What Makes Home Insurance Expensive?

Insurance carriers take hundreds of factors into consideration when calculating premiums. Here are the six things that make the biggest difference to your home insurance rate:

  1. The location of your home: Texas is prone to hurricanes, and past events have shown insurers that homes close to the coast or to large bodies of water are more likely to incur losses. Consequently, these homes are more expensive to insure against weather-related perils. Some inland areas – particularly around Dallas/Fort Worth – regularly get devastating hailstorms, which have intensified in recent years, and have subsequently caused big premium increases in those areas. There are also less obvious factors at play, meaning that some zip codes are consistently more expensive for insurance than others, which is related to past losses in an area and the complicated algorithms that insurance companies use to determine risk.
  2. The age of your home: The days of sturdy, stone-and-brick homesteads built to last hundreds of years are long gone. These days, the chance of something going wrong with your home starts to rise rapidly after about 10 years of age. Roofs become less weather-resistant and need replacing, plumbing and other internal systems are more likely to malfunction, and nearby trees grow larger and become more likely to topple onto your house. The equation is simple: older home = higher chance of a claim = more expensive insurance!
  3. The age of your roof: Today’s shingle roofs are designed to last about 15-20 years. Insurance companies know this, and will therefore charge a higher premium for older roofs, offer an Actual Cash Value policy only, or even refuse to insure your home at all. Tile or metal roofs have longer lives, but the flip side for insurance companies is that they cost more to replace if destroyed by a hurricane.
  4. Type of plumbing: Homes built before 1985 that have not been completely updated may still retain all or some of their original galvanized pipes. Statistically, these kinds of pipes are far more likely to corrode and develop leaks than modern PVC piping. If your home still has galvanized plumbing, you will have a smaller choice of insurance carriers, and premiums will be more expensive.
  5. Your “insurance score”: Whenever you get a quote, insurance carriers run an “insurance score” on one or both applicants. This is a bit like a credit check and takes lots of factors into account, but it does not affect your credit score in the same way that a loan application does. If your insurance score is low, you could be paying more for the exact same policy than someone who has a high insurance score.
  6. Prior claims: While there is some leniency towards weather claims (after all, a hurricane is not your fault!), insurance companies are wary of homeowners who have multiple claims on their record for things like water damage, theft, and – especially – liability. Any zero-paid-out claims (where the amount of the claim costs less than your deductible) can also hike your premium at renewal. So it’s best to make absolutely sure BEFORE you file a claim that it’s going to be worthwhile to do so – your agent will be able to advise you.

The golden rule is – as always – to give your agent a call! Memorial Insurance Agency’s licensed agents will be happy to provide you with a quote, help you to decide whether to file a claim, and answer any questions that you may have about insurance.

4 Reasons to Get a QUALITY Auto Insurance Policy

Some people think auto insurance is all about price. Those people get the cheapest possible policy because – obviously – no one wants to pay more for insurance than they have to, right?

Wrong! While, naturally, price is a major consideration when it comes to choosing car insurance, it is by no means the only consideration. Here are four excellent reasons to spend a little extra for a quality policy:

  1. You get higher coverages: The difference in price between state minimum liability limits (30/60 in Texas), and something a lot better, is often surprisingly small. It makes sense to spend just a few extra dollars each month, for the peace of mind that you have enough coverage in the insurance to pay for an accident. So, you should pick the 100/300 limits as an absolute minimum. Many “cheap” auto insurance companies offer only the lowest coverage limits, which won’t go far if you’re involved in a crash with a Lexus or a Tesla – and especially if someone gets injured. Guess who they come after for the money, once your insurance limits have been exhausted? Yes, that’s right: you, and everything you own.
  2. You get broader coverages: Let’s say your son or daughter is home from college for a few weeks, or your friend desperately needs to borrow your vehicle. You don’t want to have to add them to your policy, just so they can have occasional use of your car. Quality auto insurance policies, such as those offered by Safeco, Travelers or Progressive, cover anyone to drive your car with your permission. Cheap policies offer no coverage for any driver except those named on the policy.
  3. You get a high-quality claims service: If you’re ever involved in an accident, the last thing you need is a lot of hassle to get your car towed or repaired. The top auto insurance companies have a fast, efficient claims service, and they work with networks of high-quality repair shops. So you’ll be back on the road in no time, and with the minimum of heartache.
  4. You can lock in to a rate for 12 months: Safeco, Travelers, Progressive and other high-quality auto insurance carriers lock in your premium for an entire year. Most cheap auto insurance companies, including Geico, offer only 6-month policies. You don’t have to be a genius to guess what might happen when insurance companies have the opportunity to increase your rates after six months!

Give your agent at Memorial Insurance a call today, and we’ll be happy to explain your current coverages, or offer a comparative quote with a quality auto insurance carrier. Safe driving!

Galvanized Plumbing

Water damage claims are one of the most common kinds of home insurance claims. In fact, many home insurance carriers will decline to insure homes with the old galvanized plumbing, which is still commonly found in homes built before about 1985 which have not been updated.

Why do only a small proportion of insurance carriers accept this old kind of plumbing? Well, it all comes down to risk, of course. Galvanized plumbing is prone to corrosion, and statistically it is much more likely to cause an expensive home insurance claim when compared to more modern PVC piping.

Unless you have a very high value home, the chances are that your insurance company will carry out an exterior only inspection when agreeing to insure your home. So they won’t know if your plumbing is galvanized or not – it is up to you to tell your agent when you are purchasing your policy. If you’re with a carrier who doesn’t accept galvanized plumbing, and you have a water damage claim from a burst pipe, your insurance carrier may deny your claim.

This is one reason why it is very important to contact an independent agent who will work with you to select the right kind of policy for your home. But don’t worry – the licensed agents at Memorial Insurance will ask you all the right questions to make sure you are correctly covered!

How to File a Claim

We are slap bang in the middle of hurricane season, and while there are no storms on the Texas horizon – yet! – it definitely pays to be prepared with the phone number for your insurance company’s claims department.

Updated claims numbers for all our carriers are listed below. Before picking up the phone, make sure:

1) That what you are claiming for is covered by your insurance policy, and ….
2) That the amount of the claim is likely to exceed your deductible (if in doubt, get an estimate from a contractor)

Above all, remember that your account manager at Memorial Insurance Agency is here to help you. If you have any doubts about whether to file a claim, call us FIRST!

Good luck and fingers crossed for the rest of hurricane season!

COMPANY NAME CLAIMS#
AIG 1-888-760-9195
Allstate 1-800 ALLSTATE
ASI 1-866-274-5677
ASI FLOOD 1-866-274-5677
Bankers 1-800-765-9700
BRISTOL WEST 1-800-274-7865
Centauri 1-866-215-7574
CHUBB 1-800-252-4670
CYPRESS TEXAS 1-877-560-5224
Federated National 1-800-293-2532
FIDELITY NATIONAL 1-800-220-1351
FIDELITY FLOOD 1-800-725-9472
FOREMOST 1-800-527-3907
GeoVera 1-800-631-6478
GMAC 1-800-468-3466
Gulfstream 1-866-485-3005
HARTFORD 1-800-243-5860
Homeowners of America 1-866-407-9896
IMPERIAL 1-800-325-1088
Infinity 1-800-334-1661
Lighthouse 1-877-852-0606
Maison 1-844-962-4766
MERCURY 1-800-503-3724
MetLife 1-800-422-4272
Mission Select 1-800-233-2160
National General 1-800-325-1088
NFS Edge Flood 1-888-281-0684
Occidental 1-800-780-8423
Pillar 1-800-780-8423
PROGRESSIVE 1-800-776-4737
SAFECO 1-800-332-3226
State Auto 1-800-766-1853
Swyfft 1-855-542-0917
Texas Fair Plan 1-800-979-6440
TWIA 1-800-788-8247
TRAVELERS 1-800-252-4633
UNITRIN 1-800-777-8467
Universal North America 1-866-999-0898
UPC 1-888-256-3378
Velocity Risk 1-844-878-2567
WELLINGTON 1-800-447-6465
Wilshire 1-800-780-8423
Wright Flood 1-800-725-9472

Should You File a Homeowners Insurance Claim?

Homeowners’ insurance is designed to protect you from financial ruin when the worst happens to your largest asset. If a plane crashes into your house, it is obvious that your insurance company will need to become involved. However, for less serious losses, should you file a claim? Here, we answer some commonly asked questions on this topic:

Does my policy provide coverage for the damage that occurred?

Perils such as fire, smoke, and explosion are usually covered. Coverage for foundation, water damage or slow seepage will depend on the kind of policy you have. Flooding due to rising waters is never covered in a home insurance policy. If you attempt to file a claim for something that is not covered, you will not only be wasting your time, but you will also end up with a claim against your record. The golden rule is to ask your agent what your policy covers, before making that call to the claims department!

What is a deductible, and how much is mine?

The deductible is the portion of the loss that you pay out of pocket before the insurance steps in to take care of the rest. On your homeowners policy, your deductibles will usually be listed as percentages, or sometimes dollar amounts. Typical deductibles for homeowners insurance in Houston are 2% for wind and hail (including hurricane), and 1% for all other perils. In other words, on a $300,000 home policy, you would pay the first $6,000 of a weather-related claim, and the first $3,000 of all other claims. If you can’t find the numbers on your policy, or if you are unsure, give your agent a call and they will be happy to explain.

It looks like the damage will probably be more than my deductible. What next?

You should get an estimate from a licensed contractor for the total cost of the repairs. In fact, you’ll want to do this anyway, regardless of whether you plan on filing a claim.

So …. the repairs will cost $7,000, and my deductible is $6,000. I’m good to file a claim, right?

Not so fast. All claims, even those where little or no money was actually paid out, will show on your record. Claims often lead to premium increases – particularly if more than one claim is filed over a three or five-year period. If you have a lot of claims, you may even be “non-renewed” by your insurance company, and will have to seek inferior coverage elsewhere. In other words, it may be cheaper in the long run to pay for the damage yourself, even if the repair bill exceeds your deductible. So the best advice is speak to your agent, do the math, and don’t rush to file a claim when something happens.

My house burned to the ground, so should I file a claim?

Of course. Major disasters are what your home insurance is there for. This is the moment you’ll be glad you opted for the Replacement Cost policy, instead of an Actual Cash Value one which depreciates your roof and personal property every year.

My neighbor fell down in my driveway and broke her leg. Should I file a claim?

Yes. You never know when a liability claim can become a full-blown financial and legal disaster, so it is wise to file these kinds of claims as soon as possible.

My old fence finally fell down in last week’s storm. It was due for replacement anyway. Will my homeowners’ insurance cover it?

No. Your side of the bargain with the insurance company is to maintain your home to a reasonable standard, and your homeowners policy is not designed to cover routine maintenance or wear-and-tear issues. This means that any related claims will be denied.