Category: Homeowners

Vulnerable Homeowners Negligent About Flood Insurance

Posted on by steve hom

Quite a bit of attention is being paid lately to floods and the devastation they leave behind. In the wake of Katrina, more and more questions have been raised about what kind of preventative measures would have lessened the catastrophic effects of such an event.  How well equipped are individual homeowners to handle financial consequences on their own, as opposed to relying solely on agencies like FEMA to provide them with economic assistance? Are Americans taking advantage of the nation’s flood insurance program?

That’s what FEMA wanted to know. The agency worked through the American Institutes for Research (AIR) to commission a study. AIR is a not-for-profit organization that conducts research on social issues and provides technical assistance in the fields of health, education, and workforce productivity. AIR coordinated the study, which was conducted by the Institute for Civil Justice and the Infrastructure, Safety and Environment division of the RAND Corporation. It was intended to be part of an overall evaluation of the flood insurance program.

In the course of their work, the researchers discovered that most homeowners buy flood insurance only because it is required. Only 20% of homeowners living in the areas most vulnerable to floods buy federal flood insurance when they are not required to do so. The study went on to reveal that just 1% of Americans living outside designated flood zones buy federal flood insurance even though the possibility of being victimized by flood is a real threat.

Only 50% to 60% of the 3.6 million single-family homes in the most highly affected areas are legally required to buy federal flood insurance. The remaining homeowners in these areas and the nearly 76 million single-family homes outside these areas are not required to buy flood insurance.

The study put the greatest emphasis on exploring the demographics of flood insurance purchasers. About 63% of homeowners living in areas subject to coastal flooding purchase flood insurance. Approximately 35% of homeowners living in areas that are only affected by river flooding buy flood insurance. The researchers surmised that the disparity might be the result of a perception of having less risk or that coverage available for basements is limited, and basements are prevalent in inland areas subject to river flooding. The report recommended that this aversion to flood insurance by those living in inland areas be studied, to search for an explanation or possible causes.

The study also looked at purchasing habits along geographic breakdowns. In the South, 75% of homeowners who carry flood insurance also have contents coverage. Only 16% of homeowners with flood insurance in the Midwest and 49% in the Northeast have contents coverage.

Clearly homeowners everywhere need to reassess their exposure to flooding.  If you have questions about obtaining flood insurance for your property, please give us a call.

Protect Your Home from Power Surges This Summer with Surge Protectors

Posted on by steve hom

The arrival of summer can mean several welcome events: a return to outdoors living, an opportunity for vacation, and more time with the family. One of the issues people may not associate with summer are the power surges that often occur due to the tremendous demand for energy, especially to cool homes. A power surge is a brief spike in electrical power. While on the surface it may not seem like much to be concerned about, power surges can cause serious damage by burning up electrical circuits inside appliances. They can also damage electrical outlets, light switches, light bulbs, air conditioner components, and even garage door openers.

You can protect your valuable electrical appliances from the damaging effects of power surges. The most cost effective way is by purchasing surge protection strips. You can plug in your television, DVD player, and stereo into the strip and it should provide adequate protection against most surges. It’s a good idea to pick up a surge protection strip for the kitchen counter so that you can protect small electrics like the toaster, blender, food processor etc. You can also find surge protectors that fit into electrical outlets that will protect your phone and answering machine. You can buy most types of surge protectors in any local hardware store.

When it comes to your PC, however, you will have to be a bit more selective about protection, because of the delicacy of its internal components. Back-up power packs that are specifically designed to protect your hardware can be found in stores that sell computer accessories as well as in many electronics chain stores. They can be somewhat expensive, but are certainly less expensive than replacing your entire system.

Before you purchase any surge protector, there are certain features you need to look for. The first feature to look for is a surge protector that is labeled with the Underwriters Laboratories (UL) logo. The UL logo tells you that the unit has been tested to determine if it meets certain standards. Any product that is UL tested will be labeled as a “transient voltage surge protector,” which means that it meets or exceeds the minimum standards required to be an effective deterrent against power surges.

A surge protector’s performance is rated in three ways. The first is clamping voltage, which is the level of voltage surge that has to occur before the surge protector kicks in and diverts excess voltage from the item being protected. You want to find a surge protector that has a low voltage number so that it takes less of a surge to activate it. Look for a protector with a clamping voltage of less than 400 volts.

The second way to rate a surge protector’s performance is response time: the amount of time it takes for the surge protector to respond to the surge. You should look for a unit with a response time of one nanosecond or less.

Just like any other appliance in your home, your surge protector will eventually wear out. The third performance-rating factor is energy absorption, or how much energy the unit will absorb before it fails. For the longest lasting performance, look for a unit rated between 300 and 600 joules. Remember, the higher the number, the longer the life of the surge protector.

Safety Experts Say Smoke Alarms Are Decreasingly Effective

Posted on by steve hom

In early 2006, a federal jury ruled that the design of ionization smoke alarms was defective in a fire that trapped 56-year-old William Hackert Jr. and his 31-year-old daughter Christine in their house near Albany in 2001. However, even before this ruling, safety experts were already questioning whether this type of smoke alarm is adequate to deal with the threat of fast-burning synthetic materials prevalent in American homes.

Ionization alarms, which use radioactive material to detect smoke, react earlier in fast-burning flaming fires. Photoelectric alarms, which detect changes in light patterns, react earlier in slow smoky fires. Experts agree that both types save lives. However, a problem arises because the time needed to escape has shortened significantly because of fast-burning synthetics used in furniture and carpets. Smoke alarm use standards may need to change to accommodate this phenomenon.

In 2001, Consumer Reports recommended that homeowners install at least one of each type of alarm on every level of a house to provide sufficient warning time for different types of fires. A recent report from the Public/Private Fire Safety Council noted that some test escape times were “tight or insufficient” with either alarm for bedroom or living room flaming fires. The group suggested that Underwriters Laboratories (UL) modify its standard to require faster detection of smoldering fires. Current UL smoke alarm standards require alarms to respond within 4 minutes of a flaming fire and in a smoldering fire before smoke obscures visibility by more than 10 percent per foot.

In today’s homes, the synthetics in furnishings, fabrics and carpeting smolder longer, but burn faster than natural materials like wood and cotton, which char as they burn. Synthetics melt and pool which produces significantly more energy when they burn. This has shortened the time between first flames and combustion of an entire room due to accumulated heat and gases to approximately 2 to 4 minutes. The average time between first flames and complete combustion 30 years ago when the UL standard was developed was 12 to 14 minutes.

In February of 2006, UL began studying the smoke characteristics from 40 materials commonly found in homes in the effort to make alarms more effective. Also under study are the byproducts of today’s smoke, which can be lethal. Results of these studies are expected by the end of the year.

Another reason for UL concern is the increase in U.S. fire fatalities in the past 12 months to a rate of about 3,500 annually. One likely factor is the increasing use of candles as mood lighting. Candles now cause about 18,000 fires a year, triple the number five years ago.

Is Your Homeowner’s Coverage a Mystery to You?

Posted on by steve hom

If you feel in a quandary when you look at your homeowner’s insurance, take heart; you are not alone. In fact, a recent study conducted by Harris Interactive for Travelers Insurance shows that a large number of American homeowners are unsure of their coverage specifics. Many of these homeowners are underinsured and the smallest disaster could send them into a financial hardship.

The researchers questioned more than 1,300 homeowners to determine exactly what they knew about their coverage. They also asked the study participants how often they reviewed their policy to ensure they maintained appropriate coverage and how they conducted their review.  According to the survey data, more than 44 percent of those surveyed had not examined their insurance coverage in the past year. Some respondents had not reviewed their insurance policy in the last 10 years.

The “Travelers In-synch Homeowner’s Insurance Study” also indicated that nearly 27 percent of these homeowners weren’t sure whether their policy would cover the cost of rebuilding their home. Thirty-six percent didn’t know whether their policy would cover damage caused by a hurricane. Forty-two percent were unsure if they had earthquake coverage. Twenty-six percent didn’t know if they had coverage against flood damage, and 37 percent didn’t know whether their policy would cover a prolonged hotel stay if their home were damaged.

Many items impact the amount of homeowner’s coverage you need. That’s why it is important to review your coverage frequently. Here are some criteria to use in your review:

 

  • Have you recently remodeled your home?

If you’ve improved your home, chances are you’ve increased its estimated replacement cost.

 

 

  • Has the inflation rate increased since your home was last appraised?

Certain conditions, such as severe weather, can increase the demand for labor and materials, which raises costs beyond the normal inflation level. It is important to update your coverage each year to account for changing inflation.

 

 

  • What factors influence building costs in your area?

Replacement costs are directly proportionate to factors, such as the availability of labor, the current demand for labor, and the cost of construction materials. Adjusting your coverage regularly can ensure your policy will provide the money you need to rebuild.

 

To determine whether you have adequate coverage you should know your home’s estimated replacement cost. Keep in mind that your replacement cost could be higher or lower than your home’s market value. You should also consider the building materials used to construct your home. The more difficult the building materials are to find, the higher your replacement cost. Your coverage needs to reflect these increased costs.

The best way to stay ahead of changing costs is to contact your insurance agent annually to discuss your current coverage and your changing needs. They can help you manage risk by updating your coverage so there won’t be any surprises should your home be damaged.

Protect Yourself When Taking on a Remodeling Project

Posted on by steve hom

Due to sustained record low interest rates, many homeowners have elected to take on major home remodeling projects.  According to the National Association of Home Builders, approximately 26 million Americans spend more than 180 billion annually on home improvements.   In many cases, however, homeowners are not updating their insurance at the same time, leaving themselves extremely vulnerable.

Making sure you are appropriately insured should begin at the very start of a project.   A contractor should not be hired if they cannot produce their certificate of insurance.   The contractor should provide you with a copy of their certificate, which shows the type and amount of their insurance coverage.  This should include general liability, workers’ compensation and auto coverage, and the policy must be current. 

It is equally as important to make sure that any subcontractors that your contractor brings in to the job are similarly insured.  This is particularly important now, as insurance rates for the construction industry have recently risen significantly.  You want to make sure a member of your remodeling team didn’t choose a coverage lapse over a premium increase.

When you choose to take on a remodeling project yourself, you must review your own coverage for liability and property damage issues, particularly when bringing in subcontractors to help with the work.  As the homeowner, you may be liable if they are injured during the scope of your project.  Even if your current policy covers any injuries related to the renovation, we often recommend that homeowners carry umbrella liability coverage, which would cover a claim beyond normal limits.

In addition to liability issues, it is key to increase your homeowner’s coverage based on the added value to your home.  Kitchen and bathroom renovations are the most common and tend to be quite costly.   They also substantially increase the value of a home.

Homeowners should use caution not to over-insure themselves.  Don’t increase your insurance based on the cost of the remodel.  You should determine how much it would actually cost to rebuild your home with the added improvements.  This replacement cost is the amount that needs to be insured.  The cost to remodel also includes tearing out old materials.  Therefore, in some cases, the cost difference to rebuild the home may be less than the actual renovation cost itself. 

The most important item to consider is to contact your insurance agent to increase your homeowner’s limits before, not after, a renovation project.  This will ensure that you are covered should any fire or damage occur during a renovation.

Avoid Sewer and Drain Damage to Your Basement

Posted on by steve hom

Millions of dollars are spent every year repairing damage to basements caused by sewer and drain backups.  There are some ways these problems can be avoided, instead of having to repair the mess from a sewer or drain backup. 

Make sure your drainage systems are working properly.  The downspouts from your gutters should extend beyond the foundation of your home so that water is not left to trickle down basement walls.  Along those same lines, your yard should gradually slope away from the foundation, so surface water drains directly to the street.  Keep drain lines clear, especially if your gutters connect to storm sewers. 

There are several types of anti-backflow devices that can help reduce the chance of basement flooding.  Check-valve devices allow water and sewage to flow away from the drain, preventing backup into the drain.  Gate-valve devices close and shut off the flow of water and sewage, preventing backup.  Anti-backflow devices are either manually or automatically operated.

Sump pumps are another option to consider.  Single and dual-level sump pump systems are available, and a battery or generator can be used to power the pump in case of a power failure.  Sump pump systems should be checked monthly.  Check local building codes or consult your plumber to ensure your sump pump is connected properly.  Sump pumps should not be connected to your home’s waste plumbing system.

Despite your best efforts, sometimes water will still get in your basement.  Keep storage items off the floor and keep furniture on casters or shims, away from floor drains.  If your basement is finished, ensure that you consult plumbing and building professionals to design a drainage system that will prevent damage to your finished space. 

Despite the amount of damage backups can cause, many homeowners’ policies do not include coverage for sewer and drain losses.  Check with your agent to determine if an additional endorsement can protect you from this costly problem.

Survey Shows Inattention to Homeowner’s Insurance Could Prove Devastating in the Event of a Disaster

Posted on by steve hom

For the majority of Americans-even those making six figure incomes-their homes are their single biggest asset.  Furthermore, the value of homes continues to rise with the continuing strength of the real estate market.  Yet, a significant percentage of affluent homeowners are just not paying very much attention to protecting their most valuable personal asset, according to a survey conducted for Fireman’s Fund Insurance Company by Harris Interactive.

According to the survey, 94 percent of the respondents nationwide stated that the value of their home increased during the past five years.  The National Association of Realtors® reports that median existing-home prices in 2004 were 6.6 percent higher than a year earlier.  In some states such as California, a strong real estate market saw home values jump more than 20 percent in some areas from the previous year.

Yet, more than a quarter (27%) of those surveyed said they had not increased their insurance coverage to reflect their home’s increased value. Some of the most common reasons cited were lack of time to look into the need to increase coverage, and simply not knowing that they needed to change the policy’s limits to reflect a home’s change in value.

In addition to the rise of property values, home reconstruction and replacement costs are also climbing at a steady rate. With a healthy rise in new construction, recent hurricanes and ongoing trade disputes, the cost for lumber, plywood and other building materials is continuing to rise. According to the lumber industry publication Random Lengths, framing materials alone, such as 2-by-4s, rose nearly 40 percent in 2004 over the previous year.  Without the right insurance coverage, homeowners who experience a loss could see these higher costs coming straight out of their own pockets.

The survey, based on responses from more than 1,000 affluent homeowners nationwide, uncovered a consistent gap between what homeowners think is included in their coverage, and what actually is covered. Of those polled, 88 percent said they know what their homeowner’s policy does and does not cover, yet further questioning revealed that many respondents also believed that their homeowner’s policy covered more property than would actually be covered in the event of a disaster.  Only 37 percent of respondents correctly answered six of 12 questions about basic coverage on their homeowner’s and auto policies, such as the maximum amount of stolen cash that would be reimbursed if a home were burglarized ($200) or how much a standard policy will pay in temporary living expenses while a home is being rebuilt ($60,000). 

The survey showed that most affluent homeowners spend far more time managing their investment portfolios (an average of seven hours a month) than they do staying on top of the insurance coverage for their homes.  Seventy-six percent of those surveyed had reviewed their financial assets or investments within the last two months, but only half had reviewed insurance for their property assets within the past six months.  The survey found that respondents spend an average of 4.7 hours per year-a fraction of the time spent on their investment portfolios-managing their insurance coverage on their physical assets including their home.  This is true despite the fact that for nearly half (47%) of respondents, the value of their non-financial assets exceeds the value of their investment portfolio.

“The survey findings show a critical need for homeowners to communicate with their insurance agents and learn what their policies actually cover and when they should be updated, to ensure they are fully protected in the event of a disaster,” said Scott Garfield, vice president of Fireman’s Fund. “Homeowners also need to know that all policies are not created equal, and to understand the array of insurance options available in comparison to their current coverage before they are faced with a costly disaster.”

Is a Monitored Alarm System the Right Choice for Your Home?

Posted on by steve hom

Residential alarm systems get a lot of attention when talking about home security, but what choices do you have and what benefits are there?  Can you get a discount on your homeowner’s insurance if you have a system installed?  It is possible that just a sign from a security company on your window or in your yard may deter potential burglars, but educating yourself about what security companies have to offer can help you determine if an alarm system is right for your home.

Security companies offer a host of options, including protection against burglary, fire, and carbon monoxide, as well as medical monitoring and mobile monitoring.  In security systems, you have two basic choices:  monitored and unmonitored systems. 

Monitored systems will contact your monitoring company by telephone when activated.  The monitoring company will then dispatch the police, fire department, or other emergency personnel to your home.  The drawbacks, however, could be quite serious, depending on the situation.  The monitored system uses your telephone line to notify emergency personnel.  That means that your phone line will be in use and you would need a secondary phone line or a cellular phone to call for additional help.  If an intruder is bold enough to cut your telephone line before entering your home, the advantages of a monitored system are cut short.  Also, in the case of a false alarm, the police department may charge you for a trip out to your home.

Some monitoring companies will sell you the security system, but will not act as your monitoring company.  They may sub-contract with a monitoring firm who will be handling your monitoring.  You can find a secure monitoring company on your own, but if your company has an Underwriters Laboratory rating, you can trust they will be secure.

Unmonitored systems have advantages and disadvantages as well.  An unmonitored system usually has an audible alarm and possibly flashing lights, which notify neighbors that the security of your home has been breached.  This, however, poses a specific problem:  you must rely on your neighbors to take action if they see or hear your alarm system activated.  Your neighbors may not be at home, or, unfortunately, some neighbors will not want to get involved.  Consider organizing your community by initiating a neighborhood watch program and having get-togethers, so that you become vested in protecting each others safety.

For many, the advantages of a home security system are also financial.  Informing your homeowner’s insurance company that you have certain security measures in place can save you 5% to 20% on your homeowner’s policy.  Insurers will routinely give a 15% to 20% discount for homes equipped with a burglary and fire alarm system that is monitored by a third-party monitoring company.1

Considering an alarm system for your home may provide you with peace of mind, whether you are home or away.  Developing close ties to your neighbors can also provide you that same comfort.  If you are considering a monitored security system, contact your homeowner’s insurance company for details about discounts that may be available to you.  While the financial benefit from your insurance company may be an advantage to a security system, it may be greatly outweighed by the peace of mind you will feel in knowing your home is properly defended against burglary, fire, or other threats.

 

1 See https://homes.wsj.com/buysell/taxesandinsurance/20031202-smartmoney.html.

Practicing Safe Electrical Habits in Your Home

Posted on by steve hom

A new survey commissioned by the Independent Insurance Agents & Brokers of America (IIABA) has shed considerable light on a serious problem:  electrical hazards in the home. 1  The U.S. Consumer Products Safety Commission (CPSC) says that there are an annual average of 165,380 electrical-related home structure fires, taking an average of more than 900 lives, injuring almost 7,000 people, and causing nearly $1.7 billion in property damage.  Suffice it to say, electrical hazards in your home are a serious concern.

There are several areas in your home that can easily be checked to greatly eliminate risk of electrical hazards.  Wall outlets should be checked for loose-fitting plugs, which can overheat and lead to fire.  Never force a plug into an outlet.  If the plug does not fit into the outlet, it should not be plugged in.  Along those same lines, never remove a ground prong from a three-prong plug so that it can fit into a two-prong outlet, as this can cause electrical shock.  Do not overload plugs or circuits with too many items.  Make sure all switch plate covers are secure and take care to cover wall outlets when children are around.  If you notice any discolored or hot outlet plates, take action immediately, as this may indicate a dangerous heat build up and possible fire threat.

Power cords and extension cords are also a potential safety concern.  Make sure you are only using cords in good condition, with no frayed or cracked housing.  Never nail or staple an extension cord to the wall or baseboard and do not place cords in high-traffic areas, or under items such as rugs, carpets, or furniture.  Keep in mind that extension cords are not permanent wiring and should not be used for prolonged periods of time.  Additionally, use power cords approved by Underwriter’s Laboratory (UL) or another independent testing facility.  Make sure the cord has been rated for the type of application you need it for.

Check your light fixtures and light bulbs.  Does the wattage of the light bulb exceed the recommendation on the fixture?  If so, replace it immediately with a light bulb that does not have higher wattage than what has been recommended by the manufacturer.  Make sure the bulb is screwed in tightly, as loose light bulbs may overheat and can be a potential safety hazard. 

Ensure that all appliances, from kitchen to bathroom, are certified by an independent testing laboratory, such as UL, CSA, or MET Labs, and follow the manufactures instructions carefully.

When it comes to circuit breakers in your home, get familiar with them.  Create a map to outline all outlets, rooms, fixtures, and appliances and where they are on your circuit breaker.  Circuit breakers and fuses should be the correct size and rating for their circuit.  Never replace a fuse with a different size from the one you are removing.

Required in homes since the early 1970’s, consider a GFCI, or ground fault circuit interrupter, on all general-purpose circuits in your home.  A GFCI can prevent accidental shock and electrocution by shutting off a circuit when a “leak” of electric current is detected off the circuit.  GFCIs should be tested monthly and after every major electrical storm.

AFCIs, or arc fault circuit interrupters, help prevent fires resulting from outlets, switches, and frayed or cracked power cords.  The AFCI senses the particular signature of an arc and acts to immediately shut off the circuit.  AFCIs are required in all new home construction in bedroom circuits, but should be considered as a safety measure in all homes and on general-purpose circuits.

In summary, there are many simple steps you can take to ensure safe electrical habits are used in your home.  If you have questions about avoiding electrical hazards or how to further protect your home, consult a trusted electrician who can ensure your home is up to code and safe for you and your family.

 

1  See Independent Insurance Agents & Brokers of America and the Electrical Safety Foundation International’s safety tips at:https://na.iiaa.org/ESSafetyTips_FINAL.pdf.

How to Prevent and Treat Mold in Your Home

Posted on by steve hom

The impact of mold has become a prevalent topic recently, but do you know all you need to know about its impact on you and your home?  Although certain molds may be discussed more than others, all molds are treated the same when it comes to their potential health risks and their removal. 

It is easy to know if you have a mold problem.  Large mold infestations can be seen or smelled.  Mold grows naturally in the environment and may enter your home through open doors, windows, and ventilation systems such as heating and air conditioning.  Mold spores may even attach themselves to your clothing and pets, which then bring them inside the home.  Once inside, mold attaches itself to areas with moisture, such as a leaky roof, pipes, wet wallboard, plant pots, areas of condensation, and where flooding has occurred.  Many building products make a hospitable place for mold to grow.  

Stachybotrys chartarum is a greenish-black mold, which grows in areas with a high cellulose and low nitrogen content, such as fiberboard, gypsum board, paper, dust and lint.  Even carpet, fabric and upholstery can easily support mold growth.  

The most common health concerns resulting from mold exposure are allergy-type symptoms.  The severity of the reaction depends on the amount and duration of the exposure to the mold.  Individuals with chronic respiratory disease, including asthma, may experience difficulty breathing.  Also, those on immune suppression therapy may be at an increased risk for health problems associated with mold.  If you feel that you or your family members are at risk for infection, see your doctor for diagnosis and treatment.

Prevention is the key to combating mold. Just as with termites, buildings should be inspected for mold growth.  Areas affected by water damage should be inspected thoroughly.  Leaks and other conditions that supply moisture should be corrected, so as to prevent mold from taking root.  Remove and replace flood-damaged carpets and carpet pads.  Helpful tips are to keep humidity levels in your home below 50%, using air conditioning or a dehumidifier if necessary.  Also, make sure your home is well ventilated, checking heating and air conditioning units as well as exhaust fans.  Clean bathrooms and kitchens with mold-killing products.  And, consider using paint that contains a mold-inhibiting agent.

If you are going to rid your home of mold, a bleach and water solution will suffice for most jobs.  Mix 10 parts water to 1 part chlorine bleach and never mix bleach with ammonia.  Clean walls and other flood-damaged items with the bleach solution and discard moldy items.  Professionals may be needed to clean larger areas of mold.