HOME OWNERS CONSUMER INFORMATION

HOMEOWNERS CONSUMER INFORMATION

Renters Insurance: Shattering A Few Myths

Filing Your Home Insurance Claim

Every year insurance companies pay more than $75 billion in claims resulting from losses suffered during fires, hurricanes, robberies, dog bites, falls and other incidents. The trauma of a burglary or severe damage to your home is stressful enough without having to worry about your insurance claim. This following information, prepared by the Independent Insurance Agents of America (IIAA), is designed to help you understand the claims process. Your independent insurance agent will be there to ensure your claim is handled promptly and fairly.

Where Do I Start?

There are two basic types of claims. The first involves loss or damage to property such as your home or your possessions. The second type is a liability claim which arises when someone else suffers an injury or damage to their property because of something you did or did not do. For example, if someone falls while visiting at your home, you could be liable for any injuries that may have occurred. Liability claims may result in a lawsuit against you.

On The Home Front

If you own your home, chances are you have a homeowners insurance policy. Homeowners insurance covers damage to your property -- structures and your possessions -- within specified limits. This coverage extends to possessions that you carry for personal use when you travel. You usually have coverage for damage to both structure and personal property caused by:

Fire or lightning
Windstorm or hail
Explosions
Riot or civil commotion
Aircraft
Vehicles
Smoke
Theft or vandalism
Weight of ice, snow or sleet
Freezing of a plumbing, heating air conditioning or other such household system.

If you should experience damage from an above listed caused, you can make temporary repairs (e.g., to the roof) to prevent further damage to your property. Remember to keep all receipts for the insurance company, and do not sign any deals with contractors or lawyers until you have spoken with your independent insurance agent.

Suitable Coverage

Unfortunately, there are other risks involved in everyday living besides loss or damage to your property. That old tree you kept meaning to remove may come crashing down during the next storm right on your neighbor garage. Or that pesky skateboarding teenager down the street may pick your sidewalk to have a spill and break a bone. If you find yourself involved in a situation where you may be held liable, it is important to notify your independent insurance agent. You may talk to the "nice" parents of the skateboarder or with your neighbors, but leave the insurance discussion and negotiating up to the professional. For several reasons, the first conversation you have about the incident should be with your independent insurance agent. Chances are your policy includes a stipulation that the insurance company be notified promptly. Plus, in chatting about the situation you can inadvertently waive some of your rights in the case. More importantly, by inviting the insurance company in early in the process, the company can sometimes offer an early settlement that avoids a lawsuit. After all, the insurance company has a team of experts -- claims adjusters, appraisers, lawyers, and medical experts -- who have probably been down this road before and know exactly how to get mutual satisfaction for both sides without straining neighborly relations.

Is that It?

No. There are additional coverage's such as flood and earthquake damage for your home. In fact, just about any contingency can be covered by adding clauses and conditions known as endorsements or riders to a standard policy.

When The Time Comes

If you do suffer property damage or injury or incur liability, it is time to file a claim. You will be asked to fill out a claim form -- the formal document on which you request benefits to be paid according to the terms of the policy. Be complete and supply as much detail as you can and, of course, be truthful. To support your claim, it may be necessary to supply some documentation. Pictures of your tree atop the neighbor garage, details on the sofa, chairs and CD collection destroyed in the fire, and so forth. The better you document your property beforehand with pictures, receipts and other evidence, the more likely your claim will be processed smoothly.

Figuring Out The Costs

How much financial settlement the insurance company offers you of course varies with the situation. However, for property damage, it helps to know that there are two basic ways to value your property:

Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your 7-year-old TV set gets damaged in a fire, it might have depreciated 50%. Therefore, the televisions remaining value would be $250.
Replacement Coverage - The cost of replacing an item without deducting for depreciation. So the current cost for a TV set with features similar to the 7-year-old one damaged by fire would determine the amount of compensation. If the similar new television costs $500, that would be the amount of your coverage.

You may want to check your policy to see which kind of coverage you currently have. For example, if you would prefer replacement coverage and do not have it, this coverage can be added to your policy for an increase in your premium of about 10% to 15%.

What is A Deductible?

When you file a claim for property or loss, the payment made by the insurance company is subject to a deductible. Basically, when you purchase your insurance policy, you agree to pay the first specified amount of any damage as your share of the cost of repair or replacement. The insurance company adjusts its rates accordingly, charging less for those who agree to pay a larger first share -- or deductible. For example, if your home should sustain damages costing $2,000 to repair and you have a deductible of $250, you would pay $250 and the insurance company would pay $1,750.

What is A Claims Adjuster?

Once you have reported your claim to your agent, he or she will contact your insurer claims adjuster -- usually within the hour. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party, if any. While some claims are relatively easy and straightforward, others are more complicated. Your adjuster is charged with investigating the claim and then making a recommendation to the insurance company. The recommendation can be to accept the claim and pay the full amount requested, accept part of the claim and make a partial payment or refuse the claim and make no payment. The insurance company will then make a final decision regarding your claim and notify you.

A Final Note

The amount of compensation offered can vary according to the adjuster analysis of your claim. Keep in mind, if you feel it is too low, you do not have to accept the first amount offered. While you may have to do some research to prove a higher payment is valid, it may be worth it. Your independent insurance agent should be able to assist you in reaching a fair settlement. What is A Deductible?

When you file a claim for property or loss, the payment made by the insurance company is subject to a deductible. Basically, when you purchase your insurance policy, you agree to pay the first specified amount of any damage as your share of the cost of repair or replacement. The insurance company adjusts its rates accordingly, charging less for those who agree to pay a larger first share -- or deductible. For example, if your home should sustain damages costing $2,000 to repair and you have a deductible of $250, you would pay $250 and the insurance company would pay $1,750.

What is A Claims Adjuster?

Once you have reported your claim to your agent, he or she will contact your insurer claims adjuster -- usually within the hour. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party, if any. While some claims are relatively easy and straightforward, others are more complicated. Your adjuster is charged with investigating the claim and then making a recommendation to the insurance company. The recommendation can be to accept the claim and pay the full amount requested, accept part of the claim and make a partial payment or refuse the claim and make no payment. The insurance company will then make a final decision regarding your claim and notify you.

A Final Note

The amount of compensation offered can vary according to the adjuster analysis of your claim. Keep in mind, if you feel it is too low, you do not have to accept the first amount offered. While you may have to do some research to prove a higher payment is valid, it may be worth it. Your independent insurance agent should be able to assist you in reaching a fair settlement.

Taking Inventory Of Your Home

No one plans to lose their valuables and other belongings in a burglary, a fire or a natural disaster. If one of these unfortunate events destroyed your home, would you be able to report exactly what you lost to the police, to the Internal Revenue Service or to your independent insurance agent? It is easier to do an inventory of your home now rather than sitting down afterward and attempting to remember a lifetime worth of purchases. Prepared by the Independent Insurance Agents of America, this information will help you begin your household inventory.

Start Today

Write down any valuable items with their serial numbers (usually found on the bottom or back of major appliances) along with the method of acquisition (purchased, inherited or received as a gift), date purchased and price or approximate value. Attach receipts, if possible. Remember to include furniture, appliances, carpeting, jewelry, artwork, toys and the contents of your closets, cabinets and drawers. Contact your independent insurance agent with questions or concerns.

Play It Safe With A Videotape

Videotaping each room of your house can make taking inventories easier. Photographs and a tape recorder can substitute for a video camera. A complete video inventory should contain verbal descriptions of major assets as well as their value. Remember your garage, attic, basement and the exterior of the house, plus your landscaping and fencing. If possible, make it a family project by having everyone take turns describing the objects in your home. Store the video or photographs along with this inventory in a safe-deposit box and send a copy to a friend or relative.

Do Not Forget Important Documents

Extremely important documents should be photocopied. Keep one copy in your home and the original, where possible, in a safe-deposit box. Important items include, but are not limited to, the following:

House - Escrow, title, deed, insurance policy.
Personal - Birth certificates, medical history, passports, insurance certificates, credit card numbers, will.
Automobile - Certificates of ownership, finance contracts, registrations, insurance policy, driver licenses.
Finance - Account numbers for checking and savings accounts, CDs, stocks, bonds, other significant investments.
Tax - Copies of the first two pages of your state and federal returns for the past five years. Complete returns with appropriate receipts and canceled checks should be kept in a separate file box.

A Final Note

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive. This information will only be beneficial if you make use of it now. By inventorying your personal possessions ahead of time, you will save yourself from frustration should disaster strike. Your independent insurance agent can help you determine whether your property is adequately protected. A Final Note

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive. This information will only be beneficial if you make use of it now. By inventorying your personal possessions ahead of time, you will save yourself from frustration should disaster strike. Your independent insurance agent can help you determine whether your property is adequately protected.

Flood Disaster Tips

Did you know...

Floods and flash floods are the most common natural disaster, occurring in all 50 states?
Floods cause devastating damage to buildings and personal belongings?
One in three flood insurance claims are generated outside areas considered "flood-prone"?
Homeowners insurance does not cover flood damage?

Before a flood:

Make a written, photographic and/or videotaped inventory of household possessions and property, and store it in a safe place (e.g. the home of a relative or safe deposit box) with insurance policies, documents and other valuables.
Take a first aid class from your local American Red Cross chapter.
Assemble a disaster supplies kit that includes a first aid kit, canned food, non-electric can opener; bottled water (emergency managers recommend 3 gallons per person), rubber boots, rubber gloves, battery-powered radio, flashlight and extra batteries.
Identify evacuation locations.

During a flood:

When a warning is issued, listen to local radio and TV stations for information.
When a watch is issued, move furniture and valuables to higher floors of your home.
Abandon your car if stalled in rapidly rising waters and climb to higher ground. Do not drive into any large puddles or into water that seems to be moving rapidly.

After a flood:

Call your insurance agent as soon as possible to see if you need to file a claim.
Make temporary repairs to prevent further damage. Keep all receipts.
Delay permanent repairs until your insurer approves reimbursement.
Get any necessary construction permits from your community.
Prepare an inventory of all damaged or destroyed personal property. Take photos of damaged areas.
Save remnants of damaged or destroyed property for your insurance company adjuster.
Meet with your adjuster before signing anything with contractors, lawyers or public adjuster.
Let your car dry out before trying to start it.

What to ask your insurance agent:
Protecting yourself is easy!

Flood insurance picks up where your homeowners insurance leaves off. It is not expensive, especially when compared with the monthly payments for disaster loans, and it is easy to get -- just call your insurance agent.

What to ask your insurance agent:

Do I have flood insurance?
How much flood insurance should I purchase?
How much contents coverage should I purchase?
Should I consider a three-year policy to reduce my premiums?
Do I qualify for a preferred risk policy?
Can I finance my premiums?

Renters Insurance: Shattering A Few Myths

Many renters overlook or underestimate their insurance needs because they believe only "homeowners" need insurance. However, just as most of us would not think of owning an automobile without auto insurance, renters need protection for their personal possessions and from liability. Even the smallest apartment can easily contain personal property worth thousands of dollars. And all of us are at risk for liability. This information, prepared by the Independent Insurance Agents of America, provides you with important information about renters insurance.

Common Renting Myths

MYTH #1 - Insurance is too expensive. Some renters fail to insure their personal possessions because they believe insurance is too expensive, but renters insurance is typically available for as little as $100 a year.
MYTH #2 - The insurance carried by my landlord protects me. Many renters think they are protected under their landlord insurance policy. However, the property owner insurance covers the building itself and seldom tenant possessions. Clarify this with your landlord before signing a lease.
MYTH #3 - My landlord is liable if someone trips in my apartment and gets injured. Again, the owner policy may specifically exclude liability for something that occurs within your rented residence. You could be held liable for injury to another person or damage property of another person if the incident occurred within your rented residence.

A Look At Premiums

Renters insurance, because you are not insuring a building, is surprisingly inexpensive. Of course, like all property protection policies, the value of the property to be insured and other risk factors are weighed by the insurance company to determine your premium. As with your automobile insurance, your renters deductible is the amount you agree to pay in the event of a loss. For example, if your $2,000 stereo is stolen from your home, and you have a deductible of $250, the insurance company would pay you $1,750, which is $2,000 minus your deductible.

Coverage For All

Renters insurance offers the same general personal property coverage and liability protection as a homeowners policy. Property insurance covers the cost of repairing or replacing personal property that has been damaged, destroyed or stolen. Your property is covered both within your home and when you are traveling. You also receive liability protection. If someone suffers an injury or damage to their property because of something you did or did not do, you could be liable. If, for example, the oak dresser which belonged to your grandmother dents the walls in your apartment lobby while you are carrying it into the building, you could be held liable. Likewise, if a fire starts in your apartment and spreads throughout the building, and you are deemed at fault, you could be held liable for damage to the entire building.

In addition, most renters policies include coverage for additional living expenses (also called "loss-of-use" coverage) if you are forced by fire or other damage to temporarily live elsewhere.

Alterations For A Better Fit

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive. Other additions to your renters insurance that add or change the policy provisions are called endorsements. Some endorsements extend the number of risks insured against, some cover property otherwise excluded and some increase the amount the insurer will pay for a covered loss.

Also, it is important to note that the standard policy excludes damage from earthquakes and floods, so talk to your independent insurance agent about coverage for these incidents.

What Is It All Worth?

If your property does get damaged, destroyed or stolen, the insurance company will use one of two ways to determine its value:

A Look At Premiums

Renters insurance, because you are not insuring a building, is surprisingly inexpensive. Of course, like all property protection policies, the value of the property to be insured and other risk factors are weighed by the insurance company to determine your premium. As with your automobile insurance, your renters deductible is the amount you agree to pay in the event of a loss. For example, if your $2,000 stereo is stolen from your home, and you have a deductible of $250, the insurance company would pay you $1,750, which is $2,000 minus your deductible.

Coverage For All

Renters insurance offers the same general personal property coverage and liability protection as a homeowners policy. Property insurance covers the cost of repairing or replacing personal property that has been damaged, destroyed or stolen. Your property is covered both within your home and when you are traveling. You also receive liability protection. If someone suffers an injury or damage to their property because of something you did or did not do, you could be liable. If, for example, the oak dresser which belonged to your grandmother dents the walls in your apartment lobby while you are carrying it into the building, you could be held liable. Likewise, if a fire starts in your apartment and spreads throughout the building, and you are deemed at fault, you could be held liable for damage to the entire building.

In addition, most renters policies include coverage for additional living expenses (also called "loss-of-use" coverage) if you are forced by fire or other damage to temporarily live elsewhere.

Alterations For A Better Fit

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite inexpensive. Other additions to your renters insurance that add or change the policy provisions are called endorsements. Some endorsements extend the number of risks insured against, some cover property otherwise excluded and some increase the amount the insurer will pay for a covered loss.

Also, it is important to note that the standard policy excludes damage from earthquakes and floods, so talk to your independent insurance agent about coverage for these incidents.

What Is It All Worth?

If your property does get damaged, destroyed or stolen, the insurance company will use one of two ways to determine its value:

Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your 7-year-old TV set gets damaged in a fire, the value of it might have depreciated 50%. Therefore, the amount of your coverage for that set would be $250.
Replacement Coverage - The cost of replacing an item without deducting for depreciation. So current cost for a TV set with features similar to the 7-year-old one damaged by fire would determine the amount of compensation. If it still costs $500 today, that would be the amount of your coverage. You can select which type of coverage you would prefer. Having replacement coverage adds only about 10% to 15% to the cost of the premium and may well be worth this slight increase.

A Final Note

At least once during a lifetime most people will rent a home. Paying rent instead of a mortgage payment does not make your personal possessions any less valuable. Should your belongings be damaged or destroyed, or should someone suffer an injury in your home, renters insurance can offer the peace of mind of knowing that you are protected. Your independent insurance agent can help you find the best combination of coverage and price to meet your rental insurance needs.

Protect Your Roof

What causes ice dams, and how can you prevent them from happening?

Ice dams occur after a heavy snowfall is followed by very cold weather. As heat escapes from your house through the attic, snow on the roof starts to melt, and trickle down the eaves. An icy crust then forms, keeping the wind from blowing snow off the roof. This continues until a dam of ice has formed. This ice then expands and backs up closer to the warm roofing. It melts again, and finds its way under the roof shingles. This causes damage to the interior of your home as well as the roof.

You can help prevent roof and interior damage to your home by doing the following:

	Remove as much snow as possible from your roof.
	Inspect and clean your gutters regularly.
	Insulate the attic floor to help keep the attic roof cold. Your goal should be to keep it as cold on the underside of your roof as it is outside.
	Be sure vents are not blocked, and cold air is flowing along the underside of your roof.
Remember, a cold attic does not melt snow as quickly as a warm one.

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