Homeowners Insurance Policy Investment Advice
A home is likely to be the largest investment most families ever make so you want to spend what ever is necessary to protect your family’s investment. Purchase enough coverage to avoid a major financial loss if you experience a catastrophic event. This means keeping realistic current value amounts of coverage on your house and contents. Home owners insurance comes in many different prices and configurations; it is important to get the insurance that fits. Flood and earthquake damages are not covered under standard homeowners insurance and must be purchased separately. The hurricane Katrina and Rita survivors discovered that hurricane coverage often excluded flood or storm surge damage even though that was caused by the hurricane winds. Be sure to understand the fine print and if you need to purchase a separate flood or water damage policy, it may be expensive but worth the cost. Premiums will cost widely different amounts in different areas of the country. While you want the best insurance possible you also want to hold the costs down. Follow these steps to get the best deals.
In the aftermath of the hurricane disaster on the Gulf Coast many home owners found their insurance to be inadequate. Sometimes that was due to misunderstanding the policies and sometimes due to insurance company chicanery. These issues will eventually be sorted out but in the meantime it has set the rest of us to thinking about how well covered we are in the event of an emergency. Some estimates of the number of underinsured homes say as many as three out of five are underinsured by around 20% to 25%. (Coolidge, C., 2006, A Good Policy, Forbes 2006 Investment Guide, Forbes Magazine, 60 Fifth Avenue, New York, NY 10011)
1. A lesson learned from the victims of Hurricane Katrina is that it may be best to get separate coverage for wind, water, fire, or “environmental” damage. Try to be sure your policy includes incidental damage after a disaster such as the mold caused by the heat and moisture after hurricanes on the Gulf Coast.
2. Review your current policy to make sure it is sufficient for the present value of your home. Home improvements (such as kitchen renovations or adding a deck) can add significant value to your dwelling but if you do not tell your insurance agent and adjust your insurance, it will not be covered.
3. Comparison shopping is the tool of choice for finding bargains in any purchasing situation. Like any good thing this will take a bit of time and effort but the savings could be well worth it in the end. The way to go about comparison shopping for home insurance is to start with your state insurance department. States often keep records of the frequency of customer complaints on different insurance companies and may be able to tell you what typical rates to expect. Always check with the Better Business Bureau and any other consumer information guides available to you. Research the financial stability of the insurance company on www.standardandpoors.com or at www.ambest.com in addition to checking the status of the company at your State Insurance Commissioner’s office.
4. Higher deductibles mean lower premiums. Deductibles are the amount of money you pay for any damages to your home before the insurance kicks in. Deductibles can be negotiated but most insurance companies recommend a $500 dollar deductible. The higher amount you negotiate to pay for deductibles the lower the premiums you pay for your insurance will be. If you can afford to pay out of pocket costs of $1000 dollars or more you may be able to reduce your premium payments by as much as 25%. If you live in an area that repeatedly sees certain types of natural disasters your insurance policy may have different deductible amounts for damages caused by different kinds of events.
5. Get all your insurance policies from the same company. Companies who sell car insurance often sell home owners insurance as well. It can save you as much as 15% of your premium cost to get your home owners policy from the same company that insures your car. Read the policy carefully and make comparisons because this is not always true. Look at the total cost of separate policies or separate insurance companies. Then compare the total separate costs with the cost of a combined policy.
6. Maintain your credit. Insurance companies may increase the cost of your insurance if your credit rating is not good. Check your credit ratings often to make sure it has not been compromised by identity theft. Keep your bills paid and your credit to earnings ratio low.
7. Update your policy limits on contents of your home. You should review this section of the policy every year. You want a policy that pays full replacement costs not just the depreciated value of appliances, clothing and furniture. The difference between “actual cash value” and “replacement cost” can be enormous. To get full coverage for valuables you need appraisals on collectibles, artwork, jewelry and antiques. You need to keep receipts and a full inventory. It helps to have pictures and/or a video record of a home’s contents. The documentation of personal belongings should be kept in a separate and safe location.
8. Longevity counts with insurance companies. If you have been with your current insurance company for many years it is best to stay with them. If another insurance company offers what seems to be an unbeatable deal you can talk to your current insurer to see if they can meet or beat the offer. Most insurance companies offer discounts for longevity; as much as 10% if you have been with them continuously for more than six years.
9. Update all the safety features in your home including the fire alarms and the burglar protection systems. Install deadbolts and window locks and consider alarm systems that alert the local police and fire departments to emergencies at your home. You can usually get insurance discounts for installing good fire and burglar alarm protection systems. Update plumbing and wiring if your home is more than twenty years old.
10. Consider the area you live in for special disaster related insurance. Flood, fire and earthquake insurance all cost varying amounts depending on where you live. If you live in a heavily forested area you can lower your premium by establishing a fire protection zone around your home and using tile or metal roofing. In earthquake prone areas your insurance will be much less if you have a stick built house instead of brick. In California earthquake insurance information can be obtained at (www.earthquakeauthority.com). In hurricane prone areas bring your home up to current hurricane codes to lower risk and insurance costs. Install hurricane shutters and reinforce roofing to withstand hurricane force winds. If you live in a flood prone area you may want to contact FEMA for information on flood insurance. (www.fema.gov/nfip).
11. Keep the cost of land separate from the replacement cost of the house and contents. The land is permanent and except for those areas where slides or erosion might drop you into the nearest river or the ocean you should not include the cost of the land itself in the value estimate of your home.
A good insurance policy will pay for replacement or repair costs as specified in the policy; but to guard against increases in construction costs due to inflation or material shortages after a disaster you may want to get extra protection specifically to cover them. Extra coverage will include a surcharge on the premium of 10% to 15% but if you live in hurricane or earthquake zones it may be worth the extra charge.
Buy a policy from a company with the insurance grade of “A” from www.ambest.com . The risk of getting a policy from a company that is not highly rated is not worth the possible premium savings. Allstate, MetLife Auto and Home, State Farm, Chubb, Liberty Mutual, Hartford, USAA and Travelers all are rated “A” or better and are the largest sellers of homeowners insurance.
Additional information may be obtained from:
Insurance Information Institute
110 William Street
New York, NY 10038
(212) 346-5500
(www.iii.org) or (www.insurance.info)
State Insurance Regulators:
Alabama
201 Monroe St., Suite 1700
PO Box 303351
Montgomery, AL 36104
334-269-3550
Fax: 334-241-4192
E-mail: insdept@insurance.state.al.us
www.aldoi.org
Alaska
Division of Insurance
Department of Commerce, Community aand Economic Development
Robert B. Atwood Building
550 W. 7th Avenue, Suite 1560
Anchorage, AK 995013567
907-269-7900
TDD: 907-465-5437
Fax: 907-269-7910
E-mail: www.dced.state.ak.us/insurance
Division of Insurance
Department of Commerce, Community aand Economic Development
PO Box 110805
Juneau, AK 99811-0805
907-465-2515
TDD/TTY: 907-465-5437
Fax: 907-465-3422
E-mail: www.commerce.state.ak.us/insurance/
Arizona
Department of Insurance
2910 North 44th St., Suite 210
Phoenix, AZ 85018-7256
602-912-8444
Toll free in AZ: 1-800-325-2548
Fax: 602-954-7008 (Complaints)
E-mail: consumers@id.state.az.us
www.id.state.az.us
Arkansas
Department of Insurance
1200 West 3rd St.
Little Rock, AR 72201-1904
501-371-2600
501-371-2640 (Consumer Services)
Toll free in AR: 1-800-282-9134
Toll free: 1-800-852-5494
Fax: 501-371-2618
E-mail: www.arkansas.gov/insurance
California
Department of Insurance
300 Capitol Mall, Suite 1500
Sacramento, CA 95814
916-492-3500
415-538-4010 (San Francisco}
213-897-8921 (Los Angeles)
Toll free in CA: 1-800-927-4357
Fax: 916-445-5280
www.insurance.ca.gov
Dept. of Managed Health Care, California HMO Help Center
(We serve all California Consumers that are enrolled in a California HMO, Blue Cross of California PPO, and Blue Shield of California PPO)
980 Ninth Street, Suite 500
Sacramento, CA 95814-2738
1-888-HMO-2219 (HMO Health Center Consumer Complaint Line)
1-877-525-1295 (HMO Help Center Provider/Physician Line)
1-877-688-9891
Fax: 916-229-0465 (Conplaints) or (916) 229-4328 (Independent Medical Review)
E-mail: GenInfo@dmhc.ca.gov
www.hmohelp.ca.gov
Colorado
Division of Insurance
1560 Broadway, Suite 850
Denver, CO 80202
303-894-7490 or 7499
Toll free in CO: 1-800-930-3745
TDD/TTY: 303-894-7880
Fax: 303-894-7455
www.dora.state.co.us/Insurance
Connecticut
Department of Insurance
Consumer Affairs Dept.
PO Box 816
Hartford, CT 06142-0816
860-297-3900
Toll free: 1-800-203-3447
Fax: 203-297-3872
www.state.ct.us/cid
Delaware
Department of Insurance
841 Silver Lake Blvd.
Dover, DE 19904
302-739-4251
Toll free in DE: 1-800-282-8611
Fax: Fax: 302-739-6278
E-mail: consumer@deins.state.de.us
www.state.de.us/inscom
District of Columbia
Department of Insurance, Securities and Banking
810 First St., NE, Suite 701
Washington, DC 20002
202-727-8000
Fax: 202-535-1196
E-mail: info.disb@dcgov.org
disb.dc.gov
Florida
Office of Insurance Regulation
Department of Financial Services
200 East Gaines St.
Tallahassee, FL 32399-0300
(850) 413-3100
Toll free in FL: 1-800-342-2762
TDD: 850-410-9700
Fax: 850-488-2349
www.fldfs.com
Georgia
Insurance and Fire Safety
Two Martin Luther King, Jr. Dr.
Atlanta, GA 30334
404-656-2070
Toll free in GA: 1-800-656-2298
TDD/TTY: 404-656-4031
Fax: 404-657-8542
www.inscomm.state.ga.us
Hawaii
Insurance Division
Department of Commerce and Consumer Affairs
P.O. Box 3614
Honolulu, HI 96811-3614
808-586-2790 or 2799
Fax: 808-586-2806
E-mail: insurance@dcca.hawaii.gov
www.hawaii.gov/dcca/ins
Idaho
Department of Insurance
700 West State St.
P.O. Box 83720
Boise, ID 83720-0043
208-334-4250
Toll free in ID: 1-800-721-3272
Fax: 208-334-4398
www.doi.state.id.us
Illinois
Division of Insurance
Department of Financial and Professional Regulation
100 West Randolph St., Suite 5-570
Chicago, IL 606013395
312-814-2420
TDD: 312/814-2603
Fax: Fax: 312-14-5435
E-mail: Director@ins.state.il.us
www.state.il.us/ins
Division of Insurance
Department of Financial and Professional Regulation
320 West Washington St.
Springfield, IL 62767
217-782-4515
Toll free: 1-877-527-9431 (Office of Consumer Health Insurance)
TDD: 217-524-4872
Fax: 217-782-5020
E-mail: director@ins.state.il.us
www.idfpr.com
Indiana
Department of Insurance
311 W. Washington St., Suite 300
Indianapolis, IN 46204-2787
317-232-2385
Toll free in IN: 1-800-622-4461
Toll free: 1-800-452-4800 (in-state senior health insurance information)
Fax: 317-232-5251
www.state.in.us/idoi/
Iowa
Division of Insurance
330 Maple St.
Des Moines, IA 50319
515-281-5705
Fax: 515-281-3059
www.iid.state.ia.us
Kansas
Insurance Division
420 SW 9th St.
Topeka, KS 66612-1678
785-296-7801
Toll free in KS: 1-800-432-2484
TDD/TTY toll free 1-877-235-3151
Fax: 785-296-2283
E-mail: commissione4r@ksinsurance.org
www.ksinsurance.org
Kentucky
Office of Insurance
215 West Main St.
Frankfort, KY 40601
502-564-3630
Toll free: 1-800-595-6053
Fax: 502-564-1650
doi.ppr.ky.gov
Louisiana
Department of Insurance
1702 N. Third St.
Baton Rouge, LA 70802
225-342-0895
225-342-5900
Toll free: 1-800-259-5300
Toll free:1-800-259-5301
Fax: 254-342-3078
www.ldi.state.la.us
Maine
Bureau of Insurance
34 State House Station
Augusta, ME 04333
207-624-8475
Toll free in ME: 1-800-300-5000
TDD: 207-624-8563
Fax: 207-624-8599
www.maineinsurancereg.org
Maryland
Insurance Administration
525 St. Paul Place
Baltimore, MD 212022272
410-468-2000
Toll free: 1-800-492-6116
TTY toll free: 1-800-735-2258
Fax: 410-468-2020
www.mdinsurance.state.md.us
Massachusetts
Division of Insurance
Consumer Service Section
One South Station, 5th Floor
Boston, MA 02110
617-521-7777
TDD: 617-521-7490
Fax: 617-521-7575
www.state.ma.us/doi
Michigan
Office of Financial and Insurance Services
611 West Ottawa St., 3rd Floor
P.O. Box 30220
Lansing, MI 48933
517-373-0220
Toll free: 1-877-999-6442
Fax: 517-335-4978
www.michigan.gov/ofis
Minnesota
Department of Commerce
Market Assurance Division
85 7th Place East
St. Paul, MN 55101
651-296-2488
Toll free in MN: 1-800-657-3602
Fax: 651-296-4328
E-mail: www.commerce.state.mn.us
Mississippi
Department of Insurance
PO Box 79
Jackson, MS 39205
601-359-3569
Toll free in MS: 1-800-562-2957
Fax: 601-359-1077
E-mail: consumer@mid.state.ms.us
www.doi.state.ms.us
Missouri
Missouri Department of Insurance
PO Box 690
301 West High St., Room 530
Jefferson City, MO 651020690
573-751-4126
Toll free in MO: 1-800-726-7390
TDD/TTY: 573-526-4536
Fax: 573-751-1165
www.insurance.state.mo.us
Montana
Department of Insurance
840 Helena Ave.
Helena, MT 59601
406-444-2040
Toll free in MT: 1-800-332-6148
Fax: 406-444-3497
www.state.mt.us/sao
Nebraska
Department of Insurance
Terminal Building
941 “O” St., Suite 400
Lincoln, NE 685083639
402-471-2201
Toll free in NE: 1-877-564-7323
TDD toll free: 1-800-833-7351
Fax: Fax: 402-471-6559
www.nol.org/home/NDOI
Nevada
Division of Insurance
Department of Business & Industry
788 Fairview Drive, Suite 300
Carson City, NV 89701
775-687-7650
Fax: Fax: 775-687-3937
E-mail: insinfo@doi.state.nv.us
www.doi.state.nv.us/
Division of Insurance
Department of Business & Industry
2501 East Sahara Ave, Suite 302
Las Vegas, NV 89104
(702) 486-4009
Fax: Fax: 702-486-4007
www.doi.state.nv.us/
New Hampshire
Department of Insurance
21 South Fruit St., Suite 14
Concord, NH 03301-2430
603-271-2261
Toll free in NH: 1-800-852-3416
TDD/TTY toll free in NH: 1-800-735-2964
Fax: 603-271-0248
E-mail: requests@ins.state.nh.us
www.nh.gov/insurance
New Jersey
Department of Banking and Insurance
20 West State St.
P.O. Box 325
Trenton, NJ 08625
609-633-7667
Fax: 609-292-5571
www.njdobi.org
New Mexico
Department of Insurance
P.O. Box 1269
Santa Fe, NM 87504-1269
505-827-4601
Toll free in NM: 1-800-947-4722
Fax: 505-827-4734
www.nmprc.state.nm.us
New York
Consumer Services Bureau
Insurance Department
One Commerce Plaza
Albany, NY 12257
518-474-6600
Toll free: 1-800-342-3736
Fax: 518-474-6630
www.ins.state.ny.us
Consumer Services Bureau
Insurance Department
65 Court St. #7
Buffalo, NY 14202
716-847-7618
Toll free in NY: 1-800-342-3736
Fax: 716-847-7925
www.ins.state.ny.us
North Carolina
Department of Insurance
Dobbs Bldg., 430 North Salisbury St.
1201 Mail Service Cetner
Raleigh, NC 27699-1201
919-733-7349
Toll free: 1-800-546-5664
Toll free:1-800-662-7777
Fax: 919-733-0085
E-mail: consumer@ncdoi.net
www.ncdoi.com
North Dakota
Insurance Department
600 East Boulevard Ave.
5th Floor
Bismarck, ND 58505
701-328-2440
Toll free in ND: 1-800-247-0560
TDD/TTY toll free: 1-800-366-6888
Fax: 701-328-4880
E-mail: insurance@state.nd.us
www.state.nd.us/ndins
Ohio
Office of Consumer Services
Department of Insurance
2100 Stella Court
Columbus, OH 43215-1067
614-644-3378
Toll free: 1-800-686-1526 (consumer hotline)
Toll free:1-800-686-1527 (fraud hotline)
Toll free:1-800-686-1578 (senior hotline)
TDD/TTY: 614-644-3745
Fax: 614-387-1302
E-mail: nancy.colley@ins.state.oh.us
www.ohioinsurance.gov
Oklahoma
Insurance Department
2401 N. W. 23rd St., Suite 28
PO Box 53408
Oklahoma City, OK 73152-3408
405-521-2828
Toll free in OK: 1-800-522-0071
Fax: 405-521-6635
E-mail: okinsdpt@telepath.com
www.oid.state.ok.us
Oregon
Insurance Division
350 Winter St., NE, Room 440-2
P.O. Box 14480
Salem, OR 97310-3883
503-947-7984
Toll free in OR: 1-888-877-4894
Fax: 503-378-4351
E-mail: dcbs.insmail@state.or.us
insurance.oregon.gov
Pennsylvania
Bureau of Consumer Service
Insurance Department
1321 Strawberry Square
13th Floor
Harrisburg, PA 17120
717-787-2317
Toll free: 1-877-881-6388
Fax: 717-787-8585
www.insurance.state.pa.us
Puerto Rico
Office of the Commissioner of Insurance
Call Box 8330
Fernandez Juncos Station
Santurce, PR 00910-8330
787-722-8686
787-721-5848
Fax: 787-722-4402
www.ocs.gobierno.pr
Rhode Island
Insurance Division
Department of Business Regulation
233 Richmond St., Suite 233
Providence, RI 02903-4233
401-222-2223
TDD: 401-222-2999
Fax: 401-222-5475
www.dbr.state.ri.us
South Carolina
Consumer Services
Department of Insurance
300 Arbor Lake Drive, Suite 1200
P.O. Box 100105
Columbia, SC 29202
803-737-6180
Toll free in SC: 1-800-768-3467
Fax: 803-737-6231
E-mail: CnsmMail@doi.state.sc.us
www.doi.state.sc.us
South Dakota
Division of Insurance
Department of Revenue and Regulation
445 East Capital
Pierre, SD 57501
605-773-3563
Fax: 605-773-5369
www.state.sd.us/drr
Tennessee
Department of Commerce and Insurance
500 James Robertson Pkwy.
5th Floor
Nashville, TN 37243-0565
615-741-2241
Toll free in TN: 1-800-342-4029
Fax: 615-532-6934
www.state.tn.us/commerce
Texas
Department of Insurance
333 Guadalupe St.
P.O. Box 149104
Austin, TX 78614-9104
512-463-6169
Toll free in TX: 1-800-252-3439 (consumer help line)
Fax: 512-475-2005
E-mail: rbordelon@opic.state.tx.us
www.tdi.state.tx.us
Utah
Department of Insurance
State Office Bldg., Room 3110
Salt Lake City, UT 841146901
801-538-3805
Toll free in UT: 1-800-439-3805
TDD: 801-538-3826
Fax: 801-538-3829
www.insurance.state.ut.us
Vermont
Department of Banking, Insurance, Securities and Health Care Administration
89 Main St., Drawer 20
Montpelier, VT 05620-3101
802-828-3302
Toll free in VT: 1-800-964-1784
Toll free in VT: 1-800-631-7788 (Health Insurance)
Fax: 802-828-3306
www.bishca.state.vt.us
Virgin Islands
Divison of Banking and Insurance
Kongen’s Gade #18
St. Thomas, VI 00802
340-774-7166
Fax: 340-774-9458
E-mail: vidoi001@aol.com
Virginia
Bureau of Insurance
State Corporation Commission
PO Box 1157
1300 East Main St. (23219) (only for special delivery and walk-ins)
Richmond, VA 23218
804-371-9967
Toll free in VA: 1-800-552-7945
TDD: 804-371-9206
E-mail: www.state.va.us/scc
Washington
Office of the Commssioner of Insurance
Insurance 5000 Building
P.O. Box 40255
Olympia, WA 98504-0255
360-725-7103
Toll free in WA: 1-800-562-6900
TDD: 360-586-0241
Fax: 360-586-3109
E-mail: mikek@olc-wa-gov
www.insurance.wa.gov
West Virginia
Department of Insurance
1124 Smith St. (25301)
P.O. Box 50540
Charleston, WV 25305-0540
304-558-3354
Toll free in WV: 1-888-TRY-WVIC (888-879-9842)
Fax: 304-558-0412
E-mail: wvins@wvinsurance.gov
www.wvinsurance.gov
Wisconsin
Office of the Commissioner of Insurance
125 S. Webster St. (53702)
P.O. Box 7873
Madison, WI 53707-7873
608-266-0103
Toll free in WI: 1-800-236-8517
Dial 711 and ask for 608-266-3586
Fax: 608-266-9935
E-mail: information@oci.state.wi.us
oci.wi.gov
Wyoming
Department of Insurance
Herschler Bldg.,122 West 25th St.
3rd Floor East
Cheyenne, WY 82002-0440
307-777-7401
Toll free in WY: 1-800-438-5768
Fax: 307-777-5895
E-mail: wyinsdep@state.wy.us
insurance.state.wy.us/
