7 Tips to Buying and Getting the Most Out of Home Insurance

7 Tips to Buying and Getting the Most Out of Home Insurance

Many people think of home insurance as a necessary evil. The truth is that it might feel like that, but only until you need it. At that point, it will feel like a savior. You'll definitely be very glad you have home insurance when you get your financial life back.

Home insurance is meant to protect what's very likely your biggest and most valuable asset.

You've worked hard for what you have. You put in much time to be able to afford your home, and you now put in much time and effort in keeping up with that home. Therefore, it only makes sense that you you need to protect it from the myriad of things that can cause it harm.

The big problem is that most people are confused when it comes to insurance in general, much less something as important (and sometimes complicated) as home insurance. There are things that you need to understand about home insurance ahead of time, before an instance occurs where you end up needing it.

So in this post, we're going to give you...

1 – Know the Exact Value of Your Home and How Much Home Insurance You Need...

One of the most important things to understand from the very beginning is how much insurance you'll need. First you'll need to know the actual value of your home. If your home is damaged or destroyed, you're going to need to know what it will cost to replace the entire structure... or that portion of the structure which is damaged.

A home builder or assessment company should be able to give you the truest value.

This is not a time to guess. Establishing your home's value is not a do-it-yourself project. Nor is it a good idea to allow your insurance agent to be the one to solely establish that value. Again, this is your biggest asset and you'll want to be sure you've got the fairest value.

2 – Understand the Risk Factors That Your Premium Will Be Based Upon...

It's important that you realize your premium is based around the risk that the insurance company is taking by selling you the policy. In other words, the higher the risk that something will happen and they'll have to pay you for damage, the higher the premium will be.

Things like the crime rate in your neighborhood, your living habits, where on the block your home is located, how close you are to highways and busy areas, trees around or near your home...

everything that you can think of will be assessed and will take part in the factoring of your premium.

Going into it with this knowledge will actually help you and we’ll better explain how in Tip #3...

3 – Know and Utilize All of the Things That Can Actually Save You Money on Your Premium...

While there are tons of risk factors that can drive up the cost of your home insurance premium, there are also many factors that can save you money on your policy, too. It's important to know this so that you get all the discounts available to you.

For instance some things that might earn you a discount include:

•#   A home burglary alarm system
•#   Dead bolt locks
•#   Fire alarms and sprinklers
•#   Updated heating systems
•#   Updated wiring and electrical system for the home
•#   A home near a fire hydrant or fire department
•#  A home located near a police department
•#   Well-structured and maintained stairs, sidewalks, driveways, and entrances (less chance of injury),
     etc.

Basically... anything you can think of that might make your home safer, and less likely to catch fire or injure a guest or passerby can give you a discount on your premium. Furthermore, having good credit can save you money as well.

4 – Take Inventory Of Your Possessions and the Dollar Amounts...

Your homeowner’s insurance covers the structure and dwelling of the home, as well as the home owner's possessions.

This also is not a time to guess. You likely have about $20,000 worth of personal possessions in your home at any given time. Looking around your home you may not realize that, but it's absolutely true.

So make a list of all your belongings and the value of those belongings based on receipts and purchase dates. This way if you ever need it you'll have a concrete list, and not something constructed from memory, where things could get forgotten or undervalued because you have no proof.

You may even want to take photographs of the items on your list, and definitely keep receipts for all new items purchased.

5 – Keep Your Inventory List Safe...

One thing you don't want to do is take the time to create an inventory list and then not have that list available when you need it.

If you leave it laying in a filing cabinet or shoebox inside the home, chances are in the case of a fire or some other tragedy you will no longer have that list. That’s why it is recommended to keep the list inside a fire-proof safe (along with your insurance policy, copy of your mortgage, and important papers for family members)...

Or you can keep it in your bank's safety deposit box.

6 – Know Exactly What Your Covered For...

and If You'll Need Extra Insurance...
Something that happens much more often than it should is that people don't understand their coverage. Of course it's not always that simple to understand. People don't read their policy because a) it's boring as heck and b) it can be very complicated.

However, it's crucial that you know what you're covered for so that when it comes to filing a claim you're absolutely prepared.

Understand that you you'll likely not be covered for things like floods or earthquakes. These will be things that you'll have to decide on getting extra insurance for.

If you don't understand your policy take it to someone who does and have them look it over and explain it to you. A real estate lawyer, an attorney or accountant, anybody who can read and comprehend it better than you would be a good choice. If anything, simply write down the things that you don't understand and bring those questions to the types of people who will.

7 – Get Exact Instructions on How to File a Claim, Including Numbers to Call and Who to Speak To...

The last thing that you'll want to be doing in the face of a tragedy is scrambling to get the right people on the phone, and instructions on how to do things. You'll want to move fast and get the ball rolling on your claim right away, so that you can more quickly be compensated for your losses and/or get funds to pay for any displacement you may experience.

So there you go. While there are plenty more tips we may cover in more detail in a later blog post, these are some basic things that you'll want to think about when it comes to home insurance.

Calgary family's backyard climbing wall causes insurance headache

A Calgary family could lose their home insurance, all because they built a 12-foot climbing wall in their backyard.
Steven Poffenroth had the wall built for his daughter, Annika, who he says has developed a passion for climbing and has taken up the sport competitively.
“In the last nine months, it’s all she ever wants to do,” he says.
Poffenroth spent over $2,500 to have the 3.6-metre tall, freestanding bouldering wall built. The wall features a challenging, steep incline, several holes to place rock holds and create new routes, and safety mats at the wall’s base.
He obtained permits and had the wall cleared with the city. He moved service lines and hired a contractor to build it over several weeks so it would be sturdy.
Annika has been delighted with the wall, which she says has quickly became a way for her to bond with her dad.
“This has been a way for us to connect. We can come out here and he can set routes for me and try and get me to do different things,” she told CTV Calgary.
But just three months after completion, the family has been told the wall has got to go.
Poffenroth says a friend asked him if the wall was covered under his home insurance. He realized he hadn’t looked into that, so made a call to his insurance company to check.
“I kind of assumed they would add a rider to my insurance and add 10 or 20 bucks or whatever,” he recalled.
“I quickly got a call back from them, saying not only would they not add a rider, they were not interested in having my homeowner’s insurance continue at all.”
The company soon sent a formal letter informing him that his insurance would be terminated next week.
Poffenroth was stunned but also irritated, so he started shopping around for a different insurance company. But he found many of the companies were not interested in insuring him and those that were interested wanted premiums that were double the current rate he’s paying.
One of the concerns the insurance companies had was that wandering strangers or children would be attracted to the wall and be tempted to break into his backyard to climb it.
Poffenroth decided after reviewing the estimates that he wouldn’t be able to afford the higher premiums.
“I do like the wall and obviously, I love my daughter, but $1,500 a year to insure this wall seemed a little bit ludicrous for me.
A spokesperson for the Insurance Bureau of Canada, Steve Kee, says insurers consider many risk factors when choosing whether to insure someone.
“They can either charge more or decide not to insure someone if they believe that there is a risky element to it,” he said
Poffenroth is hoping that he and his insurance company can arrive at a solution or at least have a discussion. Otherwise, he says he will have to tear down the wall.
“Maybe there’s still an opportunity for us to save this wall before I have to tear it down,” he says.
The Poffenroths’ insurance company, Canadian Direct Insurance, contacted the family Wednesday and told the family to hold off on the demolition while they work on a solution.
Annika hopes the wall stays, because she loves showing her father what she can do.
“It is such a bonding thing we have together. Not too many people have such an incredible thing to bond together on,” she said,

Obamacare Is Creating Monopolies For Insurance Companies

 

 

 

  Demonstrators in favor of Obamacare gather at the Supreme Court building in Washington March 4, 2015. (REUTERS/Jonathan Ernst)

Only one insurance company will be participating on the Obamacare exchanges by 2017, affecting about one-third of all counties in the U.S.
The purpose of Obamacare was to improve “access, affordability, and quality in health care for Americans,” according to healthcare.gov. The study published Sunday shows it may actually be doing the opposite of it’s original intent.
Approximately 2.3 million enrollees will likely have just one choice of an insurance provider, up from just 303,000 people in 2016, according to a study published Sunday by the Kaiser Family Foundation.
The number of counties in America that have a single insurer participating in the exchange is astronomically higher in 2017, the research indicates. Some 225 counties (roughly 7 percent of American counties) had just one insurance option in 2016, and in 2017 that number is expected to rise to 974 counties (31 percent of American counties), according to the study.

Iowa in Middle of Debate Over ‘Shadow Insurance’ Deals

For cash-strapped life insurance companies, the deal sounds almost too good to be true: A state law allows them to create complex financial instruments to transfer liabilities to new subsidiaries, instantly wiping huge debts off their books.
So-called “shadow insurance” agreements have exploded over the last decade, but a growing number of critics, including economists and consumer advocates, say the practice threatens the solvency of insurers and puts policyholders and taxpayers at risk.
In 2013, then-New York insurance regulator Benjamin Lawsky warned that the arrangements amounted to “financial alchemy” and were reminiscent of practices that contributed to the 2008 financial meltdown.
But these opaque instruments are not being concocted on Wall Street. They emerged in places like Cedar Rapids, Iowa, at the headquarters of TransAmerica Life, a subsidiary of the Netherlands-based Aegon NV, which was deemed one of nine too-big-to-fail insurers in the world by a global standards board last year.
“I think that the industry is headed for serious trouble with this,” said Joseph M. Belth, a professor emeritus of insurance at Indiana University, who calls the practice “a shell game.”
Belth filed a lawsuit Tuesday seeking to force the Iowa Insurance Division to release documents related to eight shadow insurance subsidiaries that were set up by TransAmerica and other companies under a 2010 state law that encouraged the practice.
Insurers say the arrangements — which they call captive reinsurance — are not risky but simply free them from 2001 accounting rules mandating that they hold excess cash reserves.
Some state insurance regulators agree with that argument and reject Lawsky’s warnings, saying it is a responsible practice when done appropriately. The National Association of Insurance Commissioners has been working with members to oversee the deals and limit the risks.
TransAmerica spokesman Greg Tucker noted that group declined to ban such arrangements in 2014 after “careful consideration” and made few changes to the rules governing them.
Life insurers have been seeking more flexibility at a time when they are struggling to cover financial promises made to beneficiaries decades ago, when interest rates were far higher.
The system works like this: Insurers create wholly owned subsidiaries on paper that assume some of the company’s liabilities. Those debts are transferred off the parent company’s books, lowering the amount of capital reserves they are required to hold to pay off policies. That frees up cash that companies can use instead to pay dividends, make acquisitions and increase executive pay, all while shaving their federal tax bills.
The parent companies retain the risks because they grant their subsidiaries “guarantees” or “notes” promising to pay their debts. The details of those agreements are largely secret, making them impossible to analyze.
Iowa and a handful of other states have taken the lead in permitting the practice.
A paper published by the Federal Reserve Bank of Minneapolis in May found that U.S. life insurance and annuity liabilities ceded to shadow insurers grew to $364 billion in 2012 from $11 billion a decade earlier — or 25 cents of every dollar for companies that use them. The authors, Ralph Koijen and Motohiro Yogo, said the practice may reduce the price of life insurance policies by about 10 percent on average but also increases the risk of default.
The Office of Financial Research — an arm of the U.S. Treasury created after the 2008 financial collapse to analyze risks — called in a report earlier this year for more disclosure of the arrangements and additional requirements that they be backed by quality assets.
Belth is the author of a consumer’s guide to life insurance and former 40-year editor of The Insurance Forum, a monthly journal that ceased publication in 2013. He has been seeking copies of the promises that insurers made to their Iowa subsidiaries and other documents under the open records law. He says the records would show just how risky they are, saying the information should be available to policyholders, shareholders and taxpayers.
Iowa Insurance Commissioner Nick Gerhart has denied his requests, saying the documents are part of insurers’ “plans of operation,” which are confidential under Iowa law. Gerhart has argued that his staff routinely examines the transactions to ensure they are sound, and that Iowa has been more transparent than other states by releasing the subsidiaries’ financial statements online every year.
After reviewing those statements, Koijen and Yogo found that six of the eight subsidiaries created in Iowa “have significant negative equity under statutory accounting” — meaning their assets are worth less than their liabilities under traditional insurance industry standards.
An Iowa court will now decide whether Gerhart’s office has to release more information.
Belth said he got interested in Iowa’s practices two years ago, when Bellevue, Washington-based Symetra Life Insurance Company announced it was moving its legal headquarters to Iowa “to take advantage of the state-of-the-art statutes and regulations governing the life insurance industry in Iowa.” Symetra has since set up one of the shadow insurers in the state, but its size pales in comparison to those created by TransAmerica.
TransAmerica has set up one subsidiary that carries a “parental guarantee” of more than $2 billion and a second that has a “credit linked note” worth $924 million. Under traditional accounting rules for the industry, insurers could not count those as assets but Iowa has permitted them.
Belth said that he’s trying to shine a light on a practice that should not be confidential.
“What’s the secret? They don’t

Tesla Motors plans to get into the insurance business

Tesla Motors has plans to get into the insurance business as its self-driving cars have the potential to upend the industry.

The Palo Alto-based car company is starting a new program called InsureMyTesla in Australia and Hong Kong, according to a report from Electrek. The custom insurance plans are underwritten by larger insurance partners. Tesla is partnering with AXA General Insurance in Hong Kong and with QBE Insurance in Australia.

 

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The plans currently include coverage for home chargers; new vehicle replacement if the vehicle is less than 36 months out from first registration; coverage for damage to the Tesla Home Wall connector; and an any driver policy. The cost of the policy in Australia starts around $1,200 AUD per year ($900 USD), according to the report.

Why is Tesla moving into the insurance market? For now, its plan could solve gaps in coverage by traditional insurance providers. Insurers don’t always recognize the variances between Tesla models, which can have customers of lower-end models paying the same premiums as buyers of the more expensive models. Tesla obviously recognizes the nuance between its Model S60 and Model S75 and can adjust premiums.

The car company is also looking a few years down the road. As self-driving cars become more popular, they have the potential to disrupt the entire automotive insurance industry. Close to 90 percent of all car accidents in the U.S. are caused by people, according to NHTSA. But what happens when we take humans out of the equation? What if most people don’t even own their own cars?

It’s likely people won’t need to carry nearly as much insurance as they do now, which will force the insurance industry to reconsider its business model. Tesla will make sure its customers are covered regardless of what happens to standard insurers.

There will still be some need for insurance as autonomous vehicles will still see incidents and accidents. The Securities and Exchange Commission is currently investigating whether Tesla violated securities regulations by failing to properly disclose information about a fatal crash that occurred May 7 and involved a 40-year-old Florida man, Joshua Brown, who was driving a Tesla Model S with the Autopilot feature engaged.

What to do if your home floods: practical insurance tips

From SGI Canada, which writes much of the insurance for Saskatchewan homes and businesses, here’s a collection of practical tips on how to handle the insurance paperwork that comes with flood damage to your home, vehicle or other property — as occurred in Estevan this weekend:
Reporting a claim
If you’ve been impacted by a storm, wait until it’s safe before assessing damage. Submit your claim when you are able to do so. In the event of higher-than-normal claim volumes, SGI Canada will assign additional adjusters for your area. Adjusters will contact you as soon as possible.
Your vehicle
Auto claims can be filed online using the SGI Auto eClaim service. Or, contact the nearest SGI claims centre to file a claim and set up an appointment with an auto adjuster.
Your property
Contact your insurance broker to file a claim. Your broker will notify your insurer. If you insure with SGI Canada and are unable to report your claim to your broker, contact SGI Canada directly at 1-844-TLK-2SGI (1-844-855-2744) (toll free) during regular office hours, Monday to Friday.
Once you file a claim
While waiting to be contacted by an adjuster, take steps to protect your vehicle or property from further damage or loss, but only if safe to do so.
Other tips
• Clean up as soon as possible. Seek professional advice and take reasonable steps to minimize further damage to your property. To help with this, you can call a restoration company, contractor or other firm that you feel is qualified to do the work.
• Don’t throw out anything. Store damaged items in a reasonably safe place so adjusters can see them when they arrive. If you are disposing of items, take photos and keep a detailed list of what’s being thrown away.
• Have any appliances (including furnaces) that have come in contact with water checked by a qualified electrician, plumber, dealer or serviceperson before you use them.
• Do not touch any electrical systems or panels until you know it is safe to do so.
• Move damaged belongings to a dry area with good ventilation.
• Keep track of your cleaning time and expenses as they might be covered through the insurance claim.
Take photographs or video of damaged property to give to your adjuster.
• If your carpet and underlay are wet, pull it out in order to facilitate drying. If it must be discarded, keep a one-foot square sample of each for your adjuster.
• If damage makes your home unliveable, your policy might cover the cost of “a reasonable increase in your cost of living required to maintain your normal standard of living.” Translation: if you have to go to a hotel, keep all receipts.
• If there’s contaminated food in your freezer, take photographs and make a detailed list of anything you discard.
• Anything that’s thrown away should go to your local landfill. Photograph and record each item before disposal. If the item is not perishable, it’s best to retain it in a secure area of your yard.
• If you have to haul away heavy items, you can pay the cost, but keep your receipts and your adjuster will consider reimbursement for disposal of the insurable property.
• Finally, you need to be present when the adjuster comes out. Keep track of any questions you have, records and photographs of items you have discarded, and any receipts for related expenses

How (and Why) to Buy Travel Insurance

Scuba diving in clear blue water of Richelieu Rock in the Surin Islands, within Mu Ko Similan National Marine Park, Thailand. Credit Caine Delacy for The New York Times

Picking the best travel insurance to buy for your coming vacation can be a daunting task, said Stan Sandberg, the co-founder of the trip insurance comparison site TravelInsurance.com. “There are literally hundreds of plans out there, and they are all steeped in complex legal language that can be hard for even the savviest consumers to decipher,” he said.

A good travel insurance plan, he said, gives you peace of mind that the money you’re spending on your trip isn’t lost if you end up not going and costs, on average, from 4 to 10 percent per person of the total cost of the trip per person.

Here, he shares his top tips on buying a travel insurance plan.

Figure Out What You Want to Insure. Are you looking to protect an investment in nonrefundable airfare, hotel or cruise costs? Or do you need travel medical protection? Mr. Sandberg said that many travel insurance plans bundle both types into a single plan, which may be unnecessary but definitely costs more.

Travelers who aren’t looking for travel medical insurance, for example, and want only to insure travel costs, need a trip-cancellation-only policy. Similarly, travelers who aren’t concerned about the risk of cancellation, but want medical coverage can find a number of choices for medical-only plans. These single-category plans are cheaper. “Some travel medical insurance plans with emergency evacuation are as little as $50 a person,” Mr. Sandberg said.

Check Your Health Insurance Before Hitting the Road. Many travelers assume that their health insurance will cover them for any medical services, Mr. Sandberg said, but that is not always the case. “Most health plans today are based around in-network-only coverage, which means that you’re not covered if you see a doctor out of network, unless it’s for emergency or urgent care,” he said.

Whether you’re traveling domestically or abroad, a travel medical plan can help bridge the gap of in-network-only health insurance and save you an exorbitant out-of-pocket fee if you need to see a doctor for any ailment like a stomach virus or heat rash.

Adventure and Active Travelers, Beware. Fitness fiends and thrill seekers should buy a plan that offers coverage for hazardous and adventure sports, Mr. Sandberg said. “Many travel insurance plans exclude coverage for accidents or injuries that happen during certain activities deemed to be higher risk like skiing, scuba diving or bungee jumping,” he said. Some plans offer hazardous sports coverage as an optional upgrade while other plans include it.

A Cancel-for-Any-Reason Plan Is the Most Flexible. “If you decide the week before your trip, that you’re too scared to travel, the money you spent on the trip is protected up to 75 percent,” Mr. Sandberg said. Be aware that these flexible plans cost up to a few hundred dollars more than standard travel insurance.