Monday, August 25, 2014

You May be insured, But Where is Your Pre-Loss List?

Every homeowner knows about the importance of homeowner’s insurance. But how many know about the importance of having an inventory of their possessions? According to available statistics, while over 90% of homeowners are concerned about having the right insurance coverage, just about 40% have ever documented the contents of their homes. And how current those lists are is anyone’s guess.

Ask an insurance broker and he will tell you that a policy holder making a claim along with a pre-loss list of items that have been destroyed or stolen is very rare.

No Inventory’ Means Problems and Delays

Not having an inventory makes it difficult, and often impossible, for a homeowner to be sure that nothing has been left out when a claim is filed. In addition, the absence of an inventory can cause the settling of claims to take longer than they normally would. How much longer could it take? According to a survey of insurance professionals, about 80% think that a claim accompanied by an inventory is settled, in most cases, 50 to 100% faster. Think of what that time difference could mean when disaster strikes. Your whole focus is on repairing the damage, making good the loss and returning to your normal life as quickly as possible. The delay is going to hurt.

A Mere List is Not Enough

A problem that insurance companies often face is that the inventory, if it is available, is lacking in two key elements.

The first is proof of ownership. Keeping documentary proof of ownership of valuable items in a safe place is very important.

The second is that the lists do not have value driven descriptors. Simply listing a desk or chair is not enough. Is it a small school desk that costs about $200 or is it a valuable antique that is valued at $200,000? Or is it something in between? And not everything old is automatically a valuable antique.

Evaluating the extent of the financial loss without this kind of information is a long and cumbersome process. Besides proof of purchase, the value drivers for furniture are the brand, the condition, the material used in making it and the condition at the time of the loss.

Reconstructing Damage and Loss

The insurance company will typically go through a home room by room with the policy holder to determine what has been lost. The process is often a wall by wall, floor to ceiling exercise with the policy holder being asked to list out everything in the room. It is difficult enough to do in normal circumstances. When battling the trauma of major loss, it can be almost impossible to do it accurately and ensure that nothing is left out.

And what about the worst rooms to reconstruct – the attic and basement? These are where items that are not in use are stored. A lot may be junk, but there could also be valuable things. Can you list out everything in your attic right now and be sure that nothing important has been left out?

Make an Inventory

Making an inventory takes time. You need to go room by room and closet by closet to cover everything. And then you have to find all the documentation that is available to establish the values. Do it in a rush, and important things could be overlooked. Ideally the best way to do it is the spare a few hours each weekend to create a detailed list of all your possessions. This list will not only help you with insurance claims. It will tell you about all the things you own so you can decide what you need to keep, what has to be repaired, what can go and what needs to be added to.

If you have questions about your homeowners’ insurance policy, or insurance in general, contact Allied Brokers at 650-328-1000 or visit us at We have over 50 years of experience in the industry, and our team of experts is always happy to assist you.

Sunday, August 24, 2014

Know Your Insurance before Remodeling

Homeowner’s insurance is not the most exciting of subjects. Home renovation is much more interesting. The home is a focal point in our lives and anything that makes it better is fascinating. But remodeling and insurance are very closely linked and to ignore the insurance issues involved with home remodeling is to court disaster. With every good thing that a remodeling can achieve, there is also the potential for things to go bad. Insurance is your protection when things go wrong. Normal homeowner’s insurance will not provide the coverage needed when major remodeling is underway. For example, if 50% of your home is destroyed because of a remodel going bad, the homeowner’s policy will only cover the part that is intact. You should have a builder’s risk policy to cover the cost of what needs to be rebuilt.

Are Your Contractors Insured?

The contractor you have engaged to do your remodeling is highly reputed with great references. But even the best can make mistakes. Before hiring a contractor take the time to ensure that they, and all the subcontractors they may use, are not just licensed but also bonded and insured. While asking to have a look at the certificates of insurance is essential, many insurance experts recommend going one step further and contacting the insurers to make sure that the certificates are genuine. These experts also say that contractors should ideally carry a minimum of $1 million coverage for each type of insurance they have.

Add Yourself to the Contractor’s Policy

The contractor will have a general liability insurance policy. It makes sense to have yourself added to the policy and it costs little or nothing. If this is done then you will be fully covered against liability for any damage that may happen during the course of the remodeling such as a water main being damaged or broken and causing a neighbor’s property to be flooded. Having your name added to the policy has another advantage – if the policy lapses while the work is underway, the insurer will notify you.

Will the Value of Your Home Increase?

Many remodeling projects can increase the value of a home. An example of this is a kitchen remodel or a room addition. If your home is destroyed after the remodel, it will cost more to replace. It is a good idea to check your homeowner’s insurance policy to ensure that the coverage you have is enough to cover the cost of rebuilding a home that is more expensive than it used to be. Many insurance policies do contain a replacement cost endorsement that will cover the cost of rebuilding your home. Do you have it?

Remodeling and Peace of Mind

Home remodeling can be a stressful experience with costs to be controlled, deadlines to be met and contractors to be dealt with. These are a part of all remodels and there is no way to escape them. But the fear of financial loss when things go bad is an unnecessary burden and one that you need not carry.
Talk to Insurance by Allied Brokers to find out about the additional coverage you need to protect yourself when your home is being remodeled. Call us at 650-328-1000 or visit our website at