More people are concerned about their financial future: 4 steps to protect yours
(BPT) - Finances are consistently a top concern for many Americans, with “saving money” a top-10 most common New Year’s resolution. This year, Americans are more concerned than ever before due to the uncertainty created by the COVID-19 pandemic.
USE Credit Union reported that more than 75% of non-transactional calls received since the start of the pandemic were from members concerned about their financial future, citing economic hardship as the primary reason for concern. The economy and job market remain in a state of constant flux, which is causing many families to worry about their ability to pay an unexpected bill, continue to pay off student loans, mortgages or credit card debt, or save money for the future.
“Saving money is more than just putting spare change into a coffee can, or simply ordering takeout less often,” said Jeff Schroeder, vice president and chief product officer at Mercury Insurance. “Sure, those things can add up over time, but people may find that their greatest savings can come from taking a look at the necessary expenses they pay for every month, such as insurance.”
Schroeder recommends these four tips to help protect your finances in the coming year:
1) Check your auto insurance coverages. There’s no reason to pay for more coverage than you need, but being underinsured can leave you exposed. “The cost of repairs after a collision has grown in recent years, as a result of more crossovers and SUVs on the road, and more technologically advanced vehicles,” said Schroeder. “Beyond paying for more expensive repairs if your insurance doesn’t cover it, if you’re underinsured, you may also be responsible for paying out of pocket for medical bills, which could potentially devastate savings for a down payment on a house, your child’s college tuition or a future vacation. It’s vitally important to make sure you have the right amount of auto insurance coverage to protect against unforeseen events.”
2) Know what your homeowners insurance covers. First and foremost, be sure to read your policy so you’re clear about what it does and doesn’t cover. It’s a good idea to check in with your insurance agent each year to ensure you have adequate coverage, especially if you’ve made renovations, own collectible or valuable items, or live in an area that’s prone to flooding or earthquakes, as standard homeowners insurance policies typically don’t cover these situations. Also, maintain a home inventory to make sure to have an accurate record of your belongings and property.
3) Be aware of potential gaps in coverage. A standard homeowners insurance policy often doesn’t cover mechanical failures to your home’s appliances, HVAC or other essential systems, nor does it cover a break to service lines on your property that supply your home with electricity, gas or sewer functions. In either of these scenarios, this means you would be responsible for writing a big check to a repair company or having to purchase a pricy replacement. However, adding home systems protection and service line protection endorsements can help provide coverage for costly repairs and replacements, saving money and your peace of mind. Pennies spent now can save you thousands of dollars later.
4) Regularly shop for the best coverage and price. Insurance prices can vary significantly from company to company, so it’s a good idea to take a few minutes to see if you’re getting a good deal. Shop around at least once a year — making sure to look for the exact same coverage limits — to see if you can find a more affordable rate.
“Often, regional insurers like Mercury Insurance are more attuned to their policyholders' needs and can offer better rates,” Schroeder added.
The most effective way to make sure your finances are minimally impacted by insurance costs this year is to speak to an independent insurance agent. They can help make sure you have the proper amount and type of coverage to keep yourself, your family and property protected.
Your home is the most significant investment for almost every American. Do you know how to choose the right coverage for you and your family? Here's tips how.
How to pick the right homeowners insurance
(BPT) - If you're like many Americans, your home may be your most valuable asset. That's why it's so important to protect it with homeowners insurance. Plus, it's probably a requirement of your mortgage. Setting up your coverage the right way starts with understanding the major parts of a homeowners policy.
Consider the following information and tips from the USAA Home Learning Center:
This protection covers the cost of repairing or rebuilding your home if it's damaged or destroyed. When you select the amount, keep in mind the cost to rebuild your home is different from its market value.
It's important to get the dwelling coverage right and to monitor it over time to make sure it keeps up with construction costs to rebuild. Under most homeowners policies, if you file a claim and have underinsured your home, your payout may be reduced.
Some insurers will help you estimate the rebuilding cost. They take into account the features, materials and finishes that make your home unique.
Personal property protection
This protection covers your furniture, clothing and pretty much everything else inside your home. Most policies set the amount of personal property protection as a percentage of the dwelling coverage.
It may not be enough, though. Homeowners plans set limits on certain high-value items. If you own expensive jewelry, art, guns, stamps, furs, cameras, computers, silver or collectibles, you'll want to consider buying valuable personal property insurance. This is sometimes called a "personal articles floater."
When you set up your homeowners policy, you may have to make an important choice about how to reimburse losses. There are two approaches:
To make your recovery from a loss as smooth as possible, replacement cost coverage is recommended.
This is one of the most important and least appreciated forms of protection offered through homeowners coverage. It protects you if you're found to be at fault for someone's injury or property damage. It even covers you for non-automobile incidents away from your home. Generally, it also covers your legal costs associated with such claims against you.
As a rule, your liability coverage should at least be equal to the total value of your assets for both your homeowners and auto insurance. If your assets are higher than the maximum coverage allowed under the policy, consider purchasing umbrella insurance to cover the difference. This is important to protect the savings and other assets you've worked hard to acquire.
As with other types of insurance, a deductible is the part of a loss that you're responsible for covering out of your own pocket. The higher your deductible, the lower your monthly premium.
Choosing a higher deductible can save you money with a lower monthly premium but increases the risk you take. Consider the amount of cash you typically have on hand in your emergency fund or checking and savings accounts. Make sure you can cover the deductible amount comfortably.
What may not be covered
Your policy's basic coverage won't cover some special risks.
For additional information on protecting your home, visit USAA.com/Homeowners.
If your homeowner insurance rates are creeping up even though you haven’t filed any claims, it may be time to take a look at how you can bring those prices back down. Research, smart shopping and even some home upgrades can make a noticeable difference in your insurance premiums. Explore the cost-savings potential with these tips.
Save Your Way to Lower Home Insurance
(Family Features) If your homeowner insurance rates are creeping up even though you haven’t filed any claims, it may be time to take a look at how you can bring those prices back down.
Research, smart shopping and even some home upgrades can make a noticeable difference in your insurance premiums. Explore the cost-savings potential with these tips from the experts at CertainTeed, a leading manufacturer of exterior and interior building products:
Shop for the best rates. It’s easy to be complacent when you’ve used the same insurance company for years, but if getting the best rate is your objective, it’s a good idea to shop around. To do effective comparison shopping, have a copy of your current policy ready and contact a handful of competitors. Provide them the exact same coverage details so you can compare like rates, but also be ready to listen to information about additional coverage options that may suit your needs.
Combine homeowner insurance with other policies. Most insurance carriers offer multiple policy discounts, which they apply when you insure more than one item. For example, if your homeowner insurance carrier also insures your cars, you’re likely to save money on the rates for protecting both your home and automobiles.
Update your home’s first line of defense. Many homeowners focus on aesthetics when it’s time to make upgrades, but there are some important functional improvements that can make a difference when it comes to your insurance premiums. For example, as extreme weather becomes more commonplace, the first line of defense is often the type of roofing material chosen. Many insurance companies even offer discounts for using impact-resistant shingles. Check with your insurance provider before making a final selection, but in general, look for products that include “impact-resistant” in their name and specs, and “Class IV Impact Resistance,” the highest rating available for roofing materials.
For example, NorthGate Class IV impact-resistant shingles from CertainTeed are engineered to have a higher probability of resisting hail. These shingles are made using rubber-like polymers that offer flexibility and impact resistance, as well as crack and shrink resistance, even in cold weather. So when severe weather strikes, your home can be protected and stay looking good.
Install a home security system. An intruder alarm can provide more than peace of mind. Insurance companies often reward homeowners who take steps to minimize the chances of burglary or vandalism. After all, a well-protected home is less likely to result in a claim for losses. Some companies offer varying degrees of discounts on insurance rates depending on the type of system you install, so be sure to thoroughly research the options. For example, a system that simply emits a loud noise when triggered may generate one level of discount, while a system that dispatches emergency personnel when activated can lead to an even better rate.
Insurance rates are one place to save money on your home costs. Learn more about impact-resistant shingles and how they can save your home and wallet at certainteed.com.SOURCE:
Don’t fall victim to the financial risks and mental stresses associated with owning a home. Appliances have set lifespans, breakdowns are inevitable and repairs and replacements are costly. Make sure your home is covered, so you and your wallet can rest assured that your home is taken care of.
(BPT) - Nobody bats an eyelash when it comes to buying homeowner's insurance, but many homeowners don’t apply that same logic to planning for home repairs — not what might happen, but what will happen.
Only a fraction of the 120 million U.S. households today are protected by a home services plan, also known as a home warranty.
That number is growing, as homeowners recognize the value of coverage when appliances go on the fritz, hot water heaters run cold in the middle of winter or a leaky faucet drives up their water bill. Perhaps one reason more homeowners don’t have home service plans is because they think they are covered through their homeowner's insurance policy.
Homeowner's insurance doesn’t protect you from the natural home aging process.
Insurance kicks in when damage occurs from an outside force, like a busted sewer line or roof damage due to a major storm. While insurance covers you when Mother Nature strikes, it doesn’t protect you from the natural wear and tear that your home’s major systems and appliances go through during the aging process. Understanding how home service plans work and how they fit into your financial and risk-planning strategy allows you to be prepared for covered breakdowns, without breaking the bank.
Let’s start at the beginning. What is a home service plan?
Home service plans typically cover the repair or replacement of major home appliances, including refrigerators, washers, dryers, ovens or cooktops, and components of major systems like plumbing, HVAC and electrical.
When your air conditioning system breaks, or your washer or dryer stops spinning, you want the confidence of having a home services plan in place that will help protect your budget.
This is where the true value of a home service plan comes in. Home service providers such as American Home Shield accept service requests and assign professionals to diagnose the problem and offer a solution through its vast network of skilled and trusted contractors, which includes more than 15,000 licensed and qualified pros throughout all 50 states.
What’s the bottom line?
With a home service plan, you won’t pay the full cost of repairing or replacing items covered by your plan. Regardless of age, make or model, your contract helps cover the repair or replacement of items covered in your plan. For example, if your refrigerator malfunctions, your service provider will connect you to a quality contractor to diagnose and repair the problem. This can help reduce the hassle of repairing it yourself and help protect your budget.
Think about your home’s future (and yours).
Service plans can come in handy when selling a home. The appeal speaks for itself: When buyers are making that final decision around one of the biggest investments in their lives, having a home service plan in place gives the new homeowner confidence that the home’s systems and appliances are protected, and they won’t bear the entire financial impact of repairing or replacing it if it breaks down.
The choice seems obvious: Don’t fall victim to the financial risks and mental stresses associated with owning a home. Appliances have set lifespans, breakdowns are inevitable and repairs and replacements are costly. Make sure your home is covered, so you and your wallet can rest assured that your home is taken care of.
(BPT) - The homebuying process is exciting, but can also seem fraught with added costs, like a home inspection, title insurance and closing costs. And if you can’t afford a full 20 percent down payment on a conventional home loan, then you will most likely pay for private mortgage insurance (MI). Some people consider private MI yet another added cost, but it helps creditworthy middle-income homebuyers qualify for home financing sooner with a low down payment. Is it really an added cost if it saves time and money in the long run?
For most people, low down payment home loan options include conventional loans with private MI and government-backed loans like those offered by the Federal Housing Administration (FHA). While comparable, each of these options has important differences. For example, the minimum down payment for an FHA mortgage is 3.5 percent while it’s only 3 percent on a conventional, privately insured mortgage.
Another key feature of private MI is that it can be canceled when a borrower reaches 20 percent equity in his or her home. Borrowers who purchase a home with private MI can typically cancel it within 5 to 7 years, resulting in their monthly bill going down. Private MI’s cancelability makes it a more affordable option over FHA-backed mortgages, which typically require mortgage insurance premiums for the entirety of the loan term. Both are offered by most mortgage lenders, so it’s smart to ask a loan officer for both options so you can compare and do the math.
The myth that a homebuyer needs 20 percent down to obtain a mortgage is simply not true. Low down payment mortgages are widely available and used every day across the country. In 2018, the National Association of Realtors found that first-time homebuyers typically put down 7 percent, while repeat buyers put down an average of 16 percent. Many homebuyers choose a lower down payment option to preserve some savings for home improvements or save for other goals. The time it could take to save up a 20 percent down payment is significant. On average, it could take up to 20 years to save a full 20 percent, plus closing costs, for a $257,700 house — the national median sales price. With home prices on the rise, the amount of time it takes to save up could only increase. Private MI can mean the difference between getting into the home of your dreams sooner or waiting for years.
For over 60 years, more than 30 million homeowners of all backgrounds have used private MI to successfully buy their homes. In the past year alone, private MI helped more than one million borrowers nationwide purchase or refinance a mortgage. According to a study by U.S. Mortgage Insurers, 56 percent of purchase borrowers were first-time homebuyers and more than 40 percent had incomes below $75,000.
For decades, millions of homeowners and prospective homebuyers have relied on private MI to help them affordably and responsibly purchase their homes — in turn helping them build personal wealth. Today’s historically low mortgage interest rates are a good reason to buy a home now. It is estimated that in 2019, the average rate for a 30-year fixed-rate mortgage will be around 5 percent. Borrowers should take advantage of these historically low mortgage interest rates because experts forecast that primary mortgage rates are on the rise.
Getting a mortgage with private MI and keeping more of your hard-earned money in the bank can be a very smart way to invest in your future. Check out lowdownpaymentfacts.org to learn more.
Homeowners insurance is a practical investment to help protect you, your family and your property in the event of unforeseen and unexpected losses. Traditionally, it’s associated with fire damage, burst or leaking pipes, or stolen property, but occasionally it covers unusual events that make for sensational news stories and viral videos. Here are four claims homeowners never thought would happen to them.
(BPT) - Homeowners insurance is a practical investment to help protect you, your family and your property in the event of unforeseen and unexpected losses. Traditionally, it’s associated with fire damage, burst or leaking pipes, or stolen property, but occasionally it covers unusual events that make for sensational news stories and viral videos.
Here are four claims homeowners never thought would happen to them.
1. Bear B&B
Bears are notoriously curious and intelligent creatures that also have an acute sense of smell.
People who live in areas with bears for neighbors must not entice them with the aromas of food. Keep doors and windows on ground floors closed and locked while cooking or if you leave the house. A bear can easily get through the screen of an open window or manipulate a lever-like door handle to enter your home and cause significant damage.
“Encountering a bear inside your home would be a very frightening experience,” says Christopher O’Rourke, Vice President of Property Claims at Mercury Insurance. “Safety should be your first priority, so call your local police or animal control station to have them help you with the situation. You can worry about any potential damages after the animal leaves the residence, because your homeowners policy will most likely cover any damage to your home (though not your personal property), unless of course the bear is a family pet.”
2. The sky is falling
China’s Tiangong-1 space station plummeted back to Earth and made its re-entry into the atmosphere earlier this year, breaking apart over the southern Pacific Ocean. The odds of debris from the space station hitting you were less than one in 1 trillion, according to the Aerospace Corporation. If it had hit your home, though, homeowners insurance would’ve covered it.
3. Your house is stolen
Yes, you read that correctly. Your homeowners insurance will cover the entire house, not just the contents inside, if it is stolen.
O’Rourke explains, “We had an insured who was away on vacation and when he returned the foundation of his home was all that remained.
“A house moving company had mixed up the address with another house down the street that was scheduled to be moved. The movers came in, transported the house to another location and thought their job was done — wrong!
“You can only imagine his surprise at the mistake. While homeowners insurance covered the cost of getting things restored back to normal, I would suspect this was one of the strangest situations any insurer has ever encountered,” says O’Rourke.
Golf is a leisurely pastime enjoyed by millions in the U.S. It involves strolling across greens and riding in golf carts, so its slow pace may seem low-risk, but it can actually be quite dangerous. According to an article in Golf Digest magazine, nearly 40,000 golfers are admitted to emergency rooms annually after being injured while playing, most by errant golf balls and flying club heads.
Recreational golfers can also cause a lot of damage to personal property. If you live on a golf course, your house has probably been hit many times by errant shots — breaking windows, damaging roofs and leaving divots in exterior walls.
So, who’s responsible for these injuries and damage?
“Simply put, the golfer who hit the shot is responsible,” says O’Rourke. “There is good news, however, because recreational golfers would be covered by a homeowners, condo owners or renters insurance policy for damage or injuries that result from the wayward shot.”
Mercury recommends reviewing your homeowners insurance policy annually with your local insurance agent to ensure that you’re adequately covered for any unforeseen losses, both unusual and ordinary.
(BPT) - We know the old saying: when it rains, it pours… and when it pours, it floods. With winter snow storms coming to an end, the threat of flooding increases as the snow begins to melt and the rivers and creeks begin to swell. It’s easy to forget about how powerfully destructive water can be. In fact, nine out of 10 natural disasters include flood, making it the number one disaster in the United States according to the National Flood Insurance Program (NFIP). However, only 15 percent of homeowners have flood insurance. From 2006 to 2015, total flood claims cost more than $1.9 billion per year and the average claim was more than $46,000 during that time.
“Even just a few inches of water can cause thousands of dollars in property damage,” says Corise Morrison, executive director of underwriting at USAA. “While it’s possible to mitigate flood damage, complete prevention is nearly impossible. If you don’t take the proper precautions, it can be devastating to your family finances.”
For most homeowners, that means looking into flood insurance. But does it make sense for everyone? As an insurance professional, Morrison has heard all the explanations. Here are some of the most common misconceptions about flood insurance:
“Flood is covered by my homeowners insurance policy.”
Typically, flooding is not covered by a homeowners insurance policy. Therefore, homeowners must purchase a separate policy through the National Flood Insurance Program (NFIP) from their insurer. If the homeowner does have flood insurance, it’s important to regularly reevaluate it to ensure it provides adequate coverage.
“Flood insurance is too expensive.”
To emphasize an earlier point, the average cost of a flood claim hovered around $46,000 from 2011 to 2015. The average annual premium for flood insurance in the U.S. is $650, according to NFIP. Do the math.
“I don’t live in a flood plain so I don’t need flood insurance.”
The Federal Emergency Management Agency found that as many as 20 percent of flood claims come from moderate-to-low risk areas. These are areas in which lenders don’t require the purchase of flood insurance. However, "less likely" doesn’t equal "no risk." Complete this quick self-survey: "Does it rain where I am?" If the answer is yes, consider flood insurance because it can flood anywhere it rains.
“Flood insurance won’t provide me with the coverage I need anyway.”
It is true that the NFIP limits coverage of a single residence to $250,000 for the structure and another $100,000 for contents to the home, but they aren’t the only source for coverage. Excess flood coverage can also be purchased above the $250,000 limit.
“I’ll just wait until it rains.”
Sorry to break this to you, but most insurers require a 30-day waiting period before a policy is effective. Unless your own forecasts rival the best science and technology have to offer, it might be wise to stick to the mantra, "better safe than sorry."
The consequences for being ill prepared for a flood can be long lasting. Research and carefully weigh the risk to you and your property. Chances are that you’ll find that it might be more reasonable than you thought. Visit USAA.com/flood for more tips and information on flood insurance and what to do before, during and after flooding occurs. You can also visit FEMA’s Flood Map Service Center for more information or to determine your flood risk.
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