Homeowners, condo owners and renters come to us to purchase insurance to protect themselves from losses. The last thing we want is for you to be severely disappointed in the event of a loss due to fast changing market conditions. Did you know that the costs of construction materials has risen 108%* since April of 2020? *Source: National Association of Home Builders
Know for certain that you have the coverages you need for your home.
Updating Your Replacement Cost Coverage
At Keefe Insurance, we always recommend that our customers only purchase Replacement Cost policies to protect their dwelling and belongings. There are two different types we focus on.
- Replacement cost. The policy pays the cost of rebuilding/repairing your home or replacing your possessions with like quality without a deduction for depreciation.
- Guaranteed or extended replacement cost. This policy offers the highest level of protection. A guaranteed replacement cost policy pays whatever it costs to rebuild your home as it was before the fire or other disaster–even if it exceeds the policy limit. This gives you protection against sudden increases in construction costs, for example, due to a shortage of building materials after a widespread disaster or other unexpected situations. It generally won’t cover the cost of upgrading the house to comply with current building codes. You can, however, get an endorsement (or an addition to) your policy called Ordinance or Law to help pay for these additional costs. A guaranteed replacement cost policy may not be available if you own an older home.
Some insurance companies offer an extended, rather than a guaranteed replacement cost policy. An extended policy pays a certain percentage over the limit to rebuild your home. Generally, it is 20 to 25 percent more than the limit of the policy. For example, if you took out a policy for $300,000, you could get up to an extra $60,000 or $75,000 of coverage.
Even though a guaranteed/extended replacement cost policy may be a bit more expensive, it offers the best financial protection against disasters for your home. These coverages, however, may not be available from all companies.
If you’d like to be certain that you would be able to recover from a total loss, please contact us for a Spring Tune-up on your home, renters or condo owners insurance. We’ll go over what you have, costs to rebuild/replace in our area, and what adjustments we advise you to make to your coverages to keep current with today’s costs, so you can have peace of mind.
A Home Buyers Insurance Guide
Are you a renter, thinking about a first home? Or downsizing prior to retirement?Or relocating to be near family or a new job?Home buying activity continues to be very strong in our area in 2021. There can be insurance cost consequences in your choice of your new home. Here are some factors that will influence what it will cost you to insure a new “dream home”.
Quality and location of the fire department
- Proximity to the coastline
- Age of the home
- Condition of the roof
- Quality of construction
- Risk of flooding
- Swimming pool or other special features
Before you place an offer on a house, you will need to do the following to protect yourself from unseen and unforeseen problems.
Check the loss history report
Ask the current homeowner to obtain a copy of the loss history report on the home. Homeowners can obtain either a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report, which is available from LexisNexis, or an A-PLUSTM property report from ISO®. These reports provide a record of the type of loss on the home and can provide extremely valuable information.
Get the house inspected
You’ll need to have the house inspected by a credentialed home inspector in order to get your mortgage approved. Accompany the inspector to make sure he or she is thorough and makes sure to:
- Check the general condition of the home
- Look for water damage, termites and other types of infestation
- Review the electrical system, plumbing, septic tank and water heater
- Show you where potential problems might develop
- Double-check that past problems have been repaired
- Suggest important upgrades or replacements
If the inspector raises questions, your insurance company will as well. Be sure to find out if there is an underground oil storage tank, as many insurers will not provide policies for homes that have one.
3.Estimate maintenance costs
Routine maintenance is your responsibility as a homeowner so be sure to factor these costs into the overall price of owning the home. Losses caused by failing to properly care for your home are not covered by standard homeowners insurance policies.
4.Talk to your Keefe Insurance rep.
Contact us before you buy to provide counsel on insurance concerns and get estimated premium costs.
For a complete copy of the Home Buyers Insurance Guide, visit iii.org
Condo Owners’ Insurance Concerns
If you decide purchasing a condo is the right move for your current lifestyle, the bank will require insurance to protect its investment in your home, and your co-op or condo agreement will likely require you to have insurance, as well. There are actually two different policies necessary to fully insure co-ops and condos—a master policy for the building, and an individual condo owners policy to cover you for liability, to protect your belongings and to insure any apartment structural elements that are not covered by the master policy. Here’s what you need to know about each type of insurance.
The master condo policy
This is the policy that protects the entire condominium structure; the building management is responsible for it and its premiums come out of your maintenance fee or association dues. The master policy covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.
It is important to know which structural parts of your home are covered by the condo/co-op association master policy and which are not, so you can properly insure your unit through your individual policy. This information should be in your association’s bylaws and/or proprietary lease, which can usually be obtained from the co-op or condo board, or from the company that manages the building.
Your Individual Condo Owners Policy
Your mortgage lender and your co-op or condo by-laws will likely require that you have your own insurance on top of the master policy because your ability to repair your unit after a disaster protects the value of the unit. An individual policy provides coverage for your personal possessions and for any structural elements not covered by the master policy if you are the victim of fire, theft or other disaster listed in your policy. Like a standard homeowners policy, you also get liability and, likely, additional living expenses (ALE) protections.
If your unit has significant upgrades in your kitchen and bathrooms over the “standard” units, you want to make sure that you have replacement coverage to restore your unit to its upgraded condition.
To adequately insure your condo home and protect your assets, you may also want to consider the following, additional coverages.
- Unit assessment reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby and all the unit owners are charged the cost of repairing the loss.
- Water backup insures your property for damage by sewer backups or drain back ups—these are not covered by either your co-op/condo policy or your flood policy.
- Umbrella liability is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.
- Flood insurance may be necessary if you live in an area prone to these disasters.
- Floater for additional coverage for expensive jewelry, furs or collectibles.
We’d be glad to assist you in protecting your condo unit and possessions with the coverage that is right for you. Call us!
Did you know that Franklin has a Town Blog and Podcast that keeps residents informed on local issues and concerns? This month’s Podcast deals with the Library reopening, COVID-19 Vaccinations, planned Earth Day events, plus the town budget and Finance Committee report. Click here to connect!
When you experience a loss, the “intangible” promises in your auto or homeowner policy suddenly become very tangible! We understand the need for sensitive treatment and fast action. Fair and prompt payment of a loss settlement is our immediate goal.
This is the trust you placed in us when you chose the Keefe Insurance Agency. Maintaining your trust in these trying circumstances is a responsibility we take very seriously. Your complete satisfaction, if and when you have a claim, is our number one priority.
Bob Keras & Peter Brunelli