All Things Real Estate: Make sure homeowners insurance is adequate

All Things Real Estate: Make sure homeowners insurance is adequate

I always ask my client sellers and new homeowners how much insurance they carry on their homes. Surprisingly, the answers I receive are more varied than I would’ve anticipated. I believe the reasons are mixed, e.g., what companies they use, their coverages, and who their agents advising them and their reasons for doing so.

There are salespeople and then there are a few who I would consider advisers and/or consultants, like myself, who are professional in their approach and have strong expertise in their field; they are totally transparent, upfront and candid in the methods of conveying the crucial and critical information that sellers, investors, purchasers, renters and lessees of residential and commercial properties require to make conscious and accurate decisions. One’s home is the most valuable asset that the majority of homeowners in the nation possess. Seeking out less than the most intelligent and knowledgeable Real Estate Broker with the greatest number of years of experience is like “playing with fire.”

When it comes to homeowner insurance, it is necessary to seek out those professionals who will not “sell you” insurance, but are working in the business and not at it to provide you with an accurate and concise proposal and accounting for your home. No one wants to pay too much for insurance, but what you do want is adequate coverage to handle fire, flood, wind damage, theft etc. as well as personal liability in the event of someone hurting themselves in your home or on your property.

With global warming and more frequent unstable weather patterns, such as hurricanes and  severe wind storms, rates have increased quite a lot over the past 5-10 years. That is why checking your policies yearly and seeking out additional quotes will be a prudent path to take to make sure you are receiving the “biggest bang for your buck” for your required and necessary coverage.

Piggybacking your homeowner’s policy with your auto insurance policy will always provide you better rates as insurance companies want all your business, not just a part of it. Some companies will have you install a device in your car to monitor your driving, but as a bonus will provide future discounts for those safe drivers.

Be careful not to put in minor claims to minimize any potential future increases in your yearly premiums. Also, take the highest deductible that you feel comfortable with as long as you normally have few if any claims to increase your savings. Lastly, you might want to consider an umbrella policy up and above your basic policy, assuming you have other assets and desire stronger coverage. It is not an expensive addition and you will have greater peace of mind knowing that you are in a stronger position with the best policy in the event of a major lawsuit or claim.

Any work to be done inside or outside your home  must be done with a licensed and insured contractor (or you are taking your own calculated risk in the event of any issues that might arise, such as damage to your property, person or any individual). You will need enough coverage in the event that you must sue a contractor or are being sued by anyone (ask if you have coverage for this).

When any work is considered, you must always ask your licensed and insured contractor for an additional certificate of insurance either covering you as a person of interest or if your property is titled in a corporate name. I also advise you to have your personal name added to that insurance certificate, too. A copy must be provided to you as the homeowner in advance before any work is commenced. Better to be safe than sorry, as I have seen so many times that issues and problems can and do come about.

We all want to save money, but this is one area where cutting corners will potentially work against you if proper coverage isn’t considered.  It can come back later on to hurt you financially when someone gets injured, damage occurs on your property or worse there is a fatality.

HOA’s, townhomes, condos and co-ops are no different, but in fact proper insurance is even more crucial and critical. What happens in your place and any work that is done there could have an adverse affect on other unit or property owners who live next to and within the community and complex. Fires, floods, and physical and personal damage can have an immense impact on your personal financial well-being, if you have less than adequate insurance coverage.

Some developments may have certain minimum requirements to protect all homeowners in the event of a major or minor issue that might occur in the future. The corporation policy for the development or building should also be reviewed yearly by the board or their attorney to update and/or make changes as needed. Most do not read their policies, but I do recommend that you do so and especially the fine print, too.  To be safe you should go over your policy with your insurance agent and be prepared to ask as many questions as possible so you will be that much more informed about your coverage and what isn’t included or should be added to your policy.

Work to be done within a development or building also must be addressed so that any contractor who may need substantial insurance coverage has a sufficient amount to handle any and all potential issues and incidents that could and sometimes do occur. The boards of co-ops, condos and HOA’s should be diligent by consistently seeking proposals on a yearly basis to ascertain necessary information about their insurance needs and if any changes or updates might be required. The parties must make sure their current policy is not only adequate for the needs of the unit owners but that the pricing is fair and within the budget of the development.

Insurance is extremely important to protect you and unit owners from claims and lawsuits, so be smart and aware of your specific, “needs and wants” in your policies. Don’t  procrastinate, so give yourself enough time to review and update your coverages in advance of your policy expiration date.

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