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    Personal Insurance Blog

    WHAT ARE OTHER STRUCTURES IN INSURANCE?

    Posted by Sandra Cornell

    Wed, Dec 21, 2016 @ 08:00 AM

    The “Other Structures” portion of your homeowner policy covers a variety of items.

    For instance, did you know that the beautiful cedar stockade fence you’re thinking of having installed might be considered an “other structure”? How about an in ground pool? And a driveway? Under the right circumstances, these might all be considered other structures. The deciding factor is whether or not these items are ‘attached’ to your home somehow or if they are ‘detached’ by clear space.

    Let’s take the example of your fence. If the fence surrounding your property is not attached to your house at any point, it would be considered an “other structure” and covered under that portion of your homeowner policy.

    However, if the fence is attached to your house it would be considered part of the building and covered under the ‘dwelling’ portion of your policy. You would need to be sure that the dwelling limit on your policy reflects not only the value of your home, but that of the fence as well.

    Another example would be a shed or barn. If these buildings are separated from your house by clear space, they would be considered other structures. However, if they are attached to your house-perhaps by a covered walkway-they would be considered part of the house. As such, just like the example of the fence, you would want to be sure that the dwelling limit of your homeowner policy included not only the value of your home, but that of the ‘other structure’ as well.

    So, just to reiterate – the deciding factor here is whether or not the structure is ‘attached’ to your house or ‘detached’ by clear space.

    When you decide to install any of these items, be sure to contact your insurance agent to determine if you need to update your policy to reflect additional limits to either the ‘DWELLING’ or ‘OTHER STRUCTURES’ portion of your homeowner policy.

    Contact Us

    fence.jpg

    Tags: homeowners insurance, dwelling, additional insurance, structures

    Homeowner 101

    Posted by Donna Bellavance

    Tue, Dec 17, 2013 @ 09:16 AM

    Learn about homeowners insurance for your home with andrew g gordon incA homeowner's policy is considered a “package” type of policy where the premium is derived from the coverage for the dwelling and other coverages are provided based on this limit at no additional premium. The dwelling limit is based on details of the home (year of construction, type of construction, finished or unfinished basement details, number of bathrooms, quality of  construction, wall and floor finishes, heating type, etc) which are plugged into carrier estimating software which then provides an estimated cost to rebuild for the home. This amount is what is used as the dwelling limit on the policy. The other coverages are usually provided at a percentage of the dwelling limit and no premiums are attached. Other structures (such as fencing, garage, shed, pool, patio, gazebo, etc) is usually at 10% of the dwelling coverage, contents (personal belongings as well as above ground pools) is usually at 50% or 70% of the dwelling limit, and loss of use (when insureds are displaced following a covered loss) is usually at 20% of the dwelling limit.

    An issue that can arise is if the dwelling limit has not been increased for renovations or has not kept up with inflation and there is a covered loss and the carrier has determined that the limit is not at least at 80% of the replacement cost estimate. If this occurs, a co-insurance penalty is incurred. If the replacement value is $1,000,000 but coverage is at $750,000 (this is only 75% of the replacement cost) then the carrier would only pay 75% of the total loss. 

    Liability and medical payments are the other coverages provided by the policy and do include premiums for injuries incurred.

    A homeowner policy can be written as an HO-3 which is the standard policy offering “open perils” coverage for the dwelling and limited “named perils” coverage for contents or as an HO-5 which is “open perils” for both thus broadening coverage for an insured’s belongings.

    There are several endorsements to the homeowner policy which most people opt to include in their coverage. Some of the more common are replacement cost coverage for the dwelling.  Carriers provide either “guaranteed” replacement cost coverage on the home or coverage at 125% or 150% of the dwelling limit. To be eligible for this endorsement, it is required to maintain the coverage at the estimated cost to rebuild based on the company’s software determination. Replacement cost coverage on the contents allows for the full replacement without taking depreciation following a covered loss. Homeowners can add Identity Theft coverage, Water Back-Up/Sump Pump Failure coverage, Ordinance or Law Coverage which allows for the additional costs to rebuild/repair according to new town codes which may have been put in place since the original construction of the home and schedules for valuable articles, which requires current appraisals. There are other additional endorsements available which are applicable to particular scenarios that are present in the lives of our customers.

    Hopefully this brief synopsis of a homeowner policy provides an overview so that you can review your coverages with a little more insight. Learn more about home insurance here.

      Top 10 Things to Know about Homeowner's Insurance Home Quote Request

    Donna Bellavance

    Tags: home, liability, premium, HO-3, HO-5, homeowner, open perils, named perils, dwelling, dwelling limit, ho3, limit, ho5

    What is an Additional Insured?

    Posted by Sue Bird

    Wed, Jun 26, 2013 @ 04:33 PM

    Learn what an additional insured is with homeowners insurance from andrew g gordon incAn "Additional Insured" designation on a Homeowner's policy is used when someone who has a financial interest in the property does not live at the residence. This could be an ex-spouse, relative, or deceased spouse (estate) who's name is still on the deed or mortgage. It provides that entity with coverage the Dwelling and Other Structures coverage as well as Personal Liability and Medical Payments in respects to the residence premises only.

    Keep in mind that the person listed as an Additional Insured on the property would also be sharing the Personal Liability limits on the policy with the Named Insured/Policyholder. It would be wise, if possible, for the Additional Insured to also extend liability coverage from his/her own Homeowner's policy to the property that he/she owns but does not live at so that he/she has the full amount of Liability Coverage afforded under his/her policy.

    Any other questions? Feel free to contact us. Learn more about home insurance here.

    INSURANCE QUESTION? Home Quote Request

    Sue Bird

    Tags: Additional Insured, home insurance, home, homeowners policy, estate, named insured, policyholder, homeowners, insured, dwelling

    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

    Insurance for a Vacant Home (A Vacant Dwelling Policy)

    Posted by Val Feeney

    Tue, Apr 10, 2012 @ 05:24 PM

    House owners should insure their home even while vacant with homeowners from Andrew Gordon Inc Insurance Norwell MAThere are many scenarios in which a home becomes vacant for more than just a weekend or week or two vacation. I speak to people all the time who believe that their vacant home is fully covered under the existing policy, not knowing that in reality, the vacant home most likely has severely limited coverage. The most common examples of this are:

    • Family has purchased and moved into a new home.  The old home is now vacant and for sale.
    • An elderly parent has moved into a nursing home permanently, leaving the house behind for the adult children to decide what to do with it.  It sits vacant.
    • A couple moves abroad for 6+ months for a job opportunity, leaving their home in Massachusetts vacant.  One of their parents checks on the house once a week. 

    The worse time to discover that the home is not covered by the existing policy is during a claim. And the “fine print” details in the homeowners policy language has an exclusion for

    …”Vandalism and malicious mischief, and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss

    There are similar exclusions for glass and other specific limitations.  The point is, the coverage isn’t what consumers might expect.

    If your home is going to be vacant for any period of time over 30-60 days (varies by insurance company and policies used), a specialized Vacant Dwelling Policy can be put into place.   A Vacant Dwelling Policy differs from a standard homeowners policy in that it covers “Named Perils” instead of “Open-Perils” like a homeowners policy.  See our Open vs. Named Perils for details. 

    The Vacant Dwelling Policy will not have the bells & whistles that a standard homeowners policy has.  The main parts of a Vacant Dwelling Policy are:

    • Dwelling Coverage will provide a specified amount of money to rebuild the house if it is ever destroyed by a named peril (fire, wind, explosion, riot, aircraft, vehicle, smoke, theft, vandalism). 
    • Personal Liability will provide protection for chosen amounts: most common are $500,000 or $1M if you are named a defendant in a lawsuit from an event occurring at the vacant dwelling. 

    Do not get caught with the incorrect insurance policy.  Speak with an independent insurance agent today to determine the proper insurance for you. Learn more about homeowners insurance here

    INSURANCE QUESTION? Home Quote Request  
    Val Feeney

    Tags: home, policy, vacant, empty, abandoned, insurance, massachusetts, homeowners, dwelling

    Do I Need Insurance on My Condo?

    Posted by Val Feeney

    Wed, Oct 12, 2011 @ 04:39 PM

    If you own a condo, it is essential that you have your own insurance policy, commonly known as an H0-6.  Depending on your Condo Association’s master insurance policy, the amount of coverage you may need will vary.

    Condo Association's Master Policy

    Learn about the importance of having condo insurance with us at Andrew Gordon Inc

    There are two types of master policies that your Condo Association can put into place: “All Inclusive” or “Bare Walls.”  The majority of Condo Associations have been using “All Inclusive” approach because they cover the entire condominium complex. This type of policy will cover damage to individual condos and common areas, as well as include liability protection for the association. So, if your condo is part of the building that is destroyed in a fire, the master policy would cover the rebuilding of your condo. A “Bare Walls” master policy will only cover the basics if the entire building is destroyed, leaving the construction of your condo up to you. Thus, the most important question for your condo association is, "do we have Bare walls or All-in?". The answer can be found in your deed, and we can assist you with determining this.

    Neither of these policies, however, cover your own personal property or personal liability. This is an important fact that all unit owners need to know, to arrange proper protection.

    Dwelling Coverage

    Even if your Condo Association has an “All Inclusive” master policy, you may want to get some level of dwelling coverage to cover any improvements you may have made to the condo, further increasing its value over the average unit in the complex.  The Condo Association will determine the proper amount of insurance to get on the master policy for the entire building, but if it is insufficient, you can also include your own "assessment" protection to fall back without having to sacrifice your equity in the property.

    Personal Property

    If your condo is damaged or destroyed by a storm or fire, the building would most commonly be covered under the master insurance policy (The associations' policy).  But what about your flat screen television, your brand new iPad, laptop, couch, bed, pictures, art work, kitchen appliances, and all of your clothes? Your condo association is not responsible for your stuff, you are.  Think about all of the stuff you own in your condo, if it was all taken from you, how much would it cost to buy all of it brand new, $30K? $50K? $100K? Regardless, you’d most likely be unable to immediately replace everything out of your own pocket. A condo insurance policy can cover the expenses to replace all of your stuff right away.

    Personal Liability

    If someone is hurt in your condo, you could be sued. It’s not the most pressing thought on your mind when you first buy a condo, but the threat of being sued is very real. For example, you have friends over for a party and people are leaving at the end of the night. On the way out of your condo, a guest trips over a coffee table, and, God forbid, becomes permanently disabled. Chances are, you are going to be sued. Do you have insurance protecting you?  If you do not have a condo policy, you could be in real trouble. The court could potentially come after all of your assets and even your future earnings. A typical condo policy will protect you in such a settlement up to the limit you've chosen, most commonly $500,000 in damages, including a defense team provided by the insurance company.

    In conclusion, it is very important for a condo owner to know that even though the condo association has an “all inclusive” master policy, it does not protect your personal property or personal liability. With your own policy in place, you are protected financially and can sleep easy at night. 

    At Gordon Insurance, we "Make Insurance Make Sense." For a free professional review of your policy and quote, please contact us at Andrew G. Gordon Insurance.

    Learn more about your condo insurance options here

      Condo Quote

    Val Feeney

    Tags: personal, property, H0-6, ho6, h06, condo association, bare walls policy, coverage, liability, dwelling

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