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3/22/2024 0 Comments

Decoding Higher Rates: A Guide for Seasonal and Investment Properties

A question that our agency heard today, "Why is the rate for this dwelling higher than the home I currently live in which is worth much more.
Seasonal and rental property insurance rates can be influenced by several factors. Let’s explore some of the key reasons why these rates tend to be higher:

Location. The geographical area where your property is situated plays a significant role. Here are some location-related factors:
1. Distance from fire department and water hydrant are rating factors.
2. Urban vs Rural- Urban areas may have higher crime rates, including theft and vandalism, leading to more insurance claims. Additionally, large cities tend to have higher real estate values, which impact construction costs for repairs.
3. Regional Weather Patterns- Areas with specific weather patterns may experience more significant claims.
Rebuild or Replacement Cost. Insurance providers consider the rebuild or replacement cost of your property. Replacement cost refers to the amount needed to rebuild the same house from scratch, while market value includes other factors like land value and neighborhood appeal. It is important to have an insurance professional review the coverage to avoid overestimating or underestimating as this can effect immediate cost or have negative consequences in the event of a future claim.
Age and Condition of the Property.
1. Older Properties: Older homes may have features that don’t meet modern building standards, leading to higher insurance rates. Updating these features can help reduce premiums as discounts may be available for updated systems or a replaced roof.
2. Vacation and Secondary Homes: The insurance cost for a secondary home is often higher since the owner is not always living there. Having someone occupy the home helps to protect it against risks and deters burglars.
Risk Exposure. Properties in areas with rapid economic growth, vacation spots, or retirement destinations face unique challenges. Secondary homes and investment dwellings may take longer before discovery of a claim so the cost paid out will be higher.
Bundle vs Package. A primary home will sometimes have more discounts available and is traditionally a more bundled policy. It has been designed to bundle the coverages that a majority of consumers would want resulting in a lower price overall since those coverages are always written. A seasonal or investment dwelling is more of a package policy because there are many more variables as to what is needed so a larger amount of coverage or endorsements are individually selected. Since less are chosen the individual cost is higher.

Remember that insurance rates are influenced by a combination of these factors, and each provider may use different criteria to calculate premiums. If you have specific concerns about your seasonal or rental property insurance, consider discussing them with your insurance agent.

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3/7/2024 0 Comments

Rental Car Insurance: Friend or Foe? What You Need to Know ?

Planning to Rent a Vehicle for Personal Use...Do you need to purchase their insurance, or will your insurance extend to the rental vehicle?

This depends on several factors.

What type of vehicle are you renting. ? A personal passenger vehicle like a car or minivan, or a box truck moving vehicle? A personal vehicle in most cases would be covered if it is a temporary replacement of your covered vehicle. Typical insurance policies would cover a rented personal passenger type vehicle for the same coverage that has been purchased on your personal policy. Therefore, you would have the same liability limit and physical damage coverage deductibles on the rental vehicle that exists on your personal vehicle. If you only carry liability coverage on your policy your policy probably will not cover physical damage to a rental car as you have not purchased that coverage on your policy.

However, a moving truck (box truck) is a commercial vehicle and is typically excluded from coverage on a personal auto policy. Some large pickup trucks might be excluded as well depending on their weight and how the policy is worded.

Do you carry physical damage coverage on your personal vehicle or only liability coverage?

If you only carry liability coverage on your policy, it most likely will not cover physical damage to a rental car, as you have not purchased that coverage on your policy.

Another factor to consider when determining whether to purchase the rental companies insurance is your deductible.

If you purchase the rental companies insurance you most likely will not have to pay a deductible in the event of a loss. If you need to set up the claim on your insurance any damage to the rental vehicle would have the same deductible as carried on your policy and you would be responsible for paying it. You also have to recognize that a claim on your policy could make more of an impact on your future rates than if the rental company pays the claim. Although, if you are at fault your insurance rates will reflect any violations or accidents that appear on your Motor Vehicle Record.

Where are you driving the rental car?

If you are renting a vehicle and driving in a location that is not covered by your personal auto policy the coverage would not extend. If you are planning to drive anywhere out of the United States it is essential that you speak with your insurance agent to find out if there is coverage.

What insurance company is your insurance with?

Although most insurance policies are developed from similar forms, each insurance company has written their policy independently. A coverage that is included with one company may not be given with the policy from another insurance carrier.

The best bet anytime you are concerned about coverage is to consult your agent. This is another example of how a local agent can be of great value to the policyholder. They can explain whether your policy will or will not cover the rented vehicle.

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Decoding Higher Rates: A Guide for Seasonal and Investment Properties

Rental Car Insurance: Friend or Foe? What You Need to Know ?

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