The Types of Insurance You May Need or Are Required to Get by Law

 

The world of insurance can be overwhelming and confusing to most Americans.

It is difficult to know what types of insurance you should prioritize. When you're working within a budget, you may be tempted to cut certain types of insurance out to save a bit of money. In many cases, this could be a huge mistake.

Some types of insurance are required by law and, if you're caught without them, you could be in serious trouble. Depending on where you live, the required insurance may include auto insurance, health insurance, homeowners or renters insurance, and even disability insurance.

Auto Insurance

Auto insurance is mandatory in almost every state. If you are caught driving without it, you may face serious fines and penalties. Most states require a minimum amount of liability coverage as well as uninsured motorist coverage (in case the other driver doesn't have insurance).

Home/Renters Insurance

There aren't any laws stating that you need to get homeowners or renters insurance, but it's certainly wise to do so. If you've got a mortgage, your lender may require you to get home insurance to protect their stake in the property.

These types of insurance help you financially if your home or belongings are damaged or stolen. Without it, you'd have to pay out of pocket to replace your belongings, which can be financially devastating in many cases.

Health/Life Insurance

Health and life insurance are both non-mandatory, yet essential forms of protection. If you have dependents, life insurance is necessary to ensure that they're looked after financially when you pass away. You'll choose between term and whole life insurance, which will depend on your budget and needs.

Health insurance is important because most medical attention in this country is enough to cripple someone financially. If you pay into a health insurance policy or get it through your employer, you can significantly reduce the burden of medical bills.

Business Insurance

If you're a business owner, there are a few different types of insurance that are mandatory. General liability insurance protects your business against claims of bodily harm or property damage. For example, if someone slips at your restaurant, general liability insurance covers their medical bills.

Workers' comp insurance is similar but covers an injured worker's medical expenses and missed time. If you're found without one or both of these, you could be hit with major expenses or even serious fines.

Get the Right Types of Insurance

Not all these types of insurance are legally required, but they're all highly recommended. Not only do they protect you, but they put your mind at ease. Knowing that you're covered in the event of an auto accident, natural disaster, or medical emergency allows you to focus on other things.

If you need auto, home, business, or life insurance in Greensboro, NC, look no further than the Tom Needham Insurance Agency. We'll help you find the best possible rates, so you have the protection you need without breaking the bank. Contact us today to find out what we offer.

Preventing Theft While on Vacation

 

Preventing theft while you're on vacation calls for proactive deterrence measures along two avenues:

1. Prevention needed to ensure that your home, property and personal belongings are safe from would-be vandals or thieves wanting to break in, believing your property is unoccupied
2. Preventive steps needed to ensure the safety of your person, your family and your personal belongings during your travels

Home Burglary Protection While on Vacation

According to statistics gathered by the FBI, a home is burglarized in the US every 15 seconds, with an average loss of approximately $2,188 per burglary.  This means there are about 4,800 burglaries every day or 2.5 million per year.

While nearly 50% of all homes in the US are without a security system, statistics show that a home without a security system is three times as likely to suffer a break-in or burglary.  Burglars are known to look for signs of a security system in a property they're considering robbing.  They'd much rather prey on a home without a system and, if a system is apparent, will often move on to a different victim.

This makes an active home security system the number one item for preventing home theft, especially if the alarm is monitored by off-site authorities.  Systems are also available that can notify you personally on your cell phone if your home security system is triggered.  Other theft-deterrence items include:

• Solid wood or steel exterior doors with deadbolt locks.
• Motion-activated sensors on exterior flood lights and cameras.
• Locks on pet doors.
• Hardware installed on garage doors to prevent easy access.
• Windows should be locked and blocked and basement windows have well covers.

Make sure you have comprehensive homeowners insurance protecting your home and personal belongings.  Complete an inventory of your personal belongings.  Include photos and serial numbers.  Some other safety tips for protecting your home while on vacation include:

• Don't publicize your upcoming travel in public or on social media
• Put a halt on your newspaper and mail deliveries or arrange for a trusted friend or neighbor to collect them regularly
• Put an inside light on a timer
• Park your car in the garage and ask a neighbor to park in your drive once in a while
• Make sure your lawn gets trimmed

Preventing Theft on Your Travels

Tips to avoid theft while on your travels are too numerous to list individually here but many can be found here and here.

How to Know If You Are Underinsured

 

You buy insurance primarily for the purpose of protecting yourself and your family against certain losses from which you would otherwise be helpless to handle financially.  For example:

• Life insurance protects the financial future of the loved ones that depend on your income, so their standard of living can continue at a similar level in the event of your untimely death.
• Auto insurance protects you from losses associated with liability suits if you're held responsible for causing injury, death or property damage to a third-party with your vehicle.  You can also insure against damage or destruction to your vehicle, personal injuries and more.
• Homeowner's insurance provides a long list of protections for what is likely to be your most valuable asset, your home.  If your home is damages or destroyed as a result of any of the perils listed within you insurance policy, the insurer is responsible for helping you deal with the financial costs.

Life Insurance 

Since life insurance is meant to help replace your income should you die prematurely, you're underinsured if the death benefit of your policy falls short of taking care of such things as:

• The income your now provide
• Debts/financial liabilities your have incurred, including your home mortgage
• End of life expenses
• Higher education expenses for your children

Auto Insurance

Almost every state requires a minimum amount of liability coverage for every vehicle driven on public roads but these minimums are woefully inadequate.  In North Carolina, for example, you're required to have liability insurance of $30K per person (bodily injury),  $60K per accident (bodily injury) and $25K for damage to a third-party's property.

An accident for which you're held liable could incur costs many times these minimum amounts and any amount above your policy limits would fall directly to you for payment.  One serious accident could ruin you financially for life.  Unless your auto liability coverage is many times higher than the minimum required, you are underinsured.  For best coverage, look into purchasing an umbrella policy.

Homeowner's Insurance

The worst case scenario for the company insuring your home is if it becomes totally destroyed by something like a house fire or a tornado.  If your insurance policy would pay 90% or less of the cost to completely rebuild your home, you are underinsured.  This includes using the same or similar materials and replacing everything in your home.  Homeowner's coverage should be rechecked every year or two.

What Can You Do to Reduce Homeowners Insurance Costs?

 

Saving money on expenses has universal appeal, especially when you can save on something you're required to purchase.  Statistics show that approximately 95% of all homeowners in North Carolina maintain homeowners insurance coverage, so ways to reduce homeowners insurance costs should be widely welcomed.  We'll present you with a comprehensive list of tips for reducing your home insurance costs starting today.  Choose your Greensboro homeowners insurance policy with the goal of getting the best for the least.  Try these tips:

Seven Ways to Save on Your Greensboro Homeowners Insurance Coverage

1.  Most experts agree that the first and most important tip for saving on any insurance policy is to shop around.  It's recommended that you obtain no less than three quotes from companies rated highly for service and financial stability.  Consult A. M. Best and/or Standard & Poor's for this information.  Consider using an insurance broker who has access and insight into multiple providers.  Price is important but other factors such as service and stability should also figure in.  Shop around when buying a new Greensboro homeowners insurance policy or when renewing your existing coverage. 

2.  An immediate reduction in your homeowners insurance rate can be obtained by simply raising your deductible amount.  Insurance companies typically recommend a deductible of $500, which is the amount you're required to pay our of pocket when you make a valid claim.  Higher deductibles mean lower premiums and raising your deductible from $500 to $1000 could save you as much as 20% on your policy cost, depending on your insurer.

3.  When deciding how much home insurance to buy, don't include the value of the land your house sits on.  Land isn't subject to the same perils as your home and other structures on your property.  Also, calculate how much coverage you need by the cost it would take to rebuild your home rather than its current market value.

4.  Bundling a variety of policies such as homeowners, auto and umbrella all with one insurer can save you as much as 15% on these policies.

5.  Improving your home's security with smoke detectors, burglar alarms and deadbolt locks can save you 5% or more on your home policy.

6.  Most insurers offer a variety of discounts for which you may qualify.  Often, however, you won't know about these unless you ask.

7.  Review policy limits for your personal property coverage to make sure you're not paying for coverage you don't need.

 

 

Does Homeowners Insurance Cover Water Damage?

 

Thoroughly reading through your Greensboro homeowners insurance policy is the best way to learn just what is and what isn't covered in your contract.  It's especially important to understand how water damage is handled, since claims for water damage can often be denied by an insurer due to confusion of what qualifies under a standard policy.

Water Damage Coverage on Your Greensboro Homeowners Insurance Policy

A standard home insurance policy requires that for a claim to qualify for payment, it be a sudden and unexpected loss.  There are additional requirements for a qualified water damage claim.

The source of water damage may be varied.  As a rule, in order to qualify for a claim the water that damages your home must be the result of one of the perils covered by your homeowners policy.  This may include:

• Rain or snowstorm damage
• Plumbing accidents such as burst pipes, accidental overflow of a bathtub, toilet or sink, faulty water-using appliances such as hot water heaters, washing machines or air conditioners
• Frozen plumbing inside the house
• Water damage from fire extinguishment
• Vandalism

From the Top Down, Not the Bottom Up

One way to think about water damage that qualifies for a loss claim is to remember that the damaging water must have never touched the outside ground.  Another way to look at it is that the damaging water must be internal or come from above, never from below.  This qualifies:

• Ground water seepage
• Sewer pipe or water backups
• Flooding

You'll also find that water damage caused by lack of maintenance or neglect will not be covered by your Greensboro homeowners insurance policy.  This means if the pipes in your home freeze and then burst while the home if left unoccupied and the heat was turned off, you won't likely be covered for the loss.

Mold

Mold is insidious and dangerous to your health and often accompanies water damage.  Whether on not your home insurance will cover you for mold removal/remediation costs will be determined by the cause of the water damage preceding the mold development.  If the water damage is covered, the mold removal will likely also be covered.

Flooding

Flood damage can be covered by getting a special flood policy.  Available through your trusted agent or broker, these policies come from a government program called the National Flood Insurance Program (NFIP), which comes under direction of FEMA, the Federal Emergency Management Agency.

Home Insurance: Above-Ground Versus In-Ground Swimming Pools

Your Greensboro home insurance coverage, an essential part of your family's risk mitigation plan, protects your home, your personal possessions and your assets if you're ever held liable for someone getting injured while on your property. A standard Greensboro home insurance policy consists of several components including:

• Dwelling coverage
• Coverage for other structures
• Personal property coverage
• Liability coverage

If you own a swimming pool, it can have an effect on one or more of these policy components, depending on the specifics of your policy and the way your pool is classified by your insurer.

An “Attractive Nuisance”

To your insurer, a swimming pool is what's known as an “attractive nuisance”. This means that it's a hazardous object that may appeal to or attract children but may also cause them harm. It's one more item added to your insurance policy that may cause you to have to increase your coverage, particularly in view of the liability implications a swimming pool represents.

Pool Classifications

A residential swimming pool may be classified in one of three ways:

1. An in-ground pool
2. An above-ground permanently installed pool
3. An above-ground temporarily installed pool

Your Greensboro home insurance policy will generally cover damages to your swimming pool, but how it does so and the limits on claim amounts will depend on how your insurer classifies the pool. Policies cover your pool for damage from the same perils as the dwelling coverage component of your insurance contract. These may include perils such as fire, lightning, hail, wind, explosions, vehicle collision, vandalism and more. Take note that exclusions to coverage include earthquakes, floods, wear & tear (such as a ripped lining) and neglect.

In-ground pools may be considered as part of your home, in which claims payments will be made from your dwelling coverage, or as other structures, in which claims are paid from the other structures portion of your policy. Why this matters is because some companies consider an in-ground pool as part of the main home structure, while others consider it an external structure similar to a shed, a fence or a detached garage.

Most damage claims for other structures have a maximum payoff limit of 10% of your dwelling coverage amount. Above-ground temporarily installed pools, on the other hand, are considered personal property, which typically has a higher payout limit than for other structures. Personal property coverage is often capped at $100,000.

Switching Your Home Insurance Carrier

There are any number of reasons you may be thinking of switching your home insurance carrier. Experts agree that it's a good idea to take a look at your homeowner's coverage every couple of years. Some mistakenly believe that you must wait until your current coverage is ready to expire before changing insurers. In reality, you have the right to change your homeowner's insurance at any time.  In North Carolina Homeowner’s Policies are cancelled on a “pro-rata” basis meaning that you will get 100% of all unused premiums returned. If you've paid for a whole year's worth of coverage and cancel seven months in then you should receive an amount equal to five months premium back..

Why Switch?

Here are some of the reasons you may be contemplating switching your current homeowner's insurance carrier:

• You've been comparison shopping and found a company that can provide you with a better price for the same level or better coverage. Tom Needham, a leading Greensboro home insurance provider, is a broker capable of diving deep into a long list of home insurance providers to find you the coverage you're seeking.
• Additional discounts may be available from a new insurance provider. Some companies even give a special discount discounts to those willing to bundle their coverages such as homeowner's, auto, umbrella, boat, RV and  life insurance.
• Perhaps you had a less than ideal experience with your insurer while going through the claims process. Poor service is a major cause of individuals quitting their insurance company and switching to another.
• You may be looking for additional protection (such as earthquakee coverage) not available through your present insurer or an insurance policy that is less restrictive that your current coverage.
• You may be buying a new home and want to take this opportunity to comparison shop what's out there.

When to Switch

If you're buying a house, you should start shopping for homeowner's insurance as soon as your buy offer is accepted by the seller. If you're switching insurance providers while still living in your current home, make sure your new coverage is activated before canceling your existing coverage. If your primary reason for switching companies is to get a better price, make sure you give your current Greensboro home insurance provider an opportunity to renegotiate your rate.

4 Insurance Planning Tips for Difficult Times

Auto insurance companies have recently come under pressure to refund policyholder premiums charged based on out-of-date estimated miles driven data. Since many drivers have significantly curtailed their normal driving habits during the coronavirus crisis by not traveling, miles driven have gone way down. The good news is two fold.  1. Vehicle accidents have also gone way down.  2. Many companies are now refunding some premium dollars to consumers. 

Stay Home, Stay Safe and Stay Productive

With approximately 90% of the U.S. population under some form of lockdown order due to the novel coronavirus pandemic, “flattening the curve” has been shown to be possible through diligent limitation of social interactions and staying at home except when needing to leave to procure essential materials such as food or medicine.

With plenty of hours available during your days at home, we recommend you take some time revisiting your insurance portfolio to ensure your coverage is still what you need. Here at Tom Needham Insurance Agency we're open for business, working from home and at the office by appointment. We're happy to offer some insurance planning tips to help square away your portfolio and maybe even save a little money at the same time.

Insurance Planning Tips

1. It's recommended you re-shop for your car insurance every so often. Car insurance companies change their rates all the time and you should regularly check for lower prices.
2. Reexamine your life insurance needs – that 30-year term policy you bought 20 years ago may no longer be appropriate to your current needs. You may choose to lower your policy amount and save some money on your monthly premiums.
3. Ask about homeowner's discounts – just like good drivers can qualify for auto insurance discounts, good homeowners can sometimes qualify for good homeowner's discounts. These may be available for deadbolts, burglar alarms, sprinkler systems and more.
4. Bundle Your Policies – Tom Needham Insurance has access to numerous companies, some of the best in the business, and we'll work to find you the best deals available. Bringing your various policies such as homeowner's, auto and life under the umbrella of a high quality single insurance provider can save you as much as 15% or more on your premium costs.

Woodpecker Damage: Does Insurance Cover It?

There are lots of things that your standard homeowner's insurance policy covers. Also known as an HO3 Special Form, the HO3, which is what most homeowners carry for their homeowner's insurance coverage, is an “open perils” policy. This means that it covers all perils except those specifically listed in the policy's exclusions section.

A typical exclusion found in most HO3 policies is for: “Birds, Vermin, Rodents, Insects,” so, if you're wondering if woodpecker damage is covered in your policy, the answer is likely, “No.”

The reason woodpecker damage, or any other bird, vermin, rodent or insect damage, isn't covered by homeowners' insurance policies is because said damage is considered by insurance companies to be preventable. Their position is that prevention is possible by observing proper maintenance procedures.

Insurance Isn't For The Birds!

Some serious damage can occur when a persistent bird like a woodpecker decides to go to work on your home. He can drill holes through your siding, your window frames or your roofing. These holes can allow water and insects entry to your home and fungus and mold won't be far behind if left untreated. In addition to surface damage, structural damage can actually occur if woodpeckers spend significant time working on support beams.

While your homeowner's insurance doesn't cover woodpecker damage, there are things you can do to fix the damage and to prevent the same thing from happening again. Getting rid of insects, which woodpeckers feast on, can be a big help. Woodpeckers, however, use the noise that their pecking makes as a way of attracting mates, so different strategies need to be undertaken to get them to leave your property and go somewhere else. One idea that's worked for some is to place imitation owls or hawks in the areas where the birds have been causing trouble.

What About an Endorsement or Rider?

In most homeowner's insurance policies, even perils that are contained in the exclusions section can be covered by adding an endorsement (or rider) to the policy or adding an additional policy. Two common examples of this are the addition of flood insurance and/or earthquake insurance to your standard coverage.

An endorsement to cover the damage created by “Birds, Vermin, Rodents, Insects,” might be possible to obtain from some insurers for a price, since coverage for just about any peril can be negotiated for the right premium increase. Ask your agent.

Homeowner's Insurance: Spoiled Food After an Outage

The most popular type of homeowner's insurance sold in North Carolina to owners of single occupancy dwellings is what's called an HO3 Special Form Policy. This is the one that most people choose to satisfy the requirements of their mortgage holders. This type of policy is known as a hybrid since it provides “open perils” coverage for your dwelling but only “named perils” coverage for your personal belongings. It's not the most comprehensive homeowner's insurance policy available but represents the most economical way of complying with the insurance requirements of most mortgage lenders. An HO3 Special Form Policy can also be broadened in its coverage by the addition of special endorsements or riders if more coverage or higher limits are desired.

Sixteen Named Perils

The open perils coverage your HO3 Special Form Policy includes for your dwelling provides that all perils are covered except those specifically excluded in the exclusions portion of the policy. There may be dozens of exclusions, but since each individual homeowner's insurance policy may be unique, the only way to be sure of what's not covered in your insurance contract is to read and understand it. Almost all HO3 policies will have some typical exclusions, however, including floods, earthquakes, war, neglect, wear and tear and power failures, but there may be many more as well.

The named perils section that applies to your personal possessions will consist of a list of perils for which you're covered. In a standard policy, this list typically contains 16 perils such as fire or lightning, windstorm or hail, freezing, falling objects, vandalism, explosion and more. You'll notice that power outages and the spoiled food that may result from them aren't listed as named perils. This would seem to answer the question of whether spoiled food after a power outage is covered by your homeowners insurance. The fact is, though: like many questions related to home insurance, the answer is, “it depends.”

When Spoiled Food May Be Covered

In general, your insurance may cover the cost of spoiled food from a power outage (often limited to $250-$500) if the cause of the outage is a covered peril. For example, if the cause is a fallen tree in a windstorm or a lightning strike, it's likely covered, but not if the outage is caused by flooding or an earthquake. Your deductible applies, meaning the filing of a claim may not make sense.

 

What Can I Do to Lower My Homeowners Insurance Premiums?

If you're like most homeowners, your home and personal possessions represent your largest investment. You need to protect that investment, which is why you're willing to pay homeowners insurance premiums to an insurance company who will extend that financial protection to you for a price.

If you have a mortgage on your property, the mortgage company requires that you take out insurance coverage to protect their financial investment in your home. If your home is destroyed, they want to know they'll be paid back for the amount outstanding on your mortgage loan.

A Major Problem 

According to a recent survey by research firm Marshall & Swift, fewer than half the homes in the U.S. are covered by enough insurance to rebuild them after a major disaster occurs. They go on to say that approximately 60% of American homes are worth more than their insurance reflects (by 17%). This is an improvement, however, from 30 years ago when, according to the Insurance Information Institute, 73% of homes were underinsured by an average of 35%.

There's no doubt that a certain number of these homes are being underinsured for the purpose of lowering the homeowners insurance premiums. Another explanation is that many homeowners only carry as much homeowners insurance as is required by their mortgage lender, equal or greater than the current amount owing on their mortgage loans.

If you fall into this category, there's a good chance that your home is underinsured. The cost difference between the amount owed on your loan and the amount that would be required to rebuild your home, including construction materials and labor, is likely significant.

Saving on Premiums

Underinsuring your home in order to save on premium dollars is only smart if you know for a fact that you'll never need to make a major claim on your policy. And, of course, you couldn't know this absolutely. As the old saying goes regarding insurance: “It's better to have it and not need it than to need it and not have it!”

There are, however, other ways to lower your homeowners insurance premiums that are safe and make good sense. Consider these:

• Shop around for the best deal. Use a broker with multiple companies from which to choose
• Bundle your home, life and auto policies with the same company
• Explore every discount available
• Choose a higher deductible
• Improve your home's disaster resistance
• Add home security features