Why You May Need a Vacant Dwelling or Builder’s Risk Policy

Empty buildings or buildings under construction or renovation present some unique concerns. An empty home or other building can be a magnet for vandalism, and if someone isn’t living there, a small leak could easily become a big flood. Empty buildings are just as likely to be affected by fire, wind, or lightning. Standard homeowner’s or commercial insurance policies may not cover you if the insured building is vacant. Certain remodeling projects, and residential and commercial construction jobs require specialized insurance policies. At Lakewood Financial, we have the experience and knowledge to help you with your unique needs.

Here are two types of policies that might apply to your situation:

A vacant dwelling policy covers your home if it is left vacant for a certain length of time, usually at least 60 days.

A Builder’s Risk policy covers a building under construction. It can cover just the building itself, or also the materials at the job site for use in construction of the building. Coverage limits should be for the completed value of the structure, less the value of the land. The policy can be written for as short a term as one month all the way up to 6 months or a year. The policy can also be extended if construction is not finished in time, or be cancelled if the building is finished before the end of the policy term.

Let’s look at some scenarios in which you should have a vacant dwelling or builder’s risk policy:

Vacant dwelling

  • You’ve bought a home, but for some reason you can’t move in yet—you haven’t sold your old home, or, conversely, you’ve moved to your new home and need an insurance policy to cover your previous home until it sells.
  • You own a commercial building or rental property that currently has no tenant.

 Builder’s risk

  • You bought a home as investment, intending to have renovations done before selling it, and it will remain vacant until you sell.
  • You’re building a home from the ground up.
  • You bought a bank-owned home you’re renovating before you move in.

Unlike many agencies, at Lakewood Financial, we have a lot of experience working with property investors and others with complex real estate insurance needs. We understand and are familiar with the situations that require these types of policies. Please contact us so we can tailor the right policy for your unique builder’s risk or vacant dwelling needs. 

Wrap Up 2016 With an Insurance Review

Now that the holidays are winding down, you may be thinking about your goals and plans for 2017. If one of those plans is improving your financial condition, one way you can do this is to conduct a review of your current insurance coverage. Your goal is to have the right amount of coverage for your needs, at the best price.

First, look over your policies to remind yourself of your current coverage and deductibles, insurance premiums, and discounts. Then consider how your life has changed in the past year. Did you get married, divorced, or have a baby? Do any of your children now have driver’s licenses? All these changes should be reflected in your insurance portfolio. Here are a few additional specifics to consider:

Auto Insurance

Is it time to raise your deductible or drop comprehensive and collision coverage? Has your commute changed? Do you have additional drivers in your household who are not listed on your policy? Are you receiving all the discounts, such as safe driver or multi-car, that you’re eligible for?

Homeowners Insurance

If your home were destroyed, would your coverage be adequate to replace it at today’s construction costs? Do you have enough coverage for your personal possessions? You may need to increase your coverage limits if you’ve made improvements to your home, or bought or received as gifts expensive items such as computers, jewelry, or art.

If you’re thinking of raising your deductible as a way to save money on your premium, would you have the resources you need to pay that deductible if you have a claim?

You may be eligible for discounts on your homeowners insurance if your alarm system is monitored. You’ll need to provide a certificate from your monitoring company to receive the discount. If you’ve recently replaced your roof, ask your insurance agent how you can benefit from a wind mitigation report.

Flood Insurance

The entire state of Florida is at risk for flooding. Even if you don’t live in a so-called high-risk area, if you don’t have flood insurance, you might want to consider buying it.  We represent several private companies that write flood insurance policies at a competitive rate.

Umbrella Policy

An umbrella policy is additional liability insurance, beyond your home and auto insurance, which protects your assets from a lawsuit. If your assets have increased, you will want to make sure you have enough coverage, or if you don’t currently carry an umbrella policy, you might want to consider purchasing one.

Life Insurance

If you’re the breadwinner, what would happen to your family if you die? A life insurance policy is one way to provide for them after you’re gone. In addition, although life insurance is mainly intended to replace lost income, consider buying life insurance for a non-working spouse or domestic partner. It can quickly become expensive to replace the work he or she does to keep your household running.

Because insurance is an important part of your financial life, it’s good to review your policies from time to time to be sure your coverage remains in line with your assets and liabilities. Remember, if you have any questions about your policies, Lakewood Financial is here to help.

Stay Cyber Safe This Holiday Season

While you’re shopping for and exchanging gifts with loved ones, scammers and identity thieves are lurking in the background, waiting to take advantage of unwary consumers. At Lakewood Financial, we do our best to make sure your personal assets are covered by appropriate insurance. As a service, we’d like to remind you to reduce your risk of identity theft and credit card fraud by protecting your personal information with common sense precautions. To help you stay cyber safe this holiday season, here are a few tips, courtesy of the Federal Trade Commission (FTC), and StaySafeOnline.org’s “Stop. Think. Connect.” campaign.

 Cautious Clicking

Be cautious about clicking links in emails, online advertising, posts, and tweets, especially when they originate with someone you don’t know. Cybercriminals often use bogus links to compromise your computer with malware. Make sure all your household’s computers, smart phones, or tablets are running the most current versions of software and apps. And if you haven’t already done so, install anti-virus software, anti-spyware software, and a firewall.

Watch out for offers that sound too good to be true, or that encourage you to act immediately.  If you’re shopping a website that is new to you, check online reviews to make sure it’s legitimate and that previous customers have had positive experiences. Look for web addresses that start with “https,” and the “lock” icon on your browser’s status bar to indicate your personal information will be sent securely.

Be careful what you share on social networking sites. Too much information can give an identity thief the clues he needs to answer security questions that will give him access to your accounts. Don’t post your full name, Social Security number, address, phone number, or any account numbers on publicly accessible sites.

Password Power

Create strong passwords for your accounts by combining upper and lowercase letters with symbols. The FTC suggests thinking of a special phrase and using the first letter of each word as your password. You can also substitute numbers for some words or letters. For example: “I love to fish with my dad” could become 1L2fWmD. Use unique passwords for each account, and write them down someplace secure away from your computer.

Wi-Fi Wisdom

Connecting to the Internet while out and about is a convenience—just be sure you adjust your security settings to keep others from accessing your personal information. If you must send personal information over public wi-fi, make sure to use a secure wireless network, not just an encrypted website. If  the network isn’t secure, don’t visit bank accounts or your email—you could be opening the door to cybercriminals.

Use these tips to stay cyber safe this holiday season—and all year long. If you want to know more about protecting your personal information, please visit StaySafeOnline.org.

The staff of Lakewood Financial would like to wish you and your family a very happy and safe holiday season!

Creating a Home Fire Escape Plan

Home firesHome fires are the single most common disaster in the United States, according to the American Red Cross. In fact, chances are 1 in 4 that a household will have a fire large enough to be reported to the fire department during the average person’s lifetime. In addition, it can take only a few minutes for a house to become engulfed in flames. You and your family need to know how to get out quickly—in two minutes or less, according to Red Cross recommendations. 

One way to reduce the chances that someone in your home will be injured or killed in a fire is to create a home fire escape plan. Here are some tips to help you draw up a plan that works for you:

  • Start by sketching a map of your home (click here for a printable template from the Red Cross). Locate and mark at least two exits from every room, if possible.
  • For bedrooms higher than the ground floor, consider buying escape ladders and storing them near windows. Learn how to use them as part of your escape plan practice(see below).
  • If your home has security bars on windows, make sure at least one window in each room is equipped with a quick-release device.
  • Include your pets in your home escape plan, by training them to come when you call them, and plan to take them with you when you evacuate. However, do not endanger yourself or other family members trying to save a pet. Place a pet alert window cling with the number and type of family pets on a front window (and keep the information current). This can save time for rescuers searching for your pets. Pet alert decals and clings are inexpensive and readily available, or click here to order a free pet safety pack from the ASPCA that includes a pet alert decal. 
  • Choose a safe location for all family members to meet after getting out of the house—a streetlamp, mail box, etc.
  • Teach children what smoke alarms sound like and what they should do if they hear one.
  • Practice waking up to smoke alarms, crawling on the floor to avoid smoke, and dialing 9-1-1.
  • Go over what to do if your main escape route is blocked by smoke or flames, or the doors or door handles are warm. Don’t open a door that is warm to the touch. Instead, leave through your second exit if you can. If there is no safe exit, place a wet towel under the door, open a window and signal for help by waving a flashlight or something brightly colored.
  • Remind everyone to stop, drop, and roll if their clothes catch fire.
  • Emphasize “Get out, stay out.” Don’t go back into a burning building to retrieve anything. Only professional firefighters should enter a burning building.
  • Discuss and explain your plan with all family members to make sure they understand what to do. Practice your escape plan at least twice a year, and practice at different times of day.

We hope you never have to experience a home fire. However, if you have a clear fire escape plan for all household members, and practice that plan, you’ll significantly reduce the chance that someone will be hurt or killed. 

Should You Drop Comprehensive and Collision Coverage on Your Older Vehicle?

While we generally don’t recommend dropping insurance coverage, there may be an instance where it makes financial sense: If you have an older vehicle and do not make payments on it, you may want to consider reducing or dropping your comprehensive and collision coverage.

First, a quick reminder of what comprehensive and collision coverage are: Comprehensive pays for things that happen to your insured vehicle other than damages from a collision—a fire, theft, vandalism, or a tree limb falling on it, for example. Collision pays for loss or damages to your insured vehicle due to a collision.

If you are considering dropping your comp/collision, here are some factors to consider:comprehensive and collision coverage

The value of your vehicle. If your vehicle were a total loss, what would your insurance company pay you?  It’s easy to find out the actual cash value (ACV) of your car by using an online tool such as Kelley Blue Book’s “Check My Car’s Value” feature. Remember that the value of your vehicle is lower if is in poor condition (dings, dents, high mileage, worn interior, etc.).

How much you pay for comprehensive and collision. Check your declarations page to find out what portion of your premium comes from comp/collision coverage. One guideline to bear in mind is that if the value of the vehicle is less than 10 times the annual premium, you might consider dropping comp/collision coverage. Example: your car is worth $2,500 and you pay $300 year for coverage.

Your deductible. Common options range from $250-$1,000. If your vehicle is totaled, your insurance company will pay you the value of your vehicle less your deductible.  Also factor in what you’ve paid in premium for the year. In an older vehicle, it’s possible for your premium and your deductible to equal more than the value of your car.

Even if your vehicle is older and not worth that much, there are some circumstances in which you may still want to carry comp/collision, including:

  • You have teen drivers in the household. (Teens are more likely to be in an accident.)
  • You’d have a hard time coming up with enough money to replace your car if it was a total loss. (Even a small payout from your insurance company would help with replacing your vehicle.)
  • You live in a hurricane or flood prone area. (In Florida, most of us do!)
  • You live or work in an area known for high theft.

We understand economic reality forces all of us to look for ways to save money. At Lakewood Financial, we do our best to offer a wide variety of cost-effective options, and we’ll gladly discuss with you what coverage you need.

Please contact us if you have any questions about your auto insurance policy, or you’d like to get a free quote.

Haunted Hazards: Avoiding Halloween Havoc

Halloween

It’s almost Halloween! Time for jack-o-lanterns, scary costumes, bowls of candy, excited children, haunted houses, and a whole host of spooky fun. We don’t want to scare you, but do remember Halloween brings increased risk of vandalism (home or vehicle), fire, injuries (including dog bites and trip and fall), burglary, auto theft, and even gravestone theft or vandalism.

Your insurance (homeowners, renters, and/or auto) should cover any major Halloween mishaps, but you don’t want to have to make a claim if you don’t have to. Most policies come with deductibles, and frequent claims can cause your premiums to rise. To keep Halloween from becoming a horror, here are some tips to protect you, your pets, and your property this Halloween. (Did you know your homeowners policy often covers theft or damage to a gravestone?)

While driving or walking

Safekids.org reports that kids are more than twice as likely to be hit by a car and killed on Halloween than on any other day. Prime time for trick or treating is between 6:30 and 9:30 p.m., so take extra care if you’re driving during these hours, especially in residential neighborhoods and near driveways and alleys.

Children under the age of 12 should have adult supervision while trick or treating at night. Make sure children can see through masks (or use face paint instead), and that their clothing or costumes are visible even in the dark. Also have them carry flashlights or glow sticks. Remind them to stop and look both ways before crossing streets, and to cross at intersections rather than squeezing between parked cars.

Another Halloween danger is that of impaired or drunk driving. According to the National Highway Traffic Safety Administration, in 2015 52% of all fatal crashes on Halloween night involved a driver or motorcyclist with a blood alcohol concentration of 0.08 (the legal limit) or higher. Make sure to designate a driver if you’re attending a party where alcohol is served. And if you serve alcohol at your own Halloween party, you could be liable if an impaired guest leaves your party and hurts or kills someone. To be safe, monitor your guests’ alcohol intake, make sure impaired guests have someone to take them home, or let them spend the night.

Keep pets out of harm’s way

Halloween can be tough for pets. The doorbell rings constantly, even familiar people are dressed in costume, and there is an abundance of candy around, most of it toxic to animals. Be sure to keep all candy out of reach of your pets, as well as any decorations that could harm them, such as candles with open flames. On Halloween night, confine your pet in a quiet place in which he or she feels safe. That way, there will be no chance of your pet biting someone, or escaping through an open door.

Safe at home

Take precautions against vandalism, and against becoming liable for an injury on your property. Walk your property and remove anything someone might trip over. Remember, it will be dark, and some costumes make it hard to see properly.

Make sure your home is well lit.

To guard against fire, consider using battery-operated tea lights to light your jack-o-lanterns. If you do use candles, keep them away from doorways, curtains, and walkways, and don’t leave them unattended.

Park your vehicle in the garage to protect it from vandalism.

Your insurance is there to protect you, but there are things you can do to minimize the chance you’ll need to use it. Please contact us if you have any questions or concerns about your homeowners, renters, or auto insurance policy. And have a safe and spooky Halloween!

Shopping for Homeowners Insurance? Don’t Cut Corners!

Home InsuranceYour home is your most valuable asset, and you want to be sure you’re covered financially if it’s damaged or destroyed. When shopping for homeowners insurance, make sure your policy’s coverages and limits are adequate and appropriate for your situation. We’ve noticed that some agents cut corners on coverage just to sell you a policy, without regard for what you really need.

When you call for a homeowners quote, here are six questions you should ask:

Will my home and belongings be covered for replacement cost or actual cash value?

Actual cash value is the cost to repair your home or replace your belongings, less a deduction for a decrease in value due to age, wear and tear, and other factors. Replacement cost is the actual cost to repair or replace your property with items of equivalent quality and kind at current market value. For example, if you have a kitchen fire that destroys your appliances, with replacement cost, you’ll receive enough money to buy new appliances. If you have actual cash value, you’ll receive a lesser amount due to the depreciation of your destroyed items. Replacement cost usually costs a little more than actual cash value, but we think it’s well worth the investment.

Does this policy cover water back up?

A standard homeowners policy usually covers damage from overflow of water from plumbing, heating, or air conditioning as long as it originates on your property. However, if the back up damage comes from outside of your property, such as if heavy rains cause a sewer back up into your home, you may not be covered. This is a scenario all too common in our hurricane-prone state. (Please note: water back up coverage is NOT the same as flood insurance.)

How much is my home insured for?

Make sure the policy you’re being quoted is for the full replacement cost of your home—not the property’s market value or the amount you paid for the property. We’re seeing quotes from other agents where the home’s structure is severely under insured, which could lead to future claims only being partially paid, or if you have a total loss, leaving you without enough to rebuild.

What are the liability limits of this policy?

Liability protects you from lawsuits for injury or property damage you do to someone else. Most homeowners policies carry a minimum of $100,000 worth of liability insurance, but many insurance experts feel this is inadequate, and recommend coverage of at least $300,000 to $500,000. The price difference of raising your limits can be as low as $20 a year.

How much coverage is there for my home’s contents?

Most homeowners policies cover your personal belongings at a percentage (usually 50-70%) of the amount your dwelling is insured for. So if your home is insured for $200,000, and your policy covers contents at 50%, your contents are insured for $100,000 if there is a total loss. Some agents may try quoting 25% coverage or even no contents coverage at all to bring the policy’s price down, but you don’t want to risk this.

Does this policy have a hurricane deductible or a wind/hail deductible and how much is it?

Storms occur frequently in Florida, so always ask what deductible you have for a hurricane loss. If it is a percentage, ask what that equates to in dollars so you’ll know your out-of-pocket cost in the event of a hurricane loss. If possible, you want to avoid the broader “wind/hail” deductible since most storms that could damage your home are not hurricanes.

Homeowners insurance in Florida is not cheap, and while you don’t want to pay too much for a policy, don’t make the mistake of underinsuring your most valuable asset. Beware of agents who quote you a low rate just to get your business rather than watching out for your best interests. At Lakewood Financial, we have years of experience in the Florida homeowners insurance market, and we will do our best to serve you. Please contact us today for a free quote, or if you have any questions about your homeowners policy. 

What Is a Health Savings Account (HSA)?

For the average business and consumer, health insurance is a major chunk of the budget. One way consumers and employers are trying to keep health insurance costs down is by offering or choosing a high-deductible health plan (HDHP). These plans, as you might guess, come with high deductibles, but also more affordable premiums. Health savings accounts, or HSAs, are often offered in tandem with HDHPs. 

HSA Basics

Image courtesy http://401kcalculator.org

HSAs are essentially savings accounts used for medical expenses. You can use money from your HSA to pay eligible medical expenses, such as co-pays, prescription medicines, and other medical and dental care as determined by your HSA. Usually you’ll receive checks and/or a debit card from your HSA account to use to pay your medical expenses. Unfortunately, you usually can’t pay insurance premiums with HSA funds.

To be eligible for an HSA, you must be covered under a high-deductible health plan (for 2016, a high deductible health plan must have a minimum deductible of $1,300 for an individual, and $2,600 for a family). You won’t be eligible for an HSA if you are enrolled in Medicare, claimed as a dependent on someone else’s tax return, or covered by other insurance.

Health insurance providers or your employer may offer HSA options along with a high-deductible health plan. If not, you can open your own HSA through a qualified financial institution (contact us if you need a recommendation).

 Each year the IRS sets the maximum amountthat can be paid into an HSA. For 2016, those limits are $3,350 for individuals, and $6,750 for families.  Your employer can contribute to your HSA but the total contributions from you and your employer must still be within the contribution limits.

Benefits of HSAs

One of the major benefits of investing in an HSA is that you don’t play taxes on the money you deposit into it, thus reducing your taxable income. You also don’t pay taxes on money you take out of your HSA as long as you use it for eligible medical expenses. You will be taxed (and penalized 20%) if you take it out for non-medical expenses before age 65. After age 65, if you take out money for non-medical expenses, you will be taxed, but not penalized.

You always own and control the money in your HSA. You decide how much to contribute. If you don’t spend it in one year, it rolls over to the next. If you change jobs or leave the job force, the money is still yours.

Some HSA companies allow you to invest your HSA funds, and the earnings from those investments are also not taxed.

Contributing to an HSA can be a smart way to save for future medical expenses. Contact Lakewood Financial for more information about health insurance or health savings accounts. 

Flood Insurance Is Now More Affordable

The recent flooding in the wake of Hurricane Hermine reminds us that living in Florida can be a soggy business. Since Florida is essentially flat, the entire state is at risk for flooding. If you’ve been reluctant to buy flood insurance because of the cost, we’ve got some good news for you.

It’s true that flood insurance rates have been rising. The National Flood Insurance Program (NFIP) is still pulling itself out of $24 billion dollars of debt incurred following losses from Hurricane Katrina and Superstorm Sandy, and government subsidies of flood insurance rates are being phased out. However, at Lakewood Financial, we represent several private companies that write flood insurance policies at a more competitive rate than the NFIP policies.

Here are some basic things to remember about flood insurance:

  • Flood insurance is not included in a standard homeowners insurance policy and must be purchased separately.
  • If you live in a flood zone and have a mortgage backed by a federal lending guarantor (Freddie Mac, Fannie Mae, etc.), you must carry flood insurance.
  • Even if you don’t live in a high-risk area, you should consider buying flood insurance to protect your home. Be aware that 25% of flood claims come from preferred zones B, C and X.
  • Even a few inches of water can do major damage. The average flood insurance claim is $43,000, according to FloodSmart/gov.
  • The average NFIP flood insurance policy costs about $700 year.  However, at Lakewood Financial, we represent several private companies that could save you a substantial amount on your policy.
  • NFIP flood insurance covers your home and your possessions (with some exceptions). Your home’s structure can be insured up to $250,000, and its contents can be insured up to $100,000.  Private flood companies offer higher limits, up to $500,000 on your home, and up to $250,000 for contents.
  • With NFIP policies, there is a 30-day waiting period after purchase before flood insurance goes into effect. With most of our private companies, there is no waiting period after the policy is bound. 

Consider buying flood insurance insurances to protect your greatest asset—your home. Contact us today for a free quote.

A Wind Mitigation Report Can Lower Your Homeowners Insurance Premium

 

homeowners insurance Did you know some common construction features of Florida homes could save you money on your homeowners insurance? During a hurricane, most serious damage comes from wind and water intrusion. Wind mitigation features help your home withstand high wind damage from hurricanes or other wind events. The Florida Department of Insurance estimates that up to 70% of your insurance premium can be attributed to wind damage risk. By law, Florida insurers must offer customers discounts and credits for construction features and home improvements that reduce potential damage from wind. Having a wind mitigation inspection and filing the report with your insurance company could save you hundreds of dollars on your policy each year. A wind mitigation inspection report runs around $75, but in many cases it more than pays for itself in discounts to your homeowners insurance.

Most Florida homes built after 2002 were constructed with many wind resistive features, so you may already be receiving some discounts. However, if you own an older home and have replaced your roof, you should talk to your homeowners insurance agent to see if a wind mitigation report will save you money on your insurance.

During a wind mitigation inspection, the inspector will examine several areas of your home, looking for features that improve your home’s wind resistance. Features that may qualify you for discounts include:

  • The shape of your roof (hip vs. gable)
  • How your roof deck is sealed and attached
  • Roof to wall connectors
  • Gable-end bracing
  • Windows covered with shatterproof glass or storm shutters
  • Hurricane-rated doors  (including the garage door)
  • Special bracing for the garage door

At Lakewood Financial, our agents are familiar with wind mitigation reports and discounts. Please call us at 941-747-4600 if you have any questions about whether or not you should schedule a wind mitigation inspection.