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When it comes to various worthwhile and not so worthwhile homeowner's insurance add-ons, we presently have this information discussed in a number of different insurance threads. So, I thought I would start a new thread in which people can post their thoughts on some of the more worthwhile add-ons that they've come across.

For instance, to me the extended replacement cost endorsement is an absolutely essential one. The endorsement increases your dwelling coverage by the specified amount (depending on the endorsement and the company, it can be 125%, 150%, etc...). I consider it an essential endorsement, as during significant natural disasters that affect quite a few houses in the area, material and labor costs spike up, so even properly calculated building replacement costs may not be sufficient. It also protects you in the event the building replacement cost was miscalculated in the first place (remember that building replacement coverage is also used to pay for debris removal, which can be expensive).

Any other ones? What are people's thoughts, for instance, about purchasing flood insurance if they are NOT located in a flood zone? After all, according to all the statics that I am seeing, a significant percentage of flooding occurs outside designated flood zones and high flood risk areas.

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I thought about it and checked the price a few years ago and found the rate to be extremely high.

I figure if that "big" ... (more)

ZenNUTS (Mar. 02, 2013 @ 12:47p) |

Yes, just the minimum coverage allowed by law. I haven't had a moving violation or accident in 20 years. I was rolling... (more)

RiversideTom (Mar. 02, 2013 @ 5:29p) |

If you don't mind running the risk of causing an accident and being sued for everything you own, sure, stick with the mi... (more)

BobM73 (Mar. 02, 2013 @ 7:57p) |

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Sewer and drain backup endorsement.

Firearms rider....

I agree with the need to purchase the extended replacement cost endorsement, which, by the way, is way cheaper than increasing your dwelling coverage by the same amount (not that insurance companies would, in most cases, let you just increase your dwelling insurance coverage by 25%), so it is actually a very cost effective endorsement. A few years ago you could purchase a guaranteed replacement endorsement, which covered you regardless of the amount that it would cost to rebuild. A few companies out there still offer it but the vast majority only offer extended replacement endorsements.

I would certainly also get the replacement cost endorsement for your contents. In the absence of the endorsement, when it comes to your personal property insurance companies will only reimburse you for the ACV (actual cash value) of those items, which is the depreciated value of these things. Most personal property depreciates very quickly, so ACV coverage on personal property doesn't amount to much. The replacement cost endorsement for your contents tends to be very inexpensive and, to me, is a no-brainer in most situations.

A lot of people out there do not realize that most insurance companies no longer cover (or provide very limited coverage) for water/sewer back-ups. If you want this coverage, you have to purchase an endorsement. I think that we pay something like $25/year for a $25,000 water/sewer backup endorsement.

From 10+ years of adjusting homeowner losses, here are some in addition to the two mentioned above (both good ideas depending on the situation):
- Replacement cost coverage on contents (most base policies are actual cash value)
- Increased limits for jewelry for loss by theft, if applicable
- "Scheduling" expensive jewelry as that also usually gives you coverage if you just plain lose it
- Worker's comp endorsement (usually only a couple $$$, covers people working at your property if injured)

Many companies offer extended coverages as a bundle, so you may not need to buy each one individually.

As far as extended replacement cost, it depends on the value of the land too. If land is worth a lot, cleaning and rebuilding won't be as expensive as what your house is worth. That extra coverage also depends on your natural disaster risk vs. say regular fire burning house down case. That extended replacement cost is better though than having way too much coverage as it usually won't be as expensive.

I think the flood insurance depends entirely on your location. For example, if you're on top of a small hill with pretty good stormwater system, then maybe it doesn't make sense. If you're in an area that could get flooded easily given the appropriate conditions then it may be worth the premium. I'd find an older neighbor and ask them if they've seen flooding in all their time there. If it's not flooded in over 20+ years, maybe paying flood insurance premiums would be a waste, especially if you don't anticipate reasons for having it.

dnickerson said:   - Increased limits for jewelry for loss by theft, if applicable
- "Scheduling" expensive jewelry as that also usually gives you coverage if you just plain lose it
Right, if you just increase your jewelry insurance limits, you will have gigantic gaps in your coverage, as most policies will not cover things, such as "mysterious disappearance." Even if you do schedule it separately, some/many policies will still have gaps and won't be as comprehensive as standalone jewelry policies, such as Jewelry Mutual or, the gold standard in standalone jewelry coverage, Chubb.

Standalone policies are more expensive but one of the big advantages there, besides typically being much more comprehensive, is that a claim on a standalone jewelry policy won't affect your homeowner's insurance premiums.

Many companies offer extended coverages as a bundle, so you may not need to buy each one individually.Right, but don't just purchase these bundles without understanding what they include. Traveler's, for instance, previously tried to sell me one of their bundles. When I started asking questions, I quickly realized that a lot of endorsements included in the bundles duplicated my Traveler's umbrella coverage, so they were a waste of money.

If you are a collector of anything or have a significant investment beyond what the average homeowner might have, you will probably need a rider to cover it. For example, a policy might have modest coverage for your kid's comic book collection, but if you have a rare Superman #1, you're gonna need a rider. Same goes for guns, coins, stamps, artwork, jewelry, electronics, computers, furs, china, antique furniture, rugs, etc., even exotic fish or birds. Also, if you maintain any kind of inventory or samples in your home, you probably need additional coverage.

Bottom line - read your policy. If there is a limit or exclusion, and you have it, beef up your policy.

Shandril said:   I think the flood insurance depends entirely on your location. For example, if you're on top of a small hill with pretty good stormwater system, then maybe it doesn't make sense. If you're in an area that could get flooded easily given the appropriate conditions then it may be worth the premium. I'd find an older neighbor and ask them if they've seen flooding in all their time there. If it's not flooded in over 20+ years, maybe paying flood insurance premiums would be a waste, especially if you don't anticipate reasons for having it.You know, I kind of struggle with this one. We are not even close to being in the flood hazard area and have excellent stormwater drainage systems in the area, so we do not carry flood insurance. At the same time, a colleague of mine who lives in a different area but is also not in a flood hazard area had her house flooded even though the area had not been flooded in at least 60 years. This has given me pause.

For people who are worried about mismatched siding and roof (if they have vinul or aluminum siding, for instance, so that a partial replacement just won't match the rest of it; architectural shingles are in the same category) many insurance companies offer the matching undamaged siding and/or roofing coverage, which also often only runs $20-$20/year.

What are the thoughts on earthquake insurance in earthquake prone areas (like most of Cali)? I often think that most houses are built to withstand the vast majority of earthquakes, but I realize there is a risk there.

Also ... does equity in the house make a difference? If you are underwater (not from flooding ), or have very little equity in the house, does it fiscally make sense to be less covered by insurance because you may instead choose to walk away?

I have a potentially dumb question about flood insurance.
Do you need flood insurance to protect against "non-weather" floods?

I live in a cookie cutter subdivision next to a community park. One day I noticed an inch of water in one side of my backyard. I traced it to a busted main irrigation pipe in the park. I had to turn off the street main. I see a scenario where if I was on vacation it could have done some real damage if it got to the level of the door as we have very expensive hardwood floors downstairs.. I know the community HOA has insurance for this, but it made me think about some similar scenario that wasn't a traditional "storm flood" and if it would be covered by my regular homeowners insurance.......

dcwilbur said:   Sewer and drain backup endorsement.
How important is this if you have new-ish plumbing (<10 years old) and are connected to the city sewer?

thanks

The issue is that the larger city system can back up into your house pipes. So it's more a question of your city's plumbing than yours. You are at less risk if you have backflow devices, and don't have any below grade openings (like say a basement toilet.

dcwilbur said:   Sewer and drain backup endorsement.

This one esp if you have a basement. Also get basement/sump pump addon as well.

csdx said:   The issue is that the larger city system can back up into your house pipes. So it's more a question of your city's plumbing than yours.
If my city's plumbing backs up into my home, is the city liable?

You are at less risk if you have backflow devices, and don't have any below grade openings (like say a basement toilet.
How would I know if my home has any backflow devices? I do not have a basement.

thanks for your advice, csdx

We own an earthquake rider, near Portland. It's worth it to prevent a catastrophic loss, which is what insurance is really for.

beethovengirl said:   dcwilbur said:   Sewer and drain backup endorsement.
How important is this if you have new-ish plumbing (<10 years old) and are connected to the city sewer?

thanks
First of all, this endorsement is cheap - like $15 to $25 per year. In my experience, it is a lot easier to file a water damage claim and not have the insurance company arguing with you over where the water came from. Insurers will look for any way out of paying a claim, so getting these cheap riders on your policy is a good way to ease the claims process.

beethovengirl said:   If my city's plumbing backs up into my home, is the city liable?Good luck with that. You are much better off having your own coverage.

kmsandrbs said:   What are the thoughts on earthquake insurance in earthquake prone areas (like most of Cali)? I often think that most houses are built to withstand the vast majority of earthquakes, but I realize there is a risk there.

Also ... does equity in the house make a difference? If you are underwater (not from flooding ), or have very little equity in the house, does it fiscally make sense to be less covered by insurance because you may instead choose to walk away?

If you have no equity I'd certainly walk from a devastated and underinsured property .

In terms of EQ insurance I think it's a terrible value - I am almost directly on the fault line . I'd rather mortgage up the house and walk away than get EQ insurance . The bad thing about EQ insurance is the high deductible/ 15 or 25% , so for for my property value (about $500k insured replacement cost ) even with EQ insurance i would need to pay $75-125k out of pocket .

There is no option to buy a " small" EQ policy with say $100k limit so the deductible would only be $15 k


Also in my mind its far more likely to sustain 5 figure losses than complete destruction.

One angle to cover for this is if you have a significant other living in your home who is not a covered insured under your HO policy , they can purchase a renters EQ policy from the CEA. This only covers personal property , not the structure , but has a flat $750 EQ deductible . I could easily see having $30-80k of personal property damage in a large EQ and given the affordable premium of a renters EQ policy it can make financial sense.

Auto, homeowners' and umbrella insurance policies continue to be constantly revised by the carriers, so don't assume that just because an endorsement wasn't needed in the past that is still the case. For instance, our current umbrella policy provides drop down coverages for bodily injury (false imprisonment, libel, slander, etc...) subject to only a $1K deductible. Well, the same company's newly issued umbrella policies now include a $25K deductible for these things. This means that while a bodily injury endorsement to the homeowner's policy would've been a waste of money for us in the past, as that coverage is already provided under our umbrella policy, we would need this endorsement now if we were buying a new umbrella policy with the same company (or if the umbrella policy was getting reissued).

Likewise, our umbrella policy's deductible for property damage on the auto side is $50K. The same carrier's umbrella policy deductible is now $100K, so for new policies and reissuances, you have to make sure that your auto coverage is adjusted accordingly.

geo123 said:   Auto, homeowners' and umbrella insurance policies continue to be constantly revised by the carriers, so don't assume that just because an endorsement wasn't needed in the past that is still the case. For instance, our current umbrella policy provides drop down coverages for bodily injury(false imprisonment, libel, slander, etc...) subject to only a $1K deductible. Well, the same company's newly issued umbrella policies now include a $25K deductible for these things. This means that while a bodily injury endorsement to the homeowner's policy would've been a waste of money for us in the past, as that coverage is already provided under our umbrella policy, we would need this endorsement now if we were buying a new umbrella policy with the same company (or if the umbrella policy was getting reissued).

Likewise, our umbrella policy's deductible for property damage on the auto side is $50K. The same carrier's umbrella policy deductible is now $100K, so for new policies and reissuances, you have to make sure that your auto coverage is adjusted accordingly.


I know you meant personal and advertising injury instead of bodily injury.

ClaimsGuy said:   I know you meant personal and advertising injury instead of bodily injury.Right, I meant personal injury, not bodily injury.

I think "building codes coverage" is a worthwhile add on if your policy does not include that clause.

I might go so far as saying it's essential if your house is more than 30 years old.

Looking at getting homeowners insurance for the first time which likely will be from my auto insurance carrier, Wawanesa, and had a question...

I only carry the minimum auto insurance since my car is older paid off Crown Vic (actually a corolla) but they suggested I up my auto coverage limits since I am buying a house.

Thoughts?

RiversideTom said:   Looking at getting homeowners insurance for the first time which likely will be from my auto insurance carrier, Wawanesa, and had a question...

I only carry the minimum auto insurance since my car is older paid off Crown Vic (actually a corolla) but they suggested I up my auto coverage limits since I am buying a house.

Thoughts?


By minimum, do you mean the minimum liability coverage amounts???

Lots of people make that mistake on paid off cars.

psychtobe said:   We own an earthquake rider, near Portland. It's worth it to prevent a catastrophic loss, which is what insurance is really for.I thought about it and checked the price a few years ago and found the rate to be extremely high.

I figure if that "big" one hits, the fed will step in and give everyone $$$, like Katrina.

BEEFjerKAY said:   RiversideTom said:   Looking at getting homeowners insurance for the first time which likely will be from my auto insurance carrier, Wawanesa, and had a question...

I only carry the minimum auto insurance since my car is older paid off Crown Vic (actually a corolla) but they suggested I up my auto coverage limits since I am buying a house.

Thoughts?


By minimum, do you mean the minimum liability coverage amounts???

Lots of people make that mistake on paid off cars.


Yes, just the minimum coverage allowed by law. I haven't had a moving violation or accident in 20 years. I was rolling the dice in order to save some cash.

But now I am wondering if that is something I should change?

If you don't mind running the risk of causing an accident and being sued for everything you own, sure, stick with the minimum coverages.



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