Archive | October, 2010

Understanding Your Homeowner’s Insurance: Part 2

Inventory your expensive jewelry and watches, like this Rolex Submariner Chronometer

Take a look at your homeowner’s insurance lately? It’s wise to schedule an annual review of your homeowner’s insurance policy with your agent every year to clarify any changes or revisions.  But even without the helping hand of an agent, you should always be able to fully know and understand what your insurance policy entails.  A while back, BMR Insurance wrote a blog about the importance of understanding your homeowner’s insurance policy.  Having a general idea about your policy is great [link to first blog], but here’s the second installment to the series in which we will walk you through the complete format of homeowner’s insurance to better equip you with an understanding of the options you have.

Home Insurance Property Protection

Homeowner’s Insurance generally consists of two main sections.  In this blog, we will be reviewing the first section, Home Insurance Property Protection, which is split into four subcategories: Dwelling, Other Structures, Personal Property, and Loss of Use. These sections detail specifically which areas of your property are covered in the unfortunate event of accidents or perils.

Under the Dwelling section, homeowners’ insurance policies typically offer coverage against any damages caused to your dwelling, including your home, your home’s fixtures (built-in appliances, floors, lighting, etc), and any additional attached structures, like garages.  Dwelling coverage ideally provides the necessary compensation needed for any home reparation costs.

The Other Structures section covers additional structures that your home might have.  This may include fixtures such as detached garages, backyard sheds, swimming pools, gazebos, fences and driveways.

Of course, insuring just your home and its physical structures is not enough.  If you want to fully secure your home and personal belongings, opting for Personal Property goes without saying.  Personal Property coverage offers protection for the personal items and contents of your home. It is crucial to review your personally property annually with your agent to check if your insurance policy is adequate enough to cover the value of your belongings and property.  BMR Insurance also highly advises all homeowners to keep an updated and thoroughly-documented inventory of their personal belongings.  Keeping inventory of your personal belongings will make your life much easier during any claims or reimbursements.

The Loss of Use coverage reimburses you for any additional living expenses you may incur due to your home’s unlivable conditions.  These expenses can range from transportation fees to hotel and restaurant bills.   Loss of Use coverage is vital in helping alleviate financial burdens associated with finding temporary shelter while your home is being rebuilt.

These four sections are the essentials of what your homeowner’s insurance property protection covers. Thoroughly review your insurance policy and understand what is and is not insured.  If you have questions, make sure you ask your insurance agent, or  you can contact BMR Insurance today at (714) 838-1911 for a free insurance consultation.

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Has Your Home Insurance Left You Flooded?

Rains hit hard in Anaheim, causing flooding in the streets. Photo by Bruce Chambers, OC Register.

Unseasonal and heavy rains in Southern California over the past few days have left many homeowners and renters with significant water damage. Sadly, many of these people have found out that their homeowners or renters insurance does not cover for a flood, nor do they cover for sewer, drain or sump pump backups without adding a sublimit.

Whether you were one of the fortunate, covered and insured or one that experienced a “denied” claim for flood or backup, you should take the time to understand how these two important insurance coverages could protect your home and family before the rains are really supposed to hit California’s southland.

According to the website FloodSmart.gov, your home has a greater chance of being flooded than torched with fire. Yet it can be an ugly surprise to find out that your homeowner or renter’s insurance does not cover home or property damage from a flood—the only way you can be protected is to get a flood insurance policy from an insurance agent.

But you thought that flood insurance was only available to people with mortgages who live in high-risk flood areas? Think again. Actually, anyone can buy flood insurance, even if you only rent. Those in low-risk areas are eligible for flood coverage, according to FloodSmart.gov, and it can start as low as $119* annually for coverage for the building and contents. The average flood claim costs $21,000 (and that’s just one inch of water in 2,000 sq. ft.!), so you do the math. $119 a year to cover tens of thousands in repair, mold remediation and property replacement? The benefits of flood insurance are pretty clear.

Don’t think that flood coverage is a replacement for homeowners insurance, it’s more of an add-on designed to get a homeowner or renter back on their feet after tragedy strikes. Although California is short on basements, be warned that flood insurance is very limited on paying out for damages to basements, walkout basements and crawl spaces, or the property that is kept in them.

Another caveat: most flood insurance has a 30-day waiting period before it goes into effect. So don’t wait until the sky starts clouding up to call your insurance agent—call while the sky is clear and the ground is dry so that when the rain hits, you’ll be covered. Literally. For more information on flood insurance, call us here at BMR Insurance for a full explanation. For good ideas on flood prevention, visit the FEMA website.

Heavy rains, especially in an area unused to such downpours like Southern California, can cause flooding in sewers and drains. Ever looked at your toilet and realize that water can come IN through it from the sewer? No? Well it certainly can, and you can kiss your expensive carpet or hardwood flooring goodbye.

But you’re covered, right? Almost 70% of homeowners think that damage from a sewer, drain or sump-pump back up would be covered. And they’re wrong. Most homeowner and renters insurance doesn’t cover the damages for these type of events unless it’s been added to the policy as a sublimit or endorsement. Luckily for a low price, usually around $50 per year, you can add this coverage to your policy giving you between $2,500 and $50,000 worth of protection*.

When it comes to a potential of thousands of dollars in damages, it’s not smart to assume. Call BMR Insurance now at (714) 838-1911 to find out if you are covered. It’s a big enough surprise to find your living room furniture swimming in six inches of sewage; don’t let the fact that you’re not covered be the next surprise!

* These are estimates. To get a personalized quote with accurate figures for your property, please call BMR Insurance or check with your insurance agent.

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Insurance Doesn’t Cover Faulty Workmanship

Make sure that your contractor is licensed and bonded, and not just some kid off the street.

Did you know that commercial general liability insurance does not cover faulty workmanship of a contractor, but rather only subsequent damages that the faulty work could cause?  For example, say you call your electrician to install light switches in your business office.  Later, when the light switches break or don’t work, your insurance will not be able to cover you for your contractor’s poor workmanship.  However, if the light switches spark a fuse and burn down a wall, then your insurance policy will cover for these damages.  You could even go so far as to file a claim for loss of income because there was no light available for your business.

Another example is if you hired a contractor to install a new pool in your backyard.  The contractor doesn’t level the pool correctly, causing it to crack.  You won’t be able to file a claim for your contractor’s faulty workmanship.  However, if the crack causes the pool water to flood into your home, then your insurance company will pay out these damages.  Bottom line: your insurance company will pay out any damages caused by the contractor’s mistakes. You could still sue your contractor, but your insurance company will not cover the bad workmanship.

While it is understandable that there are mishaps with contractors and accidents that could happen throughout any home project, from an insurance company’s point of view, there is no way to insure something as unpredictable and variable as contractors.  Some contractors could simply just be careless, while others could unfortunately have malicious intent.  There is no way to gauge this, thus it is impossible for insurance companies to cover damages caused by contractors because of the unpredictable liability risk.

For this reason, BMR Insurance urges all homeowners to thoroughly screen their contractors before making any hiring decisions.  Look up your contractor’s license online at the Contractors’ State License Board and make sure that they are licensed and bonded.  If your contractor has employees, remember to check that they have workers’ compensation.  Most importantly, know and trust your contractors!  Taking these steps will help you to find trustworthy contractors and to avoid any calamities with your home and insurance.

If you have questions, make sure you ask your insurance agent, or  you can call BMR Insurance today at (714) 838 1911 or send us an email to arrange a free insurance consultation.

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Is the Texting Ban Working?

It's against the law!

A new study by the Highway Loss Data Institute [HDLI] suggests that the laws in California, Louisiana, Minnesota and Washington have done nothing to curb the amount of accidents caused by texting. In fact, it seemed that the laws banning texting have been associated with a slight increase in the frequency of car insurance claims. In the three out of the four states included in the study, crash reports had actually gone up.

These four states are not the only states to have banned motorists from using their phone to send or receive text messages; the District of Columbia was the first to do so in 2004, and today 30 states have imposed similar bans. Since California, Louisiana, Minnesota and Washington only recently adopted these laws, in 2008 and 2009, the HLDI compared their claims to each other, then to patterns of claims in nearby states without legislation banning motorists from texting. Continue Reading →

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