10 hidden home insurance credits

New wiring: Save money and lives
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Electrician working on wiring

Want to scare your insurance agent? Tell him your teenage son rewired your house over the weekend. Then expect your premium to go through the roof.

The math is simple: house + old wires = fires. According to the U.S. Fire Administration, in a typical year, home electrical problems result in 67,800 home fires, 485 deaths and $868 million in property losses, according to a 2006 report. The USFA estimates that home wiring causes twice as many fires as electrical appliances.

Considering new wiring? Depending on the age of your home, you may qualify for a new wiring credit.

“New wiring, if it’s installed right, is much safer and less likely to cause any type of outages, shortages or fires,” says Meehan. “It can be an insurance eligibility issue, too, because a lot of companies are not as keen to write old knob-and-tube wiring because of the fire risk. It could limit your options.

New wiring credit: 10 percent.


High-tech sensors: Create a safer home
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Sensor on a wall

When we think of sensors that keep our home safe, most of us think of either a fire alarm or a security system. While these are both excellent and creditworthy loss-prevention devices, insurance companies are equally excited about a new generation of home sensors that can detect water or natural gas leaks before they become a claim.

Water sensors come in two varieties. Passive leak detectors are inexpensive stand-alone devices that emit an alarm and/or flashing light when moisture is detected. Active leak detectors signal a leak and shut off the water source. Active systems may be installed on individual appliances or as a whole house solution. Gas detectors are most often passive.

“Gas and water sensors are a great credit,” says Meehan. “The big-box stores helped create the culture of improving and protecting your home because you can go to Home Depot and Lowe’s and just buy this stuff. That drove companies to create solutions that people can self-install.”

Sensor credit: 5 percent to 10 percent.

Read the entire article here.

Got Nest? Some insurance companies reward smart-home device owners

Many early adopters of smart-home gadgets were in it to save money on heating and electricity bills, but now there’s a new bonus to smartening up your home: insurance breaks.

A smart thermostat can help prevent pipes from freezing, while products like Utilitech’s smart-leak detector can shut off the water if it detects moisture. It makes sense that insurance companies such as Pure would be big fans of technology that helps homeowners prevent and minimize damage. The same appeal is there for owners themselves, especially when paired with the potential for lower energy bills. There are other potential benefits, too. “When I sell my house,” says Arone, “this could make it a little more valuable, what distinguishes my house versus my neighbor’s house.”

Read the entire article here.

Allstate Poll Reveals Spike in Property Claims During the Holidays

By the time the turkeys, pumpkin pies and cranberries are devoured and the calendar flips from November to December, 75 percent of Americans will have already started checking items off their shopping lists, according to a new poll released by Allstate. What many are not checking off, though, are simple steps to protect their homes – Allstate claims data shows many types of fire, theft and weather property claims increase during the holiday season.Thanksgiving dinner

The third annual Allstate Holiday Home Hazards poll revealed risky behaviors, such as leaving packages in the open, leaving doors unlocked, or falling asleep with the stove on, a candle lit or a fire still roaring. Despite 71 percent of adults acknowledging the increased risk of in-home incidents, just 37 percent take extra care to protect themselves. The poll also found many do not heed safety warnings while decorating the home.


One of the priciest purchases for many this season will be holiday travel. Sixty percent of Americans plan to spend at least one night away from home this year, with four-in-10 (41 percent) travelers planning to spend more on travel than last year. The poll revealed some risky behaviors that could contribute to home losses while away:

  • Half of Americans have left a door unlocked for a friend or family member. About the same amount (52 percent) have hidden a key for a friend or family member.
  • More than a third (35 percent) of adults say they have posted about travel plans on social media, including 58 percent of people between the ages of 18 and 34.
  • Less than a quarter (23 percent) frequently set a timer for lights in their houses while traveling.
  • Only 17 percent frequently shut off the water in their homes to prevent leaks or floods, and just 16 percent frequently leave a faucet dripping to prevent freezing pipes while traveling.

The holidays are busy enough as is, but when travel is thrown in, things can get even more hectic. Allstate claims data reveals upticks from colder temperatures that could wreak more havoc:

Insurance Policy Type Most Costly Claim Median Cost of Claim Increase During Holidays
Burst Pipes From Freezing
Homeowners $1,004,968 $5,833 722%
Condo $382,510 $4,445
Renters $66,943 $2,596
Damage From Ice Dam Build-up
Homeowners $209,870 $1,832 23%
Condo $13,071 $1,895
Renters $34,582 $920
Missing Property From Garage
Homeowners $5,919 $1,848 51%
Condo N/A N/A
Renters $2,684 $1,711
Property Damage From Weight of Snow/Ice On Roof
Homeowners $318,778 $1,886 64%
Condo $6,743 $2,206
Renters $15,609 $653


Read the entire article here.

Homeowners Policy Excludes Damage From Prolonged, Unattended Water Inundation

Based on standard homeowner policy water damage exclusions, the United States District Court in Utah found no coverage for extensive damage from water escaping over several months from a sink located in the lower level of a seasonal cabin in Duck Creek, Utah. The decision was filed September 29, 2015 and is entitled Wheeler v. Allstate Ins. Co., 2015 U.S. DIST. LEXIS 13136.

Plaintiff owned a log cabin which was unoccupied during the winter months of 2010 to 2011, not having been even visited since the first of January, 2011. In April, 2011 acquaintances of the plaintiff entered the cabin to get a drink of water and found water “everywhere” inside to a depth of 4 or 5 inches. Mold had grown so thick on the walls and appliances that the front door would not open, and the blades on a ceiling fan on the main level sagged so low they were touching the inside cabin lights. Water continued to spray inside the cabin when the damage was discovered.  Continue reading here.

Water Leak Detection Systems – A Landlord’s Best Friend

There’s not much technology can do to prevent a flash flood. But if water damage is due to water leaks, burst pipes, or appliance malfunctions, there’s a lot that technology can do. Water leak detection systems can help prevent extremely expensive water damage from burst pipes, broken toilets, etc.

Smart home technology has come a long way in the past few years – to the point where it’s actually quite affordable for property owners to install effective low-voltage devices that can alert you to potential water leaks. Some devices automatically shut off the water for you to prevent further damage, and some allow you to control the shutoff valve remotely.

The latest devices actually connect to a cloud-based computer system that sends a text or alarm to your mobile device or email address. Some devices will also monitor your usage to detect and alert you to slow leaks that may not do much immediate damage but still contribute to the insidious problems of mold and wet rot.

Through sensitive use monitoring, these devices can also detect leaks such as a toilet with a leaky flapper valve, which can waste 50 gallons of water every day. As you may expect, active systems that can turn off the water supply tend to cost more than passive systems, which simply detect leaks and alert you to the problem.

The High Cost of Water Damage

Failing to quickly detect water leaks can be extremely expensive for rental property owners. According to the Insurance Information Institute, the average home insurance claim for water damage (including damage due to freezing) between 2009 and 2013 was $7,479, not including claims from renters and condominium owners.

Water damage was also the second most common damage claim, affecting nearly two percent of all in-force homeowner policies. In 2013, water damage and freezing accounted for 26.4 percent of all claims dollars the insurance industry paid out. It’s unknown how many landlords may have been uninsured, or underinsured to the point where the amount of money actually paid out was less than the damage incurred.

Read the entire article here.