Guide to Protecting Your Home

Nobody should drive like a maniac because they have auto insurance. Why? Insurance doesn’t prevent dangerous accidents; it offsets their related financial losses.

Likewise, no one should live in an unsafe house because they have homeowner’s insurance. Why? Insurance doesn’t prevent things like fires and water damage, it offsets their related financial losses.

So even with good insurance, it makes sense for homeowners to take steps to protect their homes because things like fires are dangerous, and claims can be a hassle. Some steps may lead to insurance discounts and others will just be a layer of valuable protection for your family and property.

Click here for “A Guide to Building A More Resilient Home” from Pure Insurance (one of my high-value carriers). It contains real-life examples of large claims and good suggestions on how they could have been prevented. Some ideas are easier to implement with new construction, but many others are steps you can take to protect your existing home now. Or you can save it as a reference so you can do a “safety audit” when buying a different new or existing home. I hope you’ll give it a read.

Risk of Water Damage is Higher Than You Think

Guess what is the most likely cause of loss on your homeowner’s policy? Fire, wind, flood or theft? Nope. The most likely cause of loss is water damage from an interior leak while you’re away.

I’ve seen a lot of this. Yes, it’s covered by insurance, but it’s still subject to your deductible and is a big hassle and mess. The water flowing from a toilet, washing machine hose or ice maker can go on unimpeded for weeks or months destroying floors, carpets, furniture and cabinetry. Then it seeps into walls where it destroys molding, sheetrock and electrical. If it goes on long enough, mold begins to form. Ugh.

And it’s completely preventable. The old school way is to simply turn off your water while you’re away, and turn your water heaters down to vacation mode.

The high-tech way involves water leak detection systems. They involve a little work, but will protect you at all times. Some insurance carriers will provide a discount if you have them, and other carriers require you to have them before they’ll cover your property.

There are three different types:

Auto Turn Off

These systems are the gold standard because they automatically turn off your water and notify you by smart phone if there is a leak. They most commonly use remote sensors, but a few advanced models detect anomalies in your water flow. They are good if your home is remote and/or it’s not easy to send somebody out to the house quick if there is a leak. They are the most expensive ($500-$2,000) and need to be installed by a plumber.

Water Monitors

These systems are pretty good. They detect leaks from remote sensors and notify your smart phone so if you’re away you can get somebody out to the house. They range from $200-$500 and can be self-installed, or they can be conveniently installed by your alarm company.

Sound Alarm

These blast a sound if they detect a leak. I suppose they are better than nothing, but don’t help if you’re away from your house. Some leaks (like behind a washer) can go a long time undetected and create problems like mold, so even a sound alarm would help. They’re inexpensive…around $10 per unit. Still, I really can’t recommend these as a solution because most damage occurs while the homeowner is away.

So what did I do for my own home? I simply told my alarm company to install water monitors. If I’m gone for several weeks I’ll turn off the water, but for shorter trips I’ll leave it on and trust the monitors to alert me. I’ve got little sensors on the floor around the washer, kitchen sink, water heaters and baths. It was easy. And I feel better because I’ve seen what extended period water damage can do. Nobody wants that.

Make it a great day!

This Top Cause of Homeowner’s Loss Will Surprise You

What’s the top cause of loss on Homeowner’s insurance? You probably didn’t guess interior water leaks but it’s true, and it’s getting worse every year. Why? Our housing stock is getting older making plumbing and water heaters more likely to crack. There are more water-connected appliances. And unoccupied vacation homes can spring small leaks that go undetected for days, weeks or months resulting in large claims. Continue reading “This Top Cause of Homeowner’s Loss Will Surprise You”

Fires and Floods: 2017 Year in Review

2017 wasn’t very happy for the insurance industry thanks to three nasty grinches named Harvey (in Texas), Irma (in Florida) and Maria (in Puerto Rico). Because coastal development has been so strong over recent decades, these hurricanes could result in total losses of $100 billion! Despite that massive number insurance carriers are not forecast to be overly stressed because only 18-20% Florida and Texas residents have flood insurance, and carriers have their own insurance (called reinsurance) to cover excessive loss.

Still, homeowner rates in Florida and Texas are expected to rise. Rates in Florida are already twice as high as the national average and after 2017 will likely increase more.

The news isn’t much better on the automotive side. The recent increase in miles driven was the most in 25 years. And everybody loves their cell phones: more than 400,000 people were injured in distracted driving incidents last year. Then when they are in accidents, new technology makes cars more expensive to repair. A study showed minor front-end damage to an Acura ILX that cost $1,844 to fix in 2014 cost $3,551 in 2016. It all adds up to pressure for auto rate increases nationwide.

Here in California we had devastating summer fires in the north and surprising winter fires in the south resulting in nearly $10 billion in insurance claims. Claims are high because of coastal development, questionable land management practices and the high cost of homes, particularly in Southern California. And unlike flood, fire is covered by all standard homeowners policies.

What does that all mean for you? Because many areas previously thought safe were proven to be dangerous, carriers will be taking a hard look at how they define “fire prone area”, particularly for new business. So if you live in or even near a fire prone area it’s important to keep your insurance paid up because if you let it lapse for even one day it may be non-renewed. If you buy a new house in a fire prone area and can’t get insurance from your existing carrier don’t be alarmed… at Desert Insurance Solutions we have multiple carrier options for each situation, but you can expect new policies in fire prone areas to be more expensive.