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.

Back-to-School Safe-Driving Tips

Florida roads are about to get a little trickier to navigate as many of our children go back to school Aug. 10.  More vehicles, bikes, and pedestrians will be taking to the road during the before- and after-school hours, and Lakewood Financial wants you and your children to stay safe. We offer these back-to-school safe-driving reminders:

School zone zen

“More children are hit by cars near schools than any other location,” according to the National Safety Council (NSC). Extra traffic at drop-off and pick-up times, inexperienced teenage drivers, and children walking and biking, sometimes unpredictably, all add up a situation that requires extra vigilance. (And remember, fines for speeding through a school zone are doubled. If you’re caught going 30 miles over the speed limit in a school zone, for example, your fine will be $555.50.) As frustrating as reduced speeds in school zones can be, they’re there for a reason.

Watch for that bus

How would you like to play chauffeur for 50-plus rowdy grade-schoolers?  Show courtesy for school bus drivers, and yield to buses wanting to merge. If you’re driving behind a bus, allow yourself extra room to brake safely since buses stop often and sometimes unexpectedly. And remember that it’s illegal to pass a school bus from behind—or from either direction on an undivided road—when it’s stopped to load or unload children.

Pedestrian perils

According to the Safe Routes to Schools Organization, 33% of youth pedestrian crashes are due to kids darting out into the road. Be sure to watch for all pedestrians, but take extra care when children are near. Yield to pedestrians crossing at a crosswalk or intersection, and stop for a crossing guard holding a stop sign. Don’t block the crosswalk if you’re stopped at an intersection or waiting to make a turn. This can cause pedestrians to go around you, possibly forcing them into moving traffic. Also, don’t pass a car that’s stopped for a pedestrian.

Ditch the distractions

We know you don’t text while driving, but did you know it only takes about three seconds of taking your eyes off the road to double your chances of crashing? Minimize or completely steer clear of anything that takes your eyes off the road or distracts your mind from your driving. That means things like talking on a cell phone, fiddling with the radio or your iPod, eating, and drinking. And always remember to buckle your seat belt—unbelted drivers are more likely to be distracted drivers than belted ones.

As kids go back to school, remember these few common sense rules to keep both children and drivers safe, and your driving record clean.

Safe drivers not only save lives, they save money. If you have a clean driving record, be sure to check with your Lakewood Financial agent to make sure you’re receiving all available discounts for safe driving.

Assignment of Benefits Abuse: Everyone Pays

Oh no! You’ve just had a leaky pipe flood your bathroom and bedroom. While you’re busy fixing the pipe, mopping up and drying out, along comes a water mitigation company that wants you to sign a contract that allows them to deal directly with your homeowners insurance claim. They make it sound like they’ll handle everything from filing the claim with your insurance company to dealing with all the contractors who will be involved in making repairs to your home—if you sign a contract that contains an Assignment of Benefits clause. This sounds tempting—should you do it?

No, you should not, and here’s why. 

Assignment of Benefits (AOB) is a tool that allows a third party to be paid directly by the insurance company for services performed, rather than by the homeowner after making a claim. Unfortunately, in Florida, unscrupulous trial lawyers and shady contractors (many of them unlicensed) have taken advantage of this tool, inflating repair costs and suing insurance companies if they deny the claim or don’t pay it in full. AOB abuse has become so rampant in Florida that’s it’s costing every homeowner money in the form of higher homeowners insurance premiums. According to the Consumer Protection Coalition, since 2000, there has been a 90,000% increase in AOB lawsuits.

Ultimately, this will cost Florida consumers as much as $1 billion dollars in rate hikes, and those rate hikes have already begun. State-run Citizens Property Insurance Corp. asked for a 3.2% increase in rates for all personal lines policyholders in its 2016 rate filing, and CEO and President Barry Gilway told Florida insurance regulators, “I want to be crystal clear on this issue: water losses are the major reason Citizens is seeking rate hikes for the coming year….” (AOB is most commonly used when a homeowner experiences a water-related loss, but the scam is also spreading to the roofing industry.)

Private insurance companies are also raising rates in response, with one large insurer saying it needs a rate increase of 15% statewide to cover the explosion of water loss claims and AOB lawsuits. Private insurers may also begin withdrawing from or eliminating certain zip codes where the abuse is widespread, making homeowners insurance not only more expensive but harder to get.

 In addition, often, AOB abuse also leaves homeowners with poor workmanship or incomplete jobs, and because they’ve signed over the rights to their insurance policy, they have no recourse.

If you have a water damage claim, here’s what you should do:

  1. Call Lakewood Financial or your homeowners insurance company.
  2. Be leery of unsolicited offers from contractors or other vendors who want to take over dealing with your insurance company for your claim.
  3. Carefully read any contracts of service, and look for a clause titled “Assignment of Benefits.” If you see it, don’t sign.

 To learn more, visit www.FightFraud.Today

Is It Time for You to Change Car Insurance Companies?

Florida has some of the highest car insurance rates in the U.S, with policies costing about 25% more than the national average—this according to an Insure.com study based on the rates from six large carriers including Allstate, State Farm, GEICO, and Nationwide. With costs rising all the time, you should comparison shop your car insurance on a regular basis, especially if your current policy is with one of these carriers.

Many people believe that because they’ve been long-time customers of State Farm, Allstate or another large national carrier, they’re getting a great insurance rate. Often, that’s just not true. Many factors go into determining car insurance rates including type of vehicle, coverage purchased, driving records, where you live, and sometimes even your credit rating. Carriers with name recognition like those listed above spend a lot of money on advertising to make you think they have lower rates when they really don’t. Do you want to subsidize their advertising budget, or find the best rates for you?

As an independent agency, Lakewood Insurance represents more than 40 different car insurance companies—not just one. We are often able to save our clients hundreds of dollars each policy term just by placing them with one of our companies.

Give Lakewood Insurance the chance to save you money. Contact us by phone at (941) 747-4600 or email us for a free, no-obligation quote.

Homeowners Insurance Discounts You Should Know About

Lakewood Financial Homeowner's Insurance

Homeowners Insurance

Your home is probably one of the biggest investments that you’ll make.  As such, protecting your home is one place you don’t want to scrimp on.  Making sure your home is properly covered does not mean that you have to break the bank.  The great part about homeowners insurance is that you don’t have to sacrifice coverage to lower your premiums.  By mitigating losses, you can decrease your homeowners insurance payments while keeping your home properly insured

If you’re in the market for a new house, ask your realtor about the type of roof.  If the new house has a hip roof, you’re in luck.  Hip roofs, while more complicated to build, are more hurricane-resistant which results in a nice discount for you!   

The type of roofing material can also make a huge difference in your premiums.  Not only can having better roofing material lower your homeowner insurance premiums, it could also get you a tax deduction.  You may have to have your roofing material tested by an approved laboratory before you receive the credit but it’s certainly worth the effort.

If you’re buying a home that was built before 2002, ask your inspector to perform a wind mitigation inspection.  Wind mitigation inspectors will assess how your home would fare in the event of a windstorm, hurricanes, etc.  You can see why it is a vital part of homeowners insurance, especially in Florida. 

As you can see, insurance companies (especially in Florida) are very concerned about your roof and what your homes chances are of surviving a storm.  Consider this, if a hurricane blows through the Manasota area and your roof blows off, there will be substantial water damage which to the insurance company translates to substantial claims. 

If you’re looking for a reason to renovate – look no further! For the same reason that they give discounts to new homes, insurance companies will give you credits for renovating!  New homes or newly renovated homes have fewer safety risks.   Rewiring your home can also result in savings since new wiring is safer and less likely to cause fires, shortages, etc.  If rewiring your home sounds like something your home could use, depending on the age of your home, you could quality for a new wiring credit so it’s certainly something worth looking into. Check with your local insurance agent to see if you qualify!

Do you live in a gated community or a community with a guard? That could mean more insurance credits for you and decreased premiums.  The reasoning behind this credit is that would be thieves could be deterred by the extra security and would move on to a different neighborhood.  There’s also a discount for having a monitored burglar and fire alarm.  These additions help to keep you and your home safer while also helping you save money.

These are some of the main discounts you may qualify for when applying for homeowners insurance, but certainly not all.  To make sure that you’re getting the best premiums possible, call Lakewood Insurance and speak with a qualified local agent.   

Traffic Violations that will Increase your Car Insurance

I came across a great article today and wanted to share this information with you, our loyal readers.  At the very top of the list of traffic violations that could increase your car insurance (not surprisingly) was driving under the influence.  According to Quadrant Information Services, a DUI or DWI can increase car insurance premiums by 92.5%.  Driving under the influence is dangerous and carries long term ramifications, so most of us already do our best to avoid putting ourselves in that situation.

However, how often are you running just a couple minutes late to work and you rev up the RPMs on the interstate?  Maybe you’re late to an appointment or just anxious to get home.  Whatever your excuse is, it could cost you so much more than just the speeding ticket you might expect.   On top of the big ticket the local cops will throw at you, your car insurance premiums could increase by as much as 83.3% or more depending on the severity of the ticket.

In general,  there are few things that are in your control to affect your insurance premiums.  You cannot change your gender or make yourself older to help reduce the price of car insurance. You can however, control your driving behavior on the road.  Drive safely and you can minimize your car insurance premiums.  

Check out the full article here.

What You Need to Know About Renters Insurance

In our current economy, pinching pennies is a part of life for most of us: buying store brands instead of name brands, driving out of your way for cheaper gas, eating out less often.  If you’re renting your home, you may be tempted to pass on renter’s insurance. It’s an extra expense and not one you need right now, right? Here’s the skinny on renters insurance.  Sure, you may never use it. And if that’s the case, then you’re lucky and should count your blessings.  However, like all insurance, it’s really great to have it when your luck runs out.

The average person isn’t aware of what renters insurance covers, which may be half of the reason why people don’t bother with it.  Renters insurance covers the contents of your home. Looking around your home, you might think that you don’t need to insure your possessions – that it’s not worth it. But, according to USAA, the average renter has more than $20,000 in possessions.  Inventory your possessions and their worth and your insurance agent can help get you a policy with sufficient coverage for all your electronics, jewelry, furniture, and other valuables. 

Your renters insurance covers more than just your valuables. Did you know that if you couldn’t live in your rented premises, your policy might pay to house you and your family while repairs were being done?  For example, in the event of a fire, the repairs could take weeks. So not only would your renters policy cover your valuables inside the home, it would also cover your living accommodations while the repairs were taking place.  Ask your local agent if you have “loss of use” coverage.  Especially in Florida, making sure you have “loss of use” coverage is almost reason enough to get renters insurance due to hurricanes or floods.  There are also numerous potential discounts.  Talk to your local agent and see which apply to you. Your premiums could be reduced if you have fire alarms, fire extinguishers, sprinkler systems, and deadbolts.  You can even save money by paying for the entire year upfront. 

Call us at Lakewood Financial to see how much money we can save you on your renters insurance.  Your local agent can help make sure that you’re properly protected without over paying.