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 last week to add a new car to their car insurance policy, bringing the total number of vehicles on the policy to three. I added the car to the policy, then emailed them the ID card for the new car along with the new annual rate for their policy. They were a little surprised at the rate and wanted to know why it increased as much as it did with the new car. I reviewed their rate with my other carriers and verified the new rate was in-line with them. The cost of their new vehicle is the biggest factor that impacted their new rate.
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.
Consumer Reports released a study last week which was published online that appeared on Yahoo and various other websites. It’s one of the most interesting articles I’ve read on car insurance pricing from a consumer organization in some time. The conclusion of the Consumer Reports study is blue collar drivers pay more for car insurance than do white collar drivers. The amount of the difference isn’t trivial either; it’s $681 a year more on average nationally.
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.
What’s your guess for the car that is number one in getting ticketed the most? A bright red or black sports car such as a Nissan 350Z, Audi TT, or BMW M Series? Maybe an exotic like a Lamborghini, Ferrari, Lotus, or McLaren? Perhaps a more common Mazda M5, Camaro, Mustang, or Corvette? If any of these cars were your top pick, you’d be wrong.
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.
I’m working with a number of clients who are parents of teens. They usually call me when their son or daughter is about to get their learner’s permit to ask several questions relating to their car insurance policy and their teen who’s about to drive. The questions include when they have to add them to their car insurance policy and does it make a difference whether they do the classroom or parent led driver training. The brave parents want to know what it will cost to add their teen driver to their car insurance policy when they get their license!
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.
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