Power Outages: Be Prepared
Your electric service is generally very reliable; however, extreme weather conditions and other factors can lead to a temporary loss of power. To keep your family safe and comfortable during an outage or other emergency, it’s important to be prepared.
Here are some tips:
• Create an emergency preparedness kit, including a flashlight, batteries, cash and first aid supplies.
• Maintain supplies of healthy and filling snacks that don’t require refrigeration, such as dried fruits, nuts and protein bars.
• Make sure you have alternative charging methods for your phone or any device that requires power.
• Purchase ice or freeze water-filled plastic containers to help keep food cold during a temporary power outage.
• Learn about the emergency plans established in your area by contacting your state or local emergency management agency.
• If you rely on anything that’s battery-operated or power dependent, such as a medical device, have a backup plan.
• Maintain backup generators according to manufacturers’ recommendations and store an adequate supply of fuel in a safe place.
During an outage, monitor local radio stations or online sources for reports about power restoration. Disconnect or switch off appliances and electronic equipment that were running when the power went out. Avoid opening refrigerators and freezers to save cold air and preserve food longer.
Follow these measures to ensure the safety of you and your family during and after an outage.
Generators. Operate backup generators safely by following manufacturer’s instructions. Don’t attempt to connect your generator to the electrical system; it can backfeed to outdoor utility lines and injure or kill utility service personnel. An automatic transfer switch—installed by a qualified electrician—will help to ensure safe operation.
Refrigerated foods. Discard any perishable items in your refrigerator or freezer that may not be safe to consume. A refrigerator keeps food at a safe temperature for up to four hours during a power outage if it remains closed. The U.S. Department of Health and Human Services recommends discarding foods such as meat, poultry and eggs if they’ve been above 40°F for more than two hours.
For more tips and resources, see Power Outages from the U.S. Department of Homeland Security.
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How to Make a Disaster Plan for Your Pet
A hurricane. A flood. A fire. When disaster strikes, our worst fears can come to life. There’s panic and confusion. And, depending on the catastrophe, you may need to leave your home – often in a hurry.
Who can forget the image of pragmatic Otis–a German shepherd mix–who was not a stray but escaped from a screen porch during flooding, carrying his own bag of dog food.
When it comes to these terrifying events, there’s a lot to think about, and it’s important to exactly know what to do with your family, including your pets. So while we hope it never comes to this, let’s make sure you and your pets are prepared in the event of an emergency.
1. Make a Plan
When it comes to disaster planning, preparation is key! That’s why it’s a smart idea to keep a leash by the exit and have a planned destination in case you need to leave in a hurry. If possible, it’s a good idea to have more than one transportation option in mind just in case your primary mode becomes unavailable.
In the event you are separated from your pet, you will want to make sure they have proper identification. This includes having an up-to-date license, a microchip, and accurately labeling their carriers. You want to make it easy for anyone who finds your pet to contact you. That way you and your buddy can be reunited as quickly as possible.
2. Know Where to Seek Shelter
It’s not easy to think about something happening to your home, but it’s important to have a plan in place should you – and your pets – need to evacuate.
For many, it’s as simple as calling a friend or family member, but what if that’s not an option? Ask your veterinarian for a list of facilities that can accommodate pets. It’s also a good idea to identify pet-friendly places you and your pet could stay until it’s safe to return home.
3. Build an Emergency Kit
From clothing to medicine, most of us know what we need to pack if we’re going to be away from home for a period of time. However, in the event of an emergency, it could be hard to pack for yourself and your pet when you’re under duress and in a hurry, increasing the likelihood of forgetting something important.
To avoid this, prepare a pet emergency kit that you can easily grab if you’re running out the door. This will ensure you can provide for your pet’s needs when you’re away from home and it will save you precious seconds if you are rushing to evacuate. When preparing a kit, consider everything your pal needs on a daily basis: food, water, prescriptions, leash or harness, maybe even a toy or two. It’s also important to include a pet first-aid kit (create your own with this handy checklist) in case your pet gets injured.
4. Don’t Forget Your Rescue Alert Sticker
What if you’re not home when disaster strikes? How will rescuers know you share your home with a furry family member? That’s why you place a rescue alert sticker near your front door.
These stickers let rescuers know what types of pets are in your home, how many there are, and provides them with your veterinarian’s contact information. Get a Free Rescue Alert Sticker today from the American Society for the Prevention of Cruelty to Animals® (ASPCA®)!
Did you ever have to evacuate with a pet? What was your experience like? Do you have tips to add to our list? Sound off on our Facebook page or on our Twitter, LinkedIn or Instagram feeds. And don’t forget to sign up for our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
Home Contractor Warning Signs…
What are some red flags for industry professionals?
Hiring a professional to work in your home is a touchy thing. You want to get the best work for your dollar, but not all of the “professionals” out there will give you the kind of quality work you’re looking for, or even be honest about how much it will cost you in the end.
To help homeowners figure out how to tell the true professionals from the scam artists, we turned to our home industry experts to find out what the red flags are for the home expert industry. So what are some home contractor warning signs? Here’s a list of the biggest red flags…
1. Lack of a track record
Any professional worth working with will have references for you to check, so you can see the quality of their previous work. If you can’t find any information about a professional’s work online, or they’re cagey about giving you references, you should be very suspicious. Please do not be fooled by sites like Yelp or Angie’s List. Anyone can purchase their way onto these sites and invest more to highlight only their best reviews. Actually, a Jersey Shore Real Estate Agent will likely have a number of contacts they can refer you to.
2. Get it in writing
Some old-timers in the industry might advocate their word as their bond, but as a homeowner you should always get the plan in writing. A written contract can save you a lot of heart ache, and a true professional shouldn’t have a problem with it.
3. The contractor is late
Showing up late to a first meeting is a huge red flag for a contractor, just like it would be in any other situation. If they don’t respect your time or make an effort to behave professionally on your first meeting, don’t expect that to change after you’ve hired them. That goes double if they swear excessively, smoke, wear shoes into your house without slip covers, or otherwise behave unprofessionally.
4. Be suspicious of too-low prices
It’s tempting to go off lowest price offered when you’re looking for a home professional, but you should think twice before picking that one outlier company. Ask yourself: what corners are they cutting to get a price that’s so much lower than anybody else is offering?
5. They want you to get the materials
If you don’t have a lot of experience hiring home professionals, you might not know that home professionals usually include material costs in their quotes. If a professional is asking you to do the buying up front, it means that they don’t have a good relationship with supply houses and can’t get credit there. This means they aren’t on top of their finances, and you might find yourself holding the short end of the stick if you hire them.
6. A disorganized truck
If you get a chance to see the contractor’s work space and it’s disorganized or not well cared for, it’s an indication that they are not taking their work seriously or professionally. A disorganized professional will treat your space the same way they treat their truck. If you don’t want to find your house littered with tools, don’t hire someone who’s disorganized about their work.
7. Try and gauge their subject matter expertise
It might be difficult, but try and ask questions that gauge the contractor’s subject matter expertise. While an older, more seasoned contractor may not be a red flag, it’s possible they haven’t kept up on their education since entering the business. Getting the appropriate training up front is important, but the home industry changes all the time, and what was sufficient training a few years ago may not be up to snuff now. Staying up-to-date with codes is the bare minimum here.
So keep an eye out for these early signs that the contractor you’re considering isn’t a true professional.
Recently hire a home contractor or tradesman to perform work in your home? What home contractor warning signs did you spot? Did you learn anything the hard way? Sound off on our Facebook or Twitter pages and don’t forget to sign up for our monthly Patrick Parker Realty eNewsletter for articles like this delivered straight to your inbox!
Hurricane Preparedness: A Complete Guide from the National Weather Service
Two keys to weather safety are to prepare for the risks and to act on those preparations when alerted by emergency officials. These are essential pieces to the Weather-Ready Nation.
Refer to the Federal Emergency Management Agency’s (FEMA) Ready.gov/hurricanes for comprehensive information on hurricane preparedness at home and in your community.
Some highlights on how to prepare and take action are available below:
1. Gather Information
2. Plan & Take Action
4. Additional Resources
1. Gather Information
Know if you live in an evacuation area. Assess your risks and know your home’s vulnerability to storm surge,flooding and wind. Understand National Weather Service forecast products and especially the meaning of NWSwatches and warnings.
Contact your local National Weather Service office and local government/emergency management office. Find out what type of emergencies could occur and how you should respond.
Keep a list of contact information for reference.
- Local Emergency Management Office
- County Law Enforcement
- County Public Safety Fire/Rescue
- State, County and City/Town Government
- Local Hospitals
- Local Utilities
- Local American Red Cross
- Local TV Stations
- Local Radio Stations
- Your Property Insurance Agent
Online hazard and vulnerability assessment tools are available to gather information about your risks.
- Check your hazards risks with FEMA’s Map Portal.
- Rate your flood risk with the FloodSmart.gov portal.
2. Plan & Take Action
Everyone needs to be prepared for the unexpected. Your friends and family may not be together when disaster strikes. How will you find each other? Will you know if your children or parents are safe? You may have to evacuate or be confined to your home. What will you do if water, gas, electricity or phone services are shut off?
Develop and document plans for your specific risks.
- FREE DOWNLOAD: Protect yourself and family with a Family Emergency Plan
- Be sure to plan for locations away from home
- Business owners and site locations should create Workplace Plans
- Make sure schools and daycares have School Emergency Plans
- Pet owners should have plans to care for their animals. The Centers for Disease Control & Prevention offer information on animal health impacts in evacuation shelters.
- Prepare your boat and be aware of marine safety if you are on or near the water.
Health & Environment
Follow guidelines to guard your community’s health and protect the environment during and after the storm.
- Review the Centers for Disease Control’s (CDC) health considerations before, during, and after a storm.
- Remember to follow the U.S. Food & Drug Administration’s (FDA) food and water safety guidelines during disasters.
- Review the Environmental Protection Agency (EPA) suggestions for health and environmental safety in disaster preparedness.
- Review the FEMA Evacuation Guidelines to allow for enough time to pack and inform friends and family if you need to leave your home. FOLLOW instructions issued by local officials. Leave immediately if ordered!
- Consider your protection options to decide whether to stay or evacuate your home if you are not ordered to evacuate.
When waiting out a storm be careful, the danger may not be over yet…
Be alert for:
- Tornadoes – they are often spawned by hurricanes.
- The calm “eye” of the storm – it may seem like the storm is over, but after the eye passes, the winds will change direction and quickly return to hurricane force.
- Wait until an area is declared safe before returning home.
- Remember that recovering from a disaster is usually a gradual process.
4. Additional Resources
This content originally appeared on noaa.gov
How to Cut Your Homeowner’s Insurance in Half
Fire, flood, earthquakes, hurricanes, wind, falling trees, and burst water pipes are just some of the villains that could damage or destroy your home and its contents. Or maybe someone will trip not so lightly down your stairs and decide to sue. Don’t forget about thieves, who could ransack your abode and steal your valuables.
Whether you own or rent a raised ranch, brownstone, McMansion, or two-bedroom condo, having the right kind of home insurance – and enough of it – is both costly and vital. Yet with a little effort, you can cut your premium in half.
Make the Crucial Decision to Spend More on Homeowner’s Insurance
Most policies cover homes and personal property (the items inside your home) for “actual cash value” which is based on what they’d be worth today, considering wear and tear. If the roof is 12 years old, it will be valued at that amount – not what it will cost you get a new roof.
To insure the full cost of replacing your home and possessions, you need to buy a more expensive “guaranteed replacement cost” policy. While it will run you in the range of 10% to 15% more, virtually every personal finance expert we’ve come across recommends guaranteed replacement cost coverage for your home and belongings.
If you have a cash value policy and disaster strikes, the check you get from the insurer will be for a lot less than you’ll need to rebuild. Think about that roof. Every house in the neighborhood needs a new one. There’s a high demand for roofers, the cost of labor and materials has gone up … and if you’ve got a cash value policy, you’ll only get reimbursed for the value of your 12 year old roof. Yet it will probably cost you thousands more to get a new one. Yikes!
With cash value coverage, you’ll take a hit on your personal property losses as well, since you’ll only be reimbursed for the depreciated value of each piece of personal property. For example, consider a couch that cost $1,000 when it was purchased 10 years ago. With a cash value policy, you might only get $500 for it – regardless of what it might cost to buy a couch like the one you lost.
Is It Really Guaranteed Replacement Cost?
You might think that if you spend the extra 10% to 15% for guaranteed replacement cost insurance, the policy will actually pay the entire replacement cost. Not necessarily. Some companies will pay the actual replacement cost; others limit their payment to 125% or 150% of the face value. Be sure you know exactly how your policy defines this coverage.
A ballpark figure on your home’s value is a useful starting place, but that won’t tell you how much it’s going to cost to rebuild. You’d be wise to get a professional estimate of the replacement cost of your home – not its market value. Ask insurers, get a friendly local builder to give an estimate based on current local conditions, and crunch the numbers with an online replacement cost calculator. Then insure your home for 100% of its replacement cost.
Also be sure that your policy has automatic inflation protection, which increases its face value each year based upon construction costs in your area. It’s another way to make sure your home remains sufficiently insured.
Although they’re not identical, home insurance policies are standardized to some extent. Still, they can be complicated. Before signing on the dotted line, take the time to understand what the various policies will cover and what they won’t.
If you’re like most people who rent, you probably don’t have home insurance. That could prove very costly. Your landlord’s policy will not protect your possessions against loss or damage. Nor will it protect you against personal liability if, say, your babysitter trips on the rug and sues you. Yet according to the Independent Insurance Agents & Brokers of America, it only costs $12 per month for about $30,000 of property coverage and $100,000 of liability coverage.
The tips we offer here for homeowners can also help renters find the best deal on a policy.
How to Cut Your Homeowner’s Insurance in Half:
It’s well worth investing the time to lower your home insurance costs. With a little effort, you really can cut your premium by as much as 50 percent, not just this year, but for years to come. Of course, in certain parts of the country, homeowner’s insurance rates are going up and up. If you live along a coastline, for example, your costs are going to be high no matter what you do. It’s all the more important for you to follow these steps. The more you do what we suggest here, the more you’ll save.
1. Make sure you look your best on paper.
Insurers believe that reliable bill payers file fewer claims, which is of course what they want. So check your credit report for accuracy and get errors fixed. Otherwise, you will pay more and may even be denied coverage.
2. Don’t be clueless.
Before agreeing to give you a policy, insurance companies check to see if you have a history of filing claims – even small ones, like for theft or fire.
TIP: Consider covering some claims on your own – or even withdrawing a claim you’ve made – to avoid falling into the bad risk zone. Ask your insurance agent for some guidance on this. (Don’t blame us, we’re just the messengers!)
3. Shop around. Policies are not identical.
Costs, coverage, and conditions can vary as can the financial stability of the insurer. Compare coverage and prices for your home and belongings.. Start with a couple of sites that will get you multiple quotes, for example, Insure and Insweb.
But don’t stop there. Make sure you get quotes from a range of insurers, including:
- “Independent” agents, who sell the policies of several different insurance companies. While they can help you get the best deal among the insurers they handle, their commission structure is the highest. Still, there are often benefits to working locally with someone who you know and can contact quickly in an emergency. But even if all you want to do is look at the pros and cons – say, of registering your kid’s car at school or at home – a good independent agent should help you figure out what makes sense. Your best bet is going to be to ask friends and relatives for recommendations of local independents they’ve worked with and liked.
- “Captive sellers,” who work for a single insurance company such as Allstate and State Farm – companies that have their own sales forces. Their commissions are typically lower than those of the independent agents, so you may pay a bit less for your policy.
- ”Direct writers,” who can give you a quote on the phone or online. They can generally offer the lowest-priced policies because they sidestep commission fees. Examples: Amica (800-242-6422) and GEICO (800-841-2964). Members of the military and their families should definitely consider USAA (800-531-8080). Be aware, though, that direct writers tend to be the choosiest. If you have anything that hints at a real risk (a wood stove, for example), it’s quite possible they’ll say, “No thanks.”
4. Go for the highest deductible you can afford.
Compare quotes for the replacement value of your home and its contents with different deductibles, say, $500 and $1,000. They’ll shave 10% to 25% off your premium annually. If you can go for a still higher amount of $2,500 or $5,000, your annual savings will be 30% or higher.
5. Put smoke and carbon monoxide detectors on every floor, and make sure the agent knows about them.
A smoke detector may not only save a life, it will pay for itself in a year or two with the 2% to 5% that it will save you on premiums.
6. Get fire extinguishers, deadbolt locks for all the doors, and consider other safety devices.
Ask if there are other low-cost safety features that might save even more money on the policy. And depending on the location and condition of your home, you may want to invest in costlier fire and theft protection. Fire sprinklers, anyone? They can save you money – although a home security system that’s connected to the local police and fire departments can save you more, in the range of 15% to 20% annually.
7. Ask the agent or company that writes your car insurance for a “multiple policy” discount.
Find out if you’re eligible for a price reduction if you let them write both your home and car insurance. You could save 10% to 20%. Also ask other insurers what their multiple policy discounts are.
8. Be loyal – if it’ll save you money!
Many insurers reward good customers to keep them. Does yours offer discounts to long-time customers? Ask!
9. Get money off for “good behavior.”
Have you been claim-free for a few years? Some companies offer discounts from 2% to 5%.
10. Are you retired?
Some companies offer retirees discounts of 10% to 20%.
11. Be sure to ask about all possible other discounts.
Here’s a handy checklist:
- Was your home built with fire-resistant materials?
- Is yours a non-smoking household?
- Got a newish house, built with state-of-the-art construction materials? If so, it should cost less to insure.
- Recently renovated? You might be eligible for a price break – but if you made a significant improvement, you may need additional coverage.
- If you normally keep some of your gems in a safe deposit box, and if they’re worth more than the standard policy limits, ask if you would be eligible for a discount.
- Does your membership in an organization – whether it’s AARP, AAA, a labor union, or an alumni group – make you eligible for a discount?
- Insuring a second home? See if you can get a multiple policy discount. You might need to accept less coverage for the contents of your second home or install an alarm system.
NOTE: Protect Yourself from Mother Nature
Even though some 25% to 30% of flood insurance claims come from areas that weren’t considered to be high risk, basic policies don’t cover floods. For more information, contact the National Flood Insurance Program (888)FLOOD29.
What are your homeowner’s insurance policy experiences? Tell us the good, bad and ugly in Comments or on the Patrick Parker Realty Facebook or Twitter pages and don’t forget to sign up for the monthly Patrick Parker Realty eNewsletter for more articles like this delivered straight to your inbox.
12 Ways to Save on Homeowners Insurance
The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from.
Here are some things to consider when buying homeowners insurance:
1. Shop Around
It’ll take some time, but could save you a good sum of money. Ask your friends, do some online research or contact your state insurance department. The National Association of Insurance Commissioners (www.naic.org) has information to help you choose an insurer in your state, including complaints. States often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.
Also check consumer guides, insurance agents, companies and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don’t consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim. So in assessing service quality, use the complaint information cited above and talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs.
Check the financial stability of the companies you are considering with rating companies such as A.M. Best and Standard & Poor’s and consult consumer magazines. When you’ve narrowed the field to three insurers, get price quotes.
2. Raise Your Deductible
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the shore, you may have a separate windstorm deductible.
3. Don’t confuse what you paid for your house with rebuilding costs
The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.
4. Buy your home and auto policies from the same insurer
Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.
5. Make your home more disaster resistant
Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
6. Improve your home security
You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.
7. Seek out other discounts
Companies offer several types of discounts, but they don’t all offer the same discount or the same amount of discount in all states. For example, since retired people stay at home more than working people they are less likely to be burglarized and may spot fires sooner, too. Retired people also have more time for maintaining their homes. If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. Some employers and professional associations administer group insurance programs that may offer a better deal than you can get elsewhere.
8. Maintain a good credit record
Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies. In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
RELATED: Ways to Improve Your Credit Score
9. Stay with the same insurer
If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.
10. Review the limits in your policy and the value of your possessions at least once a year
You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you’ll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference.
11. Look for private insurance if you are in a government plan
If you live in a high-risk area – say, one that is especially vulnerable to coastal storms – and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative or contact your state department of insurance for the names of companies that might be interested in your business. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.
12. When you’re buying a home, consider the cost of homeowners insurance
You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. For example, if you live on the water, consider a brick home because it’s more wind resistant. Choosing wisely could cut your premiums by 5 to 15 percent.
Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are thinking of buying. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have.
Remember that flood insurance is not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you’ll have to pay for a flood insurance policy. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov.
If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you’re shopping around for a policy. For example, if you run a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.
Patrick Parker Realty works with a network of professionals for home buying and selling peripheral services. Contact Us today for a referral to one of our trusted partners.
5 Different Types of Homeowner’s Insurance
Owning a home can be a risky business. Homeowner’s insurance provides protection against risks such as medical payments for anyone who injures himself on your property, legal fees if the injury case goes to court and hazard insurance against the cost of damage from fire, theft, wind or a bursting water pipe. Mortgage lenders require borrowers to take out hazard insurance to guard against the loss of the house. Homeowners insurance comes in several standard forms.
Insurers use the term HO-1 to identify a bare-bones policy (discontinued in many states, according to the International Risk Management Institute). It provides hazard insurance covering a list of “named perils,” as well as liability insurance. Liability occurs when an owner is held responsible for an accident on his property, such as a visitor tripping over a loose step and breaking her ankle.
HO-2 covers the owner’s house, other buildings on the property, personal property–furniture, clothes, books and so on–as well as liability insurance. The list of “named perils” is broader than under HO-1. Some policies also pay expenses if the owner has to move into a hotel or apartment while his house is being repaired. The policy covers personal property up to a percentage of the value of the policy, typically 50 to 70 percent.
HO-3 is the policy most commonly used today, the institute states. It offers the same features as HO-2, but protects homes against any damage not specifically excluded; floods, earthquakes and water seepage are standard exemptions. Personal property is only covered for damage from the 16 named perils in the policy.
4. Cash Value
A cash value policy pays owners the original purchase price of whatever was damaged, less depreciation for wear and tear, the Federal Citizen Information Center states. If the owner bought her house for $80,000 10 years ago, the most she can claim is $80,000 less a decade of depreciation, even if the appraised value of the house is higher.
5. Replacement Value
A replacement value policy covers the cost of replacing or repairing a house or personal possessions, regardless of the cash value or the original purchase price. A $125,000 policy, for instance, will pay for repairs and replacements up to the policy’s value. A guaranteed or extended replacement value policy will cover expenses above the value of the policy.
Patrick Parker Realty works with a network of professionals for home buying and selling peripheral services. Contact Us today for a referral to one of our trusted partners.
Get Great First Aid & Emergency Preparedness Apps offered by The American Red Cross
First Aid App
The official American Red Cross First Aid app puts expert advice for everyday emergencies in your hand. Available for iPhone and Android devices, the official American Red Cross First Aid app offers videos, interactive quizzes and simple step-by-step advice it’s never been easier to know first aid.
Monitor conditions in your area or throughout the storm track, prepare your family and home, find help and let others know you are safe even if the power is out – a must have for anyone who lives in an area where a hurricane may strike or has loved ones who do.
Shelter Finder App
The Red Cross Shelter Finder is available in the iTunes store and works on iOS devices. The Shelter Finder displays open Red Cross shelters and their current population on an easy to use map interface.
Stay safe, we hope you will never need these tools.
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