auto insurance norwell MA gordon atlantic insurance homeowners insurance norwell MA gordon atlantic life insurance norwell MA gordon atlantic boat insurance norwell ma gordon atlantic business insurance norwell ma gordon atlantic
             Auto Insurance          Home Insurance           Life Insurance           Boat Insurance      Business Insurance

    Personal Insurance Blog

    Val Feeney

    Recent Posts

    How to Avoid Frozen Pipes in the Winter

    Posted by Val Feeney

    Wed, Dec 14, 2016 @ 12:33 PM

     
    Frozen pipes can cause interior water damage, leading to contractors traipsing through your home, an insurance claim, and possible increased insurance costs down the road. As cold weather settles in, these tips should help you prevent frozen pipes from sending water down your walls, onto your floor, and dripping into lower levels until they unfreeze.


    Here are some tips on how to prevent pipes from freezing in a home or condominium:

    • Thermostat:  During a cold snap, set your thermostat at a minimum of 65 degrees. The extra few degrees will keep water in pipes moving and protect from the intrusion of a polar vortex into your walls.     

    • Main Water Valve:  Identify the location of the water shutoff in the event of a burst pipe.  When water is gushing it's important to know where to go to stop it.

    • Insulate:  OK, so this is a summer project, but if you have any work done be sure that all water pipes around the exterior of your house are insulated. This includes any crawlspace, basement, attic and exterior walls. It may be too late for this now, but make it a priority when you have insulation upgraded.

    • Garage:  Keep garage doors closed during extremely cold weather.

    • Cabinets:  Open cabinets, especially at night, if they hide bathroom or kitchen sinks that are up against an exterior wall. Open air from the house should circulate near those exterior walls.

    • Exterior Faucets:  Disconnect and drain all outdoor garden hoses, faucets, showers, etc. Keep the outside faucets open to allow them to drain and for any ice to expand freely.

    • Basement:  If you can, heat your basement during extreme cold weather.

    • Washing Machine:  If you plan to be away from the home during a cold snap, shut off the water supply valves to the machine. Replace hoses with metal cased hoses available at most home improvement stores.

    • Doors:  Install weather stripping at the bottom of each door to prevent cold drafts, or use an old fashioned door snake.

    • Lawn Sprinklers:  Turn off the sprinkler system and blow compressed air through the system...this is another important fall reminder.

    • Drip:  During extreme cold, turn kitchen and bathroom sinks to a slow drip

    water damage water stain.jpg

    The first sign of a freezing pipe is reduced water flow from a faucet. Check the faucets for water flow and pressure before bed and again in the morning. In the event a pipe begins to freeze:

    • Use a hair dryer, electric heater, heat lamp or electric heat tape to thaw the frozen pipe

    • Keep the faucet open when thawing to allow water to run and drain

    In the event a pipe does burst:

    • Shut off the main water valve

    • If the pipe is a hot water pipe, also shut off water from water heater

    • Call your plumber to repair the damaged pipes

    • Call a water remediation expert to mitigate damage: here is a list of locally vetted mediation contractors; agordon.com/home-repair-service-provider
    • Call Gordon Atlantic Insurance for additional coordination of water extraction, damage mitigation and initiating a claim if needed. You can also contact your insurance carrier directly by clicking HERE.

    Contact Us 

    To take this one step further, consider smart valve technology which will turn off your water even when you're not home.  And get a discount on your homeowners insurance with some carriers!

    Tags: frozen pipes in winter, Water damage, frozen pipes

    Risks of Hiring an In-Home Nanny

    Posted by Val Feeney

    Mon, Aug 01, 2016 @ 02:35 PM

    in-home-childcareThe soaring cost of daycare is leading to a rise in the number of families hiring an in-home nanny amongst our customer base.  Most families however, do not have a comprehensive understanding of the financial risk involved with bringing a nanny on board until an uninsured claim occurs.  

    If you hire a nanny independently and plan to pay them on your own, you have essentially become an employer. This article will explore some of the risks associated with hiring a nanny, and how to mitigate those risks as much as possible. There are two ways to mitigate the exposure:  buying the proper insurance coverage, and implementing the proper risk management (prevention). 

    The first thing that comes to my mind as an insurance agent is injury to the nanny. It is important that the family purchase workers compensation coverage for him or her. This will protect the family and the nanny if injured while performing nanny duties. The workers comp will pay for the nanny’s lost wages and medical bills during her leave. Without workers comp the family is leaving itself exposed to paying for the nanny’s medical bills and lost wages out of pocket, which can be substantial, while also being in the position of living without the nanny’s services. 

    It is equally important that the family have its own proper insurance protection in the form of personal umbrella coverage,with employer’s liability coverage included. The nanny could sue the family for a variety of reasons (mistreatment, negligence, etc), or the nanny’s family could sue the employing family for loss of consortium, which is the loss of his or her services (being able to provide for his or her own family). 

    Another insurance item necessary is auto insurance for the nanny. If the nanny will be operating the family’s vehicles it’s important that the nanny is included in the auto insurance program, and with increased insurance limits.

    A good risk management tool for hiring a nanny is a thorough background check, which should include running the nanny’s driving history. A formal background check will alert the family to any previous criminal activity, or bad driving habits, that could lead to serious problems if the nanny is hired such as theft or speeding with children in the vehicle. His or her history of job terminations is also beneficial when considering a new hire. Using a payroll service to handle the payment of the nanny, including state and federal taxes, is also an ideal risk management tool.

    The ultimate risk management solution for hiring an in-home nanny is using a nanny agency. This type of service alleviates nearly all of the risk exposure as he or she is the agency's employee. In other words, the agency is responsible for wages, taxes, background checks and workers compensation insurance. With that said, it is important that the family review the agency contract in detail with an attorney to understand what the family is responsible for and what the agency is responsible for.  Increased umbrella coverage, including employer’s liability, is still recommended while using an agency.

    If you currently have or are looking into an in-home nanny and would like to discuss your coverage options, ask your question below; click here to get a quote; or give us a call today at (800) 649-3252. 

     

    Contact Us

    Val_Feeney.jpg

    Tags: risks, insurance options, in home nanny, in home childcare

    Should I file an insurance claim or not?

    Posted by Val Feeney

    Wed, Feb 17, 2016 @ 05:20 PM

    Should I file an insurance claim or not?

    The following article was written from experience, and should not be used as the only source in determining to file an insurance claim or not on your home or rental property. 

    The four seasons in New England offer some of the best weather there is to be had in the United States.  The fall provides a beautiful landscape and wonderful cool nights, for example.  However, the change in seasons also provides severe swings in nature that result in potential blizzards & freezing temperatures in the winter, flooding in the spring, lightning in the summer, and possible Hurricanes in the fall. 

    Your home has to withstand many different types of elements throughout the year.  A severe storm may hit the region and your home could be damaged.  Once the damage occurs, it is up to you as the homeowner to fix the damage.  This is when the question arises, “should I file an insurance claim to fix the damage?”  For the sake of simplicity, we are not going to discuss if the damage is actually covered, we are going to assume the damage caused by the weather event is covered under your homeowner’s policy. 

    Through my experience as an insurance agent, guiding my customers through the claim decision process, there are a few pieces of information from your policy that you should review when deciding to file a claim:

    • The deductible. The deductible is the portion of the claim that you will be responsible for.  The standard deductibles are $500, $1,000, and $2,500. 

    • Claims Free or Loss Free Credit/Discount. Your policy will have a discount or credit listed on your policy for your claims history.  If you have had no claims in the past 3+ years, it could be significant. 

    Let’s create a scenario where your house has been damaged by a winter storm.  The gutters were destroyed and were ripped off your home when a large chunk of snow & ice slid off the roof.      

    The first step is to quantify the damage and repair.  If you have a contractor or handy man that you use, have them provide you an estimate for the damage.  In this scenario, let’s say the contractor gave you an estimate of $1,500 to fix the damage.  This is where the policy information becomes a factor.  You have a $1,000 deductible on your policy, so the insurance company would cut you a check for $500 ($1,500 damage minus the $1,000 deductible). 

    However, once you file a claim, the claims free discount ($250 per policy year in this scenario) you receive on the policy may go away for 3 years (that’s a total credit of $750 over 3 years).  If you add the deductible ($1,000) and the claims free discount over 3 years together ($750) that is $1,750 that is coming out of your pocket for this claim. This is the threshold I like to use when determining to file a claim.  Essentially, if you factor in the loss of the claims free discount with the deductible ($1,000 deductible + $750 claims free discount = $1,750), you are eventually going to pay an extra $250 out of pocket for filing this claim ($1,500 - $1,750 = -$250).

    In this same scenario, if the contractor gave you an estimate of $3,000, now you are receiving a net of $1,250 from the insurance company ($3,000 minus $1,750).   This seems more attractive..

    The decision to file a claim will always be the customer's, not the agent's nor an adjustor's.  However, it is helpful to understand the many financial ramifications,,, and to have an advocate on your side like Gordon. 

    House.jpg

    Tags: Should I file a home claim?, Pros and Cons of Filing a home claim, Should I file a claim?

    How Insurance Plays a Role in Buying a New Vehicle

    Posted by Val Feeney

    Wed, Feb 17, 2016 @ 09:41 AM

    How Insurance Plays a Role in Buying a New Vehicle

    You’ve done it!  You bought the car of your dreams, or maybe the car for right now.  There are several steps in the process of buying of a new vehicle.  One of the last steps to take in order to get the vehicle registered and on the road is the insurance.  How the insurance is completed depends on what avenue you are using to buy the vehicle.

     

    Dealership

    If you are buying the vehicle from a dealership, the dealer will typically take charge of getting the vehicle registered and titled for you.  If you have an existing policy in place, you can simply provide the dealer with the contact info of your agent (Gordon Insurance in Norwell) and the dealer will coordinate with the agent on the necessary paperwork.

    If you do not have an existing policy in place, you’ll need to call your agent, or find an agent, and provide them the necessary information to create a new policy for you (your personal info – name, date of birth, address, other household drivers, vehicle info).  Once you choose which quote you are going with, you can provide the dealership with the agent’s contact info. 

     

    Private Party Sale

    If you are buying the vehicle from a private party, or from a dealer that does not offer registry services, the process involves you a bit more. 

    Most agents will provide the service to existing customer of running to the registry, or in office registry access, so you can get the plates for the new vehicle within a few days. 

    You will need to obtain the title from the seller when you buy the vehicle.  You will then provide that title to the agent so they can create the necessary paperwork for you to sign.  The agent will simply add the vehicle to your existing policy (and remove the old vehicle if necessary), or create a new policy for you.

     

    Using an independent insurance agent is always recommended when purchasing a new vehicle.

    Contact Us 

     

    Car.jpg

     

     

    Tags: Insuring a new car, Buying a New Car, Insuring a new vehicle

    Homeowners Insurance for a new Home Purchase

    Posted by Val Feeney

    Wed, Nov 12, 2014 @ 04:53 PM

    Purchasing a new home can be a complicated process with many moving parts.  It may have taken months to find that dream home, to negotiate the sales price, and to get approved for the loan.  With the closing date soon, there is still one piece of the puzzle that needs to be completed: home insurance.  This piece will have its greatest effect long after the closing has faded from memory.

    A month or so before the closing date, your mortgage broker or loan officer will remind you to provide a binder, which is proof of insurance for the new home, to close on the loan.  Don’t fret; a good independent insurance agent will help you build the proper insurance program for your family’s new home.  The agent collects the necessary information from you including facts on the home, some personal information such as current address or home insurance claims you have had in the pas, about unique items at the house (wood stove or pool), and if you plan on running a business or working from the home. These all matter for crafting appropriate insurance protection.

    The agent should do the heavy lifting to design an appropriate insurance program, integrating your needs with the best insurance carrier.  What does this process look like?

    Notify_your_insurance_agent_of_home_construction_with_homeowners_from_Andrew_G_Gordon_Inc-1

    1.  The first step is to determine a replacement cost estimate for the building coverage limit on the house.  This is not the assessed value, nor mortgage amount, nor market value, but the amount of money it would cost to rebuild the house if it was ever destroyed, by a fire, hurricane, or whatever else. 

    2.  Next, the agent (we) secure cost estimates from several different companies based on the geographical location of the house and the building amount calculated by the replacement cost. 

    3. The agent (we) tailors the insurance offer from the best priced companies to provide protection for the standard risks (fire, wind, etc), plus your unique issues with the house.  Thing like a large barn or outbuilding, collections, business exposure, or other distinct characteristics that would affect your insurance program. 

    At this point, we also typically recommend pricing your auto insurance, as it often makes sense to “bundle” the home and auto policies together with the same insurance company.  Some companies offer bundled discounts even if both policies with different companies, but with the same agency. 

    The agent (we) will help you to make choices on the best insurance options for you in your new home. 

    Once you select which company and policy options you’d like to go with, you will determine how the bank wants you to pay for the policy.   In most cases, the bank requires you to pay the homeowners policy in full prior to the closing, and then will begin to escrow – setting 1 /12th of the premium aside monthly -  next year’s premium,  In some instances, the bank may allow you to pay for the insurance at the closing. 

    Once the paperwork (application veryfying info) is done we provide the bank and closing attorneys with an insurance binder (proof of insurance).  You are now cleared to close!

    It is helpful to have a good independent insurance agent who can make this process easy for you.  It is important that your agent learns about your family, the home, and how you plan to use the home to create the most comprehensive program, for a fair and competitive price. Also, once the policy is selected, a good agent wwill coordinate the binder documentation process seamlessly with the bank or closing attorneys. 

    Good luck on your new home search, and remember that it is never too early to find a good insurance agent who will help you along the way.

     Top 10 Things about Home Insurance

    Val_Feeney

    Tags: homeowners insurance, Educated

    Does Remodeling or Adding to My House Affect My Insurance?

    Posted by Val Feeney

    Tue, Apr 01, 2014 @ 09:00 AM

    Are you considering remodeling your home or adding an addition to your home?  If you are, you will want to speak with your insurance provider to ensure you are fully insured during construction.  It is important to factor the cost of insurance into your budget.   Many insurance companies are not comfortable insuring your home under your standard homeowner’s policy during the length of construction. 

    Learn if remodeling your house changes your homeowners insurance andrew g gordon inc

    During major construction in your house, carpenters, electricians, plumbers, plasterers, floorers, roofers and other contractors could be working in your home.  With so many different types of smaller jobs needed to complete the total project, the chances of a fire and/or accident happening in your home are elevated.  For example, an electrician may charge a piece of equipment overnight in the home and it could short circuit, causing a fire. 

    If you do not inform the insurance company of the work being done, and there is a loss at the property, the insurance company has the right to deny the claim. 

    If your insurance company is not willing to insure the home during construction, you will need to insure your home under a Builder’s Risk Policy.  This type of policy is designed to cover property in the course of construction.  It can be purchased for 3, 6, and 12 month intervals.  Coverage typically applies to personal property both on and off your land, like building supplies in transit or furniture in storage.  This type of policy uses the completed value of the home after the project is done as the limit of insurance. 

    For example, if you currently insure your home for $300,000 and plan to add a $50,000 addition, the Builder's Risk policy would be written for $350,000. 

    Please contact Gordon Insurance for a free Builder’s Risk quote for your upcoming project. 

    INSURANCE QUESTION?

    Val Feeney

    Tags: construction, remodeling, insurance claim, risk policy, builder's risk policy, denied claim

    The Biggest Insurance Discount: Bundling Your Policies Together

    Posted by Val Feeney

    Wed, Feb 06, 2013 @ 09:04 AM

    Trying to save money on your insurance?

    Bundle your home insurance for discounts with andrew gordon inc
    Bundle your car insurance for discounts with andrew gordon inc
    Bundle your life insurance for discounts with andrew gordon inc

    The best way to lower your insurance costs is by placing both your home & auto policies with the same insurance company. Insurance companies offer “multi-line” discounts of up to 20% to attract the customers who will place more than one policy with them. These discounts allow the insurance company to charge significantly less for your home & auto together than compared to insuring the policies separately at more than one company.   

    Chances are, when you bought your first auto policy, you used the same insurance company as your parents or siblings. You may have since changed it to another insurance company through a savings offer, but have never made a conscious decision to choose one company over another. 

    The same scenario is common among homeowners. When buying a home, the first time buyer often gets insurance through whichever company the bank or broker recommends, or uses the same as their parents or friends.  But rates are different for different kinds of homes.  Since the insurance is often paid through the mortgage after the first year, the new homeowner never shops for better insurance options after the initial purchase.  The insurance market is so dynamic, it's really valuable to have your agent shop your program periodically.  Id if they aren't bundling the home and the auto, you may be leaving money on the table.

    The customer has separate insurance policies, each with a different company, resulting in three separate insurance bills each month. This is a sure fire way to pay the most for insurance. 

    Today insurance companies use multi-tiered rating algorithms with all kinds of separate charges and credits for particular variables to achieve unique rates for every customer.   (For more on the math behind insurance company rating, see our separate blog).

    But for most people the biggest single discount is the "account discount" when the home (or apartment insurance) is bundled with auto insurance.  Credits apply both ways, meaning these credits lower the cost of BOTH the auto insurance and the homeowners insurance.

    One exception to this general rule of thumb is for homes near the coast.  Coastal home insurance carries all kinds of unique challenges (which we are quite familiar with and capable of addressing), but these variables may be the only time when home-plus-auto discounts don't trump everything else.

    Naturally you don't want to miss other discounts either; see our separate articles on auto insurance and homeowners discounts.

    Contact us here at Gordon Insurance, or talk to your own local independent agent today to have your home, auto, and life insurance quoted together with several companies. This will give you the chance to review your options, which will most likely be significantly lower in cost.  Also, if a life altering event takes place and you need to use the insurance, the claim process will be simplified with only one insurance company in the mix.

    If you would like us to shop for policies for you, click the buttons below. Or simply contact us.

    Top 10 Things to Know about Homeowner's Insurance

    Auto Quote Home Quote Life Quote

    Val Feeney

    Tags: home, auto, company, policy, account, bundle, bundling, policies, same, insurance, discounts

    Flood Zone Changes Affect Thousands of Homeowners in Massachusetts

    Posted by Val Feeney

    Thu, Oct 25, 2012 @ 04:52 PM

    This past July the Federal Emergency Management Association, otherwise known as FEMA, came to Massachusetts to review every community’s flood zone maps.  FEMA is in charge of mapping the entire country’s flood zones. These flood zones determine if your property is susceptible to a flood and the likelihood of it happening. After reviewing the flood zone maps, FEMA made thousands of changes, placing many previously low-risk neighborhoods into high-risk flood zones. 

    Be aware of the massachusetts flood zone changes with andrew gordon inc insurance norwell maMany homeowners on the coast of Massachusetts, most notably Hingham to Wareham, had their flood zone changed from “Outside the 100 Year Flood Plain” to “Inside the 100 Year Flood Plain.” This triggered a red flag on their mortgage or home credit line at their bank.  Banks require anyone “Inside the 100 year Flood Plain” (also known as SFHA – Special Flood Hazard Area) with a loan to have a flood policy on the home for the amount of the loan or for a maximum of $250,000, whichever comes first. 

    A flood policy for a home inside a flood zone (for $250,000) can be extremely expensive, and the bank expects the flood policy to be put in place within 30 days of notice, leaving many homeowners in a serious bind. Flood policies typically need to be paid in full at the time of issue. However, these homeowners have options.

    If the flood zone was changed from a non flood zone (C or X) to a flood zone (A, AE, VE, to name a few), the homeowner can get flood insurance based on the old zone for up to 2 years, under FEMA’s Preferred Risk Program. However, the rate may change from year 1 to year 2.  The home is ushered  into the program using the old zone to allow the homeowner time to save enough money for the new policy, or to hire an engineer to do an Elevation Certificate on the property. An Elevation Certificate can prove that the property is elevated enough above the flood zone, that it will never be touched by a flood. An example of this is a home on a hill or bluff overlooking the Atlantic Ocean. 

    Flood Insurance under the Preferred Risk Program is very reasonable, typically between $300-$1,000 for the year, and will cover $250,000 in building coverage and $100,000 in contents coverage.  

    Many banks are just now catching up to the flood zone changes from July, putting many homeowners on the South Shore of Massachusetts in this very scenario. 

    We have a flood resources page prepared just for you. If you have any questions about your insurance, contact us

    INSURANCE QUESTION? Home Quote Request
    Val Feeney

    Tags: home, insurance, FEMA, Marshfield, massachusetts, South Shore, ma, hingham, Flood, zone, changes, Coastal

    What is a Personal Umbrella Insurance Policy?

    Posted by Val Feeney

    Mon, Oct 15, 2012 @ 04:50 PM

    Learn what a personal umbrella insurance policy covers with andrew gordon inc norwell ma

    An Umbrella Policy provides liability coverage above and beyond your first line of legal defense, which is usually your homeowners and/or auto policy. These both offer liability coverage to protect you against the cost of a lawsuit. The umbrella policy provides additional levels of insurance in case something really bad happens and the lawsuit is big.

    If a guest is at your house and is injured, you may be sued for damages including medical expenses, pain and suffering, loss of earnings and other damages. Your homeowners policy (Part E. Personal Liability) will typically cover you for up to $300,000 or $500,000. If you are sued for more than your coverage amounts, you become personally responsible for the difference. 

    An umbrella policy protects you in these bad case scenarios by adding an additional layer of coverage that sits on top of the underlying home or auto limits. Umbrella policies can be bought in amounts of $1M, $2M, $3M, $5M, $10M, and even greater. Relatively speaking, they’re not expensive.

    To purchase an umbrella policy you must have sufficient underlying limits on your home and auto policies first. For the homeowners insurance you generally need a minimum of $300,000 under Part E. For your auto insurance, most carriers require at least $250,000 per person and $500,000 per accident in Optional Bodily Injury coverage (Part 5). Different companies have different underlying requirements, so coordinating these properly is important.

    Learn about liability and personal umbrella insurance coverage policies with brokers and agents at andrew gordon inc insurance norwell ma

    Umbrella policies vary in price depending on several factors: how many homes you own; how many cars you have; number of drivers in your household; any youthful drivers; driving records; and any owned watercraft. The price can be as low as $150 and the umbrella policy might be written as a stand-alone policy or added to your homeowners policy. Whenever possible, it’s best to have all these policies with the same insurance company.  Given a complicated accident where you exceed those underlying policy amounts, you don’t want to switch defense teams mid-stream if the insurance carriers are different. 

    If you own a second home, a business, any rental properties, or other substantial assets, it is particularly important that you have an umbrella policy.  With assets like these, you're perceived to have a deep pocket and you have multiple exposures that could result in a claim. Lawsuits are on the rise in the United States, and so are your odds of being named a defendant. It is wise to protect yourself with this extra layer of coverage.

    Call the Gordon Atlantic Insurance professionals to discuss a personal umbrella further by calling us toll free at 1-800-649-3252. Prefer to type versus talk?  Click below! 

     

    HAVE A QUESTION?


    Val Feeney

    Tags: personal, policy, insurance, umbrella, coverage, liability, protection, lawsuit

    How Much Should I Insure My House For?

    Posted by Val Feeney

    Wed, Jun 27, 2012 @ 11:41 AM

    A Guide to Determining How Much Insurance to Buy for Your Home

    On nearly every homeowners quote I present to customers, the #1 question I receive is how I determined the amount of coverage to use for the home, or the “Dwelling Coverage” amount.

    What is Dwelling Coverage?

    The Dwelling Coverage (often referred to as the ‘Replacement Cost’) is not the market value of the home, the assessed value of the home, nor the mortgage amount used to buy the home, but the amount of money it would cost to rebuild the home if it is ever destroyed by a fire.  Land is also not a factor in this amount.

    Understand the cost of insuring your house with homeowners dwelling coverage from Andrew Gordon Inc Norwell MA

    How does Dwelling Coverage work?

    Your independent insurance agent will calculate the dwelling coverage by entering the square footage, year built, style of home, foundation type, garage type, # of bathrooms, type of kitchen, material of the interior & exterior walls, type of flooring, and energy infrastructure (to name a few) into a replacement cost calculator provided  by the insurance company.  The insurance companies keep up to date replacement cost calculators by continually updating the current prices for building materials and labor.  The insurance companies create these calculators to ensure that their customers are getting the proper protection and so the insurance company is covering homes to their proper replacement value.

    Now, here is the important part.  Once the agent presents the quote to the customer, the customer decides if they are happy with the dwelling coverage.  I would urge, if you trust your agent, to use the dwelling coverage amount the agent has come up with. After all, this is what an agent is for.  This will ensure that you have adequate coverage for your home. 

    Cover your house with the right pricing of home dwelling coverage with homeowners from Andrew Gordon Inc Insurance Norwell MA

    Can't I opt for less dwelling coverage?

    In a tough economy, customers try to find savings anywhere possible, and one area is their insurance.  Most homeowners believe they can simply lower their insurance coverage (dwelling coverage) to save some money.  This is true, but it comes with a heavy cost due to the coinsurance clause

    Insurance companies require homeowners to carry at least 90% in coverage of the dwelling/replacement cost, which is the coinsurance clause. So in our example of $300,000, the insurance company would require at least $270,000 in dwelling coverage to satisfy the 90% or more insured-to-value requirement.  Insurance companies offer discounts for homeowners who insure to the full replacement cost.  The customer will sleep easy having full coverage on the home.

    What does that mean in a claim?

    Now let’s say that the homeowner decided that he/she wants to lower the dwelling coverage to $250,000, which is 83% of the replacement cost.  Let’s also say the homeowner suffers a $100,000 claim. The insurance company will penalize the homeowner with a penalty of 17% taken directly from the claim.  It is calculated by the following:

    ($250,000/$300,000) X $100,000 = $83,333.

    The homeowner may have saved a few hundred dollars in premium by lowering their dwelling coverage to $250,000, but have now taken a penalty of $17,667 at the time of the loss, vastly eliminating the saving they thought they found earlier.  Instead of receiving $100,000 for the claim, the insured is now only receiving $83,333.

    In conclusion, it may seem like the obvious area to save money on your homeowners insurance, but lowering the dwelling coverage on your policy can negatively affect you during a time of a claim, or a total loss.  That is not the time to realize you made a bad decision. 

    Use an independent agent to ensure you are getting the best coverage available for your home, and allow the agent to find discounts for you that don’t affect your coverage.

    Top 10 Things to Know about Homeowner's Insurance

    Val Feeney

    Tags: house, home, cost, how much, insurance, coverage, homeowners, premium, dwelling, agent

    Latest Posts

    Most Popular Posts

    Have a Question?