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Lowering your insurance to match reduced market values is a bad move

Posted by Rey Renolds Monday, March 26, 2012 1 comment

Home & Commercial Building Prices Down, Rebuilding Costs Up

In a difficult economy it may be tempting to save a few dollars by reducing your Homeowners Insurance or coverage for your commercial building to match decreased market values.

Homeowners Insurance and insurance for commercial buildings is designed to cover the cost of rebuilding, not the market value of a home or commercial structure. Recent studies show that rebuilding costs have climbed during the recession, even as market values plummeted.

In past decades, market values were always ahead of rebuilding costs. That trend has reversed. Homeowners and business owners are encouraged not to lower their insurance to match market values. If your home or business is destroyed in a fire, you could be stuck paying the difference between your insured amount and the actual cost to rebuild.

Instead work with your agent or insurance company annually to determine the cost to rebuild and insure accordingly.

Research from Xactware, a leading rebuilding cost estimator for the construction and insurance industries, reveals that between 2006 and 2011 average reconstruction costs rose 17.55 percent in Washington, 13.92 percent in Oregon and 13.81 percent in Idaho.

During that same time period, data from the National Association of Realtors shows median home sales prices fell 25.9 percent in the Seattle-Tacoma-Bellevue area and 14.13 percent in the Spokane area. The only areas that experienced a net increase in median home sales price were the Yakima area with prices rising 28.13 percent and Kennewick-Richland-Pasco prices rising 16.14 percent.

In Oregon, median home sales prices fell 22.04 percent in the Portland-Vancouver-Beaverton area, 30.34 percent in the Salem area and 18.3 in Eugene-Springfield. In Idaho, median home sales prices fell 43.58 percent in the Boise City-Nampa area.

According to Xactware, the national average cost to rebuild rose 15.17 percent between 2006 and 2011. The national median home sales price fell 21.6 percent, according to the National Association of Realtors.

A 2008 survey by Marshall & Swift showed that 64 percent of homeowners in the United States don’t have enough insurance to rebuild their homes if they are destroyed. Of those without enough coverage, the average homeowner only has enough insurance to rebuild about 81 percent of the home.

Although most insurance companies periodically update your replacement cost coverage amount, it is your responsibility to make sure you have enough coverage for your home or business and its contents.

NW Insurance Council offers the following tips to help you keep your insurance coverage up to date:

Contact your agent or insurance company annually to evaluate the current replacement cost of your home or commercial building. Be sure to include any large remodel projects or additions that could add a substantial amount to your rebuilding costs. Also ask about special coverage for high-value items such as jewelry, art, antiques and coin collections.
Marshall & Swift offers homeowners an affordable way to check home replacement costs using their online Accucoverage tool. For $7.95, Accucoverage evaluates your home and gives an estimated rebuilding/replacement cost.
Consider separate optional flood and earthquake insurance. Flood and earthquake damage is specifically excluded from standard Homeowners insurance policies and most business insurance policies. Keep an up-to-date home inventory with Free Home Inventory Software from the Insurance Information Institute.
Prepare your business to survive a disaster, get Open For Business from the Institute for Business & Home Safety.

For more information on Homeowners and business insurance, visit NW Insurance Council or call (800) 664-4942.

The NW Insurance Council is a non-profit, public-education organization funded by member insurance companies serving Washington, Oregon and Idaho.

Posted by Rey Renolds Friday, December 16, 2011 0 comments

Protect your vehicle, gifts from holiday prowlers

The hustle and bustle of holiday shopping has begun. While rushing from store to store, remember you are not the only one looking for a hot deal. Parking lot thieves are on the prowl, preying on inattentive shoppers and hoping to cash in at your expense.

If you have optional Comprehensive Coverage on your Auto Insurance Policy, your vehicle is covered if it’s stolen. However, your auto policy will not cover gifts and most personal possessions stolen from your car. Your Homeownersor Renterspolicy does cover your belongings, including gifts, but only after you pay the deductible, which is usually $250 or more.

That’s why it’s important to take extra precautions as you shop from store to store and get in and out of your vehicle. Unless it’s permanently attached to your car, most Auto Insurance policies don’t cover your personal belongings. You could save yourself a lot of headaches by taking steps ahead of time to reduce the risk of a break-in.

As you shop, be wary that car prowlers are lurking in parking lots waiting to steal gifts from unattended cars. Here are a few tips from NW Insurance Council to help you shop safely and worry free:

Review your insurance policy and consider adding Comprehensive coverage if you don’t already have it.
Whenever possible, store gifts and other valuables in your trunk. If this isn’t possible, throw a blanket over gifts before you leave your vehicle unattended.
Manually lock your vehicle’s doors. Do not use your remote locking device. Many high-tech thieves have begun using scanning devices to record remote lock frequencies to unlock vehicles.
Double-check to make sure your doors are locked.
Don’t go back and forth frequently from stores to your vehicle to unload gifts. Car prowlers watch for shoppers who leave gifts in their vehicles unattended.

If you have questions about your Homeowners or Renters insurance, check your policy or call your insurance agent or company. For more information on how to protect your vehicle and gifts from theft, contact NW Insurance Council at (800) 664-4942 or visit www.nwinsurance.org.

Posted by Rey Renolds Wednesday, September 28, 2011 0 comments

Water Damage: Home maintenance is a key to preventing structural damage, insurance claims

Summer has come to an end and that means fewer fair weather days to work outside. Now is a good time to do some simple, preventative maintenance around your home to protect it from harsh fall and winter weather.

If your home isn’t properly maintained, it could be vulnerable to water damage –one of the most costly Homeowners Insurance claims.

Water running or dripping into your home from the outside can rot drywall and support beams, crack foundation walls and cause mold. Standard Homeowners policies do not cover water damage unless it is the result of a covered peril such as a broken water pipe or water that gets into the home due to a fire or windstorm. Damage from roof leaks, excessive condensation or poor landscaping is excluded from coverage.

Nationally, in 2007, water damage, including frozen, burst pipes, accounted for 22 percent of all Homeowners Insurance claims, according to the Insurance Information Institute. The average claim was $5,531.

The good news is most water-damage losses are easily preventable by taking some simple maintenance steps. NW Insurance Council and the Institute for Business & Home Safety offer these tips to help you prevent future damage and thousands of dollars in repair costs:

Inspect your roof. Remove leaves, branches and debris from gutters to prevent water blockage and possible run-off into the home.
If you find a leak, clean and dry the exposed area and fix the problem immediately.
Routinely inspect ceilings, walls, floors and windowsills for water stains, discoloration and musty odors.
Routinely inspect attics, vents, ducts, washer hoses and outside water sources for leaks.
Check and replace heating system air filters.
Properly ventilate bathrooms and kitchens to prevent a moisture buildup.
Use high quality silicone caulk to seal areas where cables or pipes exit walls, such as around clothes dryers, kitchen or bathroom vents and outdoor electrical outlets.
Routinely caulk bathtubs, sinks, tile walls and floors to prevent water seepage.
To reduce flooding from poor drainage or excessive rainfall, clear outside drains of debris and make sure your lot’s grading directs water away from buildings.

For free brochures, Protect Your Home From Water Damage and Maintenance Guide For Your Home, contact NW Insurance Council at (800) 664-4942.

NW Insurance Council is a nonprofit, public-education organization funded by member insurance companies serving Washington, Oregon and Idaho.www.nwinsurance.org

Windstorms: They can strike with a devastating blow

Posted by Rey Renolds Friday, December 17, 2010 0 comments

As with many disasters, windstorms can wreak havoc across a region, severely damaging homes, businesses and vehicles.

Fortunately, wind damage is covered under standard homeowners and business owners insurance policies. Vehicle owners with optional Comprehensive Coverage in their Auto Insurance are also insured.

"Insurance companies really show their value to customers following a catastrophe like a windstorm," said Karl Newman, NW Insurance Council president. "It's frustrating to deal with a windstorm loss, but it would be financially devastating to many if they hadn't insured their homes and businesses."

The Hanukkah Eve Windstorm that struck Western Washington and Oregon in December caused nearly $220 million in damage and more than 61,300 insurance claims.

Knowing what to do immediately following a windstorm can help you more quickly get back on your feet. NW Insurance Council offers the following key points and recommendations for homeowners and business owners who experience wind damage:

Filing A Claim:

If you have damage to your home or business, don't wait to file a claim. Filing quickly will reduce the time it takes to get your claim settled.
If you've filed a claim for minor damage that doesn't impact your ability to live in your home, consider getting several repair estimates before your adjuster arrives. This will help your adjuster settle your claim more quickly.
If you have minor damage, please be patient. Adjusters are working to handle the most severely damaged properties first and will make it a priority to reach your property as soon as possible.

Damage from neighbor's trees:

Damage to your home from wind and falling trees is covered under most insurance policies, regardless of whose property the tree fell from.
In cases where negligence can be proven, your neighbor's insurance may apply.
If your neighbor's tree poses a future risk to your property due to leaning, disease or root problems, claims experts recommend asking your neighbor to correct the problem. If the neighbor refuses to act, follow up with a certified letter stating your concerns. File a copy of the letter with your insurance records and provide it to your adjuster in the event of a future loss. This will help the adjuster investigate whether or not there was provable negligence on the neighbor's part.

Additional Living Expenses:

If your home is unsafe to occupy due to physical damage from the windstorm, most policies provide for Additional Living Expenses that exceed your normal expenditures.
General power outages occurring off your insured property are excluded from coverage under most policies.
While you may elect to seek other accommodations due to a power outage, cold weather alone does not qualify you for coverage under your insurance policy.

Frozen and Refrigerated Food Spoilage:

Many companies exclude coverage for spoiled food unless a power outage is caused by a loss on your property, such as a tree severing the power lines attached to your home.
Some companies provide up to $1000 coverage for frozen and refrigerated food spoilage after 72 hours of continuous power interruption. Check your policy for coverage information.

For more information, call (800) 664-4942 or visit http://www.nwinsurance.org/. For information on how to prepare your home, business and family for a natural disaster, visit http://www.getreadynw.org/.

Holiday Prowl: Protect Your Vehicle & Gifts From Parking Lot Thieves

Posted by Rey Renolds Thursday, December 16, 2010 0 comments

The hustle and bustle of holiday shopping is in full swing around the Northwest. While rushing from store to store, remember you are not the only one looking for a hot deal.

Parking lot thieves are on the prowl, aggressively preying on inattentive shoppers hoping to cash in at your expense.

If you have optional Comprehensive Coverage on your Auto Insurance Policy, your vehicle is covered if it's stolen. However, your auto policy will not cover gifts and most personal possessions stolen from your car.

Your Homeowners or Renters policy does cover your belongings, including gifts, but only after you pay the deductible, which is usually $250 or more. That's why it's important to take extra precautions as you shop from store to store and get in and out of your vehicle.

"Unless it's permanently attached to your car, most Auto Insurance policies don't cover your personal belongings," said Karl Newman, NW Insurance Council president. "As always, you'll save yourself a lot of headaches by taking steps ahead of time to reduce the risk of a break-in."

As you shop, be wary that car prowlers are lurking in parking lots waiting to steal gifts from unattended cars. Here are a few tips from NW Insurance Council to help you shop safely and worry free:

Review your insurance policy and consider adding Comprehensive coverage if you don't already have it.
Double-check to make sure your doors are locked.
Whenever possible, store gifts and other valuables in your trunk. If this isn't possible, throw a blanket over gifts before you leave your vehicle unattended.
Don't go back and forth frequently from stores to your vehicle to unload gifts. Car prowlers watch for shoppers who leave gifts in their vehicles unattended.
Do not leave valuable items in sight. Cell phones, laptops and other expensive electronic equipment make your vehicle more inviting to thieves.
Be sure to park in a well-lit area.
Consider installing a quality security system in your vehicle or applying a locking device to your steering wheel.

If you have questions about your Homeowners or Renters insurance, check your policy or call your insurance agent or company.

Kerosene heaters, wood stoves can cost you comfort during cold, winter months

Posted by Rey Renolds Tuesday, December 7, 2010 0 comments

Space heaters and wood stoves are good sources of heat during the cold, winter months. But carelessness and improper use can ruin a festive holiday if safety isn't a priority.

According to the U.S. Consumer Product Safety Commission, space heaters and wood stoves are associated with 25,000 fires and 300 deaths annually.

Nearly half of the reported fires in one- and two-family dwellings are attributed to the use of solid-fuel appliances. These accidents cost homeowners thousands of dollars in damage and loss.

Fuel-burning heaters, such as kerosene heaters, can cause carbon monoxide poisoning and indoor air pollution due to improper venting or incomplete combustion.

As temperatures continue to dip below freezing, NW Insurance Council encourages those who burn wood or kerosene as a source of heat to first follow these helpful tips:

Notify your insurance company or agent before you purchase a wood-burning appliance or begin to install it. Be sure to ask about any special requirements.
Install your wood-burning appliance correctly. Obtain a building permit, follow the building code and manufacturer's recommendations and conform to any special requirements of your insurance company.
Use your wood-burning appliance safely. Burn proper fuels - no milk cartons, other trash or Christmas trees. These materials can lead to dangerous soot buildup that can cause chimney fires.
Maintain your wood-burning appliance on a regular basis. Inspect the appliance and chimney for cracks or corrosion. Sweep the chimney and check your fire extinguisher at least once a year - before the burning season.

Here are a few safety tips when using a kerosene heater:

Place heaters near the center of rooms away from furniture, drapes and other combustibles.
Children and pets should be kept a safe distance from heaters.
Be sure to follow the manufacturers' instructions while using a kerosene heater.
Maintain a constant source of fresh air. Make sure rooms are adequately ventilated before using heaters. Kerosene heaters consume oxygen as they burn. If they are operated in a small room or in an inadequate ventilated place, oxygen levels could be reduced to dangerous levels. Keeping doors to other rooms open will help provide more fresh air.

Homeowners Insurance policies cover damage or loss caused by wood stoves or space heaters, but each company may have unique features in its policies. Check with your agent or insurance company to learn more about your coverage.

For more information about insurance and fuel-burning heaters, contact NW Insurance Council at (800) 664-4942.

Avoid a financial fumble: Don’t reduce Homeowners or business insurance to match lower market values

Posted by Rey Renolds Thursday, December 2, 2010 0 comments

In a difficult economy, it may be tempting to save a few dollars by reducing your Homeowners or commercial building insurance coverage to match decreased market values.

However, studies show that rebuilding costs have climbed during the recession and lowering coverage may be a risky move.

“In past decades, market values were always ahead of rebuilding costs. That trend now has reversed,” said Karl Newman, NW Insurance Council president. “We encourage homeowners and business owners not to lower their insurance to match market values.

If your home or business burns down, you could be stuck paying the difference between your insured amount and the actual cost to rebuild.”

Although most insurance companies routinely update your replacement cost coverage amount, it is your responsibility to make sure you have enough coverage for your home or business and its contents. A 2008 survey by Marshall & Swift showed that 64 percent of homeowners in the United States don’t have enough insurance to rebuild their homes if they are destroyed. Of those without enough coverage, the average homeowner only has enough insurance to rebuild about 81 percent of his home.

Also, while home prices have fallen, studies by Xactware, a leading rebuilding cost estimator, show that costs to rebuild damaged homes increased through the recession, only leveling out this year. Cost increases were powered by rising transportation and building materials costs.

NW Insurance Council offers the following tips to help you keep your insurance coverage up to date:

Contact your agent or insurance company annually to evaluate the current replacement cost of your home or commercial building. Be sure to include any large remodel projects or additions that could add a substantial amount to your rebuilding costs.
Also, be sure to ask about special coverage for high-value items such as jewelry, art, antiques and coin collections.
Consider separate optional flood and earthquake insurance. Flood and earthquake damage is specifically excluded from standard Homeowners insurance policies and most business insurance policies.
Keep an up-to-date home inventory with Free Home Inventory Software from the Insurance Information Institute.
Prepare your business to survive a disaster, get Open For Business from the Institute for Business & Home Safety.