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How Do Insurance Escrow Accounts Operate?

Escrow Account

Escrow Account

Insurance Escrow 101

An escrow account is established to collect payments such as your homeowner’s insurance, property taxes and other items in equal installments over the year. The bills are then paid as they fall due. If the lender agrees you can pay the bills yourself.

The mode of payment is at the sole discretion of the lender or the investor who finally purchases your loan. Because it is in the interests of the investor that you pay all the bills as required, they always prefer an escrow arrangement. For example, you fail to pay your property taxes, at the end of the day this will lead to a tax lien against the property (which ranks higher than theirs). If you are behind in your insurance payments and a major fire destroys the house, there will be no protection to cater for rebuilding costs, yet the house is the basic collateral for your home loan.

If you are a first-time homebuyer, a little explanation is in order. Lenders are the primary funders of mortgages, they normally sell their loans soon after closing to other investors trading on the secondary markets. Examples of such investors include banks, pension funds or investment entities. The final buyer of your loan typically engages a third-party servicing firm to collect your payments and distribute the funds. So, the term lender may refer to your lender or servicers or investors.

Dealing with escrow taxes and insurance fees

Most people prefer escrow accounts because they find it easier to pay their insurance and taxes monthly. It is harder to set aside funds for these obligations each month on your own, so you can pay when they become due every year. You may also be tempted to use the funds to settle these bills if the money was lying in a bank or even your desk drawer. An escrow is like a type of forced savings that ensures that the bills will be paid promptly, and you will not incur late fees and penalties

The law restricts the amount of money a borrower should pay where the lender asks for an escrow account. Usually the lender will divide the total cost of your expected property tax by twelve and this is the money they will collect in addition to the interest and principal payment. This also how your homeowner’s insurance and any other items requiring an escrow like flood insurance and homeowner’s association dues will be treated. These combined costs will be your escrow payment.

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TOP HOMEOWNERS INSURANCE CARRRIERS

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Establishing the amount of money to be placed on escrow

To get a rough estimate of your monthly escrow payment, just add these charges together and divide them by twelve. For instance, if you have an annual tax bill of $2,000 and the insurance cost is $600 per year, then your monthly escrow payment shall be $2,600 divided by twelve which comes to $216.67. Note that lenders are legally required to keep a cushion of up to one sixth of the total money paid from the account or money equivalent to two months payment to ensure the escrow account always has a balance. In addition, bear in mind that your escrow payment can change annually when your insurance or taxes increase, or if it becomes necessary to adjust the cushion amount.

While this is done automatically, mistakes do happen, and you need to monitor your account from time to time. If you receive a late notice from your insurance or county, then you will know there is something wrong. But you need not worry because the lender is required to pay all penalties for being late in payments. For this reason, the law stipulates that you be given a full breakdown within 45 days of setting up an escrow account, showing the projected amounts to be paid during the following year. You should also be given a free annual statement that highlights the activities in the account, for example which bills were paid, and an explanation regarding the amount of money you must pay in the next one year to ensure your account stays current.

If the loan is new, lenders have a tendency of underestimating the money they collect for insurance and taxes mainly because they are only able to estimate these costs. In addition, it means your initial payments become more affordable. Therefore, prepare for a rise in the escrow part of your payment-the tenant improvement (PI) portion of your principal, interest, taxes and insurance (PITI)-after the first year. Sometimes the increase may be big enough to shock you, so you need to get ready.

Escrow deficits and surpluses

In the event there is a deficit in your escrow account in a year, your lender might give you several options to settle the difference. For instance, you may pay for the full shortfall immediately or using twelve equal payments during the next year so that the deficit is cleared by the time the next anniversary of the loan comes around. At other times, the lender can give you a combination of the two methods which means you pay some money now and spread the remainder over the next one year.

If your escrow account has a surplus where the lender collects too much during the preceding year, the lender might do one of two things, based on the size of the surplus. If it is an over a specific amount, the lender will write you a check. If the surplus is smaller, it will be applied to the escrow payments for the following year. If you are told to choose, know that what the lender gives in one year will probably be taken away the following year in form of increased insurance premiums or higher taxes. It is always advisable to let it slide unless you direly need the money.


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High Value Home Insurance Long IslandInsuring Your High End Home with High Value Home Insurance.  Almost all insurance policies are designed with the average-priced home in mind. Generally speaking, insurance companies offer standard policies that suit the needs of nearly all homeowners. But it reaches a point when the standard homeowners insurance policy may not be sufficient enough to rebuild your home or replace your valuable furnishings.

READ MORE>>

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Iis-your-home-insurance-too-high-nys Your Home Insurance Too High? .  You’re not the first person to look at their insurance policy and realize that your property’s insured value is too high. In fact, two out of three homes in the US are underinsured, yet there are still plenty of people who believe they’ve over insured their home. We’re not saying this may not be the case, but the only real way of finding that out is by reviewing the value listed on your policy (usually called Dwelling limit or Coverage A) on a yearly basis. This way, you’ll be able to know whether your home is properly insured. READ MORE>>

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Rental Property Insurance7 Important Steps to Filing a Successful Homeowners Insurance Claim . Any peril which is covered under an insurance policy that occurs in your home, has to be paid out by your insurer; but the first step is the claim filing process. The first step to take is to notify your agent in writing, at the first possible moment. A policy is a contract which is binding between you and your insurer; this means there are rules in place you have to follow, but also rules they have to follow if an accident does take place. It is also important to read and fully understand the policy, to ensure you know what is and isn’t covered. READ MORE>>

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pure-insurance-ny

PURE is a member-owned insurer and a part of the PURE Group of Insurance Companies, a specialist group of companies serving the personal insurance needs of financially successful families across the United States.

Learn More >>

cincinnati-insurance-ny

The Cincinnati Insurance Company and its subsidiaries are among the nation’s top 25 property casualty insurer groups, based on 2016 net written premiums. Four independent insurance financial strength ratings agencies acknowledge our ability to meet financial obligations to policyholders.

Learn More >>

National-general-insurance-ny

With a nationwide network of claims professionals and a 24-hour, toll-free claims hotline available 365 days a year, National General Insurance provides superior claims service for its customers.

Learn More >>

Travelers-insurance-ny

Travelers takes on the risk and provides the coverage you need to protect the things that are important to you – your home, your car, your valuables and your business – so you don’t have to worry.

Learn More >>

mercury-insurance-ny

Dedicated managers and enthusiastic employees work hand-in-hand with Mercury Insurance’s network of independent agents to make Mercury one of the fastest-growing insurers in the nation.

Learn More >>

merchants-home-insurance-logo-ny

Merchants provides high-quality and affordable insurance for home owners, automobile owners, and many businesses, such as contractors and business owners.

Learn More >>

the-hartford-insurance-ny

The Hartford helps people and businesses prepare for the unexpected, protect what is uniquely important to them, and prevail when the unforeseen happens.

Learn More >>

AIG-ny

AIG’s Private Client Group focuses on high value property and casualty products for luxury homes, yachts, private aviation, art collections, wine collections, kidnap, ransom, extortion, and high liability limits.

Learn More >>

The-Andover-Companies-ny

The Andover Companies has been providing quality insurance protection since 1828. They are committed to providing competitive, affordable products tailored to meet the needs of homeowners, landlords and business owners.

Learn More >>

 

Kingstone-Insurance-ny

Kingstone Companies Inc., through its subsidiary, Kingstone Insurance Company, underwrites property and casualty insurance products to small businesses and individuals in New York through independent retail and wholesale agents and brokers.

Learn More >>

Ocean-Harbor-Homeowners-Insurance-ny

The Ocean Harbor Insurance Group does business in more than a dozen states, writes over $300 million of combined premium and is a top 100 writer of homeowners business in the United States.

Learn More >>

nycm-insurance-ny

NYCM Insurance is a property and casualty insurance company located in central New York that employs over 800 dedicated insurance professionals. They remain committed to maintaining great service and the personal touch we have always provided to our insureds.

Learn More >>

progressive-insurance-ny

They began in 1937 with the first drive-in claims office, became the first to introduce reduced rates for low-risk drivers, and then changed the insurance shopping experience by offering comparison rates on the Web.

Learn More >>

farmers-home-insurance-ny-

What began as a simple Car insurance company for farmers has become a multi-line, multi-company insurer and financial services group with a solid reputation for doing the right thing for the right reason.

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15 Ways To Reduce The Cost Of Your Homeowners Insurance Policy by 20%

home-If you own a home or are in the process of buying your first house, you must know by now how expensive home insurance premiums can get depending on the size, content and insurer of the home.

How much you pay for your homeowners insurance may differ by hundreds of dollars. Just by making some small changes to your home insurance policy, we can help you reduce this fee. We have put together a list of the most important factors that will lower your home insurance premium by at least 20%.

15 Ways to Save 20% On Your Homeowners Insurance Premium:

  1. Shop around
  2. Increase your deductible
  3. Leave out the value of land when assessing the insurance need
  4. Buy several policies from one insurer
  5. Reinforce & upgrade your home
  6. Update the security of your home
  7. Search for discounts
  8. Maintain a healthy credit score
  9. Remain with the same insurer
  10. Reassess your policy and values annually
  11. Get private insurance in case you are covered by government insurance plan
  12. Think about homeowners insurance whenever you are purchasing a home
  13. Call your current agent or broker
  14. Add an umbrella policy
  15. Ask for a list of discounts your homeowners insurance company offers and compare that to the list applied to your policy

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1)Shop around

It might be time consuming, but you can save a sizable amount of money. Get help from your friends, talk to the insurance department in your State or browse the yellow pages. The National Association of Insurance Commissioners possesses information that might help you out when selecting an insurance company in your particular state. You can also go through their site (www.naic.org) and get information relating to the insurer, including any complaints relating to them. States frequently reveal information relating to the standard rates charged by the leading insurers and a lot of states provide lists detailing the rate of customer complaints per insurance company.

look-around-home-insuranceIn addition you also need to look at online insurance quote services, information concerning agents and companies as well as consumer guides. This will let you have a rough idea of the range of prices available and reveal the insurers with the most affordable prices. However, you must consider other things besides the prices. The company that you choose must give a reasonable price and provide the level of service you would hope for if you needed help when filing an insurance claim. Therefore, as you evaluate the quality of service, utilize the complaint information mentioned above and speak to several insurance companies to get an idea about the type of service they provide. Request them to explain what action they would take in order to reduce your costs.

Analyze the financial solidity of the companies you are thinking about using consumer magazines and rating firms like Standard & Poors (www.standardandpoors.com/ratings) and A.M. Best (ambest.com). After you narrow down your choices to three insurance companies, ask them to give you price quotes.


2) Increase your deductible

increase deductibleA deductible essentially refers to the specified sum of money that you must pay towards covering a loss before your insurer starts to pay, as stated in the terms of the policy. When you pay a higher deductible, this means that you will pay less premium. Many insurance companies these days advise that you increase the amount to over $500. It is possible to lessen your insurance costs significantly if you could manage to increase your deductible to $1,000. Note that if you reside in a region that is disaster-prone, your policy could have a separate deductible for specific types of damage. In case you live near the Eastern coast, you could get a separate deductible for windstorms. Where your home state is susceptible to hailstorms, you could have a separate hail deductible. In the same vein, if your locality is vulnerable to earthquakes, your earthquake policy may contain a deductible.


3) Leave out the value of land when assessing the insurance you need

Your land cannot be endangered by windstorm, fire, theft or other perils defined in your homeowners insurance policy. For that reason, disregard its cost when working out how much homeowners insurance coverage you need to buy. When you fail do that, you may find yourself suffering higher costs than necessary.

Get-10-Free-quotes-Renters-Insurance


4) Buy several policies from one insurer

Savings ProtectionSome insurance companies that deal with homeowners, liability and auto insurance coverage will reduce your premium by five to fifteen percent if you purchase more than one policy from them. However, make sure that the unified cost is less than buying individual insurance policies from various companies.

 


5) Reinforce and upgrade your home

reinforce-homeRequest your insurer or insurance agent to advise you on the best course of action so as to ensure that your home can resist windstorms and other such natural calamities. You might lower your policy premiums by installing shutters that are storm-resistant, reinforcing your roof or even procuring more robust roofing materials. Older houses can be modernized to improve their ability to resist earthquakes. Additionally, think about upgrading your electrical, plumbing and heating appliances so as to bring down the risk of water and fire damage.

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TOP HOMEOWNERS INSURANCE CARRRIERS

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6) Update the security in your home

update-home-securityNormally, you can obtain discounts of more than five percent for installing dead-bolt locks, burglar alarms and smoke detectors. Several companies offer to reduce your premium by about 15 or 20 percent if you put up an advanced sprinkler, anti-fire and anti-burglar system that is connected to the fire and police stations or other monitoring services. Such systems can be expensive and not every system makes you eligible to be awarded a discount. Prior to installing such a system, get recommendations from your insurer regarding the best device, the cost and how much savings you will realize on premiums.


7) Search for discounts

Insurance companies give different kinds of discounts which vary in amount and depend on the particular state. For instance, retired people are at home more than working people. This lowers the likelihood of getting burglarized, and they can detect fires earlier. In addition, they have more time to maintain their houses. As a result people who are more than 55 years old and have retired can qualify for at least 10 percent discount by various insurers. There are professional bodies and employers insurance plans that can offer better bargains than what is in the market.

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8) Maintain a healthy credit history

several-policies-one-insurerBuilding a strong credit history can lower your insurance costs. More and more insurers are using credit data to set the price homeowner insurance policies. The majority of states require the insurer to advise the insured about any unfavorable action, for example when charging a higher rate. When that happens, you are supposed to ascertain the accuracy of the data used by the insurer to justify the increase. In order to safeguard your credit rating, pay your bills promptly, do not apply for more credit than you need and maintain your credit balance as low as you can. Monitor your credit record frequently and get any errors rectified immediately so that your credit record stays accurate.


9) Remain with the same insurer

If you have maintained your insurance coverage with the same insurer for a couple of years, you may get a special discount as a reward for being a good customer. Some insurance companies cut their premiums by five percent in case you remain with them for three to five years and ten percent if you stay with them for a period of six years and over. However, it is important to compare the cost of their policies with those of other companies from time to time.

Get-10-Free-quotes-Renters-Insurance


10) Reassess your policy limits and the value of your assets annually

Home Contents InsurancePreferably, your policy ought to take into account any significant purchases or upgrades to your home. Obviously, it is imprudent to spend money on insurance coverage that is not really necessary. If you have a fur coat that you bought for $5,000, it might not be worth that much today. It is therefore advisable to lower or scrap your floater (additional insurance for articles whose total value is not covered by normal homeowners policies- for example precious artwork, high-end jewelry and expensive computers) and keep the extra cash.


11) Get private insurance in case you are covered by a government insurance plan

If you reside in a region that is dangerous, for example one that is susceptible to crime, coastal storms or fires and you have been purchasing your homeowners insurance policy using a government plan, it is important to reach out to the sales department of your insurance company, insurance agent or the staff at your state department of insurance and get the names of insurers who may be keen to get your business. You might learn that there are things you can do to purchase insurance at reduced cost in the commercial market.


12) Think about homeowners insurance whenever you are purchasing a home

purchasing-home-insuranceYou can lower your insurance cost by buying a home that is adjacent to a fire hydrant in a neighborhood that is served by a professional (not voluntary) fire department. It can also be less expensive if the plumbing, heating and electrical systems in your home were installed less than ten years ago. If you reside in the eastern section of the country, consider buying a home that is constructed using brick since it has more wind resistance. If you reside in a zone that is susceptible to earthquakes, consider getting a wooden frame home since it can tolerate earthquakes better. Making a smart selection can lower your premiums from five to fifteen percent.

Study the Comprehensive Loss Underwriting Exchange (CLUE) report of the house you intend to buy. Such reports detail the insurance claim history of the property you intend to buy and it can help you as you evaluate some of the issues in the house.

Flood InsuranceNote that a normal homeowners policy does not cover earthquake damage and flood insurance. In case you purchase a home in a region that is susceptible to floods, you will have to take out a flood insurance cover that goes for about $400 per year. The Federal Emergency Management Agency offers beneficial information concerning flood insurance on their website page (fema.gov/nfip). An individual earthquake policy is offered by the majority of insurers . The cost of the insurance policy will be determined by the probability of experiencing earthquakes in the region you live. In California, this coverage is provided by the California Earthquake Authority.

Assuming that you have any queries pertaining to the insurance needs of any of your belongings, remember to ask the sales representative of your insurer or agent as you are searching for the best policy. As an illustration, when you conduct your business from your home, see to it that you talk about insurance coverage for such a business. The majority of homeowners insurance covers protect the business equipment in your home-but coverage is capped at just $2500. Furthermore, they do not offer any business liability insurance coverage. Even though you want to reduce the price of your home owners insurance, it is also important to ascertain that you have all the coverage you require.


13) Call your current agent or broker

Contact home Insurance AgentMany times, your current agent or broker may have an inside scoop on a new product or program that has become available in your area. Give them a call and ask them to look over your policy and make suggestions on ways to lower your premium without sacrificing coverage.

 


14) Add an umbrella policy

It may seem silly to add coverage to save money but many insurance companies offer large discounts to clients that have a homeowners policy and add an umbrella policy. The reason is retention. Data shows that clients with two or more insurance policies in force with the same company are less likely to put in a claim and more likely to remain a client of theirs.


15) Ask for a list of discounts your homeowners insurance company offers and compare that to the list applied to your policy

reassess-home-policyMany companies are required to offer discounts to clients when they request them but they aren’t upfront about which ones are available. For instance, are you a non-smoker? Does your policy show a non-smoker discount? Lots of insurance companies offer a discount for being a non-smoker but either forget to offer it or never ask the client. Getting a full list of discounts offered by the insurance company and comparing those against the discounts listed on your current policy is one way to ensure you aren’t missing out.

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Related Home Insurance Articles

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Iis-your-home-insurance-too-high-nys Your Home Insurance Too High? .  You’re not the first person to look at their insurance policy and realize that your property’s insured value is too high. In fact, two out of three homes in the US are underinsured, yet there are still plenty of people who believe they’ve over insured their home. We’re not saying this may not be the case, but the only real way of finding that out is by reviewing the value listed on your policy (usually called Dwelling limit or Coverage A) on a yearly basis. This way, you’ll be able to know whether your home is properly insured. READ MORE>>

++++++++++++++++++++++++++++++++++++++++

Rental Property Insurance7 Important Steps to Filing a Successful Homeowners Insurance Claim . Any peril which is covered under an insurance policy that occurs in your home, has to be paid out by your insurer; but the first step is the claim filing process. The first step to take is to notify your agent in writing, at the first possible moment. A policy is a contract which is binding between you and your insurer; this means there are rules in place you have to follow, but also rules they have to follow if an accident does take place. It is also important to read and fully understand the policy, to ensure you know what is and isn’t covered. READ MORE>>

++++++++++++++++++++++++++++++++++++++++

High Value Home Insurance Long IslandInsuring Your High End Home with High Value Home Insurance.  Almost all insurance policies are designed with the average-priced home in mind. Generally speaking, insurance companies offer standard policies that suit the needs of nearly all homeowners. But it reaches a point when the standard homeowners insurance policy may not be sufficient enough to rebuild your home or replace your valuable furnishings. READ MORE>>

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pure-insurance-ny

PURE is a member-owned insurer and a part of the PURE Group of Insurance Companies, a specialist group of companies serving the personal insurance needs of financially successful families across the United States.

Learn More >>

cincinnati-insurance-ny

The Cincinnati Insurance Company and its subsidiaries are among the nation’s top 25 property casualty insurer groups, based on 2016 net written premiums. Four independent insurance financial strength ratings agencies acknowledge our ability to meet financial obligations to policyholders.

Learn More >>

National-general-insurance-ny

With a nationwide network of claims professionals and a 24-hour, toll-free claims hotline available 365 days a year, National General Insurance provides superior claims service for its customers.

Learn More >>

Travelers-insurance-ny

Travelers takes on the risk and provides the coverage you need to protect the things that are important to you – your home, your car, your valuables and your business – so you don’t have to worry.

Learn More >>

mercury-insurance-ny

Dedicated managers and enthusiastic employees work hand-in-hand with Mercury Insurance’s network of independent agents to make Mercury one of the fastest-growing insurers in the nation.

Learn More >>

merchants-home-insurance-logo-ny

Merchants provides high-quality and affordable insurance for home owners, automobile owners, and many businesses, such as contractors and business owners.

Learn More >>

the-hartford-insurance-ny

The Hartford helps people and businesses prepare for the unexpected, protect what is uniquely important to them, and prevail when the unforeseen happens.

Learn More >>

AIG-ny

AIG’s Private Client Group focuses on high value property and casualty products for luxury homes, yachts, private aviation, art collections, wine collections, kidnap, ransom, extortion, and high liability limits.

Learn More >>

The-Andover-Companies-ny

The Andover Companies has been providing quality insurance protection since 1828. They are committed to providing competitive, affordable products tailored to meet the needs of homeowners, landlords and business owners.

Learn More >>

 

Kingstone-Insurance-ny

Kingstone Companies Inc., through its subsidiary, Kingstone Insurance Company, underwrites property and casualty insurance products to small businesses and individuals in New York through independent retail and wholesale agents and brokers.

Learn More >>

Ocean-Harbor-Homeowners-Insurance-ny

The Ocean Harbor Insurance Group does business in more than a dozen states, writes over $300 million of combined premium and is a top 100 writer of homeowners business in the United States.

Learn More >>

nycm-insurance-ny

NYCM Insurance is a property and casualty insurance company located in central New York that employs over 800 dedicated insurance professionals. They remain committed to maintaining great service and the personal touch we have always provided to our insureds.

Learn More >>

progressive-insurance-ny

They began in 1937 with the first drive-in claims office, became the first to introduce reduced rates for low-risk drivers, and then changed the insurance shopping experience by offering comparison rates on the Web.

Learn More >>

farmers-home-insurance-ny-

What began as a simple Car insurance company for farmers has become a multi-line, multi-company insurer and financial services group with a solid reputation for doing the right thing for the right reason.

Learn More >>


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Insuring Your High End Home on Long Island with High Value Home Insurance

High Value Home Insurance Long Island

Almost all insurance policies are designed with the average-priced home in mind. Generally speaking, insurance companies offer standard policies that suit the needs of nearly all homeowners. But it reaches a point when the standard homeowners insurance policy may not be sufficient enough to rebuild your home or replace your valuable furnishings.

Using high value home insurance to safeguard your investment on Long Island

The majority of luxury and custom-made homes around the New York City area are worth a lot of money. Undoubtedly, you have invested a lot when buying or upgrading your dream home and naturally you would want it to be covered properly. For this reason, maybe it’s time to reexamine how much it would cost to rebuild your home and replace the assets and valuables inside your house.

High value home insurance policies are not for everyone

If your home is valued at $1,000,000 (one million) and above, you should think about taking out a higher insurance policy. Generally speaking, homes in this price category tend to have more personal possessions, are more costly to rebuild and can have many custom features such as electronic home control units, basketball courts and difficult to replace landscaping. High value insurance companies specialize in homes that have these custom features.

You might think about getting a high value policy if you have occupied the house for many years and you have made significant improvements. For instance, if you have added a customized outdoor kitchen, guest room, gymnasium or even a home theater, you will want to ensure that you are carrying sufficient coverage limits in case you have to rebuild in future.



Apart from the custom designs and the actual structure of your home, you should carefully think about your personal possessions. As your personal wealth increases, your possessions and their value tend to increase as well. There’s a chance you will have expensive jewelry, antique fittings, fine arts, paintings, original artifacts or other rare objects that may be exceedingly expensive or difficult to replace.

Distinguishing between High Value Home Insurance and Standard Insurance

Commonly, computer programs are used to estimate the insurance quotes on less expensive homes and establish their replacement values. However, this method is not preferred for customized homes.

Elegant custom-made homes are usually more expensive to rebuild and require higher levels of insurance coverage.

The importance of property appraisal

If you select an insurance company that focuses on high market properties (which is a wise idea) they must designate an appraiser to come over and inspect your entire home before buying a high value home insurance policy. In the majority of cases, the appraisers are experts who are conversant with the procedures of appraising high end homes.

Once the appraiser arrives in your home, it is highly recommended that you work closely together with him or her and offer information relating to the costs and ages of the different items and features in your home. You can provide vital knowledge about antiques, original paintings, collectibles and sport collections. The appraiser might also be interested in looking at jewelry appraisals, letters of authentication and purchase receipts.



 

In the course of the inspection, the appraiser will make a note of every part of the home that has custom features such as chandeliers, floor heating systems, a handmade bar and exotic porcelain tiles that add uniqueness to your home and makes it costly to repair.

Safeguard your beautiful home

If you have upgraded your current home significantly or designed a customized dream home on Long island, the time might be right for you reevaluate the substantial investments that you have put into your home. This could be the best time to get a quote on a high value home insurance package.


 

PureAIG Cincinatti Insurance

Coastal Insurance Welcomes Cincinnati Insurance to NY’s High Value Homeowners Insurance Marketplace

Coastal Insurance Solutions is pleased to announce its agency partnership with Cincinnati Insurance Company

ROCKY POINT, NY (PRWEB) SEPTEMBER 08, 2017

prweb-logo

Coastal Insurance Solutions is pleased to announce it’s agency partnership with Cincinnati Insurance Company, one of the top 25 property & casualty insurers in the U.S. Cincinnati recently joined the high-end, high value homeowners insurance marketplace on Long Island in New York, an area that Coastal Insurance has been a leader in for more than a decade.

Cincinnati’s entry has grabbed the attention of consumers and luxury insurance carriers that share space in this exclusive, niche marketplace by offering a quality insurance contract and an industry-leading customer claims experience.

In October of 2015 Cincinnati Insurance began offering its Executive Capstone™ high value home insurance product (homes w/coverage limits over $1 million) to New York’s wealthy. Coastal Insurance joins a handful of insurance agents that have the financial stability, infrastructure, expertise and appetite to insure some of Long Island’s most beautiful homes.

cincinnati-insurance-company-ny“We’re proud to add Cincinnati to Coastal Insurance’s portfolio of high net worth insurance carriers. It’s competition at its best and great for the consumer,” says David W. Clausen, CEO of Coastal Insurance Solutions (a Long Island based insurance broker that focuses on high-net worth Individuals). Clausen adds, “They’re rapidly gaining market share in the New York City and Hamptons area. Consumers will see benefit from attractive premiums and greater carrier flexibility due to the increased capacity Cincinnati brings to the Long Island insurance market. If you own a high value home in Nassau, Suffolk or anywhere in New York for that matter, you should consider Cincinnati as an option. We’re please to have them on board.”

Who should request a quote from Cincinnati Insurance?

If you own a high value home and consider yourself an educated consumer, who understands the value of proper coverage and world-class claims handling, then we suggest you schedule a review with a local independent advisor representing Cincinnati Insurance-like Coastal Insurance Solutions.

About The Cincinnati Insurance Company
Founded in 1950 by a group of independent insurance agents, The Cincinnati Insurance Company stands among the top 25 property & casualty insurers in the U.S., with a financial rating of A++ (Superior) by A.M. Best and is publicly traded on the Nasdaq. The company employs more than 4,000 people as of July of 2017. Learn more at http://www.cinfin.com.

Is Your Home Insurance Too High?

You’re not the first person to look at their insurance policy and realize that your property’s insured value is too high. In fact, two out of three homes in the US are underinsured, yet there are still plenty of people who believe they’ve over insured their home. We’re not saying this may not be the case, but the only real way of finding that out is by reviewing the value listed on your policy (usually called Dwelling limit or Coverage A) on a yearly basis. This way, you’ll be able to know whether your home is properly insured.

is-your-home-insurance-too-high-nyOn the other hand, there are also cases when you may find that your insurance is too low. In this case, you can easily adjust your policy or use endorsement to add extra coverage.

One of the main issues with insurance though is when your property’s value increases so much that you quickly find yourself in a situation where your home is over insured. Luckily, there are quite a few things you can do if you don’t agree with the estimated reconstruction cost of your home or its insured value.

Check to see whether you’re over insuring your property

When people make large claims, one of the main issues they’re going to deal with is finding out their home is underinsured. Even so, when people check the cost of their home insurance, they often want to reduce costs as much as possible. New buyers are often surprised to find out just how much they need to pay to insure their home, while people who’ve had a home for a long time may feel quite annoyed to see that their property’s insurance value has increased, while its resale value may not have followed the same trend.

Prior to lowering your property’s insurance, there may be a few other factors that can help you in this regard. For instance, you may be able to take advantage of various discounts that can be added to the insurance policy. Other options may also be available, such as getting a new security system or increasing your deductible or lowering your personal property coverage.

If you don’t agree with the value the insurer wants you to insure your property for, rest assured, since there are always options you can consider.
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Top 3 ways your property insurance dwelling value can go up

Prior to letting you know exactly why your property’s value may be too high and what can be done about it, it’s important to understand why this happened in the first place.

There are 3 factors that may influence this increase, including:

  • You’ve had an evaluator visit you for an insurance property inspection. After checking the cost of reconstruction, he recommended your insurer increases your property’s value.
  • There may be a clause in your home insurance policy that’s meant to protect you from the costs of inflation. This clause may also increase the value of your property insurance on a yearly basis, yet only by a small percentage. However, in the long run, this inflation can become pretty substantial and eventually force you to review your property value for accuracy.
  • You’re the proud owner of a new property that’s going to be insured for the very first time. In order to check its value, the insurance broker or agent used basic tools and info you’ve provided them to determine the home’s insurance value.

Things you can do if you don’t agree with your property’s insurance value

A lot of people believe that the insurance value set by an agent or broker is final, but that’s not true. There are many cases when this type of evaluation can be erroneous. Luckily, there are a few ways you can check whether your property is over insured. The main reason people get insurance is to protect their assets, so if you think that something is indeed off, then you have every right to investigate and get an answer. Therefore, don’t be afraid to call your insurance agent and request a review or ask questions.

Usually, if you have a solid and legitimate case, the insurance agent or broker will submit your request for review to the insurance underwriter.

Have inflation adjustments caused your property’s value to increase?

Inflation clauses are put in place by insurers to protect their clients when they insure their property. The reason for this is simple: if a homeowner insures his home for a certain dollar amount and after several years he files a claim, he won’t have to worry about coming up short on the dollar amount required to rebuild his home from increased cost of construction. The inflation clause is intended to keep up with increased cost of construction over a period of time.

The bad news about this method’s accuracy is that it depends on the homeowner’s foresight, specifically him insuring his property for the right replacement cost at the time of writing the policy. If the numbers are off in the beginning they will continue to be off in the future- and sometimes by a significant amount.

When it comes to standard inflation that happens over a long period of time, insurers recommend that homeowners use current reconstruction rates to re-evaluate the value of their property. You should speak to your insurance representative about your home’s value and review the dwelling coverage every few years for accuracy. Getting a readjustment can in many cases be as simple as making a call and talking to an agent.

Effectively negotiate by using these simple tips when your property’s value is increased

If you’ve discussed with your insurance representative about the increase and the results are not what you were hoping for, then rest assured. There are 3 very simple approaches you can consider negotiating with your insurers.

3 simple methods to get a second opinion on your property’s insurance value

One of the first things you can do is ask your insurer to recheck their calculations. You should specifically check the square footage they’ve used and then compare those numbers with the standard in your area (based on info from local builders). If you find that your numbers are off, show those numbers to your agent and ask them to have an underwriter make an adjustment to your policy. In many cases they’ll offer you a different solution or a compromise.

Get in touch with one or more insurers and request that they estimate the cost of having your property reconstruction and have them send you a quote. If their cost is different, be sure to ask why, especially if the info you’ve provided them for this purpose is identical to the info you provided your insurer. Make sure they also used the same rating tools as your insurer.

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Another thing you could do is get in touch with a private appraiser who is accepted by most insurers. It’s important to do a bit of research in this regard and only hire someone that is accepted by your insurance company. Wasting money on this and finding out your insurer doesn’t accept the independent investigator’s review is not the goal. The methods and tools used by the independent appraiser must also be approved by the insurance company. You should know that in the majority of cases, independent appraisers are a bit more accurate and their appraisal amounts may be higher. It’s true that the appraisal value may be lower in some cases, but this happens quite rarely. Before hiring an appraiser, you need to inform them of the previous appraisals you’ve got, including the cost per sq. ft. used by your insurer. If the appraiser is well reputed and experienced, he’ll tell you right away if your values are within the normal range and may even help you save some time and money in the process.

Check your home insurance policy type and coverage requirements. In most cases, insurers provide many types of insurance coverage for properties.

What you need to know about home value and guaranteed replacement cost

Guaranteed replacement cost will effectively insure your property to replacement value, including a certain percentage over the value of your insured property in the event the reconstruction cost may go over the policy limit after making a claim. Depending on the company used, some of them may put a cap on the value to 125% of the insured property’s value. However, there are also companies that may provide a guaranteed replacement regardless of the cost. To know which insurance type to get, it’s advised that you speak to your insurance representative about it. If you opt for guaranteed replacement coverage, then you need to insure 100% of your property’s evaluated reconstruction cost at the time the policy was written. This coverage is the best by far since it fully protects your home regardless of what happens to it. Still, there are a few other options out there that provide great coverage at a much lower cost.

What you should know about replacement cost

Replacement cost is a bit different compared to guaranteed replacement cost. The difference lies in the fact that you’re only going to be protected up to the property’s insured value and no more. If you believe your home insurance dwelling evaluation is incorrect and you deem that a lesser insurance amount is better suited for your property should you file a claim in the near future, then you need to get in touch with your insurer. This way, you can talk to them about lowering your insurance cot by getting a replacement cost insurance policy instead.

To benefit from replacement cost, you need to insure your property to a certain percentage of its value. Depending on the insurance company used, you’ll find that most of them offer different plans that vary in requirement to insure to eight or up to eighty five percent of your property’s reconstruction value. Jurisdiction also impacts your insurance policy and cost, so you need to speak to your insurance company about this as well. By doing so you may very well avoid the argument regarding whether the value is valid. If you’re comfortable taking your chances, then this can provide you with a safe middle ground.

How reducing or increasing dwelling value affects your insurance coverage

A wide range of the coverage found in a homeowners’ insurance policy are provided as a percentage of the insured property value. For instance, your personal contents and belongings may have been insured at about 70% of the property’s value and your extra living expenses may be set at 10% or 20%. Each time your insured property’s value changes, it’s important that you verify how this will influence the rest of the coverage you’ve got. There are cases when the value of the items in your home could be a lot higher than the items of the average individual. Under these circumstances, it’s important that you exercise care when changing your property’s value and that’s because this will impact the rest of the related insurance amounts for:

  • Extra and detached structures— (Other Structures/Coverage B)
  • Personal contents— (Personal Property/Coverage C)
  • Extra living expenses— (Additional Living Expenses/Loss of Use/Coverage D)

Cutting down on your property’s insurance value won’t affect your home policy’s liability coverage, special endorsements, riders, or any special limits the policy may contain.
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What other options do I have to save on insurance costs?

If you’ve properly evaluated the reasons why your property insurance costs are so high and you are still adamant on saving money, there are ways you can do that.

First, you may want to get in touch with your insurer to increase your deductible. In turn, this will help you save a lot on insurance costs (usually about 40%).

Bundling your insurance is also recommended. Get in touch with the insurance company you currently use and ask them to provide you a quote for your car and home insurance.

Getting in touch with other insurance companies is also recommended because costs vary greatly. Many people may also worry about getting hit with an early cancellation penalty should they decide to cancel their policy prior to the renewal date. However, what many folks don’t realize is that in that most insurance policies are written on a Pro-Rata basis (daily rate) and any unearned premium will be refunded by the insurance company—even if you cancel your policy mid-term.

Written by David Clausen