Three Major Insurance Events of Which Every Homeowner Should Be Aware
Purchasing a home can be a rewarding, pricey and overwhelming experience, especially for first-time buyers. And, if your aren’t a Gates, Buffett, Zuckerberg or one of the many others found on the Forbes 400, chances are your house will be one of the most significant investments you’ll make, so choosing the right home isn’t a decision that’s made lightly.
Shopping for a home can be exhausting as you research neighborhoods, tour homes, apply for a loan, negotiate the purchase price, organize inspections, and wade through a seemingly endless stack of paperwork. You also need to select an insurer and homeowners insurance policy. This is critical, as it will protect your investment for as long as you own your home, so it’s one of the most important decisions you’ll make. To protect your investment, your belongings and loved ones, following are some tips for both new and veteran homeowners.
1. Fire and water damage are the two most prevalent causes for insurance claims.
The National Interagency Fire Center reports that there were 63,312 wildfires and 3,595,613 burned acres in the U.S. in 2014. Additionally, according to the National Fire Protection Association, there were 487,500 structure fires in 2013, which resulted in $9.5 billion in property damage and amounted to approximately one home structure fire per 85 seconds. There are several steps a homeowner can take, both inside and outside of the home, to prevent becoming one of these statistics.
- Install at least one smoke detector on each floor and check them regularly to ensure they’re working. Be sure to put in fresh batteries at least twice a year.
- Don’t overload wall outlets or use items with frayed electrical cords.
- If you have a chimney, hire a chimney sweep to inspect and clean it before cold weather arrives. It’s also a good time to check and be sure that your chimney cap is in good condition to catch any stray embers coming up the chimney stack.
- Keep flammable items (e.g., curtains, furniture, etc.) away from portable heaters.
- Don’t leave lit candles unattended and keep them out of reach of children and pets.
- Keep a fire extinguisher in your home. Make sure everyone knows how to properly use it and have it inspected once a year.
- Never leave a lit stove unattended and keep flammable materials away from the burners.
- Be sure to have an escape plan in the event of a fire and practice it with your family twice a year.
- Regularly mow your lawn and clear away clippings, dry twigs and branches from buildings. Be sure to clean your roof and gutters of leaves and other debris that can become a fire starter.
- Keep branches trimmed so they don’t hang lower than six feet and bushes pruned to no higher than 18 inches.
- Keep garden hoses attached to faucets to aid fire personnel, if necessary.
- If a wildfire starts, track smoke and its impact on your visibility to determine if you should evacuate prior to an official evacuation notice being put in order. Monitor if the fire and smoke change direction to determine your safest evacuation route.
Using fire-resistant materials around your property and on your home provides added protection and may even save you money in the event of a loss. For example, fire-retardant plants like rockrose, ice plant and aloe resist ignition. Fire-resistant shrubs to consider when landscaping include hedging roses, bush honeysuckles, currant, cotoneaster, sumac and shrub apples, and hardwood, maple, poplar and cherry trees are less flammable than pine, fir and other conifers. Speak with your local garden center to learn more about the plants that can protect your home from fires.
Water damage is the second largest cause of insurance claims; however, certain circumstances aren’t covered by a standard homeowners policy. To differentiate, damage that is caused by weather (e.g., natural flooding from hurricanes, flash floods, etc.) is referred to as flood damage and requires flood insurance, which is available through the National Flood Insurance Program. Water damage is usually caused by bursting or leaking pipes, plumbing issues, malfunctioning household appliances (refrigerators, hot water tanks, dishwashers, washing machines) and HVAC issues.
Homeowners can take the following steps to protect against water damage.
- Check appliance hoses once a year and replace any that are cracked or have leaks.
- Review your appliance owner’s guide for maintenance tips to keep them in good working order.
- Inspect pipes for cracks and leaks. If any are detected, have them repaired immediately.
- Make sure showers, tubs and sinks are properly sealed and caulked.
- Know the location of your main water shutoff valve so you can turn off your water supply in the event of a burst pipe or damaged hose.
- Keep rain gutters and downspouts free of debris. Install gutter guards to prevent debris from accumulating and position downspouts to direct water away from the house.
- Ensure windows are properly sealed and caulked.
- Inspect the roof for damaged, missing or old shingles and replace them.
2. Some of your belongings may have limitations to their coverage.
Certain items like fine art, rare stamps or coins, wine collections, antiques, expensive jewelry and collectibles may not be fully covered by a standard homeowners insurance policy. Speak with your local insurance agent to ensure you have the right amount of coverage for everything you own.
3. Home renovations may impact your insurance rates.
If you’re considering building an addition, remodeling or putting in a pool, keep in mind that your insurance premiums will likely be impacted to protect this new investment. Square footage is one factor in determining a premium. Additionally, if renovations include higher value materials, the replacement cost in the event of a loss will go up, affecting your insurance rates accordingly. Swimming pools increase your liability exposure, which will increase your premium; however, pools can be great assets. In addition to providing a fun way to cool off on hot days, pools can act as a barrier for wildfires and an added source of water for firefighters, if necessary. And most renovations add to the comfort and livability of a home, as well as its resale value, which is well worth the added protection. Speak to your local insurance agent to determine how much your premiums will change and be sure to ask about any money saving discounts.