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A Bad Practice!

Some not-so scrupulous agents are quoting lower premiums by undervaluing the properties. It makes them look like they are saving you money, however, they are placing you in potential danger. There are Coinsurance Rules that apply to property coverage that require a minimum value in order for you to be fully protected.

What's up with Credit Ratings?

The new element in determining premium is the insured's credit rating. Your personal rating can dramatically change the premiums you are charged.

 

Tips to Reduce Premiums

There are a number of things you can do to help you achieve the best premiums possible. For a list of items for Homeowners and Auto, visit the Notes Page.

 

Shopping Around

We represent a multitude of carriers. Why? It's certainly a lot more work for us, but much better for you. That's because, each carrier has their own specialty. We take your situation and match it up against each carrier to see who "wins" your business.

Homeowners
What to Insure:
You want to be protected in the event you have a total loss. You do want to have full replacement value. That said however, when figuring the face amount of your policy, exclude the cost of the land, driveway, well, and foundation. Even after a total loss, these items remain.

Take an inventory of your possessions. If you have valuable collections, such as antiques, coins, stamps, or jewelry, or you have more than the basic limits of office equipment, you should consider a special rider to insure them.

Replacement Cost:
Obviously, with inflation, the cost of replacing a home increases each year. This should NOT be confused with Market Value. While there should reasonably be some consistency between the two, in hot real estate markets, purchase prices often exceed structural costs, and at times, to an extreme. A good example of this would be waterfront homes. In 2004, average costs in many spots more than doubled, but all the value was in land.

That said, your policy should reflect the actual cost of rebuilding your home. Each year, there should be an inflation protection increase. However, after five years or so, reevaluate the total amount of coverage to make sure it is still accurate.

Evaluation:
There are several ways to estimate the replacement cost of a home. A good agent will use more than one measure to calculate the proper amount of coverage. There are some standard formulas as well. For example, contents are normally covered to 50% of the structure; some plans will reach 75%. Outbuildings, including detached garages are typically valued @ 10%.

Bad Risks:
Based on national historical data, certain elements within a home are considered to be "high risk" and carriers will either add premium or decline coverage all together. It is important for you to know what these are and to take care to minimize or eliminate them all together.  Check the Tips Page for details.

In addition:

  • Asbestos

    • Asbestos insulation and asbestos shingles for siding are a major concern. Removal bears a huge cost which has nothing to do with home restoration.
  • Stucco Siding

    • A growing risk category with enormous loss claims is "Toxic Mold" and the most common location for this is inside the walls of stucco homes.
  • Log Cabins

    • A fire in a log home is often never a partial loss. Since there is but one element in the wall, the log itself, a house fire almost always results in a total loss. As attractive as they are, log cabins are becoming very hard to insure.

 

 

 
Automobile

There are three things that are the primary elements in an auto premium. They are (1) model and year of the vehicle, (2) driving record(s) of all drivers in the household, and (3) claims history.

Liability:
Coverage today should be no less than $100/$300 thousand. With today's outrageous court settlements, anything less is foolhardy. Liability rates, assuming a good record, are very reasonable.

Property damage:
It is recommended at $100,000. With the number of $40,000 vehicles on the road today, a multi-vehicle incident can suddenly eat a lot of coverage.

Umbrellas:
Consider adding an umbrella policy to cover excess liability exposure on your home and autos.