Thursday, October 28, 2010

Ensuring Your Homeowner's Policy Is Up To Date

When your insurance company calculated the cost to replace your home in the event of a claim, they based it on the available knowledge they were given regarding your home. Things like the square footage, the type of construction, the materials used inside and out, as well as any special features of the home were all included in the calculation. What many homeowners forget is that updates to your home need to be reflected in the replacement cost. Here are some key times when you should give your insurance company a call to provide updated information.

A Major Renovation

Whether you give your kitchen an overhaul or redo the master bath, these are high value areas of your home, and your insurance company needs to know you have improved them. Give them a call and let them know what type of materials you used and what features you may have added, such as a jetted tub or granite countertops. This will ensure that if insurance ever has to pay to replace your house, you will get those updates back.

An Addition To Your Home

If you add square footage to your home via an addition, it's important to let your insurance company know right away, as this has a large impact on your replacement cost. Remember that insurance will only cover permitted additions to your home, so be sure you have all the right permits on file and everything is up to code. Some additions, such as certain types of sunrooms, do not actually count toward the total square footage, so discuss the coverage for that type of addition with your insurance agent.

New Floors

Anything you replace or upgrade should be reported to your insurance company. Whether you replace your carpet with hardwood floors, or other features, all of these things are important to the reconstruction cost of your home.

If you aren't sure if a certain upgrade or change has any bearing on your insurance, it's always best to put in a call or e-mail to your agent just to be on the safe side. You don't want to make a claim down the road only to find out that the policy was outdated and you weren't covered for the improvements you have made to your home. Although most policies do have some protection built in for this, the safest bet is to be sure you keep your policy up to date. It's always worth a call to your agent or insurance company to let them know things have changed at your home.

Thursday, October 21, 2010

When a disaster strikes, watch out for scams!

You would think things are bad enough. Your home just caught fire and you are living at your sisters house with your kids while they repair the damage. You are at the house continuing to pull out your clothes and other valued possessions one day when a man shows up, says he is a general contractor and can repair the damage faster and cheaper than your insurance company. He implies that your carrier sent him and that they will pay for the work. No cost to you. What should you do?

Well thankfully you read this blog and you know that you should call your adjuster or your insurance agent right away and not sign anything. When your claims adjuster calls back, he tells you that they have a different contractor assigned to rebuild your home and if this man comes back, to have him call your adjuster directly. The adjuster checks the contractors license number that was on the card he gave you and finds out that he does not have workers compensation insurance and that his license expired recently. He is also not bonded. Wow. Things could have really gotten bad.

Sadly there are people who would do such a thing to an unsuspecting property owner. The get what cash they can, maybe even do some work and then leave before the job is completed. Often times these are just people looking to make a dishonest buck. You can check on a contractors license with the California State Licensing Board  by clicking here.

Thursday, October 14, 2010

So what has my insurance carrier done for me latley?

The insurance industry is protecting you from local government fees.

The Fire Surcharge Fee was blocked again due to the efforts of Insurance Brokers and Agents of the West and Liberty Mutual Insurance group. The Emergency Response Initiative would have imposed a 4.8% surcharge on homeowners and commercial property owners. This fee was being marketed by supporters as a way to offset the cost of fighting wildfires in California. However there was nothing in the bill restricting the use of the fee to pay for fire personnel and new equipment. This money would most likely be used to shore up the state budget deficit and would not provide any aid in fighting fires. Many insurance agents and insurance carriers opposed this fee.

With the current economic situation and the rising cost of living, many people are asking why they need insurance. There are several reasons:

1. It keeps you from getting wiped out financially in the event of a fire, accident or legal action.

2. Insurance may be required by your lender or another third party.

3. Insurance costs change, but you have some say in those costs.

If you had no insurance, you would have to pay the full costs of any repairs, bills and judgments in the event of something happening. With insurance you pay your deductible and the carrier takes care of the rest up to the policy limit which leads me to number 3 on my list, cost. (number 2 is really hard to do anything about. If a lender or someone else requires you to have insurance, you pretty much don't have a choice.)

Insurance carriers change their prices based on what is happening in the insurance market, what their loss experience has been, what they anticipate will happen in the coming months, etc. You may have been with XYZ underwriters for a year or more. Slowly your rebuild cost has gone up along with your bill. You call XYZ and they explain about the rebuild cost of your home increasing as it ages, building code upgrades, local ordinances, materials costs, and so on. All well and good, these factors affect the cost of rebuilding your home if it is destroyed. So you call PDQ underwriters. They can insure your property for less, but you also have a lot less coverage. You call XYZ again, tell the about the PDQ quote and ask if there is anything they can do. Well, do you really need $500,000 in liability coverage? Could you lower it to say $300,000 and still be comfortable? Depending on your situation, sure. Medical payments to others is $3,000. Can we go to $1,000. Sure. You have animal liability coverage. Your dog left with the kids. Save another $25. XYZ puts these lower coverages in and you are still a little above the PDQ quote, but you have more dwelling coverage and peace of mind. It's worth staying with them.

Don't be afraid to ask your agent if they can go lower on some coverages or eliminate them. Also, ask if they are charging a broker fee and can that be waived. Never be afraid to ask questions. If your agent tells you that's a dumb question, you may want to get a new agent.

Friday, October 1, 2010

California May Stop Paying Some Workers Compensation Benefits

Since the state still has not passed a budget, the funding for workers compensation insurance benefits, food programs, disability, medical care and many other programs is drying up.

With no idea as to when or how some of these programs will be funded, the state will be cutting back on the payments and services to those who use these programs.

With workers compensation, the employer pays into the fund to cover workers in the event of an on the job or job related injury. The state then handles the claims and payments. With record unemployment and more people filing workers comp claims, and no budget the fund is drying up fast. Since most workers comp payments made by employers is determined by their payroll numbers, this means less money coming into the fund when unemployment is high.

Also, with high unemployment, I wonder how many of these claims are really work related injury and not just an attempt to get more benefits or hold on to a job position that may be eliminated. Only time will tell.

To contact your state legislature, click and type in your zip code. E-mail them and explain how their lack of action and party politics really affects the people they are supposed to serve. Tell them California needs a budget now.