Five Factors That Can Affect Your Home Insurance Premium

by Judy Dague, insurance agent - adapted from an article by Mary Jo at Progressive 

As an insurance agent, it’s imperative to review a client’s insurance coverage on a regular basis. To plan this review well in advance of the insurance policy renewing so any changes can be made before you receive that policy in the mail. This helps to ensure that your current coverage is up to date and that you and your agent are on the same page with knowing approximate costs of repairing or rebuilding your home or replacing its contents at the time of a loss, even whether you have precious items that need specific endorsements for coverage. While this could lead to higher premiums, it helps you be more adequately insured with no gaps in your insurance coverage and less vulnerable to high out-of-pocket expenses should you encounter a loss in the near future.

Read on to learn the five factors that can affect your insurance premiums:

Home Remodeling
Home renovations and remodeling are an undeniably exciting time for any new homeowner determined to put their own personal touch on the design of their home. But homeowners often get wrapped up in the excitement of their home projects that they forget that remodeling can affect their homeowners insurance rates. If you are remodeling one or more rooms in your home or tackling any projects that will increase the value of your home, it’s important to talk to your insurance agent about adjusting the coverage on your home to include the cost of those improvements. While materials and construction costs may increase the home policy premiums, at least the coverage will be up to date on including that improvements you have made in there is a loss to your home in the near future.

Pools, Trampolines, and Other Backyard Entertainment
Pools, trampolines, and splash pads are known in the insurance industry as attractive nuisances. While a homeowner may love relaxing on the patio while their kids have fun swimming in the pool, or jumping on the trampoline, or even running around a splash pad; these items can cause your clients’ insurance premiums to increase due to the increased liability risk of guests getting injured. If you have added a pool, a trampoline, or something of the same nature, be sure to discuss with your agent the affect on your insurance coverage and how it can benefit you to take security measures to make your backyard area safe. Many homeowners fail to realize that they may be liable if someone is injured while using their pool, trampoline, or other backyard entertainment whether or not they gave that person permission.

Home Security
Have you updated your home to be smart? That fancy security camera system you bought on Black Friday for a deep discount, and the new deadbolt security lock system with a keypad entry that allows you in without your house key are just some of the features you should consider talking with your agent about; since this new security system could provide some substantial premium discounts. Anything beyond old locks to a more sophisticated monitoring system should be discussed with your insurance agent. Homeowners who have antiquated forms of home security are at an increased risk for a home invasion that results in a loss, increasing their insurance premium as a result. On the other hand, homeowners with a modern smart home security system may benefit from reduced premiums. If you’re looking to update and want to know what your insurance company would consider discount features before spending the money, contact your agent to find out.

Age of Your Home
The age of your home’s wiring, plumbing, and roof make the home susceptible to damage from the elements or internal deterioration. It’s important to keep in mind that as replacement costs increase over time, your home insurance policy will need to be adjusted to factor in the age of these areas of your home that experience wear and tear everyday. If you make updates to the wiring, plumbing, or replace your roof either completely or partially; let your insurance agent know of these changes since they can be factored into any future claim loss as a variable on a pay out.

Working From Home
As more people work remote jobs from home, some operating entire businesses out of their home. It’s important to let your insurance agent know, since you may need additional coverage for possessions like business vehicles, electronics, equipment, and inventory. Additional liability coverage is also necessary if customers will be on the premises. For homeowners who run their business out of their home, consider adding an endorsement to your homeowners policy, or purchase a business owners policy to keep any possible losses on the personal or business side separate. Your agent can advise why, and besides, a business owners policy may not be as expensive as you think for the benefit it gives.

The Use of Smart Home Technology in Fire Prevention and Detection

A handful of complementary smart devices could help prevent and/or detect a fire in your home, while minimizing even more serious damage by notifying you earlier. While traditional smoke detectors are designed to alert people inside the home of a fire so everyone can evacuate safely, some of the following smart devices can also provide alerts to you on your mobile device, and to the fire department, even if you are miles from home.

Smart Smoke Detectors

Unlike normal smoke detectors, smart smoke detectors can provide you with alarm notifications on your smartphone. They can also be wired into your home security system and monitored by a central station to alert you and the fire department of an alarm. When they detect the presence of smoke particles in the air, they can be arranged to shut down your air handling systems to help prevent the spread of smoke while people safely evacuate the home. Some systems can also turn on lights and offer spoken directions about what to do in case of a fire.

You may also be able to integrate a camera with your smart smoke detector, so you can record footage of the event to understand the whereabouts of the fire’s origin. Instead of chirping a low-battery warning in the middle of the night, smart detectors can send an alert to your smartphone when the battery charge level is getting low. In addition, some models also include carbon monoxide (CO) detection capabilities.

Smart Fire Detectors

If you have frequent false alarms with smoke detectors, a heat detector is another way to help detect fire. There are generally two types of heat detectors – simple fixed temperature detectors that alarm at a factory pre-set temperature, and rate-of-rise detectors that alarm when a rapid rise in temperature is detected. Many heat detectors have both capabilities built into them.

Be advised that heat detectors are generally not meant to replace smoke detectors in bedrooms or other places where a fire life safety device is required.

Many of these systems can be interconnected, so if a detector goes off in one area of your property, all of the alarms will sound.

Smart Batteries

As an alternative to buying a new smart smoke, heat or CO detector, you may want to consider a smart battery, which can power your existing detectors and provide you with alarm notifications on your smartphone. You can monitor more than one detector in your home, plus receive a notification to replace your battery before it starts to chirp.

Smart Stovetop Fire Prevention

Cooking fires are the leading cause of home structure fires, and the leading cause of kitchen fires is unattended cooking,1 according to the NFPA. To help prevent cooking fires, there are devices using motion sensing technology specifically designed to automatically shut off the stove. If the sensor detects that you have left the kitchen, it begins a countdown to shut off the stove. When you return to check on the stove, it automatically restarts the countdown.

Smart Plugs or Outlets

Smart plugs, also known as smart outlets, can provide peace of mind if you wonder whether you remembered to unplug the coffee pot or the iron before you left home. From an app on your smartphone, you can turn lights and small appliances on and off. Some models automatically turn off power to your appliances when they are not needed.

As with all smart devices, you may want to consult a professional for proper installation.

Source:
https://www.travelers.com/resources/home/smart-home/smart-home-technology-in-fire-prevention-and-detection

Car Insurance Requirements in South Dakota

Every driver in South Dakota is required to prove financial responsibility to legally operate a vehicle. The most common way that drivers meet this requirement is by purchasing car insurance.  In order to comply with South Dakota law, you'll need to purchase and maintain:

• Liability coverage.

• Uninsured and underinsured motorist coverage.

Liability Insurance

In order to cover the costs of injury or property damage to another person in an accident you cause, you must hold the following minimum amounts of liability coverage:

• $25,000 for bodily injury or death, per person.

• $50,000 for bodily injury or death to multiple people in an accident.

• $25,000 for property damage.

Uninsured and Underinsured Motorist

All car insurance policies in South Dakota must include coverage to pay for injuries that you incur in an accident with an uninsured driver, or a driver who doesn't have enough insurance to cover your costs.

Optional Coverage

Insurance companies offer many optional types of coverage that afford drivers additional protection when accidents occur. When you are shopping around for insurance quotes, remember to investigate which of the following types of coverage you might want to add to your policy. Optional coverage typically includes:

• Collision – Helps cover your costs when your vehicle is damaged after an accident.

• Comprehensive – Pays for non-collision-related damages to your vehicle, such as those from vandalism and theft.

• Medical payments – Covers your medical costs after an accident, up to the limits of your coverage.

• Auto loan/lease – Helps cover the difference between the amount you owe on your vehicle and the current actual cash value.

• Towing and labor.

• Customized parts and equipment.

• Rental reimbursement.

Proof of Insurance

South Dakota law requires all drivers in the state to have their proof of insurance in their vehicle at all times and to furnish it to a police officer upon request. The most common proof of insurance is your ID card provided by your insurance company, which includes:

• The insurance company's name.

• Your policy number.

• The effective date of coverage and expiration date.

NOTE: If you chose to prove financial responsibility by alternate means, proof can be a certificate of deposit from the State Treasurer or a Certificate of Self-Insurance.

Car Insurance Violations

It is illegal to drive in South Dakota without car insurance. If you are found to be driving uninsured, you'll face:

• $100 to $500 fine.

• 30 days in jail.

• Suspension of your driver's license for up to 1 year.

• Mandatory SR-22 proof of insurance for 3 years (see below).

SR-22

Driving while uninsured can result in a mandatory SR-22 filing. An SR-22 is a proof of insurance that guarantees you will hold the minimum coverage for a full 3 years. Any insurance company licensed to do business in South Dakota may file this form for you. If you neglect to file an SR-22, you will be subject to:

• Driver's license suspension.

• Suspension of your vehicle registration and license plates.

NOTE: If, at any time, you change vehicles or insurance companies, you must request your insurance company re-file the SR-22.

Policy Cancellation

Your insurance company has the right to non-renew your car insurance policy for any reason; however, they must provide notice in advance of cancelling the policy. Where cancellation is concerned, your insurance company can only elect to cancel your policy in the middle of your term IF:

• You did not pay your premium.

• You lost your driving privileges.

NOTE: Having too many traffic violations can also affect your ability to get or renew a car insurance policy. (See “South Dakota Automobile Insurance Plan" below.)

South Dakota Automobile Insurance Plan

Having a poor driving record or a history of many claims can make it very difficult to find or maintain an auto insurance policy, as car insurance companies are hesitant to take on unnecessary risk. If you are unable to find an insurance company to cover you, you can apply through the South Dakota Automobile Insurance Plan. This plan provides “high-risk" drivers the opportunity to obtain the required car insurance by distributing risk amongst all insurance providers in the plan. You can get the help of any licensed insurance provider to apply through the plan.

NOTE: Car insurance obtained through the plan is typically much more expensive. Try to exhaust all your policy options on the open market before using this one.

Questions and Concerns

In some cases, car insurance coverage can be confusing or difficult to navigate. The South Dakota Division of Insurance provides assistance to consumers. Through the Division, you can:

• File a complaint.

• Report suspected fraud.

Complaints

If you have an issue with your car insurance company that you are unable to resolve with them, you can request the help of the Insurance Division by filing a complaint. To do so, complete the Online Complaint Form and:

• Select the “Send Electronically" option at the bottom.
  OR

• Print and mail the form to the address on the form.

Car Insurance Fraud

When insurance fraud happens, car insurance companies pay the price. All too often, these costs get handed down to the consumer through increased premiums. You can help by reporting insurance fraud when you suspect it. If you feel you've been the victim of fraud, or if you suspect that it has happened to someone else, you can contact the Division:

• By phone at (605) 773-6325.

• By fax at (605) 773-5369.

• Via e-mail at insurancefraud@state.sd.us.

Determining Your SD Car Insurance Rates

When comparing car insurance quotes, it's important to remember that most companies weigh varying factors differently. These factors typically include:

• Your age and gender.

• Your credit history.

• The primary uses for your vehicle.

• Your driving record.

• The amount of coverage you're attempting to purchase.

• Your car's:

  • Age.

  • Make.

  • Model.

• The deductible you choose.

  • Choosing higher deductibles will get you lower premiums.

• The main location where you'll park your vehicle.

• Any discounts that apply (see below).

Auto Insurance Discounts

Discounts can make a big difference in the estimates you get when comparison-shopping for car insurance. Make sure to ask about which discounts might apply to you. Typically, available discounts include:

• Good driver.

• Good student.

• Multiple-policy.

• Driver training.

• Accident-free.

• Safety device.

• Multiple-vehicle.

• Vehicle safety.

Always remember that the safest bet for getting cheap car insurance in South Dakota is to drive safely and avoid accidents. A good driving record is a key factor in buying and maintaining low-cost car insurance.

Most Stolen Cars in South Dakota

If your car is a common target for car theft, you may face higher car insurance rates.

The following is a list of the most stolen cars in South Dakota for 2013, according to www.nicb .org:

1. Ford Pickup (Full Size).

2. Chevrolet Pickup (Full Size).

3. Ford Taurus.

4. Buick Lesabre.

5. Dodge Pickup (Full Size).

6. Pontiac Grand Prix.

7. GMC Pickup (Full Size).

8. Ford Explorer.

9. Pontiac Grand Am.

10. Chevrolet Impala.

Source:  https://www.dmv.org/sd-south-dakota/car-insurance.php

What is a Personal Umbrella Policy and Why Do You Need One?

Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. An umbrella liability policy covers a much higher limit and goes above and beyond claims directly relating to your home and auto.

The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage will pay for the damages you're legally responsible for up to the policy limit.

What Does Umbrella Insurance Cover? An umbrella policy provides additional coverage or “excess liability” above the limits of your basic policies. It can protect you from bodily injury liability claims and property damage liability claims. Umbrella policies also provide a broader form of coverage and can help cover legal fees, false arrest, libel, and slander.

How Does Umbrella Insurance Work? Your umbrella insurance can come into play if you are found liable and need to pay damages, or if you are sued and need to pay for your legal defense – even if the result is that you are not found to be responsible. An umbrella policy only pays once your basic liability limits have been exhausted or the claim is excluded from the basic liability coverage. The claim will be made against you, the policyholder, on behalf of the wronged party. Then your insurance company may pay the settlement amount up to the limits of your coverage. If the settlement amount exceeds your coverage limits, you are responsible for paying the remaining amount out of pocket.

Why Is Umbrella Insurance Important? Your car, house, investments and retirement accounts, as well as your normal checking and savings accounts and even future income, are all considered assets. It is important to know that if you are sued for a lot of money and do not have enough liability insurance or an umbrella policy to cover those costs, all of your assets are exposed. People typically choose to buy an umbrella policy because they want to prevent the possibility of financial ruin due to one misstep or unforeseen accident. Umbrella insurance can provide the protection to prevent such an outcome. 

How Much Does Umbrella Insurance Cost? Coverage for an umbrella policy typically starts in the rage of $150-$200 for a $1 million policy. Your premium will increase if you decide to increase coverage.  However, getting twice the amount of coverage and increasing the policy limit to $2 million will not usually double the cost  of your premium.

How Much Umbrella Insurance Should I Carry? When choosing your coverage limits, consider three things:

1. The risks you may face. Consider risks as a homeowner or renter, the risk of causing an accident during your work commute, and any potentially dangerous activities you participate in that could put those around you at risk.
2. The value of your assets. These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider.
3. The potential loss of future income. Because liability lawsuits can result in loss of both current assets and future income, even those with few assets to protect may want to consider the long-term ramifications of a serious claim.

When you review your future income, consider your earning potential. You not have many assets now, but if you’re on track for a high paying career, you could be involved in a lawsuit that can target money you haven’t earned yet. Speak with an independent insurance agent to determine your specific risk factors and learn more about how to protect your current and future assets.

Source: https://www.trustedchoice.com/umbrella-insurance/coverage-faq/#faqitem

Check out this website link if you still don't think you need an umbrella policy:

https://www.youtube.com/watch?v=XZZpMMeKCT4

Does Denting Someone's Car Increase Your Insurance Rates?

by Dawn Aldridge, an accountant/business professional

The act of denting someone's car will not increase your premiums by itself. However, once a claim has been filed with your insurance company, that may change depending on your situation. Insurance companies, no doubt, view claims filed when determining their risk of insuring you, as a driver. Therefore, those with no claims generally have lower rates.

Avoiding an Insurance Rate Increase

If you choose to pay for the damage of the other person's vehicle using your own money, rather than either of you filing an insurance claim, you can avoid a possible rate increase. If the dent is minor, the other person may decide not to get it fixed so he does not have to file a claim with his insurance company either. If the other driver wants his car fixed and you have to file a claim, it is possible your insurance company may offer a first-accident-forgiveness program that may keep your rates from increasing. By reading your policy documentation before contacting your insurance company, you should have a good idea of what to expect.

Source: https://pocketsense.com/denting-someones-car-increase-insurance-rates-12895.html

Scheduled Vs. Non-Scheduled Insurance Coverage

Scheduled Vs. Non-Scheduled Insurance Coverage  

Once you move out from your parent's house -- and their insurance -- your stuff needs protection. A normal non-scheduled renter's policy is usually good enough to replace personal property such as clothing and TV in case the person next door starts a kitchen fire, or your apartment or dorm room gets broken into. If you have valuable stuff, a scheduled policy might be what you need.

How Property Insurance Works

Property insurance pays off if something happens to your stuff. Usually, you have to pay a deductible, but once you cover it, the insurer will pay you for anything that gets stolen, damaged or even lost. Be alert to the coverage you're getting, though, because it comes in two types -- actual cash value and replacement cost. Actual cash value means you'll get what your stuff would be worth at a garage sale or thrift store; it's used, after all. Replacement cost coverage, which costs a little bit more, is designed to give you enough money to go out and buy replacements.

Non-Scheduled Coverage

With non-scheduled coverage, your insurance company will replace your stuff with two rules. They'll only cover you up to the limits on your policy, and they'll only cover things that you can prove you have. If you don't tell your insurer what you have, it's hard for them to exactly replace it if something happens. With this in mind, it's a good idea to walk through your apartment or dorm room with a smartphone and shoot a video that shows all of your stuff. Taking pictures is a good idea, too. That way, if something happens and your insurer says, for instance, that you don't have a TV set, you can prove that you do -- or at least had one. Receipts also help.

Non-Scheduled Coverage Limits

Most regular policies have limits. If you buy $10,000 worth of coverage and you lose $15,000 worth of stuff, you'll be on your own for the last $5,000. Read your policy's fine print, too. You might find out that you're only covered for small amounts of money on certain valuable items. For instance, your jewelry might only be covered for $1,000, and certain things, like a treasured comic book collection, might not be covered at all.

Scheduled Coverage

You can add scheduled coverage to your insurance if you want. With scheduled coverage, you give your insurer a list -- insurers call it a schedule -- of special items that you want covered. If you have an engagement ring, a powerful gaming computer, a collection of signed baseball cards, or a couple of hunting rifles, you can put them on the schedule. Your insurer will charge you more for the coverage, but if anything happens to a scheduled item, you'll get paid the money you need to replace it.

Article by Steve Lander; Source: https://pocketsense.com/scheduled-vs-nonscheduled-insurance-coverage-5929.html

Homeowners Insurance: Replacement Cost vs Actual Cash Value

Much like everything else we buy, insurance comes with a lot of options. And just like everything else, you can go the economical route and give up a little quality and miss out on some bells and whistles, or you can pony up a few more bucks and get the whole shebang.

The terms “replacement cost” and “actual cash value,” or ACV, are loss valuation methods insurance companies use to determine how much money they will pay out in the event of a covered cause of loss (claim) after any deductible is applied.

NOTE: Replacement cost for your physical home and for the contents of your home is two different policy endorsements.  If you want your personal items to be replaced at their cost to purchase new, you must request that separately.

It is highly recommended that you purchase replacement cost coverage if your budget permits.  Why?  Let’s take a look at an example of how you will be reimbursed as a result of a homeowner’s insurance property damage claim.  Remember, this works the same for almost any property damage, including physical damage coverage to your auto.

Let’s say, for example, your $200,000 home burns down as a result of an electrical fire caused by your clothes dryer.  How you would be reimbursed differs by the loss settlement method you agreed to and paid for:

Actual Cash Value Settlement

Had you purchased ACV coverage, you (and your lender if you had a mortgage) would be paid the actual cash value of your home at the time of the loss.  ACV is calculated as the replacement cost of your home minus depreciation.  Depreciation is the loss in value of a piece of property over time.

$200,000 replacement cost – $30,000 in depreciation = $170,000 ACV

You would receive a check for $170,000.  The lender gets their share of the money first.  You can easily see how you would not receive enough money to rebuild your $200,000 home.  In fact, you’d be exactly $30,000 (how much your home depreciated since its purchase) short.  This is not a good position to be in.

Also note, if your ACV was $170,000, and you owed $180,000 on the mortgage, you would be stuck with a $10,000 bill owed to your lender.  This is why mortgage lenders often require replacement cost coverage on a mortgaged home!

A home typically costs quite a bit more to rebuild at today’s prices than it did when you purchased it.  Homes are often built in large numbers in certain developments, which drives down the construction costs.  For this reason, you would likely want to purchase a replacement cost policy.

Replacement Cost Value Settlement

Had you purchased replacement cost coverage, you would receive the entire $200,000 in the event your home burned down. The depreciated value of your home is not a factor in the settlement you receive from your insurer.

NOTE: Replacement cost policies typically contain a co-insurance clause.

The coinsurance clause may require you to insure the property in question for at least 80% of its replacement cost.  Replacement costs can fluctuate over the course of an insurance policy.  For our $200,000 home, you would be required to carry at least $160,000 in coverage for the dwelling.

If you insured your home for only $150,000 because that’s all you owed on the mortgage, and suffered a total loss, you would incur a financial penalty for having it underinsured.  The penalty usually consists of having to cover a certain percentage of the underinsured potion of the home value.  This clause protects the insurance company from issuing replacement cost policies where the home is insured for much less than it would cost to rebuild.

Extended Replacement Cost Coverage

Some insurers offer an endorsement (extra addition) to their homeowner’s insurance policy that adds an additional 25% to 50% extra replacement cost coverage in the event it’s necessary.  This is often referred to as extended replacement cost.

Our same $200,000 home would qualify for an additional $50,000 in replacement cost coverage if you chose the 25% extended coverage.  So if it cost $250,000 to rebuild your home exactly the way it was, you’d be covered.  Of course, this option costs a little more, but is clearly worth it.

Market Value

Insurers do not use your home’s market value as a loss valuation method.  Do not make the mistake of confusing your home’s ACV with its market value.  The terms have different meanings when it comes to insurance.  For example, your home may have a replacement cost of $200,000, an ACV of $170,000 due to depreciation, but due to a lagging economy for instance, a market value of only $150,000.

Market value fluctuates and is not a number that can be calculated using a mathematical formula or by calculating the costs of labor and materials to rebuild.  The market value of your home changes at the whim of who would be willing to buy for a certain price at any given point in time.

Functional Replacement Cost

If you live in an old Victorian home, your insurance company would probably not offer you a replacement cost policy.  Why?

The cost to rebuild your home may greatly exceed its ACV.  The cost to recreate outdated construction techniques from the early 1900’s, when the home was originally built, can be staggering.   Your Victorian home’s value may be $300,000.  However, to pay someone to rebuild it using the exact techniques and materials used in the original construction may exceed $500,000.

Clearly this isn’t a good deal for the insurance company, and you would likely not want to pay for $500,000 of insurance coverage for a home that’s only really worth $300,000.

Functional replacement cost valuation means your insurer will cover the replacement cost to build your home using the most up-to-date techniques and materials available at a lower cost in today’s market.

As the example above demonstrates, it’s clear why you would want to have the replacement cost valuation property insurance policy.  For what amounts to a small additional insurance premium, you are fully covered in the event of a partial or total loss.

Contact your independent insurance agent if you are not sure what type of loss cost valuation method your policy contains.

Source; The Truth About Insurance . Com

http://www.nepainsurance.com/homeowners-insurance-replacement-cost-vs-actual-cash-value

After the Fire or Disaster: Dealing with Your Insurance Company

 

Ten tips for homeowners facing fire or smoke damage.

 By Janet Portman, Attorney at www. NOLO.com                       September 15, 2017

Homeowners whose property has been damaged or destroyed will look to their insurance for relief -- with varying degrees of success. Here are ten tips to keep in mind as you interact with your insurance company and its adjustors.

1. Get an Advance

If you were forced to evacuate your home, you might not have grabbed basic necessities -- from a toothbrush to clothes that you can wear to work. Your homeowners' policy will cover the cost to replace these items, but you don't have to file a claim and have it approved before heading to a department store to purchase that suit you need for the office.

Instead, ask your company for an advance against your eventual claim. Ask a representative of the company to bring a check to you wherever you're staying, be it a hotel or a friend's house. Save the receipts for everything you buy, and be reasonable -- if you lost khakis and a blazer, don't head for the Armani suits (you'll end up paying the difference).

Check your policy -- even if you have "replacement" coverage for the house itself (see Tip Six, below), you may have only "actual cash value" for the personal items that were in your home. A good agent will alert you to this and suggest buying an endorsement so that your contents will be covered under a replacement policy, too.

2. Secure Your Property

Every policy requires you to take reasonable steps to minimize the harm to your property. In legalese, this is known as your duty to "mitigate damages." It includes such common-sense steps as covering a section of your leaky roof with a plastic tarp until you can get it repaired or turning off the water when you discover a burst pipe. Your insurance company will pay these costs when you make your claim. Other steps you might need to take to mitigate damages include:

• Stop the smoldering. After a fire, if the structure is still burning, contact the fire department to do what's necessary to prevent a flare-up.
• Board it up. To prevent vandalism, board up your property and consider erecting a portable chain-link fence to keep people away.
• Be vigilant. Depending on the situation, you may need to keep a close eye on your property, checking for new problems and making sure it hasn't been disturbed.

3. File Your Claim Right Away

All policies require homeowners to report their loss as soon as is reasonably possible. You can comply by calling your agent or sending an email. After that, you'll be asked to submit a "proof of loss claim," in which you itemize your losses and list the value. (Hopefully, you already followed the guidance in, "Preparing a Home Inventory in Case Your Property Gets Damaged or Stolen." See NOLO.com for article.) If you delay notifying your company, you may find yourself far down on the list when it comes time for the company to send an adjustor to deal with your claim.

Get a Three-Ring Binder

When you deal with an insurance company over a major claim, you need to be organized. Calls, emails, and letters can be crucial pieces of evidence if you and the company later differ as to who said what to whom, and when. Take notes during every phone call, and organize your communication in one section of the binder. Use other sections to store estimates, invoices, bills, permits, and contracts for repairs. Never part with an original document; if your insurance company wants to see an invoice or bid, make it a copy.

4. Make Sure the Insurance Company Acts Promptly

Fortunately, insurance companies are required to handle claims in a timely manner. In California, for example, they must send you a "notice of intentions" within 30 days of receiving your claim. If there's no dispute over your coverage, you're entitled to payment within that time, too. If you haven't heard from your company and you feel that it's unnecessarily dragging its heels, write to it (and consider sending a copy to your state's Department of Insurance). Insurance companies are less likely to string you along when they're in the midst of a disaster and know that all eyes are on them.

5. Keep Track of Your Living Expenses

Your policy will include a "loss of use" clause, which entitles you to reimbursement for living expenses while you're out of your home. However, you're entitled only to additional living expenses -- that is, the difference between what it costs you to live on a daily basis at home and what it costs now. For example, if you ate most meals at home before the fire and regularly spent $300 a week on groceries, but are now spending $400 per week at restaurants, you can claim only $100.

When it comes to the motel bill, however, you can probably claim the whole thing. Even though you can't live at home, you still have to pay your mortgage, taxes, and insurance. (See Tip Seven, below, for more on paying your insurance premiums.)

Living With Friends or Family?

Many evacuees stay with friends or family, often on an extended basis. Even though you probably aren't paying your hosts, you may be able to convince your insurance company to reimburse them for the cost of putting you up. Ask your hosts to itemize the value of the room and services they're providing. Be reasonable and specific, and be prepared to negotiate with your insurance company over this one. It might help to point out how much more the company would have had to shell out if you chose to stay in a hotel and eat in a restaurant.

6. Get the Right Repair Estimates

Your homeowner's policy will enable you to rebuild or repair your home. If you have an "actual cash value" policy, you're entitled to the amount of money it will take to return your home or its contents to its market value before the fire -- which, if it was run down and needed a new roof, may be significantly less than what you'll need for a quality rebuild.

If you have "replacement cost" coverage, you're entitled to the amount it would take to replace the home or contents, up to a limit that was fixed in your policy in advance. (Only a rare type of policy, called "guaranteed replacement" coverage, actually lets you claim all of your actual rebuilding costs.)

You Don't Have to Rebuild

If you have replacement coverage, that doesn't mean you have to actually rebuild your home on the same site. You can rebuild at a different location (if it costs more to build in Hawaii, you pay the difference). If you decide to use the money for something else, such as starting your own business or creating a retirement fund, your "replacement" policy will change to an "actual cash value" policy (in broad terms, you'll get about 15% less).

For either type of coverage, you'll need an estimate of the prior market value or the cost to replace the damaged items or parts. Your insurance company will offer its own estimates, supplied by its own adjustors. Because these adjustors work for the insurance company, it's in their best interests to get you to quickly accept a modest settlement. You're under no obligation to accept these numbers.

Instead, hire an independent estimator who will work for (and be paid by) you. Choose a contractor who is experienced not only in building, but in how insurance companies respond to typical issues. Be sure that you and the insurance company agree on the scope of work to be done if you're replacing or repairing. If you're dealing with an actual cash value policy, don't accept the insurance company's number unless you are satisfied that it's a fair estimate of what a buyer would have paid for your home just before the disaster (not including the value of the land).

7. Keep Paying Those Premiums

It may seem ridiculous to continue paying homeowners' insurance premiums to protect property that's severely damaged or gone, but stopping your payments can be a big mistake. Remember, your homeowners' policy includes liability protection for you and your household, including your pets. This may come in handy if, for example, your stressed-out dog chews up an expensive Oriental rug while you're camped out at your brother-in-law's house.

If you'll be staying somewhere for a while, call your agent and ask for that address to be added as a second location for purposes of liability coverage. If your home has been destroyed, ask your insurance company to cut back on the part of the policy that covers the structure, and ask for a corresponding reduction in premiums.

8. It's Not Over Until You Say So

Your insurance company will want to close your claim as soon as possible. The longer it's open, the greater the chance that you'll discover and file a claim for an additional loss. But homeowners often discover losses that they initially overlooked, perhaps because of the stress of living through the disaster. Protect against this possibility by waiting at least a few months before allowing your claim to be closed.

Don't be surprised if you receive a check from the insurance company saying that you're accepting the payment "in full release of" your claim. Don't believe it, and don't let it stand. Cross-out that language (and initial it), then send a letter to the company, politely thanking them for the check and telling them that you do not consider the matter to be closed.

9. Consider Hiring a Public Adjustor

Despite hiring your own estimator or contractor, you may not be able to reach an acceptable settlement of your claim. In that event, consider hiring a "public adjustor:" an independent, licensed adjustor whom you pay to negotiate with the insurance company on your behalf. You'll typically pay the adjustor between 9-15% of what you recover from the insurance company, but that can be well worth it if the adjustor succeeds in significantly increasing the settlement. To find a public adjustor, start with the National Association of Public Insurance Adjusters, the national organization that regulates public adjusters, at www.napia.com.

10. Don't Worry About Losing Your Insurance

You probably know that drivers who've had an accident or two commonly face higher car insurance premiums or even lose their coverage. Fortunately, this isn't a realistic fear for homeowners who file legitimate damage claims following a disaster such as a fire. As long as you're not what the industry calls a "habitual claimant" and there's no proof of fraud in connection with your claim, you won't see an increase in your premiums or lose your coverage.

For More Information

Check out these websites for information that disaster victims can use immediately:

• United Policyholders, www.unitedpolicyholders.org, is an independent, nonprofit organization that gives great advice on dealing with your insurance company, and information on fire disasters in particular.
• The Insurance Information Institute, www.iii.org, is a news and information site with lots of specific advice for consumers, including how to file a claim.
• Your state's department of insurance is likely to have materials for people facing disasters in your state. For example, the California Department of Insurance, www.insurance.ca.gov, has provided emergency phone numbers for various insurance companies during past wildfires in California.

For detailed information about all aspects of homeowners' insurance, see Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, and Marcia Stewart (Nolo).

Source: http://www.nolo.com/legal-encyclopedia/dealing-with-insurance-after-disaster-29640.html

Renters insurance: What you need to know

By Mark Vallet Posted : May 15, 2017

Renters insurance is widely considered a best buy for the money.

Many tenants assume a landlord's insurance will cover their belongings after a catastrophe, but that's incorrect. Renters insurance typically covers not only your belongings but your liability in many cases, plus things like living expenses if you're homeless after a fire.

Here are some common questions:

• What does renters insurance cover?

• How does renters insurance liability coverage work?

• Replacement vs. Actual cash value

• Do I need renters insurance?

• How much does renters insurance cost?

• Will renters insurance cover my laptop?

• How do I buy renters insurance?

• How do I compare renters insurance coverage and policies?

• >Should I share a renters policy with my roommate?

• Do college kids need renters insurance?

• What isn’t covered by renters insurance?

• Can I bundle it with my auto policy?

What renters insurance covers

The technical name for renters insurance is an HO-4 policy and it's specifically designed to protect people living in apartments, but does cover house rentals as well. These policies protect your belongings from loss or destruction, but coverage is limited to 16 specific perils.

While specifics can vary from policy to policy, almost all HO-4 policies cover the following events:

1. Fire or lightning

2. Windstorm or hail

3. Explosion

4. Riot or civil commotion

5. Damage caused by aircraft

6. Damage caused by vehicles

7. Smoke

8. Vandalism or malicious mischief

9. Theft

10. Volcanic eruption

11. A falling object

12. The weight of ice, snow or sleet

13. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance

14. Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning system or an automatic fire-protective system

15. Freezing of a plumbing, heating, air conditioning or automatic fire-protective system, or of a household appliance

16. Sudden and accidental damage from artificially generated electric current (does not include loss to a tube, transistor or similar electronic component)

Many HO-4 policies will also cover additional living expenses, which means that if your apartment is destroyed  your policy will cover your living expenses.

"Additional living expense on an HO-4 would cover costs associated with hotels, meals, laundry, and other expenses that the tenant incurred while their apartment was being repaired. It could also cover costs associated with moving should the apartment not be inhabitable for an extended period of time," says Travis Biggert, chief sales officer with Hub International.

It's important to remember that renters insurance never covers flooding or earthquake damage, so you will be on the hook for the cost to replace all of your possessions if they are destroyed by a flood or earthquake.

If you live in an area that is prone to flooding or earthquakes you will need a separate policy. Flood insurance is available from the National Flood Insurance Program and earthquake coverage can usually be added as a rider to your renters insurance policy.

How renters insurance liability works

A renters insurance policy not only covers your possessions, it has a liability component that will protect you in the event someone is injured in your apartment due to your negligence.

The financial ramifications of a lawsuit by an injured party can be devastating. Luckily, the liability portion of your policy will protect you (and your assets) from bodily injury and property damage claims as well as damages you or your family members accidentally do to others.

As an example, if you have a party at your apartment and serve alcohol, you can be held liable for any damage or harm your intoxicated guests do to other people or their property. The liability portion of your renters insurance policy will cover the cost of any bodily injury or property damage claims.

Dog bites are another liability issue that an HO-4 policy will cover. If your dog bites a visitor or neighbor you can be on the hook for hospital bills or find yourself on the wrong end of a lawsuit.

Some insurance companies exclude dog bites from coverage and other insurers may exclude certain breeds of dogs so be sure to check with your insurance agent if you own a dog.

In most cases renters insurance will cover costs related to legal representation due to a lawsuit as well as any damages that are awarded, up to your policy limits.

It's up to you to choose your liability limit on a HO-4 policy. Liability limits for renters insurance usually start at about $100,000 and can go up to $500,000. "We recommend $300K in liability coverage minimum. If the person is more financially established, we recommend an umbrella policy of at least $1million," advises Tom Austin with Bungalow Insurance.

Finally, most HO-4 policies also include no-fault medical payment coverage. Angi  Orbann, second vice president of personal insurance at Travelers explains this coverage. "If someone gets hurt in your home, he or she can submit medical bills directly to your insurance company. This way, expenses can be paid without a liability claim being filed against the renter. It should be noted that this coverage does not pay the medical bills for the renter's own family." Guest medical coverage of $5,000 is what is recommended.

Replacement vs. Actual Cash Value

When it comes to renters insurance, you will have to choose between "replacement cost" and "actual cash value" policies. This refers to how the insurance company values your property and the difference between these two policy types can be important.

Replacement cost: These policies will cover the actual cost of replacing your possessions. As an example, if your TV is destroyed, your insurer would replace it with a brand new TV of a similar size and quality, regardless of how old it was when it was destroyed. These policies ensure that you will receive the full cost to actually replace your possessions.

Replacement cost polices tend to be more expensive than actual cash value but offer the peace of mind that your possessions will be replaced.

Actual cash value:  Insurers take depreciation into account when calculating the value of your possessions so your insurer will only pay out the value of the belongings at the time of the loss. This means that if you have a 10-year old TV, the payout amount will be for the value of a TV that is 10 years old. In most cases, it will not be enough to cover the cost of a new TV.

These policies are less expensive but remember that you will have to cover the difference between the amount your policy pays and the cost to replace your possessions with new ones.

It's important to note that some item values are capped. High-value items such as jewelry, artwork, furs, firearms and other collectibles can be subject to a value cap. The cap amount can vary, but in general, most policies put it at around $1,500. If you have items that fall into these categories and the value is more than $1,500 you can purchase a policy rider that will increase coverage levels.

Do I need renters insurance?

Yes. Because bad days happen. Sometimes they're your fault. Sometimes they just come at you.

Renters insurance is much like homeowner's insurance. It pays for your personal property that's damaged or stolen. And it provides liability protection for any damage or injuries caused by you, your household family members or your pets, either in or outside the apartment..

Sometimes called apartment insurance, it will also help pay hotel expenses if your unit is temporarily unlivable, say due to fire or water damage.

It differs from homeowners insurance in that it does not cover structural damage. This is also why it's much cheaper.

"Everything that you brought on to the structure is your responsibility," says Mike Barry of the Insurance Information Institute (III). "The landlord's responsibility, when it comes to insurance, is limited primarily to the structure."

How much does renters insurance cost?

Not much. Basic policies can cost the equivalent of one or two six-packs a month. Surveys show that most renters think it costs more than it does.

"I think a lot of people, they look at how cheap it is and they think I'm going to add $15 a month to the bill, like it's not important," says Ryan Scruggs, a Farmers Insurance agent in the Phoenix area.

Scruggs sells basic apartment policies for $12 to $20 a month, and home rental policies for $20 to $30 a month. That covers $25,000 in personal property, $5,000 for loss of use, $100,000 of liability, and $1,000 for guest medical.

Rates vary based on coverage amounts, the renter’s credit history, and where he or she lives. Based on an Insurance.com rate analysis, the national average yearly cost for a renters policy with coverage levels of $40,000 for personal property, a $1,000 deductible and $100,000 of liability protection is $197, or about $17 a month. Prices in South Carolina, Pennsylvania and Hawaii are about average. Louisiana's are the highest, at $719 a year. Colorado's are the lowest, at $103.

You may need to pay extra to add flood or earthquake coverage, or to add expensive items that exceed individual limits, such as for jewelry or antiques. These endorsements typically add a few dollars per month.

Source: http://www.insurance.com/home-and-renters-insurance/home-insurance-basics/renters-insurance.html

Five Tips for Buying Insurance

1. Shop smart. When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.
2. Look for discounts. Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free, or no law enforcement violations. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
3. Fill in the gaps. An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.
4. Purchase life insurance—you aren’t too young. Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, everybody should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
5. Talk to an independent agent. An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.

Source: https://www.grangeinsurance.com/tips/insurance-tips-millenials