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Central Ohio Real Estate News

by Teresa Butler; Signature Real Estate

By Teresa Butler | Agent in Gahanna, OH
  • New Insurance Protects From Falling Home Values

    Posted Under: Home Insurance in Columbus  |  December 9, 2013 12:19 PM  |  90 views  |  No comments

    A new type of insurance debuting next month protects home owners against negative equity. Underwater Mortgage Protection, offered by AmTrust Financial Services, is to launch in three states in December. It is then to roll out nationwide within the next year. 

    "Our product fills a significant gap that was needed in the marketplace," says Matthew Kayton, vice president of the real estate insurance group at AmTrust. "We will be there to help consumers if they end up in a situation where life happens to them and they need to sell, and they might be in a down market."

    While the recent rise in home prices has helped lift nearly 5 million home owners into positive equity again, 21 percent of all home owners with a mortgage still owe more on their loans than their homes are currently worth, CNBC reports. 

    With this insurance from UMP, home owners will have an opportunity to pay an average monthly premium of $40 to $50 to get gap insurance on the value of their home. However, in order to apply for it, home owners must have at least 10 percent equity in their homes at the time. Also, home owners will be unable to refinance during the coverage period. 

    If home owners decide to sell their homes and the value of the home is not worth the mortgage amount, UMP will assist home owners in selling  the property through its own agents and then will pay the lender the difference. 

    Some critics of the program say that the insurance plays on home owners’ fears. 

    "Consumers who have an extra $40 or $50 per month can 'self-insure' against house price declines by paying down their mortgage principal faster," Barry Zigas, director of housing for the Consumer Federation of America, told CNBC. "This generates further equity and is an investment, not an expense for insurance that may never be recouped."

    Source: “Underwater insurance, as millions of homeowners emerge for air,” CNBC

  • Homeowners Insurance Covers Halloween Mishaps

    Posted Under: Home Insurance in Columbus  |  October 31, 2013 12:34 PM  |  95 views  |  No comments

    Although Americans plan to carve away at their Halloween budget this year — spending an average $75.03, about $5 less than last year, according to the National Retail Federation — overall, spending on Halloween has increased 54.7 percent since 2005. In 2013, Americans are estimated to spend $6.9 billion on décor, costumes, and candy.

    With so much invested, it’s a good thing homeowners insurance covers common Halloween mishaps.

  • Flood Insurance Rates Could Kill Property Values

    Posted Under: Home Insurance in Columbus  |  October 15, 2013 3:43 PM  |  159 views  |  No comments

    Federal flood insurance rates are on the rise, and the sharp increases from New England to Hawaii are hurting property values, residents and legislators say. 

    The law, known as the Biggert-Waters Flood Insurance Reform Act, is rolling out in stages. A part of the law that went into effect Oct. 1 removed flood-insurance subsidies for more than a million home owners nationwide. The subsidies applied to properties that existed before the drawing of flood insurance rate maps, The New York Times reports. 

    The rising insurance rates have sparked rallies and petitions across the country. Mississippi has sued the federal government to try to stop the discontinuing of subsidies.  

    “Some property owners, including business owners and those who bought property after July 6, 2012, are shocked to be facing potential tenfold premium increases or, in some cases, significant losses to the value of their homes,” the Times reports. 

    Flooding disasters in recent years — including Hurricane Sandy — have left the National Flood Insurance Program with a $25 billion deficit. The program must make up for the losses, but home owners are concerned about how they will cover their insurance increases and how the law will effect resale of their homes.

    An estimated 600,000 home owners across the country will see their rates increase if they buy a new policy or let their current policy lapse, according to the Times. Some home owners are growing concerned that the higher premiums will deter home buyers from purchasing their homes. Depending on the home’s cost and its flood risk, the premiums could range from $3,000 to $33,000 more, the Times reports. 

    Source: “Cost of Flood Insurance Rises, Along With Worries,” The New York Times

  • Soaring Insurance Rates Shock Home Owners

    Posted Under: Home Insurance in Gahanna  |  July 16, 2013 5:18 PM  |  114 views  |  No comments

    Home owners who live near areas where disasters have struck, but have not been directly impacted by them are still seeing dramatic increases in their insurance premiums.

    For example, in the wake of Hurricane Sandy, unaffected residents living near the disaster zone still saw big spikes in flood insurance premiums. FEMA has reclassified the area as a high-risk flood zone. As such, some residents in the Valley Stream, Long Island area of New York are seeing their flood insurance rates soar from $400 per year to $3,400.

    Home owners living out West are also reporting rising insurance premiums due to recent threats of wildfires. The rise has prompted some home owners to go without coverage.

    For example, a 63-year-old Las Vegas man is refusing to evacuate his property near growing wildfires. He’s remaining in his cabin, spraying water to keep the fires from his home, which have come within about 300 feet of the property. The man says he cannot afford homeowner’s insurance because the last wildfire ended up doubling his payments.

    Source: “New Flood Insurance Rates Leave Homeowners With Sticker Shock,” AOL Real Estate (July 10, 2013) and “Man Refuses to Evacuate Home on Mount Charleston,” ABC 13 News

  • Home Owners Finding Gaps in Insurance Coverage

    Posted Under: Home Insurance in Gahanna  |  April 22, 2013 10:41 AM  |  82 views  |  No comments

    Homeowner's insurance rates have risen 69 percent over the past decade, now averaging $1,000 a year. But as rates rise, home owners are finding their coverage hasn’t. In fact, some insurance companies have added new restrictions or increased deductibles, CNNMoney reports.

    Some home owners are being faced with tens of thousands of dollars in costs for damages that they originally thought would be covered by their homeowner's insurance policies.

    "It's easy to think you're covered when you're not," says Amy Bach, executive director of advocacy group United Policyholders.

    For example, coverage most often falls short in covering flood damage and wind damage, according to the article. Private insurers mostly stopped covering flood damage, which forced home owners to be proactive in purchasing coverage through the National Flood Insurance Plan. Also, special wind deductibles have been introduced in several states, but home owners need to be proactive in checking their amount of coverage in case of a windstorm and deciding whether they need additional coverage.

    Another area where homeowner's insurance policies fall short in coverage, according to experts, is covering water damage, such as from a cracked pipe, leaky toilet, or clogged drain. Many insurers have scaled back their coverage in this area. Some experts recommend home owners should increase their protection by getting a rider that covers sewer and drain backups, particularly if they have a sump pump. Wireless water alarms -- which cost about $25 for three -- also can help home owners detect a leak quickly before significant damage.

    Source: “Covered by homeowners insurance? Don't be so sure,” CNNMoney

  • Insurance to Guard Against Equity Losses Has Short Life

    Posted Under: Home Insurance in Columbus  |  July 25, 2012 7:40 PM  |  126 views  |  No comments

    An insurance policy that would protect home owners from losing equity in their homes may have sounded too good to be true to some home owners — and apparently it was. “Home Value Protection” has recently been pulled off the market.

    Between 2006 and 2011, about $6 trillion in home equity was lost among U.S. home owners. Some home owners saw equity in their homes drop by 20 percent or more. So an insurance policy that offered protection against equity losses seemed like a “game changer” to many in the real estate business, Inman News reports.

    Home Value Protection insurance policy was first introduced in Ohio last fall and then rolled out to a few other states. It was expected to soon be available nationwide. But earlier this month, insurance agents who were selling the policies were instructed to stop. The agents were told in an e-mail from company officials that the protection plan was being suspended, Inman News reports.

    The company reportedly will service policies that are already underwritten, but it will not be accepting any new policies until further notice.

    The media has been unable to get an official comment from the company on the status of the insurance or for further information about why it’s being suspended.

    Some customers have had some objections to how the policies worked. For example, as Inman News columnist Ken Harney explains: “Policies came with mandatory deductibles — 10 percent of the ‘protected value’ during the first 12 months of coverage, and 5 percent during the second 12 months. In effect, if you had to sell your house at a loss within the first two years, the big deductible would limit your equity protection payout significantly.”

    Source: “Home Equity Protection Insurance Yanked Off the Market,” Inman News (July 19, 2012)

  • Home Owner Insurance Deductibles on the Rise

    Posted Under: Home Insurance in Columbus  |  July 17, 2012 11:48 AM  |  149 views  |  No comments

    Home owners beware: “Your home owner’s insurance now probably covers less while costing more,” The Wall Street Journal reports.

    Home owner deductibles have been rising the last few years, as home owners who may have once seen $250 to $500 a claim soar to $1,000 to $2,500 a claim in recent years.

    There’s been a move by the industry to go to percentage-based deductibles, which have caused prices to rise. For example, home owners may have once had a $500 to $1,000 deductible but now have a form of a deductible of 2 percent of the insured value of a home for items like wind and hail damage. That could mean that insurance may only cover half the cost of a roof replacement.

    What’s more, more insurance companies are issuing more limits on what all they will pay for in replacing a home.

    Texas home owners pay the highest insurance premiums in the country, but a consumer group in the state found that newer policies are covering less, like limiting coverage on plumbing leaks or damage to foundations.

    With insurance policies squeezing more home owners’ budgets, housing experts say home owners need to take an active role in reviewing their policy to find out what all is covered. Also, they say that home owners need to think twice before making several claims.

    “One large claim will affect you less than multiple small ones,” The Wall Street Journal article notes. “Of course, you buy insurance to be covered, so you are always free to file a claim. But you should know that insurers keep close track of claims and will penalize you for making too many, even if you just happen to hit a string of bad luck.”

    Source: “Insurance Deductibles Soar,” The Wall Street Journal (July 13, 2012)

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