Oct 24
Navigating the Complex Array of Homeowners Insurance Coverage Types
What comes to your mind when you hear of homeowners insurance? You probably envision it as the kind of protection only people living in their own homes take. The case, however, applies to any home you live in, whether it is a rental, condo, mobile, or you are renting it out to others.
You might be daunted by the array of homeowners insurance coverage types, but don’t worry. There are a limited number of policy types or “forms. We’ll explain.
Home Structure Coverage
This is one of the different types of homeowner insurance policies. It protects your home structures such as ceilings, floors, walls, and built-in facilities in your home. It is a basic cover in homeowners policies and covers damages arising from fire, vandalism, hurricane, theft, and hailstorms.
Depending on your insurance company, the coverage differs in the list of risks it covers. Most policies also cover other structures not attached to the house, such as a gazebo, shed, or garage.
In case of any risk wrecking the home, it can cover the cost of rebuilding your home depending on your policy limit. You may have to include additional policies since the dwelling coverage doesn’t cover everything.
Personal Liability
This is another of the important homeowners insurance coverage types. The policy covers property damage or bodily injuries that you, your family members, or pets cause to others. It also covers lawsuits, paying court awards, and the cost of defending you in court up to your policy limit.
You can also add to the coverage an excess liability policy, which includes claims for higher liability limits, slander, and libel. You need to browse around to find the best homeowners insurance price for this kind of coverage.
Personal Belongings Coverage
This one covers clothing, sports equipment, furniture, and any personal valuables you have in your home. It covers belongings if they are stolen, burned, or destroyed by any other insured risk.
For expensive items such as fur, silverware, and jewelry, if stolen there are dollar limits on them. You may opt to insure your valuables to their real value. To do so, buy a special floater or personal belonging endorsement, and the item appraised value will be protected.
Additional Living Expenses Coverage
If your home becomes inhabitable due to a risk occurrence included in the policy, you will get compensation. The policy covers the expenses of living away from your home. It covers expenses such as meals, hotel bills, and any other that you will incur during the rebuilding of your house.
Standalone Homes Coverage
HO-1– It covers a list of specific 11 perils: fire and lightning; explosion; vehicles; smoke; malicious mischief and vandalism; glass; explosion; theft volcanic eruptions; aircraft; riots and civil commotion; windstorms and hail; and vandalism.
It only covers the perils on the list and no other that is unnamed. It doesn’t include personal belongings.
HO-2– It covers all the 11 perils covered by HO-1 and some more. The additional dangers it includes are water damage from faulty plumbing, falling objects damage, household appliances, and heating air conditioning.
Its terms are the same as HO-1, as it only covers the perils that are on the list. It, however, insures personal property in your home.
HO-3– It’s a common policy as it offers a broad coverage. It covers all the included 16 perils apart from earthquakes, floods, nuclear accidents, sinkholes, and landslides.
It covers the same personal belongings in your home as in the HO-2 policy.
HO-5– It is more like HO-3 as it covers all the 16 perils and others not in the excluded list. It is, however, more comprehensive and insures against all perils apart from the ones excluded. Due to its broad coverage, it’s more expensive than the others.
HO-8– It is appropriate for older homes whose replacement cost exceeds the actual home value. It mostly covers architectural structures and registered landmarks.
It covers 11 risks and is affordable as its payout is smaller. The homes are usually 40 years older and above and do not qualify for the HO-3 policy form.
Renters Coverage
HO-4– Also referred to as renter’s insurance, it covers personal property in a rental apartment or home. The landlord usually takes the HO-1 policy that doesn’t include the tenants’ belongings. HO-4 becomes then the policy of choice for tenants to insure their personal belongings.
It also covers additional living expenses in case the rental home becomes inhabitable due to perils already covered. It does not include liability coverage, and one should consider adding it to the policy at an extra cost.
Co-Op and Condo Owners Coverage
HO-6– This is specifically for owners of condos and co-op associations. As an owner, read through the policy form to ensure it covers all the perils you want it to cover. Some policies may have a lower coverage that, in case of extensive damage, can’t insure your co-op or condo.
For a condo, HO-6 covers it like a single home—as its owned by the policyholder. As such it insures liability, belongings, and additional living expenses.
For co-op, it belongs to the tenants as the shareholders of the home. They, therefore, have to take the HO-6 policy instead of the renter’s insurance as they have ownership. Just as in the condo, co-op policy is also limited.
Mobile Home Coverage
This policy covers manufactured homes and any other structure attached to them. It covers the same perils as HO-1 or HO-3 homeowners’ policy forms. The mobile home cover only insures the home when it’s stationary and not on transit.
There are different types of home insurance covers that are optional, and they include the following:
Earthquake Insurance
The policy has its deductible and covers damage occurring in your home as a result of an earthquake.
Flood Insurance
It has its deductible and insures your home against damages arising from floods. If your home is in an area prone to floods, consider taking this policy.
Ordinance or Law Insurance
You will need this policy if you want to rebuild your house after a loss, and it has to meet the building codes of the time. It is the best policy if you have an old home.
Ready to Pick Your Best Plan?
Choosing any kind homeowners insurance coverage types is critical as you are never sure when disaster may strike. It gives you peace of mind knowing that in case anything goes wrong, you will not be rendered homeless.
From the information above, you now can choose a policy that befits you well. If you feel like you still need more information on this, you can visit our website or give us a call and all your questions will get answers.
Jan 19
Miles for Missions 5k
Zaid
Signature Insurance is proud to have participated in the Miles for Missions 5k run in October. Our very own Fadi Zayto participated in this great run.
What was accomplished
We part of a group who were able to raise over $5,000 for Mission Youth Detroit! We were of the many sponsors who hosted 150 participants who were critical for accomplishing this lofty goal.
Signature Insurance would like to thank Mission Youth Detroit for allowing us to be part such a fun and great cause.
The proceeds were critical to support the financial resources needed to coordinate local and abroad mission trips.
Race Results
Fadi able to finish the race in 7th place overall and 2nd in his age group. He kept a healthy mile pace of 7 minutes and 30 seconds finishing the race in only 23 minutes and 15 seconds.
We are so proud of Fadi and the rest of the runners for participating in this event.
Who Else Supported
We could not have imagined doing this single-handedly and were accompanied by some great companies also.
It takes a community to help a community and it was exciting to be among such great company when it comes to helping. Some of the other sponsors we would like to highlight is:
With over 60 years of foundation, Alliance Catholic Credit Union is owned by its growing membership. Established by and for the Catholic Community, Alliance Catholic Credit Union is uniquely qualified to provide financial products and services tailored to meet the needs of our Catholic community.
A fantastic institution whose board of directors are experienced in the banking industry and volunteer their time.
Description is taken from Mission Network Programs USA.
The United Auto Workers Local 228 is an amalgamated Union representing working people in all different fields of business. The mission is to protect Collective Bargaining rights for all and to provide workers with a voice in the workplace. Local 228 was established in 1948 and currently represents 2457 active Members and 2492 Retired Members. Solidarity Forever!
Description is taken from Mission Network Programs USA.
Advisors Capital, Inc. is a privately owned, Michigan Corporation, licensed as a First Mortgage Broker and Lender in the State of Michigan. They are also registered as a Second Mortgage Broker and Lender. Advisors Capital in-house mortgage team expedites the process and their technology keeps you informed and connected all the way through closing and beyond.
Description is taken from Mission Network Programs USA.
Good Girl Comeback is a nationally recognized, 501c3 approved nonprofit that empowers teens to set goals which build confidence, kindness, and personal fulfillment. The GGCB – through workshops, seminars, one-on-one mentoring, and volunteering – encourages girls to become independent thinkers and virtuous leaders, who see the goodness in themselves and others.
Description is taken from Mission Network Programs USA.
We believe that the future of Real Estate lies in technology and in service, and the future of real estate is now. Find your dream Home today! We are a team of leaders who have broken new grounds in the world of Real Estate; we have been functioning with an exceptional commitment in our field with strength, credibility, quality, and innovation. We believe in giving the very best to our clients and know a home is not defined by the size or color of the walls; it is about how you feel when you walk through the door.
Description is taken from Mission Network Programs USA.
Lucido Fine Jewelry was able to expand our reputation of quality, service, and commitment to the Metropolitan Detroit community’s clientele by consistently demonstrating our business principles. Since the establishment of our flagship store in Sterling Heights, we’ve added locations in Downtown Rochester and Birmingham through hard work and dedication. We look forward to extending a warm welcome to you and your family for generations to come.
Description is taken from Mission Network Programs USA.
Office Express, a woman-owned business, has been serving the business community since 1986. We seek to find win-win solutions to assist our customers in saving money, solving problems and increasing their business. We always do our best to deliver our products when our customers need them. We also value the people and suppliers who work with us, treating them as valued partners.
Description is taken from Mission Network Programs USA.
Nash’s Auto is a complete auto repair service provider in Shelby Township, Michigan. At Nash’s Auto, we believe in providing a fair and honest service to our customers. All our repair work is reliable and comes with a two year warranty or 24,000 miles on the road. We work hard to exceed customer expectations and will go the extra mile to ensure that your vehicle is properly repaired and ready for the road once you leave it with us for a service or repair. Let our experienced mechanics take good care of your vehicle!
Description is taken from Mission Network Programs USA.
At Neiman’s Family Market we have brought our family’s history with us. From Grandma Sophie’s recipes to the way we follow Grandpa John’s high standards in quality and customer service. Over the years we have followed two other rules: hiring exceptional staff to serve our guests and growing a deep relationship with the communities we serve.
Description is taken from Mission Network Programs USA.
Conclusion
We enjoy protecting and supporting our community just as much we enjoy protecting and serving our clients every day.
If you need help with your policy or want to know about the next run we would love to talk! Just use the contact form on this page to reach out.
Dec 18
How Your Auto Insurance Policy is Ripping You Off – And How To Fix It.
Zaid
Insurance has always been one of the most controversial subjects in the auto world. Of course, we appreciate the fact that it’s compulsory in all the 50 states. Because otherwise, imagine paying your medical bills, and probably even compensating other victims after an accident.
On the flipside, it seems like players in the insurance industry are having a ball, now that it’s impossible to avoid car insurance. Even with over 4.5 million vehicle accidents resulting in property damage, 1.7 million injuries, and 32,000 annual fatalities, insurance companies are still raking in huge profits.
Number of vehicle crashes per year. Source: Statista
Between the year 2011 and 2015, companies in the auto-insurance space lost more than $145 billion, mostly due to insurance fraud. But, it barely made an impact in the industry. Insurance firms are still pouring billions of dollars every year in television ads and digital media. Everyone is loving the status quo- except you, the consumer.
Annual Costs of Insurance Fraud. Source: Ohio Insurance Institute
If you’ve had that feeling in the pit of your stomach that auto insurance companies are probably taking advantage of you, you’re right. You’re only slightly wrong on the part about auto insurance companies. Because it’s not just them. It spreads across the board.
Everyone is ripping you off- from insurance companies, to vehicle repair shops, property agents, and even medical providers. While some blatantly defraud you, most of them are ripping you off legally. They capitalize on some interesting loopholes in the current legislation.
Take Michigan Auto Insurance Policy laws, for instance. Vehicle owners in this state pay the highest premiums in the country, so medical providers can pretty much charge exorbitantly for their services.
Whichever way you look at it, that has been how the bulk of their claims have been ending up.
Because of such cases, a third of millennials and 28% of vehicle owners in the U.S. believe that they are paying way too much for their auto insurance. The insurance companies are particularly fond of leaching off high-income earners since they are not frequent complainers.
Only 24% of vehicle owners earning more than $75,000 per year are not happy with their rates. Compare that to 37% of modest income drivers with income ranging between $50,000 and $75,000 per annum.
There are many interesting facts behind the smoke and mirrors. That’s why we’ve prepared the following guide, to help you finesse your way out of possible rip offs.
How Insurance Companies Are Ripping You Off
Failing To Factor In Car Depreciation
Unless you’re rocking an exceptional classic car, the value of your vehicle is consistently losing value with time, and every mile driven.
But some insurance companies don’t see it that way. You still continue paying the same premiums, even after your car has lost half its value.
Vehicle Depreciation Rates in The U.S. Source: Automotive Fleet
Insurance agents who support this concept argue that aging and increased mileage translates to more frequent repairs, and increase the risk of accident due to mechanical failure.
Well, of course, that’s laughable because, in actual sense, repair costs decrease with increase in a car’s age. Parts become readily available and mechanics continue to familiarize themselves with engine intricacies.
The best and most efficient way to beat this system is switching to ask your insurance agent to revisit your policy. Don’t waste your time, allow an independent agent to shop for your insurance.
Your independent agent will have multiple insurance companies assess your vehicle and charge you cheaper premiums according to its age. sticking to one insurance provider could have you losing way too much in 12 months, let alone 5 or 10 years.
Dramatically Increasing Rates After Accidents
If you assumed insurance providers hate car accidents, think again. Of course, they lose money by paying out claims.
But they immediately start recovering their losses by increasing your rates. And sometimes they even make more off you after an accident.
It’s a continuous, unending cycle. Insurance firms make a lot of money off your premium payments.
Then you’d be mistaken to assume that you’ve won the battle, when you receive compensation from cumulative payments. But when that is over, they increase rates as soon as you get behind the wheel again.
All things considered, this may be fair, since it covers an insurance company’s risk of insuring accident-prone drivers. But, in some cases, rates do not climb over time.
They shoot through the roof, punishing you for the accident. It may apply even to incidents which may not even have been your fault in the first place.
Average Insurance Penalty For Not-At-Fault Accidents. Source: Consumer Federation of America
This game is especially common among insurance providers who offer very cheap rates at the beginning. And you since you’ll assume that they are still the cheapest around, you’ll stick with them despite the high rates.
The only way around this is comparing rates offered by different insurance providers. Some companies may be lenient enough to provide coverage at way cheaper rates.
While this may seem like a pretty obvious thing to do, 38% of vehicle owners have not bothered to compare their auto insurance premiums within the last 3 or more years.
That’s according to NerdWallet, a personal finance website that sampled motorists across the country. Even more surprising is the fact that 17% of these drivers have never checked at all.
As a result, they are missing out on an average of $417 of savings per year. This is silly considering an insurance agent could do the legwork for effortless savings.
Evaluating Rates According To Credit Worthiness Rather Than Driving Habits
If there’s one outrageously ridiculous thing about insurance pricing evaluation, it’s the fact that it’s partly based on credit score. This is one area that you may end up mistaking an insurance company for a bank. They act like insurance claims are loans and financial grants.
Even a good and careful driver may end up paying high rates for a poor credit score. It’s even more amusing when you discover that poor, careless drivers with good credit scores pay lower insurances rates.
And no, this doesn’t just bump the rate up by a few bucks. Going by figures published by Consumer Reports, penalties for poor credit scores are staggering.
Crunching the numbers across the top five national insurers, they established that motorists with excellent credit scores were paying an average of $1409 annually, while good credit score drivers were shelling out $1712. Individuals with the poorest credit scores were paying an astonishing $3826 every year.
Unfortunately, apart from improving your credit score, there’s no other way of finessing your way out of this. It’s almost like the United States is hell-bent on basing everything on credit score. Soon they may even start issuing driving licenses according to creditworthiness.
Rejecting Claims On Incidences Affecting Pre-Existing Injuries
The subject of pre-existing conditions and injuries is not limited to auto insurance policies. All insurance providers, across all industries, always have a clause on pre-existing conditions. No company wants to be held liable for past injuries.
In layman terms, they don’t see themselves making a profit. And that’s understandable. Because whichever way you look at it, insurance is still a business.
But, there is a rather interesting grey area in this. Imagine an accident that aggravates a past injury or condition.
Consider a person paralyzed from the waist down for instance. A car accident may snap his spine further, causing paralysis from the chest down.
Now, of course, most auto insurance firms would counter the resultant claim, citing the clause on past injuries. If he’s not keen in following up, the victim may end up with zero compensation.
Fortunately, insurance legislation addresses this, through the “Glass Plaintiff” rule. The frailty of a victim is not a defense in a claim case.
That means you are entitled to full compensation if a vehicle accident aggravates a pre-existing injury.For fair compensation in future, have your doctor comprehensively document current injuries that your insurance company is aware of. In case of an accident, your insurance provider will have a hard time rejecting a claim on grounds that pre-existing injuries were not affected.
Offering Unnecessary Coverage On Rental Cars
If you’ve rented a car before, chances are salespeople pressured you to cough up extra cash for insurance. At first, it may seem like they are trying to protect their vehicles, or they care about your safety.
Sadly, it can never be further from the truth. Rental car salespeople get commissions from insurance companies for every cover sold.
That’s why they’ll never reveal that you won’t actually benefit much from most their insurance covers.
As a matter of fact, most salespeople continue pressing, and persistently offer alternative insurance plans if you reject their propositions. In the end, you’re forced to cave in and say yes because extra cover would hurt, now would it?
Reviewing and researching on such insurance covers would ultimately reveal that you probably didn’t even need them. You would have bought useless insurance, at rates higher than standard market premiums.
If you own a car with its own insurance plan, don’t even entertain the thought of insurance for rented vehicles. You’re already adequately covered.
That’s because rental car salespeople focus on two types of insurance covers:
Liability Insurance at $5 to $15 a day. It should cover damages to third party vehicles and people caused by the rental car.
Loss Damage Waiver (LDW) at $10 to $20 a day. It should cover the damages you might cause to the rented car.
Of course, these are very much essential to rented cars. We are not suggesting that you proceed to get a rental without both. However, your car insurance plan extends to cover these two.
They come with most auto insurance plans and adequately apply to rentals.
So, to avoid paying for unnecessary coverage, check with your current policy and confirm its boundaries and exceptions before approaching a rental car company. That way, you’ll be able to discern factual information from sales jargon by the attendants.
Conclusion
We’ve discussed many critical pointers. To help you remember, here’s a breakdown of the most important ones:
Even with over 4.5 million vehicle accidents resulting in property damage, 1.7 million injuries, and 32,000 annual fatalities, insurance companies are still raking in huge profits.
Between the year 2011 and 2015, companies in the auto-insurance space lost more than $145 billion, due to insurance fraud.
Everyone is ripping you off- from insurance companies to vehicle repair shops, property agents, and even medical providers.
A third of millennials and 28% of vehicle owners in the U.S. believe that they are paying way too much for their auto insurance.
Only 24% of vehicle owners earning more than $75,000 per year are not happy with their rates.
37% of modest income drivers making between $50,000 and $75,000 per annum complain about their insurance rates.
Get quotes every 6 months to a year from multiple insurance companies. Contact our independent insurance agents if you don’t have time to do it yourself.
Insurance companies start recovering their losses by increasing your rates immediately after compensation. And sometimes they even make more off you after an accident. Shop for a new policy or have an agent do this for you to minimize the increase in your premium.
38% of vehicle owners have not bothered to compare or have an agent compare their auto insurance premiums within the last 3 or more years. As a result, they are missing out on an average of $417 of savings per year.
Even a good and careful driver may end up paying high rates for a poor credit score.
If you have bad credit, you are paying 2.7 times more than a driver with excellent credit.
Through the “Glass Plaintiff” rule, the frailty of a victim is not a defense in a claim case. That means you are entitled to full compensation if a vehicle accident aggravates a pre-existing injury.
If you own or lease a car, your insurance covers your rental.
Although we’ve covered the major rip-offs, the auto insurance industry is extensive. And so are the laws regulating it. Different stakeholders continue developing new tactics to capitalize on the loopholes. So please feel free to share the ones we’ve not mentioned.