Tuesday, December 2, 2014

Ask an Agent: 5 Questions You're Afraid to Ask Your Insurer

Nervous about letting slip information that could cause trouble with your insurer?
No problem, we asked the tough questions for you.

Ever have a burning question for your insurance company that you didn’t want to ask because you were too afraid? You may have thought, “What if I ask this question and my premium goes up? Or what if they drop my policy altogether?”
If you’ve ever had those fears, today is your lucky day.
We know the implications of approaching certain topics with your insurer, so we posed five troublesome insurance questions to Mike Pesackis — a licensed HomeInsurance.com agent since 2006. Here are his insights.

I’m getting my kids a trampoline for Christmas. If I don’t tell my insurer, my home insurance premium won’t go up, right?

Correct — but if there is a claim associated with that trampoline, you might not be covered, either.
Trampolines are responsible for many injury claims every year. As a result, the presence of a trampoline is an underwriting concern.
Typically, owning a trampoline does not result in a rate increase. Some carriers will require protective netting, while others will not insure a home with a trampoline at all. This is definitely a case where disclosing to your carrier up front is a much better strategy than possibly being denied a claim.

I was in a car accident, but there was no damage to either vehicle. Should I tell my insurance provider?

This is a sticky one. If it were me, I would not tell my insurance agent because this would open up a can of worms unnecessarily.
However, if the police showed up on the scene and filed a report, your insurance carrier will definitely find out eventually. In that case, it would be in your best interest to have your carrier find out directly from you.

I adopted a dog from a local shelter. Should I tell my insurer?

Absolutely! Regardless of the breed, having a dog in your house increases risk, which means your carrier needs to know.
Many home insurance carriers cover dog bite liability; however, a claim would only be covered if your carrier actually knows you own the dog. Depending on the breed of your dog or whether the dog has a bite history, the insurance company could raise your premium, decline to renew your policy or exclude coverage for the dog altogether.
The best thing to do is call your provider ahead of time, reveal your plans and let the carrier help you through the situation. Generally, carriers only consider a few breeds — including pit bulls, Dobermans, and Akitas — automatic disqualifiers. Often, though, getting a dog is a non-event, especially if you’re getting a typically non-aggressive breed such as a Lab, beagle or poodle.

Will my auto insurance premiums go up if I file a claim for a broken windshield?

This depends on your carrier and how your policy is written. Many carriers will offer “full glass” coverage on comprehensive claims — meaning that a broken windshield would be replaced without you paying a deductible, and with no impact to your premium.
If you do not have full glass on your comprehensive coverage, your premium might go up slightly, but not nearly as much as it would for an accident. Carriers are typically pretty lenient when it comes to comprehensive claims (such as a broken windshield) because these types of issues do not have anything to do with your abilities as a driver.

I run a business out of my home. Is my home business covered under my home insurance policy?

Not typically. Home insurance carriers shy away from businesses in homes because with increased foot traffic comes increased risk of liability claims (such as a slip/fall). In some cases, your business-related equipment or inventory might not even be covered by your home insurance policy.
Your best bet would be to call your carrier to discuss your business. Depending on the scope and nature of your business, the carrier might require you to get a professional liability policy or small business insurance policy to further mitigate risk.

By Samantha Alexander

Monday, November 3, 2014



The holiday season is right around the corner, and the housing market could not provide homeowners with better news!
Over the past year, the housing market improved by leaps and bounds. Several factors, such as fewer distressed properties, low inventory, and high demand, converged to drive up home prices and give equity back to homeowners who haven’t had equity since the housing bubble burst.
If you found yourself struggling in recent years, or just waiting to sell until the housing market turned around, it’s important to know that the time is now! Let’s take a closer look at how the market has improved and why the turnaround in the market affects you, too!

When the housing bubble burst between 2007 and 2008, home values plummeted. Almost overnight, homeowners nationwide saw the equity they built in their homes vanish.

For many, the situation worsened as recession gripped the United States in the wake of the bubble burst.
As the recession deepened, more and more families struggled financially. Hit hard by unemployment and a worsening economic landscape, many found themselves unable to afford their mortgages. Facing the threat of foreclosure, many were forced to try and sell their homes. However, because home prices had fallen so precipitously, many found that they owed more on the home then the home was worth.

These homeowners, called “distressed homeowners,” numbered in the millions. In the years following the housing crisis, the sheer volume of distressed properties weighed heavily on housing prices, keeping all home prices low. However, over the past couple years, the housing market has begun to rebound.

More recently the number of distressed properties has fallen to levels not seen since before the housing crisis, and the reduced number of distressed properties is positively affecting home values.

 First, both the economy and the housing market are improving. As homeowners’ financial situations improve, far fewer find themselves facing the threat of foreclosure. Additionally, fewer homeowners are forced to sell at bottomed out prices, as they are in a better position to wait until they recover value in their homes.

 Second, as things started to look up, investors flocked to the housing market. Both small investors and large-scale investment firms bought huge quantities of foreclosed upon and distressed properties, taking them off the market in bulk. Without the millions of distressed properties keeping prices low, home prices have skyrocketed over the last couple years.

As mentioned previously, with fewer distressed properties on the market, home prices have been able to recover significantly.
In fact, April 2014 marked the 26th month of consecutive home price gains, with a gain of 10.5% over April 2013. (Shockingly, a double-digit gain of 10.5% was the lowest gain 14 months!)1 To see just how sharply home prices have increased, refer to the following graph.
 The graph shows the percent change in home prices year-to-year since 1988. If you look at the last couple years, you can see just how sharply prices have increased!

While the reduced number of distressed properties allowed home prices to begin to recover, many
factors fueled the skyrocketing prices. Chief among those factors is the development of a seller’s market.
As the United States economy improved and home prices recovered, more people were in a position to
buy a home.
When the housing crisis hit, many homeowners who wanted to sell were forced to wait until
the market recovered. For many, that time is now. In fact last year, more than three million homeowners
regained equity, according to the National Association of REALTORS3. Additionally, unemployment
decreased and more Americans started to enter the housing market. At the same time, home
affordability remained low. The result was a sharp uptick in demand.

However, there have not been enough properties to meet the increased demand. During the housing
crisis, new home construction came to a stand still. Consequently, there are not enough new homes on
the market today. Additionally, many homeowners are still waiting to sell their home. Some are waiting for
home prices to rise even more, while others are waiting for more homes to choose from. The result is
even less inventory on the market.

This imbalance in supply and demand has contributed significantly to the rising home prices in recent

The current market conditions provide a “perfect storm” for those looking to sell their homes. Because
inventory has remained so constrained, homeowners are able to get more for their homes than they
realize, as buyers enter bidding wars over the properties that are available. In April, the median time on
market for all homes was just 48 days!

In this crazy market, people are even making offers on homes not on the market!
These market conditions won’t last forever, though! More homes are expected to enter the market,
balancing supply and demand. Consequently, home prices are expected to grow much more slowly next

As a real estate agent in today’s market, I make it my business to have the most up-to-date information
and can help you understand exactly what your current situation is. If you have been underwater, it is entirely
possible you are not anymore. If you have been holding off until the market started to recover, that
time is now.

Contact me today for a free valuation of your home
and let me help you determine your best option!

Monday, October 13, 2014

Homeownership Expenses You Might Not Anticipate

We asked a few financial bloggers to share their experiences and advice on the expenses of buying and owning homes.

Purchasing a home is an exciting time, especially for first-time buyers. However, the financial commitment is sometimes overwhelming.
Beyond the standard mortgage, taxes and insurance calculations, homeowners inevitably face unexpected fees, repairs and lifestyle adjustments when settling into their new homes. We asked a few financial bloggers to share their experiences and advice on the expenses of buying and owning homes.

What was the most unanticipated expense of buying your home?

Two years ago, we purchased our home in New York after owning homes in Georgia and Florida, and we were surprised at how much higher our closing costs were in New York versus the other states. The biggest surprise was the lawyer fee we were required to pay. When we purchased homes in the past, everything was handled through the escrow agent, and additional legal fees were not required. — Shannon McLay of Financially Blonde

What are the most surprising expenses you encounter as a homeowner?

The surprising expenses are seasonal: decorating the house for the holidays, planting flowers in the spring, home projects in the summer. While it’s easy to think about the weekly and monthly routine expenses, those are more difficult to plan around. — Joe Saul-Sehy of Stacking Benjamins

Which bills increased when you became a homeowner?

Condo fees and heat! When we were renting, our landlord paid for heat and hot water. Let’s just say, now that we’re homeowners we’re taking shorter showers and wearing more sweaters in the winter. — Student Debt Survivor

What is the most expensive cost of owning a home vs. renting?

The answer has got to be maintenance. We would never have had to buy a new roof as renters, but we had to pay approximately $15,000 for the entire roof to be reshingled. The others would to have new landscaping put in ($7,000), and all windows, which were installed in 1961, were replaced with double-pane windows ($15,000). Ongoing expenses, like utilities (natural gas, electricity, water, trash), gardeners, property tax, and insurance are not all that costly, but they add up over the course of a year to just under $10,000. — Save and Conquer

How did your budget change after buying a home?

We were very aggressive with saving our money prior to buying our house. We were saving over 50 percent of our income. We didn’t go out very often, and we tried to eat at home. We bought a fixer-upper because it was in a better location and the price was more affordable than new builds. DIY Network and Pinterest make DIY updates seem so easy and affordable. Prior to homeownership, we never had to worry about paying for repairs or really about updating our apartment. We were renters. Now, I have to make sure any purchase fits in our budget. I’m also saving for bigger improvements like the patio. Instead of going shopping for clothes and shoes, I’m allocating that money to Lowe’s or Home Depot! So far, we have had to call a plumber to fix a leak, the exterminator to exterminate, and now, our garbage disposal is broken. $100 here and there adds up. — Savvy Financial Latina

What advice can you offer prospective home buyers beginning their shopping experiences?

Transitioning from a renter to a homeowner can be an expensive endeavor. You need to have much more money in your emergency fund to cover various things that can go wrong. Don’t forget to budget for property taxes, home insurance, repairs, HOA fees, utilities, furnishing and landscaping. There are many more expenses when you’re a homeowner. — Retire By 40

What saving strategies did you use to prepare for the expenses of homeownership?

I’m not sure if it’s a savings strategy, but whenever my wife or I wanted to spend on certain things, we’d say to ourselves, “We’re saving for a house.” That helped us focus on our priorities and goals, and not spend on things that we might have otherwise. I think it is also important to try living on your future budget as a homeowner to ensure that you can afford to buy a house. — Living Rich Cheaply

What financial concerns do you have about purchasing a home now?

My main reservation is that I don’t know how long I plan on staying in one area. I still want to travel the world before I buy. When I’m ready, I’ll create a realistic budget for a home and stick to it. Too many people create a budget and go over, and then fail to realize that they still have to pay property taxes, property, insurance and more. — Alexis Schroeder of FITnancials

How can first-time buyers financially plan for the total costs of homeownership?

Save as much money as you can. If you’re able to save for a 20 percent down payment, that’s even better. Once you move in you’ll be amazed at how often something will need your attention. That will generally take money. Go in with having money set aside to cover things that might pop up. You should also put money aside each month to cover those things. You might feel it, but the last thing you want is to be surprised by an expense and not be financially prepared for it. — John Schmoll of WiseDollar