Homeowners insurance blog

Arthur Murray

Arthur Murray is a senior editor for HomeownersInsurance.com. He has more than 30 years of experience in the industry and graduated from the University of North Carolina in 1979 with a B.A. in Journalism.

Articles from Arthur Murray

Gatsby: Great, Yes; But a Terrible Home Insurance Risk

In a few days, Jay Gatsby gets another chance to charm his way into our hearts. It wasn’t enough that he was the title character of the fantastic F. Scott Fitzgerald novel, The Great Gatsby. Gatsby also has been in the movies, played most notably by Robert Redford in 1974 and by Leonardo DiCaprio in the version that’s coming out.

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Fire up the Grill-not your Patio

You’ve suffered through the cold and dreary winter, and now it’s time to reward yourself. That’s right – time to shed those winter layers, step out into the sunshine and fire up the grill. It’s been out there waiting for you all this time, and you’ve dreamed about this reunion for months. Your fingers tingle with excitement as you reach out and grab the handle, opening the lid for the first time this year, your mind playing back scenes from last summer’s cook-outs with friends and family. Life is good.

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Bigger Families: Bigger Risks

The term ‘multigenerational household’ may sound a little dated, but the concept is anything but.  In fact, as our parents (and their parents) live longer and our homes grow larger, it only makes sense that more families than ever are welcoming elderly relatives into their homes at some point.

Additionally, adult Americans are moving back in with their families in record numbers.  It’s less unusual for post-college grads to consider moving back home while they search for employment in a tough market.

Shared households are becoming commonplace.  But while your home may be suited to accommodate more residents, is your home insurance policy ready as well?

What – and who – is covered

While insurance varies from state to state, in most regions of the country, family members who move in with relatives are covered under the existing homeowner’s policy.  If, however, the individuals who move in are not related to the homeowner, they will typically not be covered under the existing policy.

Consider Umbrella Coverage

With a larger households comes larger risks for liability claims and other damages. If you’re concerned about gaps in your coverage, consider purchasing an umbrella policy.  Umbrella policies offer pure liability coverage over and above that afforded by your regular policy.  In the case of multigenerational households, your umbrella policy will help cover any gaps in your home or auto liability coverage.

Don’t assume

The first rule in insurance is to never assume you know what’s covered.  If you are welcoming an elderly relative or an adult son or daughter back into your home, make sure to report these changes to your insurance company.  Your agent will let you know what exactly is – and isn’t – included under your existing policy.

Buy Now Before the Market Bounces Back

It has been six years since real estate markets collapsed across the country.  Six years of bad news for homeowners, home sellers, and real estate agents.

But now, finally, the news is looking good. In some markets, real estate is showing amazing signs of recovery both in terms of home value as well as number of sales.  Inventory across most major metropolitan markets has declined –which means fewer houses are sitting on the market.

What about home buyers?

Fewer houses on the market means more competition.  More competition means higher prices.  Sure, this spring could be very promising for home sellers across the nation.  But if you’re a buyer, it may mean the time to buy is now or never.

Here are a few tips that will help you deal with the rebound.

Be realistic with your offer

With the market bouncing back, your lowball offers might not stand a chance.  Sellers have gotten more realistic with their pricing. That, combined with less inventory, has even led to bidding wars in some markets.  Bottom line: your offer should be pretty close to the asking price in order to be taken seriously.   But don’t fret – those asking prices are still nowhere near the market highs we saw a decade ago.  So you’ll still get a good deal, relatively.

Play the banks against each other

Mortgage rates are low, but loan requirements are still much tougher than in the past.  If you’ve got solid credit and finances, you’re in a position to get an incredible deal. Don’t be afraid to play banks against each other.  Get a good-faith estimate from a reputable lender (be prepared to pay for the credit check) – and then use that quote as a benchmark.  Show it to other lenders and ask whether they can beat it.

Compare insurance companies before you close

Don’t wait until closing to figure out home insurance.  Once you’ve found your dream home and secured financing for it, compare multiple insurance rates, too.  It can only save you money in the long run.

It’s Tax Season – Don’t Ignore Your House

One of the great benefits of owning a home comes when you file your income taxes. And if you haven’t done it yet, remember that April 15 is just around the corner.

You’ll have to itemize your deductions, of course. But if your mortgage is for less than $1 million, you can deduct the interest you pay each year – which makes up the largest part of your monthly mortgage payment. You also can deduct the cost of private mortgage insurance and any real estate taxes you pay on the home.

So what about home insurance? Sorry, for most homeowners, the cost of their premiums is not deductible. The exception is for those homeowners who operate home-based businesses. In that case, you can deduct part of your premium – essentially the amount that would pay to cover the portion of your home used exclusively for business. If this sounds complicated, it is – you probably should consult with a tax professional to make sure you’ve got this deduction right.

The other thing you must keep in mind if you have a home-based business is that it affects your home insurance. The liability coverage typically included in a standard home insurance policy might not be in affect should a customer be injured during a visit to your house. Be sure to let your home insurance agent know about any business ventures you operate – you could need business liability or other commercial coverage.

The bottom line is that homeownership likely means you’ll get a tax refund. Many people, of course, will consider the refund “found” money and blow it on a big screen television or a beach trip or something else in the luxury category.

Instead, why not invest your refund in something for your house? Maybe you need a new refrigerator, for example. Use the “found” money to purchase an Energy Saver™ model and you’ll save on electricity costs the rest of the year. Or you could start a roof replacement fund or install new countertops or blinds. One warning: If you do something that will increase the value of your home, be sure to let your home insurance agent know about it. Otherwise, you might not be fully covered by your policy.

One other suggestion: Use your refund to pay off your home insurance premium this year in a lump sum. You’ll likely get a discount for paying in full.

You Don’t Have to Stomp the Yard – You Can Control Moles

If you’ve got a problem with moles in your yard, you know there’s nothing funny about them. If you don’t have moles, here’s what they are: Rodents. Small, blind ones that dig tunnels under your yard and munch all the roots, grubs and earthworms they can find. Here’s why that’s a problem: The tunnels, which can be as long as 230 feet, can lead to long strips of your yard where no grass will grow.

Experts say it only takes weeks for moles to overrun a yard and ruin it. Here’s the thing: Late February and March are when the critters breed. And boy do moles breed. A mole couple can produce 7 young moles every 30 days, and those offspring can quickly start reproducing as well – you can see the problem.

So what’s a homeowner to do? First, be vigilant. The main sign of mole activity occurs when one digs near the surface, which can push displaced dirt to form volcano-shaped molehills. Turns out you should make a mountain out of real molehills or at least take action to get rid of the critters below your lawn. Moles are active all year long, and while they won’t enter houses – they spend nearly all their time underground – they can wreck your lawn with their tunnels.

How do I get rid of moles?
There are several methods, some more involved than others. There are experts at it, but you also can take action on your own, particularly before the problem becomes too bad. Here are some suggestions:

  • Traps. This is one of the best ways to get rid of the varmints. However, traps also can be hazardous to children and pets – particularly the most effective kinds.
  • Mole repellents. Look for those that have garlic and castor oil.
  • Plants. Daffodils and other bulb plants repel moles, which don’t like their smell. Mexican marigolds also can do the job as well.

Here’s what doesn’t work
Despite what you may have heard, you can’t get rid of moles by placing a stick of Wrigley’s Spearmint Gum in a molehill. It doesn’t clog up the moles digestive system.

Putting cat litter in a mole hole also won’t work. Neither will adding crushed glass or mothballs. Neither does human hair. Nor does getting rid of your yard’s grubs – moles prefer earthworms anyway. Nor does flushing the holes with water – plus you might collapse your yard.

Gasoline? No. The dangers should be obvious.

Seriously, the best idea to make sure you’re going to continue to be mole free is to call an expert. You’ll spend a few bucks, but you won’t end up with a lawn that looks like Bushwood Country Club at the end of Caddyshack, either.

Social Media and Your Home Insurance

You’re a social media junkie. You hang out for hours on Facebook, you tweet like you’re a bird welcoming spring back after the long winter. Heck, you’ve even been known to try to communicate with the sparse crowds on Google+. There’s nothing wrong with that.

But anything taken to extremes is, well, extreme, and it can bring the law of unintended consequences into play. Going too far with social media, for example, can affect your home insurance.

Here’s how:

You always let everyone know where you are and what you’re doing. It doesn’t matter too much if you’re just going to the corner McClane’s for a GruBurger and some fries – but could matter a lot if you’re announcing to crooks that you’re going to be gone for the night. It could especially matter if your profile isn’t particularly secretive about where you live. Unless you’ve mastered the ever-evolving Facebook privacy rules, your post could be seen by nearly anyone.

What’s the big deal? Well, if you announce you’re eating at Chris’ Chris Steakhouse – and the time you’re going to be there – it’s not too hard for a criminal to figure out you’ll be out of the house for a while. That gives him a definite window to break in, look through your stuff and get out of there – maybe even before you finish posting a photo of your crabtini appetizer.

It gets even worse when you go on vacation. If you’re posting photos from a cruise ship, then a crook casing the house – and lurking on your Facebook profile – has a pretty good idea he can wait for his opportunity to strike without you being there.

The end result: You come home and find a bunch of stuff missing from your house – all your electronics, some cash you left on the bar and other valuable items. You could be cleaned out before you clear customs and you’d never even know it until you get back home.

Of course, you can file a claim under your home insurance policy for your missing stuff. But that doesn’t solve everything. You’ll be out your deductible, for one thing. And the end result could be an increase in your homeowners insurance premium.

The better option: Keep your friends in suspense a little. Post your photos and updates AFTER you get home, whether it’s from a restaurant or a vacation. You can still be social – just don’t give too much information away.

Don’t Invite Criminals in the Front Door

Criminals aren’t quite like vampires. They don’t have to be invited to enter your home. But many people seem to be inviting them anyway. Did you know that more than a third of all home break-ins happen when the criminal enters the front door?

Now that doesn’t mean that people are leaving the front door wide open or even unlocked. But if you have an older door, many times all a criminal has to do is kick it down or even just push it open. What to do? Get a sturdy door with a deadbolt lock.

Think that’s a pretty simplistic suggestion? Here’s the thing: Criminals are a pretty lazy lot – they much prefer low-hanging fruit than having to work for it. The second most common way they gain entry to homes is through first-floor windows. Nearly a quarter of crooks use that method. What can you do about it? Don’t just close your windows when you leave the house – lock them. A security system with window sensors is the best solution, of course. But something else you can do that won’t cost a dime – keep bushes in your yard trimmed so they don’t obscure your windows.

Attached garages also are a common entry point – nearly 10% of criminals use that. Many people don’t close their garages, much less lock them. And the door from the garage to the rest of the home can be pretty easy pickings, too, even if you lock it. Again, the best bet is to have deadbolts on all doors into the home.

Why does it matter? Every 13 seconds in the U.S., there is a home break-in, according to the FBI. These break-ins are not the work of professional burglars – the yield, which averages $2,185 per incident – is too small to attract the pros. More than 85% of home burglaries are committed by nonprofessional crooks. Only about 13% of break-ins are ever solved.

Don’t invite crooks to take your stuff. All the garlic and wooden crosses in the world won’t chase them away once they’re inside. Take precautions now to make sure you’re not making it easy on burglars.