You’ve found your new home. It has great bones, hasn’t been updated, and you can make it into something special! All it needs is a little, or maybe a lot, of remodeling love to go with your vision of how to bring it up to date and make it uniquely yours. If you’re planning something like this, don’t let home insurance derail your vision.
I sat in a meeting with one of our carriers last week and heard an interesting statistic. On average, insurance companies who wrote Texas home policies in 2016 paid $1.30 out in storm related claims last year for every $1.00 of premium they received. That doesn’t include non-storm related claims such as fire, theft, water damage, etc. The issue facing all home insurance companies is how to remain profitable without raising rates astronomically. One method carriers are examining is roof depreciation schedules.
A client called me Monday morning after receiving the estimate to replace his roof from the March hail storm which struck north Texas. Before calling, he’d emailed me a copy of the claim estimate to help guide our conversation. He had a couple of questions about the estimate and payment structure, however, his biggest concern centered on one issue. If his home insurance policy is a replacement cost policy, why does the repair estimate refer to the depreciated value of his roof.
I’ve had several conversations with clients and home buyers about roofs and home insurance since the March 26th hail storm which struck north Texas. Hail, ranging in size from golf ball to softball, fell on Justin eastward to McKinney. Thousands of roofs were damaged or destroyed by the hail resulting in the roofing industry spinning into high gear. Let’s examine some of the questions I’ve addressed in the past week pertaining to replacing roofs and its impact on home insurance.
Rising home prices in the Dallas / Fort Worth area mean larger mortgages in most cases which raises an interesting question, “How much home insurance is needed when you buy a home?” Stated another way, should the amount of home insurance be equal to the purchase price, the loan value, or some other number?
2015 ended with a bang as tornados swept across north Texas damaging or destroying over 1,000 homes and damaging vehicles and commercial properties. Spring of 2016 was not to be outdone either. Last March and April, north Texas was struck by 3 hail storms and San Antonio suffered the worst hail storm in Texas history. The four hail storms combined claims totaled about $1.3 billion in damages to cars, homes, and businesses. Let’s examine how home insurance is being impacted this year.
The spring buying season started early this year. February felt as busy as any April, May, or June, I’ve ever experienced, and it should only grow as we move into the prime spring buying season. I believe it’s a perfect time to look at how home insurance can impact home buyers when purchasing a new home.
I received an email Monday from Kathy O’Brien, a realtor with Dave Perry-Miller’s Intown office. She asked a very interesting question concerning the post I wrote two weeks ago on the impact rising home prices have on home insurance (see https://wiseinsurancegroup.com/impact-rising-home-prices-home-insurance/). The post I wrote approached the topic from a home buyer, however, Kathy’s question was directed from the point of view of a north Texas homeowner. Her question was, “With home values increasing significantly over the past few years, what, if anything, can home owners/consumers do to ensure their property is sufficiently covered?”
I’m a little partial to homes with metal roofs. They are resilient, look pretty, and there’s nothing like falling asleep to the sound of rain falling on one. Most home insurance companies tend like them too as they last long and are fire and hail resistant. There are some home insurance policies though, that may contain a surprise most homeowners aren’t aware of.
Home prices in the Dallas / Fort Worth metroplex have steadily risen since 2010. In December, they were up another 8.5% according to a recent Dallas Morning News article. Over the past 4 years, home prices in north Texas have surged more than 40%, and this impacts home buyers in several ways beyond just paying more for a home. The impact is felt with mortgages and even home insurance.
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