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Preventing basement water damage

Posted by on March 10, 2019

Water Damaged Basement

It’s been said, an ounce of prevention is worth a pound of cure. If you ever had to deal with the clean up and reconstruction from water damage you’ll appreciate that advice. A wet basement may or may not be covered by your homeowners insurance.

Are wet basements covered by home insurance?

It depends on the source of the water and the optional coverage you purchased on your policy:

  1. If water seeps through your basement walls, floors or windows, that is considered a flood. Floods are excluded (not covered) on homeowners insurance.
  2. If water backs up from a drainage system, such as a floor drain, sewer line or a sump pit, the damage COULD be covered but only if you have optional water and sewer backup coverage added to your policy. Due to the frequency of these claims, the cost of this coverage continues to increase.
  3. Damage from plumbing leaks, burst pipes and water overflowing from sinks and tubs is generally covered on your base home policy. It is all subject, of course, to the terms and conditions of your policy.

Even if insurance does cover the cost of the damage, you will still have to pay your deductible (usually $1,000 or more) and deal with the disruption, mess and paperwork of getting everything put back as it was before. In most cases you will also face increased home insurance premiums for the next three years. Therefore, prevention is a much better way to go!

Early detection is key to prevention

Fortunately, most water damage losses are avoidable. Here are some tips to help protect your home better.

  1. Consider replacing your sump pump regularly. I have customers who replace their sump pump every 7-10 years to avoid having it fail at an inopportune time. Sump pumps are relatively inexpensive, some are less than $100.
  2. Have a backup power source. A major reason for many sump pit overflows is a loss of power, especially during a storm. Battery backups are the most common. There are also sump pumps that can run off your water pressure for backup power. Emergency generators are another option.
  3. Water detectors. These are inexpensive and effective at giving you an early warning for trouble.
    1. For around $11 you can get a simple device that works like a smoke alarm, setting off an audible alarm when water is detected under it.
    2. Internet connected water detectors send an alert to your smart phone when it detects water. The advantage of this system is it can alert you even when you are away from home.

Water detectors should be placed in potential problem areas such as near your sump pit or floor drain to give you early warning. You can buy multiple units around your home, wherever water leaks can appear like under sinks, dishwasher or waterline to your fridge.

Insure your home for the big disasters but be proactive to prevent them in the first place. That’s the best emergency plan! Insurance Gurus represents several top-rated insurance companies. Ask for a free review of your homeowner insurance today.

Internet connected water detector. Just $49 at Menards.

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Prevention is Best Cure for Water Back-up Claims

Posted by on September 5, 2017

It’s been raining for days and then you step down to your basement and “squish!” You have water problems. Just how big of a problem it is depends on how long and how much is wet. Your base homeowners insurance policy usually won’t cover the damage caused by water or sewage backing up or overflow from your sump pit. You need to add the optional sewer and water backup coverage to your policy. Water back-up coverage may also be added to your renters insurance policy to protect your personal property. Unfortunately, that coverage isn’t as cheap as it once was. Water back-up insurance can cost upwards of $200/year for a $10K coverage limit. Loss occurrences have become increasingly common in Iowa and other states with higher rainfall amounts, premiums have risen dramatically. The average water backup claim is $7,500 which may include cleanup costs as well as damage to your dwelling (flooring, base trim, drywall) and personal property.

Back up your Sump Pump

There are steps you can take to help prevent the likelihood of water back-up in the first place or at least lessen the impact of the damage if it does happen. The most common cause of water back-up claims is a malfunction with the sump pump. The storms that bring the extra water can also knock out the power to your home including the sump pump. Getting a sump pump with a battery back-up will allow your pump to do its job even when the power is out. Water powered sump pumps uses the water pressure from your home rather than electricity to pump water from your sump pit.

Another cause of sewer and water backup claims are floor drains that back up when city sewers are overwhelmed, causing it to flow backwards into your home. A properly installed back-flow valve or check valve can help prevent sewage backing into your home.

Early Warning System

water detector

A battery operated water detector (about $10) can provide early warning of water problems.

Let’s say you took all these precautions and you still get water backing into your basement. A water detector placed on your basement floor sets off an audible alarm, like a smoke alarm, to alert you of trouble before it gets serious. The early warning can tell you there’s a problem with your sump pump so you can take care of it before your property is damaged. These cost only about $10 so you can buy extra ones to use around your home where water leaks can form, such as behind your refrigerator (with automatic ice-makers), under your sinks and under your dishwasher. They also make water detectors that are connected to your home’s Wi-Fi and will send a text alert to your mobile device anywhere you may be.

Act Quickly to Prevent Mold

One of the biggest cost for water back-up is the mold remediation which can start forming in just 24-48 hours after exposure to water. Therefore, you need to act quickly if your carpet does get wet. Some useful equipment to help remove the water and start drying things down are:

  1.  A wet vac and/or carpet cleaning machine
  2. Carpet blowers or high-speed fans
  3. Dehumidifier(s)

You will first remove as much water possible with the wet vac and carpet cleaner then place the blowers/fans in line to move the air in the same direction around the room. The dehumidifiers will pull the moisture out of the air. If the water collects in a corner of the room you might want to pull back the carpet and pad in that area to facilitate drying. Check for mold on the back of the carpet and pad.

Water Backup Coverage isn’t Flood Insurance

Not all wet basements are due to water back-up. Which type of coverage applies depends on where the water entered your home. If it seeps through walls or enters through windows, that would be considered a flood and only flood insurance would cover it. Even so, flood insurance provides only limited coverage in basements. For example, personal property and floor coverings that are below grade are not covered. While water from a frozen or leaking pipe as well as water that overflows from a sink or tub may be covered in your base homeowners policy.

If you’ve had water damage in the past, you are more susceptible for having damage again. And of course, a water backup claim can lead to 3-year surcharge and loss of claim-free discounts, not to mention putting you at risk for cancellation if there are multiple claims. The best policy is to take the steps necessary to protect your property in the first place and mitigate damage by taking action quickly.

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Difference between Condominum Insurance and Homeowners Insurance

Posted by on April 16, 2017
Difference between Condominum Insurance and Homeowners Insurance

Condo Insurance vs. Homeowners Insurance

The major difference between owning a condo vs. a single-family home is condominium owners own and maintain the inside of their units themselves while jointly owning and maintaining the exterior of the building and common areas of the property. The common property is governed by a condominium association or a homeowner’s association (HOA). Each homeowner is a member and the members elect the officers.

The HOA is responsible for maintaining the landscaping, walks, parking lots, building exteriors and any jointly held property like a clubhouse or pool.  Monthly dues are collected from the members to pay for ongoing and future expenses such as insurance and re-roofing as needed.

The HOA also maintains a master insurance policy that covers the building’s shell such as the roofing, exterior and common areas. The master policy may also provide liability coverage for the commonly maintained areas of the property such as lawn, sidewalks and clubhouse. The master policy can be in two typical forms:

  1. Completely rebuild the building including all interior units to their original state (not counting any subsequent improvements made by the homeowner).
  1. “Studs out” policy. This is the more common of the two and covers just the rebuilding of the building’s exterior shell and any common space such as hallways between the units. The condo owner is responsible for rebuilding from the studs inward.

The individual members still need their own insurance to cover their property and liability where the master policy leaves off. In the first scenario, the unit owner may just have coverage for their personal property and personal liability, like a renter’s policy. The policy will also include loss of use (coverage D) which can pay for your additional living expense such as hotel bills if your home is not livable during repairs from a covered loss.

In the second scenario, you will need enough building coverage limit (coverage A) to rebuild the part of the building you are responsible for. This can include interior walls, kitchen and bath fixtures, flooring, window and wall coverings, light fixtures and other improvements to your unit’s interior. Coverage B (other structures) is not usually needed for a condo because detached garages, gazebos, fences, etc. are generally common property covered by the HOA’s policy. Coverage C (personal property) is needed by the condo owner as well as Coverage D, E and F – loss of use, medical payments and liability.

When getting insurance quotes for your condominium be sure your agent gets a copy of the master policy as well as the HOA bylaws to help avoid potential coverage gaps. For “studs-in” coverage, your insurance agent will run a special replacement cost estimate that doesn’t include replacing your building’s shell. It will use your unit’s square footage, type of construction, grade of kitchen, number of baths and other interior features to get a more accurate estimate. This estimate will be used for your building coverage limit. Your personal property limit is based on an estimate to replace your property that is not permanently attached to the dwelling.

Condominium insurance quotes in Cedar Rapids

Condominium living can provide many of the rewards of home ownership such as building equity but with fewer maintenance responsibilities. Whether it’s your first home or your retirement home be sure to get the right insurance coverage for worry-free living!

Condo photo

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Ridesharing? Check with your insurance agent first.

Posted by on January 5, 2017
Ridesharing? Check with your insurance agent first.

Ridesharing networks such as Uber and Lyft have changed the way we call for a ride. Once approved, drivers use their personal vehicle to give rideshare app users a ride for a fee. Most personal auto policies specifically exclude coverage when the vehicle is being used as a “public or livery conveyance.” In fact many insurance carriers will not accept a vehicle at all if it’s used for ridesharing or will cancel the policy if it is subsequently used this way. That’s why it’s important to have a conversation with your insurance agent before you decide to get into the ridesharing business.

Introducing Progressive’s new Ride-Sharing Coverage in Iowa

For the insurance companies that do allow it, there may be a gap in coverage where you’re off your personal auto policy and yet covered buy the Transportation Network Company’s (TNC) policy. Your personal auto policy may only cover you when you’re not using the TNC’s app. As soon as you turn on the app and are available for rides, your personal coverage stops. The coverage from the TNC’s policy doesn’t begin until a match has been made between the driver and the person hailing a ride. If that’s the case, there is a gap in coverage between the time the driver turns on the app and is “available” for rides and when a passenger match is made.

Ridesharing Coverage Gap

Safeco Insurance for example is coming out with their “RideSharing Coverage” that is designed to provide coverage during this specific period of time when the driver is not covered by the Safeco auto policy or the TNC’s policy. Note that this endorsement is rolling out state-by-state and as of January 2017, is not yet available in Iowa. The endorsement covers only the vehicle identified for ridesharing, not necessarily all vehicles on the policy.

Progressive, State Auto and Integrity are some of the carriers currently offering TNC coverage. As ridesharing increases in popularity more and more insurers will offer this coverage.

Don’t assume you are always covered if you plan to become a driver for a TNC, check with your agent first. Of course if you use Uber or Lyft as a rider (not a driver), this doesn’t apply to you. Learn more about your personal auto insurance from your local agent.

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Rental Car Coverage: Accept or Decline?

Posted by on December 26, 2016
Rental Car Coverage: Accept or Decline?

Insurance tips when renting a car

Probably the most common question I’m asked as a local insurance agent is, “Should I buy the insurance from the rental car agency or just use my auto insurance policy?” Which coverage should I get and under what circumstances can I more comfortably decline coverage? Let’s get right to my answer first and the reasons why later:

My opinion is you should accept the Collision Damage coverage (which covers physical damage to your rented vehicle), even if you have full collision and comprehensive coverage. You may decline the other optional coverage (see descriptions below) provided of course your auto policy has adequate limits for liability, medical payments and roadside assistance, see descriptions below. You should carry adequate liability limits on your auto policy. I took an insurance class while in college in the early 80’s. The instructor said always carry the highest liability limits offered as it doesn’t cost a lot more and can protect you a lot better if you’re in a big accident. There is no limit on how much you can sued for. That advice still rings true today!

Let’s say you do have so called “full coverage” insurance, meaning liability plus physical damage coverage, on at least one vehicle you own. Isn’t damage to a car you rent for short-term use covered under your collision and comprehensive coverage anyway? Why should you pay extra at the rental agency for a Collision Damage Waiver?

When you sign the contract at the rental agency, you are accepting responsibility for any damage to that vehicle that occurs while it is in your care custody or control. That’s why you do “a walk around” with the rental agent before and after you rent your car. Damage isn’t limited to just an accident as you are also responsible for hail damage, door dings, rock chips and any other damage that could occur.

Yes, your auto policy’s collision and comprehensive coverage can cover this types of losses to a rental car however there are a few coverage gaps which you should be aware of:

  1. Loss of Use – The rental agency can charge you back for the time the vehicle was being repaired and out of use as a rental car.
  2. Diminished Value – If the car was damaged and repaired the rental agency could demand you pay the difference for the value of the car that’s been repaired vs. the same car value had it not been in an accident.
  3. Administrative Fees – The rental agency could charge you back for their time spent on dealing with the vehicle’s repairs including talking with the claims adjuster from your insurance company.

If the above items are not covered on your owned vehicle, they won’t be covered on a rented vehicle either, leaving you to pay out of your own pocket. Even if your auto policy does cover these type of losses (and some policies can), you would still be responsible for your deductible amount, which is typically the first $500.

The collision damage waiver can cover all physical damage (subject to the conditions of your policy) to your rented auto and without a deductible. I understand that rental agencies in some states may offer a cheaper version of collision damage waiver that does have a deductible, in which case I suggest that you get the no deductible option.  There’s also the convenience factor of not having to go through your insurance company for the claim.

Does an accident on a rental car go against my driving record?

Some people think that if they have an accident and the claim is paid by the rental car coverage rather than by their personal auto insurance, the accident will not show on their driving record. This may not be the case. Insurance companies check your Motor Vehicle Report (MVR) which is generated from police reports included violations and accidents. Insurance companies also run a Clue report. Clue is a database to which insurance companies report their claims. Even if you don’t report the accident to your insurance company, it could still show up on your MVR if there was a police report.

Car rental contract coverage options

Below is a general description of typical coverage options offered by rental car agencies. See your rental car contact for specific information for your vehicle.

Common coverage options offered by car rental agencies:

  1. Collision Damage Waiver (CDW) About $18/day*
    • Similar to your auto policy’s Collision and Comprehensive coverage.
    • This can cover damage to your rental car. Don’t let the word “waiver” throw you, this is good coverage to have.
    • Usually no deductible.
  2. Personal Accident Insurance (PAI) about $3/day
    • Similar to your auto policy’s Medical Payment coverage.
    • Can cover the costs of your own medical expenses due to a covered accident in your rental car, up to the policy’s limits.
  3. Supplemental Liability Protection (SLP) about $15/day
    • Similar to your auto policy’s liability coverage
    • Can cover bodily injury and property damage to others which you are liable for. Note this does NOT cover the rental vehicle. See rental contact for limits of liability.
  4. Roadside Assistance Protection (RAP) about $5/day
    • Similar to roadside assistance or towing coverage you may have on your auto policy.
    • Can cover cost of towing, lock-out service, lost keys and other roadside services.

*Rates stated are for examples only. Quoted from Enterprise in Cedar Rapids, IA, 2016.

The policy language on your personal auto policy is usually more comprehensive with fewer exceptions or coverage gaps when it comes to your liability and medical payment coverage. Therefore, you can more comfortably decline the SLP (liability), PAI (medical) and RAP (roadside) coverage options when you have adequate coverage on your personal auto policy.  AAA auto club for example, give you roadside coverage in any auto you are traveling in, not just the vehicles you own.

Additional car rental tips:

Your auto policy does not cover you in most foreign counties. Auto policies generally only cover you while driving in the US and Canada. Check with your insurance agent if you have any coverage in the counties you’ll be traveling in. In this case, it may be best to accept all the coverages offered, including SLP and PAI.

Don’t assume your auto policy coverage covers damage for any and all rented vehicles. Most auto policies exclude all physical damage to larger vehicles such as moving trucks, large passenger vans and other commercial vehicles. Check with agent if you are renting something other than a passenger car. To learn more about your auto coverage, contact your local insurance agent.

 

Disclaimer:

The views and information in this blog are the opinions of the author, given for general educational purposes only, not to provide financial or legal advice. Policies and regulations vary by company and by state. Please consult your insurance agent and policy for your specific situation before making any insurance decisions.

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Where is St. John XXIII church?

Posted by on November 29, 2016
Where is St. John XXIII church?

Not quite Fairfax, not Cedar Rapids

I am often asked by friends, “Where is St John XXIII Church anyway?” Dedicated in Feb. 2004 as John XXIII, it is the newest Catholic parish in metro Cedar Rapids. The church was built on an 80-acre farmstead north of Fairfax, IA on 80th St SW. The old farmhouse is now the parish rectory. The new Hwy 100 extension will bring Edgewood Rd NE and Collins Rd within minutes of its doorstep when it is competed in 2020. The quiet country fields are already starting to give way to new housing developments and road expansion. Fairfax has extended its border to the southern property line of the parish and Cedar Rapids will soon be moving in from the north and east.

St. John XXIII parish is in this nebulous area that’s not quite Fairfax and not Cedar Rapids. I call it “Cedarfax,” in the “DMZ” that lies in between. At some point the church property will be incorporated into one of these two cities. However, since churches like other non-profits, don’t pay property taxes there may not be a rush to do so.

Come out and visit our pretty little church in the cornfield while it still is. Over the next 20 years the Cedarfax area is expected to grow by 20,000 – 30,000 in population. The Cedar Rapids Community School District has already purchased land in the area for new schools. Weekend Masses are 4:00 PM Saturday and 8:00 and 10:00 Sunday morning. You can count on our fast-moving pastor, Fr. Dustin Vu, to cheerfully welcome you when you arrive!

Cedar Rapids and Fairfax Iowa

Cedarfax, IA

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Where are the best Auto Insurance rates in Cedar Rapids?

Posted by on September 19, 2016
Where are the best Auto Insurance rates in Cedar Rapids?

Everyone knows that car insurance rates can vary by driver and vehicle as well as risk factors like driving record, vehicle use and mileage. But did you know that you can pay different rates depending on what part of Cedar Rapids you live?

Recently, a customer moved from one Cedar Rapids zip code to another. With no other changes, their auto insurance rate increased by $100 over the 6-month term. I thought it was unusual for such a large difference within Cedar Rapids and was curious how much your zip code affects your auto insurance rates. Using the same customer, I checked rates in each zip code in the metro area and here are the results:
 

auto-rates-by-zip

 
 
 
 
 
 
 
 
 
 
 
 

 Note: an index of 1.02 means this zip code is 2% more than the 52402 zip. This example was checked on Progressive. Each carrier sets their rating factors with approval from the Iowa Insurance Division who regulates insurance rates in the state of Iowa. Therefore, it’s important to note other carriers will not have the same rate differentials for the same zip codes.

In this example, the driver would pay $231 more in the SE Cedar Rapids zip code versus the NE zip code. I would’ve expected a large rate differential when moving to another state, as Iowa on average has some of the lowest auto insurance rates in the nation.

Why do auto insurance rates vary by location?

Insurers keep claims data by zip code. Those areas with higher rates of losses (insurance claims) will pay more than those with lower rates of loss. A higher number of accidents can lead to increased liability and collision coverage rates. Similarly, more losses from storms, deer strikes, vandalism or theft can lead to paying higher premiums for comprehensive coverage. For example Oklahoma has more severe wind and hail storms than Iowa does. Therefore you’ll pay more there for comprehensive coverage, which covers such loses, than in Iowa due to the increased risk.

It surprised me how much just moving across town, or in some cases just across the street, can affect your auto premiums!

 

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How Deer Accidents Affect your Insurance Rates

Posted by on November 12, 2015
Deer collisions can affect your insurance rates

Watch for deer and prevent injury and property damage.

 

 

 

 

 

 

 

 

 

You’ve always been a safe a driver. You’re heading down the highway at dusk and out the corner of your eye, you get a glimpse something moving and then, BOOM! After you calm down you realize you hit a deer and it really did a number to the front of your car. According to the Insurance Information Institute, car and deer collisions cost $4 billion a year. Iowa is ranked third in the nation for the likelihood of a deer collision.

Which insurance coverage pays for deer collisions?

Your auto insurance’s comprehensive coverage will pay for your car’s property damage caused by a collision with a deer or animal. Comprehensive coverage is sometimes called, “Other than Collision.” This is the same coverage that pays for damage to your car by many natural causes such as wind, fire, hail, flood or falling objects like a tree branch downed in a storm. Deer strikes are not considered a collision by insurance because the animal usually runs into your vehicle.

Comprehensive insurance claims are considered not at-fault. Therefore insurance companies don’t surcharge for collisions with a deer. Your deductible would apply, although some insureds maintain a slightly lower deductible on their comprehensive coverage than on their collision coverage. The reasoning behind this practice is some are willing to bear more of the risk for an accident they caused if they feel they are a relatively safe driver. The higher your deducible, the lower your premium cost.

Brake – don’t swerve

I had a customer who reported a deer related claim. Several deer had run onto the roadway at once and her instinct was to avoid them. She quickly jerked the steering wheel, putting the car into the ditch and damaging the car. The claims adjuster asked if she hit any of the deer. She said she wasn’t sure since it happened so fast. The adjuster asked if there was any physical evidence of the deer on her car such as blood or fur. There wasn’t any and subsequently the claim was ruled a collision, an at-fault accident. That triggered a premium surcharge and a loss of the safe driving discount, a double blow to the pocketbook!

No one deliberately wants to see an animal get harmed. However much more serious crashes can occur when you quickly serve out of your lane into the path of another car or object. Instead, stay in your lane and brake firmly if you see a deer coming into your path. Be on the lookout for deer especially at dawn and dusk when deer are most active.

Deer Season in Iowa

The regular shotgun deer season is roughly Dec. 5th through 20th this year. As deer are flushed out of their habitat they can end up running across roads and highways. Mating season or “the rut” also occurs in the fall of the year, typically late October to early November in Iowa. Be particularly vigilant and avoid an expensive encounter with a deer this season!

Learn More: Understanding your Auto Insurance
photo credit: Deer crossing the road

via photopin (license)

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