The 5 "W's" of Personal Lines Insurability

This month’s W : “WHO”

Many people take for granted or just don’t know how their personal insurance works. It is vitally important to know the basics of insurance as a consumer. Of course, your agent should be your resource for more detailed or complicated knowledge on insurance. It might be beneficial to look at the 5 W’s of insurance to gain an understanding of the basics of how your homeowners and auto insurance works. This month we will take a look at the first W: “WHO”!

WHO is covered?

Let’s look at the definition of an “insured” according to the policy. Think of the “insured” as the customer.

The most obvious person that is covered is called the “named insured” or the person or persons that are actually listed on the declaration page of the policy. In the case of married couples, sometimes the “named insured” is the husband, sometimes it is the wife, and sometimes both names are listed. It is important to note that while coverage is extended to a spouse that is not specifically named, only the named insured can file a claim, change the policy, cancel the policy, and is the person responsible for payment of the premium. Note that in order to be a named insured on a policy, you must have an insurable interest in the property. This is why your mortgagee must be named on the declaration page of your policy.

However, unlike commercial insurance, the “insured” on a homeowners policy may include more than just the “named insured” (listed on the dec page). Also included in the category of “insured” is any relative that “resides” with the person listed on the dec page. Most courts consider unmarried college students to be “residents” of their parents’ household, as long as they resided in the parents’ home prior to going to college, attend school full time, and are under the age of 24. Also included in the definition of “insured” are foster children and foreign exchange students under the age of 21 in the named insured’s care who live with the named insured.

In the homeowners policy, there is also some liability-only protection for others: anyone with custody of an insured’s watercraft or animals, insured’s employees or relatives using a covered vehicle, and other people using a covered vehicle on an insured location

In the case of an auto policy, you have coverage for the named insured as well as residents of your household related to you by blood, marriage or adoption. Also included are foster children who reside in your household and your spouse even when not a resident of your household (such as during a period of separate in contemplation of divorce). You are covered to drive ANY vehicle, not just those listed in the policy. There is also coverage given for ANY person driving “your covered auto”, or the auto listed in the declaration page of the policy with your permission.

Next month we will look at the next “W” in our series: “WHAT”!

Thank you for supporting Judge Fite Insurance Agency. We are here to serve you and your clients with superior knowledge and customer service. Our goal is for all of our clients to be properly covered and properly serviced. Also, remember that when you support the core services of Judge Fite Company, you are investing in the tools and technology to help you sell more homes. Please call us today for insurance information or advice at 214-446-2571 or insurance@judgefite.com.

Eric Fite, VP Judge Fite Insurance
214-446-2600
EricFite@judgefite.com

Working with an Insurance Pro

One of the main reasons that buyers and sellers choose to work with a REALTOR® is the peace of mind that comes with hiring a professional that knows the business and has experience in solving problems and helping people with their needs.

The same reasoning applies when looking for insurance. Working directly with a licensed agency is much more rewarding as a policy holder than other methods of obtaining insurance. When you work with an agent directly, they will identify your needs and offer you a product that meets you needs. When you order insurance off of a website, you don’t get the opportunity to ask questions about coverage, service or price. How do you know, with as complicated and different as policies are today, if this is the right policy that fits your needs? Are there gaps in coverage that exist because there wasn’t a live person to make sure that your exposures are covered? When you order insurance by calling an 800 number and sitting on hold for 20 minutes, you don’t know the person that will answer, they don’t know you or your account, and when you call back, you will most likely talk with a different person every time. Allowing an agency to look at your account offers more personalized service and avoids potential gaps in coverage.

Not only is it important to work with an agent to ensure you are properly covered, but it is also critical to make sure it is an independent agent. An independent agent is defined as one that represents multiple insurance carriers and can shop the market to find the policy that meets your specific needs at the best price available. When your independent insurance agent gives you a quote, you can have peace of mind in knowing that your coverage was shopped with multiple carriers and that you are being presented with the best solution and the best price. Also, when it comes time to renew your policy, your agent should be automatically shopping for you to make sure that the renewal is the best out there. Carriers change rates constantly, and just because one had the best rates last year does not necessarily mean their rates are the best this year.

Lastly, working with an independent agent allows for much more flexibility in what can be offered. Many insurance companies do not like homes over a certain age, or with a certain roof type, or if that owner has a certain kind of dog. However, working with many carriers allows independent agents to have other markets to go to for those hard to place risks, and they can successfully find a solution for your needs more effectively than a direct writer.

Make sure that when you are looking for insurance that you use an independent agent for the same reasons that a buyer or seller would want to use a professional REALTOR. The level of service, expertise and variety of products that is offered is far superior when you have an independent agent looking out for your needs. Thank you for your support of Judge Fite Insurance Agency. We are a member of the Independent Insurance Agents of Texas because we pride ourselves on being able to offer our clients insurance solutions that meet their needs at the best price in the market. Allow us to being working with you and your clients today!

For more information about insurance for you home, investments, vehicles, or business, contact Judge Fite Insurance today at insurance@judgefite.com or 214-446-2571.

How do I get the right insurance for my new home?

Ask lots of questions!

Question: I am purchasing a home and my mother will be living in it. Does that change the insurance that is appropriate for me?

Answer: Yes. You will have to change you insurance from homeowners to a landlords/fire policy. By the way this policy is for your protection, for your mother she should get a renter’s policy.

Question: I am purchasing a Town Home and I am getting conflicting information from everyone. What is the right insurance for me?

Answer: To be sure what coverage is right for you we would have to check with the Home Owners Association and maybe even review their By-Laws. In some cases you will need to only cover the inside of you home, while in some you need to cover the structure including the roof of the unit.

Question: When I purchase my new home, I will be renting my current home. Will my current policy cover my tenant?

Answer: No, what you have is a home owner’s policy and you must be the occupant. You will need a fire/landlord policy that provides you the proper coverage, while your tenant will need a renter’s policy.

Question: I am buying a foreclosure and I am getting a great deal. That should save me a lot on my home insurance right?

Answer: Not really. The replacement value that your policy is based on is the cost to fully replace the home if you have a total loss. Many times what people are paying for foreclosures does not come close to the cost to rebuild it.

Question: I have heard that if I have my home and auto insurance on the same policy I can save money.

Answer: Yes. Having your insurance with Judge Fite Insurance gives you the added benefit of this discount even if we have you with two different insurance carriers not just with one company. By the way auto and a home policy are never on the same policy but some times they are with the same insurance carrier.

Question: With all the rain and storms we have been having, I was wondering if I am covered for floods.

Answer: No, flood insurance is a separate policy and that coverage is not part of your home owner’s policy. Give us a call and we would be glad to give you a quote. You may be surprised how affordable it can be.

Question: What is the rating of the insurance company you will be quoting?

Answer: All of the insurance carriers we work with for home and auto are rated in the “A” category. If you should have questions about the process of the rating of insurance companies you can visit www.ambest.com.

The above examples are just a few of the reasons why you should select an Independent Agent like the Judge Fite Insurance Agency instead of an agency that only represents one insurance carrier work for you. We have over 30 appointments with insurance carriers and a service level to provide you more options, competitive quotes and answers to your questions.

For more information about insurance for you home, investments, vehicles, or business, contact Judge Fite Insurance today at insurance@judgefite.com or 214-446-2571.

Eric Fite, VP Judge Fite Insurance
214-446-2600
EricFite@judgefite.com

How much insurance should I get when I buy my home?

Some Insurance Tips for Buying and Selling Real Estate in This Market

What do you need to consider for your insurance needs when you purchase or sell in today’s market?

Selling can be a big challenge, and sometimes it involves a lot stress due to reduced values or personal tragedies. When canceling your policy due to the sale, don’t try to save a little money by making the cancellation effective on your closing date, but wait until you have moved out or have insurance at your new home. You want to have coverage for any short periods while you are a tenant of the new owners or when your personal property is in transit from your old home to your new location.

If you lose your home to foreclosure or a short sale, don’t forget to cancel your policy like above after you move out. Also ask for a refund for the remaining policy term. There is a chance you may get a refund, but it all depends on your mortgage company and insurance carrier’s policy terms.

While purchasing a home in today’s market, there is the great potential to get one priced below what it was worth just a few years ago or below its current tax value. Be very careful about the limits you insure your home for. It may appear to make good economic sense, but in reality your purchase price does not reflect the replacement cost for damages or total replacement of your home and personal property. Always make sure to have the correct limits in place to cover you in the event of a total loss.

There can be severe consequences for not having proper replacement limits of coverage in place. Even a partial claim, like damage to a roof, can result in a dramatic reduction in the claim amount paid by the insurance company if a property is not fully insured. At the time of loss, if the limit of liability on the policy is less than 80% of the full replacement cost of the dwelling, the insurance company will only pay a proportionate share of the full replacement cost.

Insurance carriers use sophisticated replacement cost calculators that work in the background to insure that your property has the proper amount of coverage. The calculators take into account several variables that are based on statistical history of loss, square footage, construction costs and zip code. Other variables, such as swimming pools, past claims history, and the age of the roof are determined on a case by case basis and may impact the premium.

If you think the replacement value is too high make sure you bring that to your agent’s attention so he or she can review with you the different factors that went into the calculation. Sometimes your agent can consult with an underwriter at the insurance carrier to come up with a more appropriate replacement cost amount.
One of the other factors when purchasing distressed or foreclosed properties is finding a good source of information concerning the history of a home. In many cases a Sellers Disclosure Statement is not available. In these cases make sure you ask the insurance agent you are working with to provide you with feed back on what is contained on the CLUE report.

C.L.U.E. stands for Comprehensive Loss Underwriting Exchange, which is a database featuring loss information submitted by 9 out of every 10 insurance companies. A C.L.U.E. report provides a history of about 30 different kinds of losses from wind damage to dog bites that have been filed against insurance policies covering a given property. The report provides information including the dates and types of losses and the amounts paid for each claim. This information is confidential in nature and can only be shared with the client, not a third party such as a real estate agent or loan officer.

The above examples are just a few of the reasons why you should select an Independent Agent like Judge Fite Insurance Agency instead of an agency that only represents one insurance carrier. We have over 30 appointments with insurance carriers and a service level to provide you more options, competitive quotes and answers to your questions.

For more information about insurance for your home, investments, vehicles, or business, contact Judge Fite Insurance Agency today at insurance@judgefite.com or 214-446-2571.