10 Questions to Ask Before Hiring a Real Estate Agent to Sell Your Home

What do you need to know when it comes time to sell your house? Maybe you’re ready to downsize after the kids have grown. Or perhaps you’re family is growing and you need more space. No matter the situation, here are 10 questions to ask before hiring a real estate professional to help you sell your home.

Why Work With a Real Estate Pro in the First Place?

The idea of putting up a “For Sale, By Owner” sign has obvious appeal because there’s no commission to pay. But most buyers themselves typically use agents and a buyer’s agent might hesitate or even refuse to show your property unless another professional is helping to make a deal happen.

“There are only two reasons why I show an FSBO: Either there is no other inventory available, or the price is ridiculously low,” said Bruce Ailion, a realtor with RE/MAX Greater Atlanta. “Many experienced brokers have been burned by an FSBO transaction where the seller did not pay the full, agreed commission, or any commission at all, to the agent who brought the buyer.”

It’s within a real estate professional’s self interest to spread such opinions, but it also reveals a big risk when going the FSBO route. Being guided by a professional, especially if you are selling for the first time, makes a lot of sense.

Is Your Real Estate Professional a Licensed Agent, a Broker or a Realtor? 

There’s a difference—in qualifications required and services offered—among agents, brokers and realtors, even though the terms seem to be used interchangeably.

  • Agents, also called associates, are a starting point for real-estate professionals who have passed all required real-estate classes, along with any state-mandated licensing exams.
  • Brokers have additional qualification requirements, but can also work as agents on their own.  
  • Realtors are members of the National Association of Realtors, who abide by association standards and practices, and agree to uphold a code of ethics.

Why Is Real Estate Licensing Important?

There are other positives to using an agent. Most of the reasons have to do with saving money. Specifically, agents can help you:

  • Keep your own emotions out of the bargaining process
  • Save time; it’s often time consuming to sell and buy property
  • Find a bigger pool of buyers
  • Weed out unserious buyers who are “just looking”
  • Analyze the positives and negatives of your property
  • Protect clients from lawsuits if something goes awry

Licenses also a certain amount of protection for consumers via authorities such as the Better Business Bureau. License requirements for real-estate professionals vary from state to state. While academic degrees are not necessarily required, they still can be helpful:

Completing a degree gives agents a solid foundation in the basics of buying and selling of real estate, allowing you to make more informed decisions about properties, mortgages, interest rates, and stay on top of the latest trends in the industry.

In addition, holding a degree often makes potential agents more attractive to real-estate brokerage firms.

Here’s a recent list of real-estate agent requirementsfor each state. 

How Long Has the Agent Been in Business?

Experience matters. It’s likely the more sales an agent has completed, the more they have learned about the business—what and how to do it, and what to avoid. Inexperienced agents might have more time to concentrate on selling your house because they haven’t stockpiled clientele. But they also haven’t been around the block (literally and figuratively) as much as you might like.

What Strategy Will the Agent Use to Sell Your Home? 

With occasional exceptions, there’s more to moving property than sticking a “For Sale” sign in the front yard (although that could be part of it). What is the strategy? Where and how frequently will your agent advertise? Is it appropriate to use direct mail? What about online marketing? What steps do you need to take to prepare your home for sale? On that note: What about the house’s physical condition to improve to help its potential for sale?

How Good of a Negotiator Is Your Agent? 

Real-estate markets fluctuate. There are “buyers markets” and “sellers markets” that depend on all sorts of economic factors—interest rates, notably—but there are many variables. An agent’s list-price to sales-price ratio can be a helpful statistic to know. A strong listing agent should have a track record for negotiating sales prices close to list prices—the closer to 100 percent, the better.

Can the Agent Help Find Other Professionals Who Are Necessary to the Sale of a House? 

Mortgage brokers, home inspectors, title companies all are part of buying and selling a house. Agents should be able to supply you, in writing, with a list of vendorswith whom they work, along with reasons why they endorse these particular professionals. A word of caution: “Affiliated,” could mean the agent and their broker receive compensation for using a particular vendor, which means you could be paying a premium. 

In addition, get an advance copy of any legal documents is helpful to being better informed.

Can the Agent Produce Referrals? 

If the agent has many online reviews, this step might not be necessary, but no matter how you do it, it’s important to research an agent or agency’s references to inform your opinion. A questionnaire should give you a good start on how to go about doing this.

What Does a Real Estate Agent Cost? 

It is said that sellers typically pay the freight when it comes to real estate commissions, which tend to be 5 to 6 percent of a home’s purchase price. While it’s really a technicality based on how real-estate transactions work legally, fees split between the agents of buyers and sellers typically do come from the seller’s end, which obviously impacts what the list price will be. Therefore, knowing what a listing agent charges becomes an important consideration.

What Topics Might I Have Forgotten?

Selling a home is a process. It’s possible that during your first meeting you might not have all of your questions resolved with answers. Or, you might come up with more questions as the process unfolds. Being comfortable with an agent who listens is vital. It’s especially true if you’re in the process of selling one home and buying a new one. Will your agent be able to answer all your questions to your satisfaction?

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Insurance 101 for House Flippers

Flipping houses hit an 11-year high in 2017. It’s no secret why. Television shows such as “Flip or Flop” and “Rehab Addict” flaunt how flipping houses can provide a lucrative career or side hustle. But it’s not always an easy one. Many things can go south during a flip, including stolen materials or structural damage while the house sits empty. Mishaps that eat into potential profit. 

Most people go into a flip thinking about asking price, cost of renovations and earning potential. It’s important to add insurance coverage to the early list of considerations. 

Below we answer four common insurance questions from flipping newbies. 

What Type of Insurance Policy do I Need for my Flip? 

New house flippers may think general homeowner’s insurance will cover their needs. The type of insurance policy needed for a flip depends on the stage of the project. Here are four policies to consider. A Bond Insurance Group agent can help determine the best policy for each stage of your flip.

Builder’s Risk Policy – A builder’s risk policy covers the property during construction. Work with your insurance agent to ensure all of the needed items, such as an installation floater for materials, are included in the policy. Once you complete construction, secure another type of insurance.

Dwelling Policy – A dwelling policy covers the home’s structure, not the personal belongings inside. This makes it an ideal policy for flippers, whose renovations do not contain personal belongings.

Liability Insurance – Liability coverage protects the owner and investors in the event an injury occurs at their property. 

Vacant Home Insurance – If the property will sit empty for 30-60 days purchase a vacant home insurance policy. Vacant homes pose a higher risk because no one is present to catch big problems, such as flooding. And vacant homes are also more susceptible to theft and vandalism. A standard homeowner’s insurance policy does not include coverage during times of vacancy. If there are delays in the rehab schedule or the house sits on the market empty for months instead of weeks, vacant home insurance provides protection.

How Much Insurance Coverage Do I Need? 

In general, obtain enough insurance to cover the cost of the home after renovation. This accounts for both the replacement of the home at the cost you paid, as well as renovation costs.

When Should I Get Insurance for my Flip?

Don’t wait to contact an insurance agent. Many policies must be in place before a certain percentage of the renovation is complete. Talk to an insurance agentearly in the process, before making an offer, to determine policy options.

Can I Purchase One Policy for Multiple Houses? 

A policy covering multiple pieces of real estate can be especially appealing for investors looking to flip more than one home. This type of coverage does exist but may be harder to come by. An insurance agent can help research and find the right fit.

Ensuring proper insurance covered at each stage of the project is key to protecting your flip. Guard your investment. Contact a Bond Insurance Group agent before jumping into a flip to learn more.

Disaster Strikes Your Second Home: Are You Prepared?

Once you decide you’re financially ready to buy a vacation home, one important step is insuring your new pad. It’s different than buying insurance for a primary residence. Factors such as where it’s located, who stays there and what amenities are available will help determine your home insurance needs.

Your Vacation Home Versus Mother Nature

For many people, the whole idea of a vacation home is to be closer to a sandy beach or among the crisp mountain air. That perfect location for rest and relaxation may come with some additional insurance costs.

Hurricane season and intense rainstorms underscore the importance of knowing your coverage. The point applies to primary residences and vacation homes. When hurricane Florence hit in September 2018, more than 30 million people were under a flood watch and media outlets reported only about 3 percent of North Carolina and South Carolina homeowners held insurance policies

And the cost from homeowners without insurance can be significant. When assessing the aftermath of 2017’s Hurricane Harvey, the Texas Department of Insurance reported the average cost of flood damage caused was $80,000.

You can purchase a policy through the National Flood Insurance Program (NFIP), which is run by the Federal Management Agency (FEMA), or private insurance companies.

Other natural disasters or risks associated with a given region should be considered, as well. 

For areas where earthquakes or other seismic activity are common, supplemental policies to cover these risks are available. If you live in California, you also can receive it through the California Earthquake Agency (CEA). 

But Hawaii homeowners affected by volcanic eruptions and related damage were less likely to find coverage.

Whether it’s one of the aforementioned risks or another threat like wildfire, the area in which the home resides can result in higher deductibles for your property.  

Insuring Your Vacation Home for Guests

Renting out your vacation home is becoming more common. Homeowners do it to recover their investment and earn extra income. Unfortunately, guests can inadvertently hurt themselves or, inexplicable as it may seem, intentionally damage the property.

Don’t have enough insurance — or the right coverage? Additional headaches could follow. So, if you go this route, you’ll want to consider the potential insurance needs.

Before renting out your vacation home and selecting insurance, you’ll want to determine how often you’ll rent out the property and what service you’ll use.

Many insurance carriers will make a distinction based on how often you rent the property. If you plan to rent your vacation home occasionally, your carrier may offer a rental rider to add to your existing homeowners policy. These typically provide limited property and liability coverage. 

If regular renters seem more likely, your needs could warrant business insurance. 

The other important consideration is what service, if any, you will use to rent your property. Because of its large community and ease-of-use, Airbnb is a popular choiceAirbnb offers an insurance program to hosts. It would be easy for a homeowner to think they’re completely protected by the program. That would be a mistake.

It does provide coverage up to $1 million for property and liability claims. But there are still gaps. It doesn’t cover certain liability scenarios, such as assault, or protection for your valuables. 

Having rental guests? Don’t guess. Contact a Bond Insurance Group licensed agent to know what coverage you need. 

Insuring Your Vacation Home From Itself?

First, similar to how coverage works with your primary residence, the home’s specifications and features will affect how much your insurance costs. 

How old is the home? And what materials make up its construction? A carrier will review these factors when pricing coverage.

The style of home also could dictate cost. A four-bedroom, single-occupancy house on the beach may cost more to insure than a condominium two streets away. 

Not only would construction and age affect the costs, but how the property is managed could, too. Features or services provided (or not) by a property’s homeowners association, such as security, may affect cost.

Speaking of features, amenities that pose a risk could increase premiums and the need for more liability coverage. Pools and hot tubs are a prime example. 

Other Implications and Getting Help

When adding up the factors that go into insuring your vacation or second home, the costs can be greater than that of your primary residence.

Keep in mind the implications. If disaster strikes and you don’t have the right coverage, your insurance company could deny your claim. Additionally, in certain scenarios, they might decide to cancel your current policy or request you switch to a business policy. The latter may lead to higher premiums. 

Can Your Smart Home Save You Money?

There’s a definite “cool factor” to the idea of a smart home. The ability to turn lights on and off with your voice, get notified if there’s someone on your porch, or have your smoke detector alert the fire department if it detects a problem seems futuristic. It’s reminiscent of the Jetsons and Iron Man.

Smart home devices definitely are cool – but they’re also practical. Many of the devices aren’t just about convenience, they’re also about safety. Lights that turn on and off automatically when you’re on vacation can deter burglars, smoke detectors that call the fire department can save lives and property, and doorbells that capture porch activity can help serve justice if your belongings are ever stolen.

Even beyond peace of mind, smart devices can help you save money. It goes beyond smart thermostats that monitor the temperature of your home to save you money on utilities. 

It’s time to start looking seriously at how certain smart home devices can help you save money on homeowners insurance. Many insurance companies offer premium discounts of 5 percent to 20 percent for policyholders who install smart devices. The decreased revenue from premiums still costs less than the costs to repair or replace lost or damaged property. 

If you have or plan to install any of the following smart home devices, check to see if you’re eligible for any insurance discounts on the product itself, the installation or your premiums. 

  • Home Security Monitors

  • A small, weatherproof tower with a camera that surveys your home and property. It regularly sends photos to your smartphone. Your insurance company can use these photos to assess any damage that occurs rather than sending out a surveyor. It may allow the insurer to pass along those savings to you in the form of a discount.

  • Video Capture Doorbells

  • Notifies you of motion at your door so you can not only view the activity but communicate two-way with your visitors. These doorbells may be eligible for discounts not only on premium, but on purchase of the device and installation. 

  • Smart Smoke Detectors

  • These devices not only test themselves regularly and notify you of the results, they also alert you and/or the fire department if it detects smoke or carbon monoxide and lets you know where the problem originated. Insurance companies may offer discounts to policyholders with smart smoke detectors installed, since they can help the insurers save significantly on repairing property damaged by smoke or fire. 

  • Interior Fire Sprinklers

  • No longer just for commercial buildings, interior sprinklers can help prevent the spread of any fire that may occur, especially for homes in more remote areas. 

  • Water Sensors Coupled With Auto-Shut-Off Valves

  • Designed to detect flooding that isn’t caused by weather and turn off the water supply to the problematic area. This means if you leave for the weekend and a frozen pipe bursts, you won’t have water gushing into your home the whole time you’re away.

  • Smart Lock Systems

  • Can be controlled manually provide extra security while you’re away from home. Can’t remember if you locked the front door or shut the garage? Just check the app and make sure you’re all locked up. 

In most instances, installing smart home security devices like these won’t negate their purchase prices – you’ll still be paying more than you’re saving in insurance discounts. However, any discounts you receive can help you justify their installation. After all, if you can save a few bucks on your homeowners policy and feel a bit more like Iron Man, why wouldn’t you? 

Any discounts you get on your insurance premiums from installing a smart device is icing on the cake. After all, if you can save a few bucks on your homeowners policy and feel a bit more like Iron Man, why wouldn’t you?

What are the Benefits of Bundling Home and Auto Insurance?

We’ve all seen the ads. Whether in a museum of inexplicable accidents or a fitness class where alter egos debate coverage, the messaging often includes: Bundle your home and auto insurance. 

But should you?

It often leads to greater savings and better service. Let’s explore why.

Most Carriers Offer Multiple Products

Bundling home and auto policies provides a good deal for most. If you can get a single stop for your insurance needs — and save money — who wouldn’t? 

Aside from financial savings through companion discounts by purchasing multiple policies, a single carrier can save you time.

Bundling Policies Should Save Money

For bundling to make sense, combining your home and auto insurance under a single carrier should save you some money.

Often called a multi-policy or companion discount, bundling home and auto insurance can save you as much as 20 percent to 30 percent on premiums than if you purchased the policies from separate companies.

Now, that amount can vary by state and carrier. 

A byproduct of bundling can result in financial benefits down the line, as well. In certain circumstances, such as a car and house each incurring damage in the same incident, you could save you money. When you bundle, you can save by filing a single claim and paying one deductible. If you have multiple carriers in that same scenario, you would need to file claims with each carrier and pay multiple deductibles.

Hopefully you never encounter an incident where both your home and auto are damaged. If you do, saving some money could make you feel a bit better about the situation.

Bundling Should Save Time

In this day and age, where our attention is pulled in many different directions, bundling coverage could look attractive by the time savings alone.

When you bundle coverage, it should reduce administration such as paperwork and websites to visit. Overall, the need to communicate with multiple providers goes away. And when changes need to be made, having that relationship with a single provider can help simplify the process of needing to add coverage or address issues.

Loyalty Can Work Both Ways

We mentioned issues prior. Not only could you develop a personal relationship with a carrier, but that carrier can look at you differently if you have multiple products with them.

Live in an area with severe weather? When carriers get skittish about providing home coverage, it’s easier to obtain or keep your coverage if you have bundled products. They know if they don’t keep you as a client in one product, you’re likely to switch to another carrier for the other service.

Speaking of loyalty, carriers can also offer more expansive bundles. These combinations of policies work best for people who are looking to not only bundle home and auto policies, but also perhaps, as an example, a recreation vehicle or two as well as another property. 

These bundles can provide the same advantages of time and cost savings. But before committing to a single carrier for most of your insurance needs, consider and evaluate some key criteria about the company.

Sometimes Bundling Isn’t The Answer

Even though bundling policies provides benefits for many people, in some instances it doesn’t make sense. First, you want to make sure you’re getting the same coverage for your money. Don’t skimp on coverage because you could end up paying more in event of a loss down the road. 

Also, certain special items, such as premium vehicles, may not work well in a bundle.

Borrowing Money? What Loan is Best for You?

Most people need to borrow money at some point. Americans owe more than $13 trillion in total debt. Borrowing is clearly an expensive proposition for many American families.

If you do find yourself borrowing to buy a home, a car, an education, or anything else, it is important to look at the pros and cons. It’s all about making the right long-term decisions and minimizing out-of-pocket costs. Let’s look at what you need to know to best evaluate loan options available to Americans today.

Common Types of Loans

Loans come in many names and forms. When looking at consumer loans (loans to people and not businesses) there are four main categories: mortgages, student loans, personal loans and auto loans.

While these are the most common ways to borrow, there are some substitutes for traditional loans to use instead. Those include credit cards, lines of credit, home equity lines of credit and borrowing from yourself with a 401(k) loan.

Not all loans are created equal. It is important to understand some of the similarities and differences between the various types of loans and alternatives.

What All Loans Have in Common

All loans and borrowing products have a few features in common. Here are a few of the most important places to look:

Interest Rate

The first place to look with any loan is the interest rate. This is the main way you pay for borrowed funds. Depending on the type of borrowing, rates can be single-digit percentages or hundreds of percentage points for the worst short-term loans.

Fees

Common fees with loans include origination fees, late and returned payment fees, annual fees and early payoff fees. Fewer and lower fees are better.

Minimum Payment

Every loan requires you to pay it back somehow. Depending on the type and duration of the loan, your minimum payment will vary.

Payment Schedule

The vast majority of loans require monthly payments, but some allow you to pay more frequently or require a different schedule.

Lender 

Is the company you plan to borrow from an upstanding, trustworthy company? Only work with licensed, reputable lenders.

Features of Popular Loans

Here is a brief summary of each of the major types of borrowing, including traditional loans and other lending products.

Mortgages

Mortgage loans are a type of loan where you borrow to buy a property, most often a single family home or condo. The most popular type of mortgage is a 30-year fixed loan, where you pay the same payment and interest rate for the next 30 years or until the loan is paid off. 

Student Loans

Student loans are one of the fastest growing categories of borrowing. From banks and nonbank lenders, student loans help pay for the cost of a college or university education. Some loans are backed by the U.S. government, which means lower rates and better terms than private student loans.

Personal Loans 

A personal loan is an unsecured loan. The best personal loans these days often come from credit unions and online lenders. Payday loans fall into this category. You should avoid this type of predatory loan if at all possible. Payday loans typically charge high interest rates.

Auto Loans

Car loans are similar to a mortgage, except secured by the car instead of a home. When a loan is secured, it means the bank can take (foreclose) the asset if you stop paying. Most car loans are around two to seven years long with a fixed monthly payment

Credit Cards

Credit cards are a form of unsecured loan, and they often charge interest rates from around 7 percent for the best cards and borrowers up to 30 percent for the worst cards. Beware credit card debt. It is a lot easier to spend than it is to pay it back.

Lines of Credit

A line of credit can come in several forms. One popular form is as a personal loan, or an unsecured loan. Lines of credit are revolving accounts, which means you can add to the balance and pay it off again and again over the life of the account.

Home Equity Lines of Credit 

A Home Equity Line of Credit, or HELOC, is a secured line of credit. It is a hybrid of a personal line of credit and a mortgage. Because a HELOC is secured by your home, it gets a better interest rate than nearly anything else other than a mortgage. But you can spend on it like a credit card.

401(k) Loan

A 401(k) loan should be a very last resort. Taking from your 401(k) means borrowing from your retirement, and if you don’t pay it back you get hit with a handful of fees and penalties. Avoid this type of loan if at all possible.

This is not an exhaustive list of every type of loan. Many others exist that fall within these categories, and there are some less common and customized loans available in real estate, business, construction, and other areas.

Go Into Lending With Your Eyes Wide Open

Some finance experts suggest there are good debts and bad debts. Good debts arguably include a mortgage, which get you a home, and student loans, which get you an education. However, not all student loans or mortgages are good or affordable.

When it comes to cars, credit cards, and anything else, it’s best to avoid borrowing if you can’t afford to easily pay it off in full from savings. If you pay off your credit cards in full before the due date, you never have to pay interest. This is where valuable rewards cards come in. Savvy spenders buy with cards and pay them off to get rewards but avoid the costs.

Even with “good debt,” borrowing has costs. Avoid borrowing when you can. But if you do need to take out a loan, make sure you get the right loan with the most favorable terms for your needs.

 

What You Need to Know About Your Medicare Card

When you enroll in Medicare, you’ll receive a card that proves your enrollment. Like most other health insurance cards, you present the card when you get medical care.

Social Security and Your Medicare Card

If you’re turning 65 and you’re already receiving Social Security benefits, you’ll get a Medicare card automatically – it should show up in the mail three months before your 65th birthday. If you’re turning 65 and not yet getting Social Security benefits, or if you need Medicare for other reasons, you can apply in three different ways: online at www.socialsecurity.gov, by calling Social Security (800-772-1213) between 7 a.m.-7 p.m. Monday-Friday, or by going to your local Social Security office in person.

What’s On Your Medicare Card

Your Medicare card will be red, white and blue. It will show personal information about you – like your name and when your Medicare coverage took effect. It shows less personal information than it used to. Medicare cards used to identify enrollees by Social Security number, so losing your Medicare card was as serious as losing your Social Security card. Thanks to the CHIP act of 2015, Medicare enrollees are now have by unique Medicare numbers. This means your Medicare card is more secure and easier to replace if it gets lost. 

If you’ve been enrolled in Medicare for a while and just got a new card, the government recommends you destroy the old one. If you haven’t received your new card yet, don’t worry. As long as Social Security has your current address on file, it is coming – the deadline for it to be sent to you is April 2019. 

Presenting Your Medicare Card at the Doctor

Once you have your Medicare card, keep it on you just like you would your ID. Any time you visit a doctor or other healthcare facility, you’ll present it when you check in. And in case of emergency, having your Medicare card ready will make treatment and billing both go much more smoothly.  

If you enrolled in any supplemental Medicare plans, like Part D, which provides prescription drug coverage, you may need to present a separate card at the pharmacy to get your medications. 

Home Sweet Homeowners Insurance: Everything You Need to Know About Getting Covered

There’s no place like home. That’s why it’s so important to protect your home with homeowners insurance. While the paperwork can sometimes seem overwhelming, there’s nothing more rewarding than the peace of mind that comes from knowing you have the right amount of homeowners insurance. If you’re ready to get a better understanding of how your coverage works and to see if you need to make any updates to your policy, these tips can get the job done faster than you imagine. 

Homeowners Insurance Requirements

First things first. For most of us, homeowners insurance isn’t optional. Why? We don’t actually own our homes. Banks do. 

Until your mortgage is paid, your bank or mortgage company is going to require you to carry homeowners insurance. They want their investment protected. The exact specifications can vary, but generally, your lender will want you to have coverage at least up to your outstanding mortgage amount. Each lender will specify the exact amount of coverage you need, plus the different hazards that your policy must guard against. In most cases the lender will want you to protect yourself and them with “replacement” cost.

What’s In My Policy

If your mortgage happens to be paid off or you simply want to double check your coverage needs, there are a few different considerations to make when calculating how much homeowners insurance you need.

Homeowners insurance isn’t just about guarding against the loss of your home. In fact, there are four different parts that come with most policies. You will want to evaluate the amount of coverage in each of these areas. 

Dwelling Coverage

This portion of your policy defines the amount of coverage available to repair or rebuild your home, based on the type of policy.  Many “replacement” cost policies will include calculations factoring in attached structures like garages and decks. You may also have other structures coverage, which will cover sheds or even detached garages on the property in case of loss.

Personal Property Coverage

Personal property coverage protects the value of items in your home. This generally covers items like furniture and clothing. If you have expensive enough itemssuch as an engagement ring, for exampleit may also be worth adding a jewelry rider, sometimes called “a floater,” to your homeowners policy. 

Liability Coverage

Should someone be injured on your property or in your home, liability coverage is the part of your insurance policy that kicks in. Personal liability covers bodily injury to others as well as property damage. Plus, some policies also have a separate section for medical payments to others. In the event of a lawsuit, you will be relieved to have good coverage here. 

Additional Living Expenses

Should your home be damaged and become unlivable, this portion of your policy covers any costs related to loss of use or access to your dwelling. This could be everything from staying in a motel to getting food or even a toothbrush. If the truly unthinkable happens, it’s likely that you’ll be left with nothing. Additional living expenses coverage can help you get back on your feet.

How to Determine Your Needs

Now that you understand the types of coverage that typically come with a policy, it’s time to determine if you have enough coverage. Two of the biggest reasons why you want to have ample coverage is to make sure that you can pay to have your home rebuilt in case something happens to it or that you are protected in the event of a lawsuit if someone is injured at your house. 

So how do you know if you have enough coverage? Using these methods will help.

Understand the Real Cost

When the real estate market takes a dive, people tend to think their homeowners insurance is too expensive. But it’s important to understand exactly what your insurance covers. Your insurance isn’t based on the current value of your home or your mortgage. It’s based on what it costs to recreate your homefrom materials to workmanshipin the event of a disaster. 

If the unthinkable happens to your home, you do not want to find yourself in a position where you realize that you can only afford to rebuild 80 percent of your home. And yet, many homeowners find themselves underinsured. Construction costs and other expenses are on the rise, which means that building a new home, even in the same space, can cost more than you might imagine. 

You may even be able to request a reconstruction valuation from your insurance company. When considering the cost of your policy and the amount of coverage you hold, it’s important to remember that your homeowners insurance is based on building cost, not market value.

Take Inventory

In terms of your personal property coverage, one of the best ways to determine if you have enough insurance is to take an inventory of everything in your home. You can create a catalog by going room to room and estimating costs of furniture, decor, clothing, electronics. Then, you want to compare this estimate to the amount of coverage in your current policy. 

How to Update Your Coverage

Even if you aren’t thinking of updating your coverage immediately, you will want to at least review your policy if you find yourself in one of these situations:

  • Buying a new property or a second property
  • Renting out your property
  • Remodeling 
  • Buying one or more big-ticket items
  • Adding security features 
  • Adjusting the amount or type of pets you own

If you decide to adjust the amount of coverage you carry, you can do this in a few simple steps. Gather your current insurance paperwork and contact your insurance company. Clarify the parts of your policy that you want adjusted. You can then request a quote to see how those adjustments will impact your premium. 

If you decide to move forward with the updated coverage, you will either have to pay an additional amount or you may be entitled to a refund. Make sure you get a copy of your adjusted policy in writing and that you are clear on both the start and end dates. By double checking these dates, you can ensure that there are no gaps in coverage.

How to Adjust Your Deductible

Often times, people feel that their homeowners insurance is too costly. If you are someone who is fortunate enough to have never filed a claim, it’s easy to fall into the trap that you’re paying for nothing. Rather than skimping on coverage to save yourself some money, a better strategy involves adjusting your deductible. 

By electing a higher deductible, your premiums will often be reduced considerably. You can use an online calculator or work with your insurance provider to get different quotes based on various deductible amounts. The most important part to remember, though, is that your deductible has to be met when you file a claim. Don’t set a deductible higher than what you have stashed in your emergency fund or savings account. 

The Real Value of Homeowners Insurance

Homeowners insurance can seem complicated. But the simple truth is it’s peace of mind and protection against the unthinkable. Understanding the different parts of your policy and the amount of coverage you have in each area is a fundamental part of making sure you aren’t underinsured. Knowing how to adjust your coverage and your deductible can keep you protected while paying a reasonable rate. 

9 Reasons Homeowners Insurance Claims Are Denied

Year after year, you send that premium payment for your homeowners policy. When accidents happen, you expect the insurance company to cut a check for the full extent of the damage to your home, no matter the amount or what caused it.

It doesn’t always work that way. What you think you’re entitled to under your policy and what the carrier believes they owe you are often two very different dollar figures.

Don’t take it personally. Remember, carriers have to price your coverage based on statistics, probability and risk. They can only pay to the extent a claim is based in cold, hard facts, policy language and evidence. 

If your claim falls under one or more of the criteria below, there’s a good chance it will be reduced or denied altogether. But alas, insurance companies don’t take claims personally, either. We’ll follow with ways to ensure your property is covered properly and recovered adequately.

Why Are Homeowners Insurance Claims Denied?

  • Not Enough Information

  • As the homeowner, it’s your responsibility to file and prove your claim. Insufficient documentation of damage to your property won’t help your case. Neither will a lack of a complete inventory of valuables on or in your property prior to the loss.

  • Taking Too Long to File

  • If you take too long to file the claim, your chances of a satisfactory payment go way down. Policies typically contain time-sensitive requirements for filing the claim and documenting damage.

  • Late Payments

  • If your premium payments are late and result in any lapses in coverage, you run the risk of property damage occurring when your policy is exempt due to non-payment.

  • Threat of Fraud

  • Unfortunately, insurance fraud is a predictable reality. Therefore, your carrier will send their own claims adjuster to investigate almost every claim. Anything that raises questions—whether in the claim or in your initial application—could be game over. If your losses are serious, particularly if the policy covers your business, consider hiring an independent adjuster. 

  • Claim Type Not Included in Coverage

  • No homeowners policy covers the entire house and everything in it, nor does it cover against every possible source of damage or loss. Common policy “exclusions” include earthquakes, floods and water/sewage backup, or other regional risks. 

  • Loss is Close to Your Deductible

  • A typical homeowners policy deductible—the amount you pay before the claim kicks in—is $1,000. If the estimated loss is close enough to your deductible level, carriers will deny the claim, though in that scenario you wouldn’t want to file one. 

  • Perilous Claims May Not Be Covered

  • In insurance speak, “perils” refer to things like fire, theft, lightning and hail. “Occurrences” speak to the actual losses, such as a destroyed kitchen, or soaked carpet and furniture. Lower-end policies only cover a certain number of perils, others cover all of them. 

  • Somebody (or Something Else’s) Fault

  • If it was your contractor’s negligence that collapsed the foundation or your neighbor’s tree that totaled your SUV, your insurance company isn’t responsible—and your policy doesn’t apply. 

  • Excessive Wear

  • Imagine an insurance carrier paying to fix a rusted-out car bumper after an accident. Doesn’t happen. Same goes for an old roof full of worn shingles and leaks. If a claims adjuster finds evidence of poor maintenance or excessive wear-and-tear of your property, chances are the claim will be denied. 

Avoid the Dreaded Denial

  • Document all damage and file a detailed itemized claim to your insurance
  • Notify your carrier as soon as possible (even if in the middle of the night) of any loss and know the time limits for filing a claim
  • Don’t miss a premium payment
  • Know what your policy covers and excludes; obtain adequate coverage for more “perils” if available
  • Do everything possible to maintain the property before an event, and to mitigate the damage until an adjuster assesses the damage

What You Need to Know About Motorcycle Insurance

For motorcycle enthusiasts, a weekend trek with the motorcycle community is many rider’s idea of paradise. Don’t have the right motorcycle insurance? Paradise can quickly turn into something else.

To stay in motorcycle bliss, make sure to protect yourself, your precious bike and others.

Before selecting or renewing motorcycle insurance coverage, here’s what you need to know. First, you need insurance. Most riders are required by law to — at a minimum — to purchase liability coverage.

Motorcycle Liability Coverage: Bodily Injury and Property Damage

For motorcycle liability coverage, there are two different types: bodily injury liability and property damage liability.

Bodily injury liability helps cover costs for others if you cause the accident. It addresses medical costs, loss of income, as well as funeral costs in event of a fatality in an accident.

Property damage liability covers the damage to another motorist’s property.

Minimum liability insurance requirements vary by state. And while the minimum might get you by, only purchasing it could really hurt your financial situation if you’re at fault in an accident. 

Consider additional liability coverage:

  • To protect your financial assets from creditors. If you’re sued, your minimum liability may not cover all the legal costs and claims.
  • To protect your passengers. In some cases, bodily injury liability insurance will cover passengers. But check your coverage. You may need passenger liability coverage if you intend to have a friend or family member hop on the bike with you.
  • To protect yourself from others. Ever been in an accident with someone who didn’t have insurance and they’re at fault? Some states require you to carry uninsured/underinsured coverage. This will help provide coverage for injuries and, in many cases, property damage when a less conscientious rider can’t cover the liability expense.

Finally, some states also require a minimum medical benefit. Your health insurance may qualify, but let’s review the topic further.

Motorcycle Medical Payments Coverage

Required in some states and not available in others, medical payments coverage will pay for medical services — in many cases, up to one year from the accident — if you are injured in an accident. 

It’s not based on fault. It will pay for medical bills for you and, in many cases, a passenger if one or both are hurt while riding your motorcycle.

Medical services covered often include:

  • Hospital stays and visits
  • X-rays
  • Dental expenses
  • Prescription drugs
  • Nursing services

A word of caution for motorcycle medical coverage. While coverage can benefit riders, you should view it as a supplement, not a replacement, for health insurance.

Motorcycle Collision Coverage

Motorcycle collision coverage will cover the costs to repair or replace a bike, minus your deductible, if involved in a collision.

Collision coverage is not required. But if you love your bike, you might as well as treat it as required. One thing that can catch riders by surprise: the replacement value. Make sure to purchase enough coverage to replace your bike in case it’s totaled.

This is especially true of classic or custom motorcycles. Most insurers offer special coverage for these specialty bikes. With these motorcycles, you want to ensure you receive the actual value of the bike if you’re in accident or it’s damaged in some other way.

Which brings us to motorcycle comprehensive coverage.

Comprehensive Coverage for Your Motorcycle

Comprehensive coverage will pay the expenses for damage not related to a collision with another car or motorcycle. As with collision coverage, a deductible will apply.

Comprehensive coverage protects you and your bike in situations such as:

  • Theft
  • Fire damage
  • Weather damage
  • Vandalism
  • Animal collisions

Like collision coverage, with comprehensive, you will want enough coverage to pay for the total cost of the bike if you need to replace it.

Other Motorcycle Insurance Considerations

In addition to core motorcycle insurance coverage, insurers can offer options such as roadside assistance, trip interruption and custom parts coverage. 

Furthermore, if you live an area where you can’t make use of your bike year-round, ask about lay-up insurance. If you store your motorcycle in the winter, you pay a reduced insurance premium during those months. 

Finding The Right Motorcycle Insurance Coverage

When it comes to motorcycle insurance coverage, there is plenty to think through. We can work with you to find the right insurer and tailor a policy to get you on the road.

But even before connecting with us, consider doing the following to help reduce your insurance premiums:

  • Maintaining a good driving record with your auto policy
  • Taking a motorcycle safety class
  • Joining a motorcycle riders association
  • Limiting theft and non-use accident risks for your bike by installing an alarm and securing it a garage