In this week’s edition of Money, I’m Home!, Lynne is joined by Ann Kuiper of Nulty Insurance to discuss unexpected changes to your insurance costs.

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0:00:06.9 Lynne Jarman-Johnson (LJJ): Money, I’m Home! Welcome in. I’m Lynne Jarman-Johnson with Consumers Credit Union. And we have a great session for you today, it’s all about the things that you kind of forget about until, oops, the payment’s due. And then you’re thinking to yourself, “Do I have enough?” We’re talking about insurance. And with us today is Ann Kuiper, she is the personal insurance department manager at Nulty Insurance, our wonderful partner that we have here at Consumers Credit Union. Ann, thanks so much for being with us today.

0:00:35.2 Ann Kuiper (AK): Thank you for inviting me.

0:00:37.0 LJJJ: Well, we today are going to talk about something that I think that people often have questions about, especially right now, because there’s been so much change going on, and when the pandemic hit, the wheel started turning about car insurance, and you get to deal every day with personal insurance, for wonderful customers. What is it that you have found has been in the last year the top couple of questions that keep seeming that pop up for you?

0:01:02.3 AK: There has been the no-fault insurance changes. And that happened last July. We actually did a podcast last year, about this time, about all those changes.

0:01:12.9 LJJ: We sure did.

0:01:13.1 AK: They were significant. Yeah, they were significant, and I think that most people have now made their way through all those changes and understand it a little better. Of course, we’re always willing to answer questions. The newest thing though that has really come up is the cost now to rebuild your home, because the building costs have skyrocketed so much in just the last few months, most of it due to effects of COVID.

0:01:47.2 LJJ: Okay. Here’s a great example, I was just in a meeting where someone was talking about they had built a deck on their house about two years ago, and then they decided to expand that deck. Same footprint, pretend you’re just mimicking it, copying it. It cost them two and a half times more to build it.

0:02:03.0 AK: Yes, that is correct. That is what we are being told by contractors now, and so obviously that has a huge impact on the amount of coverage and what kind of coverage you have on your homeowner’s insurance.

0:02:15.7 LJJ: So, what is it that you’re recommending for someone who right now either has a home, they’re considering change? What’s the recommendation to think about?

0:02:24.4 AK: Well, most homeowners policies are currently written on a replacement cost basis, so it’s not the market value of your house, and it’s not even really the cost to build your house from scratch. I always say, it’s a whole different animal. It is the cost, if your home is completely destroyed by a fire or tornado, something catastrophic, and you need to first remove all the debris that’s there and then rebuild, even though homes are written for replacement cost, and usually, most people have gone through a whole series of questions that their agent asks them, I always feel like I’m interrogating people when I go through all the questions that we have to ask to find out how should be insured for a replacement cost. They could have done this six months ago. We insured the home or any other agent for what all of our software tells us is 100% of the replacement cost, and now it’s not adequate. And what people…

0:03:27.4 LJJ: In six months?

0:03:29.5 AK: I’d say it’s been most significant in the last six months. So, what people need to do is to review, make sure their home is still covered for replacement cost, and maybe just as important to make sure that they add a coverage to their policy if it’s not already on there. And that coverage has various names, depending on the insurance company, but really what it is, is an increased cost endorsement. So, you’ve insured… Just to make this easy, so I can do easy math, you’ve insured your house for $100,000, which I believe is really difficult to insure a house for that amount right now and have it covered adequately, but for math… You’ve insured your house for $100,000, that is the full replacement cost from an insurance standpoint, and then you put an increased cost endorsement for either another 25 or 50% over that. So that if it does cost more to rebuild your house, you can have, in this case, either another $25,000 or another $50,000 to put towards the house, to put it in the same square footage and quality that it was before.

0:04:45.1 LJJ: Is the cost then for that increased cost endorsement, is it doubling what you’re spending or is it not? Wouldn’t you be worried…

0:04:54.4 AK: No…

0:04:54.9 LJJ: Like “Oh, my gosh, I’m doubling my expense for my insurance.”

0:04:57.8 AK: No. In fact, that premium is usually… And it all depends on how much the house is insured for, but it’s usually $25 to $50 more a year.

0:05:09.5 LJJ: Oh my goodness. So why wouldn’t you, right?

0:05:12.4 AK: Right. We do try to sell that to everyone when we write a homeowners policy, we try to include it.

0:05:18.7 LJJ: So, what are some of the things that homeowners don’t think about that do cost a little bit more when it comes down to paying for your insurance? I remember when we had little kids, it was always, they wanted a trampoline. And I was always just like, “You’re not going to get a trampoline.”

[laughter]

0:05:36.2 AK: It can. Yes, it can increase your insurance. Different insurance companies have different underwriting rules and eligibility, so some insurance companies say, “We don’t care if you have a trampoline. It won’t cost anymore and we won’t surcharge you.” Other insurance companies, especially those that have had a lot of losses, they’ve had to pay out due to injuries, they say, “Of course you can have a trampoline and we’ll still insure you, but you need to have it netted, you need to have it fenced, you need to be in a fenced yard maybe.” And then there are other carriers that says, “Of course you can have a trampoline and we are going to give you a surcharge on your policy, because the likelihood that you’ll have a liability claim from someone being hurt has just increased.”

0:06:24.0 LJJ: When you are looking at the insurance that you’re purchasing for your home, it’s really important to ask the questions so that you’re not surprised later.

0:06:32.7 AK: Right. We have, again, in that interrogation that I was talking about, that is one of our customs that we…

0:06:38.1 LJJ: You make it sound… It’s a friendly interrogation, Ann. It’s a friendly interrogation.

0:06:41.9 AK: Yeah. It is a friendly one, but it still is a lot of questions, and that is just for your protection, so that we make sure that we’re covering what you need to have covered, but we do always ask about trampolines. Most insurance companies will do an inspection of the home at some point too, and if they find that there’s a trampoline there, it could have an impact on your premium if they didn’t know about it.

0:07:06.4 LJJ: What other items are there that would be considered a potential for a surcharge?

0:07:12.0 AK: Probably another one would be pools. So, when you’re thinking about putting in a swimming pool, if you don’t already have one, that’s one thing you should find out if there’ll be a surcharge, if you need any additional coverage, and, again, it depends on the insurance company. Some don’t surcharge; some do. Most require that you have it fenced or at least meet the local ordinances and what those requirements are for a pool. When you get a pool or a trampoline, you do want to really look at your liability coverage though, to make sure you have enough protection if you’re sued because of an injury that happens at your house.

0:07:50.6 LJJ: I read an article, and it kind of surprised me about even types of dogs that people might have.

0:07:57.1 AK: That is correct, yes. There are some dogs that are more prone as a breed to bite than others are, and the bites can be more severe. Some of those dogs are an Akita, a pit bull, a bull mastiff, a chow, Doberman. Some companies do German shepherds or huskies, Rottweilers, any kind of wolf or wolf-hybrid.

0:08:26.5 LJJ: That one sounds a little bit like, “Okay, I get that.”

0:08:30.7 AK: But people have those. [chuckle]

0:08:32.5 LJJ: But is it… Is it again where you’re asking the question, look it… Because, otherwise, is it hidden or is it always automatically in the questions that you ask that the information comes out?

0:08:44.2 AK: It is always in the questions that we ask.

0:08:46.9 LJJ: So, tell us a little bit about what has happened with COVID. Oh, my goodness, there are so many people now who purchased boats, who purchased RVs and campers because they want to have that great experience outdoors. Are there any changes in any of the insurance coverage or what is it again that you have to look into?

0:09:05.6 AK: If you do buy some of those toys or those boats, you should check with your agents just to see how it should be covered. Most insurance policies, homeowner’s insurance policies, only provide very, very limited coverage for those types of things. So, for example, with the recreational vehicle, you need both liability and physical damage coverage, and there’s no liability coverage provided if you use it off-premises. And most people don’t own several acres to drive it on, and so they’re always going to use it off-premises. So that would be for golf carts or snowmobiles, four wheelers, any of those types of things.

0:09:46.3 LJJ: So, any of those toys.

0:09:48.2 AK: Right. And the same is true for boats. You need to have coverage for any possible damage to the boats and liability for many boats. There are some insurance companies that will provide automatically on a homeowners policy some liability for outboard motors, but it depends how big, and it depends on the insurance company – You really have to check.

0:10:11.5 LJJ: Really what we have heard you say today over and over and over again, always double-check what your check-ups are for your insurance. Check-up on yourself. Do you have new things? Now that COVID has literally changed the landscape for building materials, do you have enough coverage? It’s okay to ask those questions, and then also make sure that you’re planning ahead so that you… In case there’s something that happens, you’re ready.

0:10:38.5 AK: That is exactly right.

0:10:40.4 LJJ: Well, Ann, thank you for your time. You always have such good information.

0:10:43.8 AK: Well, thank you very much again for inviting me to share it with people.

0:10:47.9 LJJ: Everybody, remember, your insurance is up to you, but Ann has a really good way of doing an inquisition for you, if you’d like. Just try.

[laughter]

0:10:58.0 LJJ: Ann, thank you so much. Have a great day today.

0:11:01.2 AK: Thank you. You, too.

0:11:02.3 LJJ: Hey, thanks everybody for listening in. If you have a topic that you would like us to share with our members and our listeners, please do so. Just send them our way. In the meantime, I hope everybody has a great week. Thank you, Jack Esselink, for your wonderful production skills. Money, I’m Home with Consumers Credit Union.

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