I’ve had a number of conversations with people about home insurance over the last few of weeks. Based on those conversations and the questions I’ve addressed, I wanted to write a series on the different types of home insurance policies to provide a foundation for home buyers and owners to reference.
A client called me a few weeks ago. We’ve written several insurance policies on some rental properties he and his wife own. They are all traditional single family homes in the Dallas / Fort Worth area. The conversation was interesting because they are looking at selling several of their properties and replacing them with mobile homes. I thought it would be interesting to write about mobile home insurance and how it’s similar yet different from a home insurance policy on a traditional home.
In order to answer my question whether home insurance would cover a home on Airbnb or VRBO, I talked with underwriters from each of the companies I represent. Each underwriter gave me the same answer, that their home insurance policy would not cover a loss if the homeowner is providing temporary lodging via any of these services. The reason is there is too much risk exposure for the home insurance company for any type of loss.
I received a call last month from an investment property owner. He’d bought a duplex in Houston earlier this year as a rental property and had a question about the insurance he’d originally purchased from another agent. Even though he had only bought one side of the duplex, he’d been told most carriers required both sides be covered in order to write a duplex insurance policy. He wanted to know if that was correct.
Home insurance companies provide a number of discounts. There are discounts for married couples, retired couples, homeowners with monitored alarms, new roofs, newer homes, updates to plumbing, electrical, and cooling systems, and for placing your car insurance with the same company too. In most cases, these discounts are given for something you do or have, not for giving something up. The home insurance discount Dave wrote about though was for something a policyholder gives up.
Most Texas homeowners never have to think about wind insurance, it’s included with their home policy. When you see the wind / hail deductible listed with an amount or percentage next to it, this indicates your home policy covers it. Those Texans who own homes along our Gulf Coast, however, do need to think about wind insurance. Many home insurance companies don’t include wind coverage so those homeowners have to look elsewhere for this coverage.
Tropical Storm Colin serves as a great reminder for Texas homeowners to take a few minutes to perform an insurance review that’s focused on hurricanes and the type of claims that occur. To help with that, let’s delineate who and what needs to be reviewed by tiers and the type of coverage.
The 2016 hurricane season starts tomorrow. It runs from June 1 through the end of November. Some forecasters are predicting the 2016 season could be the biggest since 2012 with 10 to 16 tropical storms and 4 to 8 hurricanes with 1 to 4 reaching major storm status.
One of my Houston clients called me in April. It was the morning after they’d been evacuated by boat from their home in the middle of the night as north west Houston flooded. The water eventually reached 10 feet deep in the street and topped out about 2 plus feet on the first floor of her and her husband’s home. I used that conversation to review the preparations she and her husband made in advance of the floodwaters and outline a plan of what to do when the water receded. They good news is they have flood insurance!
Last week’s home post outlined some of the questions I’ve been asked about flood insurance and the answers I’ve given (see https://wiseinsurancegroup.com/questions-answers-flood-insurance/). This week, I want to answer one more question, and that is, “Who needs flood insurance?” I don’t believe everyone needs it, however, there are some who do whose home may not even be in a flood zone.
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