Category: Homeowners

One of the most important household safety techniques you can implement is the purchase and proper installation of an adequate number of smoke alarms in your home. The National Fire Protection Association (NFPA) offers the following facts regarding smoke alarms and fires.

* One-half of home fire deaths occur in the 6 percent of homes without smoke alarms.

* Homes with smoke alarms typically have a death rate that is 40 to 50 percent less than the rate in homes without alarms.

* In three of every ten reported fires in homes equipped with smoke alarms, the devices were not operational.

The NFPA offers safety tips regarding smoke alarms for you to consider.

* New batteries should be installed in all smoke alarms annually or when the alarm chirps to warn that the battery is weak.

* Smoke alarms should be tested monthly.

* Smoke alarms should be placed outside each sleeping area and on each floor of the home, including the basement.

* Smoke alarms should be interconnected, so if one goes off, they all go off.

* Smoke alarms should be replaced every 10 years.

If you’ve never thoroughly reviewed your homeowner’s policy, you could find yourself out of luck at your time of need. When you bought your policy, you assumed it would provide the necessary funds needed to recover from a disaster.  However, if you are unfamiliar with your policy’s terms and conditions, you may not have as much protection as you think.

The standard homeowner’s insurance policy includes four basic types of coverage:

·   Coverage for the structure of your home – If your home is damaged or destroyed by fire, lightning, windstorm, or other peril listed in your policy, your insurer will pay to repair or rebuild your home subject to the terms of your coverage. However, if the damage is caused by a flood, earthquake or mudslide, there would no coverage unless you had purchased a separate policy for these risks.

Most standard policies also cover detached structures such as a garage. Coverage for these structures is automatically provided at 10% of the amount of insurance you have on the structure of your home.  You can purchase additional coverage if necessary.

Do you know if your policy would provide enough coverage to rebuild your home?

·   Coverage for your personal belongings – Furniture, clothes, and other personal items are covered if stolen or destroyed by fire, wind or other insured disaster. Most companies provide personal belongings coverage equal to 50 to 70 percent of the amount of insurance you have on the structure of your home.  

High-ticket items like jewelry are covered, but only at minimal dollar limits if stolen. To insure each of these items for their full value, you would need to add a special personal property endorsement to your basic policy.

Trees, plants and shrubs are also covered under standard homeowner’s insurance for theft, fire, lightning, explosion, vandalism, and riot. They are not covered for damage by wind or disease. Limits are usually $500 per item.

·   Liability protection – This protects you against lawsuits for bodily injury or property damage that you or your family members cause to others. Liability coverage also pays for damage caused by your pets. Your insurer pays the cost of defending you in court and any court awards, up to the policy limit. You are also covered not just in your home, but anywhere in the world.

Liability limits start at about $100,000, but you should purchase more coverage. You can also purchase an umbrella or excess liability policy, which provides broader coverage, including claims against you for libel and slander.

Your policy also provides no-fault medical coverage if a friend or neighbor is injured in your home. Your insurer pays the individual’s medical expenses without a liability claim being filed against you. You can generally obtain $1,000 to $5,000 worth of this coverage.

·   Additional living expenses – This pays for any additional costs in the event you are temporarily unable to live in your home because of a fire or other insured disaster.  Many policies provide coverage for about 20% of the insurance carried on the structure of your home.

In addition to reviewing your homeowner’s coverage, you should keep updated records of your property in a safe location that is easily accessible. The Insurance Information Institute offers free software you can download to create a home inventory. Log on to www.knowyourstuff.org.

Finally, try to review your homeowner’s policy with your insurance agent annually. Your agent can help you determine if your coverage is still adequate for your needs.

Quite a bit of attention is being paid lately to floods and the devastation they leave behind. In the wake of Katrina, more and more questions have been raised about what kind of preventative measures would have lessened the catastrophic effects of such an event.  How well equipped are individual homeowners to handle financial consequences on their own, as opposed to relying solely on agencies like FEMA to provide them with economic assistance? Are Americans taking advantage of the nation’s flood insurance program?

That’s what FEMA wanted to know. The agency worked through the American Institutes for Research (AIR) to commission a study. AIR is a not-for-profit organization that conducts research on social issues and provides technical assistance in the fields of health, education, and workforce productivity. AIR coordinated the study, which was conducted by the Institute for Civil Justice and the Infrastructure, Safety and Environment division of the RAND Corporation. It was intended to be part of an overall evaluation of the flood insurance program.

In the course of their work, the researchers discovered that most homeowners buy flood insurance only because it is required. Only 20% of homeowners living in the areas most vulnerable to floods buy federal flood insurance when they are not required to do so. The study went on to reveal that just 1% of Americans living outside designated flood zones buy federal flood insurance even though the possibility of being victimized by flood is a real threat.

Only 50% to 60% of the 3.6 million single-family homes in the most highly affected areas are legally required to buy federal flood insurance. The remaining homeowners in these areas and the nearly 76 million single-family homes outside these areas are not required to buy flood insurance.

The study put the greatest emphasis on exploring the demographics of flood insurance purchasers. About 63% of homeowners living in areas subject to coastal flooding purchase flood insurance. Approximately 35% of homeowners living in areas that are only affected by river flooding buy flood insurance. The researchers surmised that the disparity might be the result of a perception of having less risk or that coverage available for basements is limited, and basements are prevalent in inland areas subject to river flooding. The report recommended that this aversion to flood insurance by those living in inland areas be studied, to search for an explanation or possible causes.

The study also looked at purchasing habits along geographic breakdowns. In the South, 75% of homeowners who carry flood insurance also have contents coverage. Only 16% of homeowners with flood insurance in the Midwest and 49% in the Northeast have contents coverage.

Clearly homeowners everywhere need to reassess their exposure to flooding.  If you have questions about obtaining flood insurance for your property, please give us a call.

The arrival of summer can mean several welcome events: a return to outdoors living, an opportunity for vacation, and more time with the family. One of the issues people may not associate with summer are the power surges that often occur due to the tremendous demand for energy, especially to cool homes. A power surge is a brief spike in electrical power. While on the surface it may not seem like much to be concerned about, power surges can cause serious damage by burning up electrical circuits inside appliances. They can also damage electrical outlets, light switches, light bulbs, air conditioner components, and even garage door openers.

You can protect your valuable electrical appliances from the damaging effects of power surges. The most cost effective way is by purchasing surge protection strips. You can plug in your television, DVD player, and stereo into the strip and it should provide adequate protection against most surges. It’s a good idea to pick up a surge protection strip for the kitchen counter so that you can protect small electrics like the toaster, blender, food processor etc. You can also find surge protectors that fit into electrical outlets that will protect your phone and answering machine. You can buy most types of surge protectors in any local hardware store.

When it comes to your PC, however, you will have to be a bit more selective about protection, because of the delicacy of its internal components. Back-up power packs that are specifically designed to protect your hardware can be found in stores that sell computer accessories as well as in many electronics chain stores. They can be somewhat expensive, but are certainly less expensive than replacing your entire system.

Before you purchase any surge protector, there are certain features you need to look for. The first feature to look for is a surge protector that is labeled with the Underwriters Laboratories (UL) logo. The UL logo tells you that the unit has been tested to determine if it meets certain standards. Any product that is UL tested will be labeled as a “transient voltage surge protector,” which means that it meets or exceeds the minimum standards required to be an effective deterrent against power surges.

A surge protector’s performance is rated in three ways. The first is clamping voltage, which is the level of voltage surge that has to occur before the surge protector kicks in and diverts excess voltage from the item being protected. You want to find a surge protector that has a low voltage number so that it takes less of a surge to activate it. Look for a protector with a clamping voltage of less than 400 volts.

The second way to rate a surge protector’s performance is response time: the amount of time it takes for the surge protector to respond to the surge. You should look for a unit with a response time of one nanosecond or less.

Just like any other appliance in your home, your surge protector will eventually wear out. The third performance-rating factor is energy absorption, or how much energy the unit will absorb before it fails. For the longest lasting performance, look for a unit rated between 300 and 600 joules. Remember, the higher the number, the longer the life of the surge protector.

In early 2006, a federal jury ruled that the design of ionization smoke alarms was defective in a fire that trapped 56-year-old William Hackert Jr. and his 31-year-old daughter Christine in their house near Albany in 2001. However, even before this ruling, safety experts were already questioning whether this type of smoke alarm is adequate to deal with the threat of fast-burning synthetic materials prevalent in American homes.

Ionization alarms, which use radioactive material to detect smoke, react earlier in fast-burning flaming fires. Photoelectric alarms, which detect changes in light patterns, react earlier in slow smoky fires. Experts agree that both types save lives. However, a problem arises because the time needed to escape has shortened significantly because of fast-burning synthetics used in furniture and carpets. Smoke alarm use standards may need to change to accommodate this phenomenon.

In 2001, Consumer Reports recommended that homeowners install at least one of each type of alarm on every level of a house to provide sufficient warning time for different types of fires. A recent report from the Public/Private Fire Safety Council noted that some test escape times were “tight or insufficient” with either alarm for bedroom or living room flaming fires. The group suggested that Underwriters Laboratories (UL) modify its standard to require faster detection of smoldering fires. Current UL smoke alarm standards require alarms to respond within 4 minutes of a flaming fire and in a smoldering fire before smoke obscures visibility by more than 10 percent per foot.

In today’s homes, the synthetics in furnishings, fabrics and carpeting smolder longer, but burn faster than natural materials like wood and cotton, which char as they burn. Synthetics melt and pool which produces significantly more energy when they burn. This has shortened the time between first flames and combustion of an entire room due to accumulated heat and gases to approximately 2 to 4 minutes. The average time between first flames and complete combustion 30 years ago when the UL standard was developed was 12 to 14 minutes.

In February of 2006, UL began studying the smoke characteristics from 40 materials commonly found in homes in the effort to make alarms more effective. Also under study are the byproducts of today’s smoke, which can be lethal. Results of these studies are expected by the end of the year.

Another reason for UL concern is the increase in U.S. fire fatalities in the past 12 months to a rate of about 3,500 annually. One likely factor is the increasing use of candles as mood lighting. Candles now cause about 18,000 fires a year, triple the number five years ago.

If you feel in a quandary when you look at your homeowner’s insurance, take heart; you are not alone. In fact, a recent study conducted by Harris Interactive for Travelers Insurance shows that a large number of American homeowners are unsure of their coverage specifics. Many of these homeowners are underinsured and the smallest disaster could send them into a financial hardship.

The researchers questioned more than 1,300 homeowners to determine exactly what they knew about their coverage. They also asked the study participants how often they reviewed their policy to ensure they maintained appropriate coverage and how they conducted their review.  According to the survey data, more than 44 percent of those surveyed had not examined their insurance coverage in the past year. Some respondents had not reviewed their insurance policy in the last 10 years.

The “Travelers In-synch Homeowner’s Insurance Study” also indicated that nearly 27 percent of these homeowners weren’t sure whether their policy would cover the cost of rebuilding their home. Thirty-six percent didn’t know whether their policy would cover damage caused by a hurricane. Forty-two percent were unsure if they had earthquake coverage. Twenty-six percent didn’t know if they had coverage against flood damage, and 37 percent didn’t know whether their policy would cover a prolonged hotel stay if their home were damaged.

Many items impact the amount of homeowner’s coverage you need. That’s why it is important to review your coverage frequently. Here are some criteria to use in your review:

·   Have you recently remodeled your home?
If you’ve improved your home, chances are you’ve increased its estimated replacement cost.

·   Has the inflation rate increased since your home was last appraised?
Certain conditions, such as severe weather, can increase the demand for labor and materials, which raises costs beyond the normal inflation level. It is important to update your coverage each year to account for changing inflation.

·   What factors influence building costs in your area?
Replacement costs are directly proportionate to factors, such as the availability of labor, the current demand for labor, and the cost of construction materials. Adjusting your coverage regularly can ensure your policy will provide the money you need to rebuild.

To determine whether you have adequate coverage you should know your home’s estimated replacement cost. Keep in mind that your replacement cost could be higher or lower than your home’s market value. You should also consider the building materials used to construct your home. The more difficult the building materials are to find, the higher your replacement cost. Your coverage needs to reflect these increased costs.

The best way to stay ahead of changing costs is to contact your insurance agent annually to discuss your current coverage and your changing needs. They can help you manage risk by updating your coverage so there won’t be any surprises should your home be damaged.