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Tips for Home Insurance Shoppers: an Interview with Larry Levin of J&M Insurance

By Larry Levinn

Tell us a little bit about your company and its foundation.

J&M Contractors Brokerage Corp was established in 2005 and writes all forms of insurance and financial products. J&M started with 2 partners and now has 8 employees and has tripled in size over the past 5 years. We attribute our growth to the great relationships we have with our clients who have in turn referred us business.

What facts should I gather about my new house before I start shopping? (ie. age of electrical, energy efficient additions, etc)

When looking for a new home, there are many things that the prospective buyer should be aware of. I usually will recommend a new buyer to look at the condition of the roof. The roof is a very good indicator of the state of the home. Most of our cancellations are as a result from the condition of the roof. An insurance company will require the homeowners to either replace or fix the roof within a certain time period and if not complied with they will cancel the insurance. From my experience if the roof is in good condition the home will likely be acceptable. There are always exceptions to the rule and it is important to ask or look for updates to the following

  • Wiring
  • Plumbing
  • Heating System
  • Exterior Painting
  • Condition of sidewalk and driveway
  • Trees over power lines or leaning on house

If any of the above are considered in poor condition, the insurance company may require immediate action. I have seen a new home buyer spend all their money only to find out the house is not insurable due to faulty wiring. The cost to fix some of these conditions may be tens of thousands.

Another insurability factor is the heating of the property, be it oil, gas or electric. Gas is the most common and is usually not an issue with the insurance company, an underground oil tank is a common problem. Many insurance companies will not insure a home with an underground tank. IIf there was an underground oil tank, please make sure the previous homeowner has proper documentation it was filled correctly.

How can the location of my home affect my insurance costs?

Homes on coastal areas have and always will be rated higher than those properties inland. Especially since Hurricane Irene and Superstorm Sandy, Insurance companies have had to deal with a huge increase in homeowners claims. There has been an increase in non-renewals in these areas or at least a significant increase in premiums. As a coastal specialist, I have many insurance companies that are competitive and will write the 1st house on the water. There are many other variables but the cost could be as much 50% higher on the water.

Location is the dominant factor if flood insurance is needed. Flood insurance on its own can cost double the price of a homeowner's insurance policy. Most people believe the closer to the water the more expensive the premium. In most cases there are 3 zones, an X zone, AE zone and VE zone. Even though you may purchase the 1st house on the water you may not be in a flood zone. The reason is elevation, elevation is the most important factor determining the rate. Your agent/broker should look at an elevation certificate if there is one, a possible PRP extension which grants you the previous zone which could be an X zone or a preferred zone and save you a considerable amount of money. If you are looking at a few homes on the water, your agent/broker should be able to give you an idea on price.

How do I make sure I am not underinsured? What does it mean to make sure I insure my home to "replacement value"?

Many insurance companies will do their due diligence and will make sure your home is the correct replacement cost. If the carrier completes an inside/out inspection they will determine your replacement cost and may increase or decrease your current coverage. A company that does an external inspection is basing it strictly on square feet and will come up with a value per square foot. You will want to discuss the inside of your home with your agent/broker to determine the value. Most companies use a general indicator of $200 a square foot rule so if your home is 2000 square feet you will be around $400,000. Before purchasing your home you will get an appraisal which can also help in determining replacement cost. I would tell any new home buyer to talk to their agent/broker to determine an approx. replacement cost. There are no two houses alike and this should be addressed.

In your personal opinion, is it worth it to get additional coverage for some of the valuable items in my home?

There is definitely a need to schedule or insure certain personal property such as jewelry, fine arts, etc. Check with the company because they may offer some type of blanket coverage. In my opinion I would generally not recommend scheduling a $1000 piece of jewelry, however your $15,000 engagement ring should be scheduled on policy. Once again speak with your agent/broker and tell them your concerns and belongings.

Can I save money on my monthly premium if I add certain safety features to my home?

As of today the safety feature with the most value is a central station alarm. The savings off the premium should almost be even with the cost of monitoring the system. A deadbolt lock is a must.

I think most companies eventually will start giving discounts for hurricane proof windows and other building supplies that will protect your home in the event of a windstorm.

How can I ensure that I am working with a home insurance provider that I trust?

In my experience when researching the credibility of an insurance carrier, you will always find negatives of even the best insurers. We will always look to place with carriers that have solid claim reputation. We have dropped one of our companies due to their poor performance during and after Sandy. I have dealt with big A rated companies that handled a claim poorly and small companies that handled a claim great. The bottom line is I will only sell a company that I know will handle the claim to my standards. I will help the insured from start to finish and if there is an issue we will get it resolved.

A very important question you must ask when purchasing a home close to the water is "Is the insurance company an admitted company" For the most part most of us don't have to worry. When you deal with an agent/broker that is not familiar with coastal insurance, they may not have the correct company to sell and may sell you a non-admitted company or a New York State Property policy. There are cases were they are the only policy one may purchase but your agent/broker should give you the heads up

What is the best way for folks to contact your company?

J&M Contractors Brokerage Corp

64 W Park Ave

Long Beach, NY 11561

(516) 284-6331

You can also visit our website at www.nycoastalhomeinsurance.com and ask your questions there.

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