3 Other Things You Might Not Realize Are Covered

Insurance companies definitely aren’t just throwing in coverage for things that will never happen; in fact, there’s some really great clauses for things that happen all the time – or at least have a greater chance of happening — that you might be surprised to see in the fine print.

• MOLD – “What?! Lies! Homeowner’s insurance never covers mold!” Aha! You are wrong, sir! That is a myth! It’s true that some insurance companies don’t include coverage for mold, but it isn’t the standard. In fact, many homeowner’s find this out after they’ve already paid a pretty penny for mold damage and could have had the whole thing covered!

Of course, there are stipulations for mold coverage, but they’re reasonable and usually have to do with what caused the mold. If your policy covers things like busted pipes, then the mold is covered. If there’s a flash flood, then it’s not. Also, if mold occurs as a result of neglect, it won’t be covered.

• DOG BITES – “That’s a useless clause. My dog would never do that.” Don’t you think that’s what every person who’s ever had a dog bite someone has said at some point? Every year, 4.7 million people are bitten by dogs, according to the CDC – that results in nearly 800,000 injuries that need medical attention.

And – guess what? 50% of that number take place on the dog owner’s own property. Bill Wilson, from the Independent Insurance Agents & Brokers of America states, “Dog bites are probably the single most common cause of liability claims on a homeowner’s policy. Most insurance policies will cover the medical bills for someone bit by a dog—or a cat, snake, or other domestic animal, for that matter—and even pay lost wages if the person can’t work.”

• METEORS – “What?! What good is that?! It’s not like meteors fall every other day!” I’ll give you that one – meteors don’t fall every other day, but they do fall occasionally, and the clause that includes meteors also includes all other things that can fall from the sky. This includes things like tree limbs, debris from airplanes, and as mentioned, meteors.

Stipulations for this clause include that the damage must be solely the result of whatever fell on your house – if you let termites eat through your house and a twig fell and knocked the whole thing over… you won’t be covered.

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Steps to Better Homeowners Insurance

3 Steps to Better Homeowners Insurance,

Florida Homeowner Insurance

My client Barbara was sure she couldn’t save any more money. “It’s really tight,” she told me as we scoured her budget. Her goal was to save $250 per check into her 401k plan. Right now she was saving $210. We only needed $40.

Steps to Better Homeowners Insurance

She was correct. From everything she showed me on paper, it was really, really tight.

Barbara didn’t waste money. She diligently saved into her retirement plan at work, brought a brown bag lunch every day, and was proud of her “dumb” phone. If she could make calls and get voicemail it was good enough for her. No need for a big contract to play games or get email.

I couldn’t find fault in her grocery budget or entertainment expenses. She enjoyed spending her vacation time in a small garden at home. This even helped with bills (and it was nice getting the fresh zucchini from her every year….a benefit of being her financial advisor). Hell, I wanted to help Barbara find money to save because she deserved to get out more!

So, I had to dig deeper. Where did we find money?


Her homeowners coverage.

It wasn’t a ton of cash, but based on her overall expense, finding $40 per month was like a windfall. Here is what we did.

1) Shopped around. This was the easy part that everyone knows. In fact, Barbara had already shopped six months earlier. What she hadn’t done was checked with her credit union to see if she could get a discount through them. She could. Other clients of mine found discounts through their union, workplace, religious group, or school.

2) Asked for discounts. Once we found a cheaper insurer, Barbara secured lower rates because she was a senior citizen and because she had a home security system. In fact, Barbara hadn’t been using a home security system because she thought it was too expensive. She called a company to have it turned on, and was surprised to find that it paid for itself with the policy discount. She could feel safer and not raise her budget!

3) Paid in advance. The insurance company she chose offered two rate plans: monthly or every six months. By paying at once, Barbara was able to lower her expense even more. How did she afford that cost? Because she had an emergency fund she took the money from that account. Then she paid back into the emergency fund every month. Although she’s paying her “homeowners” account monthly, because they only receive a check semiannually, she receives a better rate.

She could have bundled her coverage with other assets (auto insurance, for example), but that wouldn’t have saved her money in this case. The biggest key to her success was to ask each company what discounts she was eligible to receive, what she had to do to get them (such as activating her home security, or, for another client, getting rid of the trampoline), and whether there were special rates for paying early. Because she asked those questions, Barbara was happier, safer at home, and a little richer.

….and she was a nice source of referrals to her financial advisor! (Bonus for me!)

Any other tips you used to get lower cost or better homeowners coverage?

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Florida Homeowner Insurance - How to Insure Your Pets under Homeowners

Florida Homeowner Insurance - How to Insure Your Pets under Homeowners

How to Insure Your Pets under Homeowners

A tip on pet insurance. Most people or most families in the United States have some form of animal, a dog, a cat. However, we would suggest that before you get a pet, that you contact your insurance agent and make sure it's an acceptable breed of animal. A lot of insurance companies do not like Pit Bulls, Rottweilers, Dobermans, German Shepherds, Akitas, for the fear of the biting history

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Florida Homeowners Insurance-Insurance Company Ratings

Frank: One of things to consider when buying insurance is the strength of the company. There's basically two different rating agencies. There's a company called A.M. Best, and there's a second company called Demotech. A.M. Best is the one most often used on a national basis. They require five years of business before they'll give you a rating.

Florida Homeowners Insurance-Insurance Company Ratings

Kevin: Right. And it's extremely important that you understand what the rating of your company is or that you have an insurance agent who is willing to explain to you the importance of your insurance company's rating and why that matters is because when you have widespread damage, catastrophic losses like we have in Florida when hurricanes come through. These are not isolated incidents. This is not one house getting blown down. This is damage across counties, across communities that can add up to be millions and millions and millions of dollars worth of damage. And when that potential is there, you need to be sure that you've got an insurance company that is financially strong enough and has the infrastructure to be able to handle that many claims at once and to be able to pay you what you think you're supposed to be getting when you buy the insurance from them in the first place. An insurance agent can help you understand that by simply going over what the rating of the company is and telling you a little about how that company does business.

Frank: A couple of things to think of. In Florida, we basically have two types of companies. We have the national companies, which are the household names: Metropolitan, State Farm, Travelers, Allstate, Nationwide. Most of these companies really now have stopped taking on new policies, so what you have is you have some regional ones, and you have two sets of regionals. You have regionals that started after Hurricane Andrew. Now, they've been around now for about 15 years. Those companies, what's nice about them is they've been through the '04 hurricane season. They have a very good handle on how to get your claims fixed and resolved in a timely manner. What you have now is, after the '04 and '05 hurricane seasons, there's a lot of new startup companies that are new. They really don't have that experience to go through a hurricane. I like to equate it to directions. If you go somewhere once on a first time, you may get lost. The second time, it's a little easier. The third and the fourth, it gets a little easier. Probably no problem. When you have a hurricane and there's widespread damage, you don't want it to be the first time your company's ever had that experience. So, you want them to know how to handle this, not going through it for the first time. So, again, I would really look at the company, ask the agent how long he or she has represented this company, how did they do during the '04 and '05 hurricane season, have they had any experience in this? I think it's important.

Kevin: It's extremely important because the last thing you want is to have your claim getting delayed or to have your claim not being settled to the way you think it's supposed to be settled because the insurance company can't keep its house in order. That's the last thing that you as a policy holder want to hear after the worst has happened. So, it's a good idea to talk to your insurance agent, find out a little bit of information about the insurance company that they have your policy with, because it's the company that's going to need to be there with the money to help you get your life rebuilt after the worst has happened. It's extremely important to have enough confidence in your insurance company to know that that's going to happen if there is catastrophic damage. And a conversation with your insurance agent is the best way to answer that question.

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Florida Homeowner Insurance - Condo Insurance

On the topic of homeowners, we’d like to talk about condo insurance. There’s a lot of condos in Florida, and Kevin can give us some information.

Florida Homeowner Insurance - Condo Insurance

There are literally hundreds of thousands of people in this state that choose to make their living in a condominium. And what’s unusual about that arrangement versus the standard homeowner's policy that we’ve talked about is, when you move into a condominium, you have to understand what property is in that complex that you are responsible for insuring versus what the association is responsible for insuring, because you’ve got 2 different interests in that property. And what a lot of people don’t realize is how much of the common property is actually the responsibility of the unit owner. Most people don’t realize that. They just assume that they need to have insurance for whatever they bring into the condominium: their furniture, their electronics, their clothing, all their personal items. And that’s true. But if you look at the declarations you signed when you bought the condominium, chances are they’re gonna require that you cover a few more things that you might not known about.

Typically, you’ll see in the condo docs that the condo’s responsible for the drywall, and that’s it. You’re responsible for the paint in. So, if you were gonna rent a shell, and you had to put all your walls up, your doors, your cabinetry, your carpet, your light fixtures, that’s typically what you want to insure on your condo policy. So, you really wanna be careful because, if you have a loss, don’t rely on your condo association to pay for your interior. That’s really your responsibility. It’s a big deal, because there were a lot of claims for condos after 2004 and 2005.

A lot of people buy the condo unit, and they go in, and there’s already fixtures there. There’s already counters there. There’s already cabinets there. There’s already appliances there, and they assume because, they had no control over those items being there or being attached or whatever the case, that means that it’s the responsibility of the association to insure that stuff. If you review the declarations, it clearly states, in some cases, no, the purchaser of the unit is responsible for insuring those things. So, it's extremely important if you buy a condominium or if you are considering buying a condominium, talk with your insurance agent, have them look at the insurance requirements of the condominium declarations that are presented to you and let you know exactly what your responsible for insuring, because it can make a tremendous difference both in the cost of your insurance and how that claim gets paid when the loss happens.

You have to be extremely careful. At one point in time after 2004, a lot of associations decided, especially if they were single story units, then they were gonna change they way they insured it. They were gonna make the whole thing the responsibility of the unit owner, because they couldn’t find insurance. It was too pricey. So, again, you wanna make sure you bring your condo docs, current, not old ones, current ones to your agent, have him review them, make sure you know what your responsible for, and then buy the adequate coverage.

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