Water you waiting for It's time to install a water leak detection system in your home

“Water” you waiting for? It’s time to install a water leak detection system in your home

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Water you waiting for It's time to install a water leak detection system in your home

In deep water with water losses

Most people tend to think of fire protection or roof replacement from storms when they consider their home insurance and what it covers them.  But according to the International Organization for Standardization (ISO), a water damage or freezing claim is nearly as likely as a wind or hail claim.1  Water losses are also over seven times more likely than fire and lightning losses.

Across the industry, more than 2.5 million homeowners experience a water loss each year.  And as your Atlanta independent insurance agent, we can attest to this right here within our office.  A recent rundown of our clients’ claims from the past year revealed that about half were in fact water losses.  Some cost hundreds of thousands of dollars.  And the most frustrating part is that many of them could have been prevented…

Causes of water losses

Plumbing failure is the #1 cause of non-weather related losses and can occur from supply lines, toilets, hoses, joints/valves, and pipe bursts.  Homes just are not built like they used to be and the average age of a home at its first plumbing failure is 8 years.

Another contributor to water losses is appliance failure – from water heaters, ice makers, sump pumps, washing machines, and dishwashers.  It depends on the hardness of the water at your house, but most water heaters only last an average of 10-15 years.

Keep your head above water with these water leak detection systems

Besides simply selling insurance, it is part of our agency philosophy to educate our clients on how to prevent losses before they even occur.  The most fool-proof way you can prevent a water loss is to install a water leak detection and/or a water shutoff system in your home.  Many of our carriers provide discounts for these as well!  There are three levels of protection:

Basic protection – local alarms

Also known as “water sensors” or “water bugs”, these sensors are designed to sound when water touches them.  Typically self-installed, they sit on the floor near appliances such as your water heater, washing machines, etc.

The general consensus: while these are the cheapest option and don’t require a plumber to install them, they are not always reliable and do not shut off the water.  You’re doing better than most if you have them, but a higher level of protection is advised.

Moderate protection – local alarms that use WIFI to alert your phone of leaks

These sensors do more than just sound at the source like the local alarms.  They alert your phone so that you can go to turn off the water yourself or have your spouse at home do it.

The general consensus: still better than nothing and a cheap/easy way to have some level of protection when you are away from your house but may not work properly if WIFI signal is weak.

Maximum protection – whole-house shutoff system

These systems are installed in your main water supply to protect your entire house and stop the flow automatically if a leak is detected.  It can also be integrated into your smart home or security system to prevent water losses while you are away.

The general consensus: this is our recommended option and the good news they become much more affordable in recent years!  The reality is just knowing you have a leak does not help unless it is shut down immediately which is what you get with these systems.  As your Atlanta independent insurance agent, we have partnerships with our insurance companies to provide you discounts on the installation of these systems so ask us for recommendations!

A final word to the wise

At the very least, please know where the water main shutoff is located and educate your family on how to shut it off.  This is the #1 skill a homeowner can have to stop a leak ASAP.  If you have any questions, as always, please reach out to us!

  1. Facts + Statistics: Homeowners and renters insurance. (https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance).
  2. Photo credit of: http://www.noworriesremovals.com.au/wp-content/uploads/2015/04/Protect-your-Furniture-in-Flood.
Corn Usage Based Insurance

Usage Based Insurance

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Corn Usage Based Insurance

Most of us have seen the commercials where a mom goes to great lengths to keep her auto insurance discount.  From having co-workers respond to messages for her in the car, refusing to speed even though her kid has to use the restroom, and even goes as far as telling her husband to slow down and not speed when she is going into labor.  All for the discount!  They are advertising their Usage Based Insurance (UBI) program, that has become increasingly popular as people are spending more time at home and off the roads due to COVID-19.

Usage Based Insurance, otherwise known as Telematics, showed up on the insurance scene years ago as a potential solution to drive down insurance premiums for young drivers (17-19 years old).  There has been a significant spike in interest as COVID-19 has changed the way we work, go to school, and has kept a lot of people off the roads.  According to Global Workplace Analytics’ President Katie Lister, her estimate is that ”25-30% of the workforce will be working-from-home multiple days a week by the end of 2021.”  And Forbes projects that there will be a significant focus on e-learning professionally to keep people out of workshops and seminars and staying in the comfort of their own home as they continue education.  With such vital parts of our work life keeping us off from going into the office and spending less time in our cars, shouldn’t car insurance premium options adjust accordingly?  As we saw at the beginning of the pandemic, insurance companies responded with credits and other kickbacks as normal working life halted. UBI is another way insurance companies are responding to the drastic change and finding options that might better fit their customers’ current and future needs.

Traditional insurance premiums are based off hundreds of variables in some cases: driving history, age, gender, credit, etc.  Usage-based insurance takes that initial calculated premium which is then adjusted depending on an individual’s driving habits, or their telematics data.  As an example, two people of the same age, gender, and income could potentially get very different insurance rates due to their driving habits.  Someone with great driving habits who on average drives short distances, doesn’t speed, and rarely brakes abruptly, could get a substantially lower premium than one who speeds and slams their break at every stop!

We have taken the time to do some research on a variety of carriers to see if UBI is really the right decision moving forward for our Atlanta auto insurance clients.  As usage-based insurance becomes more popular, we are certain we will see these programs evolve as more customers hop on board.  But as of right now, here are the pros and cons of UBI:

Pros:

There are obvious perks to utilizing usage-based insurance—especially in today’s world.  The customer can feel more in control of their insurance premium as their driving habits have a direct impact on their premium amount.  By personalizing premiums for safe drivers, the potential to save year after year could increase.

We have seen families enjoy this feature as the telematics app tracks where the driver is going.  This allows oversight for parents if needed as all the data is saved and shared with the insured.  This tracking has also been seen has a negative to some as the telematics will track times of day in the car, length of travel, and start and end locations.  If you are someone who values their privacy tremendously, then usage-based insurance might not be the right fit for you.

Additionally, there is truth to the idea that telematics promotes better driving for all drivers as they become more aware of how their driving habits affect their premiums.  Family members can better monitor driving habits of kids or even older family members and feel a bit more at ease letting their loved ones on the road.  The telematics data has also been helpful for when accidents occur as the data can help paint a picture of the accident and gives the insurance companies a better understanding of the situation from the driver’s seat.

Concerns:

As mentioned above, there are of course some downsides to relying on usage-based insurance options to lower your premium.  Privacy issues have raised a lot of questions on what other ways data collected could potentially be used in the future.  As the programs track a wide variety of behaviors while you are driving, according to multiple CNBC surveys, they found that the biggest concern was people’s location.  45% of Americans surveyed felt that sharing their locations constantly with their insurance provider was too high of a tradeoff for lower auto insurance premiums.

Despite the negatives, many people are finding usage-based insurance beneficial for their lifestyle.  While it is not perfect, we expect insurance companies to continue refining these programs in the coming years to further reward safe drivers and hopefully change habits of more aggressive drivers.  As the industry gains more data, the benefit to not only the auto insurance industry but also safe driving as a society will continue to increase.  It will be up to the consumer whether it is a good choice for you and your auto insurance premium during and after COVID-19!

Resources:

Fire Safety isn’t just for Thanksgiving

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Central Station Alarm

How alarming… all about central station alarms and why your home shouldn’t be caught without one

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Central Station Alarm

To honor National Fire Prevention Week which was created in commemoration of the Great Chicago Fire in 1871, we want to discuss the importance of having a central station monitored alarm installed in your home.  Our philosophy here at Townley Kenton Insurance is to do all we can to help you avoid having to file a claim before a loss ever even occurs.  One of the ways we do this is recommending our Atlanta Home Insurance clients always install a central station monitored alarm.  Although this can save you money on your home insurance, we cannot stress enough that the most important reason to install the alarm is to potentially save the life of you and your family.

Some staggering statistics

Every year in the United States, home fires cause around 13,000 injuries, 2,500 deaths, and nearly $7 billion in damage.1

More than half of residential fire deaths occur in fires that start between 11:00pm and 7:00am. The peak night hours are from 2:00am to 5:00am, when most people are in a deep sleep.1

One in six homes will be burglarized.3

The F.B.I. indicates that burglars are 2.7 times more likely to target homes without alarm systems.3

Why it’s important to install a central station alarm

As if the statistics above weren’t already enough to make you reconsider installing a central station alarm at your home, here are some other important reasons that we as your Atlanta independent insurance agent so highly endorse getting one:

A centrally monitored alarm could be the only line of defense in saving your life

Unfortunately, we know tragic stories of people who have passed away in their sleep due to fires that broke out unbeknownst to them in their homes.  And with the change in production and quality of homes and furniture today compared to 30 years ago3, fire experts agree that now you only have two minutes to escape a burning home before it’s too late to get out (compared to 17 minutes in the past).4

If installing an alarm is the best way to prevent a similar situation with your family, wouldn’t it make sense to gain that peace of mind?  The small monthly cost of having your home monitored is worth your life and the lives of your family.

Your home is protected while you are away from it

Even the biggest homebodies must leave the house from time to time for work, appointments, grocery shopping, and of course vacation (for you non-homebodies).  Central station monitoring centers will be watching over your home while you are away and will alert the first responders if there is an issue.  This may be the only way to save your home and possessions should a fire start while you are gone.

You get a discount on your Atlanta Home insurance

This is the obvious financial perk to having a central station alarm installed.  But do you understand why the insurance companies provide a discount?  It’s because it’s been actuarially verified that homes with central station alarms are less likely to have a loss due to a fire or theft.  Depending on the system you get, the savings on home insurance may offset the monitoring cost or more!

How to determine which central station alarm is right for you

The home monitoring industry has increased and improved significantly over the past five to ten years, and there now are many options for you in choosing the best fit to protect your home.  These are some factors to take into consideration.

National or local affiliation

There are some strong nationally recognized brands, as well as local ones.  We would be happy to give you our recommendations based on your preference if you call or email us!

Offerings

You can elect to have a basic system installed, or you can add bells and whistles such as motion-sensing surveillance cameras, window sensors, security lighting, smart home products, and more.5  The more you choose, the more you will have to pay which brings us to the next point…

Price5

Differing budgets and amounts of assets to cover cause the cost of security systems to vary greatly.  These are some factors that will contribute to your monthly bill:

  • Financed equipment costs: The monthly security hardware cost, if you don’t pay for it all up front.
  • Alarm monitoring: The cost for your home to be monitored.
  • Size of your home: Bigger homes provide more potential fire-causing opportunities and more access points for burglars to attack, so they may require more cameras or motion sensors.
  • Landline vs. cellular monitoring: Landline monitoring costs less per month but can be turned off with a single cut to your outdoor telephone line.
  • Environmental sensors: Sensors that detect heat, smoke, carbon monoxide, flooding and more will cost more.

As your trusted risk advisors, we hope this information will help you in considering the installation of a central station alarm at your home.  Please reach out if you have any more questions about the benefits of central station alarms.  Although providing you with insurance is part of our job… educating you on protection is sometimes the most important part.

Cutting Out Only 10 Unnecessary Expenses = Investing in Essential Protection

Cutting Out Only 10 Unnecessary Expenses = Investing in Essential Protection

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Cutting Out Only 10 Unnecessary Expenses = Investing in Essential ProtectionAn important part of our job as your Atlanta independent insurance agent is to educate you on why insurance matters and why it is worth the money you are paying…no matter how frustrating it may be when you feel there is nothing you are receiving in return.  We have an entire article on this feeling here!

A natural reaction to premium rate increases is to complain and look for ways to cut insurance wherever possible.  We get it because we all like to save money, too!   But, we’re here to tell you that insurance is probably the primary expense in your life that could actually hurt you when you reduce it (unless you are moving to better coverage!).  Your neighbor may be “saving 15% or more on their car insurance” with one company, but we can almost guarantee their contract and claim philosophy are not going to be the same at the time of a loss.  To be clear, we always want you to have the most cost-effective program, but not at the expense of coverage or partnerships you actually need.

With this in mind, here are 10 unnecessary expenses you can cut in your life in order to save for the ones that matter most – such as your insurance!

  • Your daily coffeeshop ritual. Buying one $3 coffee each day on your commute to work will cost you about $800 each year.  If you switch to K-cups (an average $0.75 each) at home instead, you’ll save $600. And it’s faster!  This one is a no-brainer.
  • Eating out. It’s convenient, but it also costs quite a lot more than cooking at home yourself.  For lunch, consider cooking meals in bulk and freezing them to take to work.  Find a recipe your family would like and make it an activity to cook it together one night!  And if you must eat out, switch to ordering water.  A family of four that orders drinks at a restaurant will pay $14.40 each meal.  If you eat out four a month together, that’s $691 per year on drinks alone. 
  • Ladies (and some men now too!), do you realize that you’re paying upwards of $400 per year if you get one $30 manicure each month?  Maybe have your husband give you a scheduled foot rub every other month instead! ($180)
  • Low deductibles.  This is something a call or email to us can help you with!  Higher deductibles equal lower premiums.  Maybe your vehicle is fifteen years old now and doesn’t need physical damage coverage anymore.  Or, perhaps it’s been a while since you’ve reviewed your home coverage and you now can afford a $2,500 deductible over a $1,000 one.  This is something we are happy to discuss with you. ($250)
  • Going to the movies. Going to the movies is getting more and more expensive at an average rate of $9 per ticket nowadays.1  And of course you’re going to stop at concessions.  A night at the movie theater can cost your family anywhere from $50-$100.  You’ll pay about $2 to rent a movie at Redbox.  A basic Netflix account is only $7.99 a month. ($350)
  • Heating and cooling. According to gov, you can save up to 10% each year by simply turning your thermostat back 7o-10o for 8 hours a day from its normal setting.2  In the winter, you can save by setting the thermostat at 68o while you’re awake and setting it lower while you’re asleep or away from home.  Follow the same strategy in the summer by bumping up to 78o.  The smaller the difference between the indoor and outdoor temperatures, the lower your overall cooling bill will be. Smart thermostats are something to consider, as well. ($360)
  • Recurring Software subscriptions. A recent study showed that people estimated their monthly cost on these “only $9.99 per month” subscriptions to be $79.74 per month.  However, the ACTUAL cost after reviewing each category was $237.33!  If you could just drop half of these subscriptions you likely never use it would save $1,416 annually! ($1,416)
  • Outsourced housekeeping and lawn care. If you hire cleaning help in Atlanta, you’re paying $22 per hour on average.3  Insource household tasks wherever possible.  Give your kids a sense of responsibility and accomplishment – while also saving money – by assigning household duties to them.  Teach Junior how to cut the grass or Susie how to run the vacuum.  Or, carve out time each week to do it yourself.  There’s nothing like a self-cleaned and maintained home to be proud of and enjoy! ($572)
  • Buying name brands. Buy generic when you can.  Look carefully at the ingredients and see how similar they are.  If they’re fairly close, consider buying the generic brand from now on and notice the savings! ($600)
  • Cell phone/cable bill. Reevaluate your plans and ask yourself if you absolutely need the package you’re paying for.  The average American is now paying $216 per month on these and cutting out just 15% a month will save you $388 a year. ($388)

If you cut out each of the above-mentioned items, you can save $5,407 over the course of one year!  That’s money back in your pocket without risking the protection of your family.  We know you can’t touch insurance but trust us, it will make a life-changing impact when the unexpected occurs.

https://www.cnbc.com/2019/04/30/americans-in-cities-spend-984-on-monthly-billsheres-how-to-pay-less.html

The differences between “market value” and “replacement cost” – and how they impact your home’s insured value

The differences between “market value” and “replacement cost” – and how they impact your home’s insured value

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Spoiler alert: When you call us to review your Atlanta home insurance, the amount of coverage we will advise you to carry is most likely not going to equal the amount for which you bought your home.

Why is that?

To begin, we need to differentiate between two key terms: market value and replacement cost.

Market Value

Simply put, market value is the amount at which a home would sell for today in its current condition.

A home’s market value can fluctuate and can be difficult to predict.  It is calculated based on your home’s location, internal and external characteristics, as well as supply and demand.  To give you an idea of the drastic market value increases for houses needing Atlanta homeowners insurance, there have been homes insured in our Townley Kenton client base that have gone up over 20% over a 2-year period.

Some factors that influence the market value are school district ratings, crime levels, and neighborhood popularity.

Replacement Cost

On the other hand, replacement cost is the amount it would cost to rebuild or replace your home with like kind/quality materials if it were completely destroyed.  You’ll also see it listed as “dwelling amount” or “Coverage A” in your Atlanta home insurance policy.  For this article’s purposes, we’ll refer to it as “replacement cost.”

It is based on the quality and cost of building materials, labor, and workmanship at the time of loss.  Components include floor structure, floor covering, plumbing, electrical, special finishes, etc.  A cost per square foot is determined based on current building costs and trends that are regularly updated.  Contractors, restoration specialists, and home builders throughout the United States constantly communicate with insurance appraisers and software providing these updated values.  However, it has been our experience that many companies are still severely undervaluing the replacement cost on home insurance policies.

Some of the factors that affect rebuilding cost include:

  • Fees for contractors, architects, interior designers, engineers, etc.
  • Costs for building materials such as lumber, windows/doors, roofing, copper piping and natural stone
  • Rebuilding “green” with ultra-efficient technology
  • Heating and electrical systems
  • Foundations and footings of the home
  • If applicable, custom features such as cabinetry, wall and floor finishes, lighting, built-in appliances and electronic systems
  • Debris removal
  • Building demand at the time of loss

Why knowing the difference matters

There is an obvious variance between market value and rebuilding cost.

The purpose of insurance is to make you whole again after you suffer a loss.  Since that is the case, what the insurance company owes you after a loss is not your home’s market value but rather the replacement or rebuilding cost.  This is because the market value includes factors that home insurance cannot – and therefore does not – cover.

So, it is imperative that your home be valued at its accurate replacement cost and NOT market value.

Most insurance companies require your home to be insured to at least 80% of its replacement cost.  If your home is not insured up to its full replacement cost at the time of a loss, you are at risk of not being paid enough to fully rebuild your home.

Chubb, one of our company partners, advises: “it’s crucial that you maintain sufficient coverage for your home to be rebuilt to the same quality level in the event of a major loss. Promptly report any remodeling projects, renovations, additions or upgrades that may increase the value of your home to your agent/broker.”

They bring up an often overlooked issue, please let your Atlanta insurance agent know when you’re renovating or making any additions/alterations to your home, and they will adjust the value of your home accordingly.  Failing to do so could end up leaving you “self-insuring” after a loss.

Another word to the wise is that you want to make sure that your home’s insured value is keeping up with rebuilding costs.  This is extremely important because coverage regularly needs to be adjusted upward to keep pace with increases in construction costs, such as materials and labor.  Most insurance policies include these incremental increases to the rebuilding cost each year at your renewal but pay attention to them to gauge if they are reasonable. The last think you want is to find out your home is underinsured AFTER a significant loss to your property!

The best case scenario is guaranteed/unlimited replacement cost on your home

The companies that you hear and see advertised 24/7 in the media do not all necessarily guarantee that they will pay whatever it costs to rebuild your home in the event of a loss.  Guaranteed/unlimited replacement cost means that even if the damage exceeds the limits on your policy, the insurance company will still fully replace or rebuild your property without deduction for depreciation.

Regrettably, there are insurance companies and agents out there that do not offer unlimited replacement cost coverage on homes or have drastically underinsured the value of homes, leaving customers without enough coverage at the time of a loss.

The recent California wildfire is a heart wrenching real-life example of this.  One California fire victim was led to believe that his home’s rebuilding cost was only $621,000, however, when the fire destroyed his home it was determined that the cost to rebuild was actually twice as much at $1.2 million.  Another homeowner had his property insured for $727,800 with an additional 50% replacement cost. Now he is discovering that his insurance company is valuing his home at minimum of $1.3 million to rebuild – and possibly even $1 million more than that!  Both homeowners have filed lawsuits along with many other victims of the wildfire to see if they can recoup what they believe they deserve to rebuild their homes.

We understand that many people feel this will never happen to them but have seen this scenario play out many times over the years.  We cannot emphasize the need to properly insure your home enough.  As any homeowner who has suffered an underinsured loss will tell you, it is an experience you will never want to go through again.

My wife’s trip to the store and the texting epidemic

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We have discussed texting quite a bit within our office and in general over the past few years.  You can read about the dangerous and expensive effects of texting and driving on Atlanta insurance in our previous article here.  However, today I thought we would focus on the extreme safety issue that is evolving from the occasional mishap into the dangerous daily norm.

First, some context- my wife and I live on a street where the speed limit is 25 mph.  You would think accidents would be kept to a minimum as the good law-abiding citizens of Atlanta would never speed, if for no better reason than to keep down their Atlanta auto insurance premiums.  Shockingly, this isn’t always the case as we have had seven, that’s right SEVEN, accidents either directly in front of our driveway or within a mere fifteen yards.   They were all slightly different circumstances but the common denominator in each of these accidents was a lack of performing the most common requirement when driving- looking at the road.  Only one of the seven accidents may have been unrelated to texting.  That gentleman was so intoxicated that he likely would have been unable to type if he tried.

So, back my wife’s trip to the store a mere mile away from our house.  Before she was even able to pull out of the driveway she came upon accident number seven.  This was the second of the seven accidents involving a postal worker being rear ended while placing the mail in the mailbox.  Now, I can’t unequivocally prove the offending party was texting and driving, but one would assume this to be the case, since it is unlikely to miss a stop-and-go postal truck directly in front of you.  The last postal worker hit in our driveway was out on workers compensation for quite some time so we will have to see if this latest incident on our 25 mph superhighway results in the same.

While texting and driving is dangerous enough in itself, the risk factors multiply exponentially when you combine it with another epidemic sweeping the country- texting and walking.  After leaving the scene of the accident at our house my wife continued to the store down the street.  The store is located on yet another 25 mph superhighway, but this stretch comes complete with a round-a-bout and pedestrian crosswalk frequented by Emory University students.  It is here that my wife witnessed, no more than 90 seconds after leaving the scene of the last texting accident, the dangerous collaboration of both the texting and driving and texting and walking contingencies.

An Emory student, who was obviously used to walking while staring at her screen, strode confidently into the road fully engrossed in the email, Facebook update or other distraction she was reading.  Simultaneously, a vehicle whose driver was also checking the urgent items on his screen, came careening at least 40 mph down the hill towards the crosswalk.  My wife watched in horror as neither party took any evasive maneuvers to avoid what would be a certain tragedy.  Thankfully, the driver must have finished reading his exceptionally important update as he slammed on the brakes hard enough to hear the screeching at the top of Emory’s campus.  It was only this screeching sound that pulled the student out of her texting induced trance as she jumped backwards to avoid the impact of his BMW.  There was no yelling at each other as the mutual guilt was realized and they went on with their daily routines as if no one had almost lost their life.

Unfortunately, this has become normal.  We need to make it not normal.  Until then, please be alert as no text is worth losing your life or taking the life of another.

Top 5 Pitfalls When Buying Home Insurance in Atlanta

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Do you think the only thing differentiating one Atlanta home insurance policy from another is the price?  Many insurance providers would like to make you think that’s the case, so they can win your business with the “lowest cost” home insurance policy. Unfortunately, all they are doing is encouraging you to expose the single largest asset you have…. your home.

The reality is the difference between one home insurance policy and another might be the same as comparing a mobile home to a mansion! Below, we’re sharing the top five pitfalls to be aware of when purchasing home insurance in Atlanta.

 

  1. Not Enough Coverage to Rebuild Your Home – This is an area where misinformation reigns supreme as most home buyers have no idea how much money it would take to rebuild their home. Some people believe the home should be insured for its market value while others believe you simply need to cover the loan amount. Both methods are likely to leave you unprotected at the time of loss. This problem is amplified when unscrupulous insurance providers sell you a lower coverage policy to reduce the price. If all policies paid what it takes to rebuild your home, this wouldn’t be a problem. Unfortunately, the fine print limits the amount most insurance companies will pay out. Only a handful of companies still offer true guaranteed replacement cost so be certain your coverage is adequate. Given estimates have shown two out of every three homes are underinsured, it would behoove you to check your policy!
  2. No Backup of Sewer and Drains Coverage – Do you have a finished basement?  If so, your worst nightmare would be a large basement backup causing considerable damage to your living area. When you call your insurance company, you are probably assuming they are going to happily stroke a check for the damage. This is the moment you’ll find most home insurance policies provide limited or no coverage for this loss. How could this be? Due to heavy industry losses over the years, some of the largest insurance companies began capping this coverage and most of the smaller companies followed suit.  Bottom line, if you have a finished basement, you better hope your home insurance company isn’t going to have bad news when you call with a sewer backup claim.  
  3. Named Peril Policy – Most home insurance policies provide coverage for your personal property on what is called a named peril HO-3 homeowners policy.  This means they’ll only cover losses if they are caused by a specifically listed peril on the policy. An open peril, or HO-5 homeowners policy, is the exact opposite as it covers everything unless the peril is specifically excluded. The examples of losses that may be covered are endless, but which policy would you rather have?
  4. Not Enough to Pay for Alternative Living Expenses – If you are displaced from your home for a significant period due to a loss, your reasonable expectation would be to live in a comparable home and stay there until your home is ready. However, your home insurance company may not help you accomplish one or either of these goals. Many home insurance policies limit both the amount they will pay AND the length of time they will pay it. If you have a long rebuild ahead of you, this could leave you paying your own bills after the insurance company checkbook runs dry.  It is best to find a home insurance company that will keep paying the bills both for the quality you need AND the amount of time you need it.
  5. No Coverage for Your Jewelry – Like many other areas of an insurance policy, most people just assume everything is covered with no limitations. Theft or mysterious disappearance of jewelry is one of the best examples of a “gotcha” buried within the home insurance policy. If you have a $10,000 engagement ring, most policies will only pay a fraction of that amount if the ring is lost or stolen. Additionally, if you have a collection of many different jewelry pieces the amount an unendorsed home insurance policy pays still stays the same. Often, this cap is as low as $1,000. To make sure you are truly covered, it would be prudent to specifically schedule any high value jewelry or make sure your insurance company provides a higher blanket coverage limit than a standard policy.  

 

Although these pitfalls are certainly not the only issues with a typical home insurance policy, making sure you don’t fall victim to them will go a long way in protecting the asset you worked so hard to attain.  Any one of these items could cost you tens of thousands of dollars at the time of loss. By taking a few minutes to discuss these items with a knowledgeable home insurance advisor will be time well spent.

Citations: http://www.cbsnews.com/news/most-homeowners-are-underinsured/

Why did my car insurance rate go up?

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It is the number one question we get from our personal insurance clients when their policy renews. “My car is a year older and worth less but my insurance premium has increased. Why?”.

Unfortunately, we have been asking this question for five consecutive years as car insurance rates in Atlanta and the entire country have continued to climb. Back in 2015, we had just finished enduring three consecutive years of car insurance rate increases and felt confident it would be leveling out….we had no idea the hammer had not even dropped yet. What has occurred over the past two years is likely the largest auto insurance market rate crash in the past twenty plus years. Almost every insurance company in Georgia has taken one or more car insurance rate increases during this time and many of the increases are in the double digits. One of the largest auto insurance companies in the country even announced a Seven Billion (with a B! ) loss on auto insurance countrywide in 2016. So, what is driving this extreme increase in auto insurance in Atlanta and around the country?
Essentially, we are experiencing a perfect storm involving several factors leading to the increased car insurance premiums.

Distracted Driving

Distracted driving is one of the primary root causes of the increase in accidents which leads to an increase in your insurance premiums. Texting and driving has become an epidemic around the country with estimates that over 50% of drivers on the road not paying attention in some capacity. What is even more concerning is one study found 77% of drivers believe they can safely text while driving! The numbers are clear that this is not the case and the problem is only getting worse. In just the past two years, deaths from car accidents have increased 14% which is the first noticeable rise in 50 years! In Georgia, the issue is even worse with a 22% increase in car fatalities in 2015 after nine consecutive years of decreases. It is clear something drastic needs to be done not only to save on car insurance but more importantly to save lives.

Increase in cost to repair vehicle

Compounding the issue of distracted driving in Atlanta and around the country is the rapid increase in the cost to repair vehicles. With all the modern technology in our vehicles the cost to repair them has been skyrocketing. Think about it, ten years ago it may have cost $1,000 to repair or replace a standard bumper. Today, many bumpers have built in cameras and sensors which drive the cost to repair or replace up dramatically. As cars become more technologically advanced in their safety features these costs will continue to rise for the foreseeable future.

More people on the road than ever before

Until the recession in 2008, the number of total miles driven in the United States continued to increase each year. During the recession, we saw a break in this trend until 2014. However, as the economy has improved and gas prices have decreased we are now seeing more cars on the road than at any time in American history. In fact, in 2015 there were over 3.1 Trillion miles driven and the numbers for 2016 and 2017 project to be even larger. If half the drivers are distracted then we are looking at over 1.5 Trillion miles of potentially distracted driving! Let that sink in for a moment…

Auto Lawsuit Severity Increase

To put a cherry on top of the above reasons for increased auto insurance in Atlanta and around the country, the cost of bodily injury claims is increasing as well. From 2014-2016 the average bodily injury claim increased 7%. However, different regulations and market dynamics in larger cities such as Atlanta create an environment where the claim cost increase is even larger.

With these four factors working together, it is likely that we will experience a couple more years of auto insurance rate increases especially in Atlanta and the surrounding areas. What can you do to keep your premium down during this rather challenging time in Atlanta auto insurance?

  • Take a state approved defensive driving course such as the one provided by the National Safety Council, www.nsc.org. This could provide you with up to a 10% discount.
  • Increase your collision deductible as turning in a small claim would likely harm you in the long run anyways.
  • Bundle your auto and home insurance together to receive a package discount.
  • DRIVE DEFENSIVELY! As discussed, no one can escape the increased auto insurance rates in Atlanta, Georgia and all around the country. Therefore, the best way to mitigate the increase is to not add fuel to the fire with an at fault accident. Be alert and don’t text and drive!

The Distracted Driving Epidemic

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We are now living in a world where everyone is connected at all times…people can even check their email on a remote beach somewhere in the middle of the Pacific Ocean as long as there is wifi.  While there are advantages to this constant state of connectivity, there are also some drawbacks.  Some of these drawbacks are more of a nuisance (never getting to truly relax!), however, others can be downright deadly.  Chief among these issues is the current distracted driving epidemic we are seeing across the country and to an even greater degree in Georgia.  A few sobering statistics from the Georgia Department of Transportation,

  • Georgia saw a 22% increase in traffic fatalities in 2015.
  • 65% of these fatalities were for failure to maintain lane
  • 47% of fatalities involved only a single vehicle striking a fixed object
  • 16% involved striking pedestrians and bicyclists

To put into perspective how enormous the jump in fatalities was in 2015, Georgia had experienced 9 consecutive years of decreased fatalities prior to 2015.  What is the common denominator for a majority of the fatalities caused by failure to maintain lane and striking a fixed object, pedestrian or cyclist?  

Distracted Driving.  

If you drive anywhere in Metro Atlanta these days it is hard to find drivers that are not staring at their cell phone, fiddling with their entertainment display or simply not paying attention to the road.  Distracted Driving has always been a problem but our connectivity has turned the problem into an epidemic and it is costing lives.  We all know the allure of the buzz or ding coming from our phone just a few inches away in our pocket or console.  If you give into the need, the average time it takes to check a text is five seconds which is long enough for your car to travel the length of a football field while you are driving blind!

What can you do to help curb this disturbing trend?

  • Never text and drive.  If you absolutely have to communicate with someone find a spot to pull over and safely communicate with them.  Even if you start a text at a traffic light, many times it is hard to finish before you are moving again which creates a dangerous situation.
  • Speak up if your driver is texting or otherwise distracted.  It may be uncomfortable to ask them to pay attention but it is not worth risking your life to avoid an awkward conversation.
  • Put your phone up where it is not accessible while you are driving.  This will help with the need to “constantly check” that many have become addicted to.
  • Drive Defensively.  You can only control your vehicle so you need to drive as though none of the other drivers are paying attention….because they probably aren’t.

http://www.dot.ga.gov/DS/SafetyOperation/DAAA
http://www.distraction.gov/stats-research-laws/facts-and-statistics.html