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HUD Articles

Home Insurance Check Up, Part 1:

October 16, 2018

 

Assess your liabilities this fall

Jean McLean >>> Twitter

It’s fall, y’all. That might mean…

… Gabrielle just moved into her freshman dorm room.

… Anthony is excited about participating in his first fall travel ball season.

… Aunt Annie just bought a trampoline to keep the kids and their friends busy during football gatherings.

Sam Compton, owner of Hoover-based Compton Insurance Agency, is happy to celebrate his clients’ seasonal milestones – especially if they have considered how those milestones might impact their insurance needs.

“You need to go over a home insurance policy periodically with your agent,” he says about fall-and-any-season changes. “In the case of kids going off to college, for example, a homeowner’s policy may extend to covering the contents of the student’s dorm room or apartment, but may not extend to their liability if they leave the water on and flood the apartment below. Although your homeowners’ liability will follow you to the ballpark or airport, or anywhere, if you have an umbrella policy, your liability is extended beyond that – which is especially important if someone is hurt on your property.”

RealtySouth Associate Broker Bekah Eaton says many buyers simply purchase whatever structural replacement coverage their lenders require, without considering their personal liability or replacing their home’s contents. However, she encourages her buyers to carefully assess their pre-purchase policies, to make sure they aren’t caught off-guard later on.

“Insurance is a conversation that has to happen because you won’t be able to get a mortgage without home insurance,” she says. “But my conversation with my client centers on what kind of insurance they want, whether they want more than the simple replacement policies most lenders require, and who they’re talking to about that policy. I want them to talk to a good home insurance representative.

“Otherwise, since their insurance payment is often included in each month’s mortgage payment, it’s easy to not think about it again and only realize later what was not covered.”

Although Eaton is quick to say she has no insurance-related expertise, she does believe it’s her responsibility to suggest buyers make sure their insurance needs not only cover their lender’s replacement-value requirements, but also cover owner liabilities related to their new property’s assets, from treehouses to pools or fire pits.

“I just see it as my job to make sure they have a list of several reputable insurance agents to talk to, some of the best names in the business, that I know will take care of them.”

And since a homeowner’s situation is likely to change annually, such consults should continue on a regular basis, says Compton.

“They need to re-evaluate those policies every few years, including what’s changed in their personal property. They also need to look at the price of their policies. Nine out of ten people have no idea of their homeowners’ insurance annual cost, since it’s paid through escrow. And when they actively shop it, they almost always find out they’re paying too much.”

This blog is made possible by the Greater Alabama Multiple Listing Service (GreaterAlabamaMLS.com), a subsidiary corporation of BAR that was founded in 1958 and is recognized as Alabama’s trusted real estate authority. 


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