Insurance Nickel Knowledge for 2023
I am certainly not an insurance expert in any way but I have recently learned about many new insurance issues from our agents Melissa Hodak and Lisa Blackwell of Brown and Brown insurance that I thought worth sharing. As the saying goes, “things aren’t like they use to be”. Think floods, fire, home offices, renting a room, an ADU and misbehaving dogs…
I assume everyone has a basic understanding of insurance on their homes. There is your fire policy, your liability policy, maybe an earthquake policy and probably an umbrella policy (additional liability coverage). Then you can have things added on as you need them such as jewelry coverage or artwork.
There are several types of insurance carriers. The most competitive is a Standard Carrier such as Safeco which now owns Liberty Mutual however they have a limit of $2,000,000. If you can’t get coverage from a Standard Carrier than you next plan would be a Surplus Carrier (these are not admitted carriers meaning not regulated or insured by California) and lastly Public Entity Insurance funds (your last resort when you can’t get insurance and the most expensive).
- The #1 claim industry wide is water damage caused by interior plumbing backing up (double check that the water turnoffs behind all your toilets and other locations are not corroded and are working so when you need to shut them off, they are operational).
- Some roof leaks are covered but not all, for example if your roof is 30 years old and the leak is due to wear and tear.
- There is a possibility that your current carrier could decide not to renew your policy at no fault of your own. Carriers now limit how many policies they will do in an area to avoid excessive risk in their portfolio so they will stop writing policies if they are over saturated.
- If you are thinking of building or a major remodel you will need a course of construction policy and liability policy. If you are just doing a bathroom or kitchen cabinets and you will stay in your home during the remodel you probably won’t need one. But for a larger remodel you will. Melissa reminded me that after your remodel be sure and update your existing homeowner’s policy so the limit reflects your improvements. You may also be eligible for some credits on the new items you install i.e. a house alarm, water detection monitor, earthquake gas shut off.
- The insurance carriers now go by their definition of whether your home is a high fire or flood risk. They do not go by the County or Government maps. They have set boundaries based on their claim history. In Hope Ranch they deem us “brushy” so a high fire risk. Per Melissa the biggest risk to them is your home’s location. They really don’t want to insure a property with pine needles, trees overhanging your home or vines that go up your walls on to your roofs. Be sure and correct these things before you apply for insurance as they will inspect your home before they bind your policy.
- Your policy probably provides some coverage on fine art, photo equipment and jewelry but check your scheduled limits as most likely it will not be the coverage you might need. In addition there are various exclusions on certain policies. A friend just had a claim and was told they had no coverage as their policy read the jewelry had to be stored in a safe in a closet to have coverage. Of course, they found this out after they were robbed.
Other risks that may get you turned down for insurance or a higher premium:
–Using your home as an Airbnb (more liability from having the public on your property)
– Running a business out of the house means to them more foot traffic and deliveries.
– If you rent a room or any part of your home out (you will need a Home Sharing Endorsement)
– Most likely your current homeowner policy does not cover large events at your home especially if you are having a large event and you have a pool. You may not have coverage as the public coming into your property in the insurance carrier’s eyes risk wise. For a big wedding or a fund-raising event you will need Event Insurance (you pay by event). You may get around this by covering the pool for the event but you will most likely need it for liability anyway. If the event involves swimming that is a bigger endorsement.
–Some types of dogs are excluded from your homeowner policy “animal liability exclusion”. If you have an excluded pet, a policy will be hard to find but some Surplus Line Carriers may accept your pet for coverage per Melissa. An umbrella policy will give you additional pet coverage but it will still have exclusions for certain types of pets. The ten breeds commonly excluded from home insurance are Pit bull breeds, Doberman pinschers, Rottweilers, Chow chows, Great Danes, Presa canarios, akitas, German shephards, Huskies, and Mastiffs .
One other thing, if you own your home or have other assets you most likely should have an umbrella policy. In the event you have an auto accident, and the other person is hurt due to something you did, your auto policy will have a liability limit say $500,000. The problem is if the person has long-term injuries, they could be awarded $3,000,000 and you would have to pay the difference. An umbrella policy could cover the $2,500,000 and they aren’t very expensive.
Well the insurance market, people and the courts have surely changed in recent years. I was very glad to get a tune up from Brown and Brown and help for this article. Melissa can be reached at (805) 690-2676 if you have any questions.
Trudi
