Whenever I go out of town my insurance brain comes with me. Nerd Alert! I cannot seem to turn it off. No matter where I go, or what I do I see risks right in front of me. I remember when I was a volleyball coach, see here I am mid game. We probably weren’t winning at this particular moment, I do not like to lose! Anyways, I was out of state for a tournament, and while I was en route to the gym I couldn’t help but stare at all of the homes that lined the freeway I was on. I wasn’t staring at these houses because they were gorgeous; I was staring at them because they reminded me of writing long memos to my customers about making repairs to their home.
These houses were bad. I mean, pretty bad! And it wasn’t just one! Several houses in a row, for a while, were in such poor maintenance I couldn’t believe they were livable or why people wanted to live there. Hey to each their own, right?! Each house had paint peeling, roof shingles lifting and or curling, the yard was completely overgrown and also covered with junk. All of these things and then some, are risks to an insurance company. Why? Because they could cause a loss of some sort! And as a homeowner, you’ll want to do everything in your power to NOT have a loss.
As we drove along my insurance brain kept writing memos to these homeowners. “Dear So and So, Please trim the tree branches that are overhanging and or touching the roof and provide photos….etcetera, etcetera.” The Insurance Companies aren’t asking for everyone to have a pristinely manicured yard, or require that you hire someone else to do that for you, but they do expect you to properly maintain your home. As a homeowner, you have a responsibility to make sure your home is well, maintained! That doesn’t mean you have to have a Stepford Wives house and yard, but it does mean a properly maintained home. What I mean by that is you are responsible for keeping everything working smoothly in order to prevent a loss. I mean everything! Make sure you are checking the interior and exterior of your house every so often to make sure that hazards are removed, repaired or replaced.
I mention in every post that insurance is to protect you from financial hardship. It also exists to cover “covered” losses that are sudden and accidental. For instance, the classic leaky pipe scenario. If you have had a leaky pipe for a few weeks this would be categorized as an existing condition and considered maintenance of your home and may not be covered. Now if you have a pipe burst then we have a different story.
A few years ago this happened to a family member of mine who has a secondary residence in the mountains. This family member had been out of town during the holidays visiting relatives and had been away from their primary residence and secondary residence. A neighbor at their secondary residence went into to check on their home and boom, walked into a house full of really cold water. Not the best thing you want to deal with during the holidays, but it does happen. This photo isn’t the exact pipe, but it does show what can happen if your pipes freeze. Now, this wasn’t a situation of not properly maintaining the pipes, in this case, the pipes had frozen but my point is losses can happen and they can be costly. You’ll want to pay your deductible amount instead of replacing and repairing the whole thing, I know I would rather pay a $500 deductible than an out of pocket $12,000 water loss.
If you do have a homeowners claim, it will most likely be subject to your deductible. There are some additional endorsements that can be added on to your policy for an additional premium that would give you a zero dollar deductible, or a specific deductible for a specific incident should you have a loss. If you don’t know what an endorsement is click here for our video about homeowners endorsements. You’ll want to assess your damages and then get an estimate of the damages to make sure that the loss is over your deductible. For instance, if you have a $500 deductible and your loss will be $450 to repair you would be responsible for paying to repair that loss. If your loss is $550 you may choose to not to turn it in because you’ll still be paying the first $500 and the company will only pay $50. Homeowners losses tend to be more significant so if it is something minor you may not want to turn it into the company.
Some companies now are beginning to surcharge for home losses. It is kind of equivalent to an auto policy if you’ve ever had a ticket or accident and your rate increased at your following renewal. Every company is different and every policy is different so when I say “kind of” I mean “kind of” like that situation because the premium change amount will differ. It all depends on the loss, the policy, the insured and the company. If a company doesn’t have a surcharge you could lose a claims free discount so either way, your rate could change after you turn in a home claim. Depending on the carrier the loss could stay chargeable on your policy or remain without a loss free discount for up to 3-5 years. This is why I mentioned earlier if the loss is minor you may not want to turn the claim in.
The best way you can avoid a loss is to properly maintain your home on a somewhat regular basis. But sometimes you just cannot avoid them. It’s almost like that saying about going to the dentist, or to the doctors for a check up. I’m pretty sure it’s no wives tale that if you go to the dentist twice a year for a cleaning along with daily self-hygiene you can prevent a major issue. Or “an apple a day keeps the doctor away”, Preventative Maintenance everyone!
You’ll want to do as best you can to keep your home in working order. My husband and I are always doing something. The list never seems to end, but at the end of the day, we get to enjoy our home; which is exactly what you should do. When I think of those homes out of state in such bad shape I can only imagine the losses that could happen, and oh yeah all the memos! Maybe the homeowners don’t care, or maybe they aren’t insured who knows. I hope I just caught all of those homes on a bad day, hey homes can have a bad hair day too right? Insurance Brain – OFF!
American Diversified Insurance Services, Inc
201 Natoma St Folsom, CA 95630
P: (916)985-7500 F: (916)985-7302 T: (916)389-1820
E: firstname.lastname@example.org W: www.amerdiv.com