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Have you ever opened an insurance renewal letter or an email and wonder what changed that caused your rate to go up or down? Lets take a look and see what some of the reasons are behind the price fluctuations.
Our agency represents over 15+ carriers to meet various driving requirements. If you are stuck with a one carrier type agency then this might blow your mind. We would be more than happy to quote you a price on your auto insurance. Please call 888-221-2640 or email email@example.com. Let us see if we can offer better coverage or pricing to kick off this new year 2020.
Do you like your laptop? How about your sofa? Could you afford to buy them again if a fire destroyed your apartment? Do you have a plan to replace your TV, clothes, or jewelry if a thief decides to pick the lock on your door and share them with craigslist or the local pawn shop?
No? Well then—you definitely need renters insurance.
Renters insurance protects your possessions if they’re damaged, vandalized, or stolen while you’re renting.
Simply put, renters insurance protects you from unpredictable catastrophes, like fires, electrical surges, and explosions. Without renters insurance, you’ll go broke paying out of pocket for everything you lost in a fire or burglary.
Sorry to burst your bubble, but your landlord’s insurance covers the brick and mortar building that you live in. It won’t cover the loss of your electronics, furniture, jewelry, sports equipment, or collectibles—no matter who’s at fault.
No. If your roommate has renters insurance, she has insurance for her—not you. Some insurance companies offer one policy for multiple roommates. And while this may seem like the easiest thing to do, you could find yourself in a poor situation, especially if one roommate makes multiple claims and your rate goes up because of it. That’s why it’s always better to have your own policy.
Renters insurance is cheap, starting around $12 per month and up depending on a several factors. Even if you’re paying off student loans or saving for the down payment of your first home, it cost as little as $0.40 day to insure $10,000 to $50,000 worth of stuff.
A basic renters insurance policy will cover the following things.
Bikes. Kayaks. Computers. Whatever you own, renters insurance covers it. Like other types of insurance, you have to pay a portion—called the deductible—before your coverage kicks in.
For example, if you set your deductible to $1000 and you lost $3000 worth of stuff, you’d pay $1000 and your insurance company would pay the remaining $2000.
Renters insurance covers accidents that happen in your apartment. For instance, if your dog Tiny unexpectedly bites someone, or if someone slips on your floor and breaks his nose, renter’s insurance would help pay their medical bills.
And if you’re the humpty dumpty of your apartment, liability also covers clumsiness. So, let’s say you left the water running in a plugged bathtub and you flooded your apartment. Renter’s insurance would not only help pay to put things back together again, but will also pay for the damages you caused to your neighbors.
Imagine a fire has destroyed your apartment and you’re left without a roof over your head. Where do you stay? What will you eat? Renters insurance will pay for your lodging, clothes and even your food until you have another place.
You’ve worked too hard to get your stuff and risk having it all disappear overnight. An independent insurance agent can help you find the right renter’s insurance without losing on coverage. Call 888-221-2640 or email: firstname.lastname@example.orgREAD MORE
At the end of each year, we are whisked through a series of holiday celebrations, all leading up to the most contemplative day of the year: New Year’s Eve. Whilst reflecting on our accomplishments and goals, it’s easy to forget about the logistics of updating our home insurance policies to include all of the newly acquired belongings in our lives and evaluate what’s new or old in our homes. American Modern® has created a seamless checklist to make this process a breeze, so you can focus on ringing in 2020 knowing you’re prepared for any surprises that life has in store in the upcoming year.
Protecting your family and home is likely at the top of your priorities, no matter what year it is. If any mishaps such as damage or theft occur, you need to focus on regaining stability. The following tips are not only sound advice, but can help ensure that you quickly get back on your feet by covering your bases.
For informational purposes only and may not be applicable to all situations.
Credit and source: Rick Drewry
How much Homeowners Insurance do I need?
You need enough insurance to cover the following:
You need enough insurance to cover the cost of rebuilding your home at current construction costs. Don’t include the cost of the land. And don’t base your rebuilding costs on the price you paid for your home. The cost of rebuilding could be more or less than the price you paid or could sell it for today.
Some banks require you to buy homeowners insurance to cover the amount of your mortgage. If the limit of your insurance policy is based on your mortgage, make sure it’s enough to cover the cost of rebuilding. (If your mortgage is paid off, don’t cancel your homeowners policy. Homeowners insurance protects your investment in your home.)
For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local building costs per square foot. To find out construction costs in your community, call your local real estate agent, builders association or insurance agent.
Factors that will determine the cost of rebuilding your home:
Standard homeowners policies provide coverage for disasters such as damage due to fire, lightning, hail, explosions and theft. They do not cover floods, earthquakes or damage caused by lack of routine maintenance.
Flood insurance is available from the National Flood Insurance Program – NFIP and from some private insurers. Earthquake coverage is available from private insurance companies or, in California, also through the California Earthquake Authority.
Replacement cost policies
Most policies cover replacement cost for damage to the structure. A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality. There is no deduction for depreciation–the decrease in value due to age, wear and tear, and other factors.
If you purchase a flood insurance policy, coverage for the structure is available on a replacement cost basis.
Guaranteed or extended replacement cost
After a major hurricane or a tornado, building materials and construction workers are often in great demand. This can push rebuilding costs above homeowners policy limits, leaving you without enough money to cover the bill. To protect against such a situation, you can buy a policy that pays more than the policy limits.
An extended replacement cost policy will pay an extra 20 percent or more above the limits, depending on the insurance company. A guaranteed replacement cost policy will pay whatever it costs to rebuild your home as it was before the fire or other disaster.
Building codes are updated periodically and may have changed significantly since your home was built. If your home is badly damaged, you may be required to rebuild your home to meet new building codes. Generally, homeowners insurance policies (even a guaranteed replacement cost policy) won’t pay for the extra expense of rebuilding to code. Many insurance companies offer an Ordinance or Law endorsement that pays a specified amount toward these costs. (An endorsement is a form attached to an insurance policy that changes what the policy covers.)
Consider adding an inflation guard clause to your policy. This automatically adjusts the dwelling limit when you renew your policy to reflect current construction costs in your area.
If you own an older home, you may not be able to buy a replacement cost policy. Instead, you may have to buy a modified replacement cost policy. This means that instead of repairing or replacing features typical of older homes, like plaster walls and wooden floors, with similar materials, the policy will pay for repairs using the standard building materials and construction techniques in use today.
Insurance companies differ greatly in how they insure older homes. Some won’t insure older homes for the replacement cost because of the expense of re-creating special features like wall and ceiling moldings and carvings. Other companies will insure older homes for the replacement cost as long as the dwelling is in good condition.
If you can’t insure your home for the replacement cost or choose not to do so–in some cases, the cost of replacing a large old home is so high that you might not want to replace it with a house of the same size–make sure the limits of the policy are high enough to provide you with a house of acceptable size and quality.
Your personal possessions
Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 percent to 70 percent of the amount of insurance you have on the structure or “dwelling” of your home. The limits of the policy typically appear on the Declarations Page under Section I, Coverages, A. Dwelling.
To determine if this is enough coverage, you need to conduct a home inventory. This is a detailed list of everything you own and information related to the cost to replace these items if they were stolen or destroyed by a disaster such as a fire (for more information see How do I take a home inventory and why). If you think you need more coverage, contact your agent or insurance company representative and ask for higher limits for your personal possessions.
Replacement Cost or Actual Cash Value
You can either insure your belongings for their actual cash value, which pays to replace your home or possessions minus a deduction for depreciation up to the limit of your policy. Or you can opt for replacement cost, which pays the actual cost of replacing your home or possessions (no deduction for depreciation) up to the limit of your policy.
Suppose, for example, a fire destroys a 10-year-old TV set in your living room. If you have a replacement cost policy for the contents of your home, the insurance company will pay to replace the TV set with a new one. If you have an actual cash value policy, it will pay only a percentage of the cost of a new TV set because the TV has been used for 10 years and is worth a lot less than its original cost. Some replacement cost policies also replace the item and deliver it to you.
Generally, the price of replacement cost coverage is about 10 percent more than that of actual cash value. If you need a flood insurance policy for your belongings, it is only available on an actual cash value basis.
Insuring expensive items with floaters/endorsements
There may be limits on how much coverage you get for expensive items such as jewelry, silverware and furs. Generally, there is a limit on jewelry for $1,000 to $2,000. You should ask your agent or look it up in your policy. This information is in Section I, Personal Property, Special Limits of Liability. Insurance companies may also place a limit on what they will pay for computers.
If the limits are too low, consider buying a special personal property floater or an endorsement. These allow you to insure these items individually or as a collection. With floaters and endorsements, there is no deductible. You are charged a premium based on what the item (or collection) is, its dollar value and where you live.
You can determine the value by providing your agent with a recent receipt or getting the item or collection appraised.
Additional living expenses after a disaster
This is a very important feature of a standard homeowners insurance policy. This pays the additional costs of temporarily living away from your home if you can’t live in it due to a fire, severe storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt.
Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20% of the insurance on your house. Some companies will even sell you a policy that provides you with an unlimited amount of loss of use coverage, for a limited amount of time.
If you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.
You should talk to your agent or company to make sure you know exactly how much coverage you have and how long the coverage will be in effect. In most cases, you can increase this coverage for an additional premium.
Liability to others
This part of your policy covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by pets. It pays for both the cost of defending you in court and for any damages a court rules you must pay.
Generally, most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available. Increasingly, it is recommended that homeowners consider purchasing at least $300,000 to $500,000 worth of coverage of liability protection.
Umbrella or Excess Liability.
You should buy enough liability insurance to protect your assets. If you own property and or have investments and savings that are worth more than the liability limits in your policy, you may consider purchasing an excess liability or umbrella policy.
Umbrella or excess liability policies provide extra coverage. They start to pay after you have used up the liability insurance in your underlying home (or auto) policy. An umbrella policy is not part of your homeowners policy. You have to purchase it separately. In addition to providing a higher dollar amount, they offer broader coverage. You are covered for libel, slander, and invasion of privacy. These things are not covered under standard homeowners or auto policies.
The cost of an umbrella policy depends on how much underlying insurance you have and the kind of risk you represent. The greater the underlying liability coverage, the cheaper the policy. This is becaue you would be the less likely to need the additional insurance. Most companies will require a minimum of $300,000 on your home and your car, if you own one.READ MORE
When you buy a new car, the moment you drive it off the lot, the car is now considered a used car. For this reason, the value of the car decreases dramatically. Gap insurance helps covers the gap between what your vehicle is worth, and what you would have to pay if you car was in a collision. It can also help cover theft. Gap insurance is most important with new cars, which is why car dealerships often try selling it to buyers. However, it’s best to buy a gap insurance policy from your auto insurance company.
How Exactly Does it Work?
Let’s say you buy a new car for $30,000. When you drive it home, the car is now considered “used” and the value drops down to $24,000. If you get into an accident, your regular auto insurance policy will only cover the cost of the vehicle at the current market rate, which would be $24,000. Your normal auto insurance policy does not take into consideration the loan on the car, so you are now short $6,000. With a gap insurance policy, it would help cover the missing $6,000!
Basically, Gap insurance covers the difference between the actual cash value (ACH) and the amount you owe on the car.
Why is it important?
Gap insurance is helpful for drives whose loan on their car is greater than the value of the car. For cars that are completely paid off, gap insurance is essentially useless. Or if your loan amount is less than the value of the car, gap insurance doesn’t give you any advantage. However, if you get into a bad accident and your car is totaled, then gap insurance is incredibly helpful. Keep in mind that gap insurance is also useful in the event of a theft! Gap insurance is another layer of protection and can help give you some peace of mind.
Factors that Affect the Cost of Gap Insurance
There are many factors that can affect the cost of gap insurance coverage. Some of them include:
Whether you are buying or leasing
The value of the car
The loan amount
Where you get your coverage (car dealer, banks, or auto insurer)
Most often, your auto insurance company will have the best deal on gap insurance. Car dealerships and banks frequently include the cost with other financing terms, which increases the price.
Do I need to buy Gap Insurance?
At the end of the day, it’s up to you. Depending on factors such as the value of your car and your loan amount, you may feel as though you need coverage. If you have a comprehensive collision policy, you may have gap insurance included in that. Check with your auto insurance agent to double-check you current policies. You could already have it! Also speak to your insurance agent if you are unsure whether or not gap insurance will be helpful for you in the event you get into an accident.
Vacant Property, Be It A Home Up For Sale Or A Rehab, Still Needs Proper Insurance.
If You Have A Typical Homeowners Policy And Are Selling Your Home And No Longer Live In The Home, Then You Run The Risk Of Being Denied Coverage Should Something Happen. The Insurance Company Originally Signed Up To Cover You In The Home.
If You Are An Investor Or A Homeowner Doing A Major Remodel Then Check With Your Insurance Company Before Starting. You May Be Adding More Rooms Or Remodeling With Higher End Materials Thus Raising Replacement Cost Values Not To Mention The Exposure To Liability Should A Contractor Be Involved And Something Goes Wrong. The Insurance Company Originally Signed Up To Insure A Home Not To Insure A Home Under Renovation.
Don’t Be Caught Without Proper Coverage.
We Offer Vacant, Landlord, Renters, and Builders Risk. Anywhere Your Located In Texas We Can Cover. Call, Email, Or Fill Out Our “No Hassle” Quote Form.READ MORE
There is a lot of confusion out there on what the difference is between someone that is listed as “Certificate Holder” vs. “Additional Insured”. You, being the one that purchased the policy and are the named insured, may get requests from various clients that you are working with to be added as one of these. Here is the difference:
Certificate Holder: The “Main Contractor” is provided with a ‘certificate of insurance’ that shows that the sub-contractor or vendor, the “Name Insured” does in fact maintain insurance and names the main contractor as the “Certificate Holder.” It is just a proof of insurance.
Example: XYZ Company or XYZ Contractor wants YOU or YOUR COMPANY to perform work somewhere. They usually request a ‘Certificate Of Insurance’ before you can start work. You will need to contact your insurance agency and have them provide a ‘Certificate Of Insurance’ document showing the XYZ Company or XYZ Contractor your working with as the “Certificate Holder”. It is just proof you have insurance.
Additional Insured: The “Main Contractor” is named as an ‘additional insured’ on the certificate of insurance and is actually given coverage, and has rights under the sub-contractor’s or vendor’s, the “Named Insured” policy in the event of a future claim.
Example: XYZ Company or XYZ Contractor wants YOU or YOUR COMPANY to perform work somewhere. They usually request you to provide a certificate listing them as ‘Additional Insured’ before you can start work. You will need to contact your insurance agency and have them provide a ‘Certificate Of Insurance’ document showing the XYZ Company or XYZ Contractor your working with listed as the ‘Additional Insured’. There is usually a fee for adding additional insureds to a policy.
SUMMARY: “Certificate Holder” is simply proof of insurance, whereas “Additional Insured” gives XYZ Company coverage and rights under YOUR policy.
If you need us to provide a certificate, give a quote, or make any changes to a existing policy, please give us a call or submit request online.READ MORE
The man on the phone was looking for help. He and his wife had just received a letter from the bank saying they were now required to purchase flood insurance on their home. Their bank said they had a little over a month to get a flood policy in place – or they would have one forced on them.
The policy was going to cost them $2,698 a year!
They had built their home and lived in it for about 5 years. They had never been required to purchase flood insurance before. More upsetting was that they had never seen any flooding. Not even during the severe storms and heavy rains that flooded other parts of the county in the last few years.
But that didn’t matter.
Overnight the caller went from not needing flood insurance to needing a costly policy.
I wasn’t surprised by the call. I have received dozens of others like this before.
This sort of thing happens all the time across the country. There are over 5 million home owners currently paying flood insurance in the United States. You may already be one of them. Or you might have just received a letter saying that you too must now get a policy.
How does this happen?
There is a simple reason for these unpleasant letters. In the U.S. all federally backed lenders are now required by law to check whether the home they are lending money on is in a flood plain. If the house is in a 100 year floodplain then the lender is also required to make the borrower carry flood insurance. Lenders can be severely fined if they don’t follow the rules.
A little research showed that my caller received a letter from his bank because the official Flood Insurance Rate Map was recently updated. The new map shows his house inside the floodplain whereas the old map had shown his house outside.
What could he do in this situation? What could you do if this happens to you?
There are 3 basic options.
1. Pay for the flood insurance without question.
If there has been flooding in the area in the past or if there is a stream nearby or if your home sits low and you are concerned about flooding then buy flood insurance. However if you purchase flood insurance, be aware that you should contact your own insurance company to get prices rather than get a policy forced on you by the bank. Banks will usually charge much higher rates than you can otherwise get direct from an insurance company. The national average policy premium is $717 a year for approximately $226,000 worth of coverage as of September 30, 2014.
2. Pay off the balance of the loan so there won’t be a lender to require the policy.
If you can afford to pay off your mortgage and/or home equity loans you will not only be free of this debt and the monthly payments. You will get an added benefit. By not having a loan there won’t be any lender requiring you to get flood insurance. You may still have an issue when selling the house, but that could be many years away.
3. Challenge the flood zone designation and provide documentation to get the requirement waived.
Do you think there is a chance that your home was mistakenly placed in the flood plain? The way to fight it is by calling a local land surveyor or civil engineer who is very familiar with these floodplain issues and can offer assistance.
Most homeowners won’t be able to fight the bank by themselves on this. You can’t use logic and say to them that the property hasn’t flooded in 50 years. You can’t say the house sits on a hill 20 feet higher than the creek.
The lenders aren’t the logical types. This type of reasoning won’t work for them. Their hands are tied too much by government rules.
Only one authority has enough clout to tell the bank that the property is outside the 100 year floodplain – FEMA. The Federal Emergency Management Agency.
And the surveyor/engineer is needed to get a letter from this only source that does matter.
FEMA manages the National Flood Insurance Program and publishes the floodplain maps. The National Flood Insurance Program is also the underwriter for all the basic flood insurance policies and pays all the claims. They simply sell the flood insurance through the network of private insurance companies.
I received this call because I work for a civil engineering / surveying consulting firm and have been helping property owners on this sort of problem for over ten years.
The knowledgeable engineer/surveyor can take someone in this situation through FEMA’s official process of correcting errors on their existing flood maps. This process is called a Letter of Map Amendment, or LOMA. This letter will change the flood zone designation of a property from a high risk zone to a low risk zone. The LOMA is the official letter telling the bank the property has been removed from the high risk 100 year floodplain. The bank needs to see a LOMA before waiving their requirement for purchasing flood insurance.
In order to qualify for a LOMA a home must be properly measured. You will need to hire a licensed professional to do this. A surveyor is needed to perform the field measurements of the building elevations and compare them to the 100 year flood and certify them – in an Elevation Certificate.
There are a number of rules and nuances to qualify for a removal – after all, FEMA is a big government agency and the rules can be hard to understand if you don’t work with them on a regular basis. To simplify things, if the house was built before the first floodplain map was published showing it in the high risk zone then the lowest ground touching the outside of the house needs to be at or above the elevation of the 100 year flood. In this case if the ground at the house is above the high water level from a 100-year flood then FEMA will consider the property to be low risk. They will then issue the LOMA officially removing the house from the 100 year floodplain.
The bank will only accept the official letter from FEMA as proof that the house doesn’t need flood insurance.
And what if you get your property surveyed, and it is too low to get removed?
Then you are pretty much going to be stuck paying for insurance unless you sell your house or pay off the loans. Make sure that the surveyor provides you an Elevation Certificate that shows the elevations and information about the house that will allow it to be properly rated for flood insurance.
Keep in mind if your home is lower than the 100 year flood, then there is a 1% minimum chance that your house could be flooded in a given year. That sounds like a remote chance, and it is for any given year. But it needs to be considered over the long term. Statistically over a 30 year time period a home in this zone would have a 26% chance of experiencing a 100 year flood. This is 5 times more likely than having a fire. Who doesn’t carry homeowner insurance on their home that protects against fire?
Let’s go back to the caller from the beginning.
He hired our firm to do a survey and we found that his house was indeed higher than the 100 year flood elevation. We were able to obtain a LOMA removing it from the high risk zone. The bank then waived his flood insurance requirement and he no longer needed to purchase a policy.
This sort of result doesn’t happen every time, but there are enough mistakes on the floodplain maps that it may be worth it to hire someone to survey your home to measure the elevations and try to get a LOMA. FEMA processes approximately 10,000 of these cases annually.
A knowledgeable professional will be able to guide you through the process. When looking for someone to help you in this situation ask how much experience he or she has in preparing Elevation Certificates and in obtaining LOMAs. Ask if they have done work for others in your area and what the results have been. Some areas have many errors on the maps that have resulted in many LOMAs being issued. Other areas the maps are very accurate. Experienced professionals will often have good working knowledge of the situation in your particular area and should be able to answer your questions.
Steven Darmofal, P.E. is a professional engineer at the civil engineering, surveying, and architectural consulting firm Feller, Finch & Associates in Maumee, Ohio. He is an expert on floodplain issues and has taught numerous continuing education courses for real estate agents in Ohio. He has worked on projects successfully removing over 500 properties from the 100 year floodplain. Over the years these clients have collectively saved over $1,000,000 in flood insurance premiums.
Are you moving to an apartment, condo, or other dwelling? About to renew your existing insurance? We have great rates on renters insurance for all Texas residents.
Give us a call or fill out our quote form by clicking link below.READ MORE