What’s the Best Homeowner Deductible?

Deductibles and your Homeowner Policy

What's the best homeowner deductible?The relationship between your homeowners deductible and premium can feel like a game of cat and mouse. Should I raise or lower my deductible? How much responsibility and risk should I absorb? Should I have a $1,000 deductible on my homeowners insurance, or should I opt for more or less to save on my premiums?

Let’s go through the basics of what a homeowners insurance deductible is and how you can choose the right number for you.

What is a deductible?

A deductible is the amount you are responsible to pay before your insurance kicks in to cover a claim (up to your coverage limits). The deductible is what’s “deducted” from your claim payment.

Let’s say your home is insured for $50,000 on your homeowners policy. You have a deductible of $1,000. Unforeseen water damage ends up costing you $3,000. When you submit a claim, you would be responsible to pay $1,000, and your insurance company would send you a check for the remaining $2,000 in lost property.

But let’s say that the water damage only costs $800. This is less than your deductible of $1,000, so your insurance company wouldn’t pay you anything.

Keep in mind that the insurer will only pay up to your coverage limits. Let’s say the water damage equates to $55,000 in damage. You would still be responsible for $1,000 due to your deductible. Then, your insurance company would cover $50,000 in losses, because that is the total amount of insurance coverage on your home. That means you would be missing $4,000 you would have to pay out of pocket.

How is a deductible determined?

There are two types of deductibles you’ll find in homeowners policies: dollar amount and percentage. The first type of deductible is more common. This specifies a dollar amount that you would pay out of pocket, like $1,000.

The second type is a percentage of the total amount of insurance on your policy. This only applies to homeowners policies, not auto coverage. This is based on the percentage of your home’s insured value. For example, your insurer offers a 2% deductible.  Your home is covered for $100,000 in property damage (not including liability). That means you would have a $2,000 deductible.

When searching for or switching your home insurer, make sure you ask how that company determines your deductible and how much you maintain control over your own deductible rate.

Why is there a deductible?

Curious why deductibles even exist? The purpose of a deductible is to share the risk between you and your insurer. It makes sure you have some skin in the game.

If you didn’t have a deductible, you could make claim after claim and not have to pay a cent (although your premiums would likely increase). A deductible ensures you’re only submitting important claims, and you’re not taking unnecessary risks that could damage your home. It also helps prevent insurance fraud, because people are less likely to submit a claim if they have to pay out of pocket as well.

What does a homeowners’ deductible apply to?

Deductibles typically only apply to “hazard coverage.” Hazard coverage involves property damage to your house or personal belongings. This usually also includes “additional structures” under Coverage B, which is part of a standard homeowners property policy. Still, you’ll want to talk to your insurance agent to determine your deductible for Coverages A and B.

Deductibles don’t usually apply to liability coverage, which is when a guest is injured in your home or on your property.  Often your insurer will pay the full amount for any liability claims (up to your coverage limits).

How much should my deductible be?

Most homeowners get stuck on this question. A higher deductible usually means a lower premium (monthly payment), while a lower deductible means a higher premium.

But which deductible-premium ratio is better?

Most insurers set the average minimum homeowners deductible at $1,000, while others put the minimum at $500. Most insurers will allow you to raise the deductible if you’d like.  Some deductibles can be raised to as much as $10,000.

But does that mean you want the minimum deductible amount? Sometimes yes and sometimes no.

How much can you pay out of pocket?

Raising your deductible is the most effective way to lower your monthly premiums on your homeowners insurance. But, if you were to make a claim, you would have to pay that deductible before the insurance company will pay you. That means you need to still be able to afford that deductible.

For example, if you were to have a $5,000 deductible, you would only start getting paid by your insurance company if the damage were more than $5,000. You would be responsible for 5 grand before the insurance company would even consider sending you a check. If you don’t have $5,000 to pay out of pocket for an incident, you don’t want a deductible that high.

Ultimately, you want to balance the short-term cost you could potentially afford in the case of a claim (the deductible) with the long-term cost of your overall policy (the monthly premiums). The more you could pay out of pocket for your deductible, the more you’d save in the long-term.

We generally recommend raising your deductible as much as you can reasonably afford without impacting your wallet. How much could you pay out of pocket today without it seriously impacting your finances?

Fewer claims means a higher deductible.

Some people also raise their deductible because they don’t make a lot of claims anyway. Every time you make a homeowners claim, your premiums will go up. So you likely wouldn’t want to make a claim for low-cost losses anyway. In that case, it may be in your best interest to have a higher deductible so you’re only worried about paying that cost in the case of a major disaster or large claim.

For example, if your deductible is $1,000 and you have a claim for $1,500, you would only get an insurance check for $500 but your future premiums would likely increase drastically. So you might not submit that claim anyway.

If you’re only submitting large claims, you may want to have a higher deductible. Then you’d save more in premiums in the long-term, and you’d only worry about the deductible cost in the case of serious incidents.

Pro-Tip: Create a deductible-specific account.

Want to make sure you would be able to pay your deductible out of pocket? Put the money aside in its own savings account (where it can collect a little bit of interest anyway). This ensures you’re always protected in the case of a disaster.

Also, the amount you save in your deductible account could equate to your deductible. If you used to have $1,000 in the account but now you can set aside $2,000, for example, you can talk to your insurer about raising your deductible and lowering your premiums.

What are disaster deductibles?

Your insurer may have different deductibles for different types of losses. Although wind, hail, and hurricanes are usually covered under your standard homeowners policy, they may each have their own unique deductible. Flood and earthquake deductibles may vary as well.

Hurricane, wind, and hail deductibles can often be higher than the standard homeowners deductible, especially if you live in an area prone to these sorts of disasters. Your insurer might require a percentage-based deductible rather than a fixed dollar amount. In some states, you have the option to opt out of paying the percentage deductible, but you’ll be stuck with a high premium.

Flood and earthquake offer a range of deductibles depending on the state and your insurer. Compare different options and shop around before making your decision (check out our Johnson & Rohan site www.homeownerquote.com).  Call us at (781) 224-0909 to have us shop you with our different companies.

Conclusion

We often get asked, “So, should I have a $1,000 deductible on my homeowners insurance?” And our answer is always the same: maybe.

Your deductible should be the amount you are comfortable paying out of pocket in the case of damage to your home. We typically recommend $1,000 as the minimum to maintain fair premiums, but you may want to increase your short-term deductible to boost your long-term savings if you’re financially secure enough to pay for a larger deductible out of pocket.

 

Massachusetts Auto Insurance Coverage Review: Part 4, Property Damage

Massachusetts Insurance Coverage Review: Property Damage

 

 

 

 

This week’s Massachusetts Auto Insurance Coverage Review is Part 4 of the Massachusetts Auto Policy: Property Damage Coverage.

The Policy contract reads:

Part 4. Damage to Someone Else’s Property

Under this Part, we (the insurance company) will pay damages to someone else whose auto or other property is damaged in an accident. The damages we will pay are the amounts that person is legally entitled to collect for property damage through a court judgment or settlement. We will pay only if you (named insured) or a household member is legally responsible for the accident. We will also pay if someone else using your auto with your consent is legally responsible for the accident. Damages include any applicable sales tax and the costs resulting from the loss of use of the damage property.

We (the insurance company) will not pay for property damage which occurs:

1. While your auto is being used as a public or livery conveyance. This does not apply to the use of your auto in a share-the-expense car pool arrangement or in an expense reimbursement program wither as a volunteer or at work.

2. While any auto is being used by anyone in the course of his or her employment in the business of selling, servicing, repairing or parking autos. This exclusion does not apply to the ownership, maintenance or use of your auto by you or a household member.

3. While anyone is using a vehicle in the course of any business other than the business of selling, servicing, repairing or perking autos. This exclusion does not apply to private passenger autos or to pic-up trucks, vans or similar vehicles not used for the delivery or transportation of goods or materials unless such use is incidental to your business of installing, maintaining, or repairing furnishings or equipment.

4. While a household member, other than your spouse, is using an auto which you or any household member owns or uses regularly unless a premium for this Part is shown for that auto on the Coverage Selections Page.

5. While you or your spouse, if a household member, is using an auto which you or your spouse, if a household member, owns or uses regularly unless a premium for this Part is shown for that auto on the Coverage Selections Page.

6. To an auto or other property owned by you or the legally responsible person. Similarly, we will not pay for damage to an auto or other property, except for a private residence or garage, which you or the legally responsible person rents or has in his or her care.

7. When the property damage is caused by anyone using an auto without the consent of the owner.

The most we will pay for damage resulting from any one accident is shown on the Coverage Selections Page. This is the most we will pay as the result of a single accident no matter how many autos or premiums are shown on the Coverage Selections Page.

If someone covered under this Part is using an auto he or she does not own at the time of the accident, the owner’s auto insurance must pay its limit before we pay. Then, we will pay for any damages not paid by that insurance, up to the policy limit shown on the Coverage Selections page. However, if the claim is covered by us and another auto policy, we will pay only our proportionate share of those damages not paid by the owner’s auto insurance.

Under this Part, we may have ot pay for property damage even if youor the legally responsible person fails to give us prompt notice of the accident. In that case we may be entitled to reimbursement from that person.

This Part is Compulsory. You must have limits of at least $5,000. However, you may want to buy more protection. Higher limits may be purchased if agreed upon by you and by us. However, $5,000 is the most we will pay for property damage caused by an auto covered under this Part which is being operated in any prearranged or organized racing, speed, stunting or demolition contest or activity or in practice or preparation for any such contest or activity.

Part 4, Property Damage, is a compulsory coverage on the MA auto policy, with minimum limits of $5,000.

Most of our clients at Johnson & Rohan Insurance carry Part 4 limits of $100,000 per accident. More and more are electing to buy, $250,000.

Driving next to a BMW car transport truck on Route 128 the other day, I was reminded that $100,000 may not be adequate coverage.

The annual cost to increase Part 4, Property Damage, coverage from $100,000 to $250,000 is about $7.

Conversely, the annual savings, going from $100,000 down to $50,000 of coverage is about -$5.

Call Johnson & Rohan Insurance to review your coverage today!

After Hours Claim Contact Numbers

After Hours Claim Numbers

Johnson & Rohan Insurance

Getting in an auto accident can be a traumatizing experience. In the heat of the moment, it’s difficult to remember what to do.

Some of our suggestions:

  • Stop. Be Courteous. Stay Calm. Your interest will be served best if you are courteous and engage in no controversy at the scene of the accident.
  • If there is significant damage to any of the vehicles or any potential injuries call 9-1-1 immediately.
  • Get the names of the owners and drivers involved. Get license numbers, telephone numbers, and registration numbers.
  • Get the names, addresses, and telephone numbers of witnesses.
  • Express no opinion as to who was at fault. Give no information except for as required by the authorities. Do not sign any statements unless required by authorities.
  • Contact us for prompt claims help.

If after hours, we offer some of our companies’ after hours claim reporting telephone numbers:

Travelers/ Premier:  1-877-425-2466

Vermont Mutual: 1-800-435-0397

Safety Insurance:  1-866-906-5016

MPIUA:  1-800-392-6108

Progressive: 1-800-776-4737

Commerce/MAPFRE: 1-800-922-8276

Amica: 1-800-242-6422

Plymouth Rock/Pilgrim Insurance: 617-951-1620

Hagerty Insurance: 1-800385-0274

Swyfft Insurance:  1-855-479-9338

Johnson & Rohan Insurance Hours of Operation

Johnson & Rohan Insurance Hours of Operation

Although many businesses are closed on Monday, we recognize the long, Columbus Day weekend as an opportunity many of our clients take as a time to buy a new car.

With this in mind, Johnson & Rohan Insurance is open on Saturdays (9:00 – 12:00 pm) and yes, Virginia … we’re open on Columbus Day, October 14th!

Johnson & Rohan Insurance Hours of Operation

Monday – Friday: 9:00 a.m. – 5:00 p.m.
Saturdays: 9:00 a.m. – Noon (Except July & August)

As always, we are available 24 hours a day, 7 days a week by appointment!

Phone: 1-800-491-1414 or 1-781-224-0909
Fax: 1-781-224-0546

Johnson and Rohan Insurance
50 Salem Street
P.O. Box 52
Lynnfield, Massachusetts 01940

MA Auto Excise Tax

Massachusetts Auto Excise Tax

 

 

 

 

The dreaded … MA Auto Excise Tax.

I’ve been told: “you couldn’t get away with that in Texas.” Here in Massachusetts, however, we suffer our annual auto excise tax.

Excise bills are prepared by the Registry of Motor Vehicles according to information on the registration. They are sent to city/town assessors who commit them to local tax collectors for distribution.

The MA auto excise tax rate is $25 per $1,000 of valuation (NADA) subject to the following percentage formula:

In the model year: 90%; second year: 60%; third year: 40%; fourth year: 25%; fifth year & beyond: 10%.

If you have turned in your plates on the vehicle you are getting excise taxed on, or if you have transferred plates and got rid of the vehicle, you may be eligible for abatement. Abatement instructions are located on your excise tax bill.

http://www.mass.gov/dor/local-officials/municipal-finance-law/frequently-asked-questions-motor-vehicle-excise.html#q55

Massachusetts Motor Vehicle Excise Abatement Application:  MA Excise Abatement Form

MA Auto Policy on Vacation

MA Auto Policy on Vacation

Does your MA Auto Policy go on vacation?

Before going on a long, relaxing vacation there are many things to think about including: airline tickets, hotel reservations, and car rentals.

What about your MA auto insurance?

If you have your own MA personal auto insurance policy then your coverage will follow you in the United States, U.S. Territories, Puerto Rico, and Canada.

Your coverage will NOT  follow you if you decide to go to Bermuda, Europe, Mexico or any other fabulous international destination.

The MA Coverage that follows you includes: Part 5, Bodily Injury to Others; Parts 3 & 12, Uninsured and Underinsured Motorist Coverage, your Collision and Comprehensive Coverage (including your deductible, if at fault).

Give us a call to discuss your coverage, or if traveling to Canada, so we can provide you a proof of liability insurance Canada Card.

Johnson & Rohan Insurance Discount Review

Insurance Discount Review

We recommend that every year you submit to “The Johnson & Rohan Insurance Discount Review.”

Chances are, when you insured with Johnson & Rohan Insurance, we were able to save you money.

Most likely, we also improved your coverage.

Our job, as your Massachusetts insurance agent, is to shop your coverage with numerous companies, make coverage recommendations, and help you if you ever have a billing question or claim problem.

We re-rate renewals and suggest coverage improvements, shop for discounts, and recommend insurance programs.

Some of the traditional Massachusetts automobile insurance discounts include:

Age 65 or Older, Passive Restraint, Annual Mileage discounts, Anti-theft, Multi-Car, Driver’s Education

Additional discounts may include:

Account discounts, Excellent driver & excellent driver plus discounts (99 & 98 drivers), Pay in full discounts, Hybrid vehicle discount, Advanced driver training discount, Alumni & professional group discounts, Good student discount (“B” or better), Student away at school discounts

Call or click us for your Massachusetts Auto Insurance Discount Review!

Thank you for insuring with us.

Johnson & Rohan’s Top 5 Massachusetts Public Golf Courses

Top 5 Massachusetts Public Golf Courses

Johnson & Rohan’s Top 5 Massachusetts Public Golf Courses- 2019
  1. Taconic Golf Club- Williamstown, MA (413) 458-3997. Located on edge of the Williams College campus this 1897 Stiles and Van Kleek classic makes the top 100 Public in the United States. Check out the placque on #14 where Jack Nicklaus had a hole in one during the 1956 US Junior.
  2. Pinehills Golf Club- Plymouth, MA (866) 855-4653 Created to rival the country’s most prestigious golf clubs, Pinehills brings world class, daily fee golf to New England. Conveniently located in Plymouth, Massachusetts – just a short drive away from Boston and Cape Cod – Pinehills Golf Club is spectacularly set on over 300 acres of rolling hills punctuated by dramatic, glacially carved kettles and kames. Note: I don’t know what a kame is.
  3. Red Tail Golf Club- Devens, MA (978) 772-3273. Nestled within the property formerly within Fort Devens, this 18 hole championship layout is kept in immaculate condition. Lots of elevation changes, fast greens and you can’t beat the weekend Junior Golfer plan where kids under 17 play free when accompanied by a paying adult.
  4. Farm Neck Golf Club- Oak Bluffs, MA (508) 693-3057. Located on Martha’s Vineyard, this semi-private gem plays to 6800 yards from its back tees. As you play, you will find yourself traversing a striking variation of topography and vegetation — everything from woodlands, to open meadows, to salt marshes, to stunning overlooks and intimate brushes with the water’s edge. Massachusetts’ top island public links.
  5. Granite Links Golf Club- Quincy, MA (617) 689-1900 Perched atop the Quincy quarries with stunning views of Boston, Granite Links has a great reputation for its championship caliber golf, driving range, food, beverage and events. Three strong 9 hole routings offer different tests. Wrap up your day in the beautiful clubhouse with full dining options and great views of the city.

Why You Need a Home Inventory and Keeping it Simple

Why You Need a Home Inventory

How and Why You Need a Home Inventory

Worried you’ll lose track of your stuff if anything should happen to it? A detailed, up-to-date home inventory can help you get organized, and may speed your claims process.

Quick take: How to do a home inventory

A home inventory helps you be as accurate as possible in the event of a personal property loss claim.
● There are numerous ways to conduct a home inventory including video, written, or with pictures or apps.
● Be sure to include all your valuables, from art and jewelry to firearms and collectibles.
● Don’t forget to include items in the basement or attic on your home inventory.
● Keep your home inventory safe. Make digital copies and store a hard copy someplace safe, such as a safe deposit box at a bank or back up to the cloud.

Q: I’m updating my home insurance policy and saw a recommendation to create a “home inventory.” There’s a ton of stuff in my home, so I’m not sure where to start. I’m hoping you can help: What does a home inventory typically include and how do I get started?

A:  After a major incident resulting in loss of property, your stress level can go sky high. In fact, it can be one of the most stressful times in a person’s life. Now, imagine having to recall, in as much detail as possible, every piece of personal property you may have lost. Stress, anxiety and grief can all cloud your memory, making it difficult to be sure you’ve listed every important piece of property on your insurance claim. An accurate and up-to-date home inventory can provide a helpful record of your belongings, and may save you a world of heartache during a difficult time.

How do I do a home inventory?

There are a few ways to keep track of your thorough home inventory.

  • Write it down: To do a written home inventory, you’ll need to walk through your home and make a long, detailed list of your property. For each item, be sure to record the date it was purchased, the serial or model number if applicable, and the item’s value. If you have a receipt, note it on your inventory and keep it on file.
  • Take pictures: To add dimension to your home inventory, take pictures of each item on your list. The picture should focus on the item itself, as well as any important details, such as a close-up of the setting on a piece of jewelry or the artist’s signature on a valuable painting.
  • Shoot video: Another recommendation is to conduct your home inventory on video, because of level of detail you can achieve. It’s easy to do on your own with a smartphone. As you walk through your home recording each item, you can describe details, zoom in on jewelry settings and serial numbers, take video of any appraisals you may have for certain items, and so on. Plus, if you upload it to the cloud, it will be automatically saved with a date and time, which can be important for recordkeeping.
  • There’s an app for that:  Download the Sortly app on your iphone. This highly rated application is available for no charge for up to 100 items or $3.99/month for unlimited items. See sortly.com for more details or find it on the Apple app store.
“What should I include on my home inventory?”

First, I recommend recording every valuable, which could include art, jewelry, firearms, electronics, sports equipment, heirloom pieces such grandfather clocks, china and other collectibles.

For each of the major items, try to include a description, serial number if you have it, date purchased, along with purchase price or estimated or appraised value. If you have receipts, save copies with your inventory. When working with your insurance company on a claim to settle the personal property portion of a loss, any additional details you can provide are helpful.

Also, don’t forget the property in your attic and basement. The most overlooked items left off of a home inventory are usually found in the attic or basement because we tend to put things in boxes and forget about them. When doing an inventory, be sure to label the outside of the box with a list of the contents, and then record an image of those items.

Once you have a home inventory, make sure to keep it updated by adding new purchases to the list, and re-evaluating older items over time.

“What are the benefits of a home inventory?”

Aside from providing a record of your valuable items in case of a claim, a home inventory can be a great exercise to help you more accurately determine your property coverage needs. One thing I’ve noticed in more than 20 years of working on video inventories with customers: people often discover they aren’t comfortable with the amount of personal property coverage they have. Over the years, we accumulate more property than our policies might have covered when we first purchased them. Be sure to go over your home inventory with your agent in order to determine if you have enough coverage for everything that is important to you.
And don’t forget to think about where you store your inventory. If you opt for a written inventory with pictures, scan and save a digital copy or keep a hard copy in a safe deposit box outside of your home. Your home inventory does no good if it’s lost in a fire or other unforeseen event with all your valuables.

Johnson & Rohan Independent Insurance Agent Advantage

We understand that there are lots of choices when it comes to buying your insurance. In order to keep your business, we must provide a Johnson & Rohan Independent Agent Advantage.

Johnson & Rohan Insurance Advantage:

  • We assist you at claim time.
  • We are your advocate.
  • We rate with 7 auto insurance companies. This allows us to find the lowest premiums and best insurance programs.
  • We’re not beholden to any one company; thus, you don’t need to change agents as your insurance and service needs change.
  • We are your personal insurance consultant, working with you as you determine your needs.
  • We offer one-stop shopping for a full range of products including: home, renters, condo, auto, business, life and health insurance.
  • We periodically help you review your coverage to keep up with your changing insurance needs.
  • When billing questions or issues arise, we are here to assist you.
  • We treat you like a person, not just another number.
  • We assist with the Registry of Motor Vehicles.
  • Serving you is important to us, both as a business and as a family.

Thank you for insuring with Johnson & Rohan Insurance.

We appreciate your business.

Johnson & Rohan