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!

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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Are you properly insured in the event you become disabled? (image via goingslo on Flickr)

Many working Americans don’t have the right insurance in place to provide their family with the protection they need.  If you asked most people in their 30’s and 40’s what kind of insurance they need in order to protect their family, they would likely answer auto, home, and/or life insurance.  While these types of coverage do provide protection and are a necessary, they don’t cover all the bases by themselves.  In fact, people in this age group actually need another type of insurance even more than they need life insurance.  What coverage are they missing?  Disability insurance.

Most people have some kind of disability insurance through their employer but for many of us, that coverage isn’t enough to protect our family’s financial security.  The root of the problem is that people are worried about things in the wrong order.  People in this age group are aware of their own mortality and concerned about how their death would impact their families.  What they don’t realize however, is that they have a 30% chance of becoming disabled before retirement age and only a 17% chance of dying before retirement age according to the Social Security Administration.

But My Employer Provides Disability Coverage

Many people receive short term disability coverage through their employer, but if you become disabled, this coverage may not be enough. Consider this; you are the primary breadwinner for your family and become temporarily disabled, your employer offered coverage will likely only pay you 60% of your regular salary.  If your family had to get by for several months on little more than half your salary, could you do it?  This is one of the most important questions you need to answer in order to determine if you need additional disability insurance.

But I Work for Myself

If you are self-employed, that picture may be bleaker.  Would your business be able to survive without you for several months?  Would it continue to pay you the money you need to take care of your family?  Those who own their own business and who work for themselves must have some kind of safety net in place to protect themselves in the event of a disabling event.  Even if you have money in reserves to help cover your personal income, you may not have thought about how the business will continue if you cannot function in the same role you are in right now.  Understanding how this kind of event will impact you personally and your business is the key to determining how much disability coverage you need in order to have the protection you need in place.

Short vs. Long Term Coverage

Additionally, even if your short term coverage is in place and seems adequate, you may not be protected if you become disabled for a longer term or even for life.  There are two different kinds of disability coverage, short term and long term.  Short term coverage generally covers qualifying disabilities for a period that is generally less than one year and may be tied to the amount of time you have been with the company.  If you remain disabled after the timeframe covered by the short term policy, you will need a long term disability policy in order to continue receiving benefits.

Because disability insurance policies can be complex with many restrictions and a wide range of options, you should work with an insurance professional to find the right policy to provide the coverage you need to protect your financial future.

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BOP Coverage

What kind of insurance is right for your business? Image via Grand Velas Riviera Maya on Flickr

Business owner’s policies, which are also called BOPs, can be a great fit to cover the insurance needs of many small businesses. This type of policy combines commercial general liability coverage and property coverage into a single packaged product that is generally more affordable than purchasing these coverage’s as separate policies.  Small businesses that are in the market for insurance coverage should look at whether there is a BOP available that meets their needs.

Here are 7 things business owners need to know about BOP coverage.

1.     Packaged Coverage Can Save You Money

By combining several standard coverage’s required by small businesses into a packaged product, insurers can offer that coverage at a lower price.  As long as the limits and coverage’s offered in a specific insurer’s BOP product meet your needs, this can make getting the insurance your company needs at a price that fits within your budget.

2.     Provides Business Interruption Protection

The one coverage that is frequently included in a BOP package is business continuity coverage.  This type of insurance is often overlooked but it is one of the most important kinds of insurance for small business owners.  Business interruption coverage pays you a specific amount if your business cannot be operated which can make the difference between being able to rebuild after a disaster and having to file bankruptcy.

3.     Often Excludes Professional Liability Coverage

Although BOP coverage generally provides the kinds of insurance small businesses need, one area that is not usually included isprofessional liability coverage.  This means that any business that has professional liability exposure will need to purchase that coverage in addition to BOP.

4.     Tailored to Small Businesses

BOP policies are generally only available to companies that have less than 100 employees and bring in less than $1M in annual revenue.  If your company is larger than that it may not qualify for BOP coverage and buying the specific individual policies your company needs will be more cost effective.

5.     BOP Property Coverage Will Pay to Replace Property

Most BOPs provide protection against the loss or damage of property and will cover the cost of replacing the business property.  This is an important detail to confirm with your insurance agent as the difference between replacement value and actual value can be significant.  Replacement value ensures you will have the resources to replace any lost or damaged property.

6.     Offers Protection Against Libel, Slander, and False Advertising

BOP coverage will protect your business against claims of libelslander, and false advertising in addition to shielding the business from liability for bodily injury and property damage.  This can not only save the company money in the event there is a groundless claim filed, but can also save the company in the event there is a successful claim.

7.     Lower Premium Usually Means Less Flexibility

One thing many business owners do not like about BOP insurance is the lack of flexibility these kinds of policies provide.  Business owner’s need to realize that there is a trade-off when they select BOP coverage.  Because the product is standardized and therefore easier for the company to sell and service, it is offered at a lower cost.  However, in order to maintain that standardization, BOPs don’t usually allow for any customizations or deviations from the base product.  If the BOP you are looking at doesn’t provide exactly what you need, you may need to purchase additional coverage which must be factored into your overall cost/benefit analysis.

A business owner’s policy (BOP) might be the perfect fit for your small business insurance needs.  Make sure you understand exactly what is and what is not covered and if needed, secure additional coverage to fill in any gaps.  By leveraging the cost savings provided by BOP coverage, businesses can ensure they have the protection they need at a price they can afford.

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Marriage

Are you properly insured after a major life-changing event? Image via cheesy42 on Flickr

Many people don’t realize that different life events can have an impact on their insurance needs as well as their insurance premiums.  You might think that turning 25 will bring your auto insurance down or realize that getting married means you need to combine your coverage into a single policy, but there are many other ways that major life events can impact your insurance.   A survey conducted by Trusted Choice and reported in Insurance Journal found that more than 30 million U.S. households have insurance policies and/or coverage that don’t fit their current needs.

Here are 3 of the major life events that can change what kind of insurance you need, how much insurance you need, or how much your insurance costs.

1.     Getting Married

When you tie the knot, your insurance needs and costs can change in a couple different areas.  First, your car insurance rates may go down because you are married and combining policies may qualify you for a multi-car discount.  If you are purchasing a house, you will need a new homeowner’s policy.  If you are moving in together but renting, you will want to combine your renter’s insurance and make sure the coverage limits of the policy are enough to replace both of your possessions.  Regardless of whether you are a renter or a homeowner, you may want to make sure your property replacement coverage will cover your wedding rings.  Finally, now that you are married, your life insurance needs may be drastically different and should be reviewed.  Even if you have enough insurance, you will likely need to make beneficiary changes at a minimum.  Talk to your insurance agent to make sure the coverage you have is the coverage you need and that you aren’t paying more for it than you should be.

2.     Getting Divorced or Becoming Widowed

A change in marital status can mean that you need to make changes to your insurance coverage.  Going from two cars to one, moving to a smaller house, selling valuables, and splitting assets can all result in the need for less coverage and lower limits.  This can be a big cost savings for you that you may not think of during such a difficult time.  You will also want to change any beneficiaries on life insurance or other policy payouts.

3.     Having Children

Becoming a parent for the first time or the last time is a big change and it can mean you need to make changes to your insurance coverage.  According to a life insurance fact sheet put out by LIMRA, almost 70% of U.S. Households with children under 18 would be in jeopardy and destabilized financially if the primary bread winner died.    If you have added a new family member by birth or adoption, it is a good idea to sit down with your insurance agent and make sure you have enough life insurance coverage to meet the needs of your family and that beneficiaries are designated properly.  You may also want to review your auto and home insurance policies to ensure that coverage limits are adequate for your larger family.

While these are 3 of the major life events that can affect your insurance costs and needs, there are several other events that should trigger a review of your policies with your agent.  If you have a new teenage driver, buy a vacation home, have a significant change in income, buy or inherit valuable property, or as you get ready to retire, sitting down with your agent can make sure you and the ones you love are protected.
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RV Insurance

Is your vacation insured properly? Read more to learn about RV Insurance (image via _escalade328s_ on Flickr)

The summer season is fast approaching and if you are planning to head out on the open road for a family RV adventure, make sure you take a couple minutes to ensure you have the insurance coverage you need before you leave.  Many people share the common misconception that adding their RV to their auto policy provides them with adequate protection during their trip.  While your auto policy may offer some of the coverage you need, it won’t protect you completely which is why it makes more sense to invest in an RV insurance policy.  Buying a separate policy ensures you have all the coverage you need to keep your trip on track and protect yourself while you are on the road.

What is the Difference between Auto Insurance and RV Insurance?

The primary differences between auto coverage and RV coverage result from the primary differences between your car and your RV.  An RV is more than just an RV; it is a house on wheels.  This means you need more coverage than you have on your car in order to cover potential losses that you are open to with an RV that you wouldn’t be with a car.

You keep significantly more property in your RV than you do in your car, some of which can be valuable like laptops, televisions, and other equipment.  When your house on wheels is parked at a campsite, the area around it can be considered your “yard” which makes you liable for things that happen there.  There isn’t really a situation where your car could be thought to have its own yard.  If your RV is damaged while you are on the road, you will need somewhere else to stay just like you would if your house was damaged.

If you are traveling with only your auto policy, the loss of your property, your liability for the campsite, and the expenses related to staying somewhere other than the RV won’t likely be covered which means you will be paying out of pocket.  That might break your vacation budget and force you to cut your trip short.

Common RV Coverage’s

There are several different types of RV coverage available from most insurers, although they may call the coverage by a different name.  Here are the most common coverage types:

  • Bodily Injury – Covers you if there is an accident where you are liable for someone else’s injuries including medical bills, lost wages, and other legal obligations relating to the injury.
  • Uninsured/Underinsured Motorist—Covers the cost of repairs when you are involved in an accident and the driver at fault doesn’t have insurance or doesn’t have enough insurance to cover your losses.
  • Property Damage— Covers the repair or replacement of damage done by you or your RV to other people’s property
  • Comprehensive – Covers damage or losses to your RV and/or personal property from all covered threats except collision.  This includes things like theft, vandalism, and weather.
  • Collision – Covers the cost of repair or replacement of the RV and all components if it is damaged in a collision.
  • Vacation Liability— Covers your liability for bodily injury and property damage while on a vacation site or camp site.
  • Towing & Labor—Covers the cost of towing by a tow truck capable of handling the RV.
  • Roadside Assistance—Covers the cost of roadside assistance when you break down or run out of gas.
  • Emergency Expense – Covers your costs to live outside the RV in the event it is damaged and needs to be repaired.  Generally includes lodging, meals, and travel.
  • Personal Effects Replacement Cost – Covers the expanded personal property you are likely to have in the RV against loss or damage.
  • Full Timer’s Package – Provides a package of coverage’s that usually includes liability, coverage specific to when the RV is parked and being used as a residence.

Purchasing RV insurance protects you no matter what comes your way and gives you the peace of mind to sit back, relax, and enjoy your vacation.

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