Renter's Insurance

An often forgotten insurance coverage is called “renter’s insurance.” 

Renter's insurance provides great coverage for damaged and/or stolen personal items for those who rent their housing. It also provides excellent liability coverage.

If rented housing is damaged by fire, tornado, etc. the renter will have no coverage for destroyed or lost personal items, no coverage for alternative housing (such as room in a motel, etc.) while the damaged rental unit is being repaired.

 

With liability coverage, your assets are being protected. For example, if the apartment or house that you rent burns to the ground and you are found responsible for causing the fire, you will have to pay for the home or apartment to be rebuilt. If you have renter's insurance, your insurance company pays for the home or apartment to be rebuilt.

The cost is about $10 per month for a good renter insurance policy.

Contact your favorite insurance agent (Andrea Shearer, Tessa Everman, Burton Heginger, or Ryan Edgington) at the Triplett Companies (515/232-5240) if you have questions about renter’s insurance and would like a premium quote for Renter Insurance coverage.    

 

Umbrella Insurance

The word “umbrella” is indicative of the type of coverage available to a client that would “cover” (as does the umbrella) him/her above her/him current insurance coverage levels.

 There are two types of such umbrella coverage.

 One type covers the client for claims above his/her current insurance policy coverage levels up to the umbrella level (say, any claim above the $100,000 current coverage up to the umbrella coverage of say $1,000,000 for an additional $900,000 coverage).

 The second type of umbrella covers all claims from zero to the upper dollar limit of the umbrella.  This type of umbrella coverage is often called “true umbrella” coverage.

 More and more individuals and companies are securing umbrella insurance coverage.  The price for such coverage is very reasonable and will provide considerable peace of mind to the insured.

Contact Mike, Andrea, or Mandee at the Triplett Companies and ask about umbrella coverage, its value for you and its cost. 

FDR's New Deal

A 30 year fixed-rate mortgage hasn't always been the standard. As part of FDR's New Deal in 1934, the Federal Housing Administration was created to help Americans purchase homes with affordable terms.
Prior to then, many loans had an amount due at the end of the term called a balloon. Most mortgages had adjustable interest rates even though some might be fixed for a short time. While banks would loan money on a home, they retained the right to call the note due at any time which could exert considerable stress on borrowers.
FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term. This fully amortized loan provided borrowers a financial vehicle that would help them achieve the American Dream while minimizing the risk of having a loan called without the resources to pay it off. It brought long-term stability to the housing market and helped stimulate the economic recovery at a very difficult time in our nation's history.
Roughly, a third of the mortgages created in 2011 were less than 30 year terms. Many homeowners, similar to those after the Great Depression, would like to get their home paid for as soon as possible. Shorter term mortgages typically have a lower interest rate but higher payments due to fewer years to amortize the mortgage.

Home Worth

What your home is worth depends on why you ask the question. It could be one value based on a purchase or sale and an entirely different value for insurance purposes.
Fair market value is the price a buyer and seller can agree upon assuming both are knowledgeable, willing and unpressured by extraordinary events. This value is generally indicated by the comparable market analysis done by real estate professionals.
Insured value is determined for the proper insurance coverage. Replacement cost could actually exceed the cost of new construction when additional expenses are incurred for demolition and the added complexities of matching existing construction.
Homeowners are generally more familiar with their home's market value. Since it can be lower than the replacement cost, owners should review the insured value with their property insurance agents periodically. Under-insuring could invoke a co-insurance clause that may limit the settlement and increase your out of pocket expenses.

Insurance: Why Should We Have It

The purpose of insurance is to shift the risk of loss to a company in exchange for a premium. Most policies have a deductible which is an amount the insured pays out of pocket before the insurance starts covering the cost of the loss.
In the process of managing insurance premiums, policy holders often consider adjusting their deductibles. Lower deductibles mean less money out of pocket if a loss occurs but obviously, results in higher premiums. Higher deductibles result in lower premiums but require that the insured bear a larger amount of the first part of the loss.
A small fire in a $300,000 home that resulted in $2,500 of damage might not be covered because it is less than the 1% deductible. If the homeowner can afford to handle the cost of repairs in exchange for cheaper premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible could be considered.
It is a good idea to review your deductible with your property insurance agent so that you're familiar with the amount and make any changes that would be appropriate.

Single-Family Homes

Single-family homes used for rental property have distinct advantages over other types of investments.
An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.
Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.
Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.
The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact us if you'd like to know more about available opportunities.

Renters Insurance

Here's something you might consider interesting: the five major things that renters insurance will cover, in order of what our insurance agents consider to be most important.

1 - $20,000 for your personal property, such as furniture, clothes, appliances, electronics, etc.  You can save $20 a year by accepting 'actual cash' value in the even of a claim, but if you can even name one thing that you'd want the original cost of reimbursed, then we suggest you pay the extra $20 a year for replacement cost.

2 - Paid hotel and food expenses up to 12 months in case a covered peril (i.e. lightning, fire, windstorm, weight of ice or snow, theft, etc.) forces you out of your living space.  This is great for families, as you would be able to maintain privacy, etc.

3 - Liability coverage, in case someone trips on your sidewalk or doormat and sues you for not keeping it orderly, or you hit someone with your tee shot on the golf course, or accidentally turn off the heat in the winter and cause the pipes to burst and flood the house. (This happened to some of our renters last winter!)

4 - Medical payments to help waive a health insurance deductible in case no negligence can be determined (thus liability coverage couldn't be exercised).

5 - $1,000 identity theft coverage (easily upgraded to $10,000 for an additional $0.58/month).

Homeowners and Renters Policies

There are 16 things covered under a standard homeowners or renters insurance policy.  Take a close look - some of these might surprise you:

1) Fire or lightning
         2) Windstorm or hail (including tornado)
                  3) Explosion
                           4) Riot or civil commotion
                                    5) Aircraft
                                             6) Vehicles
                                                    7) Smoke
                                                         8) Vandalism or malicious mischief
9) Theft

10) Falling objects
11) Weight of ice, snow or sleet
12) Accidental discharge or overflow of water or steam (excluding sewer and failure of sump pump)
13) Sudden and accidental tearing apart, cracking, burning or bulging
14) Freezing
15) Sudden and accidental damage from artificially generated electrical current
16) Volcanic eruption|

Come on in to triplett and chat with one of our knowledgable insurance agents. they can help you decide what kind of policy is best to insure your life!  Who knows?  You might even learn a thing or two along the way...