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This Month's Tip

Protect Your Older Home

Older homes (i.e., greater than 40 years old) present extra risks for home owners; thus, special insurance needs may arise. The following are some factors and tips for you to consider when purchasing insurance for your older home.

  • Increased construction costs. In some cases, building ordinances can increase rebuilding costs by 30 percent or more. Thus, an ordinance or law increased limit (HO 04 77) or similar endorsement is worthy of consideration. This endorsement provides higher limits for rebuilding an older home when an ordinance will increase the cost.

  • Difficulty in estimating replacement cost. Older homes are often constructed with materials and using techniques that are either no longer available or extremely expensive to duplicate, making it quite difficult to accurately forecast what the cost would be to rebuild following a loss. As a result, there is a risk that the value for which your home is insured is too low. Sometimes a guaranteed replacement cost endorsement is available to protect against this contingency. With it, the insurer will pay the actual replacement cost to entirely rebuild your home after a total loss, even if it is much higher than your dwelling limit. If guaranteed replacement cost coverage is unavailable, consider extended replacement cost coverage, which might allow an additional 20 percent or 30 percent of the dwelling limit in the event of a total loss to your home.

Historic homes pose even more challenges for home owners as they are typically subject to historical renovation regulations. Here are some recommendations worthy of consideration for your historic home.

  • You should avoid any type of functional replacement cost endorsement because this allows less costly construction materials and methods to be used to repair your home. These materials and methods may reduce the value of your home.

  • If you want to replicate custom or historical features of your home, such as stained-glass windows, antique wood floors, ceiling moldings, or hand-carved banisters, ask us about a restoration cost homeowners policy or about adding an endorsement onto your policy providing this coverage.

  • If you are planning any type of restoration to your home, make sure you hire contractors and architects that specialize or have experience in restoring historic homes. Note that the local historical commission typically has to approve any renovation plans.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2012
International Risk Management Institute, Inc.


Don't Forget Your Carbon Monoxide Alarms

More than 400 people are killed each year in the United States from carbon monoxide poisoning, according to the Centers for Disease Control and Prevention (CDC). The American Medical Association reports that carbon monoxide poisoning is the leading cause of accidental poisoning deaths in the United States.

Other CDC studies indicate that more than 20,000 people are hospitalized each year from this gas, and these poisonings are on the rise due in part to economic reasons. With a stressed economy and high unemployment, more families face utility shutoffs. As a result, they employ other sources of heat, such as kerosene heaters, gas generators, and improperly maintained wood stoves and fireplaces. Such heat sources carry a heavy risk of carbon monoxide poisoning.

Carbon monoxide alarms are essential protective devices in homes with gas appliances, gas heaters, and fireplaces. Here are some tips to consider concerning these important alarms.

  • To ensure a high-quality alarm, look for the Underwriters Laboratories certificate on any detector you purchase.

  • Connect these alarms to the smoke alarm system so that any alarm in the house becomes activated if a problem arises.

  • Periodically test these devices according to the manufacturer's instructions. Batteries should be replaced at least once per year. Replacement of the alarm itself is often necessary after a few years since the average life span of carbon monoxide alarms is relatively short.

  • Verify that you have alarms in bedrooms and other locations where people may sleep since people who are sleeping can die from carbon monoxide poisoning without experiencing any symptoms.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011


Handling Motorized Property

Insurance policies are dedicated role players. They are designed to fulfill a specific job. A homeowners policy wants to handle losses associated with home ownership. Auto policies want to restrict their job to responding to auto losses. Boat policies are meant to……okay, you probably understand!

In order for a home, auto, or any form of policy to perform properly; it has to make clear what types of losses it will protect against and it must be priced so that it can efficiently handle an insurance company's objectives. Therefore, policies have to have clearly defined coverage roles. However, our lives and our activities; the things we own and the losses that occur do not always fall into clear categories. Motorized property is an issue that challenges the roles of both home and auto policies.

In this country, many millions of homes sit on property that includes land. That land often is divided into areas for driveways, front and back yards and walkways or paths. Autos, pickup, hybrids, SUVs and other vehicles are designed to transport people and property (cargo). These items are clearly covered by auto policies. Homes, garages, play sets, pools and structures are clearly covered by home policies. But what about other forms of property that includes motors; particularly items that have the capability of self-propulsion?

Different types of motorized property have their own designs and intended purposes. Motorized items that are meant to be used for travel and recreation, such as snowmobiles, mopeds, motorcycles, All Terrain Vehicles (ATVS) are still vehicles with the chief purpose of transporting persons and, sometimes, property. However, since they are significantly different than cars or trucks (they often have less than four wheels) or are operated differently (off-road use), they are covered differently. Owners of such property usually have to buy other forms of coverage, such as motor cycle or recreational vehicle policies.

Other forms of motorized property have other purposes, some that are directly related to owning a home. Items such as riding lawn mowers, snow blowers, motorized carts, garden tractors and similar equipment are designed to take care of a residence by cutting lawns, clearing driveways and walks, and maintaining gardens and landscaping. Such property is usually handled by a home policy; but there is an important exception. Coverage is usually granted only when such property is used on the residential grounds. When they are used on the roads or on property that belong to other persons; coverage stops.

Sometimes either a home or an auto policy can be modified by attaching (and paying for) additional coverage that takes care of such instances. However, when such changes aren't made or if the right coverage is not in force, coverage gaps still exist.

If you own motorized property, be sure you use it the way it is designed and the way it is intended. Also, be sure to find out and purchase the coverage you need.

COPYRIGHT: Insurance Publishing Plus, Inc. 2011

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Don't Become an Auto Theft Victim

Every 30 seconds, a motor vehicle is stolen in the United States. Using Federal Bureau of Investigation statistics, the National Insurance Crime Bureau reports that annual property losses from these thefts are approximately $5 billion. Although technology and aggressive law enforcement actions have lowered the auto theft rate in recent years, you should still be cognizant of this loss exposure. The following tips may prove helpful in reducing the chances that your vehicle or property in it may be stolen.

  • When temporarily leaving your vehicle, never leave it running or with the keys in the ignition.

  • Always lock your car and roll up the windows, even if it is in your driveway. If you have a garage, park your car in it, and close and lock the garage door.

  • Park in busy, well-lit areas.

  • When purchasing auto stereo equipment, choose items that can be removed and locked in the trunk.

  • When using valet parking or taking your car in for repairs, leave only the ignition key with the attendant.

  • Turn your wheels sharply toward the curb when parking since this makes it extra difficult for thieves to tow the vehicle. Always use your emergency brake, and leave the transmission in park or in gear.

  • Look into various antitheft devices for your auto. Ask about auto insurance discounts for antitheft devices, including alarms and window etchings.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2011


All information is in general term.  Your specific policy language governs what is and is not covered by your policy.