Why Pay More for Replacement Cost Insurance?

One major myth about insurance is that replacement cost policies are much more expensive than a market value insurance policy. This is not always true. In many cases, we have found that replacement cost companies offer a very competitive premium for a much more valuable policy, especially when considering the companies we work with at Bradshaw & Weil, Inc. We have experience with both market value and replacement cost companies in Paducah, KY.

But why pay even $1 more if you don’t intend to rebuild your home? When insurance is advertised you are often hearing about “total losses.” What most people don’t consider is that a partial loss is really much more likely to happen. Insurance is not only designed to cover the materials used to repair your home but also to reimburse for expenses that were used to prevent further loss. Clean up from water damage or fire damage can get very expensive very quickly. Even when only a small portion of your home was damaged.  A contractor hired to do reconstructive work after a claim is working on a much tighter time frame. He doesn’t have months to negotiate prices. He also isn’t working with a fresh and clean building plan. A specialist may have to be brought in to figure out how to piece things back together. These are all expenses your insurance is designed to help with after a covered loss.

Even though you don’t intend to rebuild after a total loss, you very likely will need the extra thousands of dollars provided by a replacement cost policy in the event of a partial loss. Another issue you might get into with a market value policy is having a partial loss settled at market value. In this situation, being reimbursed on an actual cash value or market value basis might not be enough to cover the full replacement cost of the damage.  We are looking at the value your insurance policy provides not just the dollar signs listed on the declarations page.

Contact Bradshaw & Weil, Inc. of Paducah, KY if you have more questions about what type of policy best suits your needs.

Why Is My Home Insurance Value So High?

At Bradshaw & Weil, Inc. in Paducah, KY, we write insurance policies on a replacement cost basis. Meaning, they are designed to completely rebuild your home as it were if you had a total loss. We work with local homeowners reviewing construction materials and special features of their home to determine how much it would cost to rebuild their home completely.  When you are going through the home buying process you will be talking with Realtor’s and Mortgage Lenders who will refer to your home value at a much lower limit. This is the market value of your home or what you paid for your home. We have found that market value limits not only significantly reduce the coverage you have on your home but also that the premium with companies who write at market value is often the same as or only slightly less than a replacement cost policy with a preferred company.

 

Contact Bradshaw & Weil, Inc. to ensure you have the right type of policy for your needs.

What Qualifies as a “Home-Based Business”?

Your homeowner’s policy is designed to only provide coverage for personal exposures. That means it is not extended to offer coverage for any event that arises from a business exposure. Many individuals have home-based businesses and don’t even realize it. Are you part of a direct sales company like Mary-Kay? Do you have a hobby that you are particularly skilled in? So skilled that people will buy your product? Do you own a small business and work from a home office where your files are stored? If you can answer yes to any of those questions, then you are involved in a home-based business.

When you leave your home to hold a product party at a friend’s house, your homeowner’s liability will not follow you. If you store inventory in your basement it would not technically be considered personal property in the event of a home loss. The client files and office equipment you keep in your home office would also not be considered personal property in the event of a homeowners loss.

If you are concerned about whether or not your homeowner’s policy would provide coverage for a certain risk then you should contact your agent right away. Business owner policies are available for a very reasonable price when considering the alternative debt you could be in from liability or property losses.

Getting The Right Insurance For Your Home-Based Business

The Fiduciary Role of an Insurance Agent

At Bradshaw & Weil, we call ourselves Insurance Professionals because our service goes beyond just acquiring a license and selling policies. The process of obtaining an insurance policy is not necessarily a difficult one but it does require going through several steps. An Insurance Professional will guide you through each step of the process, letting you know what to expect, and helping you to understand how the process relates to your coverage.  As Insurance Professionals, we are held to a fiduciary standard and our companies’ Code of Ethics when dealing with our clients. This means more than just doing what is legal. It means doing what is right no matter the outcome.

A fiduciary is a person who stands in a special relationship of trust to another person. you hear this term a lot in the financial sector but did you know that Insurance Agents have fiduciary responsibility too? We have a fiduciary duty towards our clients, our insurer’s and the public.  Two of the ways in which we enact our fiduciary duty are:

  • selling coverage not price
  • educating on the process of inspection.

Some agents cut coverage in an attempt to price match or avoid disclosing possible inspection issues for fear it could lead to their client declining the policy and have a negative impact on the agencies bottom line. We understand that price is important to our clientele and that is exactly why we make the point to fully disclose coverage concerns or inspection red flags. If you can’t afford to pay your insurance premium, then you won’t be able to afford the payout of a large claim against you.  Education is of utmost importance when it comes to coverage. If you make an educated decision to cut your coverage or to self-insure then that is your right. But we feel that matching coverage to beat price is a disservice to you.

Inspection requirements work the same way. Insurance companies are inspecting your residence for things that increase hazards. Brush growing along the side of a home or trees hanging over the roof are going to increase the chance that your home has fire damage or damage from a tree falling etc. As with anything, the upkeep of these items can cost you money or your valuable time to fix. When your agent takes pictures or recommends you trim trees, it is not because the agent doesn’t like the way it look s or because the insurance carrier will not accept your home in the condition that it is but because your agent wants to be able to prepare you up front for any repairs or maintenance that might be required of you.

 

Disclaimer: We will not always be aware of every inspection requirement that could arise with your property. We will not force you to pay a premium for a coverage you do not want. It is your policy and your right. However, as an Insurance Professional it is our duty to make you aware of available coverage and educate you on how it can be a benefit to you. All licensed insurance agents regardless of employer are held to a fiduciary ethical standard. We cannot speak for practices of your agent or insurance company.

Is Auto Insurance Required?

Auto insurance is pretty cut and dry; however, there are still options available to you depending on your preference and on your state of residence. Liability insurance is required on your vehicles in all states. Liability coverage does not protect the insured’s vehicle or passengers but it does protect the policy holder from suffering a large financial loss when they are legally responsible for another parties bodily injury or property damage because of an auto accident.

The state of Kentucky only requires auto owners to carry liability limits of 25/50/10.  This means to be legal you need at least:

$25,000 Bodily Injury Liability per person | $50,000 Bodily Injury Liability per accident| $10,000 Property Damage Per Accident

Although these are the minimum limits, it doesn’t mean that they are sufficient to cover incurred expenses. Many auto accidents incur much more expense than these minimum limits. Therefore, we never recommend only acquiring the minimum limits. Remember the main goal of insurance is to protect against catastrophic loss.

In addition to liability insurance, many insureds also purchase comprehensive (or Other Than Collision) and collision coverages to cover physical damage to their own vehicle. Other desired insurance coverages include personal injury protection, uninsured/under insured motorist, towing and rental. We will provide more on these topics in a later blog post.

If you are a resident of Paducah or Western Kentucky, you can contact Bradshaw & Weil, Inc. for a full review of all these coverages and our personal recommendation of insurance options to fit your own situation.

 

6 Items to Include In Your Home Maintenance Checklist

The time for spring cleaning is at hand. Warm weather and sunny days make way for your outdoor to do list. Most homeowners probably already have an idea of some aesthetic updates that need your attention but often they neglect some important maintenance items. Believe it or not home maintenance can affect your insurance positively and negatively. Insurance is designed to protect you from catastrophic losses like earthquake or tornadoes. It is not designed to cover losses resulting from maintenance/wear and tear. A claim resulting from wear and tear could be denied by your insurance carrier.

But, in order to provide you with protection from catastrophic losses, insurance carriers periodically inspect homes and make recommendation on items that need maintenance to prevent loss. The carrier recommendations can be pretty extensive or they can be relatively minor. Also, just because they inspect does not mean they will necessarily make recommendations. The recommendations are based off of your specific residence and risks that you might be susceptible to. Not complying to a carriers recommendations could force you into a sub-standard market that will cost you more premium for the same coverage.

We have compiled a list of 6 things we see fairly often on inspection results from homes in Paducah, Kentucky. The items on this list are things that homeowners are definitely aware need to be maintained but may get overlooked since they are not in your direct line of sight and damage from poor maintenance does not surface immediately.

 

HOME MAINTENANCE SUGGESTIONS 

1.) Inspect roof for damages and leaks

2.) Clean Gutters

3.) Repair or replace windows and window screens

4. )Redo areas with peeling or damaged paint

5.) Trim trees and shrubbery away from the house removing dead plants and shrubs as well

6.) Add handrails to any indoor/outdoor stairway with 2 or more steps

 

WHY? A good roof, clean gutters and a good coat of paint act as sealants to prevent water damage.

Clearing out dead landscaping can reduce risk of fire and prevent trees from falling on your home.

Adding a handrail to stairs can prevent falls and save you from liability claims.

 

If you are not an expert in the areas above then look at hiring a contractor to do a routine, yearly inspection. You can also follow the Bradshaw & Weil, Inc. Pinterest page for links to information from experts on signs of roof damage, ideas to prevent gutters from getting blocked and cost effective ways to add handrails.

A Basic Guide To Your Homeowner’s Insurance

Bradshaw & Weil, Inc. is your partner for home insurance in Paducah, KY. If you are in the market for a new home then you undoubtedly know the importance of insurance before your purchase is complete. Many people do not appreciate insurance because they do not understand it. They just want the best price. Our commitment to our clients is to help them understand the benefits of their policy and ensure they are properly covered while hopefully saving them money in the process.

Part 1- Your Structure

Coverage for things you own (property)

A- Dwelling
B- Additional Structures (or Other Structures)
C- Personal Property
D- Additional Expenses (or Loss of Use)

Coverage A- replacement cost of your dwelling is calculated using the construction features of your home and represents the cost to rebuild from the ground up. Coverage B, C, & D are automatically calculated percentages of Coverage A. They can usually be increased if you have more value in those areas but not decreased.

Coverage B-refers to structures on the premises that are separated from the dwelling by clear space (think detached garage, in some cases a fence, etc.).

Coverage C-refers to personal belongings such as clothing or furniture.

Coverage D– refers to expenses related to maintaining the insured’s normal standard of living when their home has become uninhabitable due to a covered loss.

If you are wondering why the number you see listed beside Coverage A is higher than what your bank or realtor is telling you, then read our next blog post, “Why Is My Coverage A So High?”

Part II

Coverage for things you do to others (liability)

E- Bodily Injury and Property Damage Liability
F- Medical Payments to Others

Coverage E– for someone to collect payment the insured would have to be found negligent and legally obligated to pay damages for bodily harm, sickness, disease, or physical injury to or destruction of tangible property.

Coverage F pays only necessary medical expenses that caused bodily injury. The insured does not have to have been negligent.

Contact us today to talk with an agent about your limits of insurance.