INSURANCE TIPS FOR FIRST TIME HOME BUYERS

BYALAN PLAFKER, PRESIDENT & CEO
MEMBER BROKERAGE SERVICE LLC
A MELROSE CREDIT UNION SERVICE ORGANIZATION



With the housing market currently tilted in buyers’ favor, many people are choosing to make the leap and buy their first home. It’s a big investment and an intimidating process, and after sorting out everything with banks, builders, Realtors and previous owners, insurance policies often don’t get the attention they deserve. However, talking things over with your insurance agent and acquiring a little knowledge can go a long way in calming your nerves and securing your future.

Standard policies usually include:

• protections for personal possessions,
  
  
  
• property damage,
  
  
  
• liability protection for bodily injury to family members or guests,
  
  
  
• additional living expenses if your home becomes uninhabitable due to a loss.
  

However, a standard policy is not a one-size-fits-all.
Here are some tips to consider:

• Be sure the house limit you choose reflects the current cost of rebuilding it.
  
  
  
• Take an inventory of your home—your possessions, your furnishings and the materials that were used to construct your home. If there are any particularly valuable items, make sure your policy reflects that. Saving pictures or a video of your inventory in a safe place also is a good idea so you can provide evidence on any future claims.
  
  
  
• A household inventory could prove invaluable if you lost some or all of your household belongings in a fire, burglary or natural disaster. A household inventory is a list of all the personal belongings in your home including when and where you bought each item, their original cost and any identifying information such as model or serial numbers. For an investment of just a few hours, you can survey your belongings and be prepared in the event of a loss.
  
  
  
• Consider the area where you’ll be living. Is it prone to severe weather? Earthquakes? Are there any trees nearby that could damage the house if they fell? Are you in an area with a risk of flooding? You can gauge your flood risk at www.floodsmart.gov. If so, remember that flood coverage is not part of standard homeowner’s policies; it must be purchased separately.
  
  
  
• Think of how much you want to spend on your deductible. Then weigh that against the limit, or maximum amount the insurer will pay you if a loss occurs. It’s a balancing act, and only you can decide the levels that are right for your situation.
  
  
  
• A number of factors determine the cost of your homeowners policy, including:
  
  
  • The type of policy you choose;
    
    
  • How much insurance you carry; and
    
    
  • The size of your deductible;
    
    
  • The construction of your home or apartment also is a factor, as some buildings are more fire resistant than others;
    
    
  • Available fire protection in your community and where you live are factors, too.
    
    
    
• Most homeowners insurance policies, except for the very basic ones, cover damage to the home resulting from broken pipes due to freezing. For example, your insurance company will pay to clean or pay the cost to replace the carpet, furniture and other property that has been damaged due to the water from the bursting pipes less your deductible.
  

If you own, or are considering owning, a dog you should know homeowners and renters insurance policies typically cover dog bite liability as part of the standard policy’s liability coverage which can range from a limit of $100,000 to $500,000. This means that the dog owner is responsible for any additional damages, e.g., legal costs.

Most insurance companies will cover dogs. However, some breeds are more difficult to insure. Moreover, if the animal already has had an incident, your insurance premium may be higher.

Your Homeowners Policy and storm damage coverage

Your homeowners policy covers most losses that may occur to your dwelling and personal property. Commonly, losses resulting from theft, fire, wind, vehicles and vandalism are covered.

If there is damage because of a storm, a standard homeowners policy covers storm damage to the dwelling, its contents and other structures such as garages and fences up to the policy limit. Such damage also acts as a trigger for coverage of other consequential losses and expenses including removal of debris and loss of use.

When storm damages make it necessary to leave your home temporarily, your homeowners policy covers the additional costs necessary to maintain your normal standard of living for such things as meals, lodging, laundry, transportation, entertainment, etc. You will need to present receipts for all of your expenses to be reimbursed.

You can expect to recover clean up expenses following a storm. Your homeowners policy will cover costs for removal of debris when covered property is damaged. This includes the removal of trees that fall on covered structures, however, this coverage for trees usually is limited to $1,000 for a single storm.

You are covered for protecting your property from damage. Your policy obligates you to protect your property from further damage following a loss as a condition to payment of your claim.

You can expect your policy to pay for such expenses to board windows and make emergency repairs. Also, property removed from your home to protect it from an impending storm receives more comprehensive coverage than what is provided at your home. For a limited period of time, it covers flood, earthquake and any direct damage to your dislocated property without exclusions. However, the expenses to remove the property from harm’s way is not a covered expense.

Damages NOT covered a homeowners policy are:

• Trees, shrubs and gardens damaged or destroyed by the storm are not covered.
  
  
  
• The spoilage of food due to an inoperative refrigerator or freezer resulting from an off premise power outage is not covered by many policies unless the appliances are inoperative because the damage to power lines or other utility equipment occurred on your property; for example, lightning damage to your circuit box or a tree falling on power lines connected to your home.
  
  
  
• It is important to note that there is no coverage for any damage that is a direct result of flood, surface water or water that backs up through sewers or drains that is caused by an act of nature (a storm).
  

The information provided here includes general guidelines for storm damage coverage. You should contact your agency for definite answers and further advice to find out what is covered in any specific circumstances.

Most of all, remember that your insurance agency is there to help with all of the above. They clarify complex situations, keep you informed and make sure you’re satisfied with your coverage. When you find your dream home let them help you protect it.

Professional, Independent agents pride themselves on superior customer service. Unlike giant national insurers that only provide its policy holders with an automated 800 number and a website, we believe that conducting business person to person is the best way to make sure you’re satisfied and properly covered. Waiting on hold for hours or desperately searching a website for answers is no way to be treated. It’s hard to grasp the ins and outs of a policy when you’re just filling out online forms by yourself.

A Professional, Independent agency makes sure you understand your options, and that you receive the policy you think is the best fit. And afterward, you can always call our agency or drop by our office if you want to add, subtract or change coverage, or if you have any questions on your policy.

For more information, talk to your financial professional, or the author of this article.

Your Professional Insurance Agent …
We want you to know about the insurance you’re buying.

Alan Plafker, CPIA is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a Certified Professional Insurance Agent and licensed Insurance Broker. He serves as First Vice President on the Board of Directors the PIANY (Professional Insurance Agents Association of NY), serves on the Board of CIBGNY (Council of Insurance Brokers of Greater NY), and serves as Treasurer for the New York Independent Livery Driver Benefit Fund Board of Directors. His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 Ext. 1082, or visit the website at: www.MemberBrokerage.com