coverage in case of a flood you need to have a separate Flood Insurance Policy.
Q Client: I hear that flood policies are very expensive.
- Rick: Flood policies have become more and more affordable due to FEMA, The National Flood Insurance Program that encourages communities to adopt and enforce floodplain management regulations. Coverage can be obtained thru The National Flood Insurance Program as well as Primary Insurance Writers. Insurance agencies like ours can search for the best options. An important thing to keep in mind is that, Flood Insurance has a 30 day wait. So no coverage for 30 days.
- Client: Is there anything else you can tell me to protect myself during a hurricane regarding my insurance.
- Rick: Yes first of all, always consult annually with your property and casualty insurance agent, so that you make sure you have the right coverage. Especially when you are a home or commercial property buyer. Find out in advance how to bind the new coverage as well as what requirements are imposed. This could be as simple as paying for the coverage in advance.
We also need to keep in mind, when it comes to binding restrictions, insurance companies do not limit this process to just homes. For example coverage such as Auto Insurance can also be impacted.
So to recap our conversation; Always consult with us and make sure that you are ready for hurricane season. Things may have changed for you throughout the year. Keep all your policies and insurance company information handy. Keep our business card with you always and if something does happen, call as soon as possible.
I hope this was helpful.
- Client: Thank you, I am glad I don’t have to worry about that box.
There are many items that are reviewed and assessed by home inspectors:
Appliances current conditions and functionality
Plumbing systems to determine materials used and functionality; Sinks, Toilets, showers, tubs, and hot water heaters.
Electrical system probable safety hazards
Windows and doors
Exterior Grading to determine proper drainage
Heating and air conditioning systems are checked for location, life expectancy, age and temperature differentials
Roof and its components are observed to determine present condition, age and life expectancy. The inspection will take into consideration the exterior of the roof as well as what can be discerned from the attic space.
Generally the prospective buyer pays for the report. Many closings are contingent upon the inspection report. We recommend that Wind Mitigation Inspection be done on a home to maximize premium savings.
Wind Mitigation inspections:
A wind mitigation inspection can help you earn discounts on insurance premium. Discounts are mandated by the State of Florida to insureds from insurance companies to issue discounts when there is evidence of wind resistance features on a home to minimize damage due windstorm. Basically you may get a discount on your premium based on the Wind Mitigation Inspection Report.
Items Included: Roof coverings, Roof Decks, Hurricane clips and traps, Protection of openings, Secondary water resistance features, Exterior and garage doors, Roof design/configuration
A certified Home Inspector (Wind mitigation certified) must perform inspections up to three stories in height. Licensed General Contractors are required for heights above three stories.
The more features that are verified, the more discounts are applicable.
Four Point Inspection:
Generally when a home is over a certain age the insurance companies require Four Point Inspections before they will issue or at times renew a homeowners policy. Different companies have different requirement on age. It can be as low as 25 years or as high as 50 years.
The four areas of inspection are:
Roofing system, Plumbing system, Electrical system, Heating and cooling system
Roof Certification Inspection:
Some insurance companies require a Roof Certification Inspection. The purpose for this inspection is to verify that the roof is in good condition. (at least 3 years of useful life; check for visible signs of damage or deterioration; document roofing materials)
Please feel free to call us. You are also always welcome to call or visit our office to make sure you get the peace of mind you want. 813-909-0035
Please remember our motto:
“Our family business is protecting your family and your business.”
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