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Maine Homeowners – Thinking About a Pellet Stove?

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Pellet stoves are hot. Over 50% of stoves bought in the U.S.  in 2008 were pellet-fueled, according to the Pellet Fuels Institute.

A Wood Pellet StoveAny kind of wood-burning appliance causes concern for fire insurance companies. Insurers are often slow to adapt to new technology, since they rely on experience statistics to help them set rates and underwriting guidelines. However, most insurers understand the popularity of these stoves, and are trying to accomodate home owners who use them.

Operated and maintained properly, well-built stoves can be a safe, economical way to heat your home. If you buy one, your insurance company will probably ask some questions about it. Here are some of the insurance company guidelines we’ve seen.

5 Keys to Making Your Pellet Stove Insurable

  1. Make sure your stove is UL listed. Many U.S. insurers will only insure American or Canadian built pellet stoves.
  2. Many companies will only insure top-fed stoves. Bottom and side-fed stoves are considered to be harder to consistently maintain. This may change with future designs and as more experience develops.
  3. Avoid an appliance that is capable of burning Standard PFI rated pellets. Some insurers will not accept them.
  4. Although manufacturers’ requirements may be more lenient, insurance companies tend to require the same heat shielding and fireproof hearth as they would for a standard wood stove.
  5. If your stove has a power exhaust vent, many companies require a 1 foot projection of the vent from any combustibles (e.g. siding) through an approved thimble. Because power exhaust vents require electricity, several insurers require a battery backup or generator to prevent a puff-back in a power outage.

It’s always smart to ask your agent or insurance company before installing a wood-burning appliance. If you have any questions, contact Noyes Hall & Allen Insurance .

First Time Maine Homeowners Lead Real Estate Rebound

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The number of Maine homes sold increased by 22.74% in September compared to the same month last year, the Maine Association of Realtors reported last week. While the Median Sales Price declined 6%, prices seem to be rebounding a bit. The decline in Median Sales Price indicates that homes in lower price ranges were moving faster than larger, more expensive homes. This is likely due to the influx of first time homebuyers responding to the government stimulus rebate program.

Graph of Home Sales in Cumberland and York County Maine July to September 2009 vs. 2008
Cumberland County fared better than the state average.

September’s results were the best of the quarter. From July through September 2009, 14.7% more homes sold compared to 2008, with the Median Sales Price 9.6% lower than last year. Cumberland County performed slightly better; 23.55% more homes sold this year, with a 6.1% drop in Median Sales Price.

First Time Home Buyers Must Act Soon!
Realtors report that first time homebuyers are driving the market, aided by government stimulus tax credits. Unless extended, this program will expire soon. Home sales must close before November 30 to qualify for the plan.

In our South Portland insurance agency, we’ve seen a similar trend. Many of  the homeowners insurance quotes we’ve delivered this summer were for first time homebuyers. We take extra time to help the new home owner understand homeowners insurance, closing costs and escrow procedures. We also work with lenders to make sure that there are no surprises at closing. Contact Noyes Hall & Allen Insurance for a no-obligation consultation: 207-799-5541.

Download the Maine Association of Realtors’ press release.

Thinking About Renting Out Your House?

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In the current real estate market, more and more of our clients are renting their homes instead of selling them. They hope that they'll make more profit by waiting. In the meantime, they're collecting rental income on the property.

Many people don't know that a rented home is no longer eligible for a homeowners policy. To properly insure your rented dwelling, you need to buy either a Dwelling Fire policy or a commercial policy.

The Risks of Renting
Rental property has a slightly higher risk of property loss, for several reasons:

  • Your tenants may not identify or report maintenance needs so that you can address them.
  • Renters are unlikely to have the same degree of "pride of ownership" as you.
  • Your renters may be unfamiliar with the systems and "quirks" of your home that are second nature to you. We've even seen losses where the tenant did not know how to shut off the water to stop an overflowing toilet!

Different Perils, Different Policy
As a homeowner, your policy covers your home and your belongings. When you rent out your home, your contents are typically limited to appliances you might leave behind for the tenants. Also, if your rented property is damaged, you could lose twice: the cost to repair the damage, and the rental income lost while your tenants can't live there.

Most important, renting your home increases your responsibility for injuries on the premises – anything from slips and falls to someone being hurt during a fire. This increases the importance of inspecting and maintaining your property.

Dwelling Fire and commercial policies can protect the building and rental income. Often, the coverage isn't quite as broad as your homeowners policy, but it still covers the catastrophic losses of fire, windstorm, collapse from ice or snow, etc.

Like homeowners policies, these policies do not cover flood or earthquake – although such coverage is available.

Considering Renting Your Home?

  • Call an agent for an insurance quote.
  • Consider higher deductibles and higher liability coverage than your current homeowners policy may have.
  • Check on your property regularly; hire a property manager if you can't.
  • Require your renters to buy tenants' insurance to protect their property and liability from their own negligence. Your policy will not provide coverage for either.

For answers to your personal insurance questions, contact Noyes Hall & Allen Insurance.

The $50,000 Tweet?

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Our May 29 post warned about the danger of being sued for damages caused by blog entries, tweets, or Facebook content. 

Today, Mashable reports on a Chicago Sun Times article about a real estate management company suing a tenant of one of its buildings. The May 12 tweet complained about the company's response to her allegations of mold in her apartment. The company was not amused, suing the woman for $50,000 in damages, claiming that she libeled them.

Make no mistake: it's expensive to respond to a lawsuit – let alone lose one. Let's hope that the woman had a homeowners or renters policy with optional "personal injury" coverage as we suggested in our original post. This coverage is NOT part of a standard homeowners policy, but can be added for about $15 or $20 per year.

For more information about personal insurance, contact Noyes Hall & Allen Insurance today.

Easy Money

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Everyone’s looking to tighten up their budget these days. Many people prefer to  spread the cost of their insurance throughout the year by paying in monthly installments. But insurance companies charge an “installment charge” to cover the expense of sending those monthly bills, and to replace investment income they forgo by not collecting your premium up-front. The average “installment charge” is $5.00 per bill. That means if you pay your Maine auto insurance in monthly installments, you’re paying $50.00 or $60.00 extra a year.

Quick and Painless Savings

Instead of having the insurance company send you a bill, sign up for Electronic Funds Transfer (EFT) – automatic monthly withdrawal of your premium payments from your checking account. Most companies waive the installment charges completely for EFT customers. That saves you an extra $60.00, plus the cost of stamps, checks, and the time it takes to pay the bill.

Clients of our Maine insurance agency who are snowbirds or travel frequently love EFT. They don’t have to worry about bills being forwarded, or accumulating unpaid while they’re away.

One added benefit of EFT: no more risking cancellation notices by forgetting to pay your bill. Because your payments are automatically withdrawn, they arrive on time every month, without any action on your part.

For more information about insurance discounts, contact Noyes Hall & Allen Insurance at 207-799-5541.

Watch What You Say Online – and Protect Yourself Just in Case

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The internet: it’s not just for kids anymore. Almost 75% of Americans are now on the internet. Some people just surf the web and email, but more and more are participating in so-called “social media” like Facebook, Twitter and LinkedIn. And it’s not just kids. People 35-54 are the fastest-growing demographic on Facebook these days, (much to the chagrin of their children). Who knows how many blogs there are now? It seems that the world lost count somewhere after 60 million.

When Good Posts Go Bad
One thing about “social media” is that they are – well – social. Posts are called that for a reason: they’re publicly available for others to see. Blog posts and web site comments can range from informational to inflammatory, funny to foolish and ranting to R-Rated.

It’s not surprising that some postings have been accused of crossing the line – even relatively tame ones like the book reviewer sued for libel, or the blogger sued by a developer for defamation.

What if You’re Sued?
One question we’ve been asked is whether someone’s homeowners policy would protect them against such a suit. The answer is “it depends”. If your postings are purely personal – not on a business blog, and you purchased “personal injury” coverage, then you should have coverage against claims of libel, slander or defamation of character. Keep in mind that “personal injury” coverage is NOT part of a standard homeowners policy.

Hidden Value
Most people buy insurance thinking that it will pay for their legal damages because of liability of their actions. They’re right, of course. But even more important is the cost of legal representation that’s included in every homeowners policy.

Even a groundless suit can take many hours of attorneys’ time to resolve, and months of court resources. This can be more expensive than the actual damages awarded, depending on the circumstances. If you have a homeowners policy with personal injury coverage, you don’t have to worry about finding or paying for an attorney. Your insurance company takes care of that for you.

Of course, we don’t recommend conducting your online life in a reckless manner. But wouldn’t it be nice to know that if someone did accuse you of libel or defamation, your insurance would help you minimize the financial impact and stress?

Talk to a Maine insurance agent today about personal injury coverage.

 

Go Green – Save Green on Insurance!

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It seems “green is the new black”. Motivated by the economy, environment, or popular culture, many of us are looking for ways to reduce waste and excess consumption.
Whether you’re trying to reduce your impact on the environment or your expenses, even your insurance choices can make a difference.

Now Save Money by Going Green!
Progressive Insurance just announced a 5% discount for the thousands of Maine policy holders who already receive their policies and bills electronically.

Of course, insurance is primarily about protecting assets. But there are ways you can protect the environment without sacrificing your own protection.

Greening Up Your Insurance:

Pay your bills by automatic withdrawal from your bank account (sometimes called electronic funds transfer or EFT). Most insurance companies now offer EFT. This saves you time, gas and postage, not to mention making sure you don’t miss any bills or payments. Even better, it helps the enviroment by eliminating paper and the energy required to print and deliver it.

Paperless Policy Distribution. Some insurance companies will email your policy to you instead of mailing it. This saves ink, paper, postage, and storage costs for both you and the insurance

company. How often do you really need to look at your policy anyway? Just print your insurance cards, and save the rest on your computer. Some insurance companies even share their savings by offering a discount for those who choose a paperless option. Progressive Insurance even planted over a quarter million trees last year – one tree for every customer who goes paperless!

Choose an agency that “works green”. Modern technology offers many ways to work in an environmentally friendly way. Can your agent email documents and handle financial transactions electronically? Do they use digital storage where available, printing items only when necessary? What organizations, events and charities do they support in the community?

Communicate with your agent via email. Email is a great way to share insurance information. It allows you to review correspondence, quotes and documents at your pace and convenience. As a bonus, it’s all archived. It also reduces mail time and costs. And you can save paper by choosing what you want to print – or not.

You don’t have to sacrifice top-notch local service or solid protection to make green choices. If you would like to try some of these earth-friendly insurance tactics, call Noyes Hall & Allen Insurance today!


Reduce Your Insurance Costs – Improve Your Credit Score

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Like it or not, your credit score probably affects how much you pay for financial products and services than any single characteristic. Use of consumer credit information extends well beyond the traditional uses of loan underwriting.

Of the 10 home and auto insurers we represent, 8 use “insurance scores” – a variation of a consumer credit score – as a rating factor. Another considers credit information when underwriting. Only 1 of the 10 does not consider credit information.

Insurance companies have proven a strong correlation between higher credit scores and lower insurance claims. Most state regulators – including Maine’s – have agreed that insurers may offer lower rates to people with better scores – and higher rates to those with lower scores.

You Don’t Have to be Rich to Have a Good Credit Score
Contrary to popular opinion, income and savings are not factors in determining your credit score. It’s about managing finances: paying bills on time, being prudent with debt, and building credit.


A wealthy person who doesn’t use credit cards, has no car loan or mortgage, but who is sloppy about paying monthly bills probably has a worse score than someone of modest means who manages and pays debt prudently.

Tips to Improve Your Score

1. Get a copy of your credit report. They are available free once a year from each of the three major credit reporting agencies. However, you must use this web site rather than the individual agencies’ sites to get the free reports.

Check your report for errors, omissions and potential identity theft. Make sure that all your loans are shown; you want to show that you are good at managing all your accounts. Paying bills on time is critical to a good score.

2. Manage credit cards properly. If you don’t pay off your card every month, pay it down to less than half the maximum available balance.

Taking out new credit cards is a good way to drag your score down. Don’t take on a new card unless the interest rate A LOT lower and you plan to pay it off within the year.

3. Don’t cancel a credit card once you’ve paid it off – this surprises most people. Cut it up if you don’t want to use it, but don’t cancel it. Your credit score rewards longevity and restraint in using available credit.


4. If you plan to apply for credit in the near future, don’t use credit cards for groceries and other routine payments. Credit rating companies only see the balance on the day they check. They don’t know if you pay it off every month or not.

Of course, other factors -claims history, for example – affect your insurance costs. A clean driving record will lower your auto insurance costs; buying more coverage, or insuring a more expensive car will increase them. A larger home, or one without a nearby fire hydrant, will be more expensive to insure. But insurance score can play a surprisingly significant role in the price you pay for insurance. Managing yours can help you to control your costs.

For more information, call Noyes Hall & Allen Insurance.


Car Sharing? Protect Yourself First!

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A Valuable Service

Car sharing is an economical way for people who don’t own a vehicle – or who need an extra one periodically – to access a private vehicle. Led by Zipcar, the service have been extremely popular in urban areas and at colleges – including Bates College in Lewiston. Now, it’s finally come to Portland, Maine – thanks to UCarShare, a division of Uhaul.

Zipcar logo

Car sharing is often seen as environmentally friendly, because it can reduce the overall number of vehicles on the road, cut down on the demand for parking, and allow people who prefer to use alternative transportation (public transportation, bicycle, scooter, walking), but still need to use a private vehicle from time to time. It encourages density, and helps to reduce sprawl by making city living more convenient. We support the idea, and have blogged about it before. Ucarshare logo

One Big Issue

There’s just one aspect that we think you should think about before joining a car share service: liability. Car share companies provide insurance for members while driving the car. But how much? Zipcar says they provide $300,000 of liability coverage (less for members under 21 years old).

The problem is, you can get into a lot more trouble than that. Maine’s Wrongful Death Statute allows up to $1,000,000 in damages per person, PLUS punitive damages. If you’re driving a Zipcar and cause an accident that kills someone, you could be looking at at least $200,000 of responsibility, out of your own pocket. Even worse, you’d have to pay your own legal defense expenses once Zipcar’s $300,000 limit was exhausted.

UCarShare appears to offer even less liability coverage. Their web site says that they offer state minimum limits: $50,000 per person, and $25,000 for property damage (They haven’t responded to my email to clarify this). Many cars on the road are worth more than $25,000, and it’s easy to imagine a highway accident that would involve several vehicles. Never mind that $50,000 of bodily injury coverage is only 10% of the wrongful death damage limit.

And, Maine’s minimum limits are higher than most. If you cross the border into New Hampshire, you’re packing protection of $25,000 per person. And, don’t get us started on Florida, with their $10,000 bodily injury limit per person and $10,000 of property damage.

You Can Protect Yourself

If you have a Maine auto insurance policy with liability coverage, it will cover you after the car share service’s policy limits are exhausted, provided that your liability limits are higher than the service’s.

If you don’t have a vehicle of your own, you can buy “named non-owner’s” insurance to protect you. Talk to an insurance agent – including us – about this.

One More Thing…

The car share services typically make you responsible for the first $500 of damage to the shared vehicle. Your Maine insurance policy probably won’t help you out with that. Also, read your car share contract carefully. You’re probably restricted to listed people driving the vehicle, and on certain types of roads and situations. Know the rules before you get behind the wheel!

Good News to Start 2009: Maine Highway Deaths Reduced

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Gasbuddy.com chart
Last year was the least deadly on Maine roads since 1959, according to the Maine Bureau of Highway Safety. Several reasons were cited, some of which showed a possible bright side to 2008's historically high gasoline prices. including fewer miles being driven and people slowing down to conserve fuel. Officials also point to increased seat belt use and safer cars on the road as factors in the positive result.

Will Insurance Rates Drop?
If traffic fatalities are down, then insurance rates will follow, right? We think the answer is a definite "maybe." Here are 3 reasons why:
  • Insurance companies use multiple years' experience when they set rates. This avoids wild swings due to one year's particularly bad – or good – experience. Accident fatality statistics have been generally favorable over the last few years. And insurance rates are generally lower as a result (chart below is from III.org).Auto ins rates  
  • Other accident-related costs are increasing. Car insurance can pay for lots of things: medical bills for injured parties, repair costs and body shop storage charges for damaged vehicles, car rental, and repair for other damaged property (utility poles, buildings, etc.). Many of these costs have increased faster than the overall rate of inflation, which insurance companies have to factor into their rates.

 

  • Accident rates haven't decreased, only fatalities.  In a recent Bangor Daily News article, a Maine State Police spokesman said "we've had the same number of crashes.". Of course, insurance companies usually have to pay larger claims in the case of fatalities, but it's the frequency of accidents that drives claims experience (and insurance rates) more than severity.  

Fewer people died last year on Maine roads, and that's great news for everyone. If the trend continues, overall auto insurance rates might continue to drop. Even if it doesn't continue, the good experience should have a calming effect on Maine auto insurance rates.