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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.
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
Here at Woods Insurance Agency we love referrals. For every referral that calls our office to get a quote or goes online and fills out one of our quote forms then we will send YOU a free gift card for $10 to Starbucks, Walmart, or Subway. CLICK HERE for details on our referral program and to submit your referral.
However, there is a new database in town, it’s in place, and it’s aim is to get everyone paying for insurance. TexasSure is a new vehicle insurance verification system that will ultimately allow law enforcement and county tax officials to confirm whether a vehicle in Texas has required personal auto liability insurance coverage. It will help reduce the number of uninsured vehicles in Texas. It is expected to help stop the actions some motorists take to avoid the law, such as using phony proof of insurance cards or obtaining insurance to get a card and then promptly canceling the policy once they’ve renewed their car registration or had their vehicle inspected.
An estimated one out of every five vehicles on our Texas roads has no automobile insurance (That’s nearly 4 million cars without insurance or about 20 percent of all vehicles in Texas). In some areas of the state, the concentration of uninsured vehicles may be even higher. That means that the four out of every five vehicle owners who do carry the minimum legal coverage wind up having to personally pay the consequences, either by paying their own medical bills and auto repairs if they’re hit by an uninsured driver or by collectively spending nearly $1 billion every year for optional insurance coverage to protect themselves against uninsured and underinsured drivers.
Visit TexasSure for more details.READ MORE
Texas law requires people who drive in Texas to pay for the accidents they cause. Most drivers do this by buying auto liability insurance. Liability insurance pays to repair or replace the other driver’s car and pays other people’s medical expenses when you are at fault in an accident.
If you buy insurance to meet the state’s financial responsibility law, you must buy at least the minimum amount. The current minimum liability limits are $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called “30/60/25 coverage”.
Because of car prices and the high cost of medical care, the minimum amounts might not be enough to pay all of the other driver’s costs. If you’re in an accident and happened to hit a Mercedes, Lexus, or damage multiple vehicles then the other drivers could sue you to collect the difference. Consider buying more than the basic limits to protect yourself financially.
NOTE: Liability insurance doesn’t pay to repair or replace your car or to treat your injuries. Consider buying other types of coverage – such as medical payments, collision, and comprehensive – to pay for these expenses.
Proof of Financial Responsibility
When you buy an auto policy, your insurance company will send you a proof-of-insurance card. You must show your current card when you
* are asked for it by a police officer
* have an accident
* register your car or renew its registration
* get or renew your driver’s license
* have your car inspected.
The penalties for violating the state’s financial responsibility laws could be:
* First offense: fine of $175 to $350
* Additional offenses: fine of $350 to $1,000, suspension of your driver’s license, and impoundment of your car
* Offense without a driver’s license: $2,000 maximum fine, 180 days in jail, or both
* Offense if you cause an accident with serious injuries or death: $4,000 maximum fine, one year in jail, or both.
When providing you a quote on insurance for your home or auto an agent may ask for a copy of the Declarations Page aka “DEC Page” to make sure they are compairing apples-to-apples against your current coverages. This will allow you to see if your getting a better price for the same type of coverage you currently have. Sometimes agents will provide a lower quote to a consumer that looks good until you dig in and see that you may have got less coverage than before. This can turn in to a real problem down the road should a claim come into play. Always ask for a quote based on the same coverages you currently have. Then you can determine if you want additional coverage or less coverage to arrive at the right coverage for your situation.READ MORE
Credit checks from your insurance company is considered a “soft hit” and an inquiry will be added to your credit report each time an insurance company accesses your credit report. But, the inquiries will have no effect on credit scores or lending decisions.
Insurance inquiries are shown only on your personal credit report. They are not provided to lenders, so they are not considered in credit score calculations or lending decisions. The inquiries are treated the same way as inquiries for employment purposes, preapproved credit offers, and requests from you for a personal credit report.
Because inquiries for these purposes are the result of your application for credit, they are shown only to you so that you have a complete record of who accessed your credit report and why.
Many people often ask what the difference is between Mortgage Protection Insurance and Life Insurance. While mortgage protection is often accomplished by a simple term life insurance policy, there are often many different options to protect your family and your mortgage.
Term Life Insurance is simply life insurance for a term period of time. That period of time could be 10 years, 20 years or 30 years. The life insurance policy begins upon issuance and continues until the policy expires. After that term or period of time is over, so is your policy.
Mortgage Protection Insurance normally begins with a term life insurance policy however, options are added. Most of the time people need protection while they are still alive but are overtaken by illnesses of various degrees. A term life insurance policy alone will not help them with those illnesses.
Some insurance providers who specialize in Mortgage Protection Insurance have built policies to allow the policy holder (you) to access some of the money in monthly allotments for Critical Illness, Chronic Illness or Terminal Illness. These policies will specifically acknowlege the illnesses such as Cancer, Diabetes and many others.
The term of the policy is often geared toward the length of the mortgage.
Many people are looking for the “cheapest coverage” possible. What isn’t often realized, becuase of the amount of options with Mortgage Protection Insurance, is that the protection with all the options is normally the same basic cost as just a plain jane term life insurance policy.
For more detailed information contact an agent at Woods Insurance Agency at 888-221-2640.READ MORE