Homeowners Insurance Advice

cherryfizzNovember 21, 2012

I received a call today from my homeowners insurance company. They want to review my policy because it hasn't been done in a long time. My insurance rates have gone up considerably the last few years and I was going to call them to see how I could reduce the premium I pay. I think I still have a $500 deductible.

After asking me some initial questions today like how old the roof is, what type of floors, fireplace, furnace walls, tile or not in the bathroom they are going to do a more in depth telephone interview next week to see where some changes can be made. The agent told me most likely there will be a reduction in my premium. What information do you think I should have on hand. I don't know the replacement costs for things I have - or even to think of a guess. My basement flood insurance has been grandfather in and I don't want to lose that not that I have a finished basement or anything but my basement does flood every few years because of the City storm sewer back up.

I have only made one claim and they waived the deductible at the time because I did the cleanup myself. They only had to come in and disinfect the basement.

The fire extinguisher I had expired so I don't have a fire extinguisher now - should I get one before the interview?

Any advice you could give me would be appreciated. I also have a rental house which needs a new roof and that won't happen until next year. There is an old garage on the property that is being used at all for anything.

I really need to lower my premium.


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1. Save all of your reciepts! Any work you do, even replacing a light fixture, can be written off when the house is sold, at least here in the States.

2. Yes, get a new fire extinguisher.

As for the rest, I have no clue! Good luck.

    Bookmark   November 21, 2012 at 10:07PM
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The information we give you from the states may be different than in Canada--saying that, I would suggest that you either talk to someone else in your area, a neighbor, friend, church, etc and could you get estimates from other companies? I am not sure how much information you should release over the phone to anyone. Many times companies get this information and then end up cancelling the policy over a """dumb"""thing. If you have to give them the information, just answer the questions the best you can BUT don't give them any additional information. It should not be your responsibility to know how much everything costs. Is OJ around to help out--he might have some additional ideas.

    Bookmark   November 21, 2012 at 10:45PM
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Thanks, Marie this is a reputable insurance company and I have been with this agent for years after he took over from a family friend. I plan on only answering the questions they ask. Some answers especially on the rental house I do not know like how old the roof is, or the furnace. My policy has automatically been renewed for more than 15 years and there are some things now that I probably don't need to insure and other things that I do need. I just don't know how much information they want or will need which is why I am asking for advice. They just called today so I will ask my family and friends what they think.

Happy Thanksgiving!


    Bookmark   November 21, 2012 at 11:36PM
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I would not say anything about the basement having flooded in the past.. Not saying you should hide anything...you should ASSUME they KNEW about it since they handled your previous claim. Nowadays they hear about water in a basement and they only think of the possibility of MOLD that could happen with another flood. Mold is a very scary thing to insurance companies. I agree with you about only answering questions they ask. The agent may be a wonderful person, but he isn't the insurer. I've never been able to get a reduction even though the company's value is far higher than I could sell it for these days.

    Bookmark   November 22, 2012 at 12:01AM
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If you have State Farm, their fire insurance coverage requires you to have a working fire extinguisher in the kitchen. It should be located where it is accessible in case of a flare up on the kitchen range. This means it should not be located where a stove fire would prevent access to the extinguisher, yet it should be easily accessed for use in the kitchen.

    Bookmark   November 22, 2012 at 3:14AM
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To really lower the premium up your deductible! I upped mine from $500 to $1,000 and it really helped.

    Bookmark   November 22, 2012 at 6:13AM
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Our policy gave us a deduction because there is a fire hydrant within a block. We also have credits for non-smoking, a burglar alarm with fire detectors that alert the police, heat sensors, new roof and new windows.

We checked into raising our deductible but there surprisingly wasn't much difference so we left it at $500.

Have you taken detailed photos of your home showing your furnishings? A video is even better since you can pan each room and even open closet doors. Most insurance companies recommend this in case of a major claim. And of course keeping receipts is a must.

    Bookmark   November 22, 2012 at 8:10AM
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My guess is that this is primarily an opportunity for your agent to 'meet and greet' -- re-estalish your loyalty, and perhaps sell you more insurance.

What you might do is get your information together and go shopping for insurance with other companies so you can compare rates and coverage.

    Bookmark   November 22, 2012 at 10:30AM
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Thank you, your advice was helpful.


    Bookmark   November 22, 2012 at 1:26PM
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your fire insurance increases if there is an active railroad track between your house and the fire station.

    Bookmark   November 23, 2012 at 1:13AM
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Since this is what I do on a daily basis I will tell you it is always best to give your agent as much information as possible, it's the only way we can help you protect yourself and your belongings. Your agent should not make any changes your not in agreement to. Now having said that, the reason the roof question comes up and will continue to come up is because insurance companies are looking to reduce thier risk. Depending on where you live and I can only speak of the midwest area because that's where I live and sell, our biggest risk is wind and hail damage to roofs. Most of the big companies in this area are going to actual cash value on the roofs. What does that mean to you? Instead of replacing your roof minus your deductible they will instead take the age of the roof, subtract the depreciation and your deductible and pay the difference. In this year the magic number seems to be 16 - 17 years of age on the roof. Thats were the actual cash value will kick in with a percentage paid out, every year older and that percentage will continue to decrease. This is why an annual review as a consumer is very important, you want to make sure you have replacement. This is also an opportunity for your agent to endorse or re-write the policy to actual cash value, look like he's saving you money and unless it is discussed and agreed to, you might not be the wiser until a claim.
As far as your personal belongings, that's very difficult for anyone to put a price on, think about your summer clothing that's all put away now, the Christmas decorations that are now being brought out, all those tools in the garage and how about the shed in the back. Then there is the basement if you have one, the attic if you don't. Instead of worrying about that number, your agent will give you an option for a percentage of your dwelling coverage. That number in this area is usually about 70%, for many that's not realistic.
As for the "flood insurance in the basement" you have some sort of water sewer back up coverage, not flood insurance. By all means if you have had an issue with it, keep that coverage. If your insurance company suffers alot of those type of claims, they may increase the cost of that coverage or possibly reduce the amount of coverage. You need to be aware of that.
Your deductible, way too low. If you have collision coverage on your auto I'll bet your homeowner's deductible is the same amount. You need to consider a $1,000 deductible. If you put in a claim for anything less you will pay more than that in the next few years.
Your agent will be looking to do a replacement cost estimator with you to help you determine your coverage's.
If you've replaced your furnace or central air conditioning make sure to let your agent know that. If you have a security system, let him know that as well.
Be aware, if after your interview he suggest that he rewrite the policy they may order an inspection. An inspector will walk the outside of the property looking for things that affect the companies risk. Brush growing too close to the side of the home affecting the siding, soffits and roofs. Tree that over hang the roof or brush that sits on the roof and siding. Tripping hazards, splits in sidewalks or cement/asphalt driveways. Decks, rotten boards, low or missing rails. Chipped paint is also a big one. The roof, are there any missing shingles or curled shingles.
The list can go on and if you don't pass the inspection depending on your state you will be given 45 days to repair the problems or the policy may be terminated. Then you could be up a creek especially if at the time the agent writes the new policy, he terminated the old policy.
I hope this helps, I know it's alot of information but like I said, this is what I do.

    Bookmark   November 23, 2012 at 9:17AM
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We lowered our premium costs by accepting a 10% coverage deduction. I didn't realize that would apply not only to the house structure, but also to the personal property IN the house. When we were burgled, I lost $20K in jewelry -- items not covered on a scheduled property policy. I got nothing from the homeowners policy.

Now I'm wondering how long I should expect a 25-year architectural asphalt shingle roof to last. Our policy covers replacement to code, but what if just the roof is damaged? Maybe I should go back to 100% coverage. Roof (and house) are 12.

    Bookmark   November 23, 2012 at 10:02AM
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If you have replacement and the roof is damaged then it should be covered for actual replacement minus your deductible. You need to make sure that the roof never gets changed to actual cash value via a new policy or an endorsement.
As for the jewelry most policies allow up to $5000 for jewelry (every day stuff) but your appraised jewelry needs to be scheduled and if you haven't done so recently, the items should be re-appraised. The price of gold has increased and therefore your items should increase as well. Keep in mind, you will only get what your insurance company can replace the item for. If you have a $10,000 VS1, E in color diamond and the insurance company can get the same thing for $8500, then that is what they will offer you. I happen to use a jeweler that our insurance company uses when there is a loss. Because of that I use a realistic number on my scheduled personal property.
Why did you accept a 10% decrease in coverage? Did your agent perform a cost estimator and find you didn't need as much coverage?
If you've had a recent home appraisal done check the appraisal cost estimator (if it has been done), that number and your homeowner's dwelling coverage should be very close depending on how old the appraisal is. And keep in mind, homeowner's is about replacing/rebuilding not about the value of your property.

    Bookmark   November 23, 2012 at 1:04PM
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I was offered the 10% when I protested because our premium had gone over $1K. (Now it's edging to $2K even with the decrease.) I doubted that we'd replace this size house. I was not thinking about the unscheduled jewelry. NOW I am thinking I should return to 100% coverage with a dollar deductible.

The only jewelry loss I've ever claimed is the diamond ring I believed had gone down the drain in a laundry tub when I was washing our dog during our first year of marriage. When the dog coughed it up a few weeks later we canceled the claim. I do remember the very green adjuster telling me, "You know, diamonds do depreciate." (I understand about the like-for-like replacement, but *depreciate*? Is there any allowance for a famous 'house' name on a piece of jewelry?)

    Bookmark   November 23, 2012 at 5:53PM
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Also if you have any outside hobbies that you have invested money on, these should be listed or on a seperate policy or different company. I do.

    Bookmark   November 23, 2012 at 6:02PM
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The other thing you can do is review the replacement value of the house. A lot of times, insurance companies keep upping the value without considering the actual replacement cost. I personally did not change mine because building costs fluctuate so much. I agree with increasing the deductible. Having said that, I can tell you insurance companies will look to increase your premiums no matter what. There have been lots of payouts due to recent storms and they've got to make up the $$$ somewhere!

I'm a long time State Farm customer and have NEVER filed a homeowner's claim. My premiums jumped 40% in the past three years. I doubled my deductible to save $250/year!

    Bookmark   November 23, 2012 at 6:52PM
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Two25acres and everyone else thank you so much! I will have to read this over a few times to make sure I understand everything. Is it in my interest that the agent not rewrite the policy. I can't afford to lose the insurance especially on the rental house. I do need a roof on that house but there is no way I could replace it in 45 days. I was thinking next spring.

I am a bit concerned if he asks me if I have a back up valve in the sewer which I do not because there is no outside clean out and the City will only come inside to clear the sewer line to the road if there is no back up valve.

My furnace is over 40 years old but I was told by a furnace repair person to hold onto it for as long as I can because he said it is a good furnace. You would think my energy bills would be higher because of it but I pay less than my friends do who have newer furnaces. I don't have central air only a wall unit. My roof is probably 15-17 years old and seems to be in good condition. I have an indoor wood fireplace which I rarely use and if I do I use those fake 3 hour logs.

I will raise the deductible. I have only made one claim and unless something major happens I am not likely to make another claim. I have talked to others and they are paying much less than what I am paying for house insurance with more coverage.

My stomach has been in knots thinking about all this. I have nothing to hide but I don't want to say the wrong thing LOL

In the past 3 years my premium has gone up $40 to $156 a month for my house and the rental house(contents not included on the rental house insurance)

All your advice has been very much appreciated.


    Bookmark   November 23, 2012 at 8:54PM
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