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Tips for Home Insurance Shoppers: An Interview with Ed Wise of Wise Insurance Group

By Ed Wise

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

I started Wise Insurance Group on April 1, 2011 after stints at Liberty Mutual, Countrywide Insurance, and Farmers. I learned about insurance at these different companies and knew I wanted to run an independent agency where I could bring the best policy with the best value to each client. The overriding goal of Wise Insurance Group is operate in an advisory role for each client whether an individual, family, or business.

What are some of the services your company provides?

We provide a full suite of insurance solutions for individuals and families from a variety of companies. The insurance solutions include auto, home, life, long term care, disability, as well as commercial insurance products such as general liability, professional liability, commercial vehicle, and more. I'm a big believer in helping create educated consumers which is why I blog about insurance related topics.

Please briefly explain the idea of home insurance to our readers, what it is, why it was created, etc.

Home insurance is designed to protect the homeowner from financial loss when something happens such as damage from a water leak, hail storm, fire, etc. There should be enough coverage on the home to replace it if there is a total loss. Home insurance was created to provide homeowners a way of sharing the risk of a loss with a financially strong entity, the home insurance company.

What facts should I gather about my new house before I start shopping?

We use a questionnaire to help gather information about everyone's home we quote home insurance for. Basic information should include square footage, number of stories, number of bedrooms & bathrooms, as well as their grade (basic, semi-custom, custom, etc.). In addition, we ask about flooring type, wall coverings, is there a fire place, swimming pool, trampoline, what kind of pets they have, roofing material, and exterior walls.

If the home is over 15 years old, it's also important to know when the roof was last replaced and have there been updates to the home's plumbing (water heater), electrical system and heating and cooling systems. There are discounts for these items from many of the carriers. We'll also ask about whether a monitored alarm system will be or is installed.

If the home is near water (pond, stream, creek, etc.), I will run a flood zone determination to confirm whether the home is in a flood zone or not. Lastly, I run CLUE reports which show claim and share this information with new home buyers to confirm repairs were made for damage from water leaks, hail damage to the roof, etc.

If the home has been built in the last 5 years, it's important to know if it is a certified "green" home. There are a couple of insurance companies that provide a discount for a green home.

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

Location does impact what a person pays for home insurance. If the home is in the city limits, factors like crime statistics, home age, fire department ISO classification, and weather patterns shape the home insurance premium. If the home is out of the city limits, issues like fire department ISO classification, responding fire house distance, presence of water, and brush hazards shape the premium.

In addition, if the home is located in an area where earthquakes have occurred, or is prone to hurricanes, I review the special coverage they may need that their home insurance policy won't cover or needs to cover. For instance, homes located on or near the coast, should confirm they don't need a separate wind (hurricane) policy and that their home insurance includes coverage for wind driven rain.

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

It's important to insure the home for what it would cost to replace it due to a total loss. That means there should be enough coverage on the home to completely cover any demolition that is required, hauling debris away to the dump (this usually requires special permits), and then rebuilding the home. Most people don't realize that home construction includes plans or blue prints, permits, inspections, EPA skirting around the lot, fencing, etc.

One of the steps we take is to divide the home's insured value by the number of square feet in the home (excluding an attached or detached garage). This provides the homeowner with a cost per square foot. Most agents should be able to provide what claims are estimating the average cost per square foot should be for a home (this will vary depending on finish out, location, etc.) in their area and guide them as to whether they are properly insured or not. If the amount the home is insured for hasn't changed in 5 years or more, it should definitely be evaluated.

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

Most home insurance policies have limits on the amount of coverage the policy provides for valuable items (jewelry, artwork, collectibles, antiques, musical instruments, etc.). These limits can be dollar limits such as $2,000 total for a jewelry loss, they can limit the type of loss (mysterious disappearance is usually excluded) or both.

If the homeowner has any of these items, and they combined value is $2,000 or more, this is excellent coverage to add to the home policy or to purchase separately. For all scheduled jewelry, I strongly recommend that mysterious disappearance (I lost it) coverage be included. Many carriers will insist on an appraisal that is no older than two years.

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

Most home insurance companies provide a discount on the home insurance policy if the homeowner has operational smoke detectors, a fire extinguisher, deadbolt locks and the home is visible to neighbors. Additional discounts may be available for homes with a centrally monitored burglar and fire alarm system and some offer an even better discount if the alarm system is monitored by the local fire and police departments.

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

It's important for any homeowner to do their homework when selecting an insurance company. Start with the financial ratings provided by A.M. Best and Standard and Poor to confirm whether they are financially strong. Check with your state insurance department too. Many provide a listing of what perils are covered and which ones are not. The Texas Department of Insurance provides homeowners the ability to compare policies between companies and there should be information on how well they handle claims. If the agent represents more than one company, ask who they have their home insured with!

What's the best way for people to get in contact with you and your company?

We can be reached in a number of ways including:
Office number: (469) 464-5740
Email: ed.wise@wiseinsurancegroup.com
Twitter: @wiseinsgroup
Facebook: www.facebook.com/wiseinsurancegroup
Website Blog: www.wiseinsurancegroup.com/blog

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About The Author

Wise Insurance Group was started by Ed Wise, an insurance veteran with Farmers and...

Phone: (469) 464-5740

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