Upgrade Your Home, Insurance Policy Before Spring Storms Hit

Mother Nature's forces of wind, water and hail account for more than half of all homeowners insurance losses.


Standard homeowners and renters policies cover the damage wreaked by wind, hail, falling water or wind-driven rain, but not from rising water from any source, including a sewer or drain backup or sump-pump failure. The cost can be substantial: Mother Nature's forces of wind, water and hail accounted for more than half of all homeowners insurance losses between 2009 and 2013, with an average claim amount of $7,610, according to the Insurance Information Institute.


If you live in a federally designated flood zone, or if your house could be flooded by melting snow, an overflowing creek, or water or mud running down a steep hill, you can buy flood insurance from the National Flood Insurance Program (www.floodsmart.gov) by calling your insurance agent. The program covers homes for up to $250,000 of the cost to rebuild and insures contents for up to $100,000. The average premium is $700 per year, but rates depend on a home’s features and location.

Prevention pays. You can take steps to minimize the risk. Visually inspect your roof for damage, clean your gutters, and attach extensions to downspouts and regrade soil to divert water away from your home’s foundation. Test your sump pump and recharge its battery.


To avoid coming home and finding that a deluge has created a sodden (or worse, moldy) mess, install a remote alarm system, such as the Samsung Smart-Things Hub (about $300 with five water-leak sensors). It will notify you when the sensors—-placed where leaks or overflow are most likely to occur—detect water. Home insurers usually offer their biggest discount for a combination of approved protective devices, which may include a water-leak detection system. State Farm offers discounts of 10% on the ADT Pulse home-monitoring system ($636 a year) and the Comfort and Control Kit for the Iris by Lowe’s smart-home system ($339). Plus, State Farm offers customers a premium discount of up to 10% to 15% for the ADT system and up to 2% to 7% for the Iris.

If your home (or neighbors' homes) experience sewer backups, hire a plumber to install a sewer-backflow valve ($600 to $1,400) to keep pure nastiness from backing up through toilets and drainpipes into your home. The valve allows waste to flow out but closes when the flow reverses. You can also add, say, $5,000 of sewer-backup coverage to your homeowners policy for about $50 annually.

Fortify your home. Your roof is your home’s first line of defense against the elements. When it's time to replace it, strengthen it. You can install impact-resistant shingles that are rated for superior resistance to hail damage, and you may earn a premium discount.


Four coastal states—Alabama, Georgia, Mississippi and North Carolina—require insurers to give homeowners a premium discount of 5% to 35% for retrofitting a roof to meet the “Fortified” standards of hurricane resistance developed by the Insurance Institute for Business & Home Safety (see www.smarthomeamerica.org). Florida, Louisiana, South Carolina and Texas have similar programs.

Also consider storm shutters ($9 to $30 per square foot of openings) or impact-resistant windows ($50 to $70 per square foot). Florida requires insurers to discount premiums by 35% to 44% for storm shutters that meet code.

Wherever you live, check with your insurance agent or state department of insurance to learn about incentives for preventing storm damage.

source: kiplinger.com

4 Insurance-Policy Add-ons Worth the Money

A few inexpensive add-ons can add valuable coverage to your auto and homeowners insurance.

1. For your auto insurance, consider roadside assistance. For $3 to $12 every six months (versus $52 per year for AAA), you can get lockout service, towing, jump starts, and flat-tire fixes, says Cadie Patrizz, an independent insurance agent in Tarzana, California

2. Rental reimbursement can be worthwhile if you need a car while yours is being repaired (repairs must be due to a covered loss).
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Mercury Insurance, for example, charges $20 every six months to provide up to $40 per day for a rental car while yours is being repaired, for a maximum of 30 days.

3. Medical payments coverage takes care of medical and ambulance bills for you and your passengers. It may duplicate health insurance, but it can fill in some gaps if you have a high-deductible policy.

You’ll pay about $19 every six months for $5,000 in coverage, says Patrizz.

4. For homeowners, coverage for sewage backup is a big gap in most policies — leaving you to pay thousands of dollars to clean up nasty damage caused by water and sewage that backs up into your house. But you can often pay about $50 per year to get $10,000 to $25,000 in coverage.

source: kiplinger.com

Understanding Settlement Statements: How to Decipher Yours Before Closing on Your Home

One of the most important documents you’ll receive as you draw closer to closing on your new home is called Good Faith Estimate, which is a precursor to the settlement statement that defines the financing of your home closing. This detailed piece of paperwork may seem like it needs its own decoder ring to understand, but you can use this simple guide to understand your Good Faith Estimate.

 Property Information

When you receive your Good Faith Estimate, double-check that the information about your new home is accurate, including the address, purchaser name and date. The date is especially important because estimates of the closing costs like interest and taxes can vary based on this date.

The other important date to review is the deadline to lock in the offered interest rate. Your lender may require you to pay a fee to lock in that interest rate and may also requires you to close the loan by another deadline to guarantee that rate.

Costs and More Costs

While applying for your mortgage, you probably discussed potential monthly costs with your broker. Under the “Summary of Your Loan” area, actual interest and recurring costs are further defined. Verify whether your interest rate can change over time or if you will face any penalty for making early payments. In this area, you’ll also learn if your mortgage lender will require you to pay a portion of your homeowners insurance and property tax every month with your housing payment — called escrow charges — or if you can independently pay these charges.

Origination Charges

Your mortgage company may charge you fees for originating a loan on your behalf, including fees to lock in rates or process your paperwork. Some of those fees may be collected up front, while others are included in your closing costs. You may also agree to pay additional charges called “points” to lower your interest rate. Your mortgage company may provide several rates: in general, lower rates cost more to lock in at closing, while higher rates reduce your closing costs.

Settlement Charges

Settlement charges often include

    Surveyor fees
    Legal recording fees
    Title fees
    Prepaid insurance and taxes
    Appraisal fees
    Credit report fees
    Courier fees
    Attorney fees

An estimate of these fees will be included under your settlement charges. As a buyer, you can request that the seller pay certain fees entirely or that they pay a percentage of the total settlement cost as part of your price negotiation.

Homework

On the final page of your Good Faith Estimate, you’ll have room to do more homework. Although you may have talked to only one lender, you can still investigate other interest rates or options. Take the time to go through these numbers. Refinancing can be expensive and time consuming, so locking in the loan with the best available rate and lost costs can save time and money in the long run.

Now that you better understand your Good Faith Estimate, you will be well prepared to review your HUD Settlement Statement at closing and know what fees and costs you will bear.

source: totalmortgage.com

3 Types of Insurances You Need as a Homeowner

Your home is your biggest investment, so it goes without saying that you’ll do anything to protect your property. This is why you have homeowners insurance to covers damage to your property and belongings in the event of theft, fire or natural disaster. Additionally, homeowners insurance provide liability coverage if someone is injured on your property.

If you’re financing your home through a bank, your lender will require homeowners insurance. And depending on where you live, you may have earthquake insurance or flood insurance. You might think this is all the coverage you need. However, if you really want to protect your investment, there are three other insurances to consider.

1. Life insurance

 

Some people put off purchasing life insurance, but tragedies can happen at anytime. If you have children, a spouse or other relatives who rely on your income, a life insurance policy provides your loved ones with financial support in the event of your untimely death.

At the end of the day, you want your family’s life to continue as normal as possible. If you’re the primary breadwinner or contribute to the household expenses, losing your income might force your family to move out of your home and they might struggle to make ends meet.

Life insurance policies can provide peace of mind. The death benefit can cover your funeral costs, pay off the house and other debts, plus provide your family with ongoing financial support. There are no hard or fast rules regarding how much coverage to receive, but some experts recommend purchasing a policy that’s eight to 10 times your annual salary if others rely on your income.

2. Payment protection insurance

 

In addition to life insurance, you can purchase mortgage payment protection insurance from your mortgage lender. Many lenders offer this supplementary insurance policy, which is similar to a life insurance policy, but the death benefit is paid to your mortgage lender. Mortgage payment protection pays off your home loan if you die.

Typically, you have to request payment protection when buying a house, but some lenders let borrowers add coverage anytime within the first three to five years after a purchase. Payment protection premiums are based on different factors, such as your age, whether you’re a smoker and the outstanding mortgage balance. Premiums are paid monthly and included in your mortgage payment.

3. Disability insurance

 

Take advantage of short-term disability insurance if offered through your employer, or look for a policy on the individual market. Disability insurance provides income if you’re temporarily unable to work due to an illness, injury or other medical reasons. This income can cover living expenses and help you stay current on your mortgage payment, which can alleviate payment problems and possible foreclosure.

The amount you’re eligible to receive varies depending on the insurer. For example, some insurance companies offer short-term disability policies that’ll pay up to 60 percent to 70 percent of earnings, whereas other companies only pay up to 40 percent to 50 percent of earnings. Unfortunately, you won’t find a disability policy offering 100 percent coverage.

Bottom Line:

 

Life insurance, payment protection insurance and disability insurance aren’t “only” for homeowners — anyone can benefit from protection. But as a homeowner, you can’t afford to skip coverage. Home is where you’ll raise your family and create memories for years to come. So you need to do whatever you can to protect your biggest investment.

source: totalmortgage.com

5 Insurance Policies You Should Review

Since little Nora’s arrival in January, I’m confident we’ve doubled our possessions due to all the baby stuff that vomited all over our home. We only spent $150 to prepare for Nora’s arrival but we inherited a LOT of toys and clothes from family and friends. We recently met with our insurance agent to review our policies and to make necessary changes now that life looks a little different with Nora in the picture. One of the significant changes we made was increasing our property coverage in case a fire destroyed everything we have. We lean pretty hard on the minimalist side so we originally had only $25,000 coverage if we lost everything in our home. That probably seems way low but this might put into perspective how minimalist we were: When we moved to Calgary for 6 months we each packed one suitcase with clothes and then fit every single thing we owned in the smaller bedroom of our condo (minus a couch we sold before we left) since we were renting out the rest of our home to friends. We didn’t have much then and we still don’t have a ton now but it’s more than what we used to have. Here are a few areas we’ve reviewed and I have added a few more that you may want to look into to make sure your insurance policies are up to date and are covering the appropriate amounts.

Auto Insurance


What’s your current deductible? If you have a gem like our ‘99 Honda Accord that’s maybe worth a couple thousand then why would you pay hundreds of dollars if you’ll end up paying more for insurance than the car is even worth? If you’ve recently added another car you can qualify for discounts for having more than one car.

Property Insurance

Do you have any jewelry like wedding rings or other prized possessions insured? I didn’t realize this existed but if you have a significant amount of expensive jewelry you may want to consider covering it. Often insurance companies will offer another discount for bundling multiple types of insurance. We get this overall discount by having our car, homeowners, and property insurance all insured by the same company.

 Homeowners Insurance

The total worth of items in our home has definitely gone up over the past few years. We’ve added new furniture, electronics, and our beloved deep freezer over the past year. Do you have appropriate coverage? If you haven’t taken pictures of your house in awhile now may be a good time to do it assuming you got all of your spring cleaning done. If a fire occurred and your insurance gave you a blank piece of paper to write down all of the possessions you had in your home (toothbrushes and all), having pictures of your closets, kitchen cupboards, rooms, etc will be very helpful. We more than doubled the amount we’d like covered and it only added $15/year to the cost of our policy. It won’t break the bank to make sure you’ve got the appropriate amount of coverage.

Life Insurance

We recently bought term life insurance for my husband and are in the process of getting me covered. In my mind I’m not “worth” much since I stay home with Nora and only work a couple days each month but I have to consider the cost of daycare and a few other factors if Dave were to be on his own with Nora. Life insurance is the cheapest it will ever be for you TODAY because today is the youngest and likely the healthiest you’ll ever be. Getting coverage now can lock you in on a lower rate.

Health Insurance

Do you know what your coverage includes? You might be missing out on some benefits if you haven’t taken a look at what you can have covered. For example, I almost added a breast pump to our baby registry (those suckers can cost $100-$400!) until a friend told me to check if my insurance covered one. I ended up with a free electric pump! Another thing to re-evaluate is your deductible. It might be worth it to pay less money for the higher deductible if you never get sick or need any medical attention.

If you have an insurance agent and they haven’t reached out to you to review your policies, now may be the time to reach out to them. You could save money by cutting unnecessary expenses and you’ll have peace of mind knowing everything is up to date and accounted for.

source: lifeandmyfinances.com