Archive for the ‘home damage’ Tag

Some Wintery Insurance Tips   Leave a comment

Sammy Bo

Sammy Bo loves the snow!

Long time no post!  This El Nino winter has been a strange one here in Pittsburgh.  The on-again off-again wintery weather has kept us busy.    The Insurance Dogger loves the snow, so this winter has been an emotional roller coaster to be sure!

A month into winter and we’ve received an unusual array of claims for this time of year – of course we are seeing the normal frozen pipes, chipped windshields (salt wreaks havoc on your glass!), and sliding on ice.  But we are also seeing some unusual-for-winter claims as well – in particular, sewage backing up in basements, which is far more common in spring & early summer.  The heavy snowfall, followed by rapidly rising temps and even occasional rain showers has simply been too much for many sewage systems to handle.

All of this has gotten us to thinking, in light of some of the conversations we’ve had to have with clients, it’s time to do a brief update & post on choosing your insurance coverage – both home and auto. 

I can’t tell you how many times a client has told us they want to insure their cars or home “as cheaply as possible.”  Though this is a thought process we work very hard to counter, it’s not always feasible to adjust this mindset.  When you’ve had a claim is NOT when you want to find out that if you spent a couple extra dollars per month, you would have saved yourself a lot of heartache.

Once you’ve had a claim, you cannot backdate a change to your policy to provide you with the coverage you need – even if you offer to pay for the additional premium.

Here are a few coverage options to consider having on your policy to avoid stress & financial difficulty:

Auto Insurance

Comprehensive physical damage – do not confusion this with collision coverage, or “full” coverage.  As explained previously here on the Dog Blog, comprehensive coverage (in Pennsylvania) protects against things like glass damage, hail damage, fire, theft, flooding, or hitting a deer.  Even if you remove Collision coverage from your vehicle, we always recommend retaining Comprehensive on your policy, as it is a cheap way to provide protection against a number of different claims.

Rental Reimbursement & Towing and Labor – Again, previously explained on the Dog Blog, these two extremely inexpensive coverages will save you A LOT of stress in the event of a covered claim.  Towing & Labor, which provides similar benefits as AAA membership for a fraction of the cost, is a particularly useful during the winter months. It provides everything from jumping a dead battery to pulling your car out of a ditch after sliding on black ice.  Rental reimbursement pays you back for the use of a rental car (with policy-specific limits – ask your agent) in the event that a covered claim puts your car in the shop for an extended period of time.

Increased Property Damage liability limit – Did you slide on slushy roads and rear-end that brand new Mercedes driving in front of you?  We recommend all clients carry AT LEAST $50,000 of Property Damage liability coverage, if not $100,000 or more.  Sleep peacefully knowing that you have the protection you need if you damage an expensive car (or cars!) or home.

Homeowners/Renters Insurance

Sewer & Drain back up – Put simply, S&D B/U (as I call it) protects you in the event that sewage backs up through your floor drains or water overflows from your sump pump.  The coverage is available on both owners and renters policies.  Though this is more common in spring & summer – add it now to ensure A) you don’t get any nasty surprises during this unusual weather season and B) you don’t forget to add it before the spring rains start.

Preventing pipes from freezing – though not a specific coverage, preventing your pipes from freezing in winter is crucial to preventing an unforeseen catastrophe – especially if your power goes out!  Some useful links with more in depth information were provided last winter, but there are several easy things you can do to prevent your pipes from freezing during cold snaps.  If you know you are not going to be home for 24 hours or more, ALWAYS shut your water off at the main.  This prevents water from flowing continuously from a burst pipe.  If you have pipes closed up within a cabinet (like your kitchen sink), open the cabinet from time to time to warm things up – and leave the doors open during especially cold times (when temps drop below zero Fahrenheit).  If your power goes out during a storm or a cold snap, turn all faucets on exterior walls on to a slight drip to ensure the pipes don’t freeze.

Identity Theft – OK OK, identity theft has nothing to do with winter weather, but especially during the Christmas shopping season, it bears repeating that the $20-30 per year that you spend on identity theft is money extremely well spent.  In 2014 alone, nearly 10% of all Americans were a victim of identity theft.  If that’s not enough to motivate you, consider that nearly 15% of identity theft victims suffered a direct financial loss of at least $1,000.  At $20 per year, it would take 50 years to make up the difference with premium savings to cover a $1,000 loss!

To summarize – a few simple and inexpensive steps now can prevent a great deal of stress down the road!  Contact your agent to discuss any questions or concerns you might have.

Slow down and drive carefully!

Always drive slowly and carefully when the snow is flying!

A review of Personal Insurance – Home Owners (Part 1)   1 comment

dog blog

Sitting at home, blogging away!

Homeowners coverage.  Where to begin?  With your home, of course!  In this “installment,”  I’m going to review a couple things to keep in mind while reviewing or considering insuring your home – based on the assumption that you own, not rent.

The primary “concern” of homeowners is protecting the actual dwelling itself.  As there are quite a few formats to do this, I’m only going to cover the most common form, called an HO5 policy

Under an HO5 homeowners policy, the dwelling is covered for comprehensive perils at replacement cost valuation.

  • Comprehensive Perils – CP is actually easier to explain by starting with its counter-part, named perils.  A named perils policy means that only claims (causes of loss or perils) specifically named on the policy are covered – if it’s not listed, it’s not covered.  Comprehensive perils is the opposite – if a cause of loss is not specifically excluded, it’s covered.  Every company has its own list of excluded losses, but some common ones are flood, acts of war, intentional acts of the homeowner (arson, for example), and wear and tear (in other words, maintenance is typically NOT covered!).
  • Replacement Cost Valuation – RCV describes how payment for a loss will be made.  When you carry RCV coverage, a loss will be paid out based on the true cost to repair or replace damaged goods (less your deductible).  Actual Cash Value, by contrast, pays based on the cost to repair or replace MINUS depreciation (typically based on age and condition). 

Understanding RCV is what typically causes frustration.  The easiest way to understand how this works is by using an example.  If you have a fire in your home, and the kitchen is destroyed, RCV dictates that the insurance company pay the cost of restoring your kitchen (as closely as possible) to its original condition, REGARDLESS of the age of materials there.  In other words, your cabinets may be 15 years old, but an RCV policy pays for the cost of brand new cabinets (comparable – “like kind and quality”).

The replacement cost valuation of your home is commonly found by entering in the characteristics of your home into software designed for this purpose – how many square feet, how many stories, year built, updates, style, construction, etc etc.  A common source of confusion is that the RCV of your home is often greater than the market value of the house – this occurs because the cost to rebuild per square foot is almost always higher than the actual market value per square foot – but this works in your favor!  If a home policy were written based on market value, and you had the kitchen fire described above – guess what!  The cost to repair would not be paid in full: unless your kitchen were brand new, it’s virtually impossible that it’s market value would be anywhere close to what the replacement value is!

Contents Coverage – Another important component of your homeowners policy is contents, or personal property, coverage.  This is for the actual contents of your home – simply put, anything that’s not permanently attached.  So all of your clothing, furnishings, appliances/electronics, decorations, etc etc.  This is almost always calculated as a percentage of your building limit – 60, 70, and 80% are the most common levels. 

Something important to remember – if you have high-value, unique, antique, or difficult to replace items, it’s generally a good idea to schedule them on the policy.  Most policies have limitations or exclusions for these items that generally mean that you are only going to get a fraction of what they are actually worth.  In addition, by scheduling items, you can typically get minimal or zero dollar deductibles, which drastically reduces your out of pocket expense in the event of the loss.  The coverage tends to be more expensive than general contents (PP) coverage, but in the long run is far more beneficial!

Liability Coverage – The last of the major coverages I will review today is liability coverage, which covers damage or “injury” for others.  The most common example of a liability situation would be if a person (NOT a guest of yours, who are covered by “Medical Payments” coverage) were on your property, slipped and fell, and required you to pay for their injury and rehab costs.  This would be covered by the liability coverage on your policy.   Other examples of common liability claims would be if you happened to accidentally damaged someone else’s goods – knocking over the TV in their house, hitting a baseball through their picture window, etc.  It would also cover injuries caused if your dog bites someone.  Contact your agent if you have questions about what would and wouldn’t be covered by your liability coverage. 

A common situation that often causes consternation – what if your neighbor’s tree fell over onto your property and damaged your home?  Would that be covered by your neighbor’s liability coverage, or your dwelling coverage?  Everyone’s favorite answer:  That depends.  If the tree is long since dead and your neighbor has been negligent in removing it, then his liability policy would cover your damages.  HOWEVER, if the tree is still alive, and was simply blown over by the wind, or some other similar “unforeseeable” incident, then the damages would be paid out of your dwelling coverage (and subject to your deductible). 

Some other coverages to consider:  Loss of Use, Other Structures, Medical Payments, Inland Marine Floater (see Scheduled goods)

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