There are a lot of important questions related to coverage, cost, claims service, discounts, etc. that clients and agents are generally comfortable talking about when shopping for homeowners insurance. And for good reason! These basics are very important. However, there are less obvious (and sometimes more personal issues) at play as well. These things tend to be overlooked but can be really important in determining your home insurance rating. Most people are simply not comfortable discussing them openly or they don’t even realize that they could be issues.
We are here to address them head on.
Here are 7 questions that you should ask your insurance agent regarding your homeowners insurance policy.
1. "Does this refrigerator in my front yard make me unattractive?"
In a word: Yes. I’m not talking about you personally, but insurance companies want to see what they call “Pride of Ownership”. We see it in things like keeping your lawn neat and well maintained. Deferred maintenance for things like peeling paint, mildew on your siding, and simply cleaning your gutters will affect how good of a risk insurance companies think you are.
This can affect not only your price, but whether you can obtain insurance at all. As an independent agency, we work with multiple companies and they each have their own guidelines, but all of them want to see a well maintained property. To insurance companies, having junked appliances, broken down cars, and grass that is a foot high is like showing up to a date without showering, FOR A MONTH! You ain’t getting anywhere with them like that.
2. "Aren’t Trampolines Awesome?"
Oh yeah! They are great! Especially if you are into broken bones, concussions, sprains, and lawsuits. They are the bee’s knees! But don't just take our word for it. Even the Mayo Clinic isn't too keen on trampolines...
Seriously, jumping on a trampoline is fun and everyone wants their kid to have fun. It seems like a great idea “in the moment” to put one in your yard. Mike Tyson probably thought the face tattoo was a good idea “in the moment” as well. Don’t put the equivalent of a Mike Tyson style face tattoo in your yard and say “Have at it kids!” Go to the trampoline park or something.
Here is a recent Facebook discussion between me and a couple of our clients:
If the risk of injury to your kids or their friends is not enough to sway you, think about your property as well as that
of your neighbors.
Trampoline + Wind =
In Virginia, we will have wind. Book it. If that wind is strong enough, it will not matter how well you stake the trampoline down. It will blow into something. That something could be your house or car or it could be your neighbor's house or car.
Trampolines by themselves are not a deal breaker for obtaining homeowners insurance. As a matter of fact, we insure plenty of people who own them. However, if you have a trampoline combined with other negative factors (claims, deferred maintenance, etc.), it could be the final straw that gets you declined.
3. "Do you love my dog?"
First off, I LOVE dogs. For real. I grew up having dogs my entire life. I even worked at a kennel taking care of dogs when I was in high school. Here is a picture of my sweet pups, Cornbread and Biscuit:
We love them in spite of the fact that they dig holes in the yard, get sprayed by skunks, and attempt to destroy any package that the UPS or FedEx guy leaves at ground level. They are part of the family. However, I would not have them if they had vicious tendencies or bit people.
Most insurance companies are very weary of certain dog breeds. I personally think that an individual dog can be good or bad, regardless of the breed. However, according to the Insurance Information Institute, dog bites and other dog related claims account for more than a third of all homeowners liability claims. Problems with vicious dogs are not just limited to civil penalty, either. It is possible to be held criminally liable for having a vicious dog that does harm to someone.
I am not here to tell anyone what kind of dog they should own. This is America. You do you. Just know that you may be limiting your choices if you have certain breeds of dogs in your family, which may also mean that you are going to pay more than you otherwise might. Further, if you have a dog who has bitten someone, you might have a hard time finding insurance at all.
4. "Is this a hobby or a business and does that even matter?"
I see a lot of my friends and clients on Facebook and Instagram hash tagging it up when they are #roeing or #thirtyone or #pamperedchef or #yougetthepicture.
Maybe you don’t do the party sales type of thing, but you use your personal laptop for some consulting work. Perhaps you have a lot of land and cut and sell hay to make a few bucks. You might have a wood shop where you make birdhouses for sale or do contracting work on the side.
Whatever your thing is, you should know that your homeowners coverage likely limits or even excludes coverage for those hobbies/business pursuits altogether. Your policy may not give you coverage for business property in the home. So, your samples, laptop, tools, etc. may not be properly covered in the event of a loss. Further, the liability that can arise from these “hobbies” is likely to be excluded as well. Think about that before you hold a party where you serve food or give “professional” advice on diet or anything else that could have negative consequences that might result in liability on your part.
In most cases, these types of things can be handled by a simple endorsement to the homeowners policy for business in the home. In some cases, it is necessary to purchase a separate business owners policy to better cover it.
5. "Is it cool if I rent my house to other people?"
Eh. Maybe? It kind of depends on the situation. Generally speaking, if you have your cousin crashing on the couch until he “gets back on his feet”, that’s not going to be an issue (even if he kicks in some money for groceries or whatever). Even leasing a room to a boarder for a longer term can generally be handled, but you need to make your agent aware and they may need to add coverage so you don’t get caught in the “Business Pursuits Exclusion”.
Putting your home on Airbnb is a whole different situation. Most companies have a way to cover this exposure, but depending on how the property is used, there may be an endorsement to the homeowners policy or it may need to go on a commercial policy to protect yourself.
6. "Isn’t this wood stove the greatest?"
Wood burning stoves and fireplace inserts can be great and most homes with them can be insured with no problem. There are a couple of things to keep in mind however:
1. They need to be properly (read: professionally) installed with the correct spacing from any other flammable surfaces and materials.
2. You need to clean the flue and chimney regularly to keep creosote from building up and causing a fire.
By far, the most common issue that we have with insuring wood stoves is with “homemade” stoves. Your buddy down at the welding shop may be great at building wood stoves, but you are going to have a very hard time getting anybody to insure your home if you install it. Buy a wood stove from a REAL wood stove manufacturer and make sure that it has the Underwriters Laboratories (UL) stamp on it. This ensures that the product has been tested by UL and it passes safety standards.
7. "Are all insurance companies and policies the same?"
Most people think that price is the only difference between one policy or agency and another. The public has been conditioned to believe this with multimillion dollar ad campaigns from members the insurance industry themselves.
There are enough differences to fill an entire blog post. So we wrote about it. Click the button below to check it out:
So, let's get to the most basic part of the equation: the different options that you have for purchasing insurance. There are 3 main channels for purchasing insurance:
1. Direct Writers
2. Captive Agents
3. Independent Agents
Direct writers are the GEICOs, Elephants, and USAAs of the insurance world. They supposedly "cut out the middle man" by going direct to the consumer and eliminating agents. Fair enough, I guess. However, they also eliminate choice of carriers and expert advice. Also, they spend a TON of money on advertising. So, a big chunk of the supposed savings is gobbled up by ad purchases. They are not a huge player in the homeowners market at this point as they are more focused on auto insurance. So, I won't say a lot about them here. However, you need to ask yourself if you are comfortable with the advice of a cartoon character, artificial intelligence bot, or standard call center representative in protecting what is likely your most valuable asset. If not, skip the direct writers.
Captive Agents are the State Farm and Allstate types. They spend a bunch of money on marketing as well. However, they do have actual live, professional agents to help assist you with choosing coverage options. They are a far better option to the direct writers, in my opinion. However, being "captive" they only have the products of one company to offer. Now, in some cases, that may be enough, but most people prefer to have multiple choices.
That is where Independent Agents (like Holley Insurance) come in. We offer the advantage of having a real live agent to give professional advice along with something equally as important, choice. You see, we represent many different companies, which means that if Company A is not a fit for you (maybe they don't like your trampoline or pool), we can go to Companies B, C, and D to get a better policy for you. We can also shop among multiple carriers to find you the best price.
A further benefit to dealing with a locally owned, independent agency is that you are helping a small business in your community. I have found that most local agencies support their communities by providing local jobs, sponsorships for local charities, and promoting the local economy. This is a HUGE advantage!