Prior to starting my real estate career, I spent the better part of a decade counseling those in need – people struggling with job losses, homelessness, and addictions. All of them
Your Homeowner’s Insurance Company: Friend or Foe?
Dated: September 10 2019
Greetings from the Real Estate Oracle!
Please – this can never be you!
You purchase your home and with it you purchase homeowner’s insurance. You are a perfect homeowner paying your mortgage on time. Month after month. Year after year.
There’s only one problem. You’ve never reviewed your homeowner’s insurance policy. Not once.
Well, this was me 19 years ago. I was young and just out of grad school.
Fast forward several years when I met a good insurance broker. Boy, I was shocked!
I realized several things.
- I was under covered. If I had a catastrophic event occur at my home, I didn’t have enough insurance to replace what I had.
- The price of my policy had gone up every year. I never noticed, because it was absorbed into my mortgage payment. I was paying about $1,000 more than I should have been (while also being under-covered).
- I found out the company I was insured by rarely accepts claims.
Geesh. How did I miss this?
Great news! Switching policies was relatively easy. You find the new policy. Call your lender and give them the details. The lender walks you through the rest.
Are you aware of how much construction costs have risen over the last decade? Home prices may have also gone up significantly. If you purchased a home before 2017, I encourage you to get your policy checked.
Next, you may be missing some needed additional coverage (I was!).
Here are a few coverages you may be missing. (Please ask your insurance company “what else?”):
- Pool Screen
- Septic Tank
- Pool (If you added a pool to your home since originally insuring)
- Umbrella Policy (If you enjoy large groups of people at your home you may want to consider this.)
After you’ve decided what coverage is needed, now you can look at the price and company.
Today, I’ve brought in insurance guru, Felicia Greenberg with Broker’s Insurance. Felicia is whip-smart, is from a military family, and is another good one. She’s saved some of our customers thousands of dollars.
Amy: Hi Felicia! I’m so happy you can help our customers – Thank you! First, can you tell us a little bit about who you are?
Felicia: Sure! My family and I own Broker’s Insurance in Central Florida. I’ve been an insurance broker for 10 years. We have access to hundreds of companies that we can write policies with on an insured’s behalf. We enjoy ensuring that insureds have properly protected their homes.
Amy: Ensuring insureds. That’s terrific. And that’s A LOT of companies. So we just had Hurricane Dorian pass by. Can you share what happens when large storms come in? How are consumers reacting? What do they need to know and do?
Felicia: Yes, we were very lucky it passed by us in Central Florida. We actually had so many people call us a couple weeks prior – usually asking for Flood Insurance or for those who own their homes outright, they are requesting homeowner’s insurance.
Amy: Wow – there are people who don’t have homeowner’s insurance? I thought everybody needed to have it?
Felicia: Actually, only those who have a mortgage must have it, otherwise, it’s optional. And we feel terrible, because when a storm is a certain distance away, we are not even allowed to write a policy. When a person requests to add flood insurance, there is also a 30 day wait time until the policy takes effect.
Amy: Really? You can’t even write a policy if a storm is close by? And I had no idea you needed to wait 30 days for your flood insurance to start.
Felicia: Yes, that’s the reason it’s so important to be prepared. When you know you’re coming upon a storm season, it’s always better to protect your home before the season starts. We’ve seen too many people suffer, because they are not prepared.
Amy: I think that’s everybody’s intention, to be prepared. Sometimes, our hopefulness keeps us from protecting our assets properly. So what’s the biggest mistake you see homeowners making when buying insurance?
Felicia: The biggest mistake that homeowners make when buying insurance is choosing the policy strictly based off of price. It is critical that you have a knowledgeable agent guiding you to the most cost effective option that properly protects your home.
Amy: Yes, that is unfortunate. That’s what happened in my case. I used a larger company and they just sold me the cheapest policy. So does it really matter what company you use?
Felicia: Absolutely. The company you have your policy with does matter. You want to ensure you are with a strong financially backed company.
Amy: Right, because if they’re not strong, then they won’t be able to help when you may really need them. So I suppose they should be asking their insurance agent what companies are best.
Felicia: Yes. They should have an idea of what companies are better.
Amy: Excellent. And what happens if my buyer purchases a home and finds out there was a claim. Will this affect their premium?
Felicia: No, it will usually not impact their premium. Insurance companies are typically concerned with the claims you have had at any property youown or have owned. If there has been a claim at the property you are purchasing, then the carrier will want to ensure that the claim is closed and the damage repaired.
Amy: Yes, that makes sense. And when there is inclimate weather (storm, hurricane, earthquake, etc) when is the best time to call?
Felicia: You should call your insurance company as soon as reasonably practical after a storm or hurricane if you have damage.
Amy: And what about the customer who is scared to call.
Felicia: An insured should not be afraid to call their insurance company if they have a legitimate claim. Insureds do not typically see big rate increases due to prior claims activities. Insurance carriers are most concerned with claim frequency.
Amy: Right. As in, if you’re submitting a claim several times a year? Things like that. And what’s the next step if somebody thinks they need to file a claim?
Felicia: Each of the companies has a claims number to call. We always advise our insureds to call us first to see if it makes sense to file a claim based on the damage and their deductible. If they opt to file the claim we can provide the claims number. Once the claim has been filed an adjuster will contact you to evaluate the damage.
Amy: So if the claim is accepted, is the check written directly to them?
Felicia: The check will be written out to you and sometimes your mortgage lender. It usually depends on the amount of the check. If it’s on the higher side, then usually the mortgage company is included (if you have a mortgage).
Amy: That’s great information. And last question. Is there anything homeowners can do to reduce their premium?
Felicia: Yes. A monitored alarm system is a credit that can be applied to almost anyone’s policy. A wind mitigation report is typically helpful as well. The wind mit reports run roughly $75-$100, and the savings usually more than pays for itself in year one.
Amy: That’s really great to know. I’m sure most people don’t let their insurance company know they’ve added a security or video monitoring system. What other last words of wisdom would you like to impart?
Felicia: I really want consumers to know there is a big difference between cheap and inexpensive. Your home is likely your biggest asset. You want to ensure you have it properly protected and not just with the cheapest option.
Amy: Yes, a home is usually the biggest asset. You’ve been so fantastic imparting your knowledge. Thank you so much for participating with our blog!
If you have any questions for Felicia, then be sure to reach out! If you have questions about making a claim, then be sure to take a look at last week’s blog, Hurricanes, Tornadoes, and Storms, Oh My!
Our next blog will feature how to go about getting your home restored after a claim is made. Until then, I hope you enjoy a productive and enjoyable week.
– Amy, Unravelling Real Estate Obscurities
KeyBella Homes at eXp Realty
Visit us at keybella.com
Call us at 407-445-7013
Remember, when your friends or family members are thinking of selling or buying a home, we’d be honored to help and will take amazing care of them.
Real Estate team that has helped close over 1700 homes since 2005. Exceeding Expectations is Our Standard!....
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