Category: Homeowners

When driving down a street at night looking at houses, you are most likely drawn to the house with exterior lighting, neatly trimmed landscaping, and lights on inside. That’s because the house looks inviting and well cared for. Now imagine a burglar is driving down the same street. The things that drew you to the previous house are the same things that will turn that burglar away, looking for better opportunities.  A property with no exterior lighting, overgrown landscaping, and possibly no one at home, invites criminal activity.

It is important to note that burglary is a preventable crime. Common sense dictates some of the steps you can take toward making your home safer and less attractive to burglars. The following are some general tips you should incorporate into your routine that can make the difference between the burglar stopping at your house or passing it up for another one further down the road.

The first line of defense between you and a burglar is to properly secure your home. Make sure your yard, driveway, and all entrances to your home are well-lit. Consider the use of lights on a timer or photocell, which turns lights on automatically at dusk and shuts them off at dawn. Trees and shrubs around windows should be cut back so you don’t give a burglar a place to hide while preparing to enter your home.

If you are going to be away from home for a period of time, leave a light on. Lights left on indoors, especially those on a timer that turn on when it gets dark and shut off at bed time, can be a large deterrent to a burglar. The goal is to make it look as if you are home.  Ask a neighbor to pick up your newspapers and bring in your mail. Along the same lines, if you will be gone for an extended period, arrange for your lawn to be maintained. Permitting your grass to grow high or get dry is a sign of neglect and can invite unwanted attention. If you have a garage – use it. Parking inside your garage on a regular basis makes it more difficult for a burglar casing your home to know whether or not you are really there.

Burglars will usually spend about five minutes trying to get inside your home. Make that task as difficult as possible by doing the obvious – lock your doors and windows! If you forget to lock your back door, this can be viewed as an invitation by a burglar looking to get in to your home quickly. In addition to the obvious, avoid spring bolt locks. It takes only a credit card to push open the bolt and allow access to the inside. Deadbolt locks should be installed on all exterior doors. The American National Standards Institute (ANSI) has established testing and ratings for deadbolt locks. Grade 1 locks are the best, with Grade 3 locks being easier to penetrate. Look for Grade 1 locks when shopping for a deadbolt. A key lock or pin-type lock work best for patio door, or any door with glass that could be easily broken to access a knob on a deadbolt. Heavy-duty strike plates should also be used to prevent a burglar from successfully kicking in your door.

When purchasing a new home, make sure all locks have been changed. Also, think about calling a reputable locksmith who can advise you on proper locks for doors and windows. Carefully preparing your home, including adequate locks, lighting, and regular maintenance, can make the difference between a burglar deciding to make a stop at your house or to keep driving.

There are several steps you can take to ensure you are getting the best homeowner’s insurance rates possible for the coverage you need:

• Before purchasing a home, it is wise to learn about its insurance loss history.  If there have been past losses, be sure to closely inspect the home to determine if proper repairs were made.  The CLUE and A-PLUS databases enable insurers to check the claim history of the property as well as that of the homeowner. 
• Raising your deductible is a great way to reduce your premiums. Higher deductibles on your homeowner’s insurance could produce savings of 25 percent or more.
• Consider upgrades to your home. Do you need to modernize your heating, plumbing and electrical systems to reduce the risk of fire and water damage?  Are there upgrades you could make that would reduce the risk of damage in windstorms and other natural disasters? You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them more capable of withstanding earthquakes. If you do make home improvements, be sure to make your insurer aware of the changes.
• Improve your home security. You can typically get premium discounts of at least 5 percent for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that signals the police, fire department and other monitoring stations. These systems are not inexpensive and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost, and how much you would save on premiums.
• Buy your home and auto policies from the same insurer. Some companies that sell homeowner’s, auto and liability coverage will take 5 to 15 percent off your premium if combine policies with them.

Maintain a good credit rating. Most insurers use credit-based insurance scores to determine homeowner’s and auto coverage premiums. All else being equal, a person with a good credit score will pay much less for insurance than someone with a lower score. 

Don’t wait until the weather forecast calls for prolonged heavy rains before buying flood insurance. While this practical insurance can be purchased anytime, the policy does not take effect for 30 days. As the most common natural disaster in the country, flooding ruins millions of dollars of homes and property every year. Even so, flooding is not commonly covered in your typical homeowner’s insurance policy, making it necessary to purchase additional coverage for this costly, devastating disaster.

If you are in a high-risk flood zone, a federally regulated lender will require a would-be borrower to buy flood insurance in order to qualify for a mortgage loan. To satisfy the lender, flood insurance must be purchased in an amount that sufficiently covers the loan.

A homeowner should also buy flood insurance if he or she resides in a flood plain with no failsafe controls, such as a dam. Flood policies even pay off if the President does not declare the area a federal disaster area, which can prove to be invaluable. Because the nation’s Chief Executive Officer rarely issues such a declaration, protecting yourself is extremely important. Besides, you have to repay the federal aid you receive for home repairs related to a natural disaster so providing your own protection is the only way to ensure financial recovery suffered from flooding.

Not all homes qualify for flood coverage. For instance, flood insurance for beachfront or ocean-side property may not be available for the obvious reasons.

The Federal Emergency Management Association (FEMA) reports that more than 20,000 communities have agreed to tighter zoning and building measures to control floods. Residents of these communities can buy flood coverage from the National Flood Insurance Program (NFIP), which FEMA oversees. As of 2009, NFIP had 5.7 million flood policies inforce nationwide.

Premiums for flood insurance vary widely, depending primarily on individual risk. In determining price, flood insurance underwriters consider several factors including the property’s elevation, proximity to bodies of water, and whether the dwelling has a basement. Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters.

A recent study from the National Fire Protection Agency, or NFPA, found that around 95% of U.S. homes have one or more smoke alarms installed throughout the house. Unfortunately, that same study revealed that the number of homes with nonfunctioning smoke alarms vastly outnumbered the amount of homes with no alarms at all. This shows that many homes are relying on broken and battery-less alarms to save their lives in the event of a fire. By following the advice of experts and maintaining a testing schedule, you can make sure your alarms will be ready when you need them the most.

Fire safety begins with purchasing the right type of smoke alarm, as dictated by your building code’s power requirements. The common types that are required vary from standard battery-operated alarms to ones that are wired into the home’s electricity. For individuals who have difficulty hearing, smoke alarms with flashing lights and devices called “bed shakers” are used along with audible alarms. Always purchase alarms that have been listed or approved by Underwriters Laboratories (UL), or a similar independent tester.

How Many is Safe?

The NFPA publishes the Life Safety Code 101 to inform people of the regulations and best practices when it comes to fire safety, and in this case, the amount of smoke alarms to install. It recommends having at least one alarm on each floor, including basements and attics, and within 15 feet of bedrooms. Place smoke alarms inside of bedrooms if family members usually sleep with the door closed. Remember, the strategic placement of smoke alarms is just as important as keeping them powered.

The building codes that govern homes built in the last few years are significantly trying to improve residential fire safety. Most require hardwired alarms that are interconnected, meaning that all alarms will sound if one detects smoke or intense heat. Also, the new codes require the installation of smoke alarms in every bedroom of the house.

Installing the usual store-bought smoke alarm is really quite simple and will require only a drill and a screwdriver. Hardwired and interconnected alarms should be installed by a qualified electrician. Battery back-up should also be used with electrically powered alarms, as well.

Fire safety experts offer more installation advice:

* When installing a wall-mounted alarm, locate it between 6 to 12 inches below the ceiling.

* Ceiling-mounted alarms should be installed more than 6 inches away from any wall.

* On sloped and vaulted ceilings, located the alarm at the highest point.

* In open stairways, alarms should be placed near the top of the staircase.

* In closed stairways, like basement steps, the alarm should be placed at the bottom of the staircase.

* Do not install alarms in drafty areas of the house, like near windows, ceiling fans, or forced-air registers.

If you have any questions about installing fire alarms, call or email your local fire department. They will be happy to help you better protect your home against fires and show you the optimal places to install your smoke detectors.

Whether you’re looking to do to some major remodeling or if your home just needs some basic repairs, deciding on a contractor for your home improvement project can be difficult. It’s certainly not a decision you should make in haste.

Most homeowner’s insurance policies include four basic types of coverage:

* Repairs to the home because of damage caused by specified disasters

* Replacement of items lost due to theft or damaged by specified disasters

* Liability coverage

* The cost of temporary housing in the event that a specified disaster causes significant damage to the house

While all these protections are equally important in the long run, when it comes to home improvements, your liability coverage will take the forefront. This form of protection will insure you against any injury claims made by uninsured workers, as well as property damaged during the project. Liability protection will also pay for the cost of your legal defense in any related court cases and will cover any money awarded to injured workers, as defined by the terms of your policy.

Of course, your home insurance shouldn’t come into play if you’ve selected a highly qualified contractor to get the job done. Before you make the hire, set up an interview so you can ask some of these questions:

* How long has the business been around?

Businesses that have withstood the test of time generally do good work and have enough customer reviews to back it up. Look for reviews on the internet and use a consumer protection agency, like the Better Business Bureau, to check up on their complaint history. Remember to take internet posts with a grain of salt, and that BBB records don’t always tell the whole story.

* Do they hold a state license?

Most states license plumbers and electrical contractors, but just 36 states have a license or certification for contractors and home remodelers. You can find out what types of contractor’s licenses are available in your state by contacting your local building department. If your state requires home contractors to be licensed, do not hire anyone without seeing proof of their licensure.

* Are they bonded and insured?

Only hire a contractor who carries insurance that covers against damages to your property, personal liability, and worker’s compensation coverage. If you hire an underinsured contractor, your insurance will be making up the difference if something should happen.

* Will subcontractors be used during the project?

Subcontractors are not necessarily a bad thing, just make sure to meet them first so you can check out their credentials. Subcontractors are also a good source of honest information about the prime contractor. A little known fact for many homeowners is that a “mechanic’s lien” can be placed against your home if the contractor does not pay their subcontractors, so ask them if the contractor makes prompt payments. While negotiating the terms of your home project, ask the contractor and all subcontractors to sign a lien waiver or release statement that keeps subcontractors from coming after your money if bills go unpaid.

The Federal Trade Commission has issued a warning to homeowners to help spot disreputable contractors and scammers are out there looking for your business. Here are a few telltale signs of a shady contractor:

* Goes door-to-door soliciting business

* Wants the names and phone numbers of your friends who may need service

* Offers a discount for using “leftover materials”

* Only takes cash payments

* Unable to get the proper building permits

* Has an unlisted phone number

* Considers your project a “demonstration job”

* Uses high-pressure and intimidating sales tactics

* Offers guarantees without any paperwork to back them up

* Wants the payment up-front and in full

* Offers financing through a “personal friend” of the contractor

Remodeling can make you feel like your home is brand new and can add thousands to its resale value, but without doing your homework before hiring a contractor, you could be left regretting your decision for years to come.

While most states don’t legally require you to carry homeowner’s insurance, just about every mortgage lender is going to require proof of coverage for the term of your loan.  Regardless of whether you are required to or not, homeowners should carry insurance on their homes because it’s often the largest asset they own. Don’t be fooled into thinking it’s too expensive. You can find the right amount of coverage to suit your needs at affordable rates if you follow these guidelines:

1. Shop around – Talk to a number of insurers, and ask about rates and services offered, especially when it comes to handling a claim.
2. Raise your deductible – A deductible is the amount of money you are responsible for paying in the event of a loss. The higher your deductible, the more money you can save on your premiums. Keep in mind that if you live in an area susceptible to natural disasters, your insurance policy may have a separate deductible for certain types of damage.
3. Don’t confuse what you paid for your house with rebuilding costs – The land your house sits on isn’t at risk from theft, windstorm, fire or any other peril covered in your homeowner’s policy; so don’t include its value in deciding how much coverage to buy.
4. Buy your homeowner’s and auto insurance from the same insurer – Some insurance companies will take 5 to 15 percent off your premium if you buy two or more policies from them.
5. Make your home more disaster resistant – You may be able to reduce your premiums by adding storm shutters, or reinforcing your roof. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
6. Improve your home security – You can usually get discounts for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by 15 to 20 percent if you install a sprinkler system and a fire and burglar alarm that rings the police and fire station nearest you. Before you buy such a system, find out if your insurer offers a discount, and how much it will save on premiums.
7. Ask about other discounts – If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent from your insurer because you are at home more. Being in the house a lot means you are less likely to be burglarized, and more likely to spot a fire before it gets out of control.
8. Maintain a solid credit record – Insurers use credit information to price homeowner’s insurance. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
9. Stay with the same insurer – If you keep your coverage with a company for several years, you could receive a special discount for being a long-term policyholder.
10. Review your policy once a year – You want your policy to cover any major purchases or additions to your home, but you don’t want to spend money for coverage you no longer need.

You buy homeowner’s insurance to protect your biggest asset, so it’s important to purchase enough coverage to suit your needs. By looking at a few key factors, you could end up saving yourself a lot of money and heartache should you ever have to make a major homeowner’s insurance claim. Be smart and ask yourself the following four questions when considering how much coverage to purchase.

How much will it cost to rebuild?

When you’re figuring out the cost to rebuild your home, use current construction prices. Don’t add in the cost of the land, and don’t base your cost estimates on how much you originally paid for the house.

Even though your mortgage lender may require you to have homeowner’s insurance, you still may not be adequately protected. In most cases, the policy limit is the amount owed on your mortgage, which may not be enough to rebuild at current prices.

To estimate the amount of insurance you need, multiply the total square footage of your home by the building costs per square foot. You can get information about local building costs by calling your real estate agent or home builders association.

You should select an extended replacement cost policy for several reasons:

• It pays for your home to be repaired with materials that are similar in kind and quality to what was originally used.
• There is no deduction for depreciation or wear and tear.
• If the demand for materials and construction workers exceeds the supply because of a widespread disaster, and prices skyrocket, an extended replacement cost policy will pay whatever is necessary to restore your home to its original condition.

How much will it cost to replace my personal possessions?

Most homeowner’s insurance policies cover your personal possessions for 50 to 70 percent of the total coverage amount on your home.

Conducting a home inventory will help you determine if this is enough. Create a detailed list of everything you own and how much it will cost to replace these items should they be stolen or destroyed. If you feel you are underinsured, ask you agent about increasing the coverage limits for your possessions.

Will I have any additional living expenses as a result of an insured disaster that damages my home?

When a disaster strikes, you may be forced to live somewhere else while your home is being repaired. Standard homeowner’s policies covers hotel bills, restaurant meals and other living expenses incurred while you are living away from home. In addition, if you rent out the property that was damaged, this coverage will reimburse you for any rent you would have received from tenants while the home is being repaired.

Additional living expenses coverage varies among companies. The standard is 20 percent of the total amount of coverage on your house. There are also policies that cover unlimited additional living expenses for a specific period of time.

Ask your insurance agent to tell you how much coverage you have and how long the coverage stays in effect. If you don’t feel you have sufficient coverage for additional living expenses, consider increasing it.

How much coverage do I have in the event I am named in a lawsuit for bodily injury or property damage caused to others?

The standard homeowner’s policy covers you, your family members, and your pets in the event of injury caused to others. The coverage extends to both the cost of defending the case in court and any damages you are required to pay.

The majority of homeowner’s insurance policies provide $100,000 worth of liability insurance; however, you can get higher amounts. Conventional wisdom says that homeowners should carry at least $300,000 to $500,000 worth of liability protection.

Standard homeowner’s insurance policies offer sound financial protection for most people. However, those who own large homes that would cost upwards of $500,000 to rebuild may have special coverage needs for which the standard policies were not designed. Such homeowners may own expensive jewelry or have costly business equipment at home, or they may be involved in public activities that make them targets for lawsuits. People with these exposures to financial loss may want to consider buying a high-value homeowner’s insurance policy.

Some of the additional coverages that insurance companies provide in high-value homeowner’s policies are:

Extended rebuilding cost. If a fire destroys the home and the policy limit does not cover the entire cost of rebuilding, this coverage will pay for the additional amount. Some policies pay as much as an extra 100 percent of the insurance on the home.

No requirement to replace or rebuild. A standard policy may not pay the entire replacement cost of damaged structures or contents unless the owner rebuilds or replaces them. High-value policies may waive this requirement and pay the replacement cost regardless of what the owner decides to do.

Demand surge coverage. After a major disaster like a hurricane, labor and materials for rebuilding are often in high demand. As a result, the cost of rebuilding a home jumps. This coverage provides additional amounts of insurance to pay for the increased costs.

Rebuilding to code. If building codes have changed and increased the costs of rebuilding the home, this coverage will pay for those costs above the amount of insurance on the home.

Deductible waiver. Some policies waive the deductible if the amount of a property loss exceeds a certain level, such as $50,000. However, the waiver might not apply to losses from certain causes such as earthquake or a windstorm.

Excess flood coverage. Most homeowner’s policies do not cover damage caused by flood waters. The National Flood Insurance Program offers this coverage, but the most insurance it offers is $250,000 on a home and $100,000 on contents. A high-value homeowner’s policy might provide as an option additional insurance that applies after the NFIP insurance is used up.

Backup of sewers and drains coverage. Standard homeowner’s policies do not insure against damage caused when a drain, such as a sump, backs up, though often the owner can buy this extra coverage. A high-value policy may include it automatically.

Electronic data. Some high-value policies may pay for the cost of restoring computer files and for costs resulting from theft of the policyholder’s identity.

Food. Unlike standard homeowner’s policies, a high-value policy may pay for refrigerated food that spoils when a covered cause of loss disrupts the power supply.

Lawsuits. Standard homeowner’s policies cover the costs of lawsuits and attorney fees only if they result from bodily injury or property damage the policyholder may have caused. High-value policies may go beyond that, covering alleged acts of libel and slander.

Higher amounts of coverage. High-value policies may cover some of the same things that standard policies cover, but for higher amounts. For example, these policies may provide more coverage for valuables, such as jewelry, furs and collectibles. They may provide more coverage for the expense of living elsewhere while the home is being repaired, more coverage for loss assessments from a homeowner’s association resulting from an accident, and more coverage for business property kept in the home.

Homeowners who think they may need this kind of additional coverage should consult an insurance agent. Many insurance companies are now offering high-value policies. It may well be worth a few minutes to review insurance needs and protect thousands of dollars worth of hard-earned property.