Nothing can seem as exciting — and overwhelming — as buying your first home.

There’s so much to consider that many first-time buyers don’t think about home insurance — a factor that will be important when it comes to closing on the house.

You should factor the ongoing cost of home insurance into your home-buying budget, because it will probably show up in your monthly mortgage payment along with payments on your loan principal and interest and your property taxes. That means you should go into your search knowing the basics about insuring your house and what can drive up the cost of coverage.

Once you choose the house and negotiate an offer, it will be time to find an insurance agency. There are a few issues to take into consideration before settling on a provider — all policies are not created equal. Using these tips can help you save money and ensure that you have quality coverage to protect your largest investment.

Give yourself credit

You know credit matters when it comes to getting a favorable interest rate on your mortgage. But did you know it also matters for home insurance? That’s because home insurance providers use your credit score as as part of the formula for assessing the risk you pose as a policyholder - this is not a hard hit on your credit, so it does not affect your credit score. The pricing models show that consumers with good credit are much less likely to file claims.

Before you get too far into the buying process, assess your credit and take steps to improve your score. At the very least, make sure to correct any errors. Improving your credit score can result in big savings on your mortgage and your home insurance premiums.

Shop around

The price of home insurance varies widely from carrier to carrier. That’s because each provider has a different algorithm for determining customer premiums. This is one reason why it’s a good idea to comparison shop by using an insurance agent who has access to many insurance companies. You could end up saving yourself hundreds of dollars simply by getting a few different quotes.

Don’t skimp on coverage

While you want to save money on home insurance, it’s important not to skimp on coverage. Standard home insurance policies typically offer protection from a variety of potential risks, ranging from liability to damage from weather-related perils. However, you may want to adjust or add coverage depending on your needs.

One matter you should pay close attention to is your amount of dwelling coverage — the part of your policy that protects the structure of your home. You should have enough dwelling coverage to rebuild completely in case the house is destroyed by a covered peril. That amount is often different from the purchase price.

Bundle your policies

Buying home and auto insurance from the same provider can save you as much as 20% on your annual premium. Do you have multiple vehicles? Or even a boat? You can often bundle all of these items with one carrier. Insurance companies are even now offering a bundle discount if you use the same agent for the home and auto insurance even if the policies are with two different companies.

Evaluate risks as you look

When you’re evaluating potential homes, consider the risk each proposes. Is the house in a high-risk flood plain? Standard home insurance doesn’t cover flooding. For this protection, homeowners must purchase a separate policy. Just a few inches of flood water can cause tens of thousands of dollars in damage.

Does one of the homes you’re considering have a swimming pool or trampoline on the property? Either factor can increase the amount you’ll pay for home insurance, or limit the options your insurance agent can get proposals from.

Remember, even veteran home buyers can get tripped up by the process. But take your time, ask plenty of questions and keep your eyes open for potential problems, and you’ll be well on the way to finding the perfect first home.

For more information on homeowners insurance, contact Lallis & Higgins Insurance.

zillow.com

If you were at risk of losing $5,000, $10,000 or even $15,000 and could do something to stop it, would you? The answer is a no-brainer: you’d would.

Yet, more than half of adults ages 23 to 29 years old who rent apartments don’t have renters insurance, putting all their stuff at risk.

Homeowners buy homeowner’s insurance to cover their home and belongings. Those who live in apartments or rental homes should get renters insurance to do the same thing. A renter’s policy will cover your personal possessions (clothes, electronics, furniture, etc.) if they’re stolen and will pay to repair or replace them if there’s a fire, burst pipe or other unfortunate event. Renter’s policies can also pay for you to rent a new home or stay in a hotel in if you are displaced by a fire or other natural disaster — coverage that most policies refer to as “loss of use.”

Like homeowner’s insurance, renter’s insurance includes liability coverage – if someone is injured in your home, the cost of their care and potential legal proceedings is covered up to your policy’s liability limits.

But unlike a homeowner’s policy that covers the home structure and its contents, renter’s insurance covers just the contents of your home. That makes it a lot cheaper. Your landlord has an insurance policy that covers the building, but that does nothing to protect your valuables.

Most people don’t have the cash sitting around to replace all their stuff. So why do so few buy renters’ insurance? One reason: while homeowner’s insurance is almost always required if you are paying for your home with a mortgage, there are no blanket laws requiring that you purchase a renter’s policy.

Another  reason: A lot of people are under the misconception that if they live in an apartment that their landlord is responsible for their belongings.

In fact, of the 59% of adults ages 23 to 29 who do not have renter’s insurance, 46% didn’t think they needed it. Another third said they thought it was too expensive and a quarter said they just hadn’t gotten around to purchasing it.

The average millennial carries $45,000 in debt, and it is thought that for that reason as well as other societal trends, they’re delaying a lot of life moments like marriage and home-buying. That means they’re going to rent longer.

Another reason younger renters don’t immediately think to insure their stuff is that they underestimate the value of their possessions. Once they do the math they’re shocked by the full value of what they own.

Think you can’t afford renter’s insurance? You can. The average cost of renter’s insurance is under $20 per month — equal to the cost of ordering takeout one night. What you pay for a renter’s insurance is largely based on the value of your belongings.

All renters policies should cover your belongings in your apartment and up to 100 feet from your apartment — to include damage or theft while you’re moving. Policies will cover your items whether or not you’re home at the time of the vandalism, fire, burst pipe or other disaster that ruined your belongings.

For more information, contact Lallis & Higgins Insurance.

Forbes

Four actives you and your family have to do this fall:

1. Go apple or pumpkin picking.

• C.N. Smith Farm Inc. in East Bridgewater offer pick your own apples and pumpkin, and also have a hay ride to enjoy. There is a Creepy Hollow Daytime Hayride on October 24th and 25th. www.cnsmithfarminc.com
• Lookout Farm in South Natick offers both pumpkin and apple picking during the fall. The farm also has children's play area along with a train and hay ride. www.lookoutfarm.com
• Connors Farm in Danvers on top of the apple and pumpkin picking – this farm offers a 7-acre corn maze, barn yard animals hay-jump and slide, and more… www.connorsfarm.com

2. Go for a walk or hike! Some of the most beautiful walking and hiking trails are at our footsteps - here are a few of our favorites.

• World's End Hingham GPS address 150 Martins Lane Hingham, MA 02043. Overlooking the Boston sky line, this location brings the best of both land and sea.
• Blue Hills trails in Canton are a great location to hike. They have different levels of hiking from beginner to intermediate. You can also visit the Trailside Museum at the base of trails after you're done with your hike.
• If you enjoy the foliage and like going for car rides, then you may want to take a trip up to New Hampshire this fall for a hike. A Moderate Hike Moose Mountain is just a little more than an hour and a half from Boston. For those more adventures keep driving north to the Franconia Notch State Park.

3. Haunted houses! If you like a good thrill, then these places may give you want you've been looking for.

• Factory of Terror – located in Fall River, Worcester and West Warwick RI. www.factoryofterror.com. If you like a good old fashion scare, then this is right up your alley.
• Boston Zombie Apocalypse located in Abington. www.bostonzombies.com. This experience is truly unique and each visit is different. We dare you to try to escape from the zombies!
• Ghost Ship Harbor is a unique experience that brings the terror of a haunted house onto the historic USS Salem battle ship. www.ghostshipharbor.com

4. Visit a zoo. The Fall is a great time to visit a zoo, and many of the zoos decorate for the seasons. Here are our top three zoos to visit in New England:

• Southwick Zoo in Mendon, MA. Just an hour south of Boston this zoo is a must see. They even have carnival rides for the little ones to enjoy. Zoo Boo Days are from October 22 – 30th. www.southwickszoo.com
• Franklin Park Zoo in Boston, MA. Conveniently located in Boston. The Midnight Zoo experience starts Sept 30th and runs to October 30th from 6:00 – 10:00 p.m. www.zoonewengland.org
• Rogers Williams Park Zoo in Providence Rhode Island. This zoo has a fun Jack-O-Lantern Spectacular from October 6th to November 6th. www.rwpzoo.org

Four actives you and your family have to do this fall:

Go apple or pumpkin picking.

• C.N. Smith Farm Inc. in East Bridgewater offer pick your own apples and pumpkin, and also have a hay ride to enjoy. There is a Creepy Hollow Daytime Hayride on October 24th and 25th. www.cnsmithfarminc.com
• Lookout Farm in South Natick offers both pumpkin and apple picking during the fall. The farm also has children’s play area along with a train and hay ride. www.lookoutfarm.com
• Connors Farm in Danvers on top of the apple and pumpkin picking – this farm offers a 7-acre corn maze, barn yard animals hay-jump and slide, and more… www.connorsfarm.com

Go for a walk or hike! Some of the most beautiful walking and hiking trails are at our footsteps - here are a few of our favorites.

• World’s End Hingham GPS address 150 Martins Lane Hingham, MA 02043.  Overlooking the Boston sky line, this location brings the best of both land and sea.
• Blue Hills trails in Canton are a great location to hike. They have different levels of hiking from beginner to intermediate.  You can also visit the Trailside Museum at the base of trails after you’re done with your hike.  
• If you enjoy the foliage and like going for car rides, then you may want to take a trip up to New Hampshire this fall for a hike.  A Moderate Hike Moose Mountain is just a little more than an hour and a half from Boston.  For those more adventures keep driving north to the Franconia Notch State Park.

Haunted houses! If you like a good thrill, then these places may give you want you’ve been looking for.

• Factory of Terror – located in Fall River, Worcester and West Warwick RI. www.factoryofterror.com. If you like a good old fashion scare, then this is right up your alley.
• Boston Zombie Apocalypse located in Abington. www.bostonzombies.com. This experience is truly unique and each visit is different. We dare you to try to escape from the zombies!
• Ghost Ship Harbor is a unique experience that brings the terror of a haunted house onto the historic USS Salem battle ship. www.ghostshipharbor.com

Visit a zoo.  The Fall is a great time to visit a zoo, and many of the zoos decorate for the seasons.  Here are our top three zoos to visit in New England:

• Southwick Zoo in Mendon, MA.  Just an hour south of Boston this zoo is a must see. They even have carnival rides for the little ones to enjoy. Zoo Boo Days are from October 22 – 30th. www.southwickszoo.com
• Franklin Park Zoo in Boston, MA.  Conveniently located in Boston. The Midnight Zoo experience starts Sept 30th and runs to October 30th from 6:00 – 10:00 p.m. www.zoonewengland.org
• Rogers Williams Park Zoo in Providence Rhode Island.  This zoo has a fun Jack-O-Lantern Spectacular from October 6th to November 6th.  www.rwpzoo.org

Life changes in the blink of an eye. Seasons change. Days turn to months and months to years. But what if you weren't there for all of these moments? How would your loved ones continue to live the life you always wanted them to live?

That's where life insurance can come in, giving you peace of mind that your family will never miss a moment. Life insurance: more than just protection, it can help protect your family’s financial security. Some types of life insurance can also offer access to cash in order to help meet needs during your lifetime which makes it a smart addition to most any financial plan.

How much life insurance is enough? Everyone’s life insurance need is different, but the average American family has only 3.5 years’ worth of coverage. A great first step is contacting Lallis & Higgins Insurance in order to get help calculating your unique need. All the types of life insurance offer different features designed for specific needs. We can help you choose.

For more information on Life Insurance to protect your family, contact Lallis & Higgins Insurance.

Buying a home can be so overwhelming so it is easy for first-time home buyers to give little thought to the homeowners insurance process. But if something happens to your home, homeowners insurance can make or break you. Before you sign on the dotted line, here are four tips to guide you:

1. Contact at least three insurance agents to compare coverage. Your mortgage lender will require you to have homeowners insurance. You may be required to purchase additional insurance – like flood insurance. You aren’t required to buy from a particular insurance company. Instead, compare coverage, price and customer reviews. Be sure you get the right type and amount of coverage. Shop for value, not rock-bottom price. Since you'll mainly deal with insurance companies during times of disaster, make sure the company you choose has great customer service reviews.

2. Escrow your insurance payments with your mortgage payments. If you're like most homeowners, you’ll add the monthly insurance payments into your mortgage payment. The lender will pay your insurance premiums (usually your property taxes, too) out of your escrow account. Lenders prefer this option because it lets them know your insurance premiums are being paid, and their investment is protected. Most likely, you’ll need to pay for one year of insurance at closing.

3. Make sure you're getting adequate coverage. The most important part of homeowners insurance is the level of coverage. Avoid paying for more than you need.

Here are the most common levels of coverage:

HO-2 – Broad policy that protects against 16 perils that are named in the policy.

HO-3 – Broader policy that protects against all perils except those specifically excluded by the policy.

HO-5 – Premium policy that typically protects newer, well-maintained homes; it covers against all perils except those specifically excluded by the policy.

HO-6 – Insurance for co-ops/condominiums, which includes personal property coverage, liability coverage and coverage of improvements to the owner’s unit. Insurance for the actual structure usually comes through the association.

HO-7 – Similar to an HO-3 policy, but for mobile homes.

HO-8 – Policy specifically for older homes, with similar coverage to an HO-2 policy. However, it only covers actual cash value.

4. Understand your policy. It’s not enough to get the right policy level. Before you make a decision, understand these homeowners insurance terms:

Deductible – This refers to the amount you must pay out of pocket before your insurance kicks in; the higher the deductible, the lower the annual premium.

Liability Coverage – This is coverage that will pay medical or legal bills if someone is hurt on your property, usually due to negligence.

Personal Property – Sometimes called the contents of you home, this is tangible property such as furniture, electronics and clothing.

Premium –  This is the price you pay for insurance, usually annually or monthly.

Replacement Cost – This is the kind of insurance that pays the full cost of replacing your dwelling or personal property, up to a maximum dollar amount. Most standard policies offer replacement cost, but you want to be sure the maximum amount is high enough.

Actual Cash Value – This type of policy gives you the current cash value (with depreciation) for personal property or your dwelling. It’s possible to have actual cash value dwelling coverage (as with an HO-8 policy), but to get replacement cost coverage for your contents.

Sub-Limits – Homeowners insurance policies will include limits, but they’ll typically also have sub-limits. For instance, the sub-limit on personal property for a $500,000 policy would typically be $250,000, or 50 percent of dwelling coverage.

Riders – These are policies you can include on your overall insurance policy to cover specific items. For instance, expensive antiques, jewelry and artworks are often covered under their own rider because they’re too valuable to be covered as regular personal property. Some HO-8 policyholders also may get additional riders for things like heating, ventilation and air-conditioning systems, which are part of the home and expensive to replace.

Be sure you understand how all of these terms work together in your homeowners insurance policy. Ask questions to ensure you have the right amount of coverage at the right price! For more information or for insurance quotes, contact Lallis & Higgins.

US News - Money

A flood can devastate your home and your financial security. Any flood, large or small, can cause thousands of dollars in damages. Even homeowners in low to moderate-risk zones are at risk. Up to 25% of all flood claims come from people living outside high-risk zones.

Flooding happens here in Massachusetts. You don’t have to live near a major waterway to be flooded. Sudden severe storms can cause flooding.

You might think that your Homeowners insurance covers flooding, but it doesn’t. Flood insurance gives your home that important layer of protection your Homeowners insurance doesn’t provide.

Myth: Flood Insurance Costs Too Much

You might be surprised at how inexpensive it is if you are not in a high risk flood zone. The average flood insurance policy costs less than $570 per year. Most homeowners live in a moderate-to-low risk area and are eligible for coverage at a preferred rate with building and contents coverage for one low price. If you live in a high-risk area, a standard rated policy is the only option for you. It offers separate building and contents coverage. If your home is in a high-risk flood area and you have obtained a mortgage through a federally regulated or insured lender, you are required to purchase a flood insurance policy.

How to Purchase Flood Insurance

Flood Insurance is written through the National Flood Insurance Program (NFIP), a federal program authorized by FEMA.  Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. You need to contact an insurance agent for a quote and/or application (all policies written by the NFIP are written through insurance agents).

Typically, there’s a 30-day waiting period—from the date you purchase the flood insurance—before the policy goes into effect. The waiting period, however, does not apply to a new home purchase or refinancing of a mortgage if the mortgagee requires flood insurance.

What is Covered by Flood Insurance – and What is Not

What’s covered under Building?

• The insured building and its foundation.
• The electrical and plumbing systems.
• Central air conditioning equipment, furnaces, and water heaters.
• Refrigerators, cooking stoves, and built-in appliances such as dishwashers.
• Permanently installed carpeting over an unfinished floor.
• Permanently installed paneling, wallboard, bookcases, and cabinets.
• Window blinds.
• Detached garages for up to 10% of the building limit; other detached buildings require a separate Flood policy

What’s covered under Personal Property?

• Personal belongings such as clothing, furniture, and electronics
• Curtains.
• Portable and window air conditioners.
• Portable microwave ovens and portable dishwashers.
• Carpets not included in building coverage
• Clothes washers and dryers.
• Food freezers and the food in them.

What’s never covered by flood insurance?

• Damage caused by moisture, mildew, or mold that could have been avoided by the property owner.
• Currency, precious metals, and valuable papers such as stock certificates.
• Property and belongings outside of a building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools.
• Living expenses such as temporary housing.
• Self-propelled vehicles such as cars, including their parts.

Limitations to coverage in a basement

• Coverage in a basement is very limited.
• It includes cleanup expense and items such as furnaces, water heaters, washers and dryers, air conditioners, freezers, utility connections, and pumps.
• There is no coverage for the contents of a finished basement and improvements, such as finished walls, floors, and ceilings.
• Personal property located in a basement is not covered.

For more information on flood insurance for your home, contact Lallis & Higgins Insurance.

massrealestatelawblog.com

Home rentals are hot.

Whether you’re choosing a traditional house or an apartment in a large complex, more and more people are renting.

Some are renters by default. Some are renters because they are students living off campus. Perhaps more significantly, many people today prefer the flexibility of renting as opposed to the commitment of owning a home.

But if you have made the decision to rent, there is one decision that is strongly recommended: it’s called renters insurance.

Your landlord already has insurance, but it doesn’t cover you or your possessions. It only covers the building or house where you live and any liability the owner might face.

It does not cover your belongings or your liability for accidents.

If your home is burglarized and possessions are stolen or damaged by a fire or flood, a renter’s insurance policy can allow you to recover their value.

If someone is injured or has an accident in your home, renters insurance can help protect you in the case a liability lawsuit.

You may not be worried about these things, but you should know that accidents can and do happen to good people every day. You may not think you have enough possessions to insure, but you’ll find that you have more than you think if you ever need to replace them all.

Accidents do happen

Take for example:

You finish dinner and get ready for bed. The trees around the complex all look healthy and hardy. But overnight, there is a powerful thunderstorm.

A huge oak tree is blown onto the complex, nearly crushing it. While you escape unscathed, the house is almost destroyed. During the ensuing rain storm, many of your possessions are ruined.

To make the situation worse, while you are scrambling to find a place to live, someone steals your grandmother’s priceless diamond bracelet.

In addition, the repairs will take months, so the landlord terminates the lease and tells you that you can no longer live there for safety reasons. You move into a hotel, assuming your costs will be covered.

Without renters insurance, you are out of luck. Neither the owner nor the landlord has any responsibility to you whatsoever. Yes, you will likely get your security deposit returned, and if you have prepaid your rent, you’ll probably get back the unused portion.

But beyond that, you’re on your own.

The sad part of this story is that most rental insurance policies only cost a few dollars per month. And you can usually get a discount by selecting the same company you already use to insure your car. Just ask your agent.

If you rent, you need renters insurance because stuff happens. It just does.

The basic coverage you should have falls into four areas:

Personal Property Protection: This coverage protects your valuables, such as furniture, clothing, electronics, collections, and more.

Temporary Living Expenses: If your home is damaged by flooding or fire or made unlivable by an accident, this coverage pays for your increased living expenses, sometimes including food, while the property is repaired, often up to 24 months.

Liability Protection for You: If a guest or a visitor suffers an accident at your house or apartment, this coverage protects you against a lawsuit that might come as a result.

Guest Medical Coverage: If a guest suffers an injury while visiting, this coverage can cover their medical expenses.

Interestingly, more and more landlords require that prospective tenants show proof of renters insurance as part of the rental process. That’s because your renters insurance can keep the landlord out of a lawsuit caused by an accident or calamity.

For more information on renter’s insurance policies in Quincy and Weymouth, MA, contact Lallis & Higgins Insurance.

myajc.com

Here’s what you need to know if you’re in the market for homeowner insurance to protect your biggest investment - your home.

The law doesn’t require home insurance. However, you’ll have a hard time coming up with good reasons not to, because homeowner insurance protects your most valuable assets. This includes the structure of your “dwelling” (which could be a house, townhouse, condo, or co-op), and your belongings and possessions.

Home insurance protects you in other important ways, too. It provides money for rent and living expenses if your home becomes unlivable due to damaged caused near or to your home.  The homeowner policy also protects you and your assets through liability coverage.

Not Required? Not Entirely…

Only people who pay for their homes in cash, or those that have paid off their mortgage are not required to carry home insurance.  Pretty much everyone else must insure their home, as most mortgage lenders require it.

That’s why you should know as much as possible about homeowner’s insurance coverage.

Basic Components

Homeowner’s insurance policies typically cover the following:

Your home and "structures"—this includes plumbing fixtures, electrical wiring, and heating and permanent air-conditioning systems inside your home. It also includes external ones like fences, garages, gazebos, and sheds.

Your Stuff—Clothes, electronics, furniture, books– basically everything that can fall out of your home if you turned it upside down can be covered through your home insurance. Bonus: these are protected even when they’re not on your property. For example, when they’re in your car or with you at work or on vacation.

Your insurance company will repair or replace all of the above (up to a set limit) if they’re stolen, damaged, or destroyed by lightning, fire, hail, hurricane, or any other disaster that’s listed in your homeowner’s policy.

Note: Protection against floods require a separate policy, and earthquake coverage can be added to most homeowner policies for an additional fee.

Standard homeowner policies also:

• Cover you when you’re hit with a lawsuit related to bodily injury or property damage caused by you, a live-in family member, or your pets
• Provides no-fault medical coverage, which means your insurance company will pay the medical bills for people who are hurt on your property or are hurt by your pets
• Pay some of your living expenses (hotel bills, restaurant meals, and more) if your home is damaged or destroyed by one of the above-mentioned disasters, and you’re forced to live elsewhere while it’s being repaired or rebuilt

Increasing Coverage

Many companies have added additional coverage like equipment breakdown, law and ordinance, and expanded replacement cost to name a few.

You can also buy personal umbrella liability insurance to raise the limits of your liability coverage and protect yourself against claims of libel or slander. Rates and coverage vary depending on the amount of protection you want, cars you own, along with other factors like number of houses, boats, you own.

The most common homeowner’s insurance form is the HO3:

Special Form (HO-3)— the most popular homeowner insurance policy because it provides people with the broadest coverage, and is required by most mortgage companies.

Note: if you own a multi-family home, you can add an endorsement to your “Special Form” policy to cover risks related to having rented units.

Co-op, Condo, and Renter Policies

If you own a condo or co-op or rent a home, you should check out these policies:

• Tenants Form (HO-4)—Perfect for renters, this policy type protects possessions as well as loss of use and liability coverage.  
• Condominium Unit Owners Form (HO-6)—Along with a condo owner’s belongings, this policy type can insure the floor, ceiling, and walls against all of the disasters covered by the “Broad Form” policy. It’s recommended to check your condo docs to see where the condo association’s master policy leave gaps in coverage to the space you own.  

Levels of Coverage

After selecting a homeowner’s insurance policy, you must choose a level of coverage.

The two main options are:

• Actual cash value—your insurer will pay you “market value”. This means depreciation will be factored into the final cost for your home or possessions should they be lost, stolen, or destroyed due to any of the disasters named in your policy.
• Replacement cost—your insurer will refer to the original price of any items that need to be rebuilt, repaired, or replaced, no matter how old or outdated they may have been when they were destroyed, damaged, lost, or stolen. Most mortgage companies require your home to be insured at 100% of its replacement cost.

Your insurance broker can give you the best advice when considering these options. Contact Lallis & Higgins for more information on home insurance.

quotewizard.com

Do you have flood insurance? Do you need flood insurance?

If you don’t have the answers to these questions or are unsure of the answers to these key questions, keep reading.

Of all the natural disasters impacting the United States, floods are the most common. Average homeowners are five times more likely to deal with flood than fire damage. (And your chances increase if you live in a medium- or high-risk area for floods.)

Flood damage can be expensive to repair. The National Flood Insurance Program (NFIP) estimates a six-inch flood that hits a 2,000-square-foot home is likely to cause about $40,000 in damage.

Then there's the surprising fact that most standard homeowners and renters insurance policies don't cover flood damage.

Homeowners and Renters Policies Don't Cover Flood Damage

Typical homeowners and rental insurance policies don't cover flood damage.

Most people ignore flood insurance for this very reason. They assume the insurance they have will protect them from the aftermath of a flood.

You have to go out of your way to buy flood insurance as a separate policy from the NFIP. The Federal Emergency Management Agency (FEMA) administers this insurance as does one of the 80 private insurance companies that provide flood coverage.

A Few More Reasons as to Why You Shouldn't Ignore Flood Insurance

Generally people overlook flood insurance because they don’t think they need it.

Statistics show US homeowners (and renters), in general, are likely to deal with flood damage at some point in their lives.

Chances are higher if you live in an area that's considered “high risk” for flooding. There’s a one in four chance of experiencing a flood during the life of a 30-year mortgage in high risk areas.

Low- or moderate-risk areas field almost 25 percent of flood-damage claims. So, flood insurance is a good idea no matter where you live.

When You Are and Aren't Required to Have Flood Insurance

Do you live in a high risk area? Is your mortgage with a federally regulated or insured lender?

If you answered yes to both questions, you're required to have flood insurance.

If you live in a moderate- or low-risk area, you aren't federally obligated to have this kind of insurance, although some lenders may still require it.

In some situations, government aid is available for flood damage to homeowners who didn’t have flood insurance. However, if they want to quality for future aid, they need to purchase a flood policy first.

Is One Rate Just Like the Other?

Historically flood insurance rates are set nationally and don’t differ from company to company or from agent to agent. Recently Lloyds of London has come into the market to offer a program to owner occupied homes in the AE zone at a discounted rate of the FEMA set price. Contact Lallis & Higgins Insurance to see if your home qualifies for this new program.

The rate is based on a number of factors. Including the age of your home or building, how it was built, the elevation of your property, and its overall flood risk.

You can find out what that rate would be by requesting a quote for a flood insurance policy.

Contemplating Coverage Impacts and Limits

Another factor companies take into consideration when determining your rate is the desired amount of coverage.

Be aware that standard flood policies place certain limits on the coverage they offer.

Homeowners can buy a maximum coverage of $250,000 for buildings. And up to $100,000 for the contents.

Buildings may include the actual structure and its foundation, as well as any air-conditioning, electrical, heating, and plumbing systems and equipment.

Business owners can buy up to $500,000 in structure coverage and $500,000 in personal property coverage.

If your building is worth over $250,000, you'll have to buy excess flood insurance. This increases your coverage limit to $750,000. (Businesses can extend their coverage up to $1 million.)

Don't Worry, It's Easy to Buy

Despite the fact that flood insurance is a separate policy, it isn't difficult to purchase.

In fact, it may be easier to buy than some other forms of insurance. Options are limited to private companies and agents that have partnered with the NFIP.

A Few More Things You Should Know About Flood Insurance

There's a 30 day waiting period. In most cases, flood insurance policies won’t take effect until after that period is over.

You'll still be eligible for government aid. Having flood insurance won't prevent you from receiving government aid if you live in an area declared as a federal disaster area due to flooding.

Government aid isn't a suitable alternative to a flood policy. You may be thinking, "Hey, why should I bother paying for insurance when federal disaster assistance will bail me out?"

The reality is government aid isn't all it's cracked up to be. There are a few reasons for that.

First, before a community can become eligible for this assistance, it has to be declared a federal disaster area. And these declarations are issued in less than 50 percent of flooding incidents.

Second, federal disaster aid usually takes the form of a low-interest loan. The loan is designed to help pay for the repair of flood damage. It isn’t straight compensation that doesn't need to be repaid.

A flood is a fairly specifically defined event. Just because your basement fills up with water after a torrential rain storm, doesn't mean the resulting devastation will be covered by your insurance policy.

For that to happen, the flood has to affect two or more properties. Or, if affects only your property, it has to have covered two or more acres of land.

Also, you might want to note that damage from wind-driven rain--such as when rain comes through a hole in a wall or roof, or through a wind-damaged window--isn't considered flood-related.

For more information, contact Lallis & Higgins Insurance.

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