Many people have taken advantage of lower interest rates in recent years to purchase a second home or condo that they can use as a source of income through renting it out as a vacation rental. This can be quite a lucrative venture, as some desirable rentals in resort areas (such as on a lake) can fetch $700 to $1000 per week from tourists and travelers. If you are renting your home to strangers, you’ll want to make sure that you have the proper insurance to cover you. Your standard homeowners or condo association policy might not be enough.

For example, a condo association generally has a master insurance policy or a blanket policy that covers the common grounds and insures the exterior walls of the building but won’t cover the interior walls or contents of the building such as furniture. They also won’t cover your vacation renters if they are hurt on your property. For those situations you’ll have to purchase your own condo or homeowners policy that includes liability coverage.

If your vacation rental is on or near the coast or in a floodplain, you’ll also want to consider purchasing hurricane or flood insurance. Hurricane coverage is generally flood and wind coverage, which are purchased separately from your basic homeowner’s policy. If your vacation rental is in a high risk area, the premiums for these types of coverage will be more costly. You will want to do some of this insurance shopping – especially special insurance endorsements such as flood coverage – before you even buy a vacation rental property. This is because you may find out the “great deal” you are getting on a mortgage payment on a rental property might not look so great once you add hurricane insurance premiums of $3-$4,000 per year to your monthly house payment. This can seriously cut into your potential profit on a property.

Another additional insurance coverage you may want to look at is rental insurance which covers your property in case you have a loss of rental income due to a natural disaster, flood or fire. If you are counting on a regular rental income in order to make the mortgage payments on your rental property and you suddenly lose those payments, you could be in danger of foreclosure.

There isn’t really an entire policy designed specifically for owners of vacation rental homes or condos, so you’ll have to work closely with your insurance agent and ask a lot of questions about your coverage to design a policy that works for you.  Don’t just hope that your regular homeowners or condo association insurance master policy will protect you. Once a claim is filed, such as a personal injury claim, and the insurance company finds out the home is a rental and not your primary residence, they may decide to cancel your property or deny the claim.  In that situation, you could be out thousands of dollars of your own money. Be smart and get the right coverage. Make sure it is affordable and makes sense before you buy a property. Remember that a vacation rental is really a business, and should be covered just like a business would.

If you want to know more about home or condo insurance, click here to get a free Arizona Home Insurance quote or a free Arizona Condo Insurance quote.

Source: http://www.flickr.com/photos/gdsdigital/4554359577/

Hurricanes, floods, mudslides, earthquakes, and tornadoes always get great coverage on the cable news networks. Images of destroyed homes and distraught families left with little or no possessions have become commonplace. These images are so common, in fact, that we’ve learned to ignore them at times. What people cannot ignore, however, is the reality of natural disasters and the effect they have on normal every day people.

For hurricanes, earthquakes or floods, homeowners will need to seek separate coverage in addition to their standard homeowner’s policy. For tornadoes, however, there is coverage under your existing policy. That’s because they are considered “wind events” by insurance companies. If you live in an area that experiences tornadoes such as Tornado Alley, the area of the country that runs north from Texas through eastern Nebraska and northeast to Indiana, you are probably well aware of the damage that a tornado can do. If you live outside of that area, however, you can still experience a twister. That’s why it’s smart to take a good look at your homeowner’s policy to see what your tornado coverage is like.

If a tornado damages your home, the first thing you should do is file a claim as soon as possible. Some insurance companies place a time limit on how long after the tornado occurs that you can file a claim, and this limit will vary from state to state. Document the damage with a video or digital camera right away and repair any damage such as a hole in the roof with plywood or a tarp before further harm comes to the inside of your home or belongings from the elements such as wind or rain. If there is damage to your personal items, make a list of those items and assign a value to them through research or sales records. Be as organized as you can so your claim can be handled more smoothly. Also make sure you communicate how severe the damage is to your insurance provider, as they will prioritize which claims they start on first according to which are the most severe.

Source: http://www.flickr.com/photos/overseasvoyager84/2262103731/

Don’t fall prey to suspicious companies who rush in after a tornado. Get multiple quotes from roofers or contractors and check on their references and credentials before having any work done. Your insurance agent may ask you to use a specific firm to do any repair work or provide you with a list to choose from. This is true for temporary repairs that you have done right away as much as it is for the permanent repair work you will need done. Both should be covered under your homeowner’s claim so save your receipts and paperwork to give to your claims agent.

The insurance company will pay for replacement of your damaged home or roof. Keep in mind, however, that they will not pay for you to replace the damage with better materials than you had before. If you had a shingled roof, for example, they won’t pay for you to replace it with a metal roof. If your home is uninhabitable while it is being fixed, the insurance company will also pay to move you and for the rent at a temporary residence until you can move back home.

Visit our website for more information or click here to see if you can save more money on your Arizona Home Insurance policy with a free quote.

Take for example the story of one young Northern California family who was in the process of purchasing a new four bedroom, two-story home. The home had undergone a foreclosure and was being sold by the bank, so it hadn’t been lived in for several months. The couple fell in love with the house, put down a deposit, and began the process of getting the home inspected for processing of the bank loan.

Because the home was connected to city water, the home inspector called to have the water turned on at the home. What the inspector didn’t know, however, was that someone had left the faucet in the upstairs bathtub on with the drain stopper in place. Two days later when the inspector arrived to look at the house, the water had flooded the bathroom and run down the walls of the ground floor living room and dining room below, soaking all of the carpet in the upstairs and downstairs. The drywall had buckled and bubbled, collapsing under the weight of 48 hours of continuously running water.

The house sat for nearly a week before a claim was filed and cleanup work could begin. Mold and water saturation had already crept in. The walls and carpeting were torn up and workers dried out the house with industrial fans for weeks before finally repairing the walls, carpeting, and repainting the interior of the house. The couple had to walk away from the sale, even though all of this work had taken place at the bank’s expense. Why? Because every mold expert they called told them there was no way to completely get rid of the mold in a case like that, and it could return or get worse and cause further problems down the road. Mold, while usually harmless, can still cause structural damage and problems for people with breathing issues such as asthma or allergies. It can also affect the future resale value of the home, as most disclosures require you to report the presence of mold.

Whether mold is covered by a homeowner’s insurance policy depends on the source of the moisture and the wording of your policy. A separate mold rider can be purchased, and usually costs around $500-$1500. If mold results from an accidental situation that’s already covered by your policy, such as a pipe bursting in the example mentioned, the mold remediation cost should be covered. Flood damage is different and covered by a separate policy, however.

Most basic homeowner’s insurance policies exclude coverage for damage caused by mold, fungi, and bacteria, but that doesn’t mean a mold claim will be automatically denied. Claims will usually only be rejected if mold is caused by neglected home maintenance on the part of the owner or situations such as long-term exposure to humidity or repeated water leaks. Mold claims can be expensive for insurers, with the average claim falling between $15,000 and $30,000, causing many states to adopt limitations on mold coverage. Amounts vary, but a typical homeowner’s policy might cover between $1,000 and $10,000 in mold remediation and repair. They only way to make sure you are covered is to speak with your agent and go over your policy.

Click here for a free Arizona Home Insurance quote and see if you can save more today!!

Each item below has limited coverage in the event of a covered loss. (Some items are not covered at all.)

1. Cash, Coins and other cash equivalents . (stamps, Travelers checks, Bank Notes)
2. Property used or intended to be used in Business. (TOOLS IF YOU MAKE YOUR LIVIMG FROM THEM)
3. Home computers
4. Rugs, Tapestries, Wall hangings
5. Silverware and Gold ware
6. Guns/Firearms
7. Jewelry
8. Trading cards, Comic Books, Coin Collections
9. GOLD/SILVER Bullion
10. Watercraft and equipment
11. Trailers
12. Cars stored in the garage (ONLY AUTO POLICIES INSURE CARS)

The insurance policy contract provides coverage for some things that happen to your home and contents…. But not for EVERYTHING THAT CAN HAPPEN. Here are areas that you should be aware of:

Losses to your home because of:

Arizona House

1. Birds, rodents, insects or domestic animals are not covered. (When your dog goes crazy on New Year’s Eve and rips down all the drapes… not covered!)
2. Damage to your home caused by deterioration, settling, contamination or nuclear hazard… not covered. (That old roof, is probably not an insurance problem. The crack in the tile floor, probably not.)
3. Earth movement including earthquake and mudslide is not covered under your home policy.
4. Flood is not a covered loss under a home policy. (Toilets overflowing are not floods!) Flood usually happens when it rains for 40 days and 40 nights… If you see animals going by the house in groups of two chances are that there will be a FLOOD. ) If you purchased a FLOOD policy, you will have a chance to make a claim.

In recent years, more and more people are running a business from their home. The common belief is that if the business is in the home that the home policy will cover the business. STOP THINKING THIS!! Your business in home needs the same type of business policy as if you were renting space in a strip mall or had your own business location. Your home policy was never intended to insure the business contents or liability exposure.

To find out how much coverage you need or see if you are currently under-insured, please fill out one of our free Arizona Home Insurance quote forms.

I love insurance for what it was designed to do. It protects you from financial loss for certain things, but not everything. The best way to make sure that your unique situation is taken into consideration when purchasing any insurance contract is to take the time to work with your agent. Go over the areas that are limited. Agree to taking on the risk yourself or passing it on to the insurance company for additional premium, but most importantly, don’t learn about your contract after the loss happens!