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Flood Insurance: Why You Need It – Quincy, Weymouth, MA

Joseph Coupal - Thursday, August 25, 2016

A flood can devastate your home and your financial security. Any flood, large or small, can cause thousands of dollars in damages. Even homeowners in low to moderate-risk zones are at risk. Up to 25% of all flood claims come from people living outside high-risk zones.

Flooding happens here in Massachusetts. You don’t have to live near a major waterway to be flooded. Sudden severe storms can cause flooding.

You might think that your Homeowners insurance covers flooding, but it doesn’t. Flood insurance gives your home that important layer of protection your Homeowners insurance doesn’t provide.

Myth: Flood Insurance Costs Too Much

You might be surprised at how inexpensive it is if you are not in a high risk flood zone. The average flood insurance policy costs less than $570 per year. Most homeowners live in a moderate-to-low risk area and are eligible for coverage at a preferred rate with building and contents coverage for one low price. If you live in a high-risk area, a standard rated policy is the only option for you. It offers separate building and contents coverage. If your home is in a high-risk flood area and you have obtained a mortgage through a federally regulated or insured lender, you are required to purchase a flood insurance policy.

How to Purchase Flood Insurance

Flood Insurance is written through the National Flood Insurance Program (NFIP), a federal program authorized by FEMA.  Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. You need to contact an insurance agent for a quote and/or application (all policies written by the NFIP are written through insurance agents).

Typically, there’s a 30-day waiting period—from the date you purchase the flood insurance—before the policy goes into effect. The waiting period, however, does not apply to a new home purchase or refinancing of a mortgage if the mortgagee requires flood insurance.

What is Covered by Flood Insurance – and What is Not

The following is a summary of items covered and not covered by flood insurance. For specific details as to what is covered, you have to refer to the actual policy.

What’s covered under Building?

  • The insured building and its foundation.
  • The electrical and plumbing systems.
  • Central air conditioning equipment, furnaces, and water heaters.
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers.
  • Permanently installed carpeting over an unfinished floor.
  • Permanently installed paneling, wallboard, bookcases, and cabinets.
  • Window blinds.
  • Detached garages for up to 10% of the building limit; other detached buildings require a separate Flood policy

What’s covered under Personal Property?

  • Personal belongings such as clothing, furniture, and electronics
  • Curtains.
  • Portable and window air conditioners.
  • Portable microwave ovens and portable dishwashers.
  • Carpets not included in building coverage
  • Clothes washers and dryers.
  • Food freezers and the food in them.

What’s never covered by flood insurance?

  • Damage caused by moisture, mildew, or mold that could have been avoided by the property owner.
  • Currency, precious metals, and valuable papers such as stock certificates.
  • Property and belongings outside of a building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools.
  • Living expenses such as temporary housing.
  • Self-propelled vehicles such as cars, including their parts.

Limitations to coverage in a basement

  • Coverage in a basement is very limited.
  • It includes cleanup expense and items such as furnaces, water heaters, washers and dryers, air conditioners, freezers, utility connections, and pumps.
  • There is no coverage for the contents of a finished basement and improvements, such as finished walls, floors, and ceilings.
  • Personal property located in a basement is not covered.

For more information on flood insurance for your home, contact Lallis & Higgins Insurance.

Rental Insurance: No One Should Rent Without It – Quincy, Weymouth, MA

Joseph Coupal - Tuesday, August 16, 2016

Home rentals are hot.

Whether you’re choosing a traditional house or an apartment in a large complex, more and more people are renting.

Some are renters by default. Some are renters because they are students living off campus. Perhaps more significantly, many people today prefer the flexibility of renting as opposed to the commitment of owning a home.

But if you have made the decision to rent, there is one decision that is strongly recommended: it’s called renters insurance.

Your landlord already has insurance, but it doesn’t cover you or your possessions. It only covers the building or house where you live and any liability the owner might face.

It does not cover your belongings or your liability for accidents.

If your home is burglarized and possessions are stolen or damaged by a fire or flood, a renter’s insurance policy can allow you to recover their value.

If someone is injured or has an accident in your home, renters insurance can help protect you in the case a liability lawsuit.

You may not be worried about these things, but you should know that accidents can and do happen to good people every day. You may not think you have enough possessions to insure, but you’ll find that you have more than you think if you ever need to replace them all.

Accidents do happen

Take for example:

You finish dinner and get ready for bed. The trees around the complex all look healthy and hardy. But overnight, there is a powerful thunderstorm.

A huge oak tree is blown onto the complex, nearly crushing it. While you escape unscathed, the house is almost destroyed. During the ensuing rain storm, many of your possessions are ruined.

To make the situation worse, while you are scrambling to find a place to live, someone steals your grandmother’s priceless diamond bracelet.

In addition, the repairs will take months, so the landlord terminates the lease and tells you that you can no longer live there for safety reasons. You move into a hotel, assuming your costs will be covered.

Without renters insurance, you are out of luck. Neither the owner nor the landlord has any responsibility to you whatsoever. Yes, you will likely get your security deposit returned, and if you have prepaid your rent, you’ll probably get back the unused portion.

But beyond that, you’re on your own.

The sad part of this story is that most rental insurance policies only cost a few dollars per month. And you can usually get a discount by selecting the same company you already use to insure your car. Just ask your agent.

If you rent, you need renters insurance because stuff happens. It just does.

The basic coverage you should have falls into four areas:

Personal Property Protection: This coverage protects your valuables, such as furniture, clothing, electronics, collections, and more.

Temporary Living Expenses: If your home is damaged by flooding or fire or made unlivable by an accident, this coverage pays for your increased living expenses, sometimes including food, while the property is repaired, often up to 24 months.

Liability Protection for You: If a guest or a visitor suffers an accident at your house or apartment, this coverage protects you against a lawsuit that might come as a result.

Guest Medical Coverage: If a guest suffers an injury while visiting, this coverage can cover their medical expenses.

Interestingly, more and more landlords require that prospective tenants show proof of renters insurance as part of the rental process. That’s because your renters insurance can keep the landlord out of a lawsuit caused by an accident or calamity.

For more information on renter’s insurance policies in Quincy and Weymouth, MA, contact Lallis & Higgins Insurance.

Homeowners Insurance Basics – Weymouth, Quincy, MA

Joseph Coupal - Thursday, August 11, 2016

Here’s what you need to know if you’re in the market for homeowner insurance to protect your biggest investment - your home.

The law doesn’t require home insurance. However, you’ll have a hard time coming up with good reasons not to, because homeowner insurance protects your most valuable assets. This includes the structure of your “dwelling” (which could be a house, townhouse, condo, or co-op), and your belongings and possessions.

Home insurance protects you in other important ways, too. It provides money for rent and living expenses if your home becomes unlivable due to damaged caused near or to your home.  The homeowner policy also protects you and your assets through liability coverage.

Not Required? Not Entirely…

Only people who pay for their homes in cash, or those that have paid off their mortgage are not required to carry home insurance.  Pretty much everyone else must insure their home, as most mortgage lenders require it.

That’s why you should know as much as possible about homeowner’s insurance coverage.

Basic Components

Homeowner’s insurance policies typically cover the following:

Your home and "structures"—this includes plumbing fixtures, electrical wiring, and heating and permanent air-conditioning systems inside your home. It also includes external ones like fences, garages, gazebos, and sheds.

Your Stuff—Clothes, electronics, furniture, books– basically everything that can fall out of your home if you turned it upside down can be covered through your home insurance. Bonus: these are protected even when they’re not on your property. For example, when they’re in your car or with you at work or on vacation.

Your insurance company will repair or replace all of the above (up to a set limit) if they’re stolen, damaged, or destroyed by lightning, fire, hail, hurricane, or any other disaster that’s listed in your homeowner’s policy.

Note: Protection against floods require a separate policy, and earthquake coverage can be added to most homeowner policies for an additional fee.

Standard homeowner policies also:

  • Cover you when you’re hit with a lawsuit related to bodily injury or property damage caused by you, a live-in family member, or your pets
  • Provides no-fault medical coverage, which means your insurance company will pay the medical bills for people who are hurt on your property or are hurt by your pets
  • Pay some of your living expenses (hotel bills, restaurant meals, and more) if your home is damaged or destroyed by one of the above-mentioned disasters, and you’re forced to live elsewhere while it’s being repaired or rebuilt

Increasing Coverage

Many companies have added additional coverage like equipment breakdown, law and ordinance, and expanded replacement cost to name a few.

You can also buy personal umbrella liability insurance to raise the limits of your liability coverage and protect yourself against claims of libel or slander. Rates and coverage vary depending on the amount of protection you want, cars you own, along with other factors like number of houses, boats, you own.

The most common homeowner’s insurance form is the HO3:

Special Form (HO-3)— the most popular homeowner insurance policy because it provides people with the broadest coverage, and is required by most mortgage companies.

Note: if you own a multi-family home, you can add an endorsement to your “Special Form” policy to cover risks related to having rented units.

Co-op, Condo, and Renter Policies

If you own a condo or co-op or rent a home, you should check out these policies:

  • Tenants Form (HO-4)—Perfect for renters, this policy type protects possessions as well as loss of use and liability coverage.  
  • Condominium Unit Owners Form (HO-6)—Along with a condo owner’s belongings, this policy type can insure the floor, ceiling, and walls against all of the disasters covered by the “Broad Form” policy. It’s recommended to check your condo docs to see where the condo association’s master policy leave gaps in coverage to the space you own.  

Levels of Coverage

After selecting a homeowner’s insurance policy, you must choose a level of coverage.

The two main options are:

  • Actual cash value—your insurer will pay you “market value”. This means depreciation will be factored into the final cost for your home or possessions should they be lost, stolen, or destroyed due to any of the disasters named in your policy.
  • Replacement cost—your insurer will refer to the original price of any items that need to be rebuilt, repaired, or replaced, no matter how old or outdated they may have been when they were destroyed, damaged, lost, or stolen. Most mortgage companies require your home to be insured at 100% of its replacement cost.

Your insurance broker can give you the best advice when considering these options. Contact Lallis & Higgins for more information on home insurance.

Flood Insurance: What You Need to Know – Braintree, Weymouth, MA

Joseph Coupal - Friday, August 05, 2016

Do you have flood insurance? Do you need flood insurance?

If you don’t have the answers to these questions or are unsure of the answers to these key questions, keep reading.

Of all the natural disasters impacting the United States, floods are the most common. Average homeowners are five times more likely to deal with flood than fire damage. (And your chances increase if you live in a medium- or high-risk area for floods.)

Flood damage can be expensive to repair. The National Flood Insurance Program (NFIP) estimates a six-inch flood that hits a 2,000-square-foot home is likely to cause about $40,000 in damage.

Then there's the surprising fact that most standard homeowners and renters insurance policies don't cover flood damage.

Homeowners and Renters Policies Don't Cover Flood Damage

Typical homeowners and rental insurance policies don't cover flood damage.

Most people ignore flood insurance for this very reason. They assume the insurance they have will protect them from the aftermath of a flood.

You have to go out of your way to buy flood insurance as a separate policy from the NFIP. The Federal Emergency Management Agency (FEMA) administers this insurance as does one of the 80 private insurance companies that provide flood coverage.

A Few More Reasons as to Why You Shouldn't Ignore Flood Insurance

Generally people overlook flood insurance because they don’t think they need it.

Statistics show US homeowners (and renters), in general, are likely to deal with flood damage at some point in their lives.

Chances are higher if you live in an area that's considered “high risk” for flooding. There’s a one in four chance of experiencing a flood during the life of a 30-year mortgage in high risk areas.

Low- or moderate-risk areas field almost 25 percent of flood-damage claims. So, flood insurance is a good idea no matter where you live.

When You Are and Aren't Required to Have Flood Insurance

Do you live in a high risk area? Is your mortgage with a federally regulated or insured lender?

If you answered yes to both questions, you're required to have flood insurance.

If you live in a moderate- or low-risk area, you aren't federally obligated to have this kind of insurance, although some lenders may still require it.

In some situations, government aid is available for flood damage to homeowners who didn’t have flood insurance. However, if they want to quality for future aid, they need to purchase a flood policy first.

Is One Rate Just Like the Other?

Historically flood insurance rates are set nationally and don’t differ from company to company or from agent to agent. Recently Lloyds of London has come into the market to offer a program to owner occupied homes in the AE zone at a discounted rate of the FEMA set price. Contact Lallis & Higgins Insurance to see if your home qualifies for this new program.

The rate is based on a number of factors. Including the age of your home or building, how it was built, the elevation of your property, and its overall flood risk.

You can find out what that rate would be by requesting a quote for a flood insurance policy.

Contemplating Coverage Impacts and Limits

Another factor companies take into consideration when determining your rate is the desired amount of coverage.

Be aware that standard flood policies place certain limits on the coverage they offer.

Homeowners can buy a maximum coverage of $250,000 for buildings. And up to $100,000 for the contents.

Buildings may include the actual structure and its foundation, as well as any air-conditioning, electrical, heating, and plumbing systems and equipment.

Business owners can buy up to $500,000 in structure coverage and $500,000 in personal property coverage.

If your building is worth over $250,000, you'll have to buy excess flood insurance. This increases your coverage limit to $750,000. (Businesses can extend their coverage up to $1 million.)

Don't Worry, It's Easy to Buy

Despite the fact that flood insurance is a separate policy, it isn't difficult to purchase.

In fact, it may be easier to buy than some other forms of insurance. Options are limited to private companies and agents that have partnered with the NFIP.

A Few More Things You Should Know About Flood Insurance

There's a 30 day waiting period. In most cases, flood insurance policies won’t take effect until after that period is over.

You'll still be eligible for government aid. Having flood insurance won't prevent you from receiving government aid if you live in an area declared as a federal disaster area due to flooding.

Government aid isn't a suitable alternative to a flood policy. You may be thinking, "Hey, why should I bother paying for insurance when federal disaster assistance will bail me out?"

The reality is government aid isn't all it's cracked up to be. There are a few reasons for that.

First, before a community can become eligible for this assistance, it has to be declared a federal disaster area. And these declarations are issued in less than 50 percent of flooding incidents.

Second, federal disaster aid usually takes the form of a low-interest loan. The loan is designed to help pay for the repair of flood damage. It isn’t straight compensation that doesn't need to be repaid.

A flood is a fairly specifically defined event. Just because your basement fills up with water after a torrential rain storm, doesn't mean the resulting devastation will be covered by your insurance policy.

For that to happen, the flood has to affect two or more properties. Or, if affects only your property, it has to have covered two or more acres of land.

Also, you might want to note that damage from wind-driven rain--such as when rain comes through a hole in a wall or roof, or through a wind-damaged window--isn't considered flood-related.

For more information, contact Lallis & Higgins Insurance.

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