This article appeared in the Newark Star Ledger last week discussing the explosion of medical expenses on NJ auto insurance policies. This is beginning to have an adverse impact on rates.
http://www.nj.com/business/index.ssf/2012/01/nj_auto_insurance_rates_on_the.html
It’s often difficult to predict insurance rates into the future.
This article appeared in the Newark Star Ledger over the weekend pertaining to the extreme weather that has been affecting the Northeast over the last few years and the expected impact on home insurance rates.
http://www.nj.com/business/index.ssf/2012/01/insurance_experts_forecast_hig.html
Many home policies include coverage for building ordinance or law changes. If your home is damaged, very often changes need to be made to the house as part of the repair process that are mandated by new zoning codes. For example, if your home was damaged substantially by a tree that fell on it, you might need to change the set back of the home to conform to new zoning laws that had been enacted after the house was built. This could dramatically increase your cost of the repair.
This type of issue is not covered as part of a companies’ obligation to repair . You generally have 10% of the value of the home on the policy to pay for the costs associated with becoming compliant, which for something as drastic as a change in the setback from the street might not be sufficient for a New Jersey home insurance policy (for example).
Building ordinance or lawcoverage can be increased for an additional cost; higher end policies also will typically provide more coverage. Older homes that have not been completely overhauled are generally the most in need of building ordinance or law coverage. We recommend that you speak with your agent to determine if you should increase building ordinance or law coverage to be adequately protected.
In the past few years, New Jersey has been affected by an increasing number of large storms. We’ve seen many customers suffer damage to their homes caused by their sump pump failing and by outright flooding. As such, we are now suggesting that all Garden State homeowners carry NJ flood insurance or increase their sump pump overflow coverage, particularly if they have a finished basement.
Nearly all home insurance does not cover flood damage, and sump or sewer backup coverage is limited.
This post will focus on: sewer overflow, sump pump overflow and drain overflow.
Sump pump overflow coverage does not come automatically on most policies. Except on very high end policies, it needs to be added by your agent. Most companies limit the amount of coverage.
Sump pump overflow coverage provides you with coverage in the following circumstances:
This coverage will pay for damage to your building, contents, and for cleanup and sanitation.
All policies include a “concurrent causation” clause which states that if there are conditions of general flooding around the house the coverage will not respond. Companies may also impose other restrictions based upon their exact contract language and the style of policy you have, so be sure to check with your agent to understand how your coverage works before disaster strikes.
Other posts in our Truth About Flooding series:
In the past few years, New Jersey has been affected by an increasing number of large storms. We’ve seen many customers suffer damage to their homes caused by outright flooding. As such, we are now suggesting that all homeowners in NJ carry flood insurance or increase their sump overflow coverage, particularly if they have a finished basement.
Home insurance policies generally do not cover flood damage, and sump or sewer backup coverage is limited.
This post will focus on flood insurance and where applicable, NJ flood insurance.
Flooding is defined as water that penetrates your house from the ground. For example:
After a rainstorm, you discover water has come into your basement through cracks in the foundation
Water pools by a basement window on the ground and trickles into the basement
A local stream overflows its banks and flooding conditions exist around your house.
Note that broken pipes, water that penetrates your home from roof damage during the storm, or rain that enters from your siding or above ground windows is NOT considered a flood and would be covered under the terms of your home policy.
Generally speaking, as part of “concurrent causation,” flood conditions may invalidate the sump overflow coverage available on most policies.
Flood insurance is generally available by insurance companies and underwritten by FEMA. All of these policies, which comprise over 90% of all flood insurance sold in the US, work identically.
Flood zones are defined as X, B, C, A and V. If your community has elected to participate in FEMA’s program, and your property is in an X, B, or C zone, you can obtain insurance relatively cheaply – from $154 to $405 per year depending on the level of coverage you select.
If you are in an A or V rated zone, you are considered to be in a standard zone, and your price can run into the multiple thousands of dollars per year, depending on the exact zone type and the type and elevation of home you have.
Flood insurance generally limits the amount of coverage for items in your basement, and can have depreciation taken on claims if you do not insure to the maximum coverage available or the reconstruction value of your house.
Other posts in our Truth About Flooding series:
NJ Flood Insurance: Sump Pump, Drain and Sewer Overflow Coverage
In the past few years, New Jersey has been affected by an increasing number of large storms. We’ve seen many customers suffer damage to their homes caused by outright flooding. As such, we are now suggesting that all homeowners in NJ carry flood insurance or increase their sump overflow coverage, particularly if they have a finished basement.
Home insurance policies generally do not cover flood damage, and sump or sewer backup coverage is limited.
This post will focus on flood insurance pricing in preferred zones (those designated by FEMA as B, C or X):
Flood Pricing Table – FEMA policies
Dwelling Contents Premium
$20,000 $8,000 $154
$30,000 $12,000 $185
$50,000 $20,000 $236
$75,000 $30,000 $277
$100,000 $40,000 $304
$125,000 $50,000 $324
$150,000 $60,000 $343
$200,000 $80,000 $378
$250,000 $100,000 $405
DEDUCTIBLE: $1,000 for each – dwelling and contents.
Other posts in our Truth About Flooding series:
The Truth about Flood Insurance
NJ Flood Insurance: Sump Pump, Drain and Sewer Overflow Coverage
In the past few years, New Jersey has been affected by an increasing number of large storms. We’ve seen many customers suffer damage to their homes caused by outright flooding. As such, we are now suggesting that all homeowners in NJ carry flood insurance or increase their sump overflow coverage, particularly if they have a finished basement.
Home insurance policies generally do not cover flood damage, and sump or sewer backup coverage is limited.
This post will focus on NJ flood insurance coverage limitations in most basements. “Walkout basements” are generally exempt from such limitations, but check with your agent to be certain of your coverage.
Source: Fidelity National Document, September 2011.
If it is not on this list and it is your basement, it is not covered.
For more information on flood hazards, visit FEMA.
Other Posts in our Truth About Flooding series:
The Truth about Flood Insurance
NJ Flood Insurance: Sump Pump, Drain and Sewer Overflow Coverage
The Power Is Out And I Had To Throw Out The Food In My Refrigerator!
During the recent storms we’ve had, many homeowners have gone without power for extended periods of time. Many of our customers have lost food stored in their refrigerators or freezers as a result.
The truth about home insurance when it comes to food in your refrigerator or freezer is this:
As with any coverage, you should speak with your agent to determine how your policy would respond.
We often get asked about how a homeowner’s policy covers trees that are damaged or cause damage on a homeowner’s property. The following generally summarizes coverage on a typical home insurance policy for different scenarios for storm damage (your specific policy and claim may have differences):
The actual way in which a downed tree is covered depends a lot on how big the tree is versus the item damaged. A 100 foot tree that crushed a bicycle will not result in 100% debris removal coverage, but will only be covered in part. A claims adjuster from your insurance company must typically see the damage to make a correct assessment.
A higher end policy will often provide more coverage than this.
How can I be sure my home is valued correctly on my insurance policy?
With the present market conditions adversely affecting the sales price of homes throughout the country, many people are unsure how best to value a house for insurance. Here are a few facts to consider:
Your agent has tools available to properly value your house based upon the type of construction, the year built and the area in which you live.
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