No insurance policy will cover every possibility of loss. A well-designed insurance program, however, provides you with a solid protective foundation against many insured causes of loss.
I design insurance programs that address their property insurance coverage needs based on whether they are essential, supplemental, or optional.
Essential coverages are coverages you must purchase today.
Supplemental coverages, while of high importance, can wait a while.
Optional coverages address losses you may never face based on your lifestyle, possessions, etc. Something to brag about at the neighborhood barbecue.
Just for today, we’ll unearth some important insurance facts about essential coverages.
Co-ops, condos, and rentals, oh my!
Important Insurance Facts Homeowners and Renters Should Know:
Replacement Cost Coverage for your home or apartment
Make an appointment with your current insurance agent or broker for a comprehensive insurance review. The primary focus of this review will be your property’s replacement cost calculation. Simply put, this is the amount of money needed today to fully repair your home or apartment in case of a covered cause of loss.
Flood Insurance
Losses caused by flood waters from an outside water source are not covered by your typical one-to-four family, renters, cooperative, or condominium policy. (See https://brooklyncovered.com/dont-add-your-tears-to-water-losses-at-home/)
The only way to guarantee flood coverage is a stand-alone flood insurance policy.
Water Backup and Sump Discharge Or Overflow policy endorsement
If this endorsement is not added to your policy, you’ll lack coverage for damage caused by sewer backups or sump pump failures.
Loss Assessment endorsement
This endorsement protects against uninsured losses to common areas assessed to apartment owners and homeowners in some homeowners associations.
Personal Umbrella Liability Policy
While many companies offer up to $1,000,000 in liability coverage, in today’s litigious society, that may not be enough to protect you from lawsuits. This policy also provides additional protection while operating the family car, boat, Jet Ski, etc.
Valuable Items
Your base policy limits coverage for jewelry, cameras, fine china, artwork, furs, and other unique valuables, which is limited in a basic policy.
Appraise and insure these items separately to guarantee full protection.
Your Home Inventory
Stop taking pictures of your meals. Instead, take pictures of your possessions, down to the last sweat sock.
Next steps:
Finally, call your insurance representative to schedule an annual review. This will ensure that your insurance program always includes at least the Essential Coverages.
You can always send your personal coverage questions by email to [email protected].
Meet the author:
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker with 42 years of experience, 29 of which as the owner of Bridge Insurance Agency and Greaves Financial Services.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. You can also visit his website, https://www.greavesinsurance.com, and complete any available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://www.greavesinsurance.com, and click on any of the Subscribe buttons.
Thank goodness for New York State Senator James Sanders Jr. of NYS District 10. He consistently shows how elected officials should serve the people who entrust them with public office. Especially when it comes to helping save his youngest constituents from the toxic effects of “Summer Brain-Dead Syndrome.”
Even though the summer vacation is almost over, you still have a chance to help your children avoid the dreaded “Summer Brain Dead Syndrome.”
What we did every summer
Every summer after her mom died, Ashley and I would go to either the Park Slope or Court Street Barnes and Noble to buy Summer Bridge Course books for her summer learning. Her principal, Dr. Beverly Ffolkes-Bryant, would provide insight into which subjects she should focus on to build the skills she’d need to prepare for the next grade. And every one of her suggestions was on point. McGraw-Hill’s Spectrum Series was my favorite.
A beautiful little Black girl doing what comes naturally – reading.
One plus one is . . . two?
So, every fall, while teachers were bemoaning how “…even some of the top students forgot two plus two is four over summer break,” Ashley was ready for Advanced Calculus. Well, maybe regular calculus. Okay, okay, every required exam she would take during the school year.
She and every other child who read during the summer.
Studies consistently prove children who participate in summer learning programs always perform better the following school year. Why, because they don’t have to relearn study discipline, and the summer programs prepare them for academic challenges they’ll face during the coming school year.
No reason for summer brain-dead syndrome in our family.
Or yours.
Back to Senator Sanders
I receive one email every other week about some program or another NYS residents should be aware of. Last summer his office sent information about the New York State Senate’s Summer Reading Program. All you have to do is register your child at www.nyread.com, and when they read just three books, your child will receive a Certificate of Achievement from Senator Sanders. This year’s submission deadline is September 1, 2023.
If money is tight, and your child doesn’t already have a library card, now is the time to get what is likely the best access card you can possess. Your child will be able to check out and read three, ten, or even 25 books over the summer.
Why didn’t he send a certificate to every child in the State of New York or the country for that matter? Because, at least in New York State, everyone votes for, and is represented by their own State Senator. So, if you haven’t heard about this great summer program from your own State Senator, get on the horn and ask why not. Senator Sanders and his staff put their all into serving the people of New York State’s 10th District, and so should your State Senator.
After all, isn’t that what being a true public servant is all about?
So, a huge thank you to Senator Sanders and his super-dedicated team for keeping us aware and informed.
And I’ll tell you what. If you live in New York State and have to call your State Senator to ask about this program, drop me an email at [email protected]. I’ll choose three (3) families who will receive three books for their home libraries.
We still have time to fight the dreaded summer brain-dead syndrome.
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 28 of those years as the owner of Bridge Insurance Agency and Greaves Financial Services.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. You can also go to his website, https://www.greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://www.greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
An earlier BrooklynCovered.com blog post discussed the need for home buyers to get home inspections (https://brooklyncovered.com/why-home-buyers-need-home-inspections/). We are learning, however, that regular home inspections play an important role in successful home maintenance and enjoyment after the home is purchased.
Homeowners should get regular home inspections for several reasons:
Checking each home with a home inspection
Identify maintenance issues:
Regular home inspections help identify maintenance issues early on before they become larger, more expensive problems. By addressing issues early, homeowners can save money on repairs and extend the lifespan of their home’s components.
Ensure safety:
Home inspections can also help identify potential safety hazards in the home such as mold, radon, or carbon monoxide. These hazards can be harmful to the occupants of the home and should be addressed as soon as possible.
Improve energy efficiency:
An inspection can uncover areas that are not energy efficient, such as air leaks or insufficient insulation. Addressing these issues can help homeowners save money on their energy bills.
Plan for future repairs:
A regular home inspection can also help homeowners plan for future repairs and replacements. By knowing what components of the home are nearing the end of their lifespan, homeowners can budget accordingly and avoid unexpected expenses.
Increase the resale value:
Regular home inspections can also help homeowners maintain or increase the resale value of their home. By staying on top of maintenance issues and making necessary repairs, the home will be in better condition when it comes time to sell.
Overall, regular home inspections will help homeowners save money, maintain a safe living environment, increase the enjoyment of their home, and protect their investment in their home.
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 26 of those years as the owner of Bridge Insurance Agency.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
Some of the tools you’ll need to maintain your home
Home maintenance is an essential part of being a homeowner. Neglecting regular maintenance will lead to a decline in your home’s condition, and cause expensive and serious damage and repairs. It’s important to understand the difference between legitimate claims and damage caused by the lack of home maintenance when it comes to filing an insurance claim.
The aftermath of a legitimate claim
A legitimate home insurance claim requests compensation for damage occurring due to unforeseeable events, usually caused by either natural disasters or accidental damage. For example, when a tree that falls on your home during a storm causes damage to the roof and walls, you file a claim with your insurance company to cover the cost of repairs. If your home is burglarized and valuable items are stolen, you can file a claim for the stolen items.
The aftermath of a claim resulting from the lack of regular maintenance
However, damage resulting from the lack of home maintenance is not covered by insurance. When your failure to maintain your home properly results in damage, your insurance company may deny your claim. Damage caused by your failure to clean your gutters, causing your roof to leak, will not be covered by your insurance. And there will be no coverage for damage caused when you fail to replace a damaged or worn-out pipe.
Policy non-renewed is a possibility
When if your home is damaged because of neglect, your insurance company may choose to cancel or non-renew your policy. Home insurance policies are based on the assumption that homeowners take reasonable steps to maintain their property. Failure to do so can result in your insurance company considering you a higher risk, and choosing not to renew your policy.
What results from submitting numerous claims?
Every home insurance company allows only so many claims during a certain period of years. Some companies will only allow two water damage claims during a three-year period before announcing the non-renewal or cancellation of your home policy. Some companies may only allow for one such claim and one other claim during a period of two years
What can homeowners do to stay ahead of future maintenance issues?
One previous BrooklyCovered.com blog post covers the need for home inspections before you purchase your home. “Why home buyers need home inspections,” (https://brooklyncovered.com/why-home-buyers-…home-inspections/) shows why a home inspection prior to purchase is key to successful home ownership.
How proactive home maintenance saves you money.
Many homeowners forget each claim means they must pay their policy deductible. This is the amount you must pay when a claim occurs.
By avoiding claims, you’re able to earn money you’d otherwise need to meet your deductible.
Another benefit is the Claim-Free discount many companies apply when clients don’t submit claims. Several companies I work with apply as much as a ten (10) percent discount to clients’ annual premiums when they remain claim-free for a minimum of three (3) years.
In conclusion, homeowners must understand the importance of regular home maintenance. Neglecting regularly scheduled home maintenance can lead to damage, and result in denied insurance claims. It’s crucial to take proactive steps to maintain your home properly. Regularly cleaning gutters, checking pipes, cleaning water heaters, and inspecting the roof decreases the chance of claims. And, you’ll protect your home from damage, ensuring you’re covered in case of a legitimate insurance claim.
About the author-
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 26 of those years as the owner of Bridge Insurance Agency.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
One of the most important policies you’ll ever own!
Life insurance is important for several reasons:
Life insurance provides financial protection for your loved ones. When you die unexpectedly, life insurance provides financial support for your loved ones. It helps cover expenses such as funeral costs, outstanding debts, and living expenses.
Debt Relief
Pays off debts and expenses: Properly designed life insurance programs pay off outstanding debts, such as a mortgage or car loan, preventing your family from being burdened with those debts.Your family will inherit assets, not debts.
Standard of Living Maintained
Protects your family’s future: Life insurance helps ensure that your family is able to maintain their standard of living and pursue their goals and dreams, even if you are no longer able to provide for them.
Educational Opportunities
Your children and spouse can take advantage of opportunities to attend a trade school or college. Cash values in life insurance do not affect financial aid amounts in today’s aid formulas.
Cash for other opportunities
Provide cash value and investment opportunities: Some types of life insurance, such as whole life insurance, can provide a cash value component. Your cash value can be used as an investment or for other purposes.
Many retirees who held on to their whole life policies take loans against their accumulated cash values to supplement their retirement incomes. (Note: I strongly urge my clients to take loans from their policies, and not cash them in. This way, they are able to keep the policy in force simply by paying the annual interest on the policy loan. And, if they want, the opportunity remains to repay any loan amounts to rebuild the policy cash value. Cashing in a policy can create a taxable situation, and you’ll lose the benefit of a policy purchased at a younger age.)
A self-completing policy
Your policy can be self-completing during a short or long-term disability. The Waiver of Premium endorsement pays your premium until you are either able to resume normal work or reach the age of 65, after a period of disability. You must add this endorsement when first applying for your policy.
Overall, life insurance provides important financial protection and peace of mind for you and your loved ones. Nobody wants to think about the worst-case scenario. But, owning life insurance helps ensure your loved ones are taken care of when the unexpected happens.
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 27 of those years as the owner of Bridge Insurance Agency and Greaves Financial Services.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
A senior black male home inspector and professional engineer visually inspects a building project
Why should every home buyer get a home inspection of their future home?
There are several reasons why every home buyer needs a home inspection for each and every home they want to buy.
Identify potential problems:
A home inspection can reveal any potential problems with the home that may not be immediately apparent to the buyer. This includes issues with the foundation, roofing, electrical systems, plumbing, and more.
Negotiate repairs or price:
If the inspection reveals any issues, the buyer can negotiate with the seller to have repairs made or to lower the price of the home to account for the cost of repairs.
You should attend the inspection:
It is imperative for you to attend the inspection with your inspector as this is a great time to learn about key elements of your future home. Knowing where and how to shut off the gas, boiler or furnace, and electrical systems can mitigate the effects of many home emergencies. Also, it gives you and your inspector an opportunity to ‘compare notes,’ about the house after the inspection.
Avoid unexpected expenses:
By getting a home inspection, the buyer can avoid unexpected expenses that may arise after the purchase of the home. This can include costly repairs or maintenance issues that were not disclosed during the sale.
Ensure safety:
A home inspection can also identify any safety hazards in the home, such as mold, radon, or carbon monoxide. These hazards can be harmful to the occupants of the home and can be addressed before the buyer moves in.
What you should look for in a home inspector:
After 41 years as an insurance broker and agent, my suggestion is to hire an inspector and professional engineer who is certified by the American Society of Home Inspectors (ASHI). These inspectors undergo rigorous training and education both before and after they become ASHI-Certified. Should ASHI learn they are not maintaining the high standards demanded by ASHI, they can lose their certification.
Why you should hire an ASHI-Certified Home Inspector and Professional Engineer
There is nothing wrong with hiring an ASHI-certified home inspector who is not a professional engineer. However, hiring an ASHI-certified inspector means you don’t have to pay another professional engineer to perform examinations of certain cracks, electrical panels, etc. And hiring an inspector who is a professional engineer can mean lower costs for future inspections.
How long should it take to receive your inspection report?
I caution you to hire only ASHI-Certified inspectors because they are held to higher standards.
Some inspectors provide you with a report right on the spot. My personal preference is an inspector like Colin Albert, owner of ACES Home Inspection. Colin will take some time to provide you with a preliminary assessment of your planned home purchase after the inspection. Then he’ll take anywhere from a few days or longer to prepare a well-thought-out inspection report.
Why I think every home should undergo a home inspection:
I’ve noticed a disturbing trend with many of the homes referred to me for home insurance. In several cases, I’ve given thanks for home buyers who took the time to do a home inspection. I’ve seen everything from termite-infested main support beams, windows that shake in their frames, and roofs that haven’t been completely redone in 20 years.
Insurance companies are inspecting more of homes at application, and now also prior to renewal. They won’t insure a pig in a poke, and you shouldn’t buy one.
So, overall, a home inspection is a critical step in the home-buying process that can help ensure the buyer is making an informed decision and can avoid potential problems and expenses down the line.
You can reach Colin Albert, ASHI-Certified Home Inspector, and Professional Engineer, at 718-622-4664. You can also contact him by email at [email protected].
About the author-
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 26 of those years as the owner of Bridge Insurance Agency.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
Power strip safety is an area of major concern for the insurance industry during the holiday season. As homeowners install decorative lights on their homes and Christmas trees, they suddenly discover they lack sufficient outlets to handle the additional power demands.
The easy solution? The good-old, reliable power strip.
What is a power strip?
A power strip in its simplest form is nothing more than an extension cord with more than one outlet. Many power strips now provide surge protection and battery backup. Electrical surges caused by brownouts and the like could cause severe damage to computers, televisions, modems, and cable boxes. With an advanced power strip, these power surges are blocked, and your expensive electrical equipment is protected.
Even worse is the electrical damage caused by a complete loss of power, followed by a sudden restoration of power. Computer motherboards, hard drives, and other delicate electronic devices can suffer extensive damage, if not complete destruction, rendering you unable to retrieve valuable information or watch your favorite show. With power strips, you can turn a two-plug outlet into as many as ten or twelve outlets. Thus, you can add more light strings inside and outside the house.
What’s the danger?
The fact is your normal two-plug outlet was only designed to handle the load from two electrical devices, not four, six, or ten. Adding additional electrical devices using power strips places additional strain on home wiring systems not designed to handle additional loads. Also, many homes and apartments still carry two-prong wired outlets, requiring device owners to use three-prong adapters so they can enjoy their modern equipment.
What happens to overloaded power strips?
Take a look at this graphic of an actual overloaded power strip.
Power Strip overload danger
This overloaded power strip actually began to melt. With just a bit more damage, this overloaded power strip would catch fire, leading to the destruction of a home or business.
Don’t plug these appliances into power strips
Powerful appliances should never be plugged into a power strip and you might be surprised which appliances count.
1. Space heater. Portable heaters cycle on and off, with each on-cycle drawing a surge of current. If plugged into a power strip, this surge usually causes an overload, which can cause a fire.
2. Microwave. Requires a dedicated high-voltage wall outlet.
3. Slow cooker. These common appliances may not draw surges of power, but they use power continuously over long periods. Plug them into wall outlets instead.
4. Toaster and toaster oven. Those red-hot coils inside don’t heat up without a lot of current, which can quickly overload a power strip.
5. Hairdryer, curling iron. These draw significant amperage to get hot — too much for a power strip.
6. Coffee maker. All it does is heat up water. But it does it with a lot of amps. It is misleadingly simple. Always plug it into the wall.
What is the alternative?
Renters have little say concerning the quality of the wiring in their homes or apartment.
Homeowners should hire only licensed electricians to completely rewire their homes, compliant with current building codes. One of my clients chose for their electrician to completely rewire their home when they purchased fit in 2012, and that work, as well as plumbing, heating, and roofing upgrades, proved beneficial in qualifying for a lower home insurance premium. Also, the homeowner enjoyed the peace of mind of knowing their home would be free of many problems for years to come.
So, in closing, the safe use of power strips can be beneficial. Just don’t go overboard with the number of devices plugged into them.
Eustace L. Greaves, Jr., is an NYS-licensed independent insurance agent and broker.
Call him at 718-489-2218 or email him at [email protected] to solve your home, auto, flood, life, disability, and auto insurance needs.
You can also follow his website at https://greavesinsurance.com for more information regarding personal insurance.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
Builder’s Risk insurance is the insurance needed when your home undergoes a mid-size or major home renovation.
Builders Risk Insurance and Flood Insurance should not be an afterthought
Home renovations mean buying Builders Risk insurance to protect your investment!
Jackson Robert, NMLS # 422697, a Loan Consultant with Loan Depot, sends weekly emails about mortgage industry trends and events.
This week’s email discussed the 45-day Renovation Loan process. It shocked me it lacked any mention of the need for Builders Risk insurance.
So, I sat down and wrote to Jackson. When I finished, I realized it was important to reshare this information.
Greetings Jackson:
First, many thanks for your great emails about mortgage lending. They are extremely informative. And, when shared with my clients, they make me look like a genius!
Regarding the 45-day renovation loan process, I just have one question – What about the need for Builders Risk insurance?
Now, most people think they’ll just call a broker and get a quick homeowner’s insurance quote over the phone. Believe me, it’s not that easy.
A typical homeowner’s policy doesn’t protect during a mid-sized or major home renovation. Many insurance agents and brokers mistakenly place homeowners insurance policies on homes carrying 203(k) loans. They don’t realize they are placing their clients in.
They forgot insurance companies inspect most properties they insure
New York State licensed insurance companies are given a “60-day free look,” beginning with the day a homeowner’s policy goes into effect. During this period, the insurance company hires an outside inspection company to do exterior and interior inspections of the insured property.
One major deficiency an insurance company inspection uncovers
Insurance companies hate to insure homes remaining vacant for significant periods of time. Should the inspection uncover the home is vacant while undergoing a mid-sized or major renovation, the company can reject the application within the first 60 days. And because the policy was canceled for cause it becomes more difficult to secure new coverage for two reasons:
This is because many insurance companies won’t underwrite a risk once work has commenced.
The original application for coverage could be considered fraudulent. And no insurance company wants to approve any fraudulent application.
Make sure you have Builders Risk insurance when your home is undergoing mid-sized or major renovations
How a homeowner purchases a Builder’s Risk insurance policy
The homeowner getting a 203(k) loan or making mid-sized to major renovations to their home must purchase a Builder’s Risk insurance policy.
Most companies offering Builder’s Risk insurance policies require the following information to generate a Builder’s Risk insurance quote:
A complete Scope of Work from the contractor who oversees the work. This is a room-by-room breakdown of the work to be performed, the cost for each job, and the time needed to complete the work, including all required inspections.
Certificates of Insurance for the contractor’s Worker’s Compensation, State Disability, and Commercial Liability insurance policies. The homeowner must be listed as an additional insured on these certificates. Your lending institution may also want to be listed on these certificates. I suggest checking with your legal department about that.
Copies of the contractor’s license. In New York City, this license is usually issued by the Department of Consumer Affairs. Caveat: The New York City license does not give a contractor the right to perform similar work in any other county. They must be licensed by each county or city.
The contractor’s resume or Statement of Ability regarding their past experience with the type of renovation being done and length of time in the business.
Verifiable references from clients the contractor worked for in the last six (6) to 18 months.
You must get the same information and documentation from subcontractors involved in the renovation.
Get firm time estimates
I can’t emphasize enough the need to get the contractor’s firm estimate of the amount of time it will actually take to secure the necessary permits, materials, and workers, and perform the work.
How long do Builders Risk insurance policies last?
Builders Risk policies are issued for terms of three (3), six (6), and nine (9) months, or one (1) year. Premiums for Builders Risk policies must be paid in full once bound and are fully earned. So, if the client purchases a policy with a nine (9) month term, and the work is completed in seven (7) months, there is no pro-or-short rated return of premium.
When renovations take longer than anticipated
On the other hand, if the work was supposed to take six (6) months and will take longer than anticipated, the homeowner must purchase another Builders Risk policy. Remember this: If the contractor says the work will take six (6) months, purchase a policy lasting nine (9) months or one year. Just one local disaster can set work and inspections back at least three (3) months.
For the insurance broker:
Give the insurance broker a copy of any existing appraisals. Then they can prepare before and after replacement cost estimators for the insurance company.
The insurance broker needs at least five (5) business days to do their calculations, write-ups, and submissions.
Give the insurance broker a friendly heads-up
Tell the insurance broker when you put the policy out for bid. Then, they can then decide whether they want to invest time to develop a quote.
These policies demand a huge up-front investment of time and energy. Based on the risk type, and the client’s relationship with other brokers or agents, an insurance broker may decide to not offer a quote.
A Final Thought about Flood Insurance
Furthermore, don’t forget the need for purchasing flood insurance, even for buildings undergoing significant renovations. Flooding creates damage not typically covered by either home or Builder’s Risk insurance policies. Flood damage caused by broken water mains, or severe rainstorms, or hurricanes could inundate the home, thus creating an uninsured loss.
Jackson, I know this information will greatly improve your success in making renovation loans. Thanks again for the great emails.
About our expert:
Jackson Robert is a 23-year veteran of the mortgage business. You can contact Jackson Robert, your favorite Loan Depot Loan Consultant, NMLS # 422697, at 917-941-5018. You can also email him at [email protected]
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker. He has 41 years of experience, 26 of those years as the owner of Bridge Insurance Agency.
Like to speak with Eustace?
Eustace wants to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. You can reach him at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. Or, go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
Nailing down a good contractor is key to great home improvements
I recently sat down with Curtis L. Godoy, a licensed NYC contractor, EPA-certified Painter, and Master Carpenter. This time, the conversation wasn’t about certificates of Insurance he needed for his latest home renovation. This conversation dealt with everything home and property owners need to know to nail down a good contractor.
Your search for a good contractor begins
You are finally in your dream home. You designed the perfect floor plan. Everything you need is in just the right place.
You even have a sign on your wall saying ‘Welcome Home.’
However, a few months after moving in, you may notice that something isn’t quite right or you want to change something. Wisely, you realize what you want to accomplish is far beyond your DIY skillset.
If you don’t know exactly how to do this, why not find a good contractor?
Good contractors, like good men, can be hard to find
A good contractor possesses several qualities necessary for them to help you with home improvement.
First, they will listen to and work to understand what you need during an initial joint walkthrough of your home. Now, some contractors actually charge for the walkthrough, with a credit given should they get the contract. Some, like myself, don’t charge. We consider the walkthrough a great opportunity to learn two (2) things.
A good contractor wants to see and understand your vision for your space.
When you meet with the contractor, share your thoughts concerning new designs, improvements, or changes to your home. Is the good contractor the right contractor for you?
This walkthrough also provides the good contractor with an idea of whether they can work with you to make your vision a reality. This ‘meeting of the minds’ is most important as your contractor must be as comfortable working with and for you as you are with them.
When you are in agreement
Should you and the contractor reach an agreement about your vision and the work necessary to make it a reality, it’s time to construct a contract. The contract will fully detail the work the contractor will complete, the attendant costs for materials, labor, and any additional insurance costs, the starting and completion dates, and the payment schedule.
No client should be expected to suffer frustrating delays caused by the contractor’s failure to perform for any reason except supply chain issues or local natural or medical disasters.
The recent pandemic lockdown is a perfect example. In New York City, prevented contractors and their workers from starting, continuing, or completing work. Getting caught trying to enter buildings, ‘on the sneak’ could result in license suspension or loss.
And the contractor shouldn’t be delayed in meeting payments to workers and subcontractors and purchasing additional materials because you fail to make scheduled payments on time.
For this reason, my contracts always include client and contractor penalties for failure to make scheduled payments on time and meet construction deadlines, respectively.
Some of Curtis Godoy’s tools of the trade
Check the contractors licensing and insurance
Make sure your contractor candidate is properly licensed in your municipality. In New York City, your contractor must be licensed for home improvements and carry Worker Compensation, State Disability, General Liability, and Umbrella Insurance. Also, they must possess a Department of Buildings Contractor ID. (You can check to make sure a contractor has a valid ID at https://www.nyc.gov/site/buildings/industry/check-license-registration-status.page.) This will enable them to secure the necessary permits for the work they plan to do.
Contractors should be licensed in their particular specialty. Their subcontractors should also provide proof of their meeting the same insurance requirements as the contractor. Each will provide Certificates of Insurance naming you as an additional insured.
What about using the local handyman to do the work?
I don’t suggest the use of handy people. Always use fully insured and licensed professionals. This protects you and your property. Also, should you suffer what would normally be a fully insured loss, the company could refuse to pay the claim. Why? Because without the ability to pull the necessary permits, any major work will be considered illegal modifications by most insurance companies.
And companies either don’t pay or don’t like to pay for losses caused by illegal modifications.
How does one meet a good contractor?
Like many good contractors, most of my projects come from clients recommending my firm to their friends and neighbors. This isn’t a guarantee your home project will be perfect, but it is a good way to add a layer of comfort when choosing a good contractor.
So, if you’re vetting several contractors for a particular job, require each provides references and pictures of similar projects. Ask each for references from the last five (5) years. This speaks to their years in business and the satisfaction of their customers. Pay close attention to any complaints of workers refusing to work because the contractor failed to pay them for the work they perform.
Competent home improvement and maintenance are important for those who invest in their property. Before you jump into knocking down the walls, make sure that you have the right contractor to make your dream and vision for your home a reality.
This will help when you are working towards turning a house into your home.
Meet our expert, Curtis L. Godoy
Curtis L. Godoy is an NYC-licensed contractor and EPA-certified painter and Master Carpenter. Mr. Godoy brings over 20 years of experience in interior renovations and restorations.
You can reach Mr. Godoy by telephone at 347-581-5562, or by email at [email protected].
You can reach Eustace Greaves, Jr. at 718-489-2218 or by email at [email protected]
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
Editor’s note: Since this post’s original publication date of December 5, 2022, changes in the insurance marketplace make the need for a new mortgage contingency clause a reality.
Too many companies to count ceased accepting new applications for home and dwelling insurance in many states. Many companies now employ geospatial resources in deciding whether to insure homes at a local level.
Many companies are ceasing to write insurance in ‘coastal areas.’ These encompass communities located near the coastlines of oceans, rivers, inlets, bays, and lakes. This will prove problematic for mortgage and real estate professionals as insurance coverage either be highly expensive or impossible to secure.
A new mortgage contingency looms in the near future.
In this post, I’ll do a quick review of some of the better-known mortgage contingency clauses. And I’ll discuss one I believe many, if not all real estate attorneys and allied professionals should add to client contracts.
What are the contingencies in a real estate deal?
A contingent offer is a standard way that buyers agree to purchase a home if certain conditions are met. If the conditions are not met, then the buyer can back out of a sale without fear of losing their downpayment.
The Home Inspection
For example, a home- inspection is one of the most common contingencies. Some buyers are not willing to spend money on inspections unless they can back out of the purchase, or renegotiate it, at the end of the process.
A home inspection can reveal all sorts of problems from mold to bad floor joists. It is one contingency that is nearly always made on a sale.
Also, in my experience, the home buyer who hires a qualified home inspector, and stays with the inspector during the inspection is a more informed buyer. I can’t tell you home many home buyers call me for home insurance proposals who don’t even know the outside and inside square footage of their future home. Heck, how do you know your bed and living room furniture will fit? And how many can’t provide the month and date of important home upgrades that are part of normal maintenance? Not to mention the shutoffs for the gas, oil, electricity, and water services.
Which are the best-known contingencies?
The Mortgage Contingency
Another important contingency is the mortgage contingency is also, at least until now, the most common. The mortgage contingency protects the buyer and the seller from a situation where the buyer can’t get a loan to cover the sale price. The buyer receives a certain amount of time to get a loan. He may think he has the mortgage lined up, but things happen. If he can’t get a lender to agree to the loan, then the buyer can back out of the agreement. This wastes everyone’s time and that’s why there is also an appraisal contingency.
The Appraisal Contingency
The appraisal contingency is good for the buyer because it helps ensure the property is actually worth what he is paying for it. In this case, a lender hires a third party to put a value on the property. If the value is less than the buyer is paying, then the buyer can cancel the deal.
While you may hear of non-contingency deals in hot real estate markets, these can be extremely risky for buyers and sellers.
You might hear of them in a case where the price is low and the buyers have cash. In this situation, the buyers sign the contract without an inspection. It is somewhat risky for the seller because if there is something dramatically wrong with the property, the buyers could sue. On the other hand, it is terribly risky for the buyer because they don’t know what the pitfalls of the property are.
A New Contingency Clause. The Availability of Home Insurance Clause
I strongly suggest real estate attorneys begin to include a new contingency clause in their contingent offers.
The new clause? The Availability of Home Insurance Clause.
The reason for this new clause is simple – homeowners insurance may simply become unavailable in certain parts of the country. The inability to find home insurance that meets lender requirements may become difficult based on the homes’ location and other factors. What caused homeowner insurance rates to increase exponentially?
Several factors recently caused home insurance rates to skyrocket:
A 40.4% increase in the cost of residential building supplies since January 2020;
An increase in home replacement costs to match this inflationary rise;
Devastating hurricane and flood damage in Florida, the Eastern seaboard, and the Gulf regions of the United States, no doubt caused in large part to climate change;
An expected unprecedented increase in January 2023, in the cost and availability of reinsurance purchased by insurance companies.
What is reinsurance and why is it so important to insurance companies?
That will be the subject of an upcoming post. For now, suffice it to say without the ability to purchase affordable reinsurance, home insurance companies will have no choice but to limit their policy offerings.
For example, companies known as reliable markets for coastal or rural risks could severely limit how the number of policies they write or place a moratorium on writing these types of risks for a specified time.
In the past, some companies, concerned about their reinsurance costs and exposure to possible natural disasters simply chose to non-renew policies in certain areas.
It simply means a disruption in the availability of home insurance, especially for those purchasing a new home. In some cases, insurance companies will require more underwriter approvals, and proof of sound maintenance of the proposed risk. They may also be limited in the number of policies they are able to write with particular companies.
In the worst-case scenario, some independent agents and brokers, and captive agents, may find themselves losing insurance markets altogether.
And this matters because . . .
Without reliable and affordable markets for home insurance, home lending will crawl to a stop.
Let’s talk about home insurance
The bank will not close any mortgage unless ample proof of coverage in the form of a binder and a paid receipt is received by them prior to the closing. Without both, there will be no closing, and the purchaser will lose their downpayment.
There is a simple fact I’ve tried to share with members of the real estate and mortgage professions for my entire insurance career:
Don’t save the search and eventual purchase of home insurance for last.
Everyone looking to purchase a home should begin their home insurance search as soon as they receive their mortgage commitment.
Not two weeks before their lender anticipates closing their loan.
No, as soon as they sign on the dotted line.
In this way, homeowners and purchasers of new homes will best guarantee they will find and purchase the homeowner’s insurance they need.
A closing suggestion for real estate brokers, mortgage lenders, and real estate attorneys
Your local independent insurance agent is no longer an afterthought. You need to have good if not great relations with professionals able to provide you and your clients with the insurance they will need to close. Also, you might get calls from clients asking for referrals to independent agents able to assist them should companies stop offering home insurance in certain areas, and are in danger of being non-renewed.
Now is a good time to reach out to insurance professionals you know, and get referrals to other insurance professionals in your area. Over a virtual chat, an in-person cup of coffee, or a simple telephone call, find out whether their insurance resources are solid. And then, stay in touch.
Strengthening these relationships could make all the difference.
About the author
Eustace L. Greaves, Jr., LUTCF, is an NYS-licensed Independent Insurance Agent and Broker with over 40 years of experience, 26 of those years as the owner of Bridge Insurance Agency.
Like to speak with Eustace?
Eustace is ready to assist you with your home, life, flood, disability, renters, auto, cooperative, condominium, and wedding insurance needs. He can be reached at his mobile number, 718-489-2218, his office number, 718-783-2722, or by email at [email protected]. You can also go to his website, https://greavesinsurance.com, and complete any of the available “Contact Us” forms.
How to subscribe to the “Never Knew News” newsletter
If you’d like to receive a free subscription to Eustace’s monthly newsletter, “Never Knew News,” go to his website, https://greavesinsurance.com, and click on any of the Subscribe buttons.
Have insurance, income tax, real estate, mortgage, or home inspection questions for Eustace? He’ll be happy to provide the insurance and income tax answers you seek. For everything else, he’ll gladly call on his contacts for help. Just email him at [email protected] with the subject line, “Ask Eustace.”
Original content here is published under these license terms:
X
License Type:
Read Only
License Abstract:
You may read the original content in the context in which it is published (at this web address). No other copying or use is permitted without written agreement from the author.
