New trends up cost of homeowners insurance

Small loans carry big costs

Chinese drywall, living in coastal areas, lower home prices and credit scores are all impacting the cost of homeowners insurance and your level of coverage. It's to pull our your policy and give it the once over.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - What does Chinese drywall, living in coastal areas, lower home prices and credit scores have in common?

They are all issues that can cost you more in homeowners insurance, leave you with less coverage or even get your policy canceled.

Among the issues, Consumer Reports (CR) says after Chinese drywall created both property damage and health issues, some homeowners filed insurance claims. Insurers quickly rejected the claims and in some cases dropped policyholders claiming customers and their homes were subject to risks not covered by their policy.

Attorney's are fighting and winning cases against builders and manufacturers, but the issue is under investigation by the Consumer Product Safety Commission where more than 3,000 related complaints have been filed.

Says CR, the drywall case "Highlights an industry trend. Insurers are placing more risk on policyholders by changing policy language, charging more, or interpreting coverage to the detriment of homeowners."

The number of drywall victims are limited, but larger issues loom for a greater number of home owners who may have to adjust their approach to homeowners insurance coverage.

• Coastal states' premiums increase most. Insurance premiums for renters and home owners rose an average 3.2 percent, in 2009, but much more in recent years in coastal states -- 11.4 percent in Louisiana and 10.6 percent in Massachusetts, both from 2006 to 2007.

Residents in coastal states should shop around and consider trading in the "loyal customer" discount (for using one insurance carrier for home, auto, life and other insurance needs) for a better premium from a highly rated insurer. Consumer Report said among subscribers who switched to a new carrier in the four years prior to 2008, more than half paid less for coverage.

• Many homeowners now have two deductibles, one for the main policy and another for a high-risk peril, say a windstorm or a hurricane. Florida, for example, requires a hurricane deductible of 2 percent for homes valued at $100,000 or more. Policyholders can choose a larger deductible of up to 10 percent of the insured value.

CR suggests self-insuring for smaller claims by setting aside savings, as an emergency fund. Also set a higher percentage deductible or switch to a flat-dollar deductible, when possible. The idea is to self-insure for smaller claims, because insurers drop policy holders who file frequent claims in a short period.

• Lower home prices. Depressed property values turn thoughts to less coverage, but insurance coverage isn't based on your home's market value. It's also based on the cost to rebuild -- labor and materials. Ask your insurance agent if you have sufficient coverage. Before home prices fell, many home owners had insufficient coverage.

• Credit scores. While some states are fighting the trend, credit scores are more and more a factor in underwriting. Your credit score is a numerical rendition of your credit risk, your risk of experiencing financial trouble. That's become central to how an insurer determines your premium, says CR.

Pull your credit reports for free at the only federal government-sanctioned source -- AnnualCreditReport.com, pay your bills on time, don't carry too much debt and learn how to keep your score as high as possible.

• Coverage for modern-day concerns. Many major carriers sell identity-theft coverage as a stand-alone policy or endorsement to your homeowner’s policy. The coverage might reimburse you for lost wages, notary fees, and legal fees if your identity is stolen.

Instead of the coverage, monitor your credit reports, regularly change passwords and otherwise take additional cost-free ID-theft precautions, CR advises.

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Always time for a home inspection

Always time for an inspection

For $350 to $500, a professional home inspector will review the major, visible and accessible components of the home and provide a detailed written report rating each element.

by Broderick Perkins
© 2010 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - It's a good time for a home inspection.

In today's tired housing market, a home inspection can wake up buyers to what "as is" really is and give them a negotiating edge that could lead to cash or repair concessions.

For sellers, a home inspection serves as an anti-haggling tool and keeps the dickering down to a roar.

An inspection is also for new homes, given new home defects aren't just incidental.

It's also a good tool to use to assess a home's integrity after a natural disaster, including flooding, an earthquake, a wind or rain storm.

Finally, a home inspection by home owners who aren't listing their home for sale can let them know every few years what maintenance or upgrades they need to perform.

It's always a good time for a home inspection.

For $350 to $500, a professional home inspector will review the major, visible and accessible components of the home and provide a detailed written report rating each element. Typically included are the heating system; central air conditioning system (climate permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components.

The inspection isn't intrusive and it may not include swimming pools, septic tanks, and other systems that require an inspection by a specialist.

The objective report should include detailed information in a way that allows the customer to make informed decisions about the findings.

The inspection also can be a learning opportunity for the buyer or seller who should attend the inspection. The inspection is an opportunity to see the inspector demonstrate systems and to get acquainted with necessary maintenance chores.

The inspection also sees through the veil of misleading staging and other cover-ups and it can help buyers uncover building permit and code violations.

Sellers can likewise use the inspection to determine what they need to do to put the home in competitive shape or price it fairly to sell as-is.

While a home inspection, purchased by the buyer or seller or both, is more common than it's ever been, too many home buyers skip the process.

That's especially true for new homes, but they also need a once over. There could be subcontractor issues missed by the contractor as well items missed by the local jurisdiction's harried building inspector.

Studies have exposed newly built single family homes with construction problems related to the building envelope; framing and structural elements and in the plumbing and electrical systems.

As homes age, given the life expectancy of certain systems, the home inspection grows in importance.

Within 10 years, foundation settling could create drainage problems; by the age of 20, appliances are well outdated and the roof and wood components exposed the weather or moisture could need replacing; at 40 years the HVAC system will likely need replacement. Older historic or architecturally significant homes can develop structural problems and need restoration.

Safety hazards that crop up in older homes include old sliding glass windows that are not tempered safety glass, missing smoke alarms and missing pressure relief valves on water heaters.

Neglect plays a role too, as the lack of preventative maintenance takes it toll. Some homeowners take better care of their car than their biggest investment.

The American Society of Home Inspector's (ASHI) "Virtual Home Inspection Tour" online can give you a sense of what a professional inspector sees, what areas he or she can't see and won't inspect and what the inspector is likely to find and where.



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© 2010 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner

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Deadline Newsroom FAQ 92208

When you have questions needing answers that really hit home, contact the Deadline Newsroom. This installment: ID-theft/credit monitoring; solar contractors; disclosing defects.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime.



Deadline Newsroom - Q: I'm concerned about identity theft. Should I buy a credit monitoring service?

A: Only if you are too busy to take no-cost steps to do it yourself. Everyone should be concerned about identity theft, which happens when someone pilfers your personal information to masquerade as you to make purchases, withdraw cash or open accounts in your name.

Credit monitoring services help you quickly spot evidence of ID-theft by keeping tabs on your credit report for suspicious activity. The services charge you $50 to $100 a year, but Consumer Reports calls the services "overrated, oversold, and overpriced."

That's because federal law allows you to do-it-yourself by getting your credit report from each major credit reporting agency -- Equifax, Experian and TransUnion -- every year. That means, if you spread out the freebie access and obtain one report from a different agency every four months, you've effectively set up your own credit monitoring service. The federally sanctioned freebie is at AnnualCreditReport.com. Avoid similar-sounding Web sites.

Also, under a recent class-action settlement anyone with a credit card account from January 1987 to May 2008 is eligible for free credit monitoring benefits and other related services from TransUnion.

A recent data loss case also resulted in free credit report monitoring services for certain Bank of New York Mellon customers.

Even without free credit monitoring services, consumers who want to keep closer tabs on their information than what's provided by a free credit report every four months can turn to online banking, investment and financial account services that permit daily looks at activity on their accounts. Check with your financial institution for details.



Q: How can I find a competent contractor to install solar panels on my home?

A: Start with local, regional, state and then federal solar incentive programs offering tax and cash back incentives. They typically point to qualifying contractors or contractors affiliated and approved by the programs. In California, designated solar contractors are licensed by the Contractors State Licensing Board, specifically to perform solar energy work and other building or construction work necessary to install an active solar system. A California database; a national database of state incentive programs; and the federal U.S. Energy Department all also offer reference resources.

Q: My real estate agent says I have to disclose defects in my home for sale. But won't that turn off prospective buyers?

A: Maybe, but if you don't, your eventual buyer could sue you for not disclosing known defects that could affect the value or salability of your home. It's the law. Competent real estate professionals have a saying about uncertainty over what to disclose -- "If you can't figure it out, don't leave it out. Disclose. Disclose. Disclose." You can't and you don't have to disclose information you aren't aware of, but it behooves you to disclose to potential buyers everything from access via easements to zoo noise. You local real estate association or agent can give you all the disclosure requirements for your area.

Got questions? Send them to news@deadlinenews.com. We'll do our best to get you the most relevant answer.
© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's news that really hits home!

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Ferreting Out Home Defects

You have a right to a defect-free home. Here's how to look for trouble, report it and make sure the builder corrects the problem -- and what to do if the builder won't.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - The last thing you want in a home is a built-in value deflator.

The economy can be tough enough, stripping your home of value before it's had a chance to enjoy some appreciation.

You've got to get into a good neighborhood, negotiate the best deal and buy, not because the market is up or down, but because it's the right time for you.

Just as important, you've got to make certain the most expensive item you'll ever purchase, well, works.

Home defects can be a real house wrecker when it comes to your home's value and you've got a 1.5 in 10 chance you'll buy a new home with something that's broken.

The last time Consumer Reports checked, in "Housewrecked," it found serious defects in 15 percent of new homes. Other studies have found a greater incidence of defects from small problems like kitchen cabinets that don't align to larger structural problems and others that impact the safety of occupants.

There are more homes on the market to choose from and that can give you more time to give them the once over looking for defects. Take the time.

Consumer Reports says to be on the lookout for:

• Foundation cracks. Deep cracks in the foundation or basement walls can indicate a poorly laid foundation or improperly graded soil.

• Floors that sag could be due to shifting foundation or support beam structural problems. Cheap renovations or additions can also compromise structural members.

• Windows and doors not sitting well in their frames or closing properly.

• Wide interior wall cracks. They could signal a foundation problem. Fine cracks are typically cosmetic, the result of normal wood shrinkage when drying or even minor settling.

• Mold, rot, and insect infestation in exterior walls; staining, swelling and discoloration on interior walls; and a musty odor. These are water damage warning signs that could be caused by a host of factors, including improperly installed roofing; missing flashing around penetrations and joints; no moisture barrier in a climate that requires it; lack of a drainage space behind brick or siding; poorly installed windows and doors and holes in the siding.

• Poorly graded land or faulty sewer and water-main connections. This could cause flooding and sewer and drain backups.

• Switched hot and cold spigots, which could signal improperly installed plumbing.

Some builders won't allow it, but your best shot at buying a quality new home is on site inspections at key periods -- foundation installation; framing, wiring and plumbing completion; wall completion and roof installation. If you can't obtain independent inspection during those points, have a home inspector do his or her thing during your walk through.

If you think you have a problem, Consumer Reports suggests:

• Hire a licensed engineer. The National Academy of Building Inspection Engineers can make a referral for a visual inspection. Expect to pay $100 to $150 an hour.

• Give the builder a chance to fix the problem. Some states require the step. Just don't let warranties or legal statutes expire while you wait, should builders dicker, delay or attempt to place doubt on your claim. Move quickly. Document your complaints with photographs, videos, copies of written agreements, warranties, home inspections.

• Complain robustly. Send your complaints to building and regulatory authorities in your state; state and local consumer-affairs departments; your state attorney general and the Federal Trade Commission. Complain with a shotgun approach. It can be a trying ordeal to go up against a home builder, but don't be put off. You have a right to a defect free home.

• Go grassroots. Hard. Contact Homeowners Against Deficient Dwellings and or Homeowners for Better Building, two 1970s-like grassroots efforts that have done more for homeowners suffering defects than regulators, the building industry and other entities -- public, private or government -- combined!

• Get legal help. Get an attorney on board early in the effort. If you find a major defect and the builder is uncooperative, appears to be stalling or otherwise not cooperating early in the game, hire an attorney. You want a construction-defect expert. Contact your local bar association can help you find one.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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It's A Good Time For A Home Inspection

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom – It's a good time for a home inspection.

In today's flat markets, a home inspection can give buyers a negotiating edge.

Sellers, on the other hand, get an anti-haggling tool.

Actually, it's always a good time for a home inspection. Even in a seller's market, buyers ought to know what "as-is" really is.

Housemaster franchisee, Mike Kuhn, is also co-author of "The Pocket Idiot's Guide to Home Inspections" (Penguin Group, $9.95) and says for $350 to $500, a professional home inspector should review the major, visible and accessible components of the home and provide a detailed written report rating each element.

The objective report should include detailed information in a way that allows the customer to make informed decisions about the findings.

The inspection can also be a learning opportunity for a buyer or seller who attends the event. The inspection will let them get to know the home, see the inspector demonstrate systems and to learn maintenance tips.

It can also help buyers see through the veil of misleading staging and other cover-ups as well as help buyers uncover building permit and code violations.

Sellers can likewise use the inspection to determine what they need to do to put the home in competitive shape for the market, or price it fairly to sell as-is.

"Many Realtors and clients believe they benefit from a pre-listing inspection's ability to present the fundamental condition of the home to prospective buyers; discover defects that sellers can have repaired before the home is listed; and justify the price of the home, which reduces buyer negotiations," said Chris Shupp, a home inspector and managing member of Holmes & Watson Real Estate Inspection, LLC in Santa Clara.

While a home inspection, purchased by the buyer or seller or both, is more common than it's ever been, 25 percent of home buyers, or more (depending upon the source) do not buy a home inspection, says Kuhn.

Even new homes need a once over.

"New homes should be inspected for sub contractor issues, that are
missed by the contractor. Examples of new home issues include over-fused breakers
for air conditioning units, missing or improperly wired ground fault circuit interrupters, outlets, loose roof tiles and improper plumbing," said Bruce Carmichael a home inspector and owner of Advantage Inspection Professionals in San Jose.

Last year, based on data from 20,867 new single-family homes inspected in 2005, Quality Built found that the three most common construction problems discovered in single-family homes were in the building envelope (41 percent of the time); framing and structural elements (34 percent); and in the plumbing and electrical systems (8 percent).

As homes age, given the life expectancy of certain systems, the home inspection remains prudent.

Within 10 years, foundation settling could create drainage problems; by the age of 20, appliances are well outdated and the roof and wood components exposed the weather or moisture could need replacing; at 40 years the HVAC system will likely need replacement; and older historic or architecturally significant homes can develop structural problems and need restoration.

"We also find lots of safety hazards in homes. Examples are old sliding glass windows that are not tempered safety glass, missing smoke alarms and missing pressure relief valves on water heaters, said Carmichael.

The American Society of Home Inspector's (ASHI) "Virtual Home Inspection Tour" online can give you a sense of what a professional inspector sees, what areas he or she can't see and won't inspect and what the inspector is likely to find and where.

"Most homeowners have neglected their homes and have never done any preventive maintenance. We take better better care of our cars than our biggest investment," said Carmichael.

© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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