Insurers Shift Cost Burdens to Homeowners

- By Kevin Yu

Although our economy is currently in recession, the cost of insuring a home doesn’t seem to decline, in stead, it is climbing sharply and is expected to continue doing so for several years. It is shown from the New York Times, the prices to insuring a home are rising at more than twice the 3 percent average of recent years, and by more than 10 percent in many states.

Just to show an example of what I meant by the rising price of home insurance. Allstate, the second-largest home insurer, has increased range from 10 percent to 25 percent in several states. State Farm, the largest home insurer, has lifted premium 6 percent to 10 percent in a handful of states. Safeco, the eight largest insurers, says it expects increases to average more than 25 percent for its 1.5 million customers this year.

Experts suggest that insurance companies, after paying out more than $22 billion in claims inflation-adjusted dollars, they began rewriting policies to protect themselves as mush as homeowners. Experts also believe that insurance companies developed computer programs intended to limit payouts on claims. As a result, American homeowners have to make do with much less coverage at steadily rising prices.

Sources:

1. http://query.nytimes.com/gst/fullpage.html?res=9B0DE0DF113EF93AA2575BC0A9679C8B63&sec=&spon=&pagewanted=print

2. http://www.nytimes.com/2007/11/23/business/23insure.html?_r=1

3. http://query.nytimes.com/gst/fullpage.html?res=9F04E6DC1139F930A25752C0A9649C8B63

The worst kind of wake-up call

Posted by Pin-Yu Liao

You don't need to be in the path of a Category 5 hurricane to put yourself on alert. Do a homeowners insurance audit annually -- actually, how about right now?
Grab your policy from the back of that drawer. Now's the time to find any coverage gaps -- not after disaster unfolds.

Home grown?
Have you made improvements to your home -- added a deck lately or sunk a living room? If you've kept mum to save on premiums, that dream master bath won't be covered. Check your policy's limits on any new stuff (electronics, appliances, furniture, jewelry), and ask about riders if you're over the caps.
Also, make sure your policy pays the full replacement cost, not actual cash value (ACV). If something is damaged or stolen, ACV covers only the depreciated value -- what it was worth when it was lost.

Click to read.

Home Insurance: What You Need to Know

- By Kevin Yu

After reading several articles about strategies for insuring homes from the New York Times, I have gained some knowledge of different strategies for insuring a home cheaply and the general idea about home insurance.

Nowadays, the cost of home insurance is rising especially in coastal areas where are vulnerable to hurricanes and flooding. People are likely to find a way to reduce their home insurance’s cost. One strategy that I learn from the article of how to lower insurance cost is by improving roofs, installing roof shingles, and strengthening garage doors. As a result of these implements, one person can lower premiums by 45 percent off the highest rates.

On the other hand, I also learn what are the necessary components that a person need to know about home insurance. Generally, a standard homeowner’s policy has four components:

Coverage for the structure – This is the most important aspect of the policy because it covers the damages to a person’s house from fire or other insured disasters.

Coverage for contents – Most plans will also cover the cost of replacing personal belongings if they are stolen or lost in a fire or other insured disasters. (The standard coverage limit is equal to 50 percent of the value of the structure of a person’s home.)

Liability protection – A standard policy covers a person in three ways. 1.) It covers damage to other people’s property 2.) It covers personal liability 3.) It also covers medical expenses for injuries suffered by others

Reimbursement for additional living expenses - Under this policy, your plan will cover your expenses if a fire or any other insured calamity destroy your home and force you to leave.

Sources:

1. http://query.nytimes.com/gst/fullpage.html?res=9B04E7DC173AF934A15754C0A9619C8B63

2. http://query.nytimes.com/gst/fullpage.html?res=9B04E7DC173AF934A15754C0A9619C8B63

3. http://www.nytimes.com/2007/07/25/realestate/greathomes/25gh-home.html