50 (ok, 5) shades of Insurance for the home

by | Jul 17, 2016 | Real Estate | 0 comments

Upcoming Free (& non-promotional) Home Buyer Classes:

Saturday, July 23rd, from 11am-2pm (ish)
Vancouver YMCA, conference room
        11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave)

Saturday July 30th , from 10am-1pm (ish)       Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Tuesday night, August 2nd , from 5pm-8pm (ish)
Marshall Community Center, conference room
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

If these class dates and/or times don’t work for you, please let us know.  We understand that you have lives, and families, and work.  We will work something out that works better with your schedule.  Just let us know….
….we also have home seller classes available too…link on left on website

Remember…with reservation…we will throw in lunch, or dinner!  😀
Happy Saturday morning!

So, on my facebook this week, one of my friends had a question about earthquake insurance…and whether or not it was necessary or ‘worth it’.  She had quite a few comments on her question as well, and while I read them…I was surprised how little people understand insurances.  Now… I’m not an insurance guru…far from it.  I am a real estate guru, and happy to share what I know.  🙂 I do know a little bit about insurances.

When you are buying a home,  there’s lots of insurances involved, and some you should think about after you buy your home.  I thought that I’d take a little bit of your time to talk about them…  I will try not to drone on, but let’s be honest…  I do like to talk…even if it is by email!  LOL

Mortgage Insurance…
This is insurance that is paid as part of most peoples mortgage that is an insurance to protect the bank if you were to default on your home loan.

Hazard Insurance (aka Homeowners Insurance)
This is the insurance that is paid (again) as part of your mortgage payment that goes into escrow.  This is an insurance that protects you, and the lender, in case something that were to happen to your home that is (and remember these words) outside of your ‘Care, Custody, and Control’.  With homeowners insurance, those are the Big Three words…  if damage is outside of your Care, Custody, and Control’, you could have a homeowners claim, where your homeowners insurance can help you.  However, homeowners insurance is a lot like car insurance… you have a deductible, and if the damage is a maintenance issue….you don’t have a claim, or if the damage is less than your deductible… you probably aren’t going to call in a claim.  As a buyer,  you need to call around to insurance companies to find one that works best for you.  The first place to start is usually with your car insurance company since most insurances will ‘bundle’ your insurances, and give you a discount.  Once you have chosen a home insurance company, you will request that insurance company to send a ‘binder’ to your lender.  You can’t close without a homeowners insurance policy for the home you are buying.

Everyone has hazard insurance as part of their mortgage payment, and most people will have mortgage insurance as well.  You don’t chose the mortgage insurance company though…it’s just …there.  🙂

as a note…  this is different than a home warranty.  A home warranty is something every buyer should get, especially for that first year.  A warranty doesn’t cover windows, wall, roofing, floors, or siding…but it does cover plumbing, electric, built in appliances, water heaters, heating, and there are other items you can include as well.  Three ways to get a home warranty are to ask the seller for one, ask your agent for one, or pay for one yourself.   There is a co-pay every time you use it, but it’s a lot less than the repair.  I like Old Republic Home Warranty, but there are also other good companies out there as well….like First American, Fidelity, American Home Shield, etc.

So what about ‘other’ insurances?

Flood Insurance…
For the last 19 years, I have lived in Woodland.  We moved here in 1997.  Most people remember the flood of 1996, but did you know that wasn’t a ‘natural’ flood?  The company who runs the dams, well, someone wasn’t paying attention.  That year we had a really good snowpack, then had a warm week of almost 70 degree weather, and then it started raining.  Now, normally, the dams let out water to keep levels in the dams at the best levels, but that year…well, something didn’t happen the way it was supposed to.  They (the company) went through the town and told people that they were releasing water, and they had 30 minutes.  Now, please remember that at the time, we didn’t live in Woodland, but my mother in law did, and she had a person come to their door to warn them.  In 1996, when most of Woodland flooded, many people did not have flood insurance, and had to go through FEMA for reimbursement. This took forever, and in many cases, people did not get paid out what they thought they should.  It created a huge problem for the insurance companies, and raised insurance rates. Now, flood insurance is required through most of Woodland as most of Woodland is in a 100 year flood plain.  As part of your closing costs is the flood search.  Every home has to be researched as to whether or not it is in a floodplain, what type of flood plain, and whether or not flood insurance is required. Surprisingly, there are areas of Clark County where flood insurance is required.  We have lots of water around here….
Flood insurance, because it is required for my home & home loan, is part of my mortgage payment, and goes to escrow, where it is paid out of once a year.

Earthquake insurance…
When we bought this home in 2001, earthquake insurance was part of our standard homeowners insurance policy, but with the risks now predicted for our area regarding earthquakes, your standard homeowners insurance policy no longer carries earthquake insurance. We carry a separate earthquake insurance policy…why? Because it’s cheap, and it’s always better to be safe than sorry. This is an additional policy that is NOT paid as part of my mortgage.  I pay this out of pocket once a year.  This is an insurance you might want to look into, and purchase, after you get keys.

Umbrella policy….
Because I have 2 big dogs, live on a sloped driveway, and because I often have folks in my car when showing homes, I also carry an umbrella policy…just in case.  Like your vehicle policy, your homeowners insurance has a limit.  I ‘may’ be a bit paranoid, but owning a home does have risks…  let’s say we get snow and/or ice one year (hey! it happens sometimes!), and someone slips on the sidewalk in front of your home…they ‘could’ sue you!  If some moron goes into my back yard and one of my 2 idiot dogs (who would probably lick them, and then lead the burgler into my home) did something crazy like bite or scratch the idiot inside my fenced back yard…believe it or not…but that trespasser could sue me.  Now… my philosophy is that if someone I do NOT know is inside my FENCED back yard…I would HOPE that one of my 2 stupid dogs would actually…oh, I don’t know… protect the property?  Now, frankly, my 2 dogs are hopeless.  They are sweet, loveable, and goofy.  In our house, I would be more concerned about the CATS than those two furry idiots.  🙂  The cats are pretty shady… True story….

Sometimes, you will see a ‘beware of dog’ sign…please don’t do it.  By putting up a sign like that you are saying that your dog is dangerous, and if your dog did bite someone, that sign is an admission of guilt.  Long story short… the umbrella policy is to cover your tush in case a claim goes above, and beyond, the limit of your standard car & homeowners insurance policy.  Again…It’s always better to be safe than sorry…

Umbrella policies are something you might want to talk to your insurance agent about after you buy your home.  It is not included as part of your homeowners insurance policy, and won’t be paid as part of your mortgage.  It is a policy that you would have to pay yourself.

Insurances are to protect you (or the lender) in case something were to happen to the property that the lender has an interest in, which is your home.  The insurances are there to return your property back to pre-damaged condition.  Just like your car insurance, there are deductibles involved, and different types of insurances that you can piece together for each policy.  It is good to have a relationship with your agent; someone you can ask questions to, and get reasonable answers.  I know that internet insurances are sometimes cheaper, but just like real estate, relationships give you the ability to have someone you know help you with the process, and the answers.  🙂

As stated above…I am NOT an insurance guru…just a real estate guru.  There are lots of different policies, and lots of different insurance companies.  Ask your favorite insurance agent what policies might be best for you, and what coverage you need.

Information is power, and I hope that I am able to help you.  Good luck, and as always…May the odds be ever in your favor out there….  AND If you are looking for a real estate agent, I would love to be able to help you.  
 As always….this is just a quick overview…. please remember that your agent is NOT a salesperson, and should not be acting like one.  Your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.

If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email,  text, or facebook me anytime.  I am, as always, happy to help!

Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers.

.   ..disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…

Upcoming Topics:  Buying a home & buying a car…how is that alike & different? or   Escrow Accounts, and what they do
Last Week:  Buyers due diligence

Have a great day, and I will talk to you soon,

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA

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