Vacation Home insurance

Do I Need Vacation Home Coverage?

If you are anything like me, when you go somewhere incredible on vacation , you daydream of a time when you might be able to buy a vacation home there. (I dream of a beach house AND a mountain cabin.) You won’t be there all of the time and you won’t have too much stuff there, so what kind of coverage do you really need?

 The fact that you won’t live there full time is one of the main reasons you need insurance coverage. Think about it. If no one is there, who will notice when there is a leak? Or catch a fire before it blazes out of control? What if you get burglarized? Chances are no one will be there to prevent or at least handle these situations on a timely basis. This means the damage could be much worse than it would have been if someone lived there full time and would be able to intervene on a timely basis. These are high risks you don't want to pay for on your own. 

 Many vacation homes are in rural or beach areas. Let's say you are there when one of those situations occurs, but the fire /police departments are miles away and they take 30 minutes to get there. A fire can destroy an entire home in that amount of time. A leak can destroy your entire flooring. A burglar can empty your home. These are a high risks you don't want to pay for on your own. 

   What if you rent it out or let friends/family stay there when you are not there?  Someone trips over a rug and breaks their leg. Or someone starts a fire in the kitchen and it gets out of control. You can be liable for injuries and/or damages, even if you are not there. These are high risks you don't want to pay for on your own.

   You have worked hard to buy that secondary home for your family to enjoy. If something happens you want to make sure you have adequate coverage for that vacation home, just like you do for your primary home. 

Just like your primary home insurance, there are many coverage options and many carriers to choose from. Talk to your agent and work through what you want and need in coverage. Most primary home policies will not extend much coverage to a secondary property. So you will need a separate policy for your vacation home.

There are few additional options you should consider.

Personal Umbrella Policy (PUP): This is an extra Liability policy that will pick up where your home/auto policies stop. So if you have a liability claim of $500,000 and you only have $300,000 in Liability coverage on your secondary home policy, your PUP will kick in and cover the rest. The more properties, cars and toys (boats, motorcycles...) you have, the higher the premium will be for the PUP. But the added coverage can be a financial life saver.

Fair Rental Income: If you are renting out your secondary home, I highly recommend this coverage. If the home becomes uninhabitable (therefore un-rentable) due to a covered loss, you can be paid the rents you would lose during the time it takes to repair the damage. 

Dwelling Coverge Amount: Dwelling coverage isn’t optional, but there is a little bit of wiggle room in the amount. But as I explained up above, you are more likely to have more extensive damage from a fire, leak or burglary because you are not there full time. Make sure you have enough dwelling coverage to cover a total loss. Don't go cheap because you don't use the home as often. You need complete coverage because of the lack of time you spend there. 

Also consider the fact that you may not be as familiar with the coverage needs of a different part of the country. Make sure you talk to an agent (or have your agent talk to someone) who is familiar with the possible hazards of an area that gets several inches of snow or is on/near a body of water. Especially us city folk- we need to make sure we talk to someone who is an expert on these areas. Every carrier has different options for what they will/will not cover and what type of policies they will/will not write. So I wouldn't get your heart set on "bundling" by trying to make sure your secondary home policy is with the same carrier as your primary home policy. This is not always an option. Your primary home carrier may not even write secondary homes and sometimes they won't have great rates. So be open to the quotes your agent offers you. Of course, if you are with a captive carrier, you won't have many options. (I urge you to find an independent agent and see what they have to offer!) 

There are three ways to request a quote for your insurance needs: 

* Visit our website

* Email us

* Call Brockman Premier Insurance at 877-987-8683  

Loan/Lease Gap Coverage

How Can You Cover the Gap?

 You just bought your dream car 6 months ago. You have been oh so careful. No one is allowed to eat or drink in your car. You stop fully at every stop sign. You stat a full car length behind every car you drive behind. Until one day you don’t stop at the stop sign.

Your dream car is totaled. Then you find out that not only is your dream car gone, but the insurance isn’t going to cover the full amount you owe on your loan. They say something about not having Gap insurance. What is that? Why would I have had it? How can I get it? How much will it cost me? We can explain that!

Want a better scenario?

   When you buy a new car, many carriers (and dealerships!) offer Loan or Lease Gap coverage as an optional coverage. With this coverage, if you have a total loss, you are covered for the difference in the your now totaled cars value and what you owe on the loan.  The market value for your car isn't necessarily the same amount as what you owe on your car loan. Carriers pay out Actual Cash Value on your car, unless it is a certified classic automobile or you have a special policy that pays a specified amount for the car. Usually the adjuster will use the Market value of your car, at the age it is and the shape it is in. One way you can decide if the Gap coverage is worth the premium, is to ask yourself if you can pay off that loan difference out of pocket?

Where can you get Loan Gap coverage?

      When you buy a brand new car, the dealership will usually offer you this coverage. Before you take it, call your insurance agent. (You need to call them anyway to add your new car!) They should offer the Gap coverage to you, but if they don't, ask about it. It is usually inexpensive to add this optional coverage. I just added the coverage to a policy yesterday and it only added $17 annually. That is a great price to save you possibly thousands down the road. It is important to note that most carriers I know offer this coverage on cars less than 2 years old. Some may go up to 3 years, but that is it. It isn't worth it for the carrier to offer to pay out on older cars. If you have Gap coverage on your policy, the carrier will drop it at the renewal once a car is over their allotted age. You will want to look for it on your renewal. 

What about Lease Gap coverage?

   If you are leasing a car, ask if your contract includes this coverage. Many do, which is convenient! If not, most carriers offer the coverage on lease cars also. Keep in mind, this coverage only applies in the case of a total loss.  As always, it is up to you whether or not you add optional coverage. Take a look at the premium vs. the gap and decide which one you can live with. The same basic guidelines apply to Lease Gap coverage as for Loan Gap coverage.

There are three ways to request a quote for your insurance needs: 

* Visit our website

* Email us

* Call Brockman Premier Insurance at 877-987-8683  

Home Insurance Claims

To Claim or Not to Claim- 

That is the Question

Why do you have insurance? Insurance is meant to make you whole again in the case of a loss. That is the entire reason why you have insurance. But just because you file a claim, does that mean you will automatically be "made whole"? Quite often the answer is No. And on top of that, your rates will most likely go up because you filed that claim; even if the claim doesn't pay out. This can be so frustrating!

   There are several pieces to the claim puzzle that must come together before a carrier will pay out a claim. It is in your best interest to know those pieces before you make the decision to file a claim. If you don't have all of the claim puzzle pieces, your claim will not pay out. Now, you can complain and switch carriers, but chances are, it won't be any different with the next carrier. Insurance is one of the most regulated industries out there. They cannot just decide what they will and will not cover. There are rules they have to adhere to (or pay the legal consequences). And whether you know the rules or not, you are subject to them as much as the carriers are. Here is what you need to know before you file a claim:

1. Is it a covered loss? Different types of home insurance policies cover different perils.

   Basic form policies cover fire/lightning, windstorm/hail, explosion, riots, aircraft, vehicles, smoke, vandalism and theft. 

   Broad form policies cover all of the basic perils, plus falling objects, weight of ice/snow, accidental discharge of water, cracking/burning, collapse, freezing and sudden electric current.

   Special form policies cover every peril except what is specifically excluded. 

What type of policy do you have? If you do not know, contact your agent. 

This is good information you want to know.

2. What type of deductibles do you have? There are many options! 

     The deductible is the amount you will pay before your carrier will pay out the remainder of your claim amount. Your home insurance policy most likely has a deductible that is a percentage of your dwelling value(the cost to rebuild your home in the case of a total loss). Common deductibles are 1% or 2%, but you can go higher. Your home policy can have a flat rate deductible instead, but these are not very common and can cost more if they are low. The lower your deductible is, the higher your premium will be. There is one deductible for your wind/hail claims and a different one for everything else (All Other Peril (AOP)). For example, if your dwelling value is $250,000 and you have a 1% deductible, you will pay the first $2,500 of any claim. 

3. Is it worth it to file that claim?

   Before you file a claim, you want to have a certified contractor come, survey your damage and give you an estimate of the cost of repairs. If you have repairs in a lower amount than your deductible, it makes no sense to file a claim. You will not receive any benefit from the carrier and your rates will go up at your next renewal because you filed a claim. For example, if you have a tree hit your house and it just damages a piece of your roof, chances are it will not cost $2,500 to repair a section of the roof. You would not file a claim. On the other hand, if you have a fire and your entire kitchen has to be rebuilt, it will most likely cost more than $2,500. In this case, you want to file the claim.  You will pay only $2,500 for repairs that could possibly cost more than $10,000.    

   There is quite a bit more that goes into if or how a claim is paid out. There are too many scenarios of what is and is not covered for me to try to explain the particulars here. Plus, I am not a licensed claims adjuster so I am not the expert on your claim. Each claim, with each policy, with each carrier will be handled separately (and differently). But when you are deciding whether or not to file a claim, examine the three 3 things I’ve explained before you even consider calling the carrier. I would call your agent first if you are unsure. Many carriers will file the claim after talking to you; even if you just called with an inquiry and never said the words, "I need to file a claim." But if you have done your homework and you are going in with your eyes open, then your chances for a beneficial outcome increase! 

There are three ways to request a quote for your insurance needs: 

* Visit our website

* Email us

* Call Brockman Premier Insurance at 877-987-8683  

Agency Fees

Should You Pay Agency Fees? 

Some states allow Insurance agencies to charge an additional agency fee. Texas is one of them. It is up to the discretion of the agent. Many agents charge fees to offset the "cost" of running quotes. You should know the rules about charging agency fees. 

The Texas Insurance Code states:

Sec. 4005.003.  FEES.  (a)  A general property and casualty agent or personal lines property and casualty agent may charge a client a fee to reimburse the agent for costs the agent incurred in obtaining a motor vehicle record or photograph of property described under Section 4005.002.  The fee may not exceed the actual costs to the agent.

(b)  For services provided to a client, a property and casualty agent described by Subsection (a) may charge a reasonable fee, including a fee for:

(1)  special delivery or postal charges;

(2)  printing or reproduction costs;

(3)  electronic mail costs;

(4)  telephone transmission costs; and

(5)  similar costs that the agent incurs on behalf of the client.

(c)  A property and casualty agent described by Subsection (a) may charge a client a fee under this section only if, before the agent incurs an expense for the client, the agent:

(1)  notifies the client of the agent's fee; and (2)  obtains the client's written consent for each fee to be charged.

So what does that really mean?

Blah, Blah, Blah -right? Insurance speak. Let's break it down a little. It states in (a) that an agent may charge a fee as reimbursement for costs incurred for a motor vehicle report or a property photo. The fee may not exceed the cost incurred. In (b) it states the agent may also charge  a reasonable fee for various costs (listed) and in (c) it states an agent can only charge these fees if they notify the client of the fee and obtain written consent for each fee.

Before you agree to pay an "agency" fee, please make sure the agent has fulfilled the above listed obligations. You can refuse to pay the fee if they have not. You have the right to ask what services you are paying for, just like you have the right to ask what coverage your premium buys you.

   Keep in mind, you will pay a policy fee to the carrier. These are fees to cover the cost of underwriting the policy (evaluating the hazardous risk) and for the process of putting a legal policy in place. These are non refundable and non negotiable fees. This means that if you buy an insurance policy from a carrier and then cancel it soon after, you will not get a full refund. You will forfeit the agency fee because it is "fully earned" from day one. Many independent agents do not charge an agency fee on top of the policy fee. Agents receive commissions designated by the carriers. These commissions are based on the premium minus the policy fee. In other words we do not make money off of the carrier's policy fee. This is one of the reasons some independent agencies charge their own agency fee; to replace the fee the carrier gets. Legally, agencies have a right to do this, but within reason. I think charging a $195 agency fee on a $600 policy is excessive. I think charging the fee again to re-shop someone is excessive. It just has never sat right with us. But that is our decision and another agent may decide to charge agency fees. That is their decision. As long as they are following the rules listed above, they are legally able to charge agency fees in the state of Texas.

Agencies have the right to charge these fees, but not if they are not telling you exactly what they are for and getting your written permission to charge them. You, the consumer, have every right to ask for this fee disclosure. Please don't throw that right away. You may be paying quite a bit more than you need to!

 There are three ways to request a quote for your insurance needs: 

* Visit our website

* Email us

* Call Brockman Premier Insurance at 877-987-8683