Why a Home Inspection is So Critical When Buying a Home
Most states have some form of disclosure laws when purchasing a home. These disclosure laws are designed to protect buyers by making sure they are made aware of certain factors concerning the history of the home. It documents that a seller was up font about certain factors regarding the property. It can provide at least some assurance about the history and condition of the house. It is not designed, however, to be in-depth, complete or even necessarily thorough. This is why buyers are encouraged to contract with a home inspection prior to closing on a home.
A home inspection should provide you with a much better picture as to the condition of the home. A good home inspection will include a roof inspection, electrical and plumbing inspection, and include moisture tests. It should detect if mold may be a problem, foundation issues and if there is any rotting wood. A thorough home inspection will allow the purchaser, if they desire, to attempt to correct these issues before closing on a home.
It is also important because if a home is shown to have a pre-existing condition, pre-existing damages may not be covered under any homeowners’ insurance policy.
There are a few things to keep in mind about a home inspection. First, it can easily pay for itself if an unexpected problem is discovered. Buyers should be aware, however, that not all home inspections are the same. They can range from a visual inspection to a complete mechanical and structural inspection. Prices will also vary as well.
While many states require home inspectors to be certified, this does not mean every inspector is committed to providing a quality inspection. For this, you should read online reviews, seek referrals and ask how the inspection will be conducted. Ask ahead of time what sort of written reports you should expect and try to be present when the inspection is conducted.
A home inspection can provide peace of mind and help ensure your homeowners’ insurance policy will cover everything you intend it to. It is a worthwhile investment.
Getting quality, sufficient homeowners’ insurance at the best possible price is also critical when purchasing a home. Our independent agents can help you do just that. We’ll review your property and your needs and work at finding you the coverage you deserve. If you already have a home and insurance, we would appreciate the opportunity to provide a complete insurance review. Contact us to learn more.
Beware the Backyard Trampoline
Some families buy them for exercise or to burn off the youthful energy of their kids. Once in a backyard, they are a magnet for neighbor kids and even some adventurous adults who should probably know better. They may be purchased in hopes of landing the perfect summersault or backflip, but they may be just as likely to land someone in the hospital. We are talking about backyard trampolines and homeowners should beware.
During their height of popularity, between 2002 and 2011, backyard trampolines were the cause of over 1 million hospital emergency room visits with almost one-third of those involving broken bones. An astounding 93% of those fractures occurred in children 16 and under. Even with advanced safety features of the more modern editions, trampolines still cause over 100,000 injuries annually. Like they say, “it’s all fun and games until someone gets hurt” and it still happens all too frequently with backyard trampolines.
So what can you do? Well, if you don’t have a backyard trampoline you may want to think twice about getting one. If you have one, consider recycling it. If you insist on using it, make sure it has plenty of padding and that children only jump on it one at a time and they are supervised when doing so. Many homeowners’ insurance policies consider these devices an “attractive nuisance” requiring access to be restricted. There’s also one more thing to consider. That is whether your homeowners’ insurance policy has a trampoline exclusion clause. This may exclude any injury-related or liability claim made against you should someone become injured on your trampoline. More and more insurance companies will not accept a home with a trampoline. The insurance company will deny a policy if you have a trampoline. If a trampoline is purchased after you purchased your policy and the insurance company finds out you have one, most likely your home insurance will be set to be canceled on it’s next renewal. Unless, of course, you decide to recycle it.
If you have a backyard trampoline, check your policy to make sure you will be covered. If you are unsure, contact one of our independent agents for a homeowners’ insurance policy review. If you do not have coverage don’t risk your home and savings. It is time to retire it.
Beware of that backyard trampoline. It just may jump up and bite you in the assets.
Why a Lender Requires You to Carry Home or Auto Insurance
It is relatively rare when we are legally bound to purchase a product. You don’t HAVE to buy a car for example, and you certainly aren’t required to purchase a home. The fact Is, however, if you purchase either of these you may be required to purchase insurance, particularly if your purchase of these items is financed through a lender.
The reasons are fairly straight-forward. Those who lend you money to purchase something of significant value, like a house or vehicle, have a right to protect their own interests. Requiring a borrower to carry insurance is one way they can do that.
Every state already has some form of financial responsibility law for drivers. This means there are basic minimum coverages that must be carried to protect other drivers. But lenders can also require full coverage to ensure their interests are protected. If a vehicle is severely damaged or “totaled”, the lender is assured their loan will be paid. This is why car buyers get a memorandum of title as opposed to the official title when buying a car using borrowed money. The bank or financial institution will hold the title until terms of the loan are met.
It is similar with real estate. A mortgage lender will hold the title until the mortgage is paid. Should there be a major loss, the lender wants to make sure their loan will be covered. Thus, homeowners’ insurance is a requirement.
The bottom line is if a borrower defaults on a loan through non-payment, a vehicle can be repossessed or a property foreclosed on. If either is lost or significantly damaged, they can still be covered by required insurance coverage. This being said, you still have control over who provides the coverage on your car or house. This still allows you the right to choose your insurance agent and company. Of course, we believe it’s best to select an independent insurance agency who can work in YOUR best interests.
Contact us to review your automobile and homeowners’ insurance policies. Let’s make sure you are getting the most effective coverage at the best possible price. As an independent insurance agency, we work for YOU.
Calamities Basic Homeowners’ Insurance May Not Cover
Life can be full of surprises. Some, like a birthday party with friends or finding a $20 bill in an old pair of jeans can be pleasant. Others, like discovering your homeowners’ insurance policy doesn’t cover your claim, can be rather unpleasant. The fact is, there are certain events that can cause damage to your home that your homeowners’ insurance policy may or may not cover. If you don’t know ahead of time it could lead to an unpleasant, and more importantly, an unpleasantly expensive, surprise.
What are the calamities that may or may not be covered under basic homeowners’ insurance policies?
Flooding. Flooding is not automatically covered under a homeowners’ insurance policy. Flood insurance can be written through a government-sponsored insurance plan (FEMA) that can be administrated by certain insurance companies or one can secure private flood insurance as an alternative to FEMA. The point is unless it is secured separately, you do not have flood insurance. Even when it is secured, be sure to go over the coverage with your independent agent to understand what is and isn’t covered under your flood insurance.
Earthquakes. Unless coverage is secured under a separate policy, a standard homeowners’ insurance policy will not cover damage from an earthquake. The exception could be damage from a fire that results because of an earthquake.
Sinkholes. A sinkhole occurs as the result of the earth settling in underground. When it occurs below a structure, damage can be significant. A sink-hole, like an earthquake, is considered an earth movement hazard and is not covered under basic homeowners’ insurance policies. Your independent insurance agent can direct you to coverage to protect your home from sinkhole damage as an addendum or as a separate policy.
Tsunamis. Most homeowners’ insurance policies will not cover damage from a tsunami unless separate flood insurance is secured.
Wildfires. Typically, damage to a home from fire, including wildfires will be covered under most basic homeowners’ insurance policies. This, however, may vary according to geographic region. If wildfires are a concern, check with your insurance agent to verify your coverage.
Terrorism. Unless your policy specifically excludes terrorism, damage from such acts would generally be covered under most homeowners’ insurance policies. This would frequently include damage from an explosion, fire and/or smoke.
Meteorites. Talk about an unpleasant surprise. The good news is most homeowners’ insurance policies cover falling debris like meteorites, asteroids, satellites and even airplane parts. Your property and contents are likely covered in such an unfortunate event.
If you ever asked yourself “I wonder if I’m covered for…?” we can get you the answer. Contact us for a no-cost, no-obligation homeowners’ insurance review. We may not only be able to shed some light on your coverage but may also be able to help you improve your coverage at an affordable price. Connect with us and avoid at least one unpleasant surprise.
Homeowners’ Insurance: Actual Cash Value vs Replacement Value
Many of us are in a constant search to find out the value of something. We may negotiate for a used car, look up the value of an antique chair or have a property appraised for financing. Most are just “guesses” or reasonable estimates, however. In fact, someone once said the real value of anything is what another person is willing to pay for it. That’s an interesting concept but not practical when it comes to insuring a property and its contents.
Even in homeowners’ insurance policies, there are differences in how the value of a property is determined. This is important to understand when it comes to the amount your property is insured for should you experience a loss. Your property is either insured up to its replacement cost or its actual cash value (ACV), and the difference can be significant.
Replacement cost or replacement value is determined by the actual costs of replacing any property lost in a claim. Whether it is the structure itself or a computer or electronics, the amount of the claim will be paid on what it takes to physically replace lost or destroyed property.
On the other hand, actual cash value is the value of any lost items minus depreciation. Let’s say you paid $1,000 for a sofa 5 years ago. Its value after depreciation may now only be $200. That is the amount you would be paid for the used sofa. It will be challenging to replace your personal items based on actual cash value.
Another way to view it is that replacement costs will allow you to replace losses with new items at a store. Actual cash value may force you to replace your items at a garage sale.
As you can imagine, this can make a huge difference in your claim’s settlement. How accurate of an inventory you have of your personal items will also make a big difference in establishing your claim.
If there is any doubt about your homeowners’ insurance coverage, please contact us. As an independent insurance agency, we are qualified to review the policies issued by any company. We can help you determine whether your losses will be covered to actual cash value or replacement value and to what limits they are covered. There is no cost or obligation for a homeowners’ insurance policy review so don’t take chances. Contact us today!
There’s No Business Like Home Business…If You Are Covered
There are many benefits to operating a home-based business. The first, of course, is the instant commute. Many who have a home-based business conduct much of their morning office duties from their jammies. There is also the ability to better set your own schedule and be able to react to family duties. Many who operate home-based businesses are their own bosses, which has its perks. Perhaps the biggest reason home-based businesses are so popular, however, is they can be operated with very low overhead.
There is no rent for office space, for example, and utilities are included. In fact, operating a business from a home can have tax advantages that make it even more appealing. If you think, however, that your home-based business will be covered under your homeowners’ insurance policy, you are taking a big risk. The problem is magnified by the fact that you may not know it is a problem until it is too late.
Let’s take a look at the premise for your homeowner’s insurance. It is designed to cover your home from losses due to liability claims and certain calamities. The keyword here is “home”. Once you begin to use a house for more than personal living space (like renting out space or conducting business activities) its use changes. Those activities would not be covered under your homeowners’ insurance policy. From an insurance company perspective, your home now becomes a place where commercial activity is taking place.
This is particularly risky if you have inventory, office equipment or have clients visit your home to conduct business. These items would likely not be covered under your basic homeowners’ insurance policy and you will have increased exposure to liability claims.
It can be relatively simple and inexpensive to protect your home-based business, however. Contact your independent agent and make them aware you have a home-based business and what is involved in the business. They can provide an addendum or rider to your policy that will ensure coverage for your business activities conducted at home.
Yes, there are a variety of reasons operating a home-based business makes sense, as long as you have it properly covered in the event of a loss. Contact us and we can help explain your options and prevent you from experiencing an unexpected and uncovered loss.
Protecting Your House from the Terrors of Tenants
Tenants can do an extraordinary amount of damage, and you don’t always know which tenants are going to be a chore. If you want to rent out your home, you need to protect it, first. Here’s how.
The Damage That Tenants Can Do
Have you ever had concrete poured down your drains? Copper wiring ripped out of your walls? Fish placed in your vents?
It might never happen to you… But it could.
Tenants can be malicious, especially if they’re being evicted. Tenants can also be negligent: a tenant can lead to thousands of dollars in plumbing expenses simply by flushing things they shouldn’t.
If you want to protect your investment, you need to be proactive.
First: Choose the Right Tenants
You can’t completely eliminate your risk by being picky, but it helps. Don’t skip calling references: it’s important. Run a credit check. Follow up with prior landlords. If a landlord refuses to say anything at all, well, that’s saying something. And make sure your tenants have renters insurance. You can (and should) require it as terms of your lease, so if anything does happen to your property, you can be compensated.
Get Landlord Insurance
Your regular homeowners policy doesn’t protect you from the risks involved with renting. You need a specific policy known as a landlords insurance policy. This is going to protect you from incidents in your home caused by tenants. But it will also protect you from associated issues, such as being without rental income while the concrete is being drilled out of your drains.
Like other home insurance properties, your landlords insurance will be based on the value of your home. So make sure you have a current appraisal and review your coverage limits.
Keep Up With Your Inspections
We get it: inspections are awkward and weird. Tenants hate them. Landlords hate them. But without regular tenant inspections, you’re not going to know about the above ground pool your tenants installed in your unfinished basement. At least, not until they’ve already moved out. Regular inspections are critical for catching problems before they become major issues. As long as you’re not too picky about cleanliness (who doesn’t have a few dirty dishes?), your tenants should be fine with them too.
Imagine the worst tenant horror story you’ve ever heard. Even that can be countered with the right insurance policy. Contact an independent insurance agent to get a quote today.
5 Times You Need to Upgrade Your Homeowners Insurance
In reality, homeowners should have their homeowners’ insurance policy reviewed annually. This should be done more frequently when significant changes take place. Here are five times when you should consider upgrading your homeowners’ insurance policy.
1. When You Add an Outbuilding
Adding an outbuilding like a shed, unattached garage, barn or even a gazebo could potentially impact the value of your property and should trigger a call to your insurance agency. Along with making sure your outbuilding has necessary permits and meets local regulatory or HOA standards, letting your insurance agent know about the structure will make sure you remain covered.
2. When you Build an Addition
Adding space to a present home can be a practical and affordable alternative to moving to a larger house. Families needing more space may add on a sunroom, extra bedroom or bath. Kitchens can be expanded, a game or theater room added or even a deck or fence constructed. Each, however, potentially increase the home’s square footage and value. It is also likely to impact your homeowners’ insurance. Contact your provider to see how an addition to your home will affect your coverage.
3. When you Make a Significant Remodel
While you don’t have to make your insurance agent aware if you are painting a bedroom, a significant upgrade or remodel should be noted. Making structural changes, new windows or a roof, or expensive kitchen or bath upgrades can significantly affect your home’s value. This is an excellent time for a homeowners’ insurance policy review and potentially an upgrade.
4. When you Add Recreational Equipment
Considering adding an indoor or outdoor pool? Think the kids will burn off some energy if you get an outdoor trampoline? You may want to talk with your insurance agent first. These items can increase the liability risks of a policy and adjustments in your policy may be required. This is important to do before someone gets injured.
5. When You Add Safety and Security Equipment
More homeowners are taking advantage of technology to add more and more security and safety features to their home. Cameras, smart lighting, and alarms may qualify you for some homeowners’ insurance discounts you otherwise may miss out on. Even upgrading locks and deadbolts may improve security and earn a discount.
If it has been over a year since you’ve had your homeowner’s insurance reviewed or you have made one or more of the above changes, contact us for a free, no-obligation homeowners’ insurance review. We’ll not only make sure your coverage is sufficient but may be able to actually save you money. We look forward to assisting you.
Your Invisible Homeowner’s’ Insurance Policy
It is mysterious and can be difficult to understand. You may have had it for years and never gave it much thought. Your bank or mortgage company may have required it but once you get it, it can simply be forgotten. That is until, of course, you need it. Then it can help or haunt you. We are talking about the amazing, disappearing and invisible homeowners’ insurance policy.
What puts homeowners’ insurance into this invisible category? There are several factors.
It is Purchased Infrequently
Many homeowners only purchase a homeowners’ insurance policy when they buy their home. They may even buy it over the phone or online without a full understanding of what they are saying “yes” or “no” to. It is also a very busy time when tons of documents are being filled out. Homeowners’ insurance likely doesn’t get the consideration it deserves before being acquired.
Paying for it may be Automatic
Since many pay for their homeowners’ insurance premiums through their mortgage payments, some homeowners may not even know how much they are paying for coverage. They may not know who their provider is. It is less likely they know the coverage, deductibles, and limits of their policy.
It is Seldom Used
Only about 1 in 20 homes will make a homeowners’ insurance claim in any given year. Only about 1 in 50 sustain wind or hail damage. Even if minor damage occurs, many will pay to fix it themselves as opposed to paying their deductible and filing a claim.
Dangers of the Invisible Homeowners’ Insurance Policy
Your invisible homeowners’ policy can actually be a bit scary and even costly. It may not cover you for certain calamities like flooding or earthquakes. Your home’s value may have outgrown your coverage and you may even be overpaying for it. Out of sight often equals of out mind. How can you resolve this troubling issue of invisible homeowners’ insurance? Get a no-cost, no-obligation insurance review.
A review of your homeowners’ insurance policy brings your policy out of the shadows. You will no longer be haunted by unknown coverage or the thought of overpaying. You can feel good knowing you have sufficient coverage at the best possible price.
Think about your homeowners’ insurance coverage for a minute. If you are drawing a blank, it could be a sign you have invisible homeowners’ insurance. Contact us for an insurance review and put a new focus on your coverage.