homeowners insurance http://www.wisebread.com/taxonomy/term/14201/all en-US You Need an Inventory of Your Stuff (and It's Easier Than You Think) http://www.wisebread.com/you-need-an-inventory-of-your-stuff-and-its-easier-than-you-think <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/you-need-an-inventory-of-your-stuff-and-its-easier-than-you-think" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000041416368_Large.jpg" alt="woman checklist" title="woman checklist" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Take this quick quiz:</p> <ul> <li>What is the serial number of your computer?<br /> &nbsp;</li> <li>How much did you pay for your gaming console?<br /> &nbsp;</li> <li>What is the dollar value of your record collection?<br /> &nbsp;</li> <li>What is the make and model of your flat screen television?<br /> &nbsp;</li> <li>How many tools are in your garage?<br /> &nbsp;</li> <li>How many of these questions can you answer off the top of your head?</li> </ul> <p>Now imagine your house has burned to the ground with all your belongings inside of it. During this crisis, would you be able to successfully come up with this kind of information for every possession you own? Could you do that off the top of your head?</p> <p>An up-to-date home inventory list should be part of everyone's emergency kit. Not only will it help you resolve insurance claims in your favor by substantiating lost, stolen, or damaged possessions, but it will ensure that you have purchased enough insurance in the first place to replace your belongings. (If you own a vintage house or a lot of collectibles, it's important that you consider buying <a href="http://learningcenter.statefarm.com/insurance/home/replacement-cost-vs-market-value/">replacement cost insurance</a>&nbsp;versus&nbsp;market value insurance). (See also: <a href="http://www.wisebread.com/8-surprising-things-covered-by-homeowners-insurance?ref=seealso">8 Surprising Things Covered by Homeowners Insurance</a>)</p> <p>There are a number of ways to inventory your belongings. Don't make this harder than it should be. Chose the method you are most likely to do.</p> <h2>1. Make a List and Check It Twice</h2> <p>You can be old school and use pen and paper or an Excel spreadsheet to record and describe each of your possessions. The description of each object should include the make and model number, when and where it was purchased, price paid, and its current condition. Or you can use an app such as <a href="https://itunes.apple.com/us/app/inventoryd/id588651470?mt=8">Inventory'd</a> or <a href="https://itunes.apple.com/us/app/iii-inventory/id475840890?mt=8">III Inventory</a> to photograph and organize your list of belongings.</p> <h2>2. Gather Evidence to Support Your Claim</h2> <p>Keep all receipts for expensive items. These should be part of your inventory.</p> <h2>3. Visual Aids Are Your Friend</h2> <p>Regardless of how you choose to create your inventory, I recommend that you also take photographs, at least of your big ticket items such as consumer electronics, collectibles, and furniture. Valuable items such as your computer and jewelry might require a separate insurance policy. Double check with your insurance company what items fall outside your general homeowners insurance policy.</p> <h2>4. Protect Your Dragon's Hoard</h2> <p>For jewelry, I take a tip from my jeweler and make full size color copies or scans of my jewelry pieces. In the event of theft, this will make it easier for the police, pawn brokers, and others to correctly identify my stolen baubles.</p> <h2>5. Make a Movie</h2> <p>If you have access to a video camera, you can also create a video tour of your home and all its contents. Pretend you're on MTV Cribs and give a running commentary on where you bought everything in your home and how much you paid for it. Shoot close ups of small items and read out serial numbers. Don't forget to mention fancy ceiling lamps, fireplaces, and other fixtures.</p> <h2>6. Be Thorough</h2> <p>Don't be daunted by this task! If you have a house that is packed full of stuff, it might be easier to inventory room by room as opposed to itemizing things by type. Start at the door of each room and work from top to bottom, clockwise around the space. Don't forget to itemize the contents of drawers and closets!</p> <h2>7. Store Your Inventory Off-Site</h2> <p>Once you've created an inventory list, make sure to keep a copy in a safe place outside of your home, like in a safe deposit box at your bank or at the home of a trusted friend. If your house is destroyed by a tornado, you don't want the only copy of your inventory list to be lost in the rubble.</p> <p>The copy can be photocopies of your original information, or a digital version that is stored on discs or a thumb drive.</p> <p>If you plan on storing a copy of your inventory online in cloud storage, make sure that your information is protected from thieves, who use the Internet to window shop for future victims. Double-check your security settings, create a strong password, and use third-party authentication tools. If you go this route and don't have a photographic memory, remember to make a hard copy of your password, user name, and site-key codes and store that information off-site.</p> <h2>8. Yes, It's Worth It</h2> <p>I will be the first to admit it: Inventorying the contents of your home is a tedious and sucky job. It's a lot of work spent in advance of a disaster that may never strike. So, what's the point?</p> <p>Creating an inventory is like having catastrophic insurance. It's something that no one wants to spend time and money on until disaster strikes. Then it's the best thing ever. If your house gets robbed, wouldn't you like to give yourself every chance of recovering your stolen treasures?</p> <p>In addition to saving your bacon, or, at least properly ensuring your bacon in the event of loss or damage, an inventory has two fantastic side benefits: as back-up evidence for tax deductions and as a decluttering tool.</p> <h3>Win a Fight With the IRS</h3> <p>Every year at tax time, I have no problem calculating the depreciation of my office equipment and assessing the resale value of goods I donate to charity. Because I did all the heavy organizational lifting for my home inventory list, I know exactly what needs to be deducted from my taxes and where to find the related receipts if the IRS comes knocking.</p> <h3>Inventory Your Home as the First Step in Decluttering</h3> <p>One of the most powerful organizational tools you can give yourself is an inventory list. Have you watched that beautiful nightmare that is the show Hoarders? Then, you know what I'm talking about. Documenting and touching every single material possession you own gives a detailed picture of your consumerism. Most people who do a full house inventory for insurance reasons, discover that their home is full of things they don't want or need.</p> <p>Don't try to declutter while you are doing the inventory. That kind of mission creep will lead to chaos. Make your inventory list first. You can go back through your home, room by room, drawer by drawer at your convenience.</p> <p>Be sure to update your inventory list periodically. When you bring new things into your home be sure to add them to your inventory list. When you donate or sell goods, remove them.</p> <p><em>Have you created an inventory of your stuff? How'd you do it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/max-wong">Max Wong</a> of <a href="http://www.wisebread.com/you-need-an-inventory-of-your-stuff-and-its-easier-than-you-think">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-surprising-facts-about-flooding-and-your-home">10 Surprising Facts About Flooding and Your Home</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rebuilding-after-a-disaster-create-a-home-inventory-now">Rebuilding After A Disaster: Create A Home Inventory Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-your-bank-pick-your-homeowners-insurance">Don&#039;t Let Your Bank Pick Your Homeowner&#039;s Insurance</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-online-tools-to-manage-your-money-in-under-10-minutes-a-week">5 Online Tools to Manage Your Money in Under 10 Minutes a Week</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-things-every-frugal-person-should-have-in-their-wallet">The 7 Things Every Frugal Person Should Have In Their Wallet</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Organization homeowners insurance inventory possessions Mon, 05 Jan 2015 12:00:08 +0000 Max Wong 1275171 at http://www.wisebread.com Don't Let Your Bank Pick Your Homeowner's Insurance http://www.wisebread.com/dont-let-your-bank-pick-your-homeowners-insurance <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-let-your-bank-pick-your-homeowners-insurance" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2744490002_7c858811f2_z.jpg" alt="homeowners" title="homeowners" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>If you're thinking about letting your home's property or flood insurance lapse because you think you don't need it or money's tight, here's a word of advice &mdash; don't. (See also: <a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don't Prepare For</a>)</p> <p>Your bank can make you pay for home insurance in what's called lender-placed or forced-placed insurance. And the worst part about it is that it could cost much more than insurance you can find on your own, about 5 to 10 times as much.</p> <p>The problem is because of what's called &quot;reverse competition.&quot; Instead of seeking cheaper policies, lenders may be motivated to collect commissions and other fees.</p> <p>&quot;In this case, the lender, who is not the ultimate payer, has an incentive to seek higher cost insurers that offer bigger kickbacks and benefits, rather than the lowest cost option,&quot; J. Robert Hunter, director of insurance for the Consumer Federation of America, told the New York Department of Financial Services.</p> <p>Besides being more expensive, lender-placed insurance policy may have limited coverage. For example, the policies typically do not cover personal items or owner liability.</p> <p>If you're thinking that doesn't sound right, you're not the only one. Regulators in New York, California, Texas, and Florida, as well as the federal Consumer Financial Protection Bureau, are cracking down on the practice and considering new regulations.</p> <h2>Watch the Paperwork</h2> <p>Sometimes homeowners have to pay forced-placed insurance because they mistakenly let their policy lapse in a paperwork oversight. Other times homeowners who never dropped their insurance get forced-placed insurance because their lenders or insurance companies fouled up.</p> <p>Even if they never let their policy lapse, homeowners can still go through a nightmare as they pay high insurance costs while trying to prove to their mortgage servicer that they always had their own policy.</p> <p>Ask Kevin McCarty, who went through over a year of wrangling to get his money back and fix the problem after a paperwork snafu prompted his lender to force-place insurance on his Florida condominium. His insurance agent accidentally sent the wrong policy to his lender, according to the banking magazine American Banker. The agent kept trying to fax the right policy and confirm receipt, while the lender billed McCarty for its more expensive insurance.</p> <p>&quot;It was a very, very frustrating &mdash; from a consumer perspective, enormously frustrating &mdash; experience,&quot; McCarty told American Banker.</p> <p>Unfortunately for banks, McCarty is the insurance commissioner of Florida.</p> <p>The state insurance agency recently started investigating bank and insurance links over forced-placed insurance. Banks maintain they receive the same commissions that agents selling directly to homeowners get, but the insurance commissioner doesn't seem to be buying that argument. You might wonder if McCarty holds a grudge or why Florida didn't start the investigation earlier, considering the state accounts for 40% of the forced-placed insurance market.</p> <h2>Hazard and Flood Insurance</h2> <p>Lenders naturally insist that borrowers carry property insurance, also known as hazard insurance, to protect their loans. If a house burns down, the homeowner probably won't keep paying the mortgage. Homes located in a National Flood Insurance Program Special Flood Hazard Area are required to carry <a href="http://www.wisebread.com/10-surprising-facts-about-flooding-and-your-home">flood insurance</a>.</p> <p>When you buy a home, you sign documents spelling out what must be covered and how proof of coverage will be submitted to the lender or its loan servicer. Mortgage contracts typically allow lenders to buy property insurance dating back to the last date when they think the homeowner had insurance. They'll send you the bill &mdash; and it could be a large one. And if you don't pay it, you could be at <a href="http://www.wisebread.com/how-to-avoid-foreclosure">risk of foreclosure</a>.</p> <h2>Tips for Avoiding Forced-Placed Insurance</h2> <p>To avoid a forced-placed insurance headache...</p> <ul> <li>Be sure to pay the bills on time.<br /> &nbsp;</li> <li>Review all paperwork you get from your lender and insurance company.<br /> &nbsp;</li> <li>If you pay insurance through a mortgage escrow, watch for a jump in the total monthly payment &mdash; it's a red flag for an insurance issue.<br /> &nbsp;</li> <li>Make sure you don't send insurance verification to the wrong address, a common mistake when lenders often use third-party loan administrators.<br /> &nbsp;</li> <li>If you change insurance companies, make sure there's no lapse between policies.<br /> &nbsp;</li> <li>Consider notifying your lender of any change and provide proof of coverage directly, instead of waiting for a copy to be mailed from the new insurance company.</li> </ul> <p>If you're stuck in a quandary, you can contact your state insurance department.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/dont-let-your-bank-pick-your-homeowners-insurance">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to Retirement?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don&#039;t Prepare For</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-to-finance-a-tiny-house">3 Ways to Finance a Tiny House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Real Estate and Housing homeowners insurance mortgages Fri, 02 Nov 2012 09:48:38 +0000 Michael Kling 955162 at http://www.wisebread.com 9 Costly Things New Homeowners Don't Prepare For http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-costly-things-new-homeowners-dont-prepare-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new-homeowners.jpg" alt="New homeowners" title="New homeowners" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>When you&rsquo;re buying a new home (and that could be a new build or a used home that&rsquo;s new to you) you are caught up in a whirlwind of things to do, people to see, papers to sign, and plans to make.</p> <p>Most of all, you&rsquo;re excited. And rightly so.</p> <p>Then, moving day comes. Once all the boxes are unloaded, and the furniture is shoved roughly into the right rooms, you grab a coffee and take a breather. And that&rsquo;s when it dawns on you. This is only just the beginning.</p> <p>As a new homeowner, there are whole lists of things you need to take care of, and almost all of them cost money. Sometimes, a lot of money.</p> <p>So, if you&rsquo;re planning to buy a new home, have just signed the paperwork, or are moving in next week, this list is for you. And if you know someone who's moving in, be a buddy and warn him or her as well.</p> <p>Note: The figures next to the titles are rough guides based on an average sized U.S. home (2,700 sq. ft.) with a typical yard (1/5<sup>th</sup> of an acre), but obviously they could be much higher or lower depending on the size of your home, its location, and the condition it&rsquo;s in.</p> <h3>1. Window Coverings and Treatments &ndash; Up to $2,000</h3> <p>&ldquo;Oh, look at all the windows! It&rsquo;s so bright, so spacious, the views are lovely!&rdquo; Well, yes they are. But you don&rsquo;t want people viewing you at night, or looking in whenever they want, so all those windows need coverings. If it&rsquo;s a new home, you&rsquo;re going to be spending hundreds (and probably thousands) of dollars on blinds, curtains, curtain rods, tie backs, valances, and shades (even more if you're not too handy and have to have someone come and fit them for you). If it&rsquo;s an old home, you may be fine for a year or two, but you&rsquo;ll need to decide if you want to live with the old owner&rsquo;s treatments or have your own. To offset the high costs, remember to look for deals on blinds and other window coverings long before you move in.</p> <h3>2. Landscaping and Groundskeeping &ndash; Up to $30,000</h3> <p>Walking around new neighborhoods, you see all sorts of beautiful landscapes. And often, on new builds, the landscaping at the front of the house is included in the price. Hurray! Oh, but then there&rsquo;s the back. And there, almost always, you&rsquo;re on your own. Depending on the size of the yard and the HOA rules and restrictions, you could be looking at $10,000 - $30,000 worth of landscaping materials and labor. Want a deck or a patio? That&rsquo;s even more money. And then you may need sprinklers, irrigation, and other services. If you move into an old home, that&rsquo;s no guarantee of a great yard. Many foreclosed homes may have been left vacant for a long time, and a once attractive yard could be a wreck, if it was even finished in the first place. So, do your homework. See if you can hustle the homebuilder for a finished back yard too, or ask the seller to drop the price to cover landscaping. If it's foreclosed, a short sale, or some other kind of repo, guess what? Yep, you&rsquo;re on your own. Time to dig into the savings.</p> <h3>3. Major Appliances &ndash; Up to $10,000</h3> <p>New home builds usually include a dishwasher, microwave, and stove, with the option of a fridge/freezer, washer, and dryer. They are basic, unless you opt for the upgrades in your contract, but if you do, they could add a chunk to your monthly mortgage payment. If you buy a used home, you may not have any appliances included, especially on a repossession, short sale, or foreclosure. You could always hunt around on Craigslist for used appliances, but they won&rsquo;t come with a warranty. So figure on spending a nice chunk of change when the time comes to upgrade.</p> <h3>4. HOA Fees &ndash; Up to $700 a Month</h3> <p>Many new homes come with a Home Owners Association, and most used homes have HOAs as well. In theory, they&rsquo;re a sound idea. They are their to keep the neighborhood looking great, and deal with trash collection, playgrounds, community pools, street lighting, common areas, snow removal, and so on. Of course, in practice many people hate the HOA because they extend their reach far beyond what most people consider fair. They can tell you what colors you can and can&rsquo;t paint your house, what type of blinds and window treatments are allowed, what you can and can&rsquo;t put in your yard, and the list goes on. Oh, and it costs you. A typical HOA can run $100 a month. Some are just a few hundred a year, while in the higher-end neighborhoods, you may not see much change out of $1,000 every month! Did you see that one coming? Before you buy, make sure you know what the HOA dues are, but remember, they can go up annually and you have little say in the matter.</p> <h3>5. Furniture &ndash; Up to $20,000</h3> <p>That&rsquo;s a very rough estimate. Clearly your particular tastes can range from Ikea to custom-built furniture, but what you need to know is that most homeowners completely underestimate the amount of furniture they&rsquo;ll need. This is especially true when moving into a bigger home. You may now have two areas for relaxing, a living room and family room. You could also have a den, a library, a nook or study, extra bedrooms, guest rooms, or even a game room. Depending on what you&rsquo;re moving into, you could have a very empty-looking house that needs to be filled. Get ready to go shopping.</p> <h3>6. Insurance &ndash; Up to $2,000 Annually</h3> <p>There are a few different types of insurance you need to have when buying a home. First, you must have homeowners insurance. The average cost of this is around $700 annually, but this again varies by state. If you live in a duplex or other type of connected building, the insurance may be covered in your HOA dues or your monthly escrow. You should also have contents insurance, based on the value of your possessions. You could, of course, skip this payment. But if tragedy does strike, you could lose everything.</p> <h3>7. Property Tax &ndash; Up to $10,000 &nbsp;</h3> <p>When it comes to property tax, a lot of people get sticker shock a year after they move into a new construction. The reason for this is simple; the taxes are based on the empty lot the home was built on. But a year later, the assessors come around and put a new valuation on the lot, which now has a beautiful home sitting on it. Many people see their initial tax payment double, or even triple, in just one year. You can also face much higher taxes based on the particular school district you live in. And of course, taxes vary greatly by state. The average property taxes paid in New Jersey are almost $8,000, as opposed to $2,000 in Colorado.</p> <h3>8. Utilities &ndash; Up to $400 Monthly</h3> <p>Again, if you live in the Playboy mansion that figure will be greater. And in a new one-bedroom apartment, much less. But on average, when moving into a new home, you will see utility bills in the hundreds of dollars. This can be quite a shock, especially if you were formerly in a small apartment or even living with your parents. And what&rsquo;s worse, depending on when you move in, you could really get a wake-up call. Bills in the summer months can come with higher rates, so you may budget based on the winter bills, only to be unprepared for summer. The best thing you can do to prepare is ask the utility companies for the history of the property, if it&rsquo;s used. If it&rsquo;s new, ask neighbors who have already moved in what they&rsquo;re paying. If you're first on the block&hellip;good luck!</p> <h3>9. Repairs and Maintenance &ndash; Who Knows!</h3> <p>I saved the worst till last. One of the biggest unknown expenses of owning a home is the repairs and maintenance costs that can hit you out of nowhere. If you were formerly renting, that was all taken care of. Now it&rsquo;s all on you. If the boiler blows up, you pay. If the roof leaks, you pay. If strong winds blow your fence down, you pay. If vandals put rocks through your windows, you pay.</p> <p>Basically, you pay. And these bills can be steep. You&rsquo;ll soon find out that hourly labor costs for plumbers, electricians, and builders are usually a lot more than the hourly wage you get paid. There are standard call-out charges, which you pay before they even look at the problem. It can be a nightmare. You can, of course, buy insurance to cover appliances, boilers, A/C units, and so on, but there are deductibles to pay. And like any insurance, the small print can really bite you.</p> <p>Are you a new homeowner? Did a situation or expense recently pop up that you were not planning for? Let us know.</p> <p><i>This article was made possible by the support and inspiration of&nbsp;<a href="http://www.genworth.com/content/products/home_ownership.html" target="_blank">Genworth Financial</a>, a S&amp;P 500 insurance&nbsp;company with more than $100 billion in assets</i><em>. Check out Genworth's website for more information on their&nbsp;<a href="http://www.genworth.com/content/products/home_ownership/mortgage_insurance.html">mortgage insurance</a> and <a href="http://www.genworth.com/content/products/home_ownership/reverse_mortgage.html">reverse mortgages</a>&nbsp;products.</em></p> <p><a href="http://www.genworth.com/content/products/home_ownership.html"><img width="605" height="454" alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u4/genworth-ad-605.jpg" /></a></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really Costs to Own a Home</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/home-details-i-overlooked-the-first-time">Home Details I Overlooked the First Time</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-you-should-always-buy-used">8 Things You Should Always Buy Used</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-shouldn-t-buy-a-home-if">You Shouldn’t Buy a Home If…</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-terms">21 Real Estate Terms Every Home Buyer Should Understand</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cost of homeownership first time home buyer furniture home improvement homeowners insurance new homes Fri, 18 May 2012 10:36:08 +0000 Paul Michael 929147 at http://www.wisebread.com 10 Surprising Facts About Flooding and Your Home http://www.wisebread.com/10-surprising-facts-about-flooding-and-your-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-surprising-facts-about-flooding-and-your-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/flood_house.jpg" alt="Man in front of flooded home" title="Man in front of flooded home" class="imagecache imagecache-250w" width="250" height="134" /></a> </div> </div> </div> <p>We think, for now, that we have narrowly survived a <a href="http://www.thefreelancefarmer.com/2011/06/big-flood-of-2011.html">flooding of our home</a>. Located just three miles from the Missouri River, we have witnessed the swelling of her waters and the panic that has gripped our neighbors. Questions and rumors have buzzed for weeks, causing me to have to research quite thoroughly to find the facts about how rising waters could affect my home and three acres of farm land. Thankfully, I believe we will be spared the heartbreak of losing our home, but I&rsquo;m glad to have learned these ten vital tidbits. (See also: <a href="http://www.wisebread.com/why-you-should-have-renters-insurance">Why You Should Have Renters Insurance</a>)</p> <h3>1. You are likely not covered.</h3> <p>That&rsquo;s what we learned when we checked our homeowners and rental coverage policies. It turns out that most home insurance coverage plans in the U.S. don&rsquo;t have to cover flooding, damage from rising waters, or even mold from flood waters that don&rsquo;t come into contact with your home or contents. To seek protection, you will likely have to purchase a separate policy written specifically for flood coverage.</p> <h3>2. Flood coverage doesn&rsquo;t have to be expensive.</h3> <p>A common excuse for failing to get coverage in the past has been that it is too pricey for most homeowners. With the offering of the <a href="http://www.floodsmart.gov/floodsmart/pages/about/nfip_overview.jsp">National Flood Insurance Program</a>, however, it is possible to get coverage in certain communities for less than if you bought from a private issuer. (We pay less than $300 a year for our coverage.) It&rsquo;s important to note that if your community doesn&rsquo;t participate, you will not be able to receive coverage through the NFIP plan. Contact your insurance agents for details.</p> <h3>3. Flooding can happen to anyone.</h3> <p>One of the reasons we held off on getting flood insurance is that we were not considered to be in a flood plain. In over 100 years, the waters never came near us, and we didn&rsquo;t see it as necessary. Fast forward to the announcement by the Corps of Engineers that they would be releasing record amounts of water from the dams north of us and combine it with the record rainfall our area received. Now we were faced with an unprecedented possibility of flooding.</p> <p>In addition, flood maps change every year, making a home that was previously considered &ldquo;safe&rdquo; a candidate for being affected by changing water patterns. Floods can be caused by bodies of water that leave their boundaries, heavy rainfall, breaking dams and levees, or weather patterns like hurricanes and tropical storms.</p> <h3>4. Forget about the basement.</h3> <p>Even the most comprehensive coverage will likely not cover anything stored below the main level of your home. This includes basements, crawlspaces, and cellars. If anything is covered, it will be limited. (Remember, many homes contain a large portion of square footage in large &ldquo;walkout basements.&rdquo; These areas are subject to limited coverage as well.)</p> <h3>5. Being compensated for 100% of what you lose is unlikely.</h3> <p>The government-issued policies don&rsquo;t cover everything you lose, and even if private insurance has you covered, there will be a deductible to pay. If you walk away from a flooding situation with the assumption that you will get a big check to replace everything with new items, you will be disappointed, to say the least. As with most policies, you must have proof of the items you lost, and not all items will be able to be repurchased at the replacement value. (Besides, what kind of price can you put on old family photos, jewelry that&rsquo;s been in the family for generations, or your <em>Star Wars</em> memorabilia?)</p> <h3>6. You will have to wait.</h3> <p>There is a 30-day waiting period for any new policy issued under the plan. If you buy coverage on June 1, for example, your coverage will not start until July 1. It&rsquo;s important to get coverage immediately if you suspect you will be at risk for flooding in the near future.</p> <h3>7. Once the flooding starts, it&rsquo;s too late to get coverage.</h3> <p>Additionally, the flooding coverage does not cover &ldquo;flooding in progress.&rdquo; What this means is that once a flood event starts, coverage must already be in place. An excerpt taken from a <a href="http://www.iiaba.net/VU/NonMember/ThompsonFloodInProgress.pdf">recent FEMA memo</a> (PDF) further clarifies this policy, as it specifically addresses the Missouri River Flood of 2011:</p> <blockquote><p>The exclusion is triggered on the date and time of the flooding event...Specifically, FEMA considers it triggered by the earlier of the following situations:</p> <p>A. The community where the insured building is located first experiences a flood</p> <p>B. The date and time of an event initiating a flood that causes damage, including but not limited to: a spillway is opened, a levee is breached, water is released from a dam, or water escapes from the banks of a waterway (stream, river, creek, etc.).</p> </blockquote> <p>In laymen&rsquo;s terms, if flooding is caused by opening dams (in our case), once those dams are opened, the flooding event has commenced and new policies will not likely be honored. (Flooding events can occur up to six months before actual damage is sustained &mdash; just another reason to get coverage BEFORE you need it!) <em>FEMA encourages insurance professionals to go ahead and file claims that may not be covered due to this exclusion, but admits that compensation will be made on a case-by-case basis.</em></p> <h3>8. Federal disaster assistance won&rsquo;t cover much.</h3> <p>Yes, you can likely apply for help if your home is damaged or destroyed by flooding, but the money will not be enough to make your home &ldquo;good as new.&rdquo; The government estimates that the average bill for residential flood damage is around $48,000 and actual payments from FEMA funds range from $1K to just enough to get your home livable again by legal standards.&nbsp;(It will not cover things like paint, carpet, or the contents of your home.) Homeowners are encouraged to not rely on FEMA help or other government programs to make them whole after flooding, and it is best to anticipate a lengthy waiting period between when you apply for funds and when you actually see them.</p> <h3>9. Accepting assistance changes the game.</h3> <p>If you do apply for and receive grants or loans to put your home back in order, you will be required to carry insurance moving forward &mdash; and indefinitely. According to the NFIP website, &ldquo;you must cover the building for flood insurance for as long as you own it. Should you sell the building, you are required to inform the new owner of the necessity to purchase and maintain flood insurance. Failure to carry flood insurance could result in the denial of future federal disaster assistance.&rdquo;</p> <h3>10. Mitigation is still the best policy.</h3> <p>Even if you carry a high-value policy with enough coverage to get a new home after a flood, it&rsquo;s a good practice to try to avoid as much loss as possible. Errors can occur, either when issuing a policy or when it comes time to file a claim. Even if you are confident that your damage will be covered, it&rsquo;s easier and less costly to everyone to move your valuables out of the flood area and to a safe level of your home or outside storage. (Note: <a href="http://www.wisebread.com/5-ways-self-storage-units-are-more-sad-museums-than-savvy-solutions">Storage units</a> are a hot commodity during flood events. Please be certain that any unit you rent is out of the flooding danger area, and become familiar with coverage of those items. Many policies don&rsquo;t cover items stored offsite, and unit owners are not responsible for damage to items stored on their property.)</p> <p><em>These facts have been acquired, in part, by information obtained by <a href="http://www.floodsmart.gov/">FloodSmart.gov</a>, the official site of the NFIP &mdash; as well as my own experience. Please contact your insurance agent for any specific questions about flooding and your property.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/10-surprising-facts-about-flooding-and-your-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/uglify-your-stuff-to-keep-it-safe">Uglify Your Stuff To Keep It Safe</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-need-an-inventory-of-your-stuff-and-its-easier-than-you-think">You Need an Inventory of Your Stuff (and It&#039;s Easier Than You Think)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-surprising-things-your-homeowners-insurance-doesnt-cover">9 Surprising Things Your Homeowners Insurance Doesn&#039;t Cover</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/did-office-max-hire-an-accountant-with-an-i-q-of-62">Did Office Max hire an accountant with an I.Q. of 62?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/don-t-cash-that-insurance-check-it-may-not-be-yours">Don’t Cash That Insurance Check; It May Not Be Yours</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Home Insurance disaster preparedness flooding homeowners insurance Fri, 24 Jun 2011 10:36:21 +0000 Linsey Knerl 591363 at http://www.wisebread.com