How much is this worth? It’s covered right? Well, yes and no, not necessarily, it depends. How are these for answers? I get these questions a lot when I am reviewing coverage with an existing customer, or a potential customer. The truth of the matter is, when you are talking about your personal property, there are a lot of variables involved when it comes to insurance. The typical home, condo or renter’s insurance policy, does indeed have coverage that applies to your personal property, however, it is limited in scope and nature. Most policies have a specified dollar limit when it comes to certain items, such as, jewelry, home computers, tools, and other items depending on the policy. Another important issue, they are not only covered up to the limit specified in your policy, but they are only covered by named perils listed in your policy, think of the biggies, fire, theft, smoke damage.

This conversation comes up a lot when I happen to notice an inconspicuous diamond ring on a client’s finger. I comment on its beauty and then ask “is it insured?” 9 out of 10 times the answers are the same. Yes, it’s covered under my homeowner’s policy. I then ask if they ever provided an appraisal, had their agent inspect it, and they say “no.” Note, if you have not provided details to your agent to “schedule” your special items, i.e. provide details such as color, cut, clarity, etc., most likely it is not covered in the way you think it is. You may have up to $1500, or $2500, but that is it. Plus, it is only covered for the big listed perils above.

There are many other things that can be added to what we in the biz call a “Personal Articles Policy.” You can add antiques, rugs, electronic equipment, sporting equipment, i.e. golf clubs, art work, jewelry of course, and many other things. The beauty of these policies is, 1) the coverage is very broad, even covers earthquake and, 2) since the insurance company has an exact description, there is usually no argument as to the value and quality of the item should you have to open a claim.

I want to talk a little about claims involving your personal property, whether scheduled or not. If you haven’t done so already, I strongly suggest you do an inventory of your home. This can be done with many mediums, but I recommend a video, going room by room, and describing the contents as you go. You can also use a digital camera and photo specialty items and then mount them with a description and approximate value, plus any features you think may be important. All of this should be stored in either a safe deposit box at your bank, or some type of fire retardant safe in your home. This will not only help you in the claims process, but your claim representative will love you. If you have receipts, manuals, etc., store these in there as well.

I can tell you from personal experience, many of us don’t realize how much “stuff” we have until we actually inventory it. Are you are a lover of expensive shoes and handbags, ringing any bells ladies? You should definitely do this. These items can add up quickly. Years ago, my husband was working as a Fire Claim Representative. He came home after working on a fire and told me a lady had told him she had a purse worth over $1500. He said this mind you, with a look of almost disgust, as if to say, why would someone spend this type of money on a purse!. I said, “Hello, purses can cost thousands of dollars.” If he only knew………….

I know it may seem like a daunting and tedious task, but if you end up losing all of your belongings in a fire, believe me, you will thank yourself!

I’ve been asked to comment on a couple of scenarios that have recently been brought to Jim for discussion. The first is about those fortunate souls who find themselves in the enviable position of not having a home loan.  The question posed was whether or not they will have to purchase flood insurance when the Foster City change goes into effect.  The short answer, no.  Just as you are not required to carry a homeowner’s insurance policy, you will not be required to carry a flood insurance policy.  It is worth noting however, if your home is your largest asset and you may need to access your equity via an equity loan/line or a reverse mortgage, you would be required to carry insurance at that time.  If this were to be after the 2010 deadline (assuming nothing changes in terms of the flood zones), you would not be able to lock in the “preferred rate.”  Just like some who choose not to carry homeowner’s insurance once their loan is satisfied, you would be self-insuring for better or for worse.
The second question posed to Jim was regarding condo unit owners (the following comments also apply to town homes).Typically, in a condo situation there is an HOA (Homeowner’s Association). General rule of thumb is the association has what is called a “master” policy. In most cases, the master policy covers from the studs of the walls out, plus any common areas.  They do not cover the interior of the units or any liability issues that may arise within your unit.  In the event of a flood, if you do not carry a flood policy for the interior of your individual unit, you would not have coverage.  It is very important however, that you check with the company who handles the policy for your HOA to see what the policy covers.  Lenders usually do not require evidence (proof) of insurance for condo owners who are part of an HOA, as the exterior is covered under the master policy for most covered perils such as fire.  It would typically be the responsibility of the HOA to have its own flood policy for the exterior of the building plus any common areas.  If your HOA does not have a flood policy and later becomes required to carry one, you could find yourself in an assessment situation.  Do yourself a favor, check this out, or go to a board meeting and discuss this issue with your board members.

In the post Hurricane Katrina world FEMA, who took such a pounding for it’s response to the New Orleans disaster, is being extra cautious when the subject of levees comes up. That subject is certainly up when it comes to Foster City. On the 18th of this month FEMA released the preliminary drafts of their Flood Insurance Rate Maps and Foster City is being reclassified into a special flood hazard zone…and thus flood insurance will be required for all homes here.

Interestingly, the levee that’s the most problematic from the standpoint of FEMA is in San Mateo and thus there’s some amount of negotiating going on to get the levees repaired to a degree that will satisfy FEMA and prevent a final ratification of the Flood Map scheduled for 2010. Currently, San Mateo’s estimate for completion of construction of their problem levee will be after the FEMA deadline. I’ve heard from several insurance agents that buying flood insurance before the final date will save significant dollars per year on that type of policy. It’s a good idea to check with your agent and ask questions about adding flood insurance…don’t wait too long to do it. If you live in a condo or townhouse it’s doubly important because you don’t want your association dues to go up more that is absolutely necessary. Here’s a link to a press release from the City of Foster City about this topic:

FEMALevees&FloodInsurance

If you are one of the very, very fortunate families to own a home here in the Peninsula, you most likely have benefited from appreciation.  I understand the appreciation has slowed, but most of us still have positive equity.  When you put your money in a bank, most of us know at this point to look for FDIC backed banks to insure you have some type of protection for your money should the bank go under.  If you have an employer sponsored retirement plan, your employer is required to have some type of bond to protect some of that money too.  What do you have in place to protect your biggest asset, the equity in your home?  

Well, if you have a home loan, you are required to have homeowner’s insurance.  If you are a renter, you still have the need to protect your other assets (see prior BLOG entry on renter’s insurance).  Your liability coverage on both your home policy and your auto policy can turn out to be your best friend.  Your liability protection is in place to provide your insurance company with money to settle a claim in which you are liable.  Most people think of this in the context of an auto accident, people are killed in their cars more often than this insurance agent likes to think about…..BUT, people also slip and fall at peoples homes, children drown in their pools, children are hit with a baseball bat when someone is not monitoring the Piñata, it happens.  As a matter of fact, this last Saturday, my own daughter fell (or as she insists, was pushed), out of a jumpy and has a gash on her back and hit her head.  An accident yes, but had she been severely injured, is there a liability exposure for the homeowner, you bet there is.  

This is where your liability comes into play.  Your liability should have some direct correlation with your assets.  If you are one of those people who thinks the state required minimums on your auto insurance are adequate as you “don’t really drive that much,” you could be setting yourself up for a serious problem.  In case you are wondering what the state requirements are, here you go:  15/30/5.  That means your insurance company will pay a maximum of $15,000 per person for bodily injury, $30,000 total per accident for bodily injury and $5000 for property damage.  Better not total a Mercedes, BMW or a Ferrari for that matter!  If God forbid you kill someone in your car, they will pay $15,000, that is it.  How do you think the surviving family will react to this?  Do you think they will be happy with the $15,000 check your insurance gladly writes them?  Would you be? 

 If you have not looked into a Personal Liability Umbrella Policy, please do so now.  This type of policy will give your insurance company an additional $ 1 million of protection to help settle the claim.  This is a minimum amount; you may need 2, 3 or even 4 million to protect your assets.  This is something your financial planner, or your insurance agent can help you with.  For a nominal annual fee, would you rather have your insurance company write a check, or go into the equity of your home?    

This is an easy choice to make.  To make it an even easier choice, one of my employees just handed me a copy of a recent article in the New York Times, dated, March 18^th.  Guess what the title is?  “Umbrella Coverage for Preventing Your Ruin.”  This is serious business folks. You can check out the article by clicking on this direct link: 

NYTimeslinkinsurance

As an insurance professional, I am asked often about renter’s insurance.  Usually, it is followed by, “isn’t it expensive?”  The short answer?  No.  An average renter’s insurance policy is only about $15 per month.  What is expensive, is not having renter’s insurance.  As a college student some moons ago, I had my apartment broken into twice in the city.  It was during Spring break both times, and all of what I considered my prized possessions were stolen. Did I mention twice??  Believe it or not, I actually had renter’s insurance as it was required by my landlord.   I was required to fill out some lengthy inventory forms, and within a week or so, I was sent a rather handsome check to replace my lost belongings.  As far as renter’s insurance claims, this was a fairly basic claim.  What many renter’s don’t realize is, the insurance not only covers you for theft like in my situation, but for a multitude of other things.  How about a few years back when there were fires at the newly built Santana Row.  Does anyone remember seeing these poor people on the news who lost everything?  We’re talking all of their clothes, furniture, stereo, t.v.’s, kid’s toys?  The majority of these people did not have renter’s insurance.  I know this because the news was reporting it and actually urging renters to go out and purchase policies.  Had these people had renter’s insurance, not only would it have helped them re-build their lives, it also would have paid to put them up in temporary housing.  Renter’s insurance also provides liability protection.  How many renter’s out there have animals?  Any idea how much it costs if your dog bites someone?  A lot!!  How about if you have a cocktail party and someone has a little too much to drink and slips and falls while doing the limbo on your kitchen floor?  What if that little fall causes a serious head injury, or worse?  Guess who may be liable for that?  I think you are getting my point here.  $15 to $20 per month, you tell me, is it worth it?  Keep in mind that renters insurance policies do vary from company to company, but most basic policies cover at least fire, theft and liability.  Your limits are based on your individual needs.  Liability coverage is there to protect your assets, so don’t think just because you don’t own a home that you have nothing to protect.  If you work and bring home a paycheck, you have something to protect.  You may also be eligible for a nice discount on your auto insurance by adding a renter’s insurance policy.  Often times, the discount almost pays for the renter’s policy.  Give your agent a call today and let them assess your needs. If you would like to talk to me about it click here:

Jen’s website

Way back in 2001 FEMA (Federal Emergency Management Agency) rewrote their flood zone maps and included the Shoreview and Sunnybrae neighborhoods in San Mateo…and as a result the residents there were forced to purchase flood insurance. FEMA conducted studies that concluded some risk for flooding could come from Bay tidal flows or from four or more streams carrying rain runoff through San Mateo and down to the Bay. As you can imagine, there was plenty of grousing. I sold a 89 year old lady’s home on 16th Avenue in Sunnybrae at that time and her house actually backed up onto San Mateo Creek. She was the original owner and had been in the home for over 50 years. She had no report of any pesky water intruding onto her yard at any time during her occupancy.

FEMA is again rewriting the maps and the word is that it will include Foster City by 2009. At issue appears to be the strength of the levee system that’s technically in San Mateo itself. The City of Foster City is attempting to work this out with both FEMA and San Mateo but it’s very possible that flood insurance could be mandatory in the future. Here’s what will happen: after FEMA etches this in stone your lender will be quick to react. You’ll receive a written notice that you’ll be required to carry, in addition to your current homeowners policy, a flood insurance policy. FEMA will offer a policy to you but it’s a great idea to contact your current homeowner carrier to see what they have to offer.

There’s an initial period of time when you’ll be able to purchase this insurace at a big discount. In San Mateo in 2001 it ranged from around $300.00 a year if you got in early to over $1000.00 if you didn’t. It’s my understanding that if you buy it early you’ll keep the lower rate going forward. Obviously it’ll be a good idea to stay in touch with your insurance professional to act early and to stay current on this situation as it effects so many Foster City residents. I promise to follow it closely too and blog about any changes. Here’s a link to a recent story about this fun topic:

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