Adam Mueller, Author at J.M. Insurance & Financial, Inc.

Suspending Liability

If you are planning to park your vehicle for an extended period of time you might think that you can save costs by dropping your insurance coverage all together. Think again. A better road to take can avoid the twists and turns of re-insuring when you are ready to drive again may be suspending your liability coverage. Suspending liability on your vehicle keeps continuous – albeit limited – coverage. You won’t need to go to a nonstandard auto policy/high risk policy. Suspending liability helps you avoid paying unnecessarily higher premiums.

How can suspending liability insurance on your car be a better option than canceling your policy?

Talk to your insurer to confirm this option is available to you. If you aren’t planning on operating your vehicle for a month or more due to traveling abroad or if you’re placing your car in long-term storage for those long winter months, consider pausing your liability coverage.

Can you put car insurance “on hold?”

No insurance company will allow you to put a policy on hold, rather you will be required to cancel your policy all together and then start anew when you are ready to drive again. This will cause a “lapse in coverage.” These lapses often trigger red flags for insurers and cause your premiums to go up as you will be labeled a higher-risk.

Why do you have to keep insurance on a car you’re not driving?

The short answer is it is the law. In most cases, car insurance coverage is mandated by the state. Even if you aren’t driving your car, if the vehicle is registered you are beholden to the law to carry a minimum level of insurance. Beyond state requirements, insurance companies will look at your record of coverage. They will determine your risk level and any lapse in coverage can result in you being placed in a higher risk category. Thus, they require higher premiums and even higher levels of coverage.

What can you do to reduce costs if you aren’t driving your vehicle?

There are a number of reasons you may be putting your driving on hold for an extended period of time:

Extensive repairs to the vehicle making it undriveable
Long-term storage for your vehicle (convertible or motorcycle in winter months)
Your Inability to drive due to illness or injury
Your overseas military or career deployment
Your suspended driver’s license
Your lengthy travel abroad

All of these instances will put your vehicle out of use. You may think that dropping insurance coverage is right for you. Not necessarily the best move. Taking that path will likely lead to higher costs when you are ready to drive again. By suspending your liability coverage, you can stay compliant in the eyes of the law, keep in good standing with your insurer. You’ll also have peace of mind knowing that your car is still protected to damage and your costs shouldn’t go up when you return to driving.

If you are looking for more details about Suspending Liability rather than dropping your policy, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Save When You Bundle

We constantly hear television and radio commercials telling us that our cable, internet, and cell phones accounts can be bundled for the absolute best deals. The same is true in the insurance marketplace. The more policies you buy from the same provider, the more you can save.

You can Save a Bundle when you Bundle
Bundling insurance packages – like when you combine a home owners and auto policy – could save you between 20-40% off premiums combined on both policies. Having more than one policy in the same household or family could be a money saving advantage. So, let’s explore using the same company to manage multiple lines of coverage.

Beyond financial savings, bundling your insurance gives you the convenience of dealing with just one company. Access your policies with a single log-in. Simplify your monthly premium payments. Consolidate the agents you deal with so you can be confident they know your situation inside and out.

Insurance Bundling Basics
You will save money and time by bundling your insurance policies. Shopping with individual carriers for individual policies is prudent but takes time. Instead, spend that time working with your local insurance agent. They can take the time to understand the dynamics of your life and what policies can work best for you. They’ll find a multi-policy plan that offers the best discounts and bundle them.

Keep in mind when bundling insurance policies that even if you bundle policies together, they are still separate policies. These policies operate independently to provide the coverage outlined in the policy. Your agent can work with you to help understand the basics of bundling and find the right combination of plans to get you the ultimate savings.

Popular Insurance Bundles

Home and auto
Savings will vary, but by combining the most common insurance packages you can expect to cut costs up to 25% when you bundle home and auto policies.
Renter’s and auto
You don’t lose out on savings just because you don’t own a home. You could qualify for savings when you carry both renter’s insurance and car insurance.
Renter’s and motorcycle
Get creative – most any vehicle will apply. Bundle renter’s insurance with protection for your motorcycle, boat, RV, or off-road vehicle to help reduce your coverage costs.

The end result is multi-line insurance plans can be more affordable than a la carte offerings and most insurance companies will offer multi-policy discounts. If you or your family are carrying several insurance policies it may make sense to get all your coverage under one roof.

Just remember, if you currently have separate policies and are looking to combine them – be sure to check that the plans you are exploring are comparable. Often, a bundle may seem like it is saving you money, but a piece of coverage may be missing giving you an inaccurate comparison. This is why, as with any policy, it as a best practice to work directly with an agent so you can be confident a particular bundle is right for you.

If you are looking for more details about the potential savings when you bundle your insurance packages, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Scheduled Personal Property

Scheduled Personal Property – is the frequently overlooked, but an often-necessary portion of protection for your private insurance package. Why should consumers consider extended insurance coverage for their personal property – including collections – and why should seeking out a qualified appraiser when obtaining that coverage be a part of your coverage strategy? It is important to have specific items covered above and beyond your standard policy because all policies have limits.

What is Scheduled Personal Property?
According to Allstate, Scheduled Personal Property “provides extended open peril coverage for certain categories of high value personal property. Typically, property must be appraised and scheduled (described on the dec with a specific item limit) although some categories may qualify for blanket coverage (a limit for all the items for a certain category).”

Also called a “floater,” “rider,” or “endorsement,” Scheduled Personal Property is a condition or provision added to a policy that provides additional information or stipulates additional agreements. If – for instance – your homeowners policy has a coverage limit well below the value of your personal property, you will want Scheduled Personal Property that details the discrepancy in value and broadens your coverage to accommodate. Scheduled Personal Property spells out an agreement that allows a policy holder to extend the standard coverage to items not covered or items with limits lower than the actual property value under the basic policy.

What is covered under personal property coverage?
Personal property includes the things you own – furniture, electronics, clothing, and other household goods. Basic personal property coverage will help pay to repair or replace these typical belongings after a covered loss. But you should consider coverage for additional extraordinary items that aren’t covered under your policy. Sometimes the value of those items exceeds your coverage limit – hence the need for Scheduled Personal Property.

What isn’t covered under personal property coverage?
If you ever watch Antiques Road Show, you know they always say “for insurance purposes, I would value this at…” That tells you that insurance is IMPORTANT to consider for individual items you own.

Rare and unique items such as heirloom jewelry, fine art, antique furniture, or an expensive sports memorabilia collection don’t fall under your typical insurance policy and will need to be properly documented. Having Scheduled Personal Property ensures all parties (the policy holder and the policy provider) are aware of all items that fall outside of the policy, their specific details, and their estimated value. Stipulating Scheduled Personal Property makes provisions to ensure your treasures are protected.

Wedding / engagement rings / jewelry
For example: A $20,000 engagement ring. Your basic coverage item on jewelry is $1,000 per item.
Fine art
For example: You jumped in to Bansky’s work early on and its value spiked AFTER you bought it.
High end cameras
For example: Your picture taking bug bit you to the tune of $5,000 or more for a telephoto zoom lens.
Sports memorabilia
For example: The baseball card collection your grandpa handed down is a gold mine.
High priced guns
For example: You bought a George Gibbs shotgun – $6,500, well over your policy’s item limit for firearms.

Do you need appraisals for a Scheduled Personal Property policy?
As you can imagine, insurance companies have specific definitions for what is considered personal property. They also follow strict guidelines for coverage and a value limit per item. For that reason, policy holders can’t just “guestimate” the worth of their items. Insurers require a formal appraisal of items on the Scheduled Personal Property.

Beyond appraisals – a detailed Scheduled Personal Property strategy should include photos and receipts.
Important to all of this is keeping and maintaining detailed records of your possessions, their value, and proof of ownership. Some insurance providers will stipulate a requirement of receipts or photographs to make a claim on your scheduled personal property. But don’t think of this as a speedbump to coverage – by including a well-written appraisal featuring photos and receipts you guarantee that you are protecting your valuables at the proper level (not under- or over-paying) and will save you steps in the event that your items get damaged and need replaced or you need compensated for their loss.

How to make Scheduled Personal Property work for you:
Protect yourself and your heirlooms or collectibles by properly insuring the items with a personal property rider:

Take the proper steps by having a conversation with your agent
Collect photos and receipts to prove ownership and condition
Have a qualified appraiser provide a definitive value assessment
Update values based on market trends to stay up-to-date with your coverage

If you are looking for more details about Personal Property Riders contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Umbrella Insurance

When was the last time you were caught in the rain without the right gear? Did getting drenched change the way you thought about preparedness? Maybe you went out and bought seven umbrellas and put them everywhere you might need one. In your car, in your bag, a few right by the door just in case. Think of umbrella insurance the same way. You want it handy for when you need it, not after you’re already wet.

Umbrella insurance is liability insurance that exceeds the specified coverages of your other policies and can cover you for losses not covered by your primary policy. A good rule of thumb is to carry an umbrella policy for at least $1 million, but that number could be higher depending on your finances and potential risks.

What does umbrella insurance cover?

Umbrella insurance is personal liability coverage that provides protection against claims that exceed your basic homeowners, auto, or other insurance policies. The right policy can shield your savings and guard your future income from becoming garnished in the event of an accident that results in a claim or lawsuit against you. Something to keep in mind, too, is that beyond the policy holder, umbrella coverage also covers other members of the family or household.

Common Coverage areas:

Bodily Injury – if someone is injured on your property, umbrella insurance will help cover any medical bills or lawsuits that exceed your homeowner’s policy limits.
Property Damage – If you are at fault in a large auto accident, umbrella insurance can help cover any costs after your auto policy has been exceeded.
Reputational injury – Umbrella insurance can cover you in the event you are accused of and lose a lawsuit for defamation, libel, or slander.
Uncovered Court Costs – Umbrella insurance can help with fees associated with defending yourself against any of these claims; costs which are not typically covered under your basic insurance policy.

How much umbrella insurance is recommended?

As mentioned, a good rule of thumb is for a person to carry at least $1 million worth of umbrella coverage. Even if umbrella insurance is not a high priority for you, it may still be in your best interest to speak to an agent. Then, you can better understand what risks you have and what factors or behaviors you should be aware of. This will help you mitigate the likelihood of being involved in a lawsuit.

How is the amount of coverage for an umbrella policy calculated?

The amount needed is an amount determined by these factors:

net worth (your financial and non-financial assets minus your financial liability)
personal equity
retirement plans
liability limits of current insurance policies

What are common circumstances that put people at a higher need for an umbrella insurance policy?

Some policy holders are more likely to need umbrella coverage than others. Beyond the amount of financial assets you are protecting, you should also be looking at what risk factors you have.

Here are some common circumstances that increase a person’s risk:

Owning Property – by owning property, you are liable for accidents or injuries that occur on the property
Renting Property – having rental property can be seen as a great investment, but it is also inviting a higher risk of liability
Recreational Risks – things like pools, hot tubs, and trampolines increase the likelihood of an injury on your property and opens you up for potential lawsuits
Pet Ownership – dogs are a man’s best friend, they say, but pets also represent risks of injury and property damage that may not otherwise be covered
Teenagers – whether they are inexperienced drivers, have rambunctious tendencies, or are prone to accidents, your kids can elevate your risk of lawsuits

Who should consider umbrella insurance policies?

Umbrella insurance can help prevent the policy holder from losing all their assets or savings due to a large claim or lawsuit. While some are at a higher risk than others, a common recommendation is that people carry at least $1 million in umbrella coverage. The good news is that these policies are typically not as cost prohibitive as one might think, and can be there to brace you against a larger than expected storm.

If you are looking for more details about umbrella insurance, your risk level, and quotes contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Supplemental Insurance

Let’s address the elephant in the room, or the duck as it were. A major well known insurance company gets national attention through commercial advertisements focusing on their bread-and-butter offering of supplemental insurance coverage. But you need to know they aren’t your only option. When it comes to filling in any gaps in your insurance coverage or protecting your finances with cash benefits in the case of an emergency, you are in good hands when you go with your trusted policy provider.

Here we explore what supplemental insurance is; determine how these benefits could be right for you and your family; and answer why you should consider Allstate when finding the right coverage package for your situation.

What are supplemental benefits?

Supplemental benefits are part of a complete, comprehensive insurance coverage package that helps ensure your family is prepared to handle the immediate costs that arise during a medical crisis.

These products help fill coverage gaps from standard policy packages, they offer income protection during life’s most challenging events, and they supplement your existing medical coverage to help pay unforeseen out-of-pocket costs.

Here are some individual supplemental coverages you should be aware of:

Accident – Pays a benefit for covered accidental injury and treatment
Cancer – Pays a benefit for covered cancer diagnosis and can help pay for treatment, surgery, and more
Critical Illness – Pays a lump-sum cash benefit when diagnosed with a covered critical illness
Life – Pays a lump-sum cash benefit to help loved ones pay final expenses or cover bills
Hospital Indemnity – Pays a benefit to help cover out-of-pocket hospital costs
Supplemental Health – Pays a benefit for an in-hospital stay
Disability – Pays a cash benefit monthly for covered sickness that requires the policy holder to miss work or causes a lapse in income
Heart/ Stroke – Pays a cash benefit for non-medical expenses that may not typically be covered under medical insurance
Dental and Vision – Pays a cash benefit specifically for dental of vision exams which may not be covered through employer-held insurance coverage or when a deductible hasn’t been reached

Supplemental coverage isn’t comprehensive. These packages are designed specifically to work alongside your typical health insurance policy and protect the holder against gaps in coverage. One major difference, too, is that supplemental benefits come as direct cash payments to help mitigate the financial burdens of an unexpected accident, hospital stay, or illness.

Are supplemental insurance plans worth it?

Insurance plans protect your finances while dealing with health-related expenses. When you’ve planned ahead, supplemental insurance can help you avoid dipping into your savings to handle whatever life throws at you and your family. Things to consider when making a decision on supplemental plans are current coverages, your ability to cover out-of-pocket expenses in case of an emergency, and family history with cancer or other illnesses that may put you at a higher risk.

Is supplemental insurance necessary?

As with all insurance coverage, supplemental insurance is not something you think about until you need it. Supplemental insurance plans provide coverage for and reimburse everyday expenses like co-pays, deductibles, and prescriptions, as well as the more unexpected expenses like ambulance rides, cancer treatments, and hospital stays.

Another common use of supplemental insurance is to complement an employer’s medical plan. Many plans don’t always have coverage for things like vision and dental insurance. Deductibles in these instances can be exorbitant. Having a supplemental plan in place can close the gap in coverage and help pay for deductibles or procedures.

So, while not necessary, supplemental insurance coverage can have a huge impact in the face of medical emergencies. With the right package, you will have cash in hand to tackle the bills that arise. And, when you get your supplemental benefits coverage through Allstate, you are trusting a leading provider of voluntary insurance so you know your finances are protected and in good hands.

If you are looking for more details about supplemental insurance contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Suspending Liability

If you are planning to park your vehicle for an extended period of time you might think that you can save costs by dropping your insurance coverage all together. Think again. A better road to take can avoid the twists and turns of re-insuring when you are ready to drive again may be suspending your liability coverage. Suspending liability on your vehicle keeps continuous – albeit limited – coverage. You won’t need to go to a nonstandard auto policy/high risk policy. Suspending liability helps you avoid paying unnecessarily higher premiums.

How can suspending liability insurance on your car be a better option than canceling your policy?

Can you put car insurance “on hold?”

Why do you have to keep insurance on a car you’re not driving?

What can you do to reduce costs if you aren’t driving your vehicle?

There are a number of reasons you may be putting your driving on hold for an extended period of time:

Extensive repairs to the vehicle making it undriveable
Long-term storage for your vehicle (convertible or motorcycle in winter months)
Your Inability to drive due to illness or injury
Your overseas military or career deployment
Your suspended driver’s license
Your lengthy travel abroad

All of these instances will put your vehicle out of use. You may think that dropping insurance coverage is right for you. Not necessarily the best move. Taking that path will likely lead to higher costs when you are ready to drive again. By suspending your liability coverage, you can stay compliant in the eyes of the law, keep in good standing with your insurer. You’ll also have peace of mind knowing that your car is still protected to damage and your costs shouldn’t go up when you return to driving.

If you are looking for more details about Suspending Liability rather than dropping your policy, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Renters Insurance

Renter’s insurance isn’t always required, but wise renters and savvy owners rely on rental insurance policies to protect their assets, property, and investments.

What does renter’s insurance cover? Typically, renter’s insurance policies offer protection in three areas: personal property, personal liability, and temporary living expenses. Personal Property coverage is protection for personal possessions that are damaged, lost, or stolen. Personal Liability coverage protects renters after causing damage to someone else’s property or responsibility for their injuries. Temporary Living Expenses coverage is there to cover hotels or other expenses in the event renters need to re-locate during repairs or if the rental property has become inhabitable.

What is not covered by renter’s insurance?

As with all insurance policies, it is important to be well versed not only in covered incidents, but also in what is not covered. While some damages are covered under “specified perils,” these often exclude natural disasters and pests. Renter’s belongings will not be covered for things like floods nor will they be protected from things like bedbugs. Keep in mind, as well, that rental insurance will cover renter’s belongings, but not for damage to things that belong to the property owner.

Do renters need renter’s insurance?

As a renter, you may not be legally required to get renter’s insurance but ask yourself if you can afford to lose all your possessions. Are you in a financial situation that would allow you to move while replacing everything you own? Whether you rent an apartment, house, or dorm it is a good idea to protect yourself and your belongings with a renter’s insurance policy. Remember to do your homework or speak to an agent so you fully understand what is and isn’t covered under a renter’s insurance policy.

Why should owners require renter’s insurance?

If you are a landlord or rental property manager, there are a number of reasons to consider requiring renter’s insurance policies from your tenants. Adding such a requirement in your lease agreement will increase the level of protection for you, but can benefit your renters as well. Most policies are not exorbitant and many renters wrongly assume that a landlord’s insurance policy will cover their personal property.

What can a tenant do to jeopardize your property?

It goes without saying, but having renters inhabit your property invites the possibility of accidents that can cost you heaps of money or property. The chances of incidents or accidents can increase by having residents on your property. They include:

Biohazard cleanup
Fire
Freezing pipes
Injury to tenants or guests
Liability lawsuits
Overflow of sink or tub
Smoke damage
Vandalism

If these types of perils occur and your tenant has a renter’s policy, claims can be handled by their company, rather than your insurance policy. This can prevent your policy from being charged with a claim surcharge and deductible. Why should you suffer a rate increase because of renter’s negligence?

As a landlord, you can appreciate other benefits by requiring tenants to carry renter’s insurance.

Applicant Screening – by requiring rental insurance, landlords are in effect screening applicants for those who can afford an additional monthly payment. This requirement also helps screen for renters who are interested in protecting their belongings and taking responsibility for their end of the liability of renting.
Lawsuit Mitigation – renter’s insurance can help owners avoid court by keeping their insurance out of the equation in the event of an injury or property damage.
Reduce Relocation Responsibilities – When you encounter repairs that require temporary housing for your tenants, the renters’ insurance policy is responsible for covering a relocation.

As a landlord, there is already a litany of details you need to be dealing with. Knowing that your tenants are covered with their own renter’s insurance policy can give you peace of mind. You won’t be stuck covering exorbitant costs caused by damage or – worse – finding yourself facing lawsuits for issues that were out of your control.

Renter’s insurance is the right choice.

Whether you are a renter or a property manager, a strong renter’s insurance policy is worth the cost to cover your possessions or protect your investment.

If you are looking for more details about renter’s insurance or to get a quote, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Liability Coverage Is Not Enough

Leave it to an insurance blog to tell you that minimal liability car insurance coverage is not enough. But – really – you do yourself a disservice by limiting your car insurance policy to just liability coverage. While most states require only liability coverage, by not opting for full coverage you can be putting your savings and even your paycheck at risk.

What is liability coverage?

Liability car insurance is focused on damages to third party (not your) persons or property. Typically, there will be two areas of coverage included under a liability policy – bodily injury liability and property damage liability. When you are deemed “at fault” in an accident, liability insurance will pay for the other driver’s costs up to the covered limit. Because liability insurance is limited to other drivers, you will be on your own for any damages sustained to you or your car.

Is it better to have full coverage or liability?

Carrying the minimum requirement of liability insurance, while cheaper, could wind up costing you more in the long run. Over the past decade, medical costs as well as the cost to repair vehicles have continued to rise. If you only have liability insurance, you could find yourself required to pay out-of-pocket to cover your expenses incurred during an accident.

Full Coverage Insurance, however, not only protects other cars and persons, but you and your car as well. Adding comprehensive coverage and collision coverage to your car insurance package ensures you are fully covered in the case of an accident – even one that is your fault. The best way to determine if a full coverage policy is right for you is to calculate the value of your vehicle. If it is worth more than the yearly payments for a full-coverage policy plus the deductible, full coverage is your best bet.

What if my car is “totaled” and I only have liability coverage?

Picture this, you’re in an accident and your car is a total loss. If you are carrying only the state-minimum liability insurance, you are on the hook for all the bills associated with replacing your vehicle. If you’re at fault for this hypothetical accident, the only way to make an insurance claim for your vehicle damage or total loss is if you already have collision coverage. Even when you own your car outright, if you can’t afford to replace it in the event it gets totaled, you need to consider full coverage.

Can your wages be garnished for an auto accident?

This is where the level of insurance you carry really comes in to play. If you are involved in an accident and found to be at fault, your insurance company is responsible for restitution for the other parties involved. If your policy is limited or is unable to fully cover the auto damage and/or medical bills, you are liable for those costs. It may be an extreme case, but in addition to garnishing your bank accounts, your wages can also be garnished – up to 24% of your paycheck. Is that worth the risk from skimping on your insurance?

Liability coverage is not enough

State-minimum auto liability insurance is a must but additional coverages are recommended not only for peace of mind but to protect your savings and future wages. If you want your insurance company to help replace a totaled car you are going to want collision, comprehensive, or new car replacement coverage. Depending on how much your vehicle is worth, it could make sense to have full coverage.

If you are looking for more details about the importance of carrying auto insurance beyond liability, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

Hazard Insurance vs. PMI

What is the difference between hazard insurance and private mortgage insurance (PMI)?

This is a common question for first time home buyers and the answer – on the surface – is pretty simple. Hazard insurance protects the homeowner while PMI protects the lender. Depending on the homeowner’s financial situation and the lender’s stipulations, both may be required. It’s important to understand how each type of policy works and what is best for you.

What is hazard insurance?

Hazard insurance is a specific level of coverage within your homeowner’s policy which protects against property damage as the result of covered hazards. Your homeowner’s insurance will protect against theft or damage or injuries and may include other areas of coverage. The hazard insurance coverage is limited to the physical structure of your home and calls out specific risks which may include damage caused by:

Fallen trees
Fire damage
Hail
Lightning
Theft
Vandalism

Hazard insurance is typically a minimum requirement when qualifying for a mortgage as it is the portion of a homeowner’s insurance policy that is directly tied to the physical structure.

What is Private Mortgage Insurance?

Another type of insurance that a lender may require during qualifying for a mortgage is Private Mortgage Insurance (PMI). PMI protects a lender in the case a homeowner defaults on their loan. Specific types of mortgages, such as FHA or USDA loans, make PMI policies a must. Most lenders will demand carrying PMI when putting down less than 20% on a conventional loan. In that way, PMI can help you qualify for a home loan without having to remit a large upfront down payment.

Do I need both hazard insurance and homeowner’s insurance?

As mentioned above, hazard insurance is typically the minimum amount of coverage under your homeowner’s insurance policy required by lenders. In order to qualify for a mortgage, you will need to have at least some level of hazard insurance. As it comes as a part of your holistic homeowner’s policy and not as a separate package, you will likely already be meeting that criteria by holding a homeowner’s policy. When a mortgage company calls out a requirement for “hazard insurance,” what they are typically referring to is a standard home insurance policy.

How does private mortgage insurance work?

PMI is an additional insurance policy that helps protect lenders, but it can benefit homeowners as well. Whether you are hoping to qualify for a lower down payment or your home loan specifically requires it, mortgage insurance is there to compensate lenders in the event that you can’t make payments or default.

Do you need both Hazard insurance and Private Mortgage Insurance?

Given the lender’s and your situation, Hazard Insurance and Private Mortgage Insurance both may be requirements as you qualify for a mortgage. Hazard insurance, as part of your homeowner’s policy, covers your physical property from damage. Whether you are hoping to qualify for a lower down payment or your home loan specifically requires it, PMI is the option. Together, they are part of a complete insurance strategy that can help protect your finances and your new home.

If you are looking for more details about the differences between Hazard Insurance and PMI, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

First-time Home Buyers

For the first time home buyer, there is a litany of resources to help you investigate topics from loans and mortgages to taxes and the finer points of moving in to the home owner realm. But an equally imperative detail – though often overlooked – is homeowners insurance. When should you get it? What should be covered? What nuances to look out for? These are all important things that new homeowners should know and understand.

How soon before closing should first-time homeowners be looking for insurance?

The short answer is – well in advance. While not a legal requirement, you’ll want proof of insurance at closing. Keep in mind that, often, most lenders will require an insurance document that gives proof of an entire year’s worth of coverage before a loan will become unconditional.

How much home insurance do you need?

Many factors that play into what to cover and for how much. The first thing you will need to determine is the replacement cost for your home. Calculate the amount of money it would take to replace your home and its contents in the case of a total loss.

From there, understand the sum insured – that is, the maximum amount a given insurance policy is responsible to pay – and ensure that those numbers are congruent. It is important that you are comfortable with the amount you’ve determined and that your policy sufficiently covers that total.

Is replacement cost the same as market value?

First-time home buyers might not be aware of the subtle difference between how their house is valued on the market, and what the cost is to replace it. Understanding the variance can save headaches and help you make a better-informed decision on the amount and type of insurance policy you are shopping for and what is ideal for you and your family.

Market value is defined as the assessed worth of your property including the house itself and the land it is on. At what price would it sell for on the open real estate market? There are a number of online calculators that can help you determine an accurate market value which you will come in handy when determining a replacement cost.

Replacement cost is the projected price to fully reconstruct your home. This can include your residential building and, in some cases, other structures on the property. This is the most relevant amount you should be using to ensure your insurance policy is right for you.

The distinctions between these terms and differing rates are important. Because your replacement costs do not include the value of any land associated with your property while market value does, often times the insurable amount of your home is lower than the actual home price. Keep in mind that there are always varying factors in play that can add value and, thus, increase the insurable cost of your home. Talking with an agent to better understand your options is always advised.

What does a standard homeowners insurance policy cover?

A typical homeowners policy is responsible for repairing or rebuilding your home. But you will want to understand specifics before you settle on a specific policy. Your basic coverage will keep you protected in the following cases:

Fire
Lightning
Smoke
Vandalism/ Riot
Explosion
Wind and hail
Falling objects
Freezing of pipes
Damage by aircraft or vehicles
Water damage from ruptured plumbing, steam, and water heating systems

Keep in mind, for a claim to be covered it must be sudden and accidental and cannot be attributed to something occurring over time. Also, be aware that a standard policy will typically not cover damage caused by a flood, earthquake or routine wear and tear. It is important to do independent research to understand the risks and benefits of your new home, community, and region to ensure you are finding the right policy for your big investment.

If you are looking for more details about the coverage you need as a first-time home buyer, contact our office:

J.M. Insurance & Financial

(513) 756-2779

Our agency’s mission is to recommend coverage and policies meeting each individual need.

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