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Car Insurance Coverage: Uninsured Motorist & Deductibles

Car Insurance Coverage: Uninsured Motorist & Deductibles

Last week, I wrote about the one required coverage on any Texas car insurance policy. It is liability coverage (see http://wiseinsurancegroup.com/car-insurance-one-coverage-required-texas/). I’m going to continue on the theme of car insurance coverage this week as we look at two more coverage types which are Uninsured Motorist and deductibles. UM/UIM: Uninsured motorist coverage is usually referenced on a policy or quote as UM/UIM which stands for uninsured motorist / under insured motorist. This coverage is designed to protect you from other drivers; ones with no car insurance or not enough car insurance coverage. Specifically, if you’re hit by someone who doesn’t have car insurance, this coverage pays to repair or total your car based on your policy’s amount of coverage or the actual cash value of your car. It also pays if the person who hits you doesn’t have enough car insurance coverage to fully pay for repairs or the totaled value of your vehicle. Like liability coverage, there are two components to uninsured motorist coverage, medical or bodily injury coverage and property damage. The bodily injury coverage helps defray the cost of medical care for you and anyone riding in the car with you. The property damage portion is what’s used to repair or pay for the totaled value of your car. There are two benefits to carrying UM/UIM coverage. The first one is that it reduces your out of pocket deductible to $250 versus the collision deductible you may carry. In addition, you are providing an additional layer of medical coverage for you and anyone riding with you which can be very helpful when you consider many medical plans have high deductibles and co-pays. Deductibles: Most people look at deductibles as the amount of money they will pay out of pocket before their car insurance policy pays toward repairing or totaling their vehicle. That is correct in one sense. Having a deductible on your policy also indicates you have this coverage. Aside from the uninsured motorist deductible, the other two types of deductibles are collision and comprehensive. The collision deductible applies to all types of collisions such as rear-ending another car, running into a fence, or even hitting a pedestrian. These are usually at fault accidents when you hit another vehicle or object. It may also be applied in a not at fault accident where someone hit your vehicle such as when it’s parked at the grocery store, mall or elsewhere. The comprehensive deductible, which is also referred to as “other than collision”, addresses other types of claims such as a rock hitting your windshield, a tree falling on your car, hail damage, someone vandalizing your car, a flood, or if your vehicle...

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Home Insurance and Its Impact on Closing

Home Insurance and Its Impact on Closing

I spoke to a group of realtors last week. It was the monthly meeting for the JB Real Estate Group (www.jbrealestategroup.com), and the topic I presented was, How To Keep Home Insurance from Derailing the Closing. We had a great discussion and I thought it would be beneficial to share what I presented here. I believe this information is helpful whether you are a home buyer, seller, realtor (listing or buying agent), or even a mortgage loan officer. Buyer: It all begins with the buyer obtaining a home insurance quote once their offer has been accepted. This should be a “hard” quote which means the agent has run a replacement cost estimate and the CLUE report. The replacement cost estimate determines the amount of home insurance needed to replace your home in the event of a total loss. Ask the agent if they ran a replacement cost estimate. If they didn’t, find another agent. The CLUE report shows both claims the seller has filed over the last 3 to 5 years, as well as, the buyer’s claims. Some carriers rate for both sets of claims while others only rate for the buyer’s claims. Either way, claims make the home insurance cost more than it would if there were no claims. This helps the buyer confirm nothing is missing in the seller’s disclosure such as a water leak or a hail claim and determine what repairs were made or not made. Ask the agent for a copy of the CLUE report. Seller: The seller should pull all documentation for claims they’ve filed over the past 5 years. Documentation should include copies of repair bills and paid invoices showing what repairs have been made. This is especially helpful if the sellers have replaced the roof which provides a discount on the buyer’s home insurance. If a claim has been filed after the seller’s disclosure has been completed, it should be updated to alleviate any surprises to the buyers. I’ve seen a purchase almost fall through because of this. Listing Agent: When you meet with the sellers to complete the seller’s disclosure, ask about prior claims. I’d also encourage you to ask about any instances where they talked about a possible claim with their agent but did not file one. I’ve seen too many inquiries turn into $0 paid claims, and every underwriter I’ve talked with wants to know what happened and why it wasn’t paid. Help your client pull documents together to share with their buyer. Buyer’s Agent: Once the offer is made, encourage the buyer to get a home insurance quote as described above. Better to start over now because of a prior claim than...

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