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Posts Tagged ‘home insurance’

Examining the Causes of Residential Loss

Posted in Caveat Emptor, Property Risks and Solutions, tagged , , , , , , on May 8, 2008| 1 Comment »

To Hedge, or not to Hedge….

 

An interesting question was recently presented on Terri Cullen’s great WSJ blog for her Fiscally Fit column by someone who labeled themselves a “contrarian”. In essence, the post asked: “since the likelihood of losing a home to fire is remote, why bother insuring the home for the full cost to rebuild?”

 

I don’t think this question is contrarian at all, I think it is fair and logical. Savvy consumers know to beware of insurance “scare mongers”, who would have us believe that the sky is about to fall on all of our homes. Meanwhile, statistics reveal that the risk of a fire totally destroying any single home is remote.  Click here for some good insights, or check this site:  https://www.usfa.dhs.gov/statistics/national/residential.shtm

 

For those who wish to hedge the unlikely risk of a fire consuming their home by partially insuring the cost to rebuild, the insurance industry has erected significant pitfalls. While these can be navigated, doing so requires careful guidance.

 

As both a risk advisor and an insurance consumer, I would also describe myself as a “contrarian”. Meanwhile, knowing a.) fire is but one of the losses that can wreak significant damage to my home ( Click this link for a chart showing the leading losses by cause to homes), and b.) the insurance carriers who “allow” consumers to hedge against total losses do so by inserting numerous contract provisions that greatly reduce the amount they will pay after a loss, I would never elect to hedge the slight risk of a total loss by selecting a policy that offers “partial coverage”.  Others I know consider this a risk worth accepting. Neither approach can be judged “right” or “wrong” until after a lifetime of home ownership.

 

It is always wise to examine risks from different perspectives. In this instance, there is real risk in placing coverage with insurance carriers who so graciously permit you to partially insure your home.

 

 

 

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Not Your Father’s Home Security System

Posted in Property Risks and Solutions, tagged , , , , , , , , , on April 23, 2008| Leave a Comment »

While having a fire and burglar alarm system can offer some peace of mind, most property owners are curious to know how technology can help them better protect their home — and their families while at home. While I am not an expert on home security, I am a good resource in directing homeowners to the select group of specialists focused on advanced home security and “smart home” technology.

 

One organization I’ve worked with locally has merged advances in home security with smart home technology in an easy to use way that offers great home security and utility. Connected Hearth is an exciting service provider, with a website that lets you monitor and control your home from anywhere in the world. Through ConnectedHearth.com, you can control your security system, your heat and A/C, your indoor and outdoor lighting. You can pan a camera throughout your house. You can even have a hot cup of espresso waiting for you when you arrive. All this, from a computer. Wherever you happen to be.  Click on this link to be re-directed  to their web site.

 

Or, feel welcome to contact me for information on other new advances in home security, and to learn which carriers are providing real incentives to improve the loss prevention features in the homes they insure.

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Toasting Marshmallows

Posted in Property Risks and Solutions, tagged , , , , , , , , on March 6, 2008| Leave a Comment »

It is alarming, but true: depending upon where your home is located, your local fire department may not have much of a chance of extinguishing a fire in your home. 

Having worked for many years as a residential appraiser with Chubb, my colleague, Melissa Apostle, provided The Robb Report with several great suggestions on how vacation homeowners can work to improve the response time they can hope to receive from their local fire departments. The article – “A little preplanning can save your home if a fire strikes” – appears in the March 2008 Vacation Homes edition of The Robb Report.

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How Much Would it Cost to Rebuild?

Posted in Caveat Emptor, Property Risks and Solutions, tagged , , , , , , , on March 6, 2008| Leave a Comment »

It is alarming how many people confuse the purchase price or appraised value of a residence with the cost to rebuild it.

The common thinking: My house is worth X, the land is probably worth 30 – 40% of that, so I will insure it for 70% of X, since the property won’t burn. Realtors, mortgage lenders, and tax assessors confuse the issue by inserting their own valuation methods. Since you will want your insurance policy to provide the coverage to rebuild your home after a loss, you need to insure it for the cost to rebuild it, and not some other unrelated value. You should also want your insurance carrier to guarantee that they will provide the full costs to rebuild should those costs escalate.

This excellent New York Times article  explains that ariving at the proper cost to rebuild a home (and securing coverage that actually guarantees to do so) is much easier said than done.

Essentially, the insurance industry takes what can be categorized as two very different approaches to valuing and insuring homes (and cooperative apartments and condominiums). Using the most common approach, you and your agent guesstimate the cost to rebuild your home, and the insurance carrier either accepts or modestly adjusts the result. The downside?  Since this is only a guesstimate, your receive no contractual guarantee that the carrier will pay the full costs to rebuild your home after a covered loss. (often referred to as”the fine print”). The article shares the plight of the many who proceeded using this approach.

The second approach is the one we recommend: have the cost to rebuild calculated by a trained professional, and place coverage with a carrier who will provide a contractual guarantee to rebuild, regardless of any future cost surges. Contact me to learn more about how this can be accomplished.

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Assess Your Flood Risk – in 30 seconds

Posted in Property Risks and Solutions, tagged , , , , , , , , , , , , , on February 16, 2008| Leave a Comment »

Losses caused by floods are much more common than most people believe.  While most in the U.S. reside in a “low risk” flood zone, one third of flood losses last year happened to families living in low risk flood zones.Protecting your home from losses caused by most causes of rising water is inexpensive and smart. This FEMA website enables homeowners to find your relative flood risk today, online, in less than 30 seconds.  http://www.floodsmart.gov/floodsmart/pages/riskassesment/findpropertyform.jsp

Contact me for information on a variety of flood coverage solutions, including protection from carriers that is far more comprehensive than the coverage provided by the Federal Flood Insurance Program.

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