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What is the AARP Program?

The Hartford exclusively offers AARP members up to 30% off of their standard rates and includes great benefits. Anyone over the age of 50 can apply for the AARP membership; it costs $16 a year. We can offer new AARP members quote as long as you have been a member for at least 90 days.
Here are a few of the added benefits for a Hartford/AARP auto policy:

  • Lifetime renewability- once your policy is in force, Hartford promises to renew it as you meet the simple requirement, even if you have had accident or traffic violations.
  • Annual policies- lock in the premium for 12 months, compared to 6 month polices with other companies
  • New car replacement- if you total your new car within the first 15 months or 15,000 miles (whichever comes first), Hartford will replace it with a new car of the same make, model and equipment.

Here are a few of the added benefits for a Hartford/AARP homeowner’s policy:

  • Lifetime renewability- once your policy is in force, Hartford promises to renew it as you meet the simple requirement, even if you have had accident or traffic violations.
  • “New or old protection”- in a loss Hartford will pay the actual cost to replacing your belongings, regardless of age or condition.
  • New car replacement- if you total your new car within the first 15 months or 15,000 miles (whichever comes first), Hartford will replace it with a new car of the same make, model and equipment.
  • Homeowner’s deductible forgiveness- if your qualifying loss is $25,000 or more, Hartford will waive up to $5,000 of your homeowners insurance deductible.
  • 100% protection plan- if you home damaged, Hartford will pay the full cost to rebuild, even it costs up to 150% of the dwelling coverage.

 

If my lender pays my insurance, do I need to worry if I get late payment notices?

If you have an escrow account (also called an impound account) with your mortgage company, your insurance company bills your lender for your property insurance renewal. In some cases you may never see an actual bill for your insurance. Most of the time your lender pays the bill, your policy renews and all is well. Unfortunately that isn’t the case every time. Sometimes an insurance policy goes unpaid and you can find yourself without insurance. There are several things you can do to prevent this:

1. The most common problem is that at some point before your policy renewed your lender changed. This can be a result of your lender selling your loan or you refinanced. Always check your most recent policy declarations to be certain the correct lender is listed. If you see that the lender listed is incorrect, call us to give us the correct information.

2. If you receive a warning notice or cancellation notice, call us! We can help you track down payment and the sooner we do that, the better. Don’t assume that your lender will take care of it.

3. If offered by your carrier, sign up for electronic notices so you have the most current information at your fingertips.

How do past claims affect the purchase of homeowner’s insurance?

The Hartford exclusively offers AARP members up to 30% off of their standard rates and includes great benefits. Anyone over the age of 50 can apply for the AARP membership; it costs $16 a year. We can offer new AARP members quote as long as you have been a member for at least 90 days.

1. There is a claim on a new home you are purchasing

2.You have a claim on your record and want to purchase a new policy
We all hope it won’t happen to us, but sometimes filing a claim in necessary. When you do file a claim, you lose the loss free discount on your insurance policy for up to 6 years (depending on the carrier). While you may pay more for any policy over the course of this time, you shouldn’t have a problem getting insurance through the standard marketplace. You may need to provide details of the loss and proof that your home has been repaired since then, but so long as everything was corrected you shouldn’t have much trouble.

The trouble comes when you have multiple claims on your record, particularly if you have multiple claims of the same loss type. For example; if you had a pipe burst 2 years ago and then again 6 months ago. The carriers see this as indicative of a larger problem and the potential for a third loss may be too great for some.

“Frequency breeds severity” is a favorite underwriter expression.

If you have more than 2 losses in a 5 year period you will have difficulty finding insurance in the standard market. You may have your existing policy non-renewed and need to purchase through a surplus lines company. Your Purves & Associates agent is well trained in this type of policy and will be able to assist you in finding the best option to fit your needs, and your wallet.

If you are curious about what a claim might do to your policy, or if you want to know what is covered by your policy, contact your Purves & Associate agent and have a discussion. It’s what we’re here for.

Do I need a special policy for my RV?

In most instances you can add an RV to an auto policy but to truly protect you as an RV owner, we recommend that you insure your RV on its own policy and for the same limits of liability and uninsured motorist as you do for your automobiles.

Some RV-specific coverage found on an RV policy include:

  • Stated Value or Replacement Cost in case of a total loss.
  • Vacation Liability, coverage in the event of an accident that occurs on the premise while the RV is being used as a temporary residence.
  • Personal property coverage for your valuables such as camping equipment, electronics, and much more. Something not found not found on an auto policy.
What Discounts are actually available?

Save 50% in 10 seconds! Save $375 in 1 minute! Insurance advertising has told you more about discounts than it has about the insurance policies they are selling.

So, what discounts are actually available? We have some answers.

There are a variety of discounts available to reduce your insurance costs. Some discounts are applied automatically based on the basic information you provide. For your home, it could be your tile roof or the age of a newer house. For your auto insurance, the California Good Driver Discount (3 years of continuous license experience and no more than one point on their driving record) or alarm credits are easy automatic discounts.

Other discounts may require verification from you. These would be discounts such as:

  • New Home Buyer
  • Alarm System
  • Fire Sprinklers or Renovation
  • Occupation
  • Good Student (Auto)

In most cases a copy of purchase contracts, installation contracts, or photos will suffice.

The BIG ONE – The multi policy discount. By insuring your home and auto with the same carrier, you will receive a discount on each policy. This is the biggest discount you can get, and though the amounts vary by carrier it is always the biggest discount.

What is Uninsured Motorist Coverage?

First, let’s start with the why you need it. Liability Insurance is required by to law protect the other party against mistakes that you make. But what about when the other guy makes the mistake and you are the injured party?

It is estimated that nearly 15-25% of drivers in California don’t have auto insurance. What does that mean for you? If you are involved in an accident with one of these uninsured drivers, you could find yourself paying for your own injuries or property damage and perhaps the damages to your passengers. This is where Uninsured Motorist coverage on your policy protects you, not the other guy.

How it works:

There are two sections to Uninsured Motorist coverage. The first section is for bodily injury, sometimes called UMBI (Uninsured Motorist Bodily Injury). It has two parts: A limit per person and a limit per accident (stated like 100/300). The second section is often referred to as UMPD (Uninsured Motorist Property Damage). This covers damage to your car caused by an uninsured driver. If you have Collision coverage, you can buy UMPD as a Collision Deductible Waiver. This means your insurance carrier will waive your Collision Deductible if your car is damaged by an uninsured driver.

What about Under-Insured??

In California you are only required to carry Bodily Injury coverage of $15,000 per person and $30,000 per accident and Property Damage coverage of $5,000. Now, imagine you are badly injured (like a client of ours was) when he was hit by a young driver in a parking lot. His medical bills exceeded the amount of insurance the young driver carried. His Uninsured Motorist coverage paid for the difference, even though he was insured, because he was seriously under-insured. While it is true that about 75-85% of drivers are insured, many drivers only have the low minimum limits. That’s really not much. (In fact, we won’t sell minimum limits in our office)

Uninsured Motorist coverage is an inexpensive coverage and is not often used. However, it is a great example of an important coverage that is overlooked by price shoppers, but when it is needed the need is very serious.

I’m renting my house – do I need to change my Homeowner’s coverage?

You do! The insurance policy for your home is based on you living there. Insurance carriers understand, and price for, the fact that homeowners will protect and maintain their homes better than a renter. There are also different coverage needs between owners and renters. When you are living in the home, your belongings are there and are covered on your home insurance policy. When you move and take your belongings with you, you no longer need to cover them at that location. That represents a significant coverage and cost to your policy. Another important difference is in the liability coverage. Your home policy provides liability coverage that not only covers liability for incidents occurring at your home, but incidents involving you that occur elsewhere. It assumes that the homeowner is residing there, not a tenant.

A Dwelling Fire policy is intended for tenant-occupied homes. It will cover your liability specifically at the location but also from a landlord perspective. Adding Personal Injury on a Dwelling Fire policy will provide the landlord with coverage for things like wrongful entry and wrongful eviction lawsuits, things that are not needed or covered on a Homeowners policy. Lastly, the Loss of Use coverage on a Homeowners policy becomes Loss of Rental Income on a Dwelling Fire policy. When you have a covered loss and your tenants must leave for renovations, this coverage will replace the lost income, too. That coverage is not available if you leave your Homeowners policy in place.

Lastly, if you are buying another home you will need new Homeowners policy for the new house. If you are renting a place, you should purchase a Renters insurance policy. This will provide coverage for your personal belongings and give you liability protection that you had on your old Homeowners policy.

What does Flood Insurance cover?

Your Homeowners policy does NOT cover claims due to flood damage. A Flood Insurance policy is a separate policy.

What does a flood policy cover?

A flood policy has two areas of coverage:

  • Dwelling (the house and garage)
  • Personal Property (furniture, clothes, TVs, etc

In low-risk flood zones you can purchase a Preferred Risk Policy (PRP) which includes coverage for your personal property. In higher risk areas you can choose to buy only Dwelling coverage, and some home owners choose that option as a way to reduce the cost of the policy. The cost of flood insurance depends on the risk level of your homes’ flood zone, ranging from about $500 to several thousand dollars in very high-risk areas.

Required or Not Required?

Some home owners are required by their lender to buy a flood insurance policy because they are in a high-risk flood zone. In those situations the coverage begins on the date that the policy is issued, which is the same day that you close escrow on your home. However, any home owner can buy a flood policy. Keep in mind that when a home owner chooses to buy a policy without requirement, the coverage begins 30 days following the effective date.

Should I shop around?

Unlike other insurance policies, flood insurance is a non-competitive policy. In other words, the price is the same no matter which insurance company you purchase it from. Flood insurance is underwritten by the National Flood Insurance Program (NFIP) which is under the direction of FEMA. Insurance companies who sell flood insurance merely administer the program by collecting premiums and paying claims, but the program is a federal insurance program.

What is an Umbrella Policy?

Usually we think of our Homeowners insurance policy in terms of physical losses to our homes, such as a fire. Liability protection is an important and often overlooked component of a good Homeowners insurance policy. Webster’s dictionary defines a liability as “something (such as the payment of money) for which a person or business is legally responsible”. When a person becomes legally liable to another party due to their negligence, there is coverage under a Homeowners or Renters policy.

An Example of a Personal Liability

Swimming pools provide us with many real-world examples. Here are two:

1.You borrow your friend’s $10,000 sound system for a party at your house. While enjoying the party, you bump the table holding the equipment and the whole thing goes into the pool and it destroyed.

2.Your neighbors are swimming in your pool. Kids are playing and running around the yard. Someone slips by the pool and breaks their arm. Or, much worse, someone drowns.

Both cases illustrate how you can be held liable for damage to another person or their property. While our examples both involve swimming pools, it could be anything.

How does the coverage work?

Personal Liability coverage provides coverage for both defense costs and judgments against you. When another party brings a suit against you for negligence, you have coverage without a deductible from the beginning. Homeowner’s policies have anywhere from $100,000 to $500,000 of coverage built into the policy. We always advise a high limit (usually $500,000) because the cost of increasing it to $500,000 is around $25/year – that is a very good value!

So, what is an Umbrella?

Umbrella is shorthand for Excess Liability Policy. It is just like the Personal Liability coverage above, but an additional layer of protection to ensure your assets are covered. Excess policies are usually stated in flat dollar amounts in the millions, such as a $1,000,000 limit. The “umbrella” nickname also comes from the idea that this higher level of limits covers personal liabilities over both your home and auto insurance policies. Some of these policies also broaden coverage for things not covered under your Home or Auto policies, but those types of policies are becoming rare.

What is earthquake coverage?

Earthquake Coverage is NOT covered by a Homeowners or Renters insurance policy. In fact, losses due to earthquake are explicitly excluded. If you live near a fault (and most people live within 30 miles – see USGS here), that means that you will be on your own to pay for repairs to your home if an earthquake damages or destroys it. We saw this with thousands of homeowners after Katrine, albeit for flood coverage, but many were forced to walk away from their homes because they couldn’t afford to rebuild here), that means that you will be on your own to pay for repairs to your home if an earthquake damages or destroys it. We saw this with thousands of homeowners after Katrine, albeit for flood coverage, but many were forced to walk away from their homes because they couldn’t afford to rebuild.

What is covered by an earthquake policy?

  • The dwelling coverage- The amount to rebuild your home, which is the same as your homeowners dwelling coverage.
  • Your personal property- Furniture, clothes, electronics, etc.
  • Loss of use – Temporary rental of home, apartment, or hotel room while your home is repaired.

How does the deductible work?

Quake coverage has its own unique deductible that is quite different than the $1,000 or $2,500 deductible that you are accustomed to on your homeowner’s policy. Here is how it works:

  • Most earthquake policies include a 10% or 15% deductible. The loss has to exceed your deductible for your policy to pay out. If dwelling coverage limit is $500,000, then your deductible could be $50,000 if you have a 10% deductible or $75,000 if you have a 15% deductible.
  • Loss scenario: using a 10% deductible and $500,000in dwelling coverage. If your home sustained damage during an earthquake and it was determined that your loss amount ( the cost to rebuild or repair your home) is $350,000, your policy would subtract the deductible of $50,000 and pay out a total of $300,000.The deductible amount is subtracted from the loss amount. This means that you do not pay any portion of the deductible out of pocket to receive a claim payment.

Your Homeowner’s carrier is required to offer this coverage to your every other renewal. You can also purchase this coverage in a stand-alone policy if you prefer not to wait.

Should I buy the insurance for a Rental Car?

Yes, Probably and No…

No two auto policies are identical, and no two rental car contracts are the same, either. This leaves renters with a number of variables to consider. What you will read below is very general advice, but please read your rental contract.

Yes!

Your limits of liability coverage for bodily injury and property damage to others extend to non-commercial vehicles that you borrow or rent. This includes rental cars when you go to enjoy Hawaiian vacation (or anywhere in the United States and Canada).

Probably…

If you carry comprehensive and collision coverage on your vehicle, that coverage (minus the deductible) extends to the rental car. If you don’t carry those coverages then you must purchase that coverage with the rental. You need to buy it one place or the other. But keep this in mind – when you rent a car you are usually in a strange place and often in a hurry (to catch a plane, make a meeting, etc.), which is a recipe for trouble. We recommend always buying the physical damage coverage on a rental car so that there is no question when you return the car.

No!

Most rental companies will hold you responsible for ‘loss of use’ or ‘the down-time’, which is the time that vehicle is in the shop not collecting rental fees. The rental car company is in the business of collecting fees on every car, every day – even if YOU put that car in the shop. This coverage can be purchased from the rental company (often included with the physical damage waiver) and some credit card companies include this if a rental is charged to their card. If in doubt, ask the rental agent what you are responsible for and your agent for what you ARE covered for.

What is “Replacement Cost” on a homeowner’s policy?

Actual cash value coverage will provide coverage on the depreciated value of your home, which can leave a serious gap in coverage. People who have had auto claims understand how this works, but most people don’t realize that this reduction in coverage may be on their Homeowners Policy, too. Sometimes these policies are sold for homes in high-risk areas when it is the only insurance option.

Extended Replacement cost provides coverage to completely rebuild your home in the event of a total loss, including costs over your policy limits. If you have a mortgage, you are likely required to carry replacement cost coverage; and most preferred carriers will not write homeowner’s insurance on an actual cash value basis.

How is replacement cost calculated?

Replacement cost is calculated using databases available to insurance agents, such as “360value” and “Marshall & Swift.” A good insurance agent will input a lot of information about your home into the database to arrive at an accurate estimate. Using that information along with local building costs and loss data, the databases estimate the cost to rebuild your home. This figure determines the Dwelling Coverage limit on your policy so it is important that the input information is as accurate and thorough as possible.

What is “extended” replacement cost?

As explained above, your dwelling limit is based on our best estimate – but it is an estimate. Extended replacement cost is an additional coverage that is added to the basic homeowner’s policy for a small additional premium. It typically adds 50% to your Dwelling Coverage in the event that your primary coverage is exhausted due to unforeseen circumstances. For example, your home was burned in a wildfire that affected your whole neighborhood. Labor and materials costs could skyrocket, pushing the cost to rebuild your home over our estimate. Costs for various materials fluctuate as well. Your home must be insured to at least 80% of the “normal” replacement value, or your extended coverage will be invalidated.

Do I need special coverage for my wedding ring?

Your homeowner’s policy includes coverage for personal property, but certain categories of valuables such as jewelry, money, coins, silverware, fine arts, fire arms and home computers have a set dollar amount limit and are limited to losses covered by your policy.

Scheduling personal properties offer three advantages:

  • Replacement cost value – your items are covered at replacement cost, you get the real cost to replace the item, based on the appraisal you submitted when the item was scheduled or current market value.
  • Broader coverage – your items are covered for open perils risks, including damage, mysterious disappearance, and accidental loss.
  • No deductible – you are not responsible for paying your deductible on any of your scheduled items.

Scheduling your valuables does add a small premium to your policy. A good rule of thumb for scheduling property is this: If it is something that is one-of-a-kind or that can be appraised, it probably needs to be scheduled.

When do I Need to add my Teen Driver to my policy?

Teens should be added to the policy when they get their learner’s permit. When they get their actual driver’s license they are added to the policy as a driver and are rated as such – which means you start paying premium for them.

Teens don’t qualify for the California Good Driver discount until they have been driving for 3 years.
Discounts are given by some carriers if the teen is a student away at school, more than 100 miles, without a vehicle.
Good Student Discounts are given for teens than have a 3.0 GPA and are considered a full time student whether it be high school or college. Many homes adopt a “No B’s – No Keys” policy for this reason.

How do I reduce the cost for my Teen Driver?

We have customers that want to know what kind of car to buy their new teen driver that won’t break the bank. Buying an older car that doesn’t need comprehensive and collision coverage is one way to save money. Sports cars, convertibles and expensive brand new vehicles will definitely add much more premium. Also, some carriers will automatically rate the least experienced driver on the most expensive car, which can dramatically increase the price. We represent many carriers so we always know which carriers are the best for households with those pricey teenage drivers.

What coverage should I add to my Homeowner’s Policy?

There are special coverages or endorsements available that can be added to enhance your homeowner’s insurance coverage. There are single endorsements that can be added or bundled endorsements. Not having any endorsements on your policy would make it a very “bare bones” policy and leave you without important coverages. Here are a few of the popular endorsements:

  • Water Backup (coverage for losses by water backup from drains or sewers)
  • Identity Theft Coverage
  • Extended Dwelling Replacement
  • Replacement cost for contents of your home
  • Personal Injury Coverage
  • Mold/Fungi Coverage (Mold, fungi & other microbial losses)
  • Ordinance or Law
  • Scheduled Personal Property (jewelry, fine arts, furs, silverware, collectibles etc.)
  • Home Business Insurance (provides limited personal property & business liability coverage for certain types of home businesses)

Most insurance carriers offer “bundles” of endorsements with fancy names such as “Classic” or “Premier” endorsements. The very existence of these many endorsements illustrates that no two policies are alike and many cheap policies have serious gaps in coverage.

What is Water Backup Coverage?

If my toilet backs up and overflows into the house, is that damage covered? Maybe. We add this coverage to every policy we sell, but many Homeowners policies do not include this as a standard part of the policy.

Water Backup Coverage insures against the toilet, shower, sinks, and drains inside the home backing up and overflowing, causing damage to the property. This coverage doesn’t insure the plumbing or service lines themselves, but rather it’s designed to offer some protection against damage caused by water overflow from the household plumbing system. There are carriers who don’t offer this coverage at all, but most offer it as an optional endorsement on a policy. We recommend a minimum of 5,000 in Water Backup Coverage.

I’m buying a boat; do I ‘have to’ insure it like I do for my car?

Unlike automobiles where you are required to insure the vehicle for liability when a vehicle is registered, a watercraft does not have that requirement… but it probably should. As with an auto accident, you will still be held responsible for injuries and property damage that you cause while operating your watercraft. Without insurance, those costs will be out of your own pocket. If you hold a loan on the watercraft, your lender will require you to insure the boat in order to protect their interest in the craft.

We recommended that you insure your watercraft for the same limits of liability that you carry on your automobiles. The addition of medical coverage is also advised as there is a high chance of an injury related to the boat operation (think about your first time on skis or pulling a tube!). Personal Property coverage is also recommended as fishing gear and unattached equipment would not be covered otherwise.

What is Water Backup Coverage?

If my toilet backs up and overflows into the house, is that damage covered? Maybe. We add this coverage to every policy we sell, but many Homeowners policies do not include this as a standard part of the policy.

Water Backup Coverage insures against the toilet, shower, sinks, and drains inside the home backing up and overflowing, causing damage to the property. This coverage doesn’t insure the plumbing or service lines themselves, but rather it’s designed to offer some protection against damage caused by water overflow from the household plumbing system. There are carriers who don’t offer this coverage at all, but most offer it as an optional endorsement on a policy. We recommend a minimum of 5,000 in Water Backup Coverage.

How exactly does insurance factor into your home loan?

Loan Qualification

When your Loan Officer is helping you qualify for a loan, they include the cost of your Homeowners Insurance in the monthly payment that you can afford. Obviously, the lower the insurance premium the more of your monthly payment can be dedicated to your purchasing power. If the premium is too high, it can cut into your ability to buy the house you love.

Loan Underwriting + Insurance Underwriting

As mentioned above, price is very important. But it is extremely important that the cost of your insurance doesn’t change from the original figure that you give to your Loan Officer, which can cause problems with the bank.

This is where pricing gets tricky: everyone wants the price to be as low as possible, but you also need the right amount of coverage for your home. The answer is found in providing as much information about the home and the buyers to the insurance agent so that they can quote the right coverage AND apply every possible discount to get the price down. The result is solid coverage and great pricing.

Escrow/Impound Accounts

Many borrowers have an escrow or impound account set up with their lender. The purpose of this account is to manage your property tax and homeowners insurance payments so that you don’t have to. This means that each time you make a monthly mortgage payment it includes 1/12 of next year’s insurance premium. At the end of the year there is enough money in the account to pay the annual premium in full.

Let us help you find the most value in your insurance and keep your monthly mortgage payment as low as possible!

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