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 The Detroit News   Lifestyle  Homestyle

Do your homework to minimize effects of a home disaster 
By Glenn Haege

If you've ever had a burst water pipe, a leaky roof from an ice dam or a grease fire in the kitchen, you know about dealing with a home disaster.

When it comes to these home emergencies, there are two areas you need to focus on to make sure you minimize their impact: insurance coverage and restoration services.

Rick Sovel, an independent insurance agent and partner with Michigan Community Insurance Agency, (248) 465-6200, www.michigancommunity.com, said water damage is one of the most common disasters homeowners can face, and it's important to understand what your insurance policy covers.

"If a water pipe bursts, the damage to your dwelling and contents are usually covered," Sovel said. "However, if the water damage occurs because of a sump pump malfunction, most insurance policies won't cover the damage unless you have purchased a rider to your policy."

A rider is also a good idea if you have sewer backups in your home, because most standard policies don't cover it. Sovel said that when taking out a rider, it may make sense to get more than the basic coverage, which is usually $5,000, because the cleanup can be expensive and may not leave you with any coverage for damaged household items.

For many types of disasters, a restoration company may be needed.

"Most of our calls come from homeowners who have had some kind of water damage in their basement, or even in the attic from a leaky roof," said Al David of Emergency Restoration Services, (248) 299-4500, www.caller1.net.

Along with extracting the water, drying and sanitizing a flooded basement, technicians can restore appliances, electronics and even furniture that were damaged.

While not as prevalent as water disasters, David said fire damage, even from a small kitchen fire, can ruin a home's furnishings if not properly treated.

"The big issue is the soot and the smoke odor that remain in the home and your furnishings," David said.

Emergency Restoration Services uses air scrubbers, industrial steam cleaners and even ultrasonic "dunk tanks" to get rid of the soot and smoke odors that permeate the home after a fire or even get on household items like pots and pans, dishes, books or pictures.

David said one serious problem many homeowners try to fix by themselves is mold in an attic.

"Whether the mold is caused by inadequate ventilation in an attic or due to a roof leak, it needs to be cleaned up properly," David said. He said the combination of powerful HEPA vacuums and a dry-ice blasting technology, similar to sandblasting, is the best way to completely remove mold from flat surfaces and the wooden beams, underside of the roof and flooring in an attic.

And depending on your coverage, insurance agent Sovel said some mold cleanup may not be covered.

"If the mold was caused by a roof leak from an ice dam, it may be covered," he said. "But mold due to inadequate attic ventilation generally isn't covered."

Certainly, there are ways to avoid some major disasters, such as doing regular maintenance on items in the home that could fail, storing items on shelves or in plastic containers in the basement or even buying an extra fire extinguisher. But if disaster does strike, make sure you have done your homework to know how to minimize the damage and the cost, including having the right homeowner's insurance.

If you would like to suggest a question for this column, email askglenn@masterhandyman.com. If you want to talk to Glenn Haege personally, call his “Handyman Show” on WJR-AM (760) at (866) ASK GLENN, (866) 275-4536 between noon and 2 p.m. Saturday and Sunday. The “Handyman Show” can be heard on more than 130 radio stations nationwide.

(All rights reserved)


 

All homeowners insurance policies are not created equal

   When my staff talked to Rick Sovel about homeowners insurance recently, they learned that all homeowners insurance policies are not created equal.
   Sovel, a certified and licensed insurance counselor and partner in the Michigan Community Insurance Agency, (800) 430-8070, is constantly amazed at the differences in prices and coverage for seemingly similar policies.
   Since the homeowners policy of my editor at Master Handyman Press is coming up for renewal, we asked Sovel to run the numbers for what was basically the same policy with six different companies. The location, description of the house and coverage requested were identical, yet prices ranged from $956 to $2,589 a year.
   The price differential is just the tip of the iceberg. "What buyers fail to understand, is that depending upon the wording, the actual coverage on a given claim could vary a $100,000 or more. It could even determine whether there is coverage," Sovel says.
   Two weeks ago, I wrote about mold damage created as a result of a covered water damage loss. Several companies have decided that they will no longer cover mold damage when selling new or renewing homeowners' policies.
   Several weeks ago, when my company made a brief survey of insurance agents, AAA and Allstate agents said that every case is different and coverage is provided on a claim-by-claim basis. The Farmers agent said his company was leaning toward no mold coverage. The Kemper agent would not answer the question. The independent Safeco agent said there was a $10,000 mold testing and remediation limitation. The Metropolitan Life agent said the company presently covered mold if the insured had used due diligence. Certainly you can't consider these policies equal. Choosing one company over the other because of a $100 difference in the annual premium would be fool hardy. Here are a few of the other policy provisions you should discuss with your insurance agent.
   
Different types of homeowners insurance
   It is very difficult for the average person to be able to read a policy and know what it means. For example, "broad form" sounds like it gives a lot of coverage. Actually "special coverage" gives broader protection.
   
Ordinance and law coverage
   "Ordinance and law is an option, which only costs $20 to $50 per year but could decide whether you can afford to rebuild in the event of a catastrophic loss," Sovel says.
   "Let's say you have a very nice older house that was built in 1960 and insured for $300,000. A fire destroys 80 percent of the house. Since 80 percent of the house has been destroyed, the insurance company would write you a check for 80 percent of the total.
   "Many municipal ordinances state that where only 20 percent of a house remains, the entire house must be demolished. Unless they have ordinance and law coverage, the home owner has to pay for demolishing, removing and rebuilding the remaining 20 percent," Sovel says.
   Additionally, most homeowners' policies only require the insurer to bring the building up to its original condition. Without ordinance and law coverage, the homeowner will be required to pay the difference between old and new building code requirements.
   
Guaranteed replacement cost
   "Many policies used to have a guaranteed replacement benefit, which said that if it cost more than the policy limit to rebuild a structure, the insurance company would pay the additional cost subject to other policy provisions. This led a number of people to under-insure their houses.
   "The insurance companies' response has been to change the name and limit the coverage. Depending on the insurance company, 'extended dwelling coverage' limits the percentage the insurer will pay over and above the face amount of the policy from 15 percent to 25 percent," Sovel says.
   
Finished basements at risk
   "Many insurance companies will not provide coverage for sump pump problems or sewer and drain back up, and severely limit coverage on finished basements. If you have a finished basement, are considering finishing the basement or even use it to store valuables, make certain your homeowners policy provides coverage in the event of a loss," Sovel says.
   
Policy limits
   "There is no correlation between the market value of a house and its replacement cost. Market value projects what you could buy a similar house for today. Replacement cost reflects the cost of tearing down and rebuilding the dwelling.
   "Most of us live in subdivisions built by builders who constructed several homes at a time. The home buyer benefits from economies of scale on architectural plans, building materials and construction crew efficiencies.
   "If you moved into a brand-new $400,000 house today. It would cost a good deal more to rebuild the house next week. In the event of a total loss, debris would have to be carried away, the architect must draw up plans to rebuild the house according to the existing footprint, and materials and crews have to be specially scheduled," Sovel says.

By Glenn Haege
(All rights reserved)


 

Know what your homeowners insurance covers

 

While it may not have the intrigue of the latest courtroom drama or the emotion of a romance novel, have you read your homeowners insurance policy lately? Most homeowners I know admit that they have never read their policy.

 

 

Even worse, they think their policy covers more than it may, which could lead to serious problems if they need to file a claim.

 

 

According to Rick Sovel, an independent insurance agent and partner with the Michigan Community Insurance Agency, (248) 465-6200, www.michigancommunity.com, not all policies are created equal.

 

 

"I often ask customers if they want a cheap price or good coverage, because a cheap policy isn't so cheap when you find out what isn't covered," Rick said.

 

 

In cases of fire, windstorms or even tornados, most insurance policies will cover a homeowner's dwelling and contents. If you accidentally caused a grease fire while cooking in your kitchen, your standard insurance policy should cover those damages. That being said, there are some areas that often are not covered under a standard policy. One of the biggest areas of confusion is water damage.

 

 

"If a pipe bursts or a water line breaks, the damage to your dwelling and contents is usually covered," Rick said. "However, if the water damage occurs as a result of a sump pump failure, or a leak in your basement wall, it often isn't covered unless you purchased a rider." A rider is like an addendum to a homeowners policy that covers things that a standard policy may not, or where the standard policy may only cover up to a certain amount. For example, items such as jewelry, furs, antiques or other collectibles may require a rider to provide coverage that is greater than the standard policy coverage.

 

 

In the case of a sump pump, it is a smart investment because it often covers if your sump pump has a mechanical failure, you accidently unplug it or the power goes out.

 

 

Another issue that many homeowners in Michigan may face is a sewer backup. While a rider can also cover a sewer backup that is the result of a clogged sewer drain, many people assume their standard homeowners policy covers it.

 

 

"We see a lot of homeowners who call us to clean up their basement as a result of a sewer backup, and they find out their standard policy doesn't pay for it because they didn't have a rider," said Al David of Emergency Restoration Services in Troy, (248) 299-4500, www.caller1.net.

 

 

In the event that the sewer backup has been caused by a problem with a city sewer system, Al said it is best to start with your insurance company first. Often, it comes down to dealing with a city's insurance company to get a claim resolved. In some cases, it requires a class action lawsuit, as was the case in the past when residents sued several Downriver communities for damages caused by a faulty sewer system.

 

 

Insurance companies also don't cover flooding caused by heavy rains, overflowing rivers or lakes. If you live in an area that is susceptible to flooding of this type, flood insurance is available through the National Flood Insurance Program administered by the Federal Emergency Management Agency, (800) 621-FEMA, www.floodsmart.gov.

 

 

Homeowners insurance coverage for mold is another gray area. Mold by itself, according to Rick, is not usually a covered loss. However, if the mold was the result of a covered item, such as a flood in a basement caused by a burst pipe or a sump pump failure that you had coverage for, then the cleanup of the mold that resulted from this would be covered, but only to a certain sub-limit established in the policy, such as a $5,000, $10,000 or $25,000 limit.

 

 

While these are among the more common areas homeowners should be aware of when reviewing their insurance policy, they should also think about other things in their home that may or may not be covered. For example, when the power goes out for a few days, it's not unusual to lose the food in your freezers and refrigerators. Often, cheaper policies don't offer coverage those kind of losses. If it does cover this loss, the limits may be low.

 

 

If you can say you honestly know everything about your policy, move to the front of the home improvement class! If you don't know what is, and more importantly, isn't covered in your policy, read it now. Call your insurance agent to answer any questions you have. That's why they're there. Make sure you won't be blindsided if you have a problem that leads to a claim.



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