Is Your Home Property Insured
(And With the Right Agent)?
By Bill Primavera
The Home Guru
As published in The Examiner in Westchester and Putnam
Did you ever have the experience of realizing that you’ve been a figurative stepchild, even an orphan, in some aspect of your life? By the end of my meeting with Melissa Feinberg, Personal Lines Representative at The Hack Agency in Mount Kisco, I was painfully aware that I have been an orphan in the world of insurance for a very long time. I had forgotten, or maybe I never knew, that insurance agents are supposed to look after you and continually access your needs for insurance, long after the policy has been sold..
But before I realized this, I found out a thing or two about home insurance. My first somewhat naive question to Melissa was, “Now that our homes are dropping in value, do we need as much insurance on them?” Kindly, with a reassuring tone, Melissa responded that, while values were sliding, replacement costs were not. In fact, they’ve been increasing.
“The insurance amount will be lower than the sales price or market value because that includes the price of the land, which will still be there even if the entire home is destroyed,” she said. The land, however, can vary widely in value, depending on the community in which it is located and other factors. And now, there’s even a different equation because land values have depreciated in the current market, while replacement costs for the home have not decreased.
Another factor in properly insuring the replacement cost of a home is that, when a home is built, it most likely is part of a subdivision or development where large orders of building materials are discounted. However, when a home is rebuilt, that is not the case. In addition, developers are able to use workers more efficiently with the original structure, thereby saving time and cost.
Responding to a question about properly insuring the contents of a home, Melissa said that, in a typical homeowner’s policy, possessions inside the house are insured for an amount calculated as a percentage of the replacement cost of the house. This is usually about 50 to 75 percent of that estimate. But if you have prized possessions, such as antiques or expensive jewelry, it is advised that the insured has the items appraised and listed in the policy. Such items are not subject to a deductible.
In the case of jewelry, there is a limit in the insurer’s contract, normally $5,000. However, if a rider is attached, the insured is relieved of that limitation. Of course, there is an increased cost for this specification.
With condos or co-ops, where only a portion of the property is owned by the insured, responsibility for the property varies on the development’s bylaws. Normally, the owner’s responsibility is from “the walls in” and the development is responsible for the outside structure. It must be determined with the insurance agency what the replacement value would be to replace surfaces, fixture, appliances and furnishings.
During the period of rebuilding a house or condo, there is a loss of use coverage to consider and this varies from one company to another. “Your style of life should not be penalized during this period of loss,” Melissa said.
One aspect of insurance that many people don’t consider is liability. “We understand when someone falls on your property, but liability comes to mind less easily when you want to be protected away from your home too, like at a golf course. And while we may have assets that protect us, we must be concerned with litigation as well, should someone think that we’ve harmed them just from something we’ve said,” Melissa explained.
With the economic crisis, one topic that came up was the viability of the insurance companies with whom Hack chooses to do business. “Obviously we must see that the company is stable,” Melissa says. “We never go below an “A” rating from the qualifying services which evaluate strength.”
And here’s the reason I feel like an orphan among the insured. A few years ago the insurance agency that holds my home policy was sold to a new owner, and I realized some time afterward that I had never heard from the new owners. In the meantime -- roughly from 2001 to 2006 -- the estimated costs of rebuilding had risen significantly, but the terms of my policy had not.
Melissa assured me that her clients never face such blackouts of information. “I send a questionnaire to my clients every year, asking them to update their information,” she said. “Maybe some renovations have been done without the homeowner considering that this can have a substantial effect on their insurance needs. I review these questionnaires and, if I see significant issues, I’ll suggest that we get together.”
Personally, I have not enjoyed this kind of relationship with my agency. I have had to call them with specific questions and, each time, it’s starting from scratch about who I am and what kind of policy I have. Why have I let this situation continue on? Guess it’s time, at least in this area, for The Home Guru to wise up.
Bill Primavera is a Westchester, NY-based realtor ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) and marketing practitioner ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) who can be reached for questions or comment directly at 914-522-2076.
To read more in The Examiner, go to: www.TheExaminerNews.com