Explaining Homeowners Insurance & Home Warranties

by | Dec 19, 2016 | Real Estate | 0 comments

Upcoming Free (& non-promotional) Home Buyer Classes:
Saturday January 7, 2017 , from 9am-12pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)Monday night, January 9th , from 5pm-8pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)
Saturday, January 21st , from 10am-1pm (ish)
Vancouver YMCA
11324 NE 51st Circle, Vancouver WA (SR-500 & 112th/Gher Rd)

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 still snowy Monday…

First things first…THANK YOU so much to everyone who came to the 2016 Winter Client Appreciation Event for Star Wars: Rogue One.  We had a great turnout (for the weather), and we are so grateful for each and everyone of you for your continued support and referrals.  😀

Ok… I’m done with the winter weather already.  I know that I am in the minority here, but if I want snow, I will drive to it.  It is pretty, but it is also a major cause for delays, angst, and worry…and I am not a fan.  This morning I woke up to the sound of metal on metal outside my bedroom window.  My first thought was, “oh crap” since my son parks his vehicle on the side of our home.  A car slid around our corner this morning, and luckily for us (but unlucky for the woman driving), slammed into the cops car across the street.  Ooops…  It was interesting since she immediately slammed the car into reverse and spun her tires.  This was interesting because at the time I was wondering why she would do that…. you slid around the corner on snow/ice (she was going too fast as usual…we’ve yelled at this car before)…and into the cops car.  Now, I’ve been in accidents before and I’ve never hit reverse right away.  Usually everyone stays put until pictures are taken and information is exchanged…or we were in a well traveled here and it’s too dangerous to stay put…but even then it wasn’t right away.  I may be cynical here, but my first thought was, “is she trying to reverse and drive away!?”  One, hit and run is no joke (I had someone do that to my car once), and she hit a COP car, so really No Bueno.  Two, You slid on snow/ice into a car…throwing it into reverse and hitting the gas hard just meant that she spun her wheels, creating friction, and melted whatever was under her tires into a hard sheet of ice.  Really…so far she was 0-3.  So, my neighbor, the cop, comes out in his bathrobe and slippers to talk to her and he started raising his voice… he was not happy.  Almost immediately one of the city cops shows up.  After a bit the woman starts removing all her belongings from the car.  I had wondered if maybe she didn’t have insurance, and this feeling is starting to strengthen.  My neighbor comes out again, in clothes this time, to brush the snow off his car, and slowly moves it off the street into his driveway….and I can hear the tire rubbing the wheel base from my bedroom window.  Not too long after this the tow truck shows up to tow the woman’s car away…and folks, it wasn’t that bad…it was most likely driveable.  The woman (and a guy who just seemed to come out of nowhere) get in the back of the other cops car (no handcuffs) for what I suppose, is a ride home.  Ok…so there was my morning…

Insurance is very important whether you are driving a car, or owning a home.  With a home though there are actually a couple of different types of insurances.  This week we will cover home owners insurance & home warranties.  Next week we will cover Mortgage Insurance, and Title Insurance.  🙂

Home Owners Insurance (aka Hazard Insurance)

   Home owners insurance always seems to be the last thing many buyers think of, but it should be one of the first things.  Remember that this is your first legal reason to back out of an offer.  After you, and your buyers agent, make an offer on a home, you should call your insurance company to verify that the home is insurable.  If there has been a previous claim on the property, the home may not be.  Remember that a claim follows the previous homeowners, and the expense will also follow the home to the new home buyer. 
   Shop around for home owners insurance….remember that you can often get a better deal if you ‘bundle’ your insurance.  Call your current renters insurance company, call your vehicle insurance company…maybe call a few more.  Once you have an agent and company you are happy with, contact your lender and give your lender the name and phone number of the insurance agent.  The lender will call your insurance agent to request an insurance binder. You can also give your insurance agent your lenders information and s/he can send the binder directly to them. 
What is homeowners insurance?
   Homeowners Insurance is often referred to by lenders as Hazard Insurance.  When you purchase a home, you are taking responsibility for that loan.  Homeowners insurance protects the bank, and it protects you.   If you have a fire, and your home burns down, you are still responsible for that loan….even if the home is no longer there.  I know that we don’t have enough money to re-build a home on our own, and that is where insurance comes in.  Your home owners insurance will pay to re-build your home, and often help you out with living arrangements in the meantime.   
   Three words you need to remember for home owners insurance is Care, Custody, and Control.  If the event that damages the home is outside of your Care, Custody, and Control…that is where homeowners insurance comes in.  Fire?  Yes?  Leaking Roof?  not so much.  If there was a violent storm in the last couple of days…maybe.  Technically roof leaks are considered maintenance of the home owner.  Is it a claim?  Yes.  Will you receive insurance funds to repair?  No.  A leaking roof is within your Care, Custody, and Control….unless there are extenuating circumstances….  A tree falls on your home?  Yes, call home owners insurance.  Busted pipes while you are on vacation?  Should be a call to your home owners insurance company.  What about if your dog bites someone?  Well, do you have a “beware of dog sign” on your yard/home?  If you do then you could be claiming responsibility and it would be outside your coverage!  I know you ‘think’ you are protecting yourself with this sign, but in actuality you have just negated your insurance claim because you are already claiming your dog to be dangerous.  Home insurance is all about those three little words…Care, Custody, and Control….
   It is all very confusing, so I urge all of my clients to have a relationship with their insurance agent.  If you have any questions regarding whether or not you have a claim, call your agent and ‘hypothetically’ ask them the question of whether or not you have a claim.  🙂 
   Remember as well that you have a deductible.  Most deductibles are around $1000….so if you do have a claim be sure that it is going to cost more than that to repair.  You might have an insurance claim, but if it is going to cost less than your deductible to repair it, don’t make the claim. 
   Always remember…Care, Custody, and Control.  For more information, call your insurance agent.
   Homeowners insurance is paid by your mortgage company, and is part of your monthly mortgage payment.  Your monthly mortgage payments covers Principal, Interest, Taxes, and Insurance….aka PITI payment. Your mortgage payment also covers your mortgage insurance, but that would make it the PITIMI payment, and how much sense does that make???  🙂
Now home warranties are not required…but it is something I am a HUGE advocate for…..
Home Warranty

I urge all buyers to have a home warranty.  Home warranty typically covers everything but siding, roofing, windows, walls, and flooring.  There are the basic coverages, and additional coverages you can add after you close and move in.  There are three ways to get a home warranty….the buyer can pay for it, the seller (or sellers agent) can pay for it, or the buyers agent can pay for it.  Find out if you are getting a home warranty, which home warranty company it will be, and then do some research on it.  What is the basic coverage for?  How much are the co-pays/deductibles?  What are the additional coverages you can add?  What do they cover, and how much are they? 

   Why is a home warranty such a good idea?  Because things happen.  For example…in July of 2009, my water heater went out.  No hot water!!  We had to go purchase another one at $600.  This would have been covered for about $60 with a home warranty. 

On 12/31/2010, my electric furnace stopped working.  It was very cold!!  And of course…new years eve, so no one was available to repair it until Tuesday…..that was 3 days away.  Luckily, our furnace guy had his assistant come by and drop off some space heaters for us.  Come to find out, the builder put in a furnace that was too small for my home.  The furnace is meant for homes 1200 sq ft or smaller…my house is almost 1700 sq ft….no wonder why it burnt out!  We still need a new furnace that is going to cost $2500, but in the meantime the band-aid cost to repair it was $780.  Home warranty would have covered the repair, and paid for a new furnace.  Sadly, even though I get home warranties for all of my buyers, I didn’t have one on my own home.  This has since been remedied.  
😀 I now carry one on my own home, However I still don’t have a new furnace.  The band aid fix is still working so that works for me…for now.                                                             
 I urge buyers to continue with a home warranty every year, but it is, of course, up to you to continue it after the first year.  That first year is always so important as you are painting, getting used to mortgage payments, utilities, yardwork, maintenance, etc….if something were to happen, it’s nice to have that back-up. 
   Some home warranty companies are:  American Home Shield, Fidelity Home Warranty, 2-10 Home Warranty, First American Home Warranty, Home Warranty of America, among others.  The one I typically set up for my clients is with Old Republic Home Warranty.  My clients have been very happy with their service, and they are very affordable. 

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…. 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.

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: Mortgage & Title Insurance explained …..
What happens after an offer is made?
Last Week:  Rent to own & other buyer questions

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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