The Dowd Agencies

Archive for the ‘Homeowners’ Category

Is the amount of property insurance on your home correct? What is the appropriate amount of coverage for your home? To begin with, it should be insured for at least 80 percent of its replacement cost when covered under a standard homeowners policy. Replacement cost refers to the amount necessary to repair or replace damaged building parts with items of like kind and quality. Some insurance companies even require 90 percent or higher figures when the guaranteed replacement cost option is offered.

With this option, the policy pays the full cost of replacing your home, without any depreciation and often without a maximum reconstruction payment. (This gives you added protection if there is a sudden jump in construction costs due to a major shortage of certain building materials.

Construction costs often “surge” following large catastrophes, such as hurricanes.) Note that guaranteed replacement cost coverage approaches can vary by state and are not even available in every state.

Many homes are either underinsured or overinsured. For example, some homes insured for long periods of time with one insurance company may have inadequate limits of insurance due to increased building costs. In many cases, homes have been remodeled and improved, and this information has not been conveyed to the insurance agent or company, resulting in severe underinsured home values. If your home is underinsured, you not only have inadequate protection for total losses, but you may also lack full protection for smaller losses.

Sometimes homes are mistakenly insured for their market value. However, market value is normally not indicative of the home’s replacement cost.

For example, market value also reflects the cost of the foundation and the nondestructible land value, both of which normally survive intact if the house burns to the ground and has to be rebuilt.

In addition, some homes may be insured improperly to meet mortgage company requirements. Some mortgage companies require the amount of insurance be at least equal to the mortgage balance on the house. The mortgage balance is also not reflective of the home’s replacement cost, which is often considerably more but can also be less. Insurance companies and agents often struggle in properly educating mortgage companies about these distinctions, but there is nothing to prevent you from insuring to actual replacement cost if that is indeed greater than the mortgage balance. The problem occurs when the mortgage balance is greater than the replacement cost, which will result in the purchase of a higher limit than needed.

The bottom line is that you should work with your insurance agent to determine the correct replacement cost and resulting insurance limit for your home. Most agents use sophisticated replacement cost estimating packages that can fairly and accurately determine the replacement cost value of your home. Factors that these programs use to determine this figure include the following:

* Square footage of the home, including its configuration

* Construction costs for your community

* Exterior wall construction type, including frame, stucco, brick, or brick veneer

* Style of home

* Number of bathrooms and bedrooms

* Roof type

* Attached garages, fireplaces, built-in cabinets, and other special features, such as hardwood floors

The more advanced replacement cost estimating programs require detailed information to improve the valuation estimate. For example, a rectangular-shaped home with 1,800 square feet will have a much lower replacement cost than a similar-sized home with an “L” shape. In other words, the better cost estimating programs require information about the number of corners in the home. The more detailed information your agent asks about your home, the more confidence you can place in his or her recommended limit of insurance.

As a final note, you should request an annual review of your homeowners policy to keep up with increasing building supply and labor costs. Also ask your agent about the advisability of adding an “inflation guard” endorsement to your policy or about the availability of guaranteed replacement cost coverage to help assure that your home is properly protected.

Windstorm and hurricane losses account for an inordinate share of homeowners losses every year. In particular, people on the southeastern and central eastern seaboard and the Gulf Coast face substantial loss exposures to hurricanes and tropical storms. There are, however, steps you can take concerning your home that can reduce your exposure to these losses. These include risk control measures to four critical parts of your home susceptible to high wind damage — the roof, windows, entry doors, and garage doors.

* Roof — The installation and design of a roof is a critical factor concerning protection from high winds and hurricanes. For example, the roof sheathing (the boards or plywood nailed to the roof rafters or

trusses) can fail during a hurricane if not property installed. If many of the nails have missed the rafters, additional nailing is necessary. The sheathing on your roof should comply with the current building codes. In wind-prone areas, many building codes require six nails per shingle rather than four. Adding screws between the nails can also provide reinforcement.

In addition, gables need to be tightly attached and reinforced to the frame walls.

Lastly, hurricane clips should be considered in hurricane-prone areas.

These clips help prevent mammoth winds from ripping the roof off a house.

The clips are made of galvanized steel and are used to connect the rafters to the roof at the top of the house and the bottom part of the house to a plate that is bolted to the slab. Properly installed hurricane clips enable your roof to withstand winds of up to 100 mph.

* Windows — One way to protect your windows is to install impact-resistant shutters over all large windows and glass doors. Not only do they protect your doors and windows from wind-borne objects, but they can also reduce damage caused by sudden pressure changes when a window or door is broken. An alternative is the installation of impact-resistant windows and patio doors.

* Entry doors — Solid wood or hollow metal doors are more effective in resisting high winds. They should have at least three hinges and a dead bolt security lock.

* Garage doors — Because of their width, doublewide garage doors are more susceptible to high winds than singlewide doors. Retrofit kits are available for doublewide garage doors. These can reinforce your garage door by installing horizontal and/or vertical bracing onto each panel.

Heavier hinges can also strengthen your home.

If you’re like most Americans, your home is your largest investment, so you know how important it is to protect it. You probably take safety precautions and have insurance that will cover you in case of a loss.

But are you fully protected? Chances are, no. You probably are running the risk of having to pay money out of pocket to rebuild your home after a loss, to replace stolen items or to settle a liability lawsuit.

Consider the following questions to determine if you are, like most homeowners, underinsured.

It’s Valentine’s Day, and thoughts of people everywhere turn to … jewelry.

About one of four Americans buys jewelry, spending $2,000 per year on average, and industry experts expect jewelry sales to grow by at least 5% annually through 2025. Those who don’t buy shiny things for Valentine’s Day may prefer other types of valuables, such as electronics, artwork, antiques, wine and furs. All totaled, Valentine’s Day gifts will tally approximately $17 billion of retail sales in 2008.

Whatever the purchase, American consumers should take steps to safeguard and insure their valuables. Homeowners insurance generally covers valuable and precious items such as jewelry, but they usually have limits.  more….

One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. This policy provides high limits of liability to protect you against a catastrophic liability loss. For example, a major car accident may injure numerous people or cause head injuries or death that will result in liability far in excess of the limits typically purchased in a personal auto policy. An umbrella policy sits on top of the auto and homeowners policies to provide higher limits of protection. In addition to providing higher limits, this policy normally pays for some losses not covered by the underlying policy, such as legitimate allegations concerning libel or slander.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the personal umbrella policy is increasingly seen as an insurance necessity rather than a luxury. It is especially attractive because of its relatively low cost.

In particular, you should consider purchasing a personal umbrella policy if you have certain characteristics or engage in certain activities, including the following.

* Your total assets are greater than your underlying liability limits.
* You are financially responsible for the actions of a young, inexperienced driver.
* You live in an exclusive and affluent neighborhood.
* You have a high profile career or high income.
* You frequently host guests on your property.
* Your residence includes a swimming pool.
* You own waterfront property, a farm, or a ranch.
* You own watercraft, aircraft, or off-road vehicles.
* You own numerous rental properties.
* You engage in extensive international travel for pleasure.

As a college student, your child may be vulnerable to identity theft because of the availability of personal information and the way many students handle this data. The National Association of Insurance Commissioners helps you understand identity theft, and the steps you can take to help ensure your college student does not become a victim.

FEMA for Kids is presented by the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA). Go to http://www.fema.gov/ and click on Kids. Meet Herman the spokescrab and tag along on his search for a disaster-proof shell.  You’ll also meet Julia and Robbie, the Disaster Twins. Wherever these two go, trouble is sure to follow.  Watch brother and sister get into – and out of – all sorts of close calls, learning along the way how to be better prepared, or how to avoid danger altogether. 

The Web site shows disasters come in many shapes and sizes. Some are predictable — like a hurricane. Some, like a tornado, can surprise us. Leaning about the different kinds of disasters will help us all be better prepared. Learn the best way to keep safe, and keep your family and pets safe, as you do what you like to do best – have fun!

Protect Your Home Investment Against Unknown Title Defects.  For more information click here

Thanksgiving Fire Safety

Holiday Fire Safety

Home Heating Safety

One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. This policy provides high limits of liability to protect you against a catastrophic liability loss. For example, a major car accident may injure numerous people or cause head injuries or death that will result in liability far in excess of the limits typically purchased in a personal auto policy. An umbrella policy sits on top of the auto and homeowners policies to provide higher limits of protection. In addition to providing higher limits, this policy normally pays for some losses not covered by the underlying policy, such as legitimate allegations concerning libel or slander.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the personal umbrella policy is increasingly seen as an insurance necessity rather than a luxury. It is especially attractive because of its relatively low cost.

In particular, you should consider purchasing a personal umbrella policy if you have certain characteristics or engage in certain activities, including the following.

* Your total assets are greater than your underlying liability limits.
* You are financially responsible for the actions of a young, inexperienced driver.
* You live in an exclusive and affluent neighborhood.
* You have a high profile career or high income.
* You frequently host guests on your property.
* Your residence includes a swimming pool.
* You own waterfront property, a farm, or a ranch.
* You own watercraft, aircraft, or off-road vehicles.
* You own numerous rental properties.
* You engage in extensive international travel for pleasure.