Renters Insurance Myths

Renters insurance may cover more than you think! It is also one of the best value insurance policies out there …. just $150-$200 a year can buy you a LOT of liability coverage, and protection for your personal belongings as well.

Memorial Insurance Agency in Houston will be happy to provide you with a quote – call one of our agents today to discuss your requirements.

Preparing for a Hurricane

As the weather gears up for another long hot summer, it is easy to forget that a major hurricane could be just weeks away. That’s right, folks – June 1st was the official start to “Hurricane Season”!

The National Oceanic and Atmospheric Administration (NOAA) predicts a “near-normal” Atlantic hurricane season this year. But don’t be reassured by the word “normal” – it means that we can expect 9-15 named storms, 4-8 hurricanes with wind speeds up to 110mph, and 2-4 major hurricanes in category 3 and above with wind speeds over 111mph. There is no way of telling if or where these storms will make landfall. Before they arrive – in other words, right now! – it is a very good idea to not only check that your home insurance is in order, but also to follow some basic steps to prepare. Thanks to our friends and partners at http://velocityrisk.com/¬†for the following excellent tips!:

  1. Create an emergency communication plan: Pre-arrange an evacuation route and destination with other members of your household, and be sure to know how to share warnings and alerts with your family members.
  2. Stock up on emergency supplies: What you’ll need: lots of water, non-perishable foods, can opener, flashlight and spare batteries, battery-powered radio, first aid kit, whistle, plastic sheeting and duct tape, can opener, cell phone with chargers and a backup battery.
  3. Check your home insurance: Make sure your home insurance policy covers damage caused by wind, hail, and named storms/hurricanes. Verify that you have low deductibles so your out-of-pocket costs in the event of a claim are low. Check that you have a Replacement Cost (not Actual Cash Value) policy. If in doubt …. speak to your friendly insurance agency in Houston, Memorial Insurance!
  4. Consider buying flood insurance: Don’t wait until the next Hurricane Harvey is bearing down on you before you get flood insurance, because even if you buy it today, there is a 30-day waiting period before coverage takes effect. So plan ahead and get yourself covered BEFORE the next hurricane is on the horizon. And remember – flood insurance is NOT included in your home insurance policy!

Depreciation Heartache! ACV vs Replacement Cost

When it comes to insurance, there are many common pitfalls for the unwary. Let’s examine one of these today: Actual Cash Value vs. Replacement Cost.

Actual Cash Value: In this case, if you have a claim, your insurance company will pay you the amount of your claim minus depreciation. Imagine that you have a 25-year composition roof on your home which you installed 10 years ago at a cost of $10,000. If your roof is destroyed and needs replacing, how much will you get from your insurance company? The short answer is: not enough! Your roof’s expected lifespan is 25 years, meaning it depreciates in value 4% each year, to end with a theoretical value of zero after 25 years. In this example, your 10 year old roof has therefore lost 40% of its value by the time the hurricane hits, meaning the maximum available payout under an ACV policy is $6,000. But your financial pain doesn’t end there – you also have to take into account your deductible. So if your home is insured for $200,000 and you have a 2% wind/hail deductible, you will be paying $4,000 out of pocket before your insurance company pays even one cent. Keeping up? Therefore the total payout you’ll get from the insurance company will be the $6,000 Actual Cash Value of your roof, minus your $4,000 deductible, making a grand total of $2,000 ……. just a fraction of what you will have to pay to replace your roof.

Replacement Cost: This is a much better option. Your insurance company will pay whatever it takes to REPLACE your roof to the same standard as the one that was destroyed. There is no depreciation – all you pay out of pocket is your deductible. So in this case, you would receive a lot more money from the insurance company.

Moral of the story? Now you can see why Memorial Insurance always offers Replacement Cost policies, and low deductibles! Whichever insurance agent you use, always make sure the magic words Replacement Cost are on your homeowners insurance policy! Replacement Cost is not limited to the structure of the house itself – it can apply to personal property too, usually as an optional endorsement for a small extra cost. Reputable agents should always offer Replacement Cost – for both the dwelling and the contents – as standard, but beware unscrupulous agents who may try and sell you an ACV policy to save a little premium. It’s just not worth it!