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.
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.
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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.
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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.
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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.”
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You will find a funny t-shirt in the weirdest places.
So, out of the blue, for the first time ever, I received a catalog from a firm named “The Best of Collections, Etc.”
At first, I thought someone was coming after me for the money I owed them.
Well, turns out it is one of those sales catalogs which resembles the old Fingerhut catalogs. Folksy, cute, and once directed to a different demographic.
Well, being a marketer always on the lookout for new ideas, I took a few minutes to skim through the magazine.
Everything seemed normal until page 81
All of the offerings seemed rather normal, especially the “As seen on TV” offerings. Then, I turned to page 81 for some first-class belly laughs.
The first (and best) T-Shirt read,
“Roll roll roll your joint, twist it at the end, light it up and take a puff, then pass it to a friend.”
Now, I don’t condone the use of drugs, but come on, even Katt Williams may use that little ditty in one of his comedy concerts.
Called the lady who is going to produce my upcoming podcast and the first thing she said was, “That’s hilarious!”
Second thing? “You are not going to say that on the air!”
Hah. Wait’ll she reads this.
Some of my other favorites were:
“Don’t rush me! I’m waiting for the last minute!” and,
“I told my wife to embrace her mistakes. She hugged me.”
“Once in a while someone AMAZING comes along … and HERE I AM!”
Another good one would close with a bang
And one which should become another favorite of funeral directors everywhere, “Just before I die, I’m going to swallow a bag of popcorn kernels. MY CREMATION IS GOING TO BE EPIC!”
That one should be a warning to spouses everywhere – make sure there is enough life insurance for a regular burial.
Our last time?
The really funny thing about me receiving this catalog? In big, bold letters are the words, “Is This Goodbye? Unfortunately, postage and printing costs have increased, so shop today to continue receiving our great values. Place an order soon, or this could be your LAST CATALOG!”
Wow.
Last catalog.
Funny thing is, this was the first time I ever received this catalog.
If it is to be the last one, at least I got a humorous blog post out of it.
Happy New Year everyone! May the year 2021 be filled with prosperity, joy, excellent health, and all the success you and those you love can handle!
About the author
Eustace L. Greaves, Jr., LUTCF is an NYS-licensed Independent Insurance Agent and Broker with over 38 years of experience. He is celebrating 25 years as an Independent Insurance Agency Owner.
Like to speak with Eustace?
Eustace is ready to assist you with your life, disability, home, flood, renters, auto, cooperative and condominium, and wedding insurance needs. He can be reached at 718-783-2722, or by email at [email protected]. You can also contact him by going to his website, https://greavesinsurance.com, and completing any of the available “Contact Us” forms.
How to subscribe to his newsletter
If you’d like to subscribe to his monthly newsletter, “Health, Safety, and Good News You Can Use,” 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 and will continue to call on his expert contacts for help in the other areas. Just email him at [email protected] with the subject line, “Ask Eustace.”
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Betcha Never Knew About These Three Insurance Policy Discounts
“Bundling and saving”, is not the only method to save money on your home and automobile insurance policy. There’s a better way to realize massive insurance policy discounts.
Use insurance policy discounts to cut your home and automobile insurance costs!
Improve your Insurance Credit Score. Not A Discount, But It Will Still Save Your Money
This is the easiest way in the world to lower your home and auto premiums. Companies place you in excellent, good, fair, poor, and ‘forget about it’ pricing tiers. So, if you begin with a poor score, do all you can to pay bills on time, lower your credit utilization, and give the five (5) major insurance credit score no-no’s a chance to come off your credit record.
What are these five (5) no-nos?
Judgments
Foreclosures
Repossessions
Liens
Bankruptcies, or going into or coming out of a bankruptcy
Don’t forget, these no-nos will affect your insurance credit score for Five (5) years.
Hey, five and five. How about that?
Now, on to the three insurance policy discounts.
How Much Can These Three Insurance Policy Discounts Save You?
Based on your insurance company, you can actually save up to 40% on your annual homeowners’ insurance premium. So, imagine your annual premium is $2000. Using these three insurance policy discounts could help you realize an annual savings of $800. And that is not chicken feed.
Fire Extinguishers, Smoke and Carbon Monoxide Detectors, Deadbolt Locks
Some companies give you an immediate five percent (5%) discount when you keep functioning fire extinguishers, smoke and carbon monoxide detectors, and deadbolt locks. Fire extinguishers and smoke and carbon monoxide detectors are required in many cities. So, you actually benefit from obeying the law.
Alarm Systems
You can realize additional discounts up to 20% of your annual premium by installing a central-station monitored alarm system. It’s like getting paid to protect yourself and your loved ones.
Claim-Free Discounts
I’ve always questioned the sanity of people who say, “I’ve been paying this policy for ten years and never put in a claim. I think it is time for me to put in a claim and get some of my money back!”
Okay, first off, you’ve just informed your agent you intend to commit fraud. So, when you go to trial, I will testify against you. Purposely screw up my great loss ratio? I don’t think so.
Better you should just maintain your home to prevent losses and get a part-time job to supplement your income. Why? Because many insurance companies offer what is called a”Claim Free Discount” when you don’t have claims.
How Much Can A Claim Free Discount Save Me?
One of the insurance companies I work with as an independent insurance agent offers an annual Claims Free Discount of ten percent (10%).
Let’s imagine your annual homeowners’ insurance premium is $2000 at this years’ renewal. With just a Claims Free Discount, you would automatically qualify for the ten percent (10%) discount of $200. Now your annual premium drops to $1800.
What Should You Do With All The Money You Save With These Three Insurance Policy Discounts?
I learned long ago what you earn isn’t as important as how you use what you earn. So, you’ve perhaps saved up to 40% of your annual homeowners’ premium. You can choose to use the money for a new bag, a vacation, or a fabulous pair of shoes. Or, you can use your savings to enhance your insurance portfolio. You can purchase additional
life insurance to pay your mortgage or rent should you die;
disability insurance to provide an income when you are too sick or injured to work;
long term care insurance to get skilled nursing care not covered in your health insurance policy. And, it will also to protect your home from Medicaid’s dreaded, “Five Year Lookback.”;
increase your automobile insurance; and
add a Personal Umbrella Liability policy for greater protection from lawsuits.
My next post will cover other insurance policy discounts.
About the author
Eustace L. Greaves, Jr., LUTCF is an NYS-licensed Independent Insurance Agent and Broker with over 38 years of experience. He is celebrating 25 years as an Independent Insurance Agency Owner.
Like to speak with Eustace?
Eustace is ready to assist you with your life, disability, home, flood, renters, auto, cooperative and condominium, and wedding insurance needs. He can be reached at 718-783-2722, or by email at [email protected]. You can also contact him by going to his website, https://greavesinsurance.com, and completing any of the available “Contact Us” forms.
How to subscribe to his newsletter
If you’d like to subscribe to his monthly newsletter, “Health, Safety, and Good News You Can Use,” 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 and will continue to call on his expert contacts for help in the other areas. Just email him at [email protected] with the subject line, “Ask Eustace.”
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Automobile Insurance Policy Details Are Fraught With Danger
I enjoyed a great conversation with a nice gentleman the other day. He’d been referred to me for an automobile insurance policy. He readily admitted his last automobile insurance company dropped him back on July 1, 2020, for having two (2) “incidences” during the past three (3) years.
He tried, without success, to acquire new coverage for two (2) months prior to his prior company’s non-renewal date. After many tries, he simply couldn’t understand why no one would take him up as his one accident was not-at-fault and the other incident, a moving violation, resulted only in a ticket, no points.
I ran him through one of my preferred companies and discovered why no one wanted to take him.
How Automobile Insurance Policy Owners Put Themselves In Danger
Auto and home insurance are analogous to term life insurance. Basically your coverage, unlike whole or permanent life insurance, runs out after a certain number of years. If your policy allows the coverage to continue, the premium skyrockets to an amount that becomes untenable to maintain. So you wind up losing your “cheap” insurance, usually at the same time it is most important for your family’s financial well being.
In New York State, auto and home insurance companies write you policies with a term of three (3) years. So, if you maintain a good auto driving record, for example, renewal is a no-brainer. Too many “incidences” though, and renewal may come at a hefty price, or not at all.
So. several years ago you called one of those over-the-phone, direct-to-a licensed advisor automobile insurance companies and got a terrific rate.
You just weren’t aware it could have even been better.
You didn’t know your new policy contained a ticking time bomb.
So you contacted your independent agent or broker who’d been through hell, high water, and even a couple of claims with you, canceled your current policies, and moved to your new company.
Which Rating Factors Matter Most To Automobile Insurance Companies When You Want To Move Your Policy?
How long you’ve been licensed.
Your gender and age.
Your insurance credit score.
How many current moving violations (with some companies, during a period of as many as five (5) years) are on your record when you apply.
Policy lapses for non-payment of premium.
License suspension or revocation.
The length of time you were without auto insurance. Nowadays, the lack of a personally owned auto insurance policy for more than 30 days even if you didn’t actually own a vehicle, will disqualify you from getting insurance from many companies. 1
And Finally, The One Factor Most Consumers Know Nothing About
Few, if any, of the major preferred companies take new business coming from indemnity or non-standard insurance companies.
And that is where your company placed your coverage. Its indemnity or non-standard insurance company. The nice person on the phone never suggested you could request quotes for their Preferred or Standard companies. Or, even if you didn’t qualify for those companies now, you weren’t advised to try again in six (6) or twelve (12) months.
For this reason, you’re basically stuck with your automobile insurance company.
Your Policy Is Emblazoned With An Automobile Insurance Scarlet Letter
For this reason, and this reason alone, I couldn’t offer this gentleman a quote from any of my preferred companies. So, I took the only choice open to me. I gave him a quote from the New York Automobile Insurance Plan (NYAIP). In many cases, the NYAIP is the last resort for those needing automobile insurance.
The NYAIP quote? Close to $6,295 for one year, about $4,500 more than the quote I would have been able to get him from one of my preferred companies.
I called him back.
Told him the quote.
He said, “Forget it,” and hung up.
Why Do Some Automobile Insurance Companies Engage In These Practices?
Short answer? Got me.
For many companies, the name of the game is increasing market share, no matter the immediate cost. So, if your profile permits, you will be placed into their Indemnity or Non-Standard company, offering you a competitive, lower premium just to get your business. Then as claims from other drivers in your Indemnity company roll in, your premium begins to increase. This increase will be imperceptible at first. Then one day, you will open your renewal envelope and receive the shock of your life.
Even if your record is perfectly clean, when you begin calling other insurance companies to secure a lower-cost automobile insurance policy, your current indemnity policy status will prevent you from doing so.
What You Should Do Today
Find your automobile insurance policy and call the insurance company or agent. Ask whether you are in an Indemnity or Non-Standard automobile insurance company. If you are, request they requote your policy for either their preferred or standard company.
Now, when you want to switch companies, it won’t be the type of company preventing you from moving your coverage.
Notes:
1. In my previous post “8 Tips To Save Money On Your Automobile Insurance, (https://brooklyncovered.com/8-tips-to-save-money-on-your-automobile-insurance/)”, I wrote about the good old days when most auto insurance companies allowed you to go from one to up to three years owning a personal auto insurance policy without extra premiums or flat-out rejection. Some companies didn’t even factor in the lack of automobile insurance, as long as you didn’t own a car in your own name. In either case, I suggested the purchase of a monthly zip car membership where your membership automatically provided you with liability insurance coverage. This removed the necessity of maintaining a non-owned auto insurance policy. Thus, when you decided to purchase your own vehicle, the money you’d spent on the zip car membership:
Wound up saving you money on your new auto insurance policy as you’d been continuously insured, and,
Enabled you to qualify for a better or preferred company in an insurance company’s member companies.
Eustace L. Greaves, Jr., LUTCF is an NYS-licensed Independent Insurance Agent and Broker with over 38 years of experience. Eustace is ready to assist you with your life, disability, home, flood, renters, auto, cooperative and condominium, and wedding insurance needs, and can be reached at 718-783-2722, or by email at [email protected]. You can also contact him by going to his website and completing any of the available “Contact Us” forms.
If you’d like to subscribe to his monthly newsletter, “Health, Safety, and Good News You Can Use,” 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 and will continue to call on his expert contacts for help in the other areas. Just send him an email to [email protected] with the subject line, “Ask Eustace.”
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Today’s clever insurance commercials are a necessary evil. They provide more information about bundling and saving and less about the coverages you, your family, and your business really need.
We can change that by simply asking the right questions.
Customizing Your Insurance
No insurance company owns a monopoly on helping you customize your insurance.
None.
Commercials, Commercials, Commercials
Commercials are designed to increase brand awareness using gimmicks, including celebrity spokespersons, animals, car crashes and chases, and, well, anything they think you will remember when it is time to buy insurance.
Does Every Company Allow You To Customize Your Insurance?
You can customize your home, life, auto, renters, co-op, condo, disability, long-term care, personal umbrella, and, yes, even your flood insurance with any company licensed to do business in the State of New York and every other state in the Union.
Every company gives you the ability to customize your insurance.
Every single one.
The problem is that most consumers aren’t served by most of the television commercials aired today.
They are goaded into a perpetual state of dissatisfaction with their current career, even when their current career is doing a good job for them.
It’s What Consumers Don’t Know About Their Insurance Which Hurts Them
Each year, I make at least 25 insurance-based presentations for HUD-approved housing agencies and organizations such as Neighborhood Housing Services of New York City, Harlem Churches for Community Improvement, and Impacct. I always ask those in attendance to tell me their automobile insurance coverages. Inevitably, 14 out of 15 give the same answer, “Full Coverage.”
Not 25/50/10.
Not 250/500/100.
Full coverage.
When I ask them how much their policies cover in an accident, they usually reply that they’re not sure, but they did save money by bundling their home and auto.
Yay,
Buying What You Need Is A Two-Edged Sword
As long as the policy or policies quoted for you meet your state’s required minimum coverage limits, buying the cheapest policy or bundle possible is actually all you need.
What if, though, you just struck and killed a pedestrian or lost control of your vehicle and totaled a house? Will your policy provide you with the actual amount of money you will need when the jury hands down some obscenely massive award against you?
Imagine coming home to find;
Your home is on fire.
Two (2) feet of toxic sewage water sloshing about your finished basement.
Burglars paid you an expensive visit while you are at work or the market.
Your good dog had a bad day.
There are three feet of floodwater in your home, and you don’t own a flood insurance policy.
What Questions Should I Ask?
What, if any, hoops must I jump through in case of a claim?
Are policy coverages or exceptions more important to know?
Why do I have duties after a loss?
In case of a covered cause of loss, how easily will my claim be settled?
Is your claim service fair?
What Should My Insurance Company and/or Independent Agent and Broker Teach Me?
Why buying home insurance based on your home’s replacement cost is essential.
How to determine your condominium and cooperative apartment “walls in” insurance coverage based on what a licensed contractor would charge to completely repair fire or water-damaged walls, ceilings, and floors.
It is important for renters to complete a personal home inventory down to the last sweat sock.
How owning Life and Disability insurance will prevent financial disaster should death or disability destroy the earning power of a family breadwinner.
Reasons why every property policy should include Water and Sewer Backup coverage. And why every cooperative and condominium apartment owner should add the Loss Assessment endorsement to their coverage.
Why buying flood insurance, even when their home is not in a high-risk flood zone, is a smart financial move.
And, of course, what coverages do I actually need to protect my family and home from most disasters?
The other day a woman asked me for my honest opinion of who I felt was the best insurance company out there.
My answer?
The one with whom you secured the proper policies, with sufficient coverages, which is in force at the time of your claim.
A company that won’t make you jump through hoops to settle a claim fairly. An independent insurance agent and broker willing and able to service your policies. With premiums accurately reflecting the coverages your policies provide.
Nothing else matters.
As for the commercials, well, give my regards to Broadway.
At least until we can enjoy live theater again. Until then, stay healthy and safe.
Eustace L. Greaves, Jr., LUTCF is an independent insurance agent and broker, licensed to conduct business in New York State. Contact Eustace at 718-783-2722, 718-489-2218, by email at [email protected] or by completing the contact form on this page, or one of the many contact forms on his website, https://greavesinsurance.com.
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One of the best things you can do in life is to “Live Life Fully Covered.”
It’s time to just be honest and admit many bad things, gruesome tragedies and heart-rendering losses don’t always happen to “The Other Guy or The Other Woman.”
You Can Be “The Other Guy”
One day you could be “The Other Guy or The Other Woman” who;
Loses their husband or wife whose income helped meet mortgage payments, to cancer;
Suffers a life-changing heart attack which requires you to stay home to recuperate for six (6) months to a year or more;
During their prime working years finds themselves as the primary care-giver for a parent, other elderly relative, or even a sibling who lacks long-term care coverage;
Experiences the pain of burying a child;
Watches as their house containing all their treasured belongings accumulated over a lifetime burns to the ground;
Comes home after a hard day at work to discover they’ve been burglarized;
Needs money to secure a new place to live while your home, co-op or condo is being rebuilt;
Gets sued by the cyclist, pedestrian or other driver who can prove you were at fault;
Gets sued by the cyclist, pedestrian or other driver who can’t prove you were at fault, but you must engage the services of an attorney to defend you against a baseless suit;
Watches as their home is inundated by two (2) to ten feet of floodwaters even though you bought your home in a non-Special Flood Hazard Area (SFHA).
Owns the sweet and gentle nice old dog walking off the leash who rears up and mauls or takes a bite out of your neighbor’s child;
Wonders who stole their new car;
Never gets their wedding and bridesmaid dresses because the bridal shop went out of business unannounced, and the owners didn’t return your deposit.
It doesn’t always happen to “The Other Guy or The Other Woman.” It’s also amazing how these types of tragedies frequently happen yesterday, last night or while you were thinking about taking action to put the proper coverage in force.
Can Life’s Tragedies Be Stopped?
You can’t stop life’s tragedies. You can, however, take intelligent, adult steps to control their outcomes using;
Life Insurance
Disability Insurance
Long Term Care Insurance
Homeowners Insurance
Renters Insurance
Co-op Insurance
Condominium Insurance
Flood Insurance
Auto Insurance
Personal Umbrella Liability Insurance
Wedding Insurance
In over 37 years of helping my clients reach successful life outcomes using insurance and related financial services and products, I’ve realized for me it all comes down to one simple phrase:
“Live Life Fully Covered.”
I would be honored to help you reach your desired outcomes. Call me at 718-489-2218, or reach me by email at [email protected] .
Let’s work together to make sure you “Live Life Fully Covered.”
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