You are currently browsing the tag archive for the ‘homeowner’s insurance’ tag.

Late last month, California Insurance Commissioner Dave Jones, joined by Amy Bach, executive director of United Policyholders, announced a series of new homeowner regulations aimed at enhancing the standards and training for estimating the replacement value on homeowners insurance in the event of a disaster. These new regulations also represent a concerted effort to significantly curb the common problem of underinsurance that many homeowners face.

The new regulations include provisions for laying out requirements applicable to replacement value and replacement cost estimates to create a more consistent, comprehensive and accurate replacement cost calculation; setting forth training standards for agents and brokers who sell homeowners insurance; creating standards for real estate appraisers who estimate replacement cost for insurance purposes; requiring the application of certain standards when estimating replacement and construction costs; and establishing record keeping requirements.

The regulation addresses how insurance companies communicate with their customers when they are making a sale, ensuring they give them complete and accurate information and not mislead them. According to Commissioner Jones and complaints filed with the Department, when policies are sold to customers there has been confusion about what a “replacement cost” estimate actually covers. This regulation clears up that confusion. Insurance companies are not required to provide an estimate, but if they do, it must be complete and include certain components.

Not being able to get a home insured can stall, if not kill, a transaction. At this morning’s SILVAR Cupertino/Sunnyvale District tour meeting, an affiliate panel shared information on how to avoid such a dilemma. The panel, moderated by Kyle Chuang (Farmers Insurance), included Walt Rowley (Liberty Mutual Group), Linda Bentson (Old Republic Title), Laura Roseblade and Pauline McDonald (both from State Farm Insurance).

Here are some of many tips the panel shared:
• Each insurance company is different and has its own limitations of coverage, so it’s important to shop around and make sure you are dealing with a true insurance professional who knows the business.

• While there are lenders who may insist that insurance should cover the amount of the loan, insurance companies will only cover the value of the home. The amount an insurance company will cover differs from the appraised value because the appraised value includes land, while home insurance just covers the structure.

• The condition of a house affects insurance coverage more than the age of a house. The following may affect coverage:

– Roof condition – Some companies may deny coverage if an additional layer is placed on top of the original layer.

– Trees and brush in close proximity to the house

– Distance of a fire hydrant or fire station to the house – Some insurance companies will not insure a home if it is more than three miles away from a fire station

– Certain pets

• You have to think in terms of risk. Would you take a risk on a condition that you have observed? Inform you client about a potential problem so it can be fixed right away.

• In the case of condominiums, work closely with the lender. It’s important to know the insurance company that handles the master policy, what the HOA master policy entails, and get a copy of the certification of insurance for the master policy.

• Once you have all insurance documents, get them to your escrow officer as soon a possible.

October 2020

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 64 other followers