Insurance

What Does Your Home Insurance Not Cover?

September 26, 2019 By Tamila McDonald 1 Comment

About 85 percent of homeowners have home insurance policies. On average, homeowners insurance costs around $1,083 per year in premiums, making it a substantial expense for many. Considering the price tag, it isn’t uncommon for property owners to assume that nearly every kind of event would be covered. However, that isn’t the case. Here’s a look at what most home insurance policies won’t cover.

Flood Damage

While the majority of homeowners insurance policies cover some forms of water damage, standard coverage won’t help you for floods. If you want flood coverage, you’ll need separate flood insurance.

Usually, homeowners go through the National Flood Insurance Program (NFIP) for flood policies. Those are overseen by the Federal Emergency Management Agency (FEMA) and can cover damage to the structure as well as personal belongings inside.

However, there are coverage amount limits of $250,000 for the structure and $100,000 for the contents of a home for basic flood insurance. If you need more than that, you’ll have to get “excess” coverage either from the NFIP or a private company.

Damage from Negligence

If your home is damaged, but that damage could have been prevented by properly maintaining the property. Your damages might not be covered. For example, if a pipe burst that should have been replaced years ago. Your claim might be denied. Similarly, if a storm tore a hole in your roof, but the roof was already in disrepair. Your claim might be denied or what is covered could be incredibly limited.

Often, damage caused by pests is also considered an issue of negligence. For example, if termites harm your home’s structure. Your policy probably won’t help.

Moving Earth

In many cases, damage caused by earth movement – like earthquakes, landslides, and sinkholes – isn’t covered by many policies. Like flooding, you’ll need a separate policy that covers that specific kind of damage if you want protection.

You’ll need to check your policy to see if earth movement is covered. If not, then you can get an earthquake policy through a private company to cover those kinds of events.

Backed Up Sewer Lines

If a sewer backup damages your home, most homeowners aren’t covered by their basic policies no matter the cause. For sewer backup coverage, you’ll either need a separate policy from a private company or a rider or endorsement on your existing policy.

Some Dog Attacks

Homeowners insurance often covers costs associated with someone being bitten by your dog. However, if you own certain breeds that are considered to be “aggressive” by your insurer. Your canine companion’s actions might not be covered.

For example, German Shepherds and Pit Bulls are frequently excluded from policies. Akitas, Chows, Staffordshire Terriers, Doberman Pinschers, Alaskan Malamutes, Siberian Huskies, Rottweilers, Great Danes, and Presa Canarios are often banned as well. Plus, nearly all wolf hybrids are eligible for coverage.

High-Value Jewelry, Antiques, Art, or Computers

While homeowners policies cover jewelry, furniture, art, and electronics in general. If yours have values beyond a certain cutoff point. Your coverage won’t handle the full value of the item. Instead, you’ll need to purchase a rider or endorsement to expand the amount.

The limit may vary from one insurer to the next. However, it is typically around the $1,000 to $2,000 mark for each item. For example, if you have a gaming computer worth $3,000, then you’ll probably need a rider. But, if you have three computers worth $1,000 each. You might not, depending on your insurer.

If you are concerned about coverage limits in those categories. You should contact your insurer. They can let you know what restrictions apply and whether you need a rider. Additionally, for antiques, art, and jewelry, your home insurance company can let you know if a formal appraisal is necessary if you want to expand your coverage.

Terrorism and War

Both acts of terrorism and war are uninsurable. If any kind of attack in those categories causes damage to your home, your insurer isn’t going to cover it.

Trampolines

While home insurance does cover a wide range of potential injuries. They won’t cover anything related to trampolines. These fun pieces of play equipment are incredibly dangerous and lead to a large number of injuries annually. This is why most insurers exclude them in their policies.

Have you ever tried to make a claim only to discover that your home insurance won’t cover it? Tell us about your experience in the comments below.

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Home Insurance Adjuster Estimate Too Low? Here’s What to Do

August 29, 2019 By Tamila McDonald Leave a Comment

Approximately 85 percent of homeowners have property insurance. Of those with coverage, about 6 percent of homeowners make an insurance claim each year. And more than 98 percent of those claims involve some sort of property damage or theft. When you file a homeowner’s insurance claim for damage, the hope is that the insurer will provide enough to cover the cost of repairs. However, that doesn’t always happen. Sometimes, the home insurance adjuster estimate is too low.

The Role of the Home Insurance Adjuster

A home insurance adjuster’s job is to exam your property and estimate what the insurance company needs to pay out. This involves the creation of an estimate – a formal overview of the damage. Also, you get an outline of what needs to be repaired and what the adjuster believes each of those fixes will cost.

The adjuster may be an employer of the insurer. However, it is also possible that they are an employee of a third party. Not all insurers have adjusters available in every region. They essentially contract that task out to a specialty business.

While most homeowners would assume that the estimate will be an accurate reflection of the repair costs, that isn’t always the case. Sometimes, the amount listed by the adjuster is far below what they actual expense for the fixes would be. This leaves homeowners in a difficult position.

If you receive a home insurance adjuster estimate that is too low, here’s what you need to do.

Understand Your Coverage

Before you approach your insurance company about the amount on the estimate, you need to understand how your homeowner’s insurance coverage is set up. Your policy may work one of two ways.

First, it could cover you for the full cost of the replacement regardless of whether the damaged areas have aged. Often, this means your insurance company will handle your claim based on the amount it takes to do the work, buy the needed supplies in today’s market, and address any associated sales tax.

However, there can be exceptions even if you have this level of coverage. For instance, if you have a wooden fence that was in incredibly poor shape and clearly needed repairs before the incident-related damage occurred, you might not be eligible for full replacement cost in that instance.

Second, your insurer could factor in depreciation, paying only for the value of the damaged items before the incident occurred. For example, if your windows are broken due to heat from a fire, your insurance company would examine the age of the windows to see how much their value has changed since they were originally installed. If your windows are older, you may receive less money from your claim than it would typically cost to install new windows based on the depreciated value of the existing windows.

Knowing how your coverage works before you address the adjuster’s estimate is wise. That way, you understand whether you are covered for full replacement or if depreciation is a factor. If you are in the latter group, you may be stuck with a lower estimate because that is how your policy works, but it can still be worth it to seek an adjustment. However, if you are in the former, pursuing an adjustment should definitely be on your to-do list.

Speak with Your Insurance Company

If you believe the home insurance adjuster’s estimate was too low, you need to contact your insurance company, not the adjuster specifically. Have them walk you through the estimate, explaining why the adjuster listed various costs. Then, ask about the procedure for getting the amount adjusted.

The goal is to learn about your insurer’s process, as each company may handle it slightly differently. However, there are typically similar requirements, as will be discussed below.

Gather Quotes from Contractors

In nearly all cases, you’ll need to prove that the home insurance adjuster’s estimate was too low. Often, the easiest way to do that is to gather quotes from several reputable companies regarding the work that needs to be done.

Research companies in your area that could handle the type of repairs involved with your claim. Use sites like Yelp, Angie’s List, and Home Advisor to read reviews before reaching out. That way, you can make sure the company is likely to provide a fair quote, offers good customer services, and has former customers who are happy.

After you find some suitable companies, contact at least three, and request a free estimate. By having multiple quotes, you are able to build a case that demonstrates that the adjuster’s estimate was too low. Additionally, you are being diligent about confirming your assumption that the adjuster’s estimate was, in fact, inappropriate.

Consider an Independent Adjuster

Just as your insurance company may hire a third-party adjuster to examine the damage, you can too. Hiring an independent adjuster can accomplish the same goal as getting quotes from contractors. However, you won’t be able to secure this service for free.

Often, an independent adjuster will charge between $200 and $500 to provide an estimate. If the discrepancy between the original amount and the cost of repairs is less than what you would need to pay for an independent assessment, this likely isn’t worth pursuing. But, if the difference is substantial, it is a path you can choose to take.

Provide the Evidence to your Insurer

Once you have quotes from contractors and/or an independent adjuster estimate, contact your insurer again. Submit the documents for the insurer to review and see if they will make an adjustment.

As long as the contractor quotes only relate to damage from the incident and the companies are reputable, there is a solid chance your insurer will settle your claim for a higher amount. However, if they don’t, you still have one more course of action.

File a Formal Complaint

If you genuinely feel that you are being mistreated by your insurer, you do have the option of filing a complaint with your state insurance department. That department would conduct an investigation and provide you with guidance regarding how they think you should proceed.

In some cases, the state insurance department will reach out to your insurer on your behalf if they feel your complaint is justified. When this occurs, they try to encourage the insurance company to reach a fair resolution.

Hire An Attorney

At times, the department may recommend you hire an attorney. However, they will not assist with that cost, so you would be responsible for paying any associated fees. Usually, this is only worth pursuing if the difference between the adjuster’s estimate and the contactor quotes or independent adjuster’s estimate is substantial. If the disparity is too small, you may end up losing money on the claim overall when you pay your attorney.

Ultimately, disputing a home insurance adjuster’s estimate can be a bit of a cumbersome task, but it is worth doing to the estimate is significantly too low to repair the damage. Just make sure you understand your coverage and insurer’s process before you begin. Otherwise, you may spend a significant amount of time fighting for an amount that you would never receive.

Have you ever had to get an insurance estimate adjusted after learning the actual cost? Share your experience in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Everything You Ever Wanted to Know about Lemonade.com

June 17, 2019 By Tamila McDonald Leave a Comment

Nearly everyone needs some kind of property insurance. If you rent your home or apartment, renter’s insurance can help you cover the cost for replacing items that are damaged or destroyed by a covered event, like an electrical fire. People who own their home need homeowner’s insurance. This goes a step further, covering both damaged items and structural repair costs. Finding good and affordable coverage can be a daunting task. However, Lemonade.com, a property insurer, aims to simplify the process while keeping your costs low.

What is Lemonade.com?

Lemonade.com is a property and casualty insurance company. It embraces technology to help keep the company’s overhead costs low, and it passes those savings onto the customers. Additionally, Lemonade believes in transparency.

All of their customers pay a simple flat fee for the service, which means Lemonade has no incentive for denying or delaying any claims. With traditional insurers, unpaid claims lead to bigger profits. Since Lemonade only takes in a flat fee to cover its costs, denying claims doesn’t create a financial benefit.

If there is any leftover money after covering all of the valid claims, Lemonade doesn’t keep it. Instead, through its Giveback program, the extra cash is donated to various charitable causes. Customers even get a say in where this money goes based on the virtual group they join.

Lemonade.com Coverage Options

In order to get a policy with Lemonade, you have to either use the company’s Android or iOS app, or head to its website. By issuing claims digitally, Lemonade can keep operational costs low, allowing policyholders to get more affordable coverage.

With Lemonade, you get two primary coverage choices. The company offers both renter’s and homeowner’s insurance, so you need to select the option that aligns with your living situation.

Renter’s insurance can cost as little as $5 a month while homeowner’s starts at $25 a month. Your exact premium will depend on a range of factors, including anything from the amount of stuff you own if you have any high-value items (jewelry, computers, etc.), your credit history, the size of your deductible, and your number of recent claims. For homeowner’s insurance, the property’s details also come into play.

Lemonade considers other risks as well. For example, if your area is susceptible to severe weather, that may lead to a higher premium. Additionally, if you have home security devices, your premium might be lower.

Once you create your policy, you can pay your premium with a credit or debit card. If at any point you no longer need the coverage, you can easily cancel the policy.

With any policy, you also get additional coverage when your items are outside of your home. For example, if your laptop is stolen while you are at a coffee shop, you are covered for that loss. Further, if your dog bites someone, you have might coverage for that too.

Filing Claims with Lemonade.com

While no one ever hopes to file a claim, it is nice to know that Lemonade’s process is incredibly easy. Use the smartphone app and tap the Claim button. Then, follow the simple process to submit your claim. It usually only takes a few minutes as long as you can provide sufficient information about the loss or damage.

During the process, you do need to submit a short video. In that clip, you describe what happened in your own words, making it easier for Lemonade to get a realistic picture of the situation.

If you have receipts to show the value of their items, you can submit those too. But, that isn’t a requirement; it can just help speed up your claim.

Once you submit those details, you give Lemonade bank account information for a wire transfer. Once approved, Lemonade sends the payment (minus your deductible) straight to your bank account.

In most cases, the approval process is almost instant. However, there may be situations where Lemonade needs to take a closer look, so it can take longer if a manual assessment is necessary.

Where Lemonade.com is Available

Lemonade.com doesn’t offer coverage in every state yet, though they are continuously expanding the company’s service area. As of June 2019, renter’s, condo, and homeowner’s insurance are available in:

Arizona
California
Colorado
Connecticut
Georgia
Illinois
Indiana
Iowa
Maryland
Michigan
Nevada
New Jersey
New York
Ohio
Oregon
Pennsylvania
Tennessee
Texas
Virginia
Washington DC
Wisconsin

Rhode Island residents have access to renter’s and condo insurance, while Arkansas and New Mexico residents can sign up for renter’s insurance. However, Lemonade continues to expand, so other states and options could be forthcoming.

Is Lemonade Always Cheaper?

While Lemonade aims to offer the best price possible, that doesn’t mean they will be the cheapest in every scenario. The company’s policies do tend to cost less, but each insurer uses different pricing models, so not everyone will find a deal with Lemonade.

However, since getting a no-obligation quote is free, you can also go through the process and see if Lemonade is right for you. If so, then you can sign up and have coverage in just minutes. If not, you can keep looking elsewhere until you find the right insurer for your needs.

Do you use Lemonade.com? Are you interested in trying Lemonade the next time you need insurance? Tell us about your experience or share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Should You Buy Insurance To Cover Your Funeral Expenses?

May 17, 2019 By Susan Paige Leave a Comment

We all know its going to happen one day, so why put off planning ahead?

Nobody enjoys talking about death, but part of being an adult is dealing with the uncomfortable because it’s the right thing to do.

We have insurance to cover our car, health, home and much more. But should we have insurance to cover our end of life expenses?

The answer: It depends.

Let’s face it, if you don’t have a plan in place to pay for your final expenses, your family will pick up the slack.

Think about that for a moment.

Your family will step up and pay for your funeral costs if you do not.

Every time someone loses a loved one, they want to see them honored in a respectable and dignified way. That’s why so many families take on debt or sell personal belongings just so they can honor whom they lost.

Funerals aren’t cheap either. On average, a funeral can cost up to $10,000 depending on the service.

What if your family had to pay for a bill that large? That is a lot of money for anyone to come up with let alone with no time to prepare.

The truth is most families simply don’t have that kind of cash laying around which means they have to resort to less than ideal means of raising money.

Ultimately, if you don’t have the cash or assets on hand right now to pay for your burial expenses, then yes you need insurance to cover this eventual loss that your family would experience.

Oftentimes insurance companies will market policies specifically for this cause. They’re usually referred to as burial insurance plans or final expense insurance.

They’re really just small life insurance policies. The idea is the policy insuring your life will payout a cash benefit to your beneficiaries so they have the money to pay for your funeral.

Most companies that sell these plans allow you to buy as little or as much coverage as you want.

That’s great news if you want to be cremated. If so, you’ll only need a little bit of coverage. Thankfully you can buy small amounts such as $5,000 in coverage.

Most of the time these plans are whole life which simply means it will never expire. You can forever count on the policy being in force for as long as you live. However, some companies sell a term policy that will expire between 80-90. Make sure you get clarification up front before you sign on the dotted line.

Either way, qualifying appears to be very simple. There usually aren’t medical exams required and many common health issues are accepted by most insurance companies.

What if you are really unhealthy; will you be able to get coverage?

The answer is yes! Some (not many) insurance companies have plans where your acceptance is guaranteed. They have no medical questions and you cannot be turned down. Granted, they cost more and seem to all have a waiting period provision. However, that’s the price you pay if you are in a really high-risk category.

At the end of the day, if you know your family will not have to pay for your funeral bills, you’re all set. Pat yourself on the back for a job well done.

However, if that is not your situation, you should seriously consider getting life insurance to ensure your family can remember you rather than what it cost to see you off properly.

5 Benefits to Look For This National Employee Benefits Day

April 2, 2019 By Tamila McDonald Leave a Comment

Today is National Employee Benefits Day — a day to recognize everything professionals do for the workforce and take a closer look at the benefits available ro today’s worker.

In most cases, employees only pay attention to their benefits when they make plan selections or change jobs. But, understanding what is out there is always beneficial. With that in mind, here are five benefits everyone should look for, either in your current job or the next one.

1. Medical and Prescriptions

In most cases, medical and prescription benefits go hand in hand. These plans not only help you control the cost of your healthcare needs, but they can also protect you against financial disaster.

Medical bills are one of the leading reasons for bankruptcy, so having sufficient coverage is a must.

2. Dental Coverage

While these don’t inherently go together, they are usually additional benefits beyond medical and prescription, even if they fall into a similar category.

Although there are ways to get free dental care, it doesn’t usually cover everything. The cost of dental care can be significant without insurance, so many people choose to skip treatments they can’t afford. Dental insurance helps offset these expenses, making your care more affordable. Ultimately, your oral health is important, so finding a job with dental benefits is always a smart move.

3. Vision Benefits

The same goes for vision plans. Whether you currently need corrective eyewear or not, neglecting your vision can have serious consequences. Without insurance, the cost of appointments, glasses, and contacts can add up fast. Plus, numerous conditions can affect the eyes, so you need to keep up with your exams.

Vision insurance makes it easier to stay on top of your overall health, so seek out these benefits when possible.

4. Retirement Plans

Saving for retirement is a must. If your employer offers a retirement plan, then keeping up with this form of savings is a breeze. Usually, you can have the monthly payment taken straight out of your paycheck. And, in some cases, you can get additional funds from an employer match.

Having an employer provide you with a retirement plan can be significantly more convenient than setting up one yourself. Plus, you’ll be much less likely to ignore your retirement savings, ensuring a more stable financial future.

5. Paid Time Off

Everyone has obligations outside of the workplace, and most people experience occasional illness. But, without paid time off, they can be hard to manage. You might struggle to make doctor’s appointments, handle the needs of your children, or simply to recover after getting sick if you can’t get away from work. But, with suitable leave, you can take the time you need without having to sacrifice anything from your paycheck.

What National Employee Benefits Day Is All About

Ultimately, National Employee Benefits Day is a great time to review what you have or what you want from your job. Not every company offers the same benefits, so look closely at their programs to ensure you get everything you need.

Which kinds of employee benefits do you value the most, readers?

What Is Your Insurance Score and Why Does It Matter?

March 19, 2019 By Kathryn Vercillo Leave a Comment

Do you know what your insurance score is?

Everyone knows what a credit score is, and nowadays, it’s fairly easy to access for free.

However, many people don’t know what an insurance score is, let alone what their own number is.

What Is an Insurance Score?

As you might have guessed, an insurance score is similar to your credit score. However, it applies specifically to insurance rates. In other words, an insurance company will consider this number when determining your rates. Like with a credit score, if you have a good insurance score then you’ll get better rates.

Your score is directly linked with your credit report. The insurer evaluates the data in that credit report. They want to know the likelihood that you will file a claim in the future. To determine this, they examine your past. If your credit report indicates that you aren’t likely to file a claim, then your insurance score is better. As a result, you get offered better rates. Essentially, the insurance company rewards you for being unlikely to require their services.

Basically, research shows that there is some correlation between specific aspects of your credit report and the likelihood that you’ll get into an accident or need to file an insurance claim. Therefore, starting in the 1990s, some states began allowing insurance companies to use these numbers to determine customer’s rates. However, not all states allow this, even today. Therefore, whether or not your credit impacts your insurance rates will vary depending on what state you are in.

Insurance Score vs. Credit Score

It’s important to understand that these two scores are not the same thing. Obviously, they are related. If you have a good credit score, then you are also likely to have a good credit-based insurance score. In both cases, you have good credit. Therefore, lenders will trust you to make your payments on time and in full.

However, just because you are good at making payments doesn’t mean that it’s smart for them to give you insurance. Yes, you’ll likely make your monthly insurance payments. They do take that into consideration. However, if your credit report indicates the likelihood that you’ll file frequent claims, then your insurance score might not be great in spite of your good credit score.

Insurance companies will look at your history of accidents and claims to determine your rates. Your credit score and report play a part but aren’t the only determining factors. Insurance companies also look at information in two big databases (called A-PLUS and CLUE) to get a sense of the risk they take on when they insure you. As a consumer, you are entitled to one free annual report from each of these companies. Therefore, you can order yours to get a sense of what insurance companies might see when they consider your rates.

Where to Get Your Insurance Score

Major credit businesses, such as FICO and Transunion, generate credit scores. Moreover, individual insurance companies sometimes use their own methods of calculation to get your credit score. For example, Progressive has its own data calculation tool. Therefore, there are slight variations in credit scores depending on who does the calculations.

This may sound odd, but if you think about it, it’s similar to getting your credit score from each of the three major companies (Experian, Equifax, and TransUnion). The scores are all similar, but they may not be exactly the same.

What Does This Score Affect?

If you live in a state that allows insurance scores for underwriting and rate determination, then you might want to know how this can affect you. Typically, you’ll see these scores used in two situations:

Auto insurance (including other vehicle insurance such as boats and RVs)
Home insurance (including homeowner’s and renter’s insurance)

These types of insurance are often mandatory. If you drive, then auto insurance is mandatory. If you have a home mortgage, then most likely homeowner’s insurance is mandatory. Therefore, you are probably affected by your insurance score even though you might not have known before today what that score even was.

Sometimes health insurance and life insurance plans also consider insurance scores, although this is less common.

Calculating Your Insurance Score

Since there are so many different places that might calculate your insurance score, it’s difficult to know exactly which factors will be taken into consideration. However, the companies all consider a variety of factors.

In terms of your credit report, they all look at the same basic information. What is your credit score? How good are you with making on-time payments? Do you have high amounts of debt? The lower your credit score, the lower your insurance score is likely to be.

In terms of other factors, it will depend on which type of insurance you’re applying to get. For example, auto insurance companies may look at:

Overall driving history
Tickets you’ve received in recent years
Auto accidents
Claims that you have filed with previous auto insurance companies

If you are looking at homeowner’s insurance, then you might be aware of the following:

Claims that you have filed with previous home insurance companies
Safety features such as house alarm systems

It’s important to be aware that there are certain factors that insurance companies are not allowed to take into consideration. Your home’s location, your race or cultural background, and your marital status are all off-limits. In other words, they can look at your potential risk as an insurance consumer, but they can’t factor your personal details into that risk assessment.

Like with a credit score, you’ll receive a number as your score. It’s typically between 200 and 997. Generally speaking, if you have a score of over 770, then you have a good score. In contrast, if your score is under 500, then you have a poor rating. However, this may vary depending on the company.

How to Improve Your Insurance Score

If you have a good score, then you get better rates on insurance. Therefore, a good score means that you don’t have to pay as much for coverage. As a result, it makes sense to do all that you can to improve your insurance score.

First off, you should take all steps necessary to improve your overall credit score. After all, it does play a big part in determining your insurance score. When you consistently make on-time payments, have a strong debt-to-income ratio, and meet the other demands to achieve good credit, it goes a long way towards reducing your insurance costs.

Furthermore, the more time that passes without filing a claim, the better your insurance score will be. Therefore, unless it’s absolutely necessary, avoid filing claims with your insurance companies. Although you may have to pay a bit more out of pocket at first to get that good score, the score means you’ll pay less on your premiums over time.

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