Are termites covered on my homeowners insurance?

The formosan termite in New Orleans can cause major damage to your home but is it a covered claim?

 

My house in New Orleans was recently attacked by a swarm of termites.

A few even found their way under my door and were flying around before I went to bed.

Yes one of the first phone calls I made when I moved in was a termite inspection contract.

I know New Orleans residents are under attack every year and there is nothing we can do about it.

Swarming season in New Orleans is April to July.

Termites have been labeled the silent destroyer of homes in our area.

When you discover termite damage, it may be too late.

 

Before you even consider making a homeowners claim,  

you should be able to recognize a few common signs you have termite damage

 

FLOOR DAMAGE

Termites can damage laminate flooring and baseboards.

If you think your floor feels spongy or soft,  take a look underneath.

 

WALL DAMAGE

Cracks or tracks in your sheetrock is a sure sign you have termite damage.

Termites love cellulose found in wood within walls.

 

CEILING DAMAGE

Wooden support beams and rafters in the attic are at risk.

Look for tracks or cracks in your ceiling and take a look in your attic.

 

SLAB OR FOUNDATION

Although your slab is concrete, they can get in between the slab and your wooden floor joists.  

Homes built on piers with a crawlspace are at a greater risk because there is no concrete slab barrier.

 

WINDOW FRAMES

If your windows are sticking or no longer open, 

the termites may have tunneled underneath are eating away at the window frames.

 

ROOF DAMAGE

Broken roof tiles hold moisture and attract termites to the wood decking underneath.  

Replace any damaged or water-soaked roofing tiles.

 

If I discover I have termite damage should I make a New Orleans Homeowners insurance claim?

 

The fundamental principle of covered claims on a homeowners policy is simple.

When in doubt ask yourself one question.

“Was the damage sudden and accidental?”

 

If not, more than likely the claim would be denied.

 

Termite damage is not sudden and accidental.

Termites can destroy a house and cause major damage over an extended period of time.

 

Common Claims not covered on a home insurance policy.

  • Termite Damage
  • Wear and Tear 
  • Maintenance

 

A homeowners insurance policy is not a home warranty policy.

 

What should you do?

 

If you have not already purchased a Termite contract from a local Pest Control company,

you should.

Most contracts with Pest Control companies will come out and treat your house for termites.

If they discover termites, you may be able to get them to repair the damage.

You need to read the contract for the conditions that apply to you.

If you don’t meet certain conditions, it may void the contract.

Most Pest Control companies will give you a free inspection so now is the time to start the process of protecting your house from the termite swarm

and don’t rely on your New Orleans Homeowners policy to respond to a termite damage claim.

Flood insurance in New Orleans

How much is flood insurance in New Orleans is common question

in this article

  • Preferred Flood Insurance rates
  • Can I remove contents coverage on a preferred flood risk policy?
  • What is Excess Flood Insurance?
  • How much is Flood Insurance in an A zone?
  • How much is an elevation certificate?

 

If the property is located in an Preferred Flood Zone X in New Orleans you will get set coverage amounts and pay the same rate 

 

Here are the Preferred Zone Rates 

Building 100,000  Contents 40,000  $399

Building 125,000  Contents 50,000  $419

Building 150,000  Contents 60,000  $446

Building 200,000  Contents 80,000 $487

Building 250,000  Contents 100,000 $516

 

Get your flood insurance quote

GET QUOTE

 

Can I remove contents coverage on a preferred flood risk policy?

No you will get the coverage included and you can’t adjust the coverage limits

 

The National Flood Insurance Program NFIP will only offer a maximum of 250,000 on a residential property and 100,000 of your personal property contents

If it will cost you more to rebuild your property minus the land value than 250,000 you should consider an Excess Flood Insurance policy

 

What is Excess Flood Insurance?

A private insurance company will offer higher limits above the 250,000 flood insurance limit up to the full replacement cost of your policy

Not all properties are eligible for Excess Flood Insurance 

 

How much is Flood Insurance in an A zone?

Flood insurance is an A zone is based on the elevation of your property in reference to the base flood elevation

 

Steps to obtain a flood insurance quote when your property is located in an A Zone

  • Get an Elevation Certificate
  • Email your Elevation Certificate to us so we can obtain the rate
  • Not all flood insurance policies are rated correctly

GET QUOTE

 

This elevation certificate will give you the elevation of your property in reference to the base flood elevation

If your home is above the base flood elevation you will pay less for flood insurance

If your home is below the base flood elevation you will pay more

You can not obtain the exact rate for flood insurance in an A zone unless you purchase the elevation certificate

 

How much is an elevation certificate?

You can call around and find a local surveyor but I believe no less than $250 might be the going the rate

 

If you are ready to get a Flood Insurance quote

GET QUOTE

6 things to do before you make an offer on a new house

Before you buy a house do these 6 things

  • Know your credit score
  • Get pre-approved not pre-qualified from a local lender
  • Find a realtor that knows the neighborhood
  • Choose your own home inspector
  • Understand the most important renovations
  • Get the lowest rate on homeowners insurance

UNDERSTANDING YOUR CREDIT SCORE BEFORE YOU MAKE AN OFFER

If you have credit issues or a low credit score there is no need to dream of owning a home until you get your score up

A higher score will allow you to afford more house and get a lower rate on home insurance which will result in a lower monthly mortgage payment

myFICO has a guide to help raise your credit score click here

Thousands of dollars can be saved over the life of loan even with a few points increase on your credit score

It all begins with knowing your credit score

 

GET PRE-APPROVED FROM A LOCAL LENDER

The conversation with a local lender is at no cost to you

The local lender is the guide to help you make a decision if you can buy a home

Most potential homebuyers like to skip this step and talk to a real estate agent

Yes a real estate agent is happy to speak with potential homebuyers but in reality you can’t buy a home unless you know how much home you can afford so any real estate agent that is serious about helping you buy a home will tell you “talk to a local lender”

Local lenders will verify employment, income and your credit score

Local lenders work with your real estate agent to develop the steps needed to get you to the closing table

If you are not ready the local lender will usually have a game plan to get you ready to buy

If you are interested in talking with a local lender here is a recommended local lender with PrimeLending Jason Pippenger

 

FIND A LOCAL REAL ESTATE PROFESSIONAL

Remember that a real estate agent works for free when you are buying a home because the seller pays your real estate agent’s commission

You get a professional real estate advisor to help you through all phases of the homebuying process at no cost to you

You want to find a real estate agent that understands the neighborhood you are interested in

There are many guides to help find a local realtor but realtor.com has an agent finder site that will allow you to input your interested zip code and it will list real estate agents

You can research by homes sold and homes listed

Local lenders work closely with the top real estate agents in an area so asking your local lender is a good idea

 

CHOOSE YOUR OWN HOME INSPECTION COMPANY

Real estate agents are asked daily from numerous other companies basically begging for referrals

You want to find an independent home inspection company that is not afraid to tell you what is wrong with the house

Would you guess that the majority of homebuyers never read the home inspection report

Why?

Because it is a report of everything that is wrong with house

One homebuyer I was speaking with referred to the home inspection report as the “deal killer”

Another homebuyer bought a house with termite damage because she never read the inspection report and after the closing the home insurance company canceled the policy because termite damage is not covered on a home insurance policy

A local independent home inspection company is Spotlight Home Inspection

 

UNDERSTAND THE MOST IMPORTANT RENOVATIONS

Before you buy a house you need to know the exact year of the update or replacement to the

  • Roof
  • Plumbing
  • Electrical
  • Heating A/C (HVAC)

These are all major discounts on your homeowners insurance

The more recent the replacement of the above items the less you will pay annually for home insurance which will result in a lower monthly mortgage payment

 

FIND THE LOWEST RATE ON HOMEOWNERS INSURANCE

Homeowners insurance rates vary by state, zip code and in some cases…by neighborhood

A homebuyer in Hammond could pay $1,000 less for home insurance on the exact same house in New Orleans

Factors that affect the price you pay for homeowners insurance including, but not, limited to

  • Year built
  • Age of home
  • Age of roof
  • Age of plumbing repair/replace
  • Age of a/c heating (hvac) replacement
  • Circuit breakers update
  • Age of homebuyer
  • Credit Score or Insurance Score
  • Shape of Roof (hip shape is better)
  • Brick or Frame siding

 

If you are ready to buy a new home and need to know the lowest rates on home insurance click on the button below

GET QUOTE

Tips on buying commercial property insurance

Tips on buying Commercial Property Insurance in Louisiana

Some tips for getting commercial property insurance include:

  • How much coverage do you need?
  • Don’t under insure or over insurance the property
  • How to determine the replacement cost of the building
  • Get a commercial insurance package proposal
  • Who buys the commercial policy..tenant or building owner?

GET QUOTE

How much coverage do you need for your commercial property?

Most building owners try to lower their insurance costs by lowering the insurance value of the building

This is a mistake

In a commercial property insurance policy the insurance company will have a coinsurance penalty clause usually 80%, 90% or 100%

If the policy has an 80% coinsurance penalty you must insure the building at least 80% of the replacement cost of the building (The replacement cost is the cost of you to hire a contractor to rebuild your property minus the land value)

If not your claim check will be reduced by the % you underinsured the commercial property

example)  You own a building with 2,000 square feet and the cost to rebuild is 220,000 determined by the insurance company replacement cost estimator

Your insurance policy on the commercial building is only 154,000

The building is damaged by fire and the estimate is $55,000 to repair

80% of 220,000 is $176,000 and that is the lowest insured value you can have on your policy

But you have the building insurance value at 70% or $154,000

To determine how much to pay on the claim, the insurer divides the amount of insurance you purchased ($154,000) by the amount you should have purchased (80% of $220,000 or $176,000)

The result is (154,000 divided by 176,000 = .875)

The amount the insurance company would pay on the claim is (.875 x the amount of the estimate (55,000)

The claim check would be $48,125 instead of the total estimate of $55,000

You would lose $6,875 off of the claim check to rebuild your commercial property

Using .875 on larger losses can really add up

55,000 claim you get $48,125 ($6,875 loss)

110,000 claim you get $96,250 ($13,750 loss)

GET QUOTE

Don’t under insure or over insure the property

It is important that you choose the correct coinsurance % value and determine the replacement cost of your building

The insurance company will only pay the replacement cost of the building (the cost to you to hire a contractor to rebuild)

If it cost $250,000 to rebuild your building and you have a policy for $400,000?

you are not going to get a check for $400,000

If it only cost $250,000 to rebuild you are only going to get $250,000 unless you can prove it will cost $400,000

How to determine the replacement cost of the building?

Get an estimate from a commercial builder or contractor

Ask for the copy of the insurance company’s replacement cost estimator

*Here is a free online commercial building estimator click here

*its just a guide or estimate and should not be used as exact replacement costs and cost of building materials fluctuates

Get a commercial insurance package proposal

Often commercial property insurance policies can be through surplus lines insurers and you each coverage you need has to be added to the policy if not you don’t have the coverage

The most common mistake we see is a commercial property policy will have building coverage but not include loss of rental income

You need to purchase a business owner policy (BOP) package policy for your commercial property

This policy includes over 30 additional coverage options such as

  • Loss of Rental Income
  • Equipment breakdown
  • Ordinance or Law including demolition costs
  • Liability up to 10,000,000 

Insurance companies in Louisiana offer a complete package business owner policy to protect your commercial building

Most common question is who buys the commercial property insurance policy in Louisiana?

A very common practice for building owners is a triple net lease

You can get your tenant to pay for the commercial property policy but you can’t get them to buy the commercial policy

You can’t purchase an insurance policy if you don’t own the building

As the owner you buy the commercial property insurance policy and you can invoice your tenant monthly for the insurance costs

GET QUOTE

3 insurance hacks to use now

Here are 3 Insurance hacks you can use now for car, homeowners and business insurance

Insurance companies have many ways and data points they use to generate a rate for you

I put together 3 things you can do now to lower your rate on car and homeowners insurance and if you are a business owner or have a friend, neighbor or family member that owns a business

 

CAR INSURANCE

One rating factor on car insurance is how many miles do you drive

Most insurance companies provide a discount for less than 12,000 miles

If your policy is rated on over 12,000 annual miles you can ask your agent to change the policy to less than 12,000 miles and see if it generates a refund

The rate savings may be minimal so here is another way to greater savings

 

SAVE UP TO 30%

Every company has a drive tracking program  

You get a discount to try up to 5% and you get an opportunity to save an additional 30% off your current rate

How does it work?

Most insurance companies now offer an app that will track the movement of your vehicle or you can get a plug in device

What do they track?

  • Acceleration from a complete stop
  • Hard braking
  • Driving after 12 am
  • Miles per day

That’s it

No an insurance company can’t track your speed because they don’t know if you are on an interstate or blowing through a school zone

No they don’t care where you are going

Tracking your daily routine has no underwriting value to an insurance company

Ask your agent or insurance company if they offer a telematics program and each insurance company gives the program a name

Progressive Snapshot

Safeco Right Track

National General SmartDrive

Liberty Mutual Right Track

State Farm Drive Safe and Save

Allstate Drivewise

USAA SafePilot

Geico DriveEasy

 

HOMEOWNERS INSURANCE

You are not locked into a homeowners insurance policy

You can get a re-rate at any time from your current agent

If you have not checked your home insurance in 3-5 years it may be time to request a rate review

Most insurance agents are willing to accommodate you

 

INSURANCE IN ESCROW

I like to call this a forced escrow refund and here is what you can do

Your escrow is based on the cost of insurance for homeowners and flood and your property tax bill

Each year the lender can do an escrow analysis to determine if you have enough or you have too much and they will issue a refund

The cost of insurance going up can cause an escrow shortage

At any time you can get your current homeowners insurance rate reviewed by an insurance agent

If rates have gone down since you purchased your house or your homeowners insurance you can purchase a new policy at a lower rate

The insurance agent would cancel your current home insurance policy that would generate a refund back to you not the mortgage company

The lender would receive an invoice for the new homeowners insurance policy at a lower rate causing a forced escrow re-evaluation

which would result in a lower monthly mortgage payment

This is fastest way to lower your monthly mortgage if you need relief now

 

BUSINESS INSURANCE

You need to understand that business insurance policies are rated on estimated annual payroll or estimated annual gross sales

If your business payroll and sales are greatly reduced here is what you can do

Ask your current agent or insurance company to change the policy to your lower estimated payroll or gross sales

This should lower your monthly bill

Not all insurance companies are willing to do this for you

If they refuse you can get another quote from an insurance company using the new adjusted figures and this should produce a lower rate

 

Most common rating factors on business policies

General Liability or Business Owners policy will use estimated gross sales

Workers Compensation will use estimated payroll

Don’t cancel your policy but consider a reduction in your estimated gross sales and payroll before you consider a cancel request

Most insurance companies will not accept you with no prior insurance or surcharge a rate for not having an active policy

 

Hope this helps during this time of need and if you need to reach out to me with any questions 504.348.3131

Tim D’Angelo owner of FM Agency Group

 

Other Related articles during this time

Are your covered under your car insurance policy if you deliver food or rideshare?

Can you get loss of business income due to a virus?

Car insurance and delivery coverage

Does your Car insurance cover you if you decide to work in food delivery?

With so many of you, your friends, family or neighbors being sent home with or without pay more than likely you may know someone that is thinking about working for a food delivery business

There was a time when we only had pizza delivery but now you can get items delivered from national and local stores such as CVS, Langenstein’s, Office Depot, Petco, Rouses, Target, Winn Dixie and others by using an app

and the food delivery companies are now hiring such as Instacart, Shipt and Waitr

CVS just released an article of hiring 50,000 workers 

 

Before you sign up and start working you need to know do you even have coverage?

Your personal car insurance policy will exclude food delivery, business use or any type of ride sharing

Get into an accident delivering food for a company “business use” and it is possible you are paying all claims out of pocket unless you purchase the endorsement or add on coverage for your personal auto insurance policy

You need to purchase a Rideshare Insurance Endorsement 

 

What is Rideshare coverage?

Two types of business use…Rideshare or Delivery

VEHICLE USED FOR RIDESHARE
The transportation (for compensation) of goods or people through Uber, Lyft or other drive-for-hire services

 

TIP: If the business uses an app and does not have a physical location this is the endorsement you need

 

VEHICLE USED FOR DELIVERY

The pick-up or delivery of goods (newspapers, pizza, other food/items, etc.), or the transportation of people (limousine, taxi, etc.)

TIP: If you work for a company that does not use an app (uber, lyft, instacart, waitr) and they have a physical location in your city

 

RIDESHARE ENDORSEMENT vs COMMERCIAL AUTO POLICY

An example here is the local poboy restaurant now wants to offer lunch delivery and they send the employee out in their own car to make a delivery

The restaurant owner would need hired and non owned auto insurance to protect their business from an auto insurance claim and the employee driver would need a commercial auto insurance policy as the add on coverage on a personal auto policy would provide no coverage

 

Here are a few companies that offer the add on coverage to your personal auto policy

Allstate

Geico

Progressive

State Farm

These companies can offer an add on endorsement to your personal auto policy which can range from 5%-25% a month increase

 

loss of business income due to virus

Does your insurance policy provide loss of business income due to the coronavirus?

At this time you can not buy insurance protection for the threat of a virus but does your current policy give you coverage?

I had a recent call from a restaurant owner asking if customers no longer go out to dinner due to the spread of the coronavirus would he have any loss of business income to help sustain his business

The business owners policy (BOP) like any insurance policy has policy exclusions

The one event that triggers loss of business income is the property must sustain property damage

A virus does not cause property damage

The first exclusion is the CP 01 40 07 06 Exclusion of loss due to virus or bacteria

click here to read the policy exclusion form BP 06 01 01 07

What about civil authority prohibited access to your business?

Once again this coverage was intended to give you coverage if you could no longer gain access to your property due to damage to another property sustaining damage

an example is a building fire up the street and the entire block is closed for days

business income form CP00300402

What can you do now?

If the virus affects your community and people are advised to stay inside you can make a claim under your business owners policy to let the insurance company investigate the claim and more than likely issue a denial letter

Keep your denial letter on file in case the government provides small business assistance as a result of the virus

They will probably require a denial letter from your insurance company to release funds

Hopefully it will not come to this but small business owners are going to be affected and at this time your insurance policy more than likely is not going to provide loss of business income due to this virus outbreak

Homeowners Insurance coverage options you need

When I’m talking to a New Orleans homeowners insurance resident and I’m reviewing their current coverage on their policy I often see missing coverage options that are important

A homeowners insurance policy does not cover everything but the insurance company does offer add on options you many not know about

Most insurance companies writing in Louisiana will use an HO-3 policy form but this policy does include all the coverage you need

You must add on or endorse the policy to get the coverage to protect your home and your bank account

GET QUOTE 

Here is a review of the most common endorsements available on a New Orleans homeowners insurance policy

 

Animal Liability Endorsement

Equipment Breakdown Enhancement

Personal Injury

Water Back up and Sump Discharge

Personal Property Replacement Cost

Service Line Endorsement

Refrigerated property

Mandatory Evacuation

The cost of a homeowners insurance policy with the endorsements above could be the difference of $100 additional per year

 

ANIMAL LIABILITY 

Even if you don’t have a dog at this time, you should consider adding this endorsement.

The usual cost is $50 a year.

This endorsement will add usually a sublimit of coverage starting at 25,000 towards a defense of an alleged dog bite claim on your property.

Most dog owners believe “my dog would never bite anyone”.

Just remember this is not dog bite liability only

Your dog could get excited and jump on someone and cause an injury too

 

GOLF CART ENDORSEMENT

Obviously if you don’t own one or intend to own one this may be an easy decision but just remember if you do buy one, check with your agent to make sure its covered.

Some policies offer this endorsement but had some requirements in order to pay in claims

“The golf cart must be used in a gated community”

or

“The golf cart is covered if used in a neighborhood or community with a golf course”

Most homeowners policies exclude coverage because you can buy a stand alone Golf Cart policy that will cover liability and property coverage and the policy usually begins at $150 for year

Agent Tim Tip: Don’t depend on your homeowners policy to give you the coverage you need if you are driving a Golf Cart around your neighborhood

 

ORDINANCE OR LAW COVERAGE

Usually a percentage 10%, 25% or 30%, this endorsement will cover any improvements to the repairs to your house after a claim because of a building code requirement that was not in force when the house was built.

ex) If your house was built in 1985 and you have a claim today, its safe to say you would have to rebuild your house to the new building code enforcement.

When the house was built were hurricane straps required on the roof?

Are they required today?

If so, the estimate would not include the cost of installing roof straps because your house did not have any but the new code in Jefferson Parish or Orleans Parish may require you to do so.

Check with a local contractor and ask if the building codes in your Parish have changed since your house was built.

Most New Orleans homeowners insurance policies include a % such as 10% of the insured dwelling limit to be used for this type of issue in the HO-3 Special Form policy.

 

EQUIPMENT BREAKDOWN

Most often this is the endorsement that gives coverage for the complete breakdown of your a/c unit or appliances but will exclude for wear and tear

If you have a home warranty policy you would be covered for wear and tear

The mechanical breakdown of the equipment in your house is usually subject to a special deductible.

Most often $100-$500 and there is a sublimit of damages

Could be a limit of around $50,000 of damage

The cost of this endorsement could be as low as $20

 

PERSONAL INJURY

This coverage can add protection against any alleged Libel or Slander claims.

This coverage is needed more today with the popularity of social media.

People say or type the craziest things on social media these days.

Do you know what your child is typing on Facebook?

If a claim is brought against you for something that was said (slander) or written (libel) about another person your personal injury coverage would apply

Without this endorsement or coverage you would be left paying for your claim defense out of your own pocket

Some home policies have a sublimit such as $25,000, so check your policy.

Most insurance companies like UPC insurance company will add personal injury as the same limit as your current liability limit for as low as $50

to see a list of Insurance Companies writing in New Orleans click here

WATER BACKUP COVERAGE

This endorsement is coverage for direct physical loss, not caused by negligence of any “insured” to property covered under Section I of the policy by water or water-borne material which

Backs up through sewers or drains on the “residence premises”

Overflows or is discharged from a sump, sump pump or related equipment, even if such overflow or discharge results from mechanical breakdown

Coverage does not apply to direct physical loss of the sump pump or related equipment which is caused by mechanical breakdown

The claim may be subject to a special deductible starting at $250 on some home insurance policies

What about an accidental water claim such as (caused by negligence)

  • overflow of a toilet
  • overflow of a bathtub
  • frozen busted pipe resulting in water damage

These type of accidental claims are covered under the home insurance policy as water damage and are not subject to a Water Back Up Endorsement because the water issue did not originate through sewers, drains or discharges from sump, sump pumps and related equipment.

Common claim is the sewer line under the slab will collapse and water can no longer leave your home and it backs up into your bathroom or kitchen

The resulting water damage would be covered by the water backup endorsement and amount of damage could be limited to $5,000 to $25,000

Check your New Orleans homeowners insurance policy for the limit 

SERVICE LINE ENDORSEMENT

This coverage will actually replace the sewer line plumbing under your slab to the street

Without this coverage you would be left paying for the replacement of the sewer line to the plumber

Most customers believe the sewer line running from the street to under their house is the responsibility of the parish but it’s not 

This endorsement can provide up to $10,000 of coverage and it covers tree root intrusions and corrosion which would normally be excluded under a homeowners insurance policy

PERSONAL PROPERTY REPLACEMENT COST

There are two options offered to you on your contents or personal property.

  • Replacement Cost
  • Actual Cash Value

Replacement Cost allows you to replace the damaged item of like kind or quality.

So if you had a 5 year old 46” Samsung TV,

you could go out and purchase another 46” Samsung TV.

Actual Cash Value is Replacement Cost minus Depreciation

So if you had a 5 year old 46” Samsung TV,

the claims adjuster would deduct 5 years of depreciation from the replacement cost of a 46” Samsung TV.

Ex) 5 years of depreciation at $50/year = $250 deducted or depreciated

Replacement Cost is $500 for a new tv minus $250 depreciation,

You would receive a check for $250.

REFRIGERATED PROPERTY

Not all insurance companies offer this coverage but if there is loss of power and you lose all your contents in your refrigerator or freezer this endorsement would pay for the replacement

The limit can go up to $500 and the cost can be as low as $10

MANDATORY EVACUATION

This coverage will kick in if the parish orders a mandatory hurricane evacuation and you must leave New Orleans

You would be reimbursed for your hotel room up to the limit of either $1,000 or $1,500

Damage to your home does not have to apply in order to receive reimbursement if you purchased this coverage

 

So what’s this all about?

New Orleans Homeowners Insurance policies do not cover everything.

If they did you would receive one piece of paper from the insurance company when you purchased a new policy and that would be a receipt.

Instead you receive a thick policy full of exclusions and a description of what is not covered.

It is important you do an annual review of your homeowners insurance policy and coverage options

When you purchase your policy it is possible that some of the coverage options listed above were not offered but now they are are

Call your agent and ask or give us a call and we can do a price protection review 504.348.3131 or complete our quick form below

Service Line coverage: the coverage you need but probably don’t have

Does your New Orleans homeowners insurance policy have service line coverage?

The answer is probably not

Most homeowners don't know they are responsible for the sewer line that runs from the street under their property and into their house

In New Orleans over time these sewer lines will collapse due to corrosion, tree root intrusion or land subsidence (settling or sinking)

Common Sewer Line Problems

  • Broken or cracked sewer line
  • Pipe bursting
  • Tree root intrusion
  • Collapsed sewer line
  • Main sewer line clogged
  • Drain repair needed

When this happens the water can't run into or from your house and the water backs up into your home

Now your policy should have water backup coverage to cover the damage inside your home from the water and most policies do but its the Service Line endorsement most homeowners insurance policies don't have

This endorsement will replace the sewer line plumbing pipe

Without the endorsement you would be responsible for paying the plumber to excavate your front yard and replace the pipe and the homeowners insurance company would pay for all the water damage inside your home

Now you can buy the coverage you need to pay for replacement of the pipe itself which can cost as much as $3500 to start

What is the cost of sewer line repair?

"The average cost to repair a main sewer line is $3,818 with most homeowners spending between $2,250 and $5,750. A full sewer line replacement ranges from $8,000 to $30,000, or $50 to $200 per linear foot, depending on the length and width of sewer pipe needed"..read full article here


How much is the Service Line Endorsement?

Most New Orleans homeowners insurance companies charge $25 to add this coverage


How much coverage does this endorsement provide?

Most companies will provide up to $10,000

Why this endorsement is important?

The standard exclusions in a homeowners insurance policy will not cover wear and tear or corrosion because the damage was not a result of a sudden and accidental event

You would get replacement coverage for corrosion, wear and tear, tree root intrusion, collapse

You also get excavation costs included too

Here is a sample pdf of the insurance policy language  


Which insurance companies in New Orleans offer the service line endorsement?

Gulf States Insurance

Capitol Preferred CPIC

Southern Fidelity SFIC

Centauri National

UPC

What's this all about?

Check your current homeowners insurance policy and if this coverage is not listed on your policy declarations page under endorsements you don't have this coverage

It is an endorsement and must be purchased or added on the policy as a line item

If you would like a quote from one of the companies listed above that offers this inexpensive but very important coverage just complete the quick form below

UPC insurance company is a top pick in 2020 

They are the 18th ranked insurance company writing homeowners insurance in the United States.  

to learn more about UPC click here

REQUEST A HOME INSURANCE QUOTE BELOW FROM

FM AGENCY GROUP

FM Agency Group

Helping Louisiana with insurance since 2001. Homeowners, car, rental property, flood and personal umbrella. Get the protection you need for the value you want. 504.348.3131

Agent Tim

To read more articles like this one get the insurance advice you need to make the decision to protect what you have in the event of a financially devastating event.  View more articles here

how strong is your homeowners insurance company

How strong is your homeowners insurance company?

You need to know if another hurricane is going to hit New Orleans will your insurance company still be in business?

No one really knows the answer to that question but before we review the ratings from Demotech you need to first understand insurance companies buy insurance too

Its called Reinsurance

Most insurance companies can not pay all claims out of their bank account

They purchase insurance just like us and have a deductible

Their deductible is the responsibility to pay all claims up to a limit

The limit could be 1,000,000

Once the losses exceed their deductible (1,000,000) they make a claim with their reinsurance company and the reinsurance company pays the remaining claims

The Louisiana Department of Insurance will review an application for a new homeowners insurance company and they have a reinsurance requirement so they monitor the financial stability of the insurance companies that are admitted to write new policies in Louisiana

Admitted Insurance Companies

You want to make sure you are with an admitted insurance company in Louisiana because all admitted insurance companies are protected up to 500,000 per house from LIGA Louisiana Insurance Guaranty Association

They protect you from insolvency of an admitted insurance company

A surplus lines insurance company will offer no protection from insolvency (out of business)


How can you check to see the financial stability of your homeowners insurance company?

You can use Demotech, a financial stability rating agency of insurance companies

Demotech will rate regional and specialty insurance companies

Here are the 2019 Demotech chart of net admitted assets from 14 insurance companies writing new homeowners insurance policies in New Orleans

If you have a New Orleans homeowners insurance policy this is a good indication of the financial size of your insurance company

Please note some of the companies just started writing in New Orleans so they may not have the amount of net admitted assets of some of the others but does not indicate in any way they are not a good choice for homeowners insurance


insurance company

net admitted assets

$698,629,722

SOUTHERN FIDELITY INS CO

$213,744,911

CAPITOL PREFERRED INS CO

$176,972,661

LIGHTHOUSE 

$143,154,509

SAFEPOINT

$134,536,478

CENTAURI

$122,884,052

MAISON

$113,543,899

GULFSTREAM

$104,805,577

SERVICE INS CO

$75,778,073

ALLIED TRUST

$62,1839,257

BANKERS SPECIALTY

$50,656,203

ACCESS HOME INS

$36,062,669

AMERICAS

$17,449,942

GULF STATES 

$11,851,061

UPC insurance company is top of the list for 2019 

They are the 18th ranked insurance company writing homeowners insurance in the United States.  

to learn more about UPC click here

REQUEST A HOME INSURANCE QUOTE BELOW FROM

FM AGENCY GROUP

The ratings of the companies listed above are A rated Exceptional from Demotech and each year they are reaffirmed

The website to do your own research is here DEMOTECH 

FM Agency Group

Helping Louisiana with insurance since 2001. Homeowners, car, rental property, flood and personal umbrella. Get the protection you need for the value you want. 504.348.3131

Agent Tim

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