Homeowners Insurance


HomeOne of the most common questions that we are asked in our office is “Why is my dwelling coverage so high?”  We all know that the housing market is not where it used to be. This has been the case for some time and probably isn’t changing any time soon. So why does the insurance company insure your home for more than it’s worth?

Amongst other things, home insurance is there to protect you in event that there is a complete and total loss. Regardless of whether you would purchase a new home or rebuild your home, it doesn’t change the fact that the company who is insuring your home is just that….insuring your home. They aren’t necessarily insuring you to go out and purchase another home, but rather are insuring the home that you currently live in and the coverage is determined by how much it would cost to actually rebuild your home from the ground up.

Here are a few things to keep in mind when considering the differences between Replacement Cost and Market Value:

1. The Market Value for a home generally includes the value of the land on which the home sits. The Replacement Cost of a home does not include any land values, but is only concerned with the home itself.

2. The Market Value for a home is affected by changes in the real estate market. When homes in a particular area are in high demand the Market Value of a home in that area will generally go up. In the same way, when demand for homes in a particular area is low, the Market Value of homes in that area may remain level or even go down. Replacement Cost is not affected by the real estate market but is instead affected by the fluctuations in material and labor costs to build a home. For example, if the cost of material such as lumber, concrete, drywall, and carpet are higher in a particular area, then the Replacement Cost of a home in that area will be higher than the Replacement Cost of the same home in an area where materials are less expensive.

3. The Market Value of a new home generally factors in the cost that was required to build the home new. Replacement Cost, however, is looking at the cost to re-build the home, if it were completely destroyed, using all of the same materials and construction techniques originally used to build the home. The cost to build a new home can be quite different from the cost to re-build a pre-existing home due to access issues, labor efficiencies, economies of scale, debris removal and higher price of materials that may no longer be in common use (such as lath and plaster vs. drywall).

When insuring a home, we always use the Replacement Cost of the home to determine the amount of insurance required as this is what it will cost to replace or repair the home should it be damaged or destroyed. Understanding your coverage and what it means for you is just one of the many things that we offer here at Canyon Lands Insurance. If you are interested in a free quote, please visit our website at http://www.canyonlandsagency.com or give us a call at 480-288-5900. Hope to hear from you soon!

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These days you can buy nearly anything online, even your insurance.  Although it may seem like you are saving time and money by obtaining a policy online, it may not be so convenient later.

One of the biggest advantages of working with an agent is that they have time to sit down and talk with you, in turn allowing you to establish a one on one relationship.  Just one visit with an agent can prove to be beneficial in respect to knowing what your options are and choosing the best possible coverage that fits your needs.  In addition to this, based on your answers to a few simple questions, an agent is able to find possible discounts that you may be qualified to receive.  Purchasing insurance can sometimes be stressful and an agent can alleviate some of that stress, if not most of it just by understanding and being able to relate to you.  After all, we are human and it’s comforting to know that someone has your best interest at heart.

Ben Franklin said it best, “Time is money”. Although an online agency provides you with a phone number where they can be reached, you may not be able to speak with a live person. I’m sure that we have all experienced the downfalls of 800 numbers and the “customer service” they provide.  One could spend 30 minutes or more being looped from one automated message to the next only to reach a live person who ends up transferring you somewhere else. Being able to reach your agent by phone without having to guess which automated option to choose can save you both time and aggravation.

One final advantage to working with an agent who is local is that they can work with you in regards to your coverage.  They can adjust your limits and/or deductibles without sacrificing the important coverage that you need resulting in a policy that is tailored just for you and your pocketbook.   Online agencies give you the freedom to choose the coverage you want according to what you can afford, but an agent can recommend coverage that will protect you and your family all while keeping you within your budget.

For example, the required liability coverage amounts in the state of Arizona are 15/30/10.  Sure, you may get a huge savings up front, but will you pay for it in the end?  If you cause an accident which results in bodily injury more than $15,000 or property damage more than $10,000, you are financially responsible.  Just to give you an idea, according to the National Safety Council, the average cost of injury in a car accident is $61,600 and the average price of a new vehicle is a tad over $30,000 according to Forbes.  Saving a couple of dollars by reducing coverage could cost you thousands in the long run.

With all of the decisions that you make in life, don’t let choosing the right policy overwhelm you when you have an agent right who is right around the corner.  Make an appointment today by calling us @ 480-288-5900.  We can help you protect what matters most!

More than 400,000 winter visitors migrate from their northern US and Canadian homes to Arizona each year, generally beginning in October.  Whether you are coming or going, there is preparation involved in regards to leaving your home unoccupied for several months.   No one wants to come home, whether it’s summer, winter, or fall to a disaster that could have been prevented by taking the time to create and execute a plan that will help protect your home while you are away. Here are just a few things to consider when leaving your seasonal home for an extended period of time.

Shut Off Main Water Supply

Imagine coming home after being on the road for hours or even days.  You finally arrive at 12:21am.  All you want to do is walk through the door, crawl into your own bed, and drift off to sleep.  Instead, you walk through the door and are stopped in your tracks by an overwhelming, musty scent in the air. Your carpet is filthy and each step you take leads you into a swamp that once used to be your living room.   Shutting down the main water valve before you leave your home can be one of the most crucial things that you can do in order to prevent water damage that can be caused by frozen pipes, a ruptured washer hose, leaking supply lines or a dripping water heater.  In addition to this, we also recommend draining your toilets and turning off your water heater.

Turn Off Breakers

Although a large number of fires that occur are associated with human activity, fires in vacant homes do happen.  Aside from your heating system, security system, or outside lighting,turn off all nonessential electrical circuit breakers in your home’s electrical box.  This can minimize the possibility of electrical fires.  Along with turning off your breakers, unplug all appliances both large and small.

Disconnect the Computer

In today’s world, identity theft is one of the fastest growing crimes.  If you have personal information stored on your computer, turning it off and disconnecting it from the internet is a must.

Lock Up  

Although this may sound elementary, be sure to lock all of your doors and windows.  If you have a security system, make sure that it is turned on before you leave.  You can also alert the local police department of your departure, leaving them your contact information and requesting that they add your home to their vacation watch list. If you have an interim caretaker, provide their information as well. You may also want to consider inviting a neighbor to park in your driveway during your time away.

Find more information at http://www.amainsure.com/maturedecisions/protectyourinvestment.html.  Taking these few steps can save you time, money and not to mention, a huge headache.  Be confident that your home is safe the moment you pull out of your driveway.  Peace of mind can be key to enjoying your spring, winter, summer or fall!

Do you know how divorce may impact your insurance policies? (image via flickr)

No one likes to think that it will happen to them but with a 50% divorce rate, it is happening to a lot of us.  The last thing you want to think about while you are divvying up your life is insurance, but it should be at the top of your to do list.  In order to ensure you are protected during and after the divorce, you will need to review and make changes to the insurance policies you have individually and together.  Here are 5 of the most common ways getting divorced impacts your insurance.

Policies that Protect Home and Property

These are your homeowner’s policy or your renter’s policy and provide coverage for damage to your home and/or loss or damage to personal property.  Odds are that at least one person is changing residences as a result of the divorce and when they leave, they will be taking property with them.  It is a good idea to reassess your homeowner’s or renter’s policy to ensure you still need all the coverage you have.  For example, if you have a rider that covers an expensive piece of art you may no longer need that rider or to pay for the additional coverage if your former spouse is taking the art.  If you are moving from a home you own to a rented space, you will want to switch your homeowner’s policy for a rental policy.

Policies that Protect Your Cars

There will definitely be changes to your auto policy unless one of you doesn’t drive.  At a minimum, the policy will need to be changed so that it only includes you as an authorized driver.  If you have more than one car, the coverage for any vehicles you no longer own can be removed as well which will save you money.  Don’t wait to make these changes.  As long as you are both listed on the policy, you are both liable for any claims against that policy.

Policies that Cover Your Life

Most people think that one of your first insurance changes you would want to make would be to your life insurance.  You don’t want to take the chance that something happens to you and your former spouse gets your life insurance payout.  However, there are several reasons why you may not want to make any changes to your life insurance as part of the divorce.  First, if you have children, you may want your life insurance proceeds to go to your spouse because they will be the primary caretakers for your children.  Second, if your spouse is paying alimony and child support and something happens to them, life insurance proceeds can help replace that lost resource.  One change you may consider is changing these policies, the ones meant to provide for the care and raising of children, from whole life policies to term policies.  This would enable you to provide means for their care until they are old enough to care for themselves without having to pay premiums for life.

If you are unsure about the insurance implications of your divorce, work with your agent.  They can help you determine what insurance you need going forward and what changes you need to make in order to have the amount of protection that works for you.

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Are you properly insured if you’re considering a remodel? (Image via google)

You have a big remodel planned this summer that includes a revamped master bedroom and bath, a new kitchen, and a small addition that will create a family room off the back of the house.  You have been dreaming about cooking in your new kitchen and waking up in your new bedroom for months.  You have all the contractors you need lined up.  Your permits are in place and you feel like you have everything taken care.  But, have you called your insurance agent?

One mistake that many homeowners make is doing major improvements to their home without consulting their insurance agent.  There are several areas where this oversight can lead to problems with your coverage while the remodeling work is underway and after it is complete.   First, you need to make sure you have the right kind and right amount of coverage to protect you during the construction.   Don’t wait until work has already started as you don’t want to find out you are underinsured when it is too late to rectify that problem.  Second, your insurance needs may change based on the outcome of the remodel.

Here are some steps you need to take to ensure you have the coverage you need to protect you during the process.

1.     Call Your Agent

It is important to do this before work starts.  There may be additional coverage you need to secure during the remodel.  If you or a family member will be doing most of the work, you may need to boost or enhance your liability coverage in the event someone is injured.  Your agent can also advise you if there are additional coverage’s you need to have in place during the project.

2.     Increase Your No Fault Medical Protection

The medical payments portion of your homeowners insurance is likely very low as the primary concern under normal circumstances is liability.  However, if you or members of your family or even other people like friends are going to be doing some of the work, you should increase this limit.  In the event someone is injured during construction, any medical bills can be submitted to the insurance company for payment.

3.     Check Out You Subcontractors

While many homeowners think to check the references of subcontractors, they don’t always think to inquire about the subcontractors insurance and bonding.  If the person doing work at your house damages your property or injures someone, you need to know that they are carrying adequate insurance to cover those losses.  If they do not, the liability may fall on you and your homeowner’s policy may not cover these kinds of claims, leaving you to pay the bill out of pocket.  Verify coverage by asking for proof of insurance from any company or individual that will be performing work on your house.  If a subcontractor is unable or unwilling to provide proof of insurance, you may want to hire someone else.

4.     Consider Additional Coverage

If you are doing a large project, you may want to purchase additional coverage like a Builder’s Risk policy.  This type of policy protects you from any damage to your house during the course of construction including damage from wind or rain, theft of materials, and vandalism.

 

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Does your insurance policy cover “acts of God?” (image via google)

If you own a car, own a house, or have a family, it’s a good bet you have some kind of insurance.  Odds are you have at least some kind of coverage for the car you drive and the place you live.  If you have personal insurance, you understand the importance of protecting yourself, your financial future, and your property.  But even savvy insurance consumers don’t always know all the ins and outs of their policies.  Here are 4 things customers commonly do not know about their personal insurance policies.

1.     Your Car Insurance Won’t Buy You a New Phone

If you have car insurance and your car is stolen, you know your policy will replace your car or reimburse you for its loss.  But, most car insurance policies will not replace or reimburse you for any personal property that was in the car at the time it was taken.  This also holds true for items stolen from your car.  Let’s say you leave your laptop under the backseat and your cell phone in the center console and someone breaks the window and steals both.  Your car insurance will cover the cost of repairing the window, but you are on your own for the loss of your laptop and phone.

2.     Losing Your Home Won’t Make You Homeless

One thing many people don’t realize about their homeowner’s policy is that it provides for the payment of expenses you incur if you have to live somewhere other than your home for a period of time while repairs are made.  For example, there is a fire in your house that causes significant enough damage that you will have to live somewhere else for 6 months; your policy will pay for the initial stay in a hotel as well as your rent and some other expenses.

3.     Life Insurance Benefits are Not Automatically Tax Free

If you die, the proceeds of any and all life insurance policies go to your beneficiaries’ tax free, right?  Not always.  Whether or not your life insurance payout will be subject to taxes completely depends on the details of your policy.  If you have a term policy where you are the policy owner and your spouse is the beneficiary, if you die during the policy term, the payout will likely be tax free.  However, if someone else, like your parent is the policy owner, there may be tax implications.  Talk to your insurance agent and an accountant to ensure you have a complete understanding of any tax implications.

4.     Natural Disasters are Not Generally Covered

An unfortunate truth in the world is that Mother Nature is unpredictable and sometimes leaves devastation in her wake.  Another unfortunate truth is that many of these disasters are excluded from standard personal insurance policies.  While most people know that flooding is not covered by their homeowners policy, they don’t realize that damage caused by tornados, earthquakes, and other “acts of god” is not covered without purchasing additional coverage.

The best protection you have is to read your policy all the way through and make sure you understand all its provisions and exclusions.  If you are unsure about whether or not something is covered, ask your insurance agent for clarification.

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Be safe while bicycling this summer (image via The Coalition of Arizona Bicyclists)

Arizona’s natural beauty and climate make it the perfect place to ride a bike.  The blue skies, warm weather, and breathtaking vistas elevate a bike ride to a cycling experience.  But while you are out, relishing the feel of the wind on your face and the warmth of the sun on your back, make sure you are taking steps to stay safe and secure.

Be Safe

Whenever you are on your bike, safety has to be a top concern.  The dangers of cycling are inherent wherever you choose to ride, but here in Arizona you are also dealing with the dangers of the desert like dehydration and heat stroke.  Sharing the road with automobiles also increases the risk of riding your bike.  In 2009, the National Highway Traffic Safety Administration (NHTSA) indicates that 2% of all traffic fatalities involved cyclists.  Be safe whenever and wherever you ride by following these simple safety rules.

  1. Use your head and wear a helmet.  Never, ever ride without a helmet.  According to the NHTSA, 70% of fatal bicycle accidents involve brain injuries and bike helmets are 85% effective at preventing these types of injuries.
  2. Follow the rules.  When you are on the road, even if you are on a bike, you need to follow the rules of the road just as you would if you were driving a car.  This helps keep you safe by making your behavior predictable to those you are sharing the road with.  Always stay as far to the right side of the road as you can safely ride.
  3. See and be seen.  The unfortunate fact is that some automobile drivers won’t see you which means you must assume that none of them see you and make sure you do everything you can to ensure motorists and other cyclists see you.
  4. Pay attention.  Don’t let yourself become distracted.  Don’t wear headphones which block out the sounds of oncoming traffic which could alert you to a dangerous situation.  Don’t talk or text on your cell phone.  Don’t try to visit with your friend while you are riding together.  The best way to stay safe is to stay focused and remain alert to potential dangers around you.

Be Secure

Even when you are not on your bike, security should be your top concern.  Bikes range in cost from a hundred dollars to several thousand dollars and are easier to steal and resell than a car.  The good news is that most standard homeowner’s and renter’s insurance policies cover losses to bicycles.  Your policy should cover the same kinds of losses that are covered if you have comprehensive car insurance like damage caused by weather, fire, or theft.  Although this is generally the case, you should check your policy or speak to your representative to make sure this coverage is provided in your policy.

As part of this check, you also need to ask if there is a limit on the recoverable amount for bicycles under your policy.  Even though your homeowner’s or renter’s policy covers damage to bicycles, the amount of coverage may be less than the actual limits on your policy.  This is especially important for anyone with expensive bicycles.  Don’t assume your policy will automatically cover the cost of a new bike.  If there is a limit, ask your agent to explain what options are available to you to increase coverage to cover the full cost of replacement.

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