Whether you’re buying a home in Falmouth, a condo in Portland or income property in Scarborough, if you’re borrowing money, your lender will ask for proof of “hazard insurance”.
What is Hazard Insurance?
Hazard insurance is just the bank’s term for property insurance. The bank wants to make sure that if a disaster strikes, they will be protected at least up to the amount of your loan. Typical types of hazard insurance in Maine include:
Homeowners insurance (sometimes called an HO-3 or HO-5);
The bank would prefer to have 100% of your loan protected by property insurance. Sometimes, that’s too much insurance. After all, your insurance will only pay to rebuild your home. Insurance doesn’t cover items such as land, site work, landscaping or other items that are included in the purchase price. Your Maine homeowners insurance agent should help you
estimate the cost to rebuild your home;
provide cost estimates based upon the coverage you need;
provide proof of insurance that will satisfy the bank.
A good insurance agent can help you avoid buying too much – or too little – insurance.
If you have questions about Maine investment property insurance, or protecting your home, camp or condo, contact a Noyes Hall & Allen agent at 207.799.5541 today. We offer a choice of many of Maine’s preferred property insurance companies, so we can do your shopping for you. As we like to say: “we’re independent and committed to you.”
Insurance policies give insurance companies the option to inspect your property from time to time. The result of your insurance property inspection is a report to the company underwriter.
If the underwriter has concerns, they make “recommendations” to address them. This is a euphemism. These are not recommendations at all, but requirements. A “recommendation” may be as minor as fine-tuning the amount of insurance on your property (up or down); or as major as replacing the roof.
The underwriter sets a deadline for the “recommendation” to be completed. The deadline varies depending on the severity of the situation, how long they’ve insured your property, when your policy expires, and the season of year.
The Importance of Communication
The worst thing you can do is ignore an insurance company “recommendation”. Nobody likes to be ignored; insurance underwriters dislike it more than most. It’s better to let the insurance company know your intentions, or to ask questions if you don’t understand.
Your Maine insurance agent is the link between you and the insurance company. Talk to them! They can explain the situation and advocate for you. If you are uncertain what the underwriter requires and why, ask your agent for a clarification. If you are unable to comply or need help, tell your agent. Depending on the circumstances, your agent may be able to negotiate with the underwriter for more time or for a different solution to the issue.
If the insurer’s recommendation involves physical changes to your property, they will require confirmation that you’ve made them. This usually means sending a photo of the completed change. The company may ask for a signed statement confirming that the change is permanent (such as removing a trampoline from the yard).
What Happens If You Can’t – or Won’t – Comply With Insurance Company Inspection Recommendations?
If the underwriter’s deadline passes without confirmation that the recommended changes were made, they may cancel your policy. Depending on the severity of the recommendation, they may cancel your policy within 30-45 days, or send a notice of non-renewal for when the policy expires.
When your policy is canceled or non-renewed by an underwriter, it’s very difficult to obtain replacement insurance with a preferred company. Your agent may be able to find replacement coverage, but it will probably at a higher cost and with less broad coverage.
Also, remember that you’re then a new customer with another insurance company. Now THEY may want to inspect. The cycle begins again, and it’s not always a good cycle.
Insurance inspection is common in Maine. Home and investment property insurers routinely inspect properties that they protect. Because of more severe property insurance losses in recent years, insurers have stepped up the rate of inspections. Inspections allow them to make sure that they insure properties that fit their guidelines and that those properties are adequately protected.
Is an Insurance Inspection Mandatory?
Inspections are expensive for insurance companies, so they don’t perform them unless they feel it’s necessary. Often, one of these conditions can cause an underwriter to order an inspection on your property:
You bought a new property.
You switched insurance to a new company. The new company wants to make sure that your home or business meets their underwriting requirements.
You had a recent property claim. The insurance company may want to make sure that you have repaired the damage following your claim. This is especially common after a water damage loss, to avoid mold developing.
You own property that the insurance company hasn’t inspected in several years. Over time, DIY renovations; property improvements and additions; or lack of maintenance can create situations that can increase the probability or size of an insurance claim. The insurance company wants to make sure that your policy stays up to date in case they have to pay a claim.
Can I Opt Out of an Insurance Inspection?
In short, no. Each insurance policy has an “inspection clause”, which gives the insurance company the right to inspect your property with reasonable advance notice. If you refuse, it’s a violation of the contract. The insurance company may cancel your policy as a result.
Does the Insurance Inspector Need to Get Inside my Home?
There are two types of insurance home and business inspections: exterior only; and interior/exterior. The company underwriter decides which report to order based upon the age and value of your property, your claim history, and other factors. Some inspectors are employees of the insurance company, but many are independent contractors.
What Does an Inspector Look For?
During a routine inspection, the inspector looks for features of your home or investment property that can affect the probability or the severity of an insurance claim. Items they typically inspect include:
electrical, including wiring, outlets and breaker boxes
heating and similar systems.
General property condition, paying particular notice to peeling paint; signs of rot; debris in the yard; and overhanging trees or vegetation close to the property. Because of an increase in deck collapse claims, insurers pay special attention to how your deck or porch is attached to the home, and its overall condition.
Special hazards such as dogs; trampolines; swimming pools; or business operations.
Condition of any outbuildings or other structures.
Dimensions of structures, so they can estimate the cost to rebuild them.
What Happens During an Insurance Inspection?
The inspector sends their report to the insurance company underwriter. If no deficiencies are noted, you will probably not hear from anyone. If the underwriter has concerns, they make “recommendations” to address them. For more information about insurance recommendations and how to deal with them, read “Can My Insurance Company Force Me to Make Changes to My Property?”
Every week we hear news of another household brand name suffering a data breach. Hannaford, Target, TJ Maxx, Shaw’s, Home Depot…the list goes on.
But local businesses are not immune from hacking. Many Maine small businesses – and their customers – were shocked recently to hear about a breach at two Portland, Maine locations of Otto Pizza, a local favorite.
Cyber attacks are a constant threat to your Maine office, retail store or professional practice. You no longer have to be a “big fish” to be a target. Hackers, phishers and the like are always looking for low-hanging fruit in the form of networks with poor security. After beefing up your security, you should insure your Maine business against data breach in case it does happen.
How Do Data Breaches Happen?
Some common scenarios that can lead to data breach in your business or professional practice:
Unauthorized access – hackers gain access to your POS system or computer network.
Theft of Computers – Someone steals your laptop, backup data or server that holds customer or employee personal information.
Improper Disposal of client or patient records.
Human Error – your bookkeeper mixes up 1099 forms and mails them in the wrong envelopes, exposing personal information to others.
Sobering Data Breach Statistics
What Does Data Breach Cyber Liability Insurance Pay For?
Cost of Maine Cyber Liability Insurance
Data breach protection is a surprisingly affordable addition to most Maine small business insurance portfolios. Coverage for basic limits such as $10,000 first party and $25,000 third party are available for premiums as low as $150 per year.
What to Do in Case of a Data Breach at Your Business
Notify the police immediately
Report the breach to your business insurance agent or company
Take all steps to protect any confidential data remaining in your control.
Preserve all evidence of the breach itself.
For answers to your Maine business insurance questions, including data breach and cyber liability insurance, contact a Noyes Hall & Allen agent in South Portland at 207-799-5541. We represent many insurance companies so we can help you find the best insurance fit for your business and budget. We’re independent and committed to you.
From Portland to Cape Elizabeth, Pine Point to Sebago Lake, peer-to-peer rental services are very popular in Maine. Recent articles in the Portland Phoenix and Portland Press Herald suggest that the practice is increasing. Does renting your Portland Maine area home, apartment or condo via a short term rental service like AirBNB, HomeAway or VRBO affect your insurance? You bet!
You’ll Have Almost No Coverage for Your Stuff – Ever!
If you regularly rent your home or part of it, most Maine homeowners insurance policies limit coverage for your personal property (stuff) to $2,500 per unit. If your place burns down, or is damaged by a storm, you’ll have very little insurance coverage to replace your belongings, furnishings, appliances, clothing, sporting goods or tools.
Even worse news: your home doesn’t have to be rented at the time. It only has to be “regularly rented or held for rental”. Does listing your home on a website with a calendar of availability make it “regularly held for rental”? The insurance company might say so.
You May Have No Liability Protection Either
Do you rent your entire home more than “occasionally”? If so, you have no liability coverage on your homeowners policy. What’s occasionally, you ask? The policy doesn’t define that. Nervous yet?
Do you rent part of your home or condo to someone who brings more than 2 others? Homeowners insurance policies exclude liability coverage completely. If your tenant or their guest gets hurt, who do you think they’ll expect to pay their medical bills, lost wages and pain & suffering? Even if you aren’t at fault, you might have to hire a lawyer to defend you.
Does the Peer-to-Peer Network Protect You?
We haven’t seen any insurance agreement that covers you where your homeowners, renters or condo policy does not. We have seen one that completely replaces a homeowners policy with a commercial insurance policy, at a higher cost. If you rely on protection from the peer-to-peer site, we recommend that you read their insurance contract very, very carefully.
Can Your Insurance Company Cancel Your Homeowners Policy if You Rent Your Property?
Many insurance companies believe that their ordinary homeowner’s insurance rates are insufficient to pay losses resulting from renting your home. They may ask you to stop renting or to make changes in your home. If you fail to comply, they may cancel your policy. That may tempt you to not tell your insurer about your rental income, and hope for the best. That’s taking a big risk.
We recommend that you talk to your Portland area insurance agent before you rent your home. They can discuss options for properly insuring you against catastrophic loss. It may cost a bit more, but at least you’ll know you have coverage.
Do you need to insure a condominium in Maine that you rent out as income property? Insuring condos can be complicated. Your condo association has a master insurance policy. You have a unit owners insurance policy. Your tenant should have renters insurance. Which policy pays if your unit suffers water damage, fire, or other covered loss?
What’s Insured by the Condo Association Master Policy?
The master policy will cover building portions as prescribed by the bylaws that govern the association. Some associations insure the entire building complex (known as “all in” in insurance jargon). Others require a unit owner to insure the interior of their unit, everything inside the studs. Still others only require the unit owner to insure improvements and betterments made to the condo after it was built. Check your association bylaws and insurance policy to see which applies to you.
What’s Insured by Your Unit Owners Policy?
Your policy will cover items not covered by the association’s master policy. This might include improvements to the unit or the association deductible. Condo bylaws can vary greatly. It’s important to consult a Maine insurance agent who knows how to insure condominiums. They should understand your bylaws and your association’s insurance policy to help you buy proper coverage.
Many insurers issue condominium unit owners policies for rented condos. Others may use a Dwelling Fire insurance form, with customizing endorsements. As long as they are tailored to your situation, either should provide acceptable coverage.
Make sure that the owner of your condo unit is listed on your policy. If you set up a trust, LLC or other entity, if they’re not listed, they’re not covered. This is especially important in case of a liability claim involving your condo unit.
What’s Insured by Your Tenant’s Renters Insurance?
Your tenant’s renters insurance policy covers their “stuff”, such as furniture, clothing, and computers. Your policy will NOT pay for this damage. Neither will the association policy. Save yourself from conflict; require your tenants to buy renter’s insurance.
Questions About Condominium Insurance?
Insuring a Maine condominium can be complicated. Noyes Hall & Allen Insurance serves dozens of Southern Maine condominium associations from two-unit conversions to 100+ unit complexes. If you have questions about condo insurance, contact a Noyes Hall & Allen Insurance agent at 207-799-5541
Many Portland, Maine landlords make their tenants purchase renters insurance when leasing an apartment or condo. This is a smart idea for both parties, for many reasons.
Why Should a Landlord Require Renters Insurance?
Protects the Landlord’s Assets
Renters insurance (HO-4 in insurance jargon) is the best way to protect a property owner’s assets from the risks of their tenants’ activities. It protects the landlord in 2 important ways:
Insulates the landlord from tenants’ liability. If your tenant leaves something on the stairway that causes someone to fall and get hurt, it’s the tenant’s fault. A tenant without insurance makes you an easier target for a lawsuit, because you have more assets (and insurance). Renters insurance insulates you because it pays your tenant’s legal defense costs and damages.
Covers Tenants’ Belongings. Many renters ask “does my landlord’s insurance cover my stuff?” They’re shocked to learn that it does not. They think that if there’s a fire, theft or leaky pipe, their landlord’s insurance will pay to replace their stuff. It won’t. Smart property owners make tenants buy renters insurance to avoid these disputes and disappointments.
It’s Another Way to Screen Tenants
Most responsible Portland Maine landlords run credit checks on prospective tenants, and check their references. This protects them and other building tenants from the harm and nuisance of undesirable renters. Requiring renters insurance is another way to screen out bad tenants.
If a prospective tenant balks at buying insurance to protect their own assets, how will they treat YOUR property? If they say they can’t afford $10-15 per month for insurance, perhaps they’re not going to pay their rent on time, either.
Should a Landlord be an Additional Insured on a Tenant’s Renters Policy?
NO!
Some Maine landlords or property managers ask tenants to add them as an Additional Insured on their renters insurance policy. They believe that it provides more insurance to them and notifies them if the tenant cancels their insurance. Don’t do it!
Why an apartment or condo landlord should NOT be an Additional Insured on their tenant’s policy.
Most insurance companies won’t do it. Listing landlords as “additional insured” is common on commercial insurance policies. But personal insurance companies frown upon it. Commercial insurers also readily provide a “certificate of liability insurance” to landlords. Personal insurance underwriters usually refuse.
Personal insurance companies use the Additional Insured endorsement when the “named insured” and another party are related (e.g. co-owners). An insurer defends and pays for an Additional Insured’s liability from “ownership, maintenance or use of the residence premises”. They would accept this scope of responsibility for co-owners of a property, but not landlords.
It’s unnecessary if you have a lease. Tenants policies extend liability coverage for duties a tenant assumes via contract before the occurrence. If the lease contains a “hold harmless” clause in which the tenant waives rights of subrogation against the landlord, the tenant’s policy will pay, and the tenant’s insurer will not attempt recovery from the landlord.
There’s a better way to notify you if your tenant’s policy cancels. It’s called Additional INTEREST Endorsement. This meets the needs of landlords, and maintains the integrity of landlord/tenant responsibilities.
Recap
Portland Maine landlords, property managers, and property owners who rent apartments or condominiums to others should require tenants to purchase renters insurance, and ask to be named as an additional interest (NOT additional insured).
We also heard from owners of investment property, wondering whether their Maine landlord insurance covers this kind of damage.
In general, the plumber’s repair bill is not covered by these policies, but the water damage caused by frozen or burst pipes is.
Sometimes, clients call us when they discover the pipes are frozen, wondering what to do next. If you’re in that situation, here are some immediate tips:
How to Tell if Your Pipes are Frozen
When fully open, your faucet only trickles water, then stops completely.
You hear banging noises from inside walls or crawl spaces.
You see water staining on a ceiling or wall.
How to Thaw Frozen Pipes
We recommend calling a plumber. However, if you want to attempt to fix the situation yourself, follow these steps:
Leave the faucet that is not working open (hot and cold).
Turn off the main water supply.
Locate the frozen pipe by opening other fixtures closer to the main water supply. The frozen section will be between the last working fixture and the first non-working one.
The frozen section will probably be near a crawl space or outside wall.
Feel the pipe, looking for a section that is very cold. There may even be frost or ice on the outside of the pipe.
Warm the frozen section GENTLY, using a hair dryer.
NEVER use a flame or torch. Heating the pipe too suddenly can weaken it and cause it to burst.
Work from the open fixture back to the frozen area. This keeps steam from being trapped by ice, which can burst the pipe.
You should notice water trickling from the open fixture as the ice melts.
Once all the ice is melted, close the fixture and open the main water supply.
Make sure there are no leaks anywhere along the pipe.
How to Prevent Frozen Pipes
Before Cold Weather Hits:
Insulate exposed pipes located near exterior walls and crawl spaces with foil, then enclose with foam sleeve insulation.
Close and drain sillcocks (fixtures that pierce the sill of your home, usually a garden hose connection).
Learn where your main water shutoff is. Show everyone in your household how to close the valve.
During Extreme Cold Weather:
Open faucets (both hot and cold) enough to keep a trickle of water going.
Open under-sink cabinets against outside walls to allow warm air into the plumbing underneath.
Keep your home thermostat to at least 55 degrees.
We hope you never suffer frozen pipes. If you do, we hope this information is helpful. If you live in the Portland Maine area and have questions about home insurance, insuring income property, or condominium and apartment insurance, contact a Noyes Hall & Allen agent at 207-799-5541.
It is quite common for Maine homeowners and landlords to receive a recommendation from their insurance company to remove moss growth from the roof of their building. Usually, this occurs following an inspection by the insurance company. Here’s some background on the issue, and what options you may have in dealing with it.
Does Moss Damage Roofs?
While there has not been much scientific study on the subject, most roofing professionals believe that moss is harmful to roof surfaces. Since most Maine homeowners insurance and landlord insurance pay for water damage and ice dams, insurance companies are understandably concerned with the subject. You may think they’re being picky, but insurance companies are in the business of reducing risk – theirs, as well as yours.
http://bryophytes.science.oregonstate.edu/
According to Oregon State University, roofing professionals say that the root-like structures of moss grow into cracks into roofing material, accelerating degradation and causing leaks. Moss can also hold moisture on your roof, allowing mold and rot to take hold. Finally, moss can grow under the edges of your roof shingles, loosening them and allowing water to enter.
How to Remove Moss from Your Roof
The University of Minnesota Extension shares that you should scrape away as much moss as possible. A power washer may work. Be careful not to damage your roof in the process. If you’re unsure, hire a professional to remove the moss. You can also use a commercial moss removal product. Most contain zinc sulfate, and are most effective when the moss is actively growing. Be careful: zinc can corrode some metals, including copper. Minnesota Extension cautions you to NEVER use table salt on your roof: it is corrosive to metal, and not effective at controlling moss.
How to Keep Moss from Growing on Your Roof
Keep leaves, branches and other debris off your roof.
Remove overhanging branches (or hire an arborist to do it). Moss thrives in a dark, damp environment. Direct sunlight and good aeration prevent moss growth.
If Your Insurance Company Requires Removing Moss from Your Roof
Insurance companies can be like spouses. A “recommendation” means “do it, if you know what’s good for you”. An insurance company can (and often will) cancel your insurance for failure to respond to reasonable loss control recommendations.
If you receive ANY recommendation from an insurance company – about any situation – talk to your agent (you DID buy your insurance from a local agent, right?).
Ask them for their advice. They can tell you how urgent the situation is, and whether this is something that all insurers would require.
They may be able to recommend a local contractor or resource to help.
They can communicate with the insurance company on your behalf.
If you need more time than the insurance company has allowed, your agent may be able to negotiate that for you (depending upon the severity of the situation).
If you’re unable or unwilling to complete the recommendation, your agent can discuss your insurance options.
The Bottom Line
When all is said and done, you don’t HAVE to make the repairs or changes that your insurance company tells you to. But, they don’t HAVE to insure you if you don’t.
Most preferred insurance companies in Maine have similar underwriting requirements, but some underwriters are pickier than others. Also, depending upon your circumstance, you may be willing to have less coverage, a higher deductible, or pay a higher rate to keep your property “as is”.
If you have questions about Portland Maine area insurance, contact Noyes Hall & Allen Insurance. We have represented many insurance companies, and served the community for more than 80 years. We have the experience to help you make an informed decision.
Daylight Saving Time begins Sunday. The first day of Spring is less than 2 weeks away. Mainers are thinking Spring. And, after our first “typical” winter in a several years, many Maine homeowners and businesses worry about flooding.
As Mainers ski, snowmobile or snowshoe all winter, we know that snow has to go somewhere when it melts: Maine rivers and streams. Usually, those bodies of water can hold the runoff. But if snow melts too quickly or is accompanied by heavy rains, flooding happens. And it happens regularly, sometimes with devastating results, such as the Maine Floods of 1987 or the Aroostook County Floods in 2012. Those are the big events, but MEMA Flood Forecasts hundreds of smaller events every year, which can be just as devastating if they strike your property.
Flooding in Gardiner Maine (MEMA photo)
Every year, our Portland Maine area insurance agency takes calls and emails from home owners anxious to buy Maine flood insurance in the face of imminent danger. Unfortunately, many don’t know that homeowners and most business policies do not cover flood damage. Flood insurance is a government-regulated program of the Federal Emergency Management Agency (FEMA).
Four Things You Need to Know About Flood Insurance
There’s a 30-day waiting period. Unless you are buying property, there is a 30 day waiting period before coverage takes effect.
Every Maine property is in a “flood zone”. Riverfront or oceanfront properties are in “special hazard zones”, but flooding can happen anywhere. In fact, FEMA reports that 1 in 4 NFIP claims come from areas with a low or moderate risk of flooding. Your local insurance agent can tell you the flood zone for your particular property.
The maximum payout under a flood policy is $250,000 (for your building) and $100,000 (for its contents) If you need more coverage, you can purchase excess insurance.
If you don’t have coverage for a flood loss, don’t expect a bailout from Uncle Sam. Although you might be eligible for a federal disaster assistance loan, you’ll have to repay it, with interest.
One of your assets probably IS insured for flood: your vehicle. “Other Than Collision” coverage does include flood damage. Check your policy to see if you purchased that.
