Thursday, December 30, 2010

Happy New Year!

With the New Year almost upon us I want to take this opportunity to wish you the very best for the coming year. I'm looking forward to sleeping in late and kicking back with the rose parade. Of course I'll be sleeping in late because, just like you, I'll start off the New Year at exactly midnight on New Year's Eve.

Just for fun, I looked up the song Auld Lang Syne online to find out its history. I learned that Auld Lang Syne is a traditional Scottish song. The version we know today was written (in part at least) by Robert Burns in the 1700s. The title refers to "old long ago," or the good old days, as we would say today. Have a great New Year's Day and don't forget to break a resolution or two!

Have a great and safe New Year's!


Auld Lang Syne

Should auld acquaintance be forgot and never brought to mind?
Should auld acquaintance be forgot and days of auld lang syne?
For auld lang syne, my dear, for auld lang syne,
We'll take a cup of kindness yet,

For auld lang syne.

Should auld acquaintance be forgot and never brought to mind?
Should auld acquaintance be forgot and days of auld lang syne?
And here's a hand, my trusty friend , and gie's a hand o' thine,
We'll tak' a cup o' kindness yet,

For auld lang syne.

Friday, December 17, 2010

Every Home, Every Year Part II - What do they look for?

If you read the first post, Every Home, Every Year, I touched on a couple of things your home inspector will look for like vicious dogs, bad roofs, etc.

So, what else do they look for?

Well, every underwriter has different types of things they want to look at. Most common are:

Remodels or renovation in progress - Many homes on the market today are bank repos. These types of homes sometimes require some work, replacing carpet, paint, tile, etc. To an inspector, this is a red flag. To the underwriter, it means additional exposure to claims. The house is a target for thieves since you are probably not able to live there with so much work going on at one time. There is a greater chance of someone getting hurt on the property, a worker, a nosy neighbor looking around, kids thinking it's a great place to play. You could get sued by the injured person since it happen on your property. That means you face the potential of a liability claim against your policy.

Debris - I know moving can be hectic. Were did we pack my clothes for tomorrow? Do we want the hutch on that wall, or this one? Did some one get beer? When an inspector shows up at a property, typically you are done moving in. But what about all the boxes on the back porch? Unwanted furniture still in the driveway, a car that has not run in years sitting in the back yard, broken refrigerator out front with the door off. All these things make it look to an underwriter that you are not going to take care of the home. Their logic is that if you won't take care of the outside of your home, that means a major claim, like that leaking pipe under the sink will get ignored until it floods the kitchen, causes mold and is a major repair job.

Overgrown landscaping - Many policies require you to have pride of ownership and maintain the property. Bushes covering windows, tree limbs hanging over the roof, your dog lays down in the yard and you have to make 'em get up to find 'em. To an underwriter it looks like you are not taking care of the property, with all the over growth you have an increased fire exposure and if the winds moved those branches over the roof, you could easily have a leak come rainy season.

Hazards on the property - So you work for the bomb squad and sometimes bring work home. Seriously though, welding tanks, construction materials,  landscaping supplies, large amounts of chemicals like fertilizer and solvents, etc. can all be potential claims, increase your fire risk and can cause injury to you and your neighbors. There are companies out there that will insure you, but you could end up paying more for a commercial policy. Keep it at work, stored properly of course.

Dogs - I know, I've already touched on this. Dogs are an issue since certain breeds do have a higher number of claims and tend to bite folks. This means a claim on your home owners because "Fluffy the pit bull"  bit Johnny when he walked too close to your fence and now Johnny's parents are suing you for medical bills. We all want good guard dogs, companions, a friend. If you have a pet or are going to get one, talk to you insurance agent or read your policy to find out which breeds they will not cover.

Remember, the carrier is not picking on you. They are not saying you are a bad house keeper, negligent dog owner or can't put in new tile. They want your business. If they did not, they would be out of business. They are trying to look out for you. If you can fix a few things yourself and maintain the property you can have your pick of carriers since your risk of a claim is lower. That means not having to settle for just one or two carriers that have really high rates because no one else will cover you after you filed 4 claims in 2 years. Insurance is there when you need it, but by doing your part, you will keep costs down and have more options.

Saturday, December 4, 2010

Every Home, Every Year

When you take out a new insurance policy on a home or rental property, the insurance company sends out an inspector who prepares a report about the property, takes pictures of the exterior and may even talk to you or whomever is home at the time. This information is then sent back to the insurance company and based on that report they decide if your property meets their requirements or if they should have you find another carrier. This inspection is usually done within the first 60 days of your new policy coming into effect. They also inspect again when you go to renew each year.

Since this inspection is only of the exterior, they are not going to come inside. If you are home, they may talk to you and ask you some questions. I have had an inspector interview a clients teenage son who told them about the pitbull puppy in the back yard. While their policy was not canceled (they removed animal liability coverage and later got rid of the dog), it did require a letter from them at renewal time stating that the dog was gone.

Insurance carriers do property inspections for a few reasons.

First, to make sure that the questions you answered during the application process are answered correctly and that the property meets their underwriting criteria.

Second, to make sure there are no hazards that may cause harm to you, your family, guests or to the structure. This could result in a claim from a condition on the property that could be easily fixed now for a few bucks at Home Depot.

Third, it's their check book. If you do have a claim, you have paid your yearly premium and your deductible. The carrier gets stuck with the lions share of the cost. If something shows on an inspection report that the carrier is concerned about, some carriers will give you time, normally 30 days, to correct the issue and respond back to them that it is corrected. Don't wait until the last moment to do this. Get it taken care of asap. If you wait until the last moment you could be canceled even though you have taken care of the issue. Call your agent and talk to them if you are not sure how to get information to the carrier.

I know inspections can be frustrating if something needs to be corrected and you just moved in. They are for us agents who have to explain to clients whats going on. We have no control over what the inspector or underwriting will do. You and your agent have to work within the rules set for us by the insurance carriers. That is not to say you don't have options. Insurance carriers are like people around a salad bar. Some want iceberg lettuce, some want corn on their salad, others don't. They may take a radish, or some ham. Or not.

There is someone out there that will take the property. The question is how much you want to pay. A few dollars now at home depot or a few hundred more a year?