50 (ok, 5) shades of insurance home buyers & sellers should know

by | Jul 31, 2017 | Real Estate | 0 comments

Upcoming Home Buyer Classes
(free and Non-Promotional)

Tuesday, August 1st, from 5pm-8pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Thursday, August 17th , from 5pm-8pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, August 19th , from 9am-2pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, August 26th, from 11am-2pm (ish)
Vancouver YMCA, conference room
11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave)

While we appreciate RSVP’s, walk ins are always welcome.  With rsvp’s we will feed you though… 😀
If these class dates & times don’t work…please let us know.  Upcoming Home Buyer (& Home SELLER classes too) dates & times are available at www.learningtobuyahome.com, or at www.traciedemars.com. ; Just follow the links!  
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Hi!  Happy Sunday!

Oh my gosh….we are going to DIIIIIIIIE this week!  I tell you….we are not set up for this type of weather they keep predicting!  Multiple 100+ degree days?  Ok….who was praying for that hot weather again?  You and I need to have a talk…  I am WAY too pale for this type of weather!! 

This all being said (or yes, I’m complaining about) it’s also FAIR week coming up!  This is why there is a ‘break’ in the class dates & times.  Don’t forget that Chris Berg (with Pinnacle Mortgage) will be there as we are every year.  I will be there EVERY day of the Clark County Fair from 10am-4pm, and Chris will be there every evening from 4pm-closing.  We are the 2nd (or 3rd) booth to the right as you enter the exhibit hall.  Stop by and see us….mention that you read my emails for a ‘special’ prize/gift…. it will make me feel better anyway.  🙂  The Clark County Fair starts on Friday, August 4 and goes through Sunday, August 13

I’ll be honest with you…. I really struggled with what I was talking about this week. I’ve had some really good questions this week to talk about, but sometimes I just am not sure what to cover.  So, stay cool this week, and stay hydrated!

So, I received a text this week from one of my clients that 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.  This insurance is actually part of your mortgage payment so while it isn’t an ‘additional’ insurance, it is there, so I’m including it.  Nice thing is that, like real estate taxes, your mortgage insurance is tax deductible!  Hey…it’s the little things that count.  🙂  Mortgage insurance can be removed from your payment once you have 20% equity in your home.  This equity can be what you have paid down from your original mortgage and/or as the market values go up….so does how much equity you have in your home.  Every loan is different though….some require you to hold the mortgage insurance for a couple of years at least, and some mean you have to refinance your home loan to get that amount removed.  This is an excellent question for your favorite lender.

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 20 years, I lived in Woodland.  We moved there 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…. and that may be the discussion for next week.  Yes, we are in our ‘dry’ time, but…as we know, that is not often the case.  
Flood insurance was required for my old homes mortgage because we were in the flood plain.  This insurance was part of my mortgage payment, and went to escrow, where it is paid out once a year. 

Earthquake insurance…
      When we bought our old 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.  It is surprisingly affordable.

Umbrella policy….
   An umbrella policy is an ‘extra’ policy that covers you over what your homeowners/hazard limits are.  I’ve always carried an umbrella policy for a couple of reasons.  In my old home, I lived on a sloped driveway, and while we asked the neighborhood kids not to ride their bikes, skates, boards, scooters, etc, on our driveway; we know that they did so when we weren’t home.  There are so many pros to be a home owner, but one of the cons is that you are liable for anyone on your property…. invited or not.  If one of these children fell and broke an appendage on my property… well, that is why I have home owners insurance, but what happens if the claim is more than my insurance limit?  Well, that is where my umbrella policy kicks in.  What happens if someone slipped and fell on the sidewalk that was in front of my home?  Same thing.  I also carry an umbrella policy because I have 2 big dogs, and because I often have folks in my car when showing homes….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 happened quite a bit last winter!), and someone slips on the sidewalk in front of your home…they ‘could’ sue you!  If some moron comes inside my fenced property, and one of my 2 idiot dogs (who would probably lick them, and then lead the burglar into my home) did something crazy like bite or scratch the idiot inside my fenced property…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 property…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 our 3 cats….especially our female cat, Opie,  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.  If you don’t have one, and you have some questions… let me know….. I always know a guy/gal who can help you.  

Information is power,  and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.  
If you have any questions, or comments please get a hold of me anytime.  You can call, text, email, or even facebook me.  Please remember that while I mean these emails/blogs to be helpful, and educational, I am still hoping that you will call, or email me as I would be honored to help you with your home buying, or home selling adventure!  🙂

As always….this is just a quick overview…. again…and I can’t say this enough…please remember that your agent is NOT a salesperson, and should not be acting like one.  Real Estate is not really about houses, it is about relationships.  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.  
 
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:
Mortgage vs Rent
Water…water everywhere… what about water under my home?
What do I need to buy a home,
Hiring a Realtor…questions to ask,

What if I don’t have a Down Payment? …..  &….
What does an Agent do for me?

Last Week:  Pre-approvals, what why, and how to get one

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

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA
360-903-3504

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