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

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

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

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 to determine the insured value on a homeowners insurance policy

If you own a home in New Orleans not many homeowners know how much insurance they need on their homeowners insurance policy

There really are four different values to use on your policy and three of them are wrong

There is

  • Market Value
  • Loan Value
  • Appraisal Value
  • Replacement Cost

Market Value is the value of your home including land value and it is usually the listing price if you were to put your home on the market

This value will fluctuate with the current interest rate and recent home sales in your neighborhood

Loan Value is the amount you owe on your mortgage

Mortgage companies and banks don’t understand the insured value

They only want the coverage for the amount of the loan and don’t understand you can’t insure land because… well after a fire, hurricane or tornado…the land is still there

Appraisal value is completed by an appraiser to determine market value of properties just like yours

All three of these values should not be used to determine the insured value limit on your New Orleans homeowners insurance policy

The correct value is called Replacement Cost or Insured Value

The Replacement Cost is the amount for you to hire a contractor to rebuild your home minus the value of the land

It is usually determined by a cost per square foot figure

Some brick homes could be replaced for $125 – $150 price per square foot

If you have a 2500 square foot home and a contractor says new home construction costs are $140/sq ft your 2500 square foot home would cost $350,000 to rebuild

 

Some Common questions we get about the insured value on a New Orleans homeowners insurance policy limit

 

1. Why do I have to insure my house for that much? My home is worth much less.

 

It has nothing to do with the value of your home in the current real estate market

You can find a 1100 square foot home in the Irish Channel of New Orleans sell for $350,000 and you can find the same 1100 square foot home in another neighborhood in Kenner La 70065 sell for $150,000

The insured value is based off the Replacement Cost (cost to hire a contractor minus land value)

 

2. I only owe 75,000 on my mortgage. Can I just write a policy for 75,000?

 

No.  The replacement cost of your home has nothing to do with your loan balance. 

It is the cost to rebuild your home based on the total square feet of your house

And you can’t under insure a house because of the co-insurance penalty.

If you have a 3000 square foot two story home and you only want to write a policy for 150,000 it could be determined that you are under-insuring the home at 50%

300,000 replacement cost and you only want 150,000

that is 50% of the replacement cost so if there is a claim you would be penalized 50% deduction off the claim check

example) House burns down and you want a check for 150,000 but since you under-insured the property by 50% the insurance company would deduct 50% off of 150,000 and give you a check for $75,000

You would not be able to rebuild a 3000 square foot home for $75,000

If you would like a professional review of your insured value on your New Orleans homeowners policy to make sure you are not under-insured or over-insured you can give me a call Tim D’Angelo at 504.348.3131 or complete our quick for below

2020 List of Homeowners Insurance Companies writing in New Orleans La

The list of homeowners insurance companies writing in New Orleans La is still growing each year

There was a time after Hurricane Katrina when maybe one insurance company was writing new homeowners insurance policies

but now the list is still growing…one good hurricane and this will change the trend

 

Insurance companies make money on homeowners insurance in New Orleans when the wind doesn’t blow

 

The current environment in New Orleans is still profitable to insurance companies from other states, mostly Florida, to enter the New Orleans Homeowners insurance market

Some insurance companies have unsustainable low rates in an attempt to grow their policy count 

This is a gamble that could pay off for you because if you get a policy that is below market rate and the wind doesn’t blow and the insurance company maintains their low rates for a few years….your savings could add up in the thousands $$$

If you go with an insurance company for an extremely low rate on New Orleans homeowners insurance and a hurricane strikes after year one you could be dropped or sustain a massive rate increase and be sent to the Louisiana Citizens Fair Plan because no other insurance companies are writing after a major weather event

 

Request a New Orleans Home Insurance Quote Proposal

GET QUOTE

 

Here is an example from the Louisiana Department of Insurance website 

2020 List of New Orleans Homeowners Insurance companies writing new policies in Louisiana

New $400K Home
Coverage Level: Dwelling is less than 1-year-old with brick veneer construction, 2800 square feet, $400,000 building coverage, $200,000 contents coverage, 2% hurricane deductible/$500 all other peril deductible, clean claims history, 710 credit score, no wind mitigation features beyond the Louisiana building code requirements for homes built after January 2007, and no multiline discount.

Access Home Ins Co (Preferred) $5472 

Access Home Ins Co (Standard) $6870 

Allied Trust Ins Co $2043

Allstate Indemnity Co $8175 

Allstate Ins Co $8941 

Allstate Vehicle and Property Ins Co $4741 

American National General Ins Co $9318 

Americas Ins Co $3728 

Anchor Specialty Ins Co $4211 

Armed Forces Ins Exchange $2364 

ASI Lloyds $2464 

Bankers Specialty Ins Co $3,479

Bankers Specialty Ins Co $4712 

Centauri National Ins Co (Elite-A program) $2716 

Centauri National Ins Co (Elite-C program) $2687

Centauri National Ins Co (Preferred program) $4377 

Centauri Specialty Ins Co $4377 

Encompass Indemnity Co $9256 

Encompass Ins Co of America $5230 

Encompass Property and Casualty Co $8305 

Excalibur National Ins Co $4812

Family Security Ins Co $3973

Federated National Ins Co $2547 

Gulf States Ins Co $2926

Gulfstream Property & Casualty Ins Co $7146 

Gulfstream Select Ins Co $7146 

Homesite Ins Co $5459 

Horace Mann Ins Co $5030 

La Citizens Property Ins Corp $7614

La Farm Bureau Casualty Ins Co $8833 

La Farm Bureau Mutual Ins Co $7362 

Liberty Ins Corporation $9436 

Liberty Mutual Fire Ins Co $6620 

Liberty Personal Ins Co $9436 

Lighthouse Property Ins Corp (Beacon) $3511 

Lighthouse Property Ins Corp (Standard) $5193 

Maison Ins Co $4447 

Metropolitan Prop and Cas Ins Co $2891 

Occidental Fire & Casualty of N.C. $3119

Progressive Property Ins Co $2464 

Safeco Ins Co of Oregon $6086 

Safepoint Ins $3546 

Service Ins Co $2495 

Southern Fidelity Ins Co $2355 

Spinnaker Ins Co $3569 

State Farm Fire & Casualty Co $3432 

The Automobile Ins Co of Hartford $6693 

The Travelers Indem Co of America $6477 

United Fire & Indemnity $7855 

United Property & Casualty $2322 

United Services Automobile Association $4029 

Unitrin Auto & Home Ins Co $4222 

Unitrin Safeguard Ins Co $1857 

USAA Casualty Ins Co $4033 

USAA General Indemnity Co $4366 

 

Request a New Orleans Home Insurance Quote Proposal

GET QUOTE

 

If you would like a quote comparison from multiple insurance companies from one insurance agency click here to get started or complete the quick form below

New Orleans La homeowners insurance guide

What is the difference between a Wind deductible and a Hurricane deductible?

Understanding your wind deductible on your homeowners insurance policy.

There is no standard deductible on a homeowners insurance policy in Louisiana for wind damage.

Some companies offer a wind deductible.

Others offer a hurricane deductible and other policies may have a named storm deductible.

Three common deductible options issued on Louisiana Homeowners Insurance policies

  • Wind or Hail Deductible
  • Named Storm Deductible
  • Hurricane Deductible

HOMEOWNERS INSURANCE DEDUCTIBLE TYPES

 

Wind Deductible

This deductible is applied to all wind and hail events regardless if caused by a named storm or hurricane. Just a windy day and a tree falls on your roof, the claim would be subject to the wind deductible.

The amount could be a value such as 1000, 2500 or a % of the insured amount.

Your policy might have a 1%, 2%, 3%, or 5% Wind deductible

Example)   200,000 house with a 2% wind deductible would result in a wind claim subject to a $4,000 deductible.  So a $4,000 deduction off of your claim check would apply to a wind loss.

 

Named Storm Deductible

This deductible applies when a weather event has been declared by the U.S. National Weather Service to be a tropical storm or a hurricane.

The force of wind must have been caused or resulted from the “Named Storm” event. Only when the storm is a given a name will the named storm deductible apply.

If you sustain just strong winds and there is damage to your house, your all other perils deductible would apply and not the named storm deductible.

This deductible is only triggered if damaged is sustained from a named tropical storm or a hurricane.

The most common Named Storm deductibles are 1%, 2%, 3% or 5%

Example)   200,000 house with a 3% named storm deductible would result in a wind claim subject to a $6,000 deductible as a result of a “Named Storm”

 

Hurricane Deductible

This deductible applies when a weather event has been declared by the U.S. National Weather Service to be a Hurricane only.

Deductibles usually range from 1%-5% as well and some companies depending on the location of your house will offer a flat deductible as low as 1000.

Example)  200,000 house with a 5% Hurricane Deductible would result in a wind claim subject to a $10,000 deductible as a result of a Hurricane claim.

If you have a Named Storm Deductible or a Hurricane Deductible and you sustain wind or hail damage not as a result of a Named Storm or Hurricane, your policy would be subject to the “All Other Perils” deductible which usually start at $500.

If your homeowners insurance policy has a hurricane deductible and your property sustains wind damage from a Tropical Storm, your claim check would not be subject to the Hurricane deductible deduction. Only the all other perils deductible would apply. 

It is best you check your home insurance policy and determine what type of  wind deductible you have.

This may not be an issue if you don’t live in a coastal area where wind damage is very common.

Hurricanes, tropical storms and hail damage are very common in Louisiana.

Depending on the type of wind deductible you have could determine the difference in you getting your roof replaced or basically self-insuring your roof out of your own pocket.

CHOOSING THE RIGHT DEDUCTIBLE FOR YOU

If you have a wind deductible, you should consider a policy with a named storm or a hurricane deductible.

Depending on the location of your house will determine the deductible options available to you.

You don’t have to wait until your policy expires to move to another homeowners insurance company offering a lower wind deductible in your area.

Some companies may also lure you in with a low wind deductible only to raise your deductible at renewal.

Something to consider is ask how long the insurance company has been writing in your area and how long they have been offering a low wind deductible.

Underwriting guidelines can change very quickly.

Rate stability and claims paying ability are key factors you need to consider when you are considering moving your homeowners insurance.

At this time if you have a 5% hurricane deductible, you should consider moving your homeowners insurance.

Unless you live in a coastal area such as Grand Isle or Lafitte, 

you should be able to get a much lower hurricane deductible.

 

If you need help when choosing your deductible, here is a guide to help you.

Home Insurance Deductible Guide: How to determine the correct deductible for your house

Understanding your deductible on your homeowners policy is important.

 

Examples of Deductibles on home insurance policies.

Here are some types of deductibles offered in South Louisiana

2%, 3% or 5% hurricane deductible

2%, 3% or 5% named storm deductible

2%, 3% or 5% wind/hail deductible

Let’s assume you have a quote for 250,000 dwelling amount on the proposal.

The home quote includes a 2% Hurricane deductible.

The Hurricane deductible is 2% of 250,000.

If you have to make a claim for damage as a result of a hurricane, your deductible will be $5,000.

The insurance company will deduct $5,000 from your homeowners insurance claim estimate.

 

 

Take a look at your insurance cover declarations page and determine the insured value of your policy and the % of your hurricane, named storm or wind/hail deductible.

Check your policy to determine not only the percentage % of your deductible but the type.

Does your neighbor have a tree that could fall on your house?

If you think your neighbor’s homeowners insurance policy will pay the damage to your house,  you are more than likely wrong.

If you have a high wind/hail or a named storm deductible and would like a low hurricane deductible, we have a variety of home insurance options for you.

Unless you live in a coastal area, you should not have a 5% hurricane, named storm or wind/hail deductible on your policy.