There are 3 Big Changes in Home Insurance that can cost you big money! If you are like most homeowners you buy a home policy when you close on a new home and stick it in the drawer. Perhaps you take a glance at it when it renews each year, but for the most part you do not pay much attention to home insurance. It stays the same pretty much right? Not exactly.
There are 3 big changes that you may not be aware of about your home insurance. Either the current policy has been endorsed with new changes or amendents – those pretty much went in the round file (trash) or you have been re-written a new home policy when you called your insurance agent to inquire about why your home insurance is so high.
The first change and a doozy is the endorsement added to many Arizona home policies. The ROOF REPLACEMENT SCHEDULE. As professional independent insurance agents in Arizona we know there are 1000’s of homeowners insured with a roof schedule and they are not even aware of it. They find out in the worst way and that is when they file a roof claim.
It goes something like this: “Mr. Jones we have your check ready to send out for your recent micro-burst roof damage. The total damage for repairs comes to $25,000. Your policy has a roof schedule, your roof is approximately 10 years old and according to the roof schedule we will be depreciating $1500 for each year. Your check for $10,000 is being sent today.”
And this is where you say “What…I thought I would get a brand new roof!” Nope. This is the roof schedule boogy man. The roof schedule boogy man typically gets you a check for about 1/2 of what it takes to repair or replace your roof. Now, in all fairness home insurance companies are in the for-profit business, so the roof schedule helps mitigate losses on old and outdated roofs.
However, this does not mean that you have to buy a home insurance policy with a roof schedule. All home insurance companies in Arizona have different underwriting and rating rules. Chances are great if you use an agent with access to 1 single company you might have a roof schedule by default – as in there were no other options presented to you because, well, there were no other options.
The 2nd Big Home Insurance Change that can cost you big money is: Water Backup. Typical home insurance pays for water damage from sudden and accidental escape of water from a broken pipe or burst appliance line. While this water damage is horrible it is not the worst. The worst is “black water” or “sewer backup water” and this is typically excluded from your home policy. You can add it to your policy but it will cost you. However, with more water backup claims being presented, several home insurance companies represented by independent agents are offering at a minimum $5000-$10,000 in standard water backup coverage for no extra charge. It is much harder to clean up yucky, stinky, toxic backup water than regular water. Read your home insurance declarations to see if water backup is on your current policy or call us for a review at 520-444-8607.
The last big change in home insurance that can cost you big money is pretty sneaky! Your REVISED HOME INSURANCE DEDUCTIBLE. You may have received your Arizona home insurance renewal a few years back and noticed that you could renew for a price of X if you agreed to a 1/2% or 1% deductible. This again was done in an effort to reduce the home insurance companies exposure. As professional risk managers we’re all for higher deductibles to save money and prevent you from making small claims that will negatively impact you. However, what the average home insurance consumer does not realize is that they can keep a lower deductible ie $1000.00 instead of having to agree to say a $3000 deductible (1%) on a $300,000 home.
At Tucson Insurance and Pacific Insurance Agency we are looking for ways to save you money, protect you properly against the risks you face, and take out a bunch of “Gotcha’s” like roof depreciation schedules, water backup and big jumps in your home insurance deductibles.
If you are like most homeowners, you buy a home policy and it renews automatically with your home mortgage escrow year on year and don’t give it much thought. Even when the insurance company sends renewals with endorsements and adjustments, most just assume it’s all good. If you have an independent agent you’ll have more options available to you and in the long run save more money – in both premiums paid and risk management.