Did you know that one of the most common causes of expensive home insurance claims is entirely preventable? Read our handy tips here – and make sure you contact Memorial Insurance Agency in Houston to confirm that you have coverage for this common peril.
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:
- 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.
- 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!
- 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.
- 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.
- 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.
- 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.
With insurance, you get what you pay for. This is fine up to a point …. but what if the things you’re paying for include hefty marketing budgets, national TV advertising, huge numbers of offices and thousands of staff? State Farm, Nationwide, Allstate and other major national carriers spend millions of dollars each year to make you think of them when you’re in the market for insurance.
If you hate the idea of your premium being spent on annoying TV jingles, you’ll be delighted to know that there are alternatives. In Houston, there are plenty of insurance carriers who offer low premiums, high coverages, and excellent customer and claims service …. but you have never heard of them. They don’t run expensive office networks, and they certainly don’t advertise on TV. In fact, they won’t even pop up on your Facebook feed, and in some cases you would even struggle to find them on Google unless you know exactly where to look.
But don’t be put off. All insurance companies are rated for their financial stability, and the amount of cash they have in reserve to pay claims. The highest available rating for insurance carriers is with A M Best. State Farm, Nationwide, and Allstate are all examples of A M Best rated companies …. but so are City National, Occidental, and Universal. The latter three companies are lean insurers that are long-established, financially stable, and use their money to pay claims, not advertising. They sell their products only through independent agents and don’t have an office network to support. By the way, did I mention that Memorial Insurance writes business with all three of these companies? (and many more besides!).
Another point to consider is that the big names often don’t have the best coverages. You’ll want to see the magic words “replacement cost” on your policy. You also need comprehensive water coverages (for water backup, slow seepage/leakage, and foundation coverage).
So, why not send us your current declarations page from State Farm, Nationwide, or Allstate? We’ll be happy to give you an honest, no-obligation assessment of what you’ve got covered, and if you like, give you an “apples to apples” quote with our carriers for comparison. Why pay more to get less? GO LEAN with your insurance today!
Still unsure whether an independent insurance agent is the best way to go for your home, auto, umbrella, flood, renters, or rental property insurance? Read below!
- You save money: The difference between your current policy and the best option available in the marketplace can be hundreds or even thousands of dollars per year. Put your independent agent to work finding the best policy for you!
- You have more choice: Let’s say you are shopping for homeowners’ insurance. An independent agent has many companies to choose from (Memorial Insurance has more than 22!), whereas a captive agent – such as State Farm – has just one. Who is more likely to be able to offer the most suitable policy at the lowest price?
- You get better discounts: New roof? Got married? Improved credit score? If you stick with the same policy for years, you run the risk of missing out on savings if no one is checking. Your independent agent will review your policies annually to make sure you’re receiving all possible discounts.
- You stay under one roof: Life is easier when you have your home, flood, auto, boat, umbrella, and rental home policies all in one place with someone you know.
- You make informed choices: Unsure about whether to file a claim? Don’t know what is covered under your policy? Your independent agent will make sure you’re not missing any essential coverage, as well as providing guidance and advice. There are no 1-800 numbers here …. you just call and speak directly to someone who knows you.
Thank you to our friends at Lighthouse Insurance for the following advice. Make sure you’re well prepared for hurricane season!
Weather Alert Apps: A variety of free smartphone apps help you stay ahead of the weather. The sooner you know, the more time you have to prepare. Check out more details here.
Emergency Preparedness Kit: Get these things in advance so you’re ready for when a hurricane hits.
Hurricane Prep Resources: Follow these tips for having emergency communication and action plans – essential when a major hurricane strikes.
Stay Safe this Summer!
Ensure your Independence Day weekend is filled with celebration and not regret with these 10 fire safety tips, from the Federal Emergency Management Agency (FEMA):
- Be sure fireworks are legal in your area before using or buying them.
- Always have an adult supervise fireworks activities and never allow children to play with or ignite fireworks. Sparklers alone account for one quarter of emergency room fireworks injuries.
- If you set off fireworks, keep a bucket of water handy in case of malfunction or fire.
- If fireworks malfunction, don’t relight them! Douse and soak them with water then throw them away.
- Never ignite fireworks in a container, especially one that is glass or metal.
- Use your grill well away from your home and deck railings, and out from under branches or overhangs.
- Open your gas grill before lighting.
- Periodically remove grease or fat buildup in trays below your gas or propane grill so it cannot be ignited.
- Declare a three-foot “kid and pet-free zone” around the grill to keep them safe.
- Avoid loose clothing that can catch fire when cooking on the grill.
The Red Cross also has plenty of useful information and tips about firework, water, and picnic safety, at http://www.redcross.org/news/article/Have-a-Safe-Fourth-of-July.
Happy Independence Day everyone!
Buying a new home can be daunting.
In partnership with Remax Signature Realty, Memorial Insurance co-sponsors a series of seminars to handhold first-time buyers through the process, including securing financing, making an offer, home inspections, and – of course – home insurance. There are great giveaways for attendees as well as essential expert advice.
The video below, taken at our latest event in Houston, provides a feel for what it’s all about. Contact us for details of our next event!
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.
Apart from having adequate flood insurance coverage, one of the most valuable lessons that emerged from Hurricane Harvey was the importance of documenting your possessions. Just one hour spent photographing your belongings now could save you a lot of time and stress later.
If your possessions are damaged, displaced, or destroyed by fire or flood, it can be surprisingly hard to remember what you had. Not only that, but your insurance company is going to want copies of receipts or photos in order to prove you actually owned the items in the first place.
Here is how to do it right:
- Use your cellphone, iPad or digital camera to take high quality images in daylight.
- Open drawers, cupboards and closets and take photos of the contents.
- Take photos of valuable items separately, with a card alongside them showing price and date of purchase.
- Back up your photos to a cloud server, to make sure you can access them even if your computer, phone and camera are destroyed.
- Don’t forget to update your photo inventory when you make a new purchase!
Why not take this opportunity to make sure you have enough personal property coverage on your homeowners’ and flood insurance policies? Be sure to call your account manager at Memorial Insurance if you need expert guidance.
1. Replacement Cost This means that the insurance company will pay to replace your roof and contents. If your quote does not include the words Replacement Cost, you’ll be stuck with an Actual Cash Value (ACV) policy, which factors in depreciation before paying out on a claim. Memorial Insurance offers only Replacement Cost policies.
2. Low deductibles The deductible is the portion of the claim you pay before the insurance company takes care of the rest. Common deductibles are 2% for wind and hail, and 1% for all other perils. Any higher than this, and you’ll be paying a lot of money out of pocket before the insurance kicks in.
3. NO policy fees Some insurance agents charge a policy fee to their customers, over and above the commission they already receive from the insurance company. Why pay $150 to your agent to do a job that other agents offer for free? Memorial Insurance never charges policy fees.
4. Adequate coverage If your home isn’t insured to the full cost of rebuilding, you are going to find yourself seriously out of pocket in the case of a total loss. Remember that even if you have an older home, the cost to rebuild it will be at 2018 prices, so you’ll want a 2018 insurance policy to match!
5. Water backup This is when a blocked drain causes sewage and waste water to back up into your home. Coverage is inexpensive, but not included in a standard home insurance policy, so make sure your insurance agent adds it!
6. Reputable company Hopefully you never have to put this to the test, but some carriers routinely outperform others when it comes to paying out on claims. Ask your agent for impartial advice on which carriers are best when the worst happens.
7. Flood coverage Protection against flood is not included in any home insurance policy – it must be purchased separately. No home in Houston should be without flood coverage, so ask your agent about purchasing a flood insurance policy today!