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Townhouse Insurance

Townhouse Insurance

A friend of mine sent me an email last week asking me to provide her with an insurance quote for her new townhouse that’s under construction in Plano, Texas. She’s looking forward to moving into her new home in April once everything’s finished. In order to provide her with the right kind of townhouse insurance, I needed to know one thing, what does the homeowner’s association insurance policy cover? Townhouse insurance can be written in one of two ways, either as a single-family home or as a condo. The key to knowing which way to write the policy is determined by the homeowner association policy. Single Family Home Coverage: When the association policy does not provide coverage for the townhouse roof, exterior walls, and foundation, the townhouse insurance will be written using a single-family home policy. This means the policy covers the entire structure (roof, exterior siding, foundation, interior finish out, etc.), as well as, the owner’s personal property or contents. Condo Coverage: If, however, the homeowner association covers the townhouse’s roof, exterior walls, framing, and foundation, a condo policy is used. This is because the HOA policy covers everything but the walls, or sheetrock, in. A condo policy provides coverage for the interior finish out (sheetrock, fixtures, floor coverings, cabinetry, etc.), as well as, the owner’s personal property. Interestingly, more and more townhouse communities are taking this approach with their association insurance policies. The one option that is important to add in this instance is the homeowner assessment coverage. As I mentioned last week (see http://wiseinsurancegroup.com/important-condo-insurance-option/), this coverage protects the townhouse owner in the event they are assessed for an association claim such as having to replace the roofs after a major hail storm. Confirming this for my friend simply took me contacting the HOA member responsible for the association’s policy. They confirmed my friend only needed a condo level policy, not a single-family home policy. Providing her with the right policy means I didn’t write the wrong policy leaving her with too much or too little coverage. It also meant a significant savings, somewhere between $500 and $1,000 a year which made her very happy! What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance Share...

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A Very Important Condo Insurance Option to Have!

A Very Important Condo Insurance Option to Have!

Condo insurance policies, like home and renter’s insurance, have many options that can be added to the policy. There are options for water leaks and the damage they cause, home equipment breakdown coverage, replacement cost versus actual cash value coverage, identity theft, credit card fraud, and even scheduled items coverage. There is one option no condo insurance policy should be without though, and that is homeowner’s assessment coverage. The homeowner’s assessment option provides coverage for the condo owner or buyer when the Homeowners Association, or HOA, assesses the owner to help pay for repairs to the building or roof that the HOA policy doesn’t cover or provide enough coverage for. Let’s examine what it does and doesn’t cover. What It Covers: This covers any assessment that is requested resulting from an insurance claim. For example, if there is a bad hail storm and the roof(s) need to be replaced, this option would provide coverage if the association assesses owners to help pay for replacing the roofs. Other examples include assessments for a major plumbing leak, a fire, or severe wind damage. What It Doesn’t Cover: HOA assessment coverage does not cover assessments that are not related to an insurance claim. This could be for cosmetic updates, new pool furniture, maintenance items, etc. Those, unfortunately, will be paid from on an out of pocket basis by each owner. Most condo insurance carriers provide limits ranging from $500 to $50,000. I usually recommend carrying a limit of $25,000. The cost to add this to a policy ranges from $0 up to $150 per year which is much easier to handle than an assessment of $25,000! What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance   Share...

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A New Drone Regulation!

A New Drone Regulation!

Every once in a while, I read something that takes me by surprise and causes me to have an “Aha!” moment! Such was the case in a recent Insurance Journal article I thought you’d find entertaining and may give you an “Aha!” of your own. New Jersey has become the first state in the country to propose a new regulation on drone operation. Specifically, the proposed bill makes it illegal to operate a drone while intoxicated or high! Assemblywoman Annette Quijano, the sponsor of the bill, believes prohibiting inebriated drone operation could prevent dangerous situations such as near collisions with aircraft and interference with fire-control operations. The bill also establishes penalties for using a drone to hunt or endanger people and property, as well as interfering with correctional institutions and emergency personnel. The blood alcohol level of 0.08 makes you too drunk to fly a drone. Part of the inspiration for Quijano’s proposed bill was an event in 2015. An intoxicated National Geospatial-Intelligence Agency employee accidentally flew a two foot by two foot DGI Phantom drone onto the White House grounds without the Secret Service spotting it. I’m sure the NGIA employee had a fascinating conversation with the Secret Service. There haven’t been a huge number of number of drone accidents in spite of the exponential growth in the number of drones each year. Yet, as the number of drones mushrooms, so does the likelihood of a dangerous accident occurring. I expect similar legislation to become more commonplace across most states. Interestingly, no insurance companies commented on the story. I believe coverage for crashing a drone onto your neighbor’s property could potentially fall under personal liability section of your home, condo, or renter’s insurance policy. Or there may be an optional liability coverage which specifically addresses drone operation. It will be fascinating to see what happens with future legislation and insurance coverage. What do you think? Share your comments, suggestions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance   Share...

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How Much Condo Insurance Do You Need?

How Much Condo Insurance Do You Need?

How much condo insurance an owner needs is one of the more challenging questions I must answer when talking with someone who’s buying or owns a condo. Regardless of how the policy is written (see last week’s post, http://wiseinsurancegroup.com/two-ways-condo-insurance-can-written/), the amount of coverage must be sufficient to protect the finish out of the home and their personal property or contents. Let’s examine how to approach both areas. Finish Out: The finish out coverage amount must be enough to rebuild the interior of the condo including interior walls, wall coverings (standard paint, custom paint, wall paper, paneling, etc.), electrical, light and plumbing fixtures (plugs, ceiling lights, sconces, sinks, faucets, tubs, etc.) and floor coverings (carpet, tile, wood, etc.) on a replacement cost basis. Replacement cost should address materials as well as the labor cost to do this. Some carriers provide a replacement cost estimation tool that estimates this for me while others don’t. When working with those that don’t, I either borrow the amount needed for finish out from another carrier and use that, or I follow a range based on the grade of finish out. The rules of thumb were provided to me by a builder friend and are below. Builder’s or economy grade about $50 a square foot Semi-custom grade between $55 and $75 a square foot Custom grade runs between $75 and $125 a square foot Luxury grade runs $130 a square foot or more Once you determine your grade, then multiply the cost per square foot by the number of square feet and you’ll know how much coverage is needed to rebuild your home. Contents: Determining what it will take to refurnish your home and replace your other personal property can also be challenging. I first recommend looking at your furniture and making a list of each item and an approximate cost to replace it based on where you purchased it. Visit store websites for current pricing if it’s been a few years since you bought your sofa, tables, artwork, decorative items, electronics, and chairs. Next look at the kitchen and begin to make a list of what you own estimating the cost to replace cookware, dinner ware, glasses, etc. Visit store websites to help determine cost. Next, move to your closet and dresser to do the same thing with all your clothing keeping in mind where you shop. Add all of this up and you’ll have an accurate estimate of how much coverage is needed for your personal property. This may take a couple of hours, but by doing this exercise you’ll have an excellent idea of how much condo insurance you need. What do you think? Share your comments,...

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Ancestry, Genetic Testing, and Life Insurance

Ancestry, Genetic Testing, and Life Insurance

Genetic testing has mushroomed over the past few years as the cost to have such a test has come down dramatically. For less than $100 you can find out where you come from, who you’re related to, and what your chances are of getting different diseases. One question most people aren’t asking is how will this impact your ability to get life insurance? Genetic testing can tell you a lot. Where you came from, who you’re related to, your percentage of Neanderthal origins, as well as, whether you’re truly Irish or Italian! Some tests can even provide you with information regarding your health and wellness such as the best exercise plan, supplements, and foods for your genetic make-up. Some will even tell you if you’re predisposed for different diseases or cancers. Knowing this can arm you to put together a plan with your physician but it can also cause you to be denied life insurance for a potential future disease you don’t have yet or may never get. Anything in your medical file can be requested and reviewed by a life insurance company when applying for a policy. If you’ve shared the results of your genetic test with your primary care physician, life insurance companies can use that information to either extend or deny coverage. The results of your genetic test can not be used to deny you health coverage due to the passage in 2008 of the Genetic Information Nondiscrimination Act or GINA. It does not contain such a provision for life insurance. I also believe it’s important to have answers to who will have access to this data and for what purposes? Who owns your genetic results? How could your genetic results be used, and do you have any say in that? Knowing the answers to these questions is as important as what the results of a genetic test can tell you. Should you get a genetic test is up to you, but I’d advise getting life insurance before you have the testing done. Otherwise, you may find yourself without coverage to pay for final expenses or live something to your heirs. What do you think? Share your thoughts, experiences, and questions with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance   Share...

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The Two Ways Condo Insurance Can Be Written

The Two Ways Condo Insurance Can Be Written

I have been working with a first-time condo buyer over the last week. As we reviewed the different condo insurance options available to her from all our carriers, I was reminded of the two different ways insurance companies approach insuring a condo. Let’s look at what condo insurance is designed to cover from a property standpoint and then address how different carriers approach it. Condo insurance is designed to cover two different types of property, the finish out of the person’s condo and their personal property or contents. The finish out means the policy covers from the sheetrock in which is everything you see before you move anything into your new home. This includes the walls, electrical and plumbing fixtures, flooring, and cabinetry. The condo association policy covers the studs out including wall framing, roof, exterior walls and common areas. There should be enough coverage in the policy to rebuild your home if it burned to the ground, exactly as it is at the time the policy is written. If you remodele your home and put in a nicer kitchen, master bath, or all new hardwoods, then the amount of coverage may need to be increased to properly cover your home’s finish out. In addition, a condo insurance policy should also have coverage to replace all your personal property, or contents, including furniture, clothing, appliances, decorative items, kitchenware, electronics, etc. Both the contents and the finish out coverage should be written on a replacement cost basis so that if something did happen, you’d be paid the cost to replace the home and what you moved into it. Some condo insurance policies combine the finish out and the personal property coverage into one amount and refer to the combined amount as personal property. In these cases, the total amount of personal property coverage should be enough to replace both your contents and the finish out of your home. Other companies keep these amounts separate and refer to the amount of finish out coverage as either dwelling coverage of Coverage A. In either case, it’s important to understand the grade of finish out in the home, as well as, what it would take to replace a person’s contents. We only have to look back at last year’s fire at the Preston Place condominiums which destroyed 60 homes to understand that having too little or no coverage actually costs more than what you’d pay for condo insurance over a 20 year period. What do you think? Share your comments, questions, or experiences with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance Share...

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