are all homeowners policies the same? - Spencer Insurance Agency, Inc

Why does my homeowner’s insurance premium increase every year?

We hear this question from clients so I thought some of you are probably not asking us this question but are thinking about it.  So let me answer the question.

There are many factors that will affect your homeowner’s insurance premium including making a claim and increases in replacement value coverage on your home. Weather related catastrophic losses also affect your rates even if you do not make a claim.   Also, each year the insurance company will increase your dwelling coverage to keep pace with inflation.  So you may see a 2%, 3%, or 5% increase depending on the cost of living increases for building materials in your area.  All of us know it will take more money to replace our home today than it did 20 years ago.

But these factors are not why homeowner’s insurance premiums can vary from carrier to carrier.  That is why I always ask our clients to send me a copy of any quotes they receive for a lower premium than they are paying now so I can make sure they are not losing any valuable coverage.

Think about the last time you bought a new car.  I just recently purchase a Toyota Camry.  I could have just gotten the base model but I wanted the hybrid.  I also wanted some safety features.  The one I really like is that my headlights turn when I am making a turn.  Pretty cool.  I also chose some other features that cost me extra money (a navigation system and Apple Car play for example).  I could have just gotten the basic model for less money and that would have been okay, but I wanted more features so I knew I would be paying more. So I paid the extra money and got the car I wanted.  Homeowner’s Insurance is very similar.

What I see when clients send me their quotes is that they are being quoted a basic homeowner’s policy.  Of course the premium is less because they no longer have the coverages we discussed that were important to them. If they want a basic homeowner’s policy I will sell them one IF that is all the coverage they want. But I will make sure they will know what coverage is now missing. Just like my Camry if you want more features you should expect to pay more.

As you know Spencer Insurance Agency represents several quality homeowner’s insurance companies. It seems that all our companies are coming out with new versions of their homeowner’s policy and/or new coverages. Should you switch?  Should you update to the new version? Should you add additional coverages that were not offered before?  One thing I know for sure is that you SHOULD talk to us about your policy.  Our agency tries our best to be as proactive as possible and reach out to our clients if we feel you should make changes. In a perfect world we would talk to all our clients about these updates but we are not perfect and this is not a perfect world.  We can’t get to everyone right away so feel free to call us at any time for a review.

Here are some new coverages being offered by our companies just recently:

  • Service line coverage – Now you can get the coverage you may be paying your water company for to replace a broken pipe from your house to the curb.
  • Mechanical Breakdown – Coverage for appliances, heating/air conditioning systems when they break down
  • Loss forgiveness/decreasing deductible
  • Hidden seepage coverage
  • Roof and siding matching in event of claim

Of course if you add some coverage you will be paying more premium.  You have to decide if it is worth the additional cost to have the coverage.  Just like my Camry I will pay more if I add more features/coverage. Price is important but remember the “True Cost of Insurance” includes the cost you pay out of pocket when you don’t have the proper coverage. If you want a basic homeowner’s insurance policy great, you can have it.  But if you want some better coverage you should expect to pay additional premium.  It is very hard from the policy pages to know all the coverages that are included or missing.  Let us help you.  If we can’t determine whether the quote you received or policy you have with have another agent has a certain coverage , we will tell you what to ask the other agent to make sure you do have that coverage.  Call us today for a review of any policy.

Know your Homeowner’s insurance exclusions before you have a claim.

 

In late January of this year there was a major sinkhole in the Glenside area.  You may have read about it or saw it on the news.  The sink hole swallowed up a pickup truck and may have damaged the foundations of two homes.  The investigation is still going on to find the cause.

If the foundation on your home was damaged and the house condemned would your homeowner’s policy cover the loss?  Probably not.  Most homeowner’s insurance policies have exclusions.  You need to read the policy and be aware of the exclusions.

One of the exclusions is “Earth Movement.”  Earth Movement can be an earthquake, sinkhole, landslide and mudslide among other things and all are excluded from most homeowner’s policies.  You can add back some of these coverages by endorsement however most people don’t due to the cost.

There are other exclusions on your homeowner’s policy. Some of them include: Flood, Ordinance or Law, nuclear hazard and war.

It is impossible to cover everything that could happen to your home but you need to be aware that you may be able to buy back coverage that is excluded for an additional premium. Whether that makes sense is up to you.

You may not even be aware that you are in an area with these risks. Contact us today at 215-885-2200 to discuss the exclusions.  Don’t be caught short when you have a claim.

Have you read your Homeowner’s Insurance Policy lately?

home-owners

 

I ask this question because many people think that the coverage is the same from one homeowner’s policy to another.  Here is the problem.  You give the coverage page of your current homeowner’s company to another agent who gives you a “comparable” quote.  You assume the quote has the same coverage and the premium is lower so you purchase the policy without checking with your current agent.  BIG MISTAKE!

For example: The “comparable” quote has Water Back Up coverage, which you have on your current policy.  So you have the same coverage, right?  Maybe not.  As independent agents we represent 7 companies.  Our companies cover “Water Back Up and Sump Discharge or Overflow” and the policies state “Water backup is water or water-borne material, which 1. Backs up through sewers and drains; or, 2. Overflows or is discharged from a sump, sump pump or related equipment.

Most companies have similar language however “Company S” and “Company L” add a section which says “the coverage provided by this endorsement only applies to the dwelling described in Coverage A and the following Coverage C personal property items: clothes washers and dryers, food freezers and the food in them, Refrigerators, Ranges, Portable dishwashers and Dehumidifiers.” Just those items are covered… nothing else!

The companies we represent do not have this section, which means they don’t limit coverage for what personal property is damaged.  What if you have a finished basement and have a water back up claim?  “Company S” and “Company L” would not cover your furniture, electronics, toys, your guitar laying on the rug, or items you store there such as clothing and your seasonal decorations.  The “comparable” quote may have been $100 cheaper, but now your additional costs could be several thousand dollars higher because you don’t have the right coverage.

This is just one example.  I have found several differences in coverage when clients send us a copy of the “comparable” quote to review.  Check out my article The True Cost of Insurance.  Many times the “comparable” quote might be lower but is it lower because you have less coverage?  Let us check for you.  Send us copies of any quotes you receive so we can make sure you are not getting less coverage than you currently have now.

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