by California Casualty | Homeowners Insurance Info |
We all know the dreaded drip, drip, drip of a water leak. It’s the sound of a potentially expensive repair or at minimum, an annoying cleanup. Either way, you want to be prepared when it happens. Knowing what your homeowner’s insurance covers in terms of plumbing and pipe leaks is the first step.
In general, sudden plumbing issues are typically covered by insurance but plumbing problems that occur over time due to lack of maintenance may not be. The policy may cover damage resulting from plumbing breakdowns, but it won’t cover the cost to repair the plumbing itself. Insurance is intended to help in emergencies, not a substitute for regular maintenance.
What Insurance (Probably) Does Not Cover
Most policies do not cover old plumbing and pipe leaks. If you’ve got a slow leak and you ignore it until it gets worse, that’s likely not covered by your homeowner’s policy. When you file a claim, your insurance company will send an adjuster. They will determine the cause of damage, and decide whether it qualifies for coverage. Here are general guidelines on what insurance probably does not cover.
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- Normal wear-and-tear and lack of maintenance are not covered. If you neglect your plumbing and pipes, you essentially have voided your policy.
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- Leaks that started small and have gotten progressively worse over a period of years are not covered. The time to address them was when they started.
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- Pipes that freeze because you turned off the heat would be categorized under neglect. So, if you went away on a winter vacation, and failed to take the necessary steps to protect your pipes, the damage that results may not be covered under your policy.
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- Mold may be excluded from your standard policy. However, you could purchase additional coverage.
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- Water damage from any flooding is not covered unless you have a flood policy.
What Insurance (Probably) Covers
From certain plumbing issues to broken, burst, or frozen pipes, your homeowner’s policy probably covers the ensuing damage if you have taken reasonable care and performed continued maintenance. For example, coverage for freezing of a plumbing system only applies if you “maintain heat in the building; or shut off the water supply and drain all systems and appliances of water.”
Insurance pays to repair the pipes or plumbing in these cases. It also compensates you for covered items that are damaged by the leak. Coverage A (which includes the plumbing system) will cover the plumbing system if there is a fire, tornado, explosion, etc. The contract specifically excludes coverage for “wear and tear, deterioration and latent defect, inherent vice” – basically, the policy will not pay for the plumbing system or pipes for leaks, broken, etc. – that is the homeowner’s responsibility. If it is a covered loss, the insurance company pays for the ensuing damage, i.e. flooring, baseboards, drywall, and personal property.
Your insurer will likely send someone out to determine the cause of loss and inspect the damage. You will get reimbursed by your policy, minus your deductible (which is the amount that you chose to pay out-of-pocket before insurance kicks in).
There are four different parts of your homeowner’s policy that address damage caused by plumbing and pipe leaks:
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- Dwelling coverage covers the structure of your home. This includes the roof, walls, and floorboards. However, if you have to remove a wall to see if there is a leak, that would not be covered. There are companies that will come out and complete a Leak Detection Report to determine where the water is coming from. If the loss is covered and over the deductible, your insurance will pay for the report.
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- Personal property coverage protects your possessions that may be damaged. Coverage may apply if there is “an accidental discharge or overflow of water from within a plumbing system or household appliance.” Damage that occurs gradually due to a leaky pipe is generally not covered. Protected possessions include clothing, TVs, and furniture. There are dollar limits for certain items such as money, jewelry and firearms, so check with your insurer. (You could add an extra rider to cover those items.) For personal property coverage on a homeowner’s policy, you typically get 50 or 75% of Coverage A, the total amount of coverage for your home.
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- Other structures coverage protects detached buildings, such as garages or guest houses, that may be damaged due to plumbing issues. The coverage limit for other structures is generally set at 10% of your home’s coverage limit. That means if your home is insured for $200,000, the coverage limit for your garage would be $20,000. For an additional premium, you can add an endorsement for additional coverage.
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- Depending upon the extent of the damage, your house may not be livable. If that’s the case, you would need to stay somewhere else. You would be covered for any necessary increase in living expenses, such as lodging, food, and gas. Under Coverage D – Loss of Use, called “Additional Living Expense,” your policy will provide a flat percentage toward living costs, usually 30% of the Coverage A amount. Some states have time limits (e.g. 12 months) on when you can use that coverage. Plan to cover those additional expenses out-of-pocket.
How to Know if You Have a Leak
Taking the time to inspect your pipes and plumbing periodically can give you a heads-up that there could be a problem. The earlier you address it, the less costly it will be. Look for these signs that you may have a leak.
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- Stains or discolorations on walls or ceilings
- Bulging or sagging spots on walls or ceilings
- A trickling sound when it is quiet, such as at night
- A musty smell, which can be a sign of moisture and mold growth
- Poor water pressure
- Rusted metal
- Peeling paint
- Steady increases in water bills
Finally, make sure your homeowner’s policy is up to date, and that it provides the coverage that you need. That will go a long way toward having peace of mind should you have a plumbing problem.
This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.
by California Casualty | Homeowners Insurance Info |
There’s nothing like a refreshing dip in the pool on a hot summer day. That’s why a swimming pool can be a great investment for your property. However, pools come with their fair share of risks, which is why protecting them with the right insurance is so important.
Swimming pools are covered under your homeowner’s insurance. They are covered in two ways: (1) other structures or personal property coverage and (2) liability insurance. The first covers damage to the pool. The second covers injuries to guests—both invited and possibly trespassers.
Other Structures or Personal Property Coverage
If your pool is in the ground or installed permanently above the ground on your property, it is covered under Coverage B – Other Structures. This is an insurance term describing a detached structure on your property. Other structures include pools, fences, gazebos, sheds, etc. However, if your pool is above-ground but portable, it is considered part of your personal property and covered by Coverage C – Personal Property insurance.
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- Coverage B – Other Structures – insurance covers open perils. That means a loss is covered unless it’s excluded. Typical exclusions include flood, earthquake, or wear and tear.
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- Coverage C – Personal Property – insurance covers named perils. That means the loss is only covered if it is one of the 16 named perils (for example, fire, explosion, theft, etc.).
If a tree falls on your pool and damages it, your policy would help with repairs, minus your deductible, the amount you chose to pay out-of-pocket before insurance kicks in.
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- The coverage limit for other structures is generally set at 10% of your home’s coverage limit. That means if your home is insured for $200,000, the coverage limit for your pool would be $20,000. For an additional premium, you can add an endorsement for additional coverage: Other Structures – Increased Limits. You may wish to do so if your pool is worth more, such as if it has a deck, waterslide, diving board, or waterfall. (Note that some companies will not insure pools with slides and diving boards, as these can present additional risk.)
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- Portable pools are covered under personal property. Depending upon the personal property limit that you set for your policy, you will get reimbursed if your pool is damaged by a covered peril. If your home is insured for $200,000, and your personal property coverage is 50%, 25%, your policy will pay up to $100,000 for repairs for covered perils. Personal property coverage for homeowners is 50% or 75%; renters may choose the amount that they wish for Coverage C.
This coverage comes with stipulations. You need to shut off the water supply and drain all systems and appliances of water at the end of the season. The loss may not be covered if the pool’s plumbing freezes. Insurers do not cover loss of property caused by faulty, inadequate, or defective maintenance.
Liability Coverage
If someone is injured — or tragically dies — in your pool, your liability policy can help to cover expenses from medical bills to lawsuits. This doesn’t apply to you or the members of your household but potentially covers any invited guests or even uninvited strangers.
Typical homeowner’s policies include $100,000 for base liability coverage. You will want to increase to the highest limit available if you have a swimming pool Alternatively, you can purchase a personal umbrella policy for additional coverage. An umbrella policy kicks in when you’ve reached the limits of your homeowner’s policy.
An Attractive Nuisance
Attractive nuisance is a term used to describe anything that might attract children and present a potential danger to them. Swimming pools are classified as attractive nuisances. As a homeowner, and owner of a pool, you are responsible to secure your pool to keep it as safe as possible from curious kids—or anyone else. Under the law, you may be found liable for any incidents even if you didn’t give someone permission to be on your property or in the pool.
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- Install a fence around your pool and a locked gate to secure it.
- Install a locking pool cover that will hold the weight of an adult.
- Move the ladder away when your pool is not in use.
- Install an alarm that alerts you when someone is in the pool.
- Consider a security camera to help you monitor the pool.
- Follow any local laws on pool construction and safety.
Replacement Cost vs. Actual Cash Value
If the pool is portable, it is eligible for replacement cost under Coverage C. If it is not portable, you will insure it for actual cash value (ACV). ACV is the amount the item is worth, minus depreciation for its age. In a loss for other structures such as a pool, you will not receive more than the amount required to repair or replace it.
Refer to your policy to know what is covered and what is not covered so that you aren’t surprised in the event of an injury or damage. Choosing the right insurance will help give you peace of mind as you enjoy your pool this summer.
This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.
by California Casualty | Auto Insurance Info, Homeowners Insurance Info |
If you’ve ever sat down to read a declaration page on an insurance policy, you know there’s a lot that goes into the documentation. This information is clearly important, but there’s a lot of paperwork. Do you really need to keep it all, and for how long?
Here’s a quick reference guide for your insurance paperwork, including how to organize it, store it, and for how long.
Insurance Policy
Whether you have home insurance, an auto policy, a renter’s policy, or another type of coverage, you will be issued a document that spells out the insurance coverage. This main policy document is multiple pages. It includes all the details of your policy, including coverages and limits, discounts, and endorsements. It also is a resource with definitions of insurance terms and explanations of the claims process. If you are bundling your coverages, such as with home and auto, you will have an insurance policy document for each.
You need to know the coverage that you have, but you don’t necessarily need a hard copy of your policy document. If your insurer offers digital access on their website, you can toss the paper version. Either way, you will want to keep a hard copy of the declarations page.
Certificate of Insurance (COI)
This document is the summary of your coverage. Its format is easy to scan and provides a quick look at your coverage details. It’s especially useful to share with lenders who require proof of insurance if you are financing your home or car.
Keep a copy of your certificate of insurance for as long as the policy is active. It is your proof of insurance. When you renew your policy, you can throw out the old COI.
Insurance Claims Documents
Accidents happen, and things get damaged and stolen. You may file a claim with your insurance company when this happens. If your claim is for an auto policy, you will get an accident report. You also may have medical reports and bills. If your claim is for home damage or theft, you will have an inventory of damage. You also will have repair bills, receipts, and other paperwork. If it’s a third-party claim, where you caused injury or loss to another person, you will receive documentation as well.
Claims can sometimes take years, especially if medical bills are involved. As long as your claim is open, keep all of the paperwork. Only throw it out after you have received the payment.
Vehicle Insurance Card
Your auto insurance card fits in your wallet or glove compartment, which is where it should be kept. That way, you have a hard copy even if you have access to a digital version. Hard copies are useful in case you are pulled over by law enforcement or need to exchange the information with another driver in the event of an accident.
Keep the hard copy of your auto insurance card as long as your policy is active. You may dispose of it when the policy renews and you receive a new card.
Billing Statements
You will receive regular billing statements from your insurer, usually monthly. These may be by mail or online.
Keep your billing statements for tax purposes if you have a home business or you use your car for business purposes. If you’re audited by the IRS, you may need to show your bills for the last 7 years.
How to Store Documents
If you’re keeping paper copies of documents, you want to make sure that they remain in good, readable condition. Here are some recommendations to keep them that way:
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- Never store your important papers in a basement in case of flooding.
- Keep your documents in a safe container in a climate-controlled space to reduce the possibility of mold and fading.
- Store papers in a waterproof and fire-resistant container. Consider a home lock box or safe or a filing cabinet.
- Consider digital storage as well, as a backup. You can store copies of papers on a flash drive. For a small fee, you also can store them in Dropbox and on iCloud and other services.
Pro Tip: Use plastic page sleeves for your documents for added protection. You can slide your documents into the sleeves and then file them in a binder or box.
How to Dispose of Documents
The general rule is that once a policy is done, you don’t need to keep the paperwork. (See the exceptions for claims documents and billing statements above.) But your insurance documents have personal information that could lead to identity theft if not disposed of safely.
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- Always shred any old papers. Use a crosscut shredder that cuts in two directions to produce confetti.
- A small home shredder will work or you may find a free shredding event in your community.
- Local banks and other companies also may shred your papers for a fee.
- Remember to permanently delete old digital copies as well.
Going Paperless
Did you know, you can access your account online with California Casualty? Once you’ve signed up, you will have quick access to your policy(ies) at any time and from anywhere. You simply “Sign In” in the same right-hand corner where you created your account initially. And easy, secure access to this policy portal gives you the flexibility to:
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- Download/Print ID Cards
- View/Download Your Declaration Pages
- Pay Your Bill Online
- Make Some Changes to Your Policy (Manage Drivers, Manage Vehicles, Manage Lienholders/Mortgagee)
- Contact Customer Service for Additional Support
- File a Claim
- Create/Save a New Auto Quote, etc.
Click here to learn more.
This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.
by California Casualty | Homeowners Insurance Info |
Looking for affordable Homeowner’s or Renter’s Insurance, but don’t know where to start?
We sat down with California Casualty Sales Team Manager Mike D. and found out all of the important questions you should be asking when you call your agent for a quote.
1. Is homeowner’s insurance required?
If you have a home mortgage, then maintaining homeowner’s insurance is generally a requirement of your loan agreement. Even if you own your home outright, it’s recommended that you protect your equity in the home by maintaining homeowner’s insurance.
2. How are homeowner’s insurance rates calculated?
While there’s no way to predict the future, home insurance providers do their best to charge a rate that’s based on both the coverage limits and the likelihood of future losses occurring.
They may consider things such as previous loss history for both the homeowner and the actual home or surrounding area, the physical characteristics of the home, the age of some critical components of the home such as the roof, plumbing, and electrical systems, and even the types of weather activity in the area.
3. What is the dwelling coverage limit and how is it calculated?
One of the most critical coverages on your policy is the Dwelling Coverage. This is the maximum amount of money your insurance provider will pay to rebuild your house. Especially in periods of economic inflation and building supply or labor shortages, the true rebuild cost of your home may be substantially higher than the market value and even much higher than the cost of building a new house on an empty lot.
If your insurance provider hasn’t recalculated the cost to rebuild your home recently, then you may be at risk of running out of coverage if you experience a total loss.
California Casualty is committed to providing policies that will truly indemnify our group members after a loss. When you speak with a California Casualty agent, he or she will have a conversation with you about the details of your home’s construction to ensure your home is protected.
4. What’s the difference between replacement cost and actual cash value?
Some components of the structure of your home and all of your Personal Property within it may be covered for either Actual Cash Value or Replacement Cost at the time of a loss.
For example, if you own a refrigerator that’s now 10 years old that originally cost $1,500 when it was new, the current market value of your fridge may now only be $500. A policy that insures your Personal Property for Actual Cash Value would only pay you $500 if your fridge is destroyed by a covered loss.
However, a policy that insures your Personal Property for Replacement Cost would pay the full amount required to replace the fridge with a reasonably equivalent new fridge.
5. What is liability coverage?
Personal liability coverage on a home insurance policy pays for damages and legal defense if you’re legally responsible for injuries to others or damage to their property. It generally follows the insured when they’re both at and away from their home.
6. When do I need an umbrella policy?
An umbrella policy provides additional personal liability insurance that starts to pay after your underlying limits of liability on your home insurance policy have been exhausted after a covered loss.
While there’s no way to know for sure how much liability coverage you may need, understanding what you stand to lose is a good place to start. If you’re being sued, it’s possible that equity in your home, your personal savings, and your income may be at risk. If the value of two years of your annual income, the equity in your home, and your savings exceed the liability limits on your auto or home insurance policies, then you should consider an umbrella policy to protect your net worth.
7. What should I set my deductible at?
There’s no single right answer. Generally, the higher your deductible, the lower the cost of your insurance premium. Since the deductible is the amount your insurance provider will subtract from an insurance payout, you’ll have to select a deductible that you’re comfortable paying out-of-pocket after a loss.
There can be diminishing returns if you set your deductible much higher than average, so as a consumer, you need to balance the premium savings against the amount you’d be required to pay after a loss.
8. What are endorsements, and how do they affect my policy?
Endorsements modify your coverage, meaning they may increase or decrease your coverage. They may also remove restrictions to your coverage or add restrictions to your coverage.
For example, at California Casualty we provide coverage enhancements to our group members that are tailored to their needs based on occupation or professional association. However, some companies only offer a standard suite of options for home insurance commodifying the product.
9. Is homeowner’s insurance tax-deductible?
Home insurance is not tax-deductible on your primary dwelling. However, home insurance may be tax-deductible for rental properties.
10. What natural disasters does homeowner’s insurance typically not cover?
Some of the more notable natural disasters that homeowner’s insurance typically does not cover include flood and earth movement (for example earthquakes, landslides, mudslides, etc.). Typically flood and earth movement must be added independently.
11. Do I need flood insurance? Do I need earthquake insurance?
Flood Insurance may be required depending on the requirements of your home mortgage. Earthquake Insurance isn’t generally required but is recommended if you live in an area where earth movement is more prevalent.
12. Do I need extra coverage for my home-based business?
Most home insurance policies have restrictions for losses related to a home-based business. It’s important to speak with your agent about the nature of your business in order for them to determine what coverage options are available.
13. Should I increase my coverage when I make updates to my house?
Generally, home updates increase the rebuild cost of your home. Since it’s the job of the insurance provider to have enough coverage to rebuild your home after a total loss, you should discuss anything that may increase the rebuild cost of your home with your home insurance agent.
14. What’s the easiest way to reduce my monthly premium?
Keep in mind that in some cases the premium is inversely related to the quality of service and coverage you can expect to receive from an insurance provider. With that being said, the easiest way to reduce your monthly home insurance premium is generally to increase your deductible. But as mentioned above, there may be diminishing returns on premium reduction, the higher you go with your deductible.
15. Am I eligible for any discounts?
It’s rare that a customer and their home would be ineligible for all discounts. If you’re eligible for a discount, then your agent should have proactively explored those options with you to provide you with the best price possible from your first day as a customer. Talk to your agent and ask what discounts you may qualify for.
If your agent confirms that you’re receiving all discounts available, but you still feel that your insurance rates are too high, reach out to California Casualty to see if you can get more for your money with your policy.
This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.
by California Casualty | Homeowners Insurance Info |
Droughts, fires, floods, and storms – natural disasters can wreak havoc on your home and your property. Yet, many of us live in regions that are prone to them. If you live in such a place – or if you’re considering moving into one – how do you protect your investment?
Two ways: 1. Know your risks. 2. Have the right protection.
Know Your Risks: Is your region prone to a natural disaster?
A natural disaster can happen anywhere at any time. Weather patterns in a region are a good predictor of whether your area will likely be at-risk now and in the future.
The average weather pattern in a place over several decades is called a climate. An area’s climate affects the weather and the type of natural disaster(s) they are prone to. For example, we know the West has a very dry climate that causes frequent wildfires; the Northwest is known for its wet weather, which could lead to severe flooding. The Midwest is associated with brutally cold winters which can lead to devastating winter storms. And the warm coastal climate of the South East is the prime environment for hurricanes.
If you want to know the most common weather risks to your home or in your area, you can do a free climate risk assessment on ClimateCheck.
Know Your Risks: 6 Common Disaster Risks
Disasters come in many forms, from tornadoes and hurricanes to floods and droughts. Following are six types of disaster risks that may affect your home or property.
1. Heat Risk
Extreme heat occurs when there is high heat and humidity, and temperatures exceed 90 degrees for a period of days. In terms of disasters, extreme heat can sometimes lead to fires. (See the Fire Risk section for more detail.) U.S. counties with the greatest risk for heat include 37 counties in the south with a third of them located in Florida.
2. Drought Risk
Droughts occur when there is not sufficient precipitation. Not only does this put a stress on the water supply, but it can also have a severe impact on your landscaping. Soil dryness can also lead to settling issues with your home’s foundation. Unfortunately, for most homeowner policies, settling or shrinking is not a covered loss. U.S. counties with the greatest risk for drought include 34 counties in the west, with 21 in Colorado.
3. Fire Risk
When drought occurs and heat becomes extreme, the conditions are right for a fire to start. Wildfires can destroy your home or community. Wildfires account for about $16.5 billion in damages annually in the U.S. In the event of a fire caused by a natural disaster, your home’s dwelling coverage will pay to repair or rebuild your home up to your policy limit. U.S. counties with the greatest risk of fire are located in the West.
4. Flood Risk
This includes coastal flooding as well as flooding from surface water or nearby lakes and streams. Rising sea levels and extreme weather have contributed to flooding, which cost as much as $20 billion annually in the U.S. A traditional homeowner’s policy does not cover flooding. For your home to be covered you will need to purchase a separate flood policy. U.S. counties with the greatest risk of flooding are mostly located in the south, including Florida, Louisiana, and North Carolina.
5. Severe Storm Risk
Storms include high wind, wet or snowy weather events. These could be hail storms, hurricanes, tornadoes, or other types of destructive weather. Storm damage in the U.S. averages about $17 billion annually. Your homeowner’s policy may cover some aspects of storm damage, including hail, wind or lightning. If you are unsure, check with your insurance’s Service Department to see what is covered under your policy. U.S. counties with the highest risk of storms are located in the Northeast or Southeast.
6. Earthquake Risk
Earthquakes typically occur along fault lines and can cost millions in damages. In the U.S., they are more common in California and Alaska. A pair of earthquakes struck Ridgecrest City, California, in 2019, causing nearly $40 million in damage. Importantly, while earthquakes cause significant damage to buildings and property, they are not covered by the typical homeowner’s policy. In some states, however, you can purchase coverage for earthquakes for an additional premium.
Have the Right Protection: Do you have enough insurance for a disaster?
If a natural disaster happens in your community, and your home and property are damaged, you want to be able to rebuild. Yet, many homeowners find themselves having to fund portions of the rebuilding process because they’re underinsured. Here’s what you need to know.
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- During a disaster, your neighbors will be rebuilding at the same time. When demand exceeds supply, that can drive up prices for materials and labor. These increased costs usually aren’t factored into homeowner’s coverage, and you have to pay out of pocket for the difference. Some policies carry a mandatory endorsement added to the policy that provides an additional 25% of coverage to cover these additional costs. There is a fee for this endorsement, known as extended repair/replacement cost.
- You may be required to meet new and stricter building codes when you rebuild. You may use up to 10% of Coverage A for the increased costs you incur due to the enforcement of any ordinance or law. For an additional premium, increased amounts of coverage can be purchased via an endorsement.
- If your area is prone to floods or earthquakes, you will want those additional policies. Your homeowner’s policy does not cover these events. Keep in mind that there is a 30-day waiting policy for flood insurance.
- Rebuilding a home can take a long time. Your policy’s living expense coverage will provide a flat percentage toward living costs, usually 30% of the Coverage A amount. Some states have time limits (e.g. 12 months) on when you can use that coverage. Plan to cover those additional expenses out of pocket.
You want to be fully prepared for a disaster, and not just with a disaster plan. Talk with your insurer about your home and property to ensure that you are fully covered, no matter which location you call home.
This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.
