Homeowners Insurance Lowdown

How Does The Payment Process In A Homeowner Insurance Policy Works?

The very first payment that you receive from the insurance company is an advance against the total settlement. You will receive this payment to manage the repair work only after an adjuster inspects the damage to your home. If it happens that you are offered an on-spot settlement amount, you can without hesitation accept that amount. But if you find another damage that has to be claimed, you can without hassle reopen the claim and file for an additional amount. But make sure that you file the claim within the limit of the time period mentioned in your policy. Most policies require claims to be filed within one year from the date of disaster. In case of damage to your home as well as personal belongings, you receive two separate checks from your insurance company, one for each category. In addition you should also receive a separate check for additional living expenses that you incur while your home is being renovated.

So, next time you receive your claims from your insurers make sure to keep yourself updated of the payment process followed by your homeowner insurance policy.

Trent Lott, U.S. Sen. Files a Lawsuit against State Farm Fire & Casualty Co.

Trent Lott, U.S. Sen. has filed a lawsuit against State Farm Fire & Casualty Co., which holds more than 30 percent of the homeowner's insurance policies in Mississippi for refusing to cover Hurricane Katrina damage. The suit was filed in U.S. District Court. Homeowner's insurance policies in Mississippi and other states cover wind damage but typically have provisions excluding damage from wind-driven water. Sunherald.com reports:

Phil Supple, spokesman from State Farm said, "State Farm cannot comment on the litigation. They handle each claim on its own merits and pay what they owe based on their contract with the policyholder."

Citizen’s Property Insurance Corp. Announces Raise in Homeowner Insurance Premiums

Homeowners in high risk areas will end up paying raised premiums by an average of 44 percent. Citizen’s Property Insurance Corp., the state's No. 2 home insurer has announced a statewide hike in the homeowner insurance rates for a second time in a month. The state-run insurer’s board has approved the raise in the premiums. This unanimous board decision came after refusal to entertain a request from state Sen. Ron Klein, D-Boca Raton, to delay voting until an audit could be completed to determine whether the increases were necessary. Followed by this hike consumers in Palm Beach County would now pay around 50.6 percent more for windstorm insurance. In contrast, the consumers in St. Lucie County would face raised windstorm premiums upto 22.1 percent. According to Citizen’s officials, the hike in insurance rates reflect the higher risk of the policies. Florida’s chief financial officer, Tom Gallagher has proposed using sales-tax revenue generated by hurricanes to shore up Citizens' finances, rather than straining homeowners. Palmbeachpost.com reports:

Citizen’s officials said, "This year we are forced by the Florida Legislature to price premiums based on the risk of homes covered rather than just to be more expensive than all private insurers."

Minnesota Supreme Court Hears an Appeal of a Lawsuit in Homeowner Insurance-Premium Refunds

Customers of State Farm Insurance Corp. can have a sigh of relief after the Minnesota Supreme Court has decided to hear an appeal of a lawsuit that sought $22 million in homeowner insurance-premium refunds. The suit was filed in December 2002 in Hennepin County advocating refunds of a State Farm surcharge of 6 percent levied on homes with electrical wiring more than 40 years old. Startribune.com reports:

State Farm reinstated the surcharge that produced data supporting its contention that older wiring leads to increased fire losses after the state’s consent. Lori Kush, State Farm spokeswoman said, "We had a unanimous opinion from the court of appeals, and it affirmed the decision of the district court. We feel that the court's opinion is well-reasoned and correct."

Homeowner Insurance: Choosing a Policy

Usually homeowner insurance policies are issued on a monoline basis or as a package at the time of sale. As a consumer it is very important to understand to clearly understand the difference between the monoline and package policies.

An in-depth understanding of the difference in these policies is a good and effective way to ensure that you buy the most appropriate policy in terms of your requirements. A monoline policy contains only one type of coverage. In contrast a package policy is an umbrella policy having variety of coverages. It is less expensive in comparison to monoline policy.

Homeowners and tenants policies are package policies that include property, liability, theft and medical payments coverages. The standard insurance can give your home a coverage in case of following events such as theft of your personal property, someone gets injured on your property due to your negligence or that of a member of your family; or somebody else’s property is damaged as a result of your negligence, fire, windstorm, hail, tornadoes, vandalism, smoke damage and other physical damage to your home or belongings.

It is very important for a consumer to be aware of the different risks that are insured against in each type of policy. This will help you to determine whether your insurance needs can be met with a basic policy or you need the most extensive type of coverage. Not all the possible threats to your home are covered under a standard homeowner insurance policy. But, you can easily buy these excluded coverages such as earthquake damage and power interruption by paying extra premium.

Some coverages listed under a policy such as off-premises theft can be excluded from the policy bringing a reduction in the premium. However, some coverages, such as flood insurance are always excluded and the consumers can obtain them from Federal insurance programs.

Tips for Filing a Homeowner Insurance Claim

To file a claim with your insurance company if someone has been injured on your property or a violent storm destroys your home, you need to follow certain rules and procedures. A homeowner insurance policy is a contract between you and your insurer and both the sides must adhere to certain laid out rules and procedures. It’s always advisable to read your policy thoroughly to have a clear view of your responsibilities.

• Phone your agent or company immediately - All the insurance providers provide a certain time limit to file the claims.

• Make temporary repairs.

• Have an adjuster inspect the damage to your home.

• Prepare a list of lost or damaged articles

• If you need to relocate, keep your receipts

• Report any crime to the police - Incase of theft or burglary inform the police and get a report made along with a names of all law enforcement officers that you speak with.

Winter Likely to Raise Potential Liability on Your Homeowner Policy

During snow falls, the potential liability on your homeowner’s policy is likely to go up. According to David Masters, State Farm Insurance, “In a situation where someone slips and falls because you didn’t take time out to clean your steps or your home, then you will held responsible for all the medical bills.” The PittsburghChannel.com reports:

The medical bills fall under med pay insurance and may range from range from $1,000 to $5,000 on your homeowners policy.

Allstate, USAA and Southern Farm Bureau Raise Homeowner Insurance Policy Rates

Consumers are expected to find a raise in their homeowner insurance policy rates on renewal of the policies. Three leading insurance companies─Allstate, USAA and Southern Farm Bureau had applied to hike the rates before Katrina struck. These insurance companies have received the permission to raise the policy rates. Though the insurers have applied for a raise in rates before Katrina struck, but according to George Dale, State Insurance Commissioner Katrina has not been factored into any rates.

Dale recently had a meeting with 11 insurance executives. He also said that insurance companies are expected to refer more and more homeowners to the wind pool, which is considered the insurance provider of last resort. At present this wind pool underwrites 16,200 policies but this number will soon grow. Sunherald.com reports:

George Dale also said, ─"It is too early to say what effect Katrina will have on insurance rates, but a change is expected."

Improved ISO Rating of LeClaire Fire and Rescue Department May Bring Down Homeowner Insurance Premiums

Leclaire Fire and Rescue Department recently received a Class 4 rating from ISO. The volunteer firefighters are feeling proud softer achieving this improved rating. This news can bring double joy to the residents of Leclaire. Quad-City Time reports:

Fire Chief Terry Rossmiller said, "The improvement in ISO rating is likely to bring down the premium rates of homeowner insurance paid by the residents of Leclaire, Iowa."

Understanding Your Homeowner Insurance Policy

A homeowner insurance policy is designed to protect homeowners against certain risks and dangers. A typical homeowner insurance policy is divided into two parts-Property Protection and Liability Protection.

Property Protection is usually mentioned in the beginning of the homeowners’ declaration page, which is usually the first page of the policy. Property Protection is divided into four different sections: Dwelling, Loss of Use, Personal Property, and Other Structures.

Dwelling typically covers your house, attached structures, fixtures in the house such as built-in appliances, plumbing, heating, permanently installed air conditioning systems, and electrical wiring. Loss of Use typically covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are being made or if you are denied access by government order. Personal Property typically covers personal property including the contents of your home and other personal items owned by you or family members who live with you. This protection can be based on actual cash value or replacement cost. Other Structures typically cover detached structures such as garages, storage sheds, and fixtures attached to the land including fences, driveways, sidewalks, patios, and retaining walls. Detached structures used for business purposes are not covered under a personal homeowner’s policy.

Liability Protection has two parts-Personal Liability and Medical Payments. The Personal Liability coverage covers a claim resulting from property damage or bodily injury. Auto and business related incidents are not covered under this section. The Medical Payments section covers medical expenses for persons who get accidentally injured on your property. It doesn’t apply to your or your family’s injuries.

Typically a homeowner insurance policy doesn’t cover damage to your motor vehicles, injuries to animals, loss due to mudslides, floods, damage due to earthquake, power failures, or sewer backups. Since different policies cover different risks, so consumers should make sure that they verify all the coverage with their insurance company

Make Your Home Safer Than Before

If you are planning to buy a new homeowner insurance policy or already own one, then make sure that you insure your home for the total amount that would be required to rebuild your home in case of destruction due to some unexpected disaster. In case you do not have enough insurance then it’s very important to know, that the insurance company will pay only a part of the cost you will spend in replacing or repairing the damages. So, it is very important to properly insure your home. Here are a few ways to insure your home safely.

• Guaranteed Replacement Cost: This insurance pays a consumer full cost of replacing or repairing damaged property. There is no deduction for depreciation and dollar limit. This gives you protection against such things as a sudden increase in construction costs due to a shortage of building materials.
• Replacement Cost: Under this type the insurance company pays the cost of replacing the damaged property without deduction for depreciation to the policyholder. But, this amount remains limited to a maximum dollar amount.
• Actual Cash Value: Under this policy the policyholder gets an amount equal to the replacement value of damaged property minus an allowance for depreciation.

Maryland Insurance Administration Launches Consumers’ Guide

The Maryland Insurance Administration has prepared a consumer's guide to help the consumers to understand the coverage that suits them the most. This consumer’s guide provides information about the different types of homeowner insurance policies available and the basic coverages that are included under them. Herald-mail.com reports:

The guide doesn’t provide any legal advice or opinions to the consumers regarding the any
kind of coverage under any policy.
      

Allstate Corp. Reduces Home Insurance Policies Owing to Climatic Risk

Allstate Corp., the nation's second-largest auto and homeowner insurance company behind State Farm, has majorly reduced the number of home insurances in Florida. Allstate is likely to follow the same plans in Louisiana and other Gulf Coast states that faced the wrath of hurricanes Katrina and Rita. President and COO of Allstate Corp., Thomas J. Wilson said, “ Americans are facing a gap in the protection as the risk of likely disasters is increasing and availability of affordable insurance is decreasing. Owing to increasing frequency and the extent of damage caused by storms, many insurance companies are facing unacceptably huge losses.” There is a risk that the companies might stop offering any such policies or may altogether increase the deductibles and raise the premiums to such a level which consumers might feel is unfair. Newsday.com reports:

State treasurers and controllers from around the country have asked all the major finance companies to analyze and disclose their financial risk faced due to the climatic changes. What we need is a government-sponsored, privately funded catastrophe pool" to deal with severe hurricanes and earthquakes, Wilson said.

Tips To Lower Down the Cost of Your Homeowner Insurance

Homeowner policyholders can cut down the cost of the policy by taking care of a few things. Here are a few ways to minimize the cost of your homeowner's insurance.

• Keep a check on available discounts
  A policyholder is eligible to receive many discounts. Discounts can be availed if you have a smoke detector, deadbolt locks, fire alarm systems etc. in your home. Also if you are above 55 years, you can get an additional 10 percent discount.
• Avoid buying coverages which aren't required
  It makes perfect sense in not buying those insurance coverages which cover the risks which you are unlikely to encounter.
• Raise homeowner's insurance deductible
  By raising your insurance deductible, you can save a good amount on your premiums. Deductible is the amount of risk you agree to accept before the insurance company starts paying on a claim. With the rising cost of homeowner's insurance, it is not advisable to let the insurance company assume all the risk.
• Try to combine the policies
  It is a good decision to buy homeowner insurance with other policies like auto insurances from a company that offers both of them. This is a good way of getting discounts.
• Improve your credit score
  Insurance companies are increasingly using credit information to price insurance policies. In order to maintain a good credit score try to pay all your bills on time, don't have too many open credit accounts, and don't charge close to the limits on your credit cards.
• Have full information about policy coverage
  Since home is a person’s biggest investment, so make sure you protect it against all the liable risks which you cannot cover yourself along with the coverage for home improvements you've made, major purchases, and increased costs of rebuilding.
• Keep insurance coverages up to date
  Before renewing your policy in a year, update your information about the current policy. It pays to discuss with your insurance agent any changes that occurred in your situations during that very year.

Deadline Extended For Debris Removal For Homeowner Insurance Policyholders

Homeowner insurance policyholders of Albita can now enjoy an extended deadline to complete the forms required for debris removal. The deadline has been extended till December 9 as stated by Covington officials. All the policyholders can get this form from Town Hall during normal working hours on all the weekdays. Nola.com reports:

The form will allow the contractors who are working for Corps of Engineers to enter private property and remove the debris to ensure public safety. In order to avail this service all the home insurance policy holders are required to provide a copy of their policies, the mayor said.