A guide to unoccupied home insurance

If you plan on leaving your home for an extended period of time – to go travelling, say, or while you wait for it to sell – you will want the peace of mind of knowing it’s protected.

But while you may have home insurance in place, policies typically won’t cover you if your property is going to be vacant for a lengthy stint.

With this in mind, you may want to consider ‘unoccupied home insurance’ instead. This covers your property against damage and burglary when there’s nobody living there.

Why do I need unoccupied home insurance?

With standard home policies, insurers will usually provide cover only if the policyholder can guarantee that a property will not remain empty for more than 30 or 60 days.

If you do leave the property vacant for longer than the stipulated number of days, this will void your cover. So if anything happens, this means you won’t be covered. (Similarly, if you have home emergency cover, this is also likely to become void if you leave your home unoccupied for a long period of time.)

Scenarios where you may need cover

There are a number of reasons why your home may be temporarily unoccupied. These include:

• Travelling for a lengthy period of time – for work or pleasure
• Visiting family abroad
• Having to move out of your home while you have building work carried out
• Not being able to live in your home because you’ve been taken into hospital or long-term care
• You are selling the property but have already moved into a new home 
• You’ve just bought the property but don’t plan on moving in just yet
• You’ve recently inherited the home
• Waiting for a new tenant to move in

Why is an unoccupied property an issue?

Insurers view premises which are left empty for lengthy periods of time as being at a greater risk of structural damage caused by events such as burst pipes. With no-one there to spot issues and get them sorted, minor issues can quickly escalate.

Vacant premises are also more attractive to burglars, and more likely to get broken into.

Given that a standard home policy won’t offer the cover you need, this is where unoccupied home insurance comes into play. This type of policy is likely to be more pricey than regular home insurance (given the increased risks involved with a property being vacant), but it will give the cover – and peace of mind – you need.

What features are included in unoccupied home insurance? 

Typically it provides high levels of cover for a range of events, including:

• Storm damage
• Flood damage
• Fire damage
• Escape of oil
• Escape of water
• Burst pipes
• Theft – or attempted theft
• Vandalism
• Legal expenses – if, say, you need to deal with trespassers or get squatters removed
• Public liability insurance – if, say, a roof tile comes loose from your property and shatters a neighbor’s car window, or a tree from your garden falls and damage a neighbor’s property

Where can I buy unoccupied home insurance?

If you plan on being away from your home for a while and are looking to buy unoccupied home cover, the best way to see how different deals stack up is by going online and using a price comparison service. So what should you expect?

Generally speaking, policies last for three, six, nine or 12 months. You will need to provide information, such as the value of the property, where it is located, how well-maintained it is, what security measures in place, why it’s going to be empty – and how long for.

Having done this, you will be presented with a list of quotes from different insurers. The various factors listed above could all impact on the price you get quoted.  Equally, the higher the level of cover you opt for, the more pricey the policy is likely to be.

Read policy documents carefully

Before signing up to a policy, make sure you read the Terms and Conditions. Understand exactly what level of cover you are getting, and which features are – and aren’t – included.

Remember to check the level of the excess. This is the amount you have to pay if you want to make a claim.  Also try and check out customer reviews to ensure the firm offers a decent level of customer service.

Tempting as it may be, don’t automatically opt for the cheapest policy. Go for the policy that offers the right features and level of cover for your needs – at the right price.

Watch out for exclusions

When comparing policies, be aware of exclusions. With unoccupied home insurance, certain situations may not be covered.

For example, burglary through unforced entry is unlikely to be covered. This is where a burglar is able to get access to your home because you left a door or window unlocked.

Policies are also unlikely to cover damage that occurs during major renovations, such as structural work on the property.

The same applies to damage caused by contractors – though contractors should have their own cover in place.

To find out about exclusions, be sure to read the small print. If in doubt, check with the insurer.

Review your coverage

When your unoccupied home insurance policy has expired, don’t automatically renew with the same insurer. You may be able to find a better deal elsewhere – so be prepared to shop around again.

The same applies to your standard home and contents policies too. In order to keep costs down, it’s important to shop around at renewal time.

Tips when leaving your home empty

A large proportion of insurance claims on unoccupied homes come from burst pipes, so it’s worth taking a few precautions when leaving your house vacant. Drain the system completely before you go away for example or, winter, leave the heating on a low setting.

As empty homes are more vulnerable to theft, take steps to make your property more secure:

• Get a burglar alarm fitted
• Make sure all doors and windows are fitted with approved high-quality locks

• Install a timer so the lights come on and go off
• Get a neighbor to open and close the curtains
• Remove tell-tale signs that the property isn’t lived in by asking a neighbor to collect mail. Alternatively, get post redirected

Can I get unoccupied home cover as a landlord?

If you’re a landlord, you might want to consider unoccupied home insurance, but you could also look into getting dedicated landlord insurance instead. This is specifically designed for rental properties, and will usually permit a home to remain empty for a few months between tenants.

Doug Myrick, phone 305.741.3684 or email dougmyrick@gmail.com

5 Rules Every Landlord Should Live By

 

I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!

I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.

So you’re probably thinking, “Well Doug, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”

I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.

1.) Do your due diligence on the rental property

This is undoubtedly the biggest mistake I see landlords make. They are in such a rush to make money, they don’t pay enough attention to the property. I get it–you want to buy the cheapest property possible so you can turn the biggest profit. The problem with that is, the property is cheap for a reason. It has problems–lots of problems.

Many people buy properties in low income areas, with hopes of re-painting the walls every 5 years and making some rent money. The problem is, that’s the exact type of property that insurance companies don’t want to take a risk on.

Be very careful with the “as-is” property too. Unless you have money to burn, stay away. You are almost always going to spend more money than you think. Most “as-is” properties are either foreclosures or properties that have been vacant/abandoned.

If you don’t know what to look for in a rental, hire a trusted 3rd party home inspector and make sure everything, and I mean everything checks out. Don’t leave any stone unturned.

Everything must be up to code before you have a tenant in the house. Period. If it’s not, make it up to code.

In particular, you need to make sure the wiring, plumbing, heating, and roof are all “problem-free”, and that they’ve been upgraded or updated within the past 10 years. I’ve seen more problems with those three things than anything else, and you are putting yourself (lawsuit), and your tenant at risk if they aren’t in good working condition.

And whatever you do, make sure there are no mold problems. Don’t just assume there isn’t. You need to test the house, and document it. Mold can kill–literally.

Of course, you may want to walk away from a property because it might be cost-prohibitive to bring everything up to code, and that’s something that only you can decide, but before you buy a rental property and put get a tenant, do your due diligence on the home.

It’s worth the time and effort.

2.) Have written contracts in place

Find a lawyer and pay his/her fee. Trust me it’s worth it. You can’t just tell your tenant, “You break it, you buy it”. You need to have a written rental contract and lease in place.

If at all possible, don’t sign less than a 12 month lease, and make sure your tenant thoroughly understands the terms of the contract. Don’t be lazy and just have them sign it without explaining everything first.

You can save yourself a lot of time, money, and hassle if you do this, and it will show the tenant that you are serious, and that they will be held accountable for the property.

3.) Thoroughly screen your tenants

Rarely have I seen someone screen their tenant(s). Most landlords are so worried about getting someone in the property to pay rent, that they fail to check the people/person out.

At the very least, you need to make sure your tenant is carrying their own renters insurance (HO4 policy). Let the tenant know that your insurance doesn’t cover them whatsoever.

Really what you should be doing is checking their credit and also checking for any criminal activity. These are reports that cost very little up front, and will give you great piece of mind knowing that you have a trustworthy, reliable tenant.

Whether you allow pets and/or smoking is up to you, but I’d be careful with both, because in the end, they could cost you money if you have to repaint, replace carpeting, etc. They could also potentially result in liability exposure with dog bites, and house fires.

4.) Make sure you have rental property insurance

Having the correct type of insurance for your rental property is paramount. The problem is, most people don’t know that they need a certain type of policy.

You can not buy traditional homeowners insurance for a rental property. What you need is called a “Dwelling Fire” policy, or sometimes it’s referred to is a “Landlord” policy.

Keep in mind that the underwriting for rental properties is generally a little tighter, and the coverage isn’t as broad as what you would find in a traditional homeowners policy. As I mentioned before, many people buy properties in low income areas, with hopes of re-painting the walls every 5 years and making some rent money.

The problem is, that’s the exact type of property that insurance companies don’t want to take a risk on.

Still you must buy this type of policy for a rental. Do not buy regular homeowners insurance because it is not designed to insure a non-owner-occupied home, and your claim would almost certainly be denied if you had the wrong policy.

Another thing you need to be aware of, is that most Dwelling Fire/Landlord policies state that if a property is vacant/un-rented for more than 30 consecutive days (with some companies it’s 60 days), coverage can be severely reduced and even eliminated, so make sure if it’s a rental property, don’t let it sit vacant too long.

If you think it will be vacant for more than 30-60 days, you need to let your insurance carrier know that, because that situation would most likely call for a different type of Dwelling Fire policy.

5.) Keep tabs on your rental property

I’ve had people call me for quotes for their rental properties, and when I begin to probe them on the construction information, they know absolutely nothing about the house.

Some people don’t know whether the house is brick, siding, or what it’s made of. They don’t know how old the roof is, or the last time the heating was updated.

Folks, if you own a rental property, you need to know all of these things.

I had someone one time who had purchased a home from a contractor who had flipped it, and hadn’t even seen the house once. He bought it on the word of the contractor, and knew nothing about it except that he wanted to rent it out as soon as possible. That is well, not very smart. You shouldn’t be trying to get insurance on a house you haven’t seen yet.

You need to keep tabs on your property.

Keep records of all repairs, and make sure you physically visit or at least drive by the property every 3-6 months or so to make sure everything is in good working order. Remember, this is an investment. You need to maintain and take care of the property just as if it was your primary residence.

Owning a rental properties can be a lucrative business that can generate a lot of passive income, however, if you don’t abide by these 5 rules, it could end up being a royal pain, and cost you a lot of money in the process.

If You Continue To Work After 65, Do You Need Medicare ?

Even as you begin to contemplate retirement, many people do not fully let go of their day job the moment they turn 65. Some find a part-time opportunity, and others devote their working hours to volunteering. According to Census data, from 2014 to 2018, almost 26% of Americans ages 65-74 were employed, so what does that mean for your health insurance and Medicare?

Having health insurance from your employer after 65 might not always be the best solution. When you turn 65, It is important to take the time to explore all your options. I’ve talked with many individuals who never took the time to compare their employer group coverage with what Medicare could provide them and later regretted it. Many told me that since they were still provided employer group insurance, which was automatically deducted from their wages, they left everything status quo. This decision can impact you not just financially but also with undue stress later due to additional paperwork.

When talking to someone turning 65 who was still employed and could continue with their employer group coverage, there were always two questions I would ask them right away. How they answered these two questions would help me better determine which health insurance option was the better choice for their situation.

• Do you have any dependents on your group coverage?

• Are you taking any high-cost, brand-name medications?

 Having a dependent not yet eligible for Medicare could make the employer group coverage a better option. This is because the dependent would more than likely lose the employer group coverage, and their insurance could be more costly on the individual marketplace. Also, if someone is taking high-cost, brand-name medication, their employer group might provide more comprehensive benefits than Medicare’s prescription drug plan.

For those with no dependents or high-cost medications, Medicare could be a better option. However, before you make any major decisions about whether to keep Medicare, you should consult with your company’s HR department and speak to a Medicare insurance agent.

Monthly price is an important factor, as well. You can calculate the baseline for your monthly insurance costs by looking at deductions on your paycheck. Medicare is straightforward when it comes to the cost of its basic coverage. Part A, which covers hospital expenses, is free for most people. Part B, which covers medical expenses like doctor’s visits, lab tests and outpatient care, has a monthly premium of $148.50. This is the standard Medicare premium most individuals will pay unless they make more than $88,000 per year. Then the monthly premium will be higher, which would be a factor in making your decision.

If you are looking to use Medicare, you have the option to add a Medicare Advantage plan to the basic coverage. These are alternative plans to Medicare provided by private insurance companies that can offer additional benefits such as prescription, vision, dental, hearing and more once you no longer have employer insurance. Many of these plans are offered with no additional monthly premium other than the Part B premium of $148.50. This alone could be more cost-effective than keeping your employer group coverage.

Those wanting to keep Medicare as their primary insurance can also consider a Medicare Supplement, also referred to as a Medigap Supplement plan, along with a stand-alone prescription Part D plan. These will come with separate monthly premiums but help cover what Medicare will not. Adding up all these options, you may find that Medicare provides better coverage than your employer’s plan.

While your insurance premium is not the only cost you will have, it is one of the easiest to budget for. A qualified Medicare insurance agent can walk you through the other costs associated with all the Medicare plans, such as copays, deductibles, etc., to help you determine what the insurance will really cost you.

The size of the company you work for also factors into whether Medicare is a better choice for coverage. At small companies with fewer than 20 employees, you will be required to take your Medicare benefits. For companies with more than 20 employees, you can wait to take your Medicare benefits, but that could mean a lot of paperwork down the road.

Enrolling in Medicare as soon as you turn 65 will mean less paperwork and no penalties. This is the ideal time to enroll, called the Initial Enrollment Period (IEP). This starts three months before you turn 65 and includes your birthday month and the three months after that. Enrolling within this period means you will not need any documentation. This is easier than dealing with the paperwork after the fact.

If you enroll in Medicare after this period, you may be eligible for a Special Enrollment Period (SEP) that starts three months before you need your coverage to start and lasts for eight months after your last day of work. You will be required to submit paperwork to Medicare from your employer.

If you cannot provide this documentation, that will mean extra fees. Unless you’re covered by group insurance, you can incur a 10% penalty for each year you delayed your Medicare after you’re eligible. Not only that, but you will have to wait for the General Enrollment Period (GEP), which takes place January 1 though March 31 each year, but coverage will not start until July.

If you are still working past 65, it is best to explore all your options. If you are not ready to retire, reach out to the health insurance liaison in your office and your human resources department. For Medicare-specific information, working with an insurance agent who is well versed in the confusing aspects of Medicare can be a big plus. Turning 65 does not mean you have to retire. It also does not mean you have to settle for one specific type of health insurance.

Doug Myrick call or text 941.979.1101

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Business Owners Revisiting Employee Benefits to Improve Retention

With employee turnover climbing for small businesses, more employers are taking steps to boost retention and see employee benefits as a key to their success, according to new survey results. 

Looking back one year after the start of COVID-19, business owners are reflecting on the biggest challenges they faced and how they might continue to overcome them, as the nation moves toward recovery, the Principal Financial Group explains in the seventh installment of its Principal Business Owner Insights survey. 

Those challenges include employee turnover and retention. The firm’s latest polling of more than 1,000 small business owners with less than 500 employees revealed a 20% jump in employee turnover during the past 12 months, compared with 15% two years ago and 11% in 2015. Among those surveyed, 97% of owners believe the pandemic affected the turnover. 

Consequently, business owners say the top two goals of offering an employee benefits package are affordability (50%) and the ability to attract and retain employees (42%). Additionally, a larger share (58%) now believe that employee benefits also help improve workforce productivity.

Overall Priorities

When asked to rank their overall business priorities, business protection was found to be the most important, yet only half of respondents indicated that they have a plan. Among those who have a plan in place, key person life insurance (60%) and disability insurance (44%) are the most popular. 

Employer-sponsored health and wellness solutions registered as the second most important priority. Comprehensive health insurance remains the most common solution (67%), while employee assistance programs (EAPs) are also showing growth, with 33% of owners indicating that they offer one. 

While qualified retirement plans registered at number five on the priority list, 401(k) plans remain the most popular, with 57% of small business owners indicating that they offer one. Meanwhile, employee stock ownership plans (ESOPs) jumped from 7% to 17% in the last two years.

Overall, the top five business priorities and the percentage of businesses that have a plan are:

1. Business protection (50%)
2. Health and wellness solutions (67%)
3. Income protection (40%)
4. Business succession planning (60%)
5. Qualified retirement plans (59%)

Supplemental key employee benefits also ranked in the top 10 for priorities. Disability income was the most common (35%), followed by deferred compensation (27%) and executive bonus plans (26%). 

Key Employees and Legacy Planning

The survey also reveals that the number of key employees per organization has increased since 2010 (23%), with significantly more owners saying they have four or more in 2021 (35%). Additionally, more than half of business owners (55%) would like to reward their key employees with additional benefits. In businesses with 50 or more employees, 75% view additional benefits as critical for key employees. 

As for business ownership and succession planning, Principal notes that of the small businesses responding, 66% report that they are family-owned, and of those family businesses, just over half are first-generation owners. Wills remain the most popular wealth transfer approach (57%), but family trusts, family limited partnerships and irrevocable life insurance trusts are examples of other strategies that continue to be used. 

However, Principal notes that 32% of those with a business succession plan haven’t reviewed it in more than two years. 

Using a Financial Professional

Nearly three-quarters of business owners (73%) are using a financial professional to help with the financial curveballs thrown their way over the last year. Principal notes that this is more than any other year the firm has conducted its survey. By comparison, in 2015, slightly more than half (54%) of business owners said they worked with a financial professional. When looking for a financial professional, owners prioritize expertise (63%) and cost (62%). 

“Financial professionals and the advice they can offer will be critical given the significant new legislation and programs offered to businesses this past year as a result of the pandemic,” says Mark West, national vice president of business solutions for Principal. “We’re seeing increased engagement from the businesses we serve via our business solutions team as employers navigate the economic impacts of COVID-19 along with relief programs rolled out to assist them.” 

The survey was conducted by Dynata and included 1,011 online interviews conducted between Jan. 1-22, 2021, with results weighted based on the number of employees and annual sales.