“Homeowner’s Insurance Policy” information that will give you $50 of value/information

 

We put together a list of 5 insurance policy items to check and have on your policy! If you have 15 to 30 minutes to review your policy please do so.  If you have difficulty finding them ask your agent or contact a local public adjuster for a review! WE HIGHLY RECOMMEND THIS, because these items could provide you upward to $500 to $100,000 pending an insurance claim. In 2017, 1 endorsement netted a client $33,000 (Had Law & Ordinance Clause) and the lack of knowing their policy also lost a client $27,000 (Had an ACV Policy). So it is critical to consider.

These items are specifically to ensure proper protection for your homes exterior products from common Midwest weather patterns! This week alone in Illinois over 30 towns were hit with hail and Crown Point, Indiana received pea-size hail. As, this Indian summer continues it’s critical to be properly protected & insured.

1. Law & Ordinance endorsement

This is extremely valuable if you live in an older subdivision! Many homes throughout northwest Indiana and the south suburbs of Illinois were built-in 1960’s to 70’s, which means many building practices are outdated. A lot of municipalities and building departments abide by 2009/13 residential building codes. It’s not rocket science to understand that 60’s version of framing is not equivalent for today’s standards. If you don’t have this endorsement, YOU WILL BE RESPONSIBLE FOR THE COST. A reputable contractor will not reinstall a product back to its original condition, because they could face fines from the village or worst lawsuits.

 

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Vapor Shield – is required by many villages/townships = $$$ for you

 

2. RCV Policy (Replacement Cost)

Pay the extra $$$ on your monthly premium. The difference of $15 to $45 dollars a month for your premium to receive the full amount of recovery IS WORTH IT. The average roof in 2018 dollars was $11,000, which equates to 733 payments of $15 (48 years of premium). So what is a RCV policy 1st?  A replacement cost value policy is a policy in which the insurance pays you the real-time cost and factors no depreciation into your cost. Whereas an ACV policy includes depreciation, for instance if your roof is 10 years old, the insurance companies will deduct 10 years from the value of the replacement cost = less $$$.

 

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This church had a RCV policy = receiving the full amount for replacement

 

3. Wind & Hail Endorsement

This is exactly what it says. Specifically covers wind & hail damage. Without this endorsement it’ll be VERY difficult to make a claim, because you’re not paying for the ability to claim wind & hail. We advise checking every year, because in storm heavy areas it’s known that clients have “mysteriously” had this endorsement left off.

4. Color matching Clause

EXTREMELY important for premium siding products and older homes. Every insurance provider is different in how they “describe” color matching peril. Example: if your home is 30 years old and only 1 side is damaged, it’ll be very difficult to find a color match for the 3 opposing sides. One company: Nationwide does have a color match clause and will indemnify for matching siding, which is fantastic for the homeowner. Be aware not all companies have this, but can assist in making your home aesthetically better looking without out-of-pocket expenses

5. A reputable insurance company

Do your research and align yourself with an organization with credible history of paying when their at fault. Ideas such as reading consumer reports, ask your neighbors about their experiences, and thoroughly research the internet. A company is only as good as their services!

We featured a recent blog pertaining to companies, in which we’ve worked with and have had good experiences on behalf of our clients! Check it out!

We hope this adds value to your life and possibly your wallet!

 

 

 

 

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10 tips to know: buying a distressed property

Fixer upper, Rehab Addict, and other shows continue to romanticized the restoration industry, but more importantly the rental/flip market. These shows make for great television for many reasons such as the alluring before/after process, ROI (return on investments), or being your own boss. Yet our goal is not to poach your wallets or scare you off from potential opportunities, but give you some information that these shows often don’t showcase.

  1. Know the municipality codes, permits, and rules before starting the construction (Flip or Rental).

    Costs associated with permits could go as much as $3,000. There are villages and towns that have a fixed rate (3%) implemented in the overall job cost, while others have set fees per the renovation. However, some towns could and will backcharge you for renovations completed without a proper permit/building inspection (HVAC, electrical, etc.).

    • Advice: Allow your contractor to file for the permits. It’ll much be easier and you won’t have to paper chase the contractor.
  2. Avoid pools and decks

    If possible, avoid both of these property headaches. Both items will raise your homeowner’s insurance policy due to the potential risk, while also increasing the home inspector’s No.2 pencil. We strongly advise against a pool if this is a rental property due to maintenance, upkeep, and potential lawsuits pending worst case scenarios.

    • Advice: If it’s an in-ground pool, fill it in with the demo debris with items such as: deteriorated wood, drywall, and biodegradable items will help slash disposal costs.
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  3. Have a good lawyer (Especially in Illinois)

    THIS IS A MUST, if you are be venturing into the rental sector. It’s common to experience one bad apple during your landlord career. Ask any colleague whose a landlord and we assure you they’ll praise the good tenants as if they’re the second coming. The true benefit’s of a good lawyer are: timely evictions, cut future court costs, and provide sound legal advice.

    • Advice: We advise having state specific attorneys rather than using only one attorney. Due to the intricacies of rental law among states and to provide a checks/balances for yourself (more importantly your pocketbook).
  4. 1st screen the potential contractor’s 

    We recommend choosing the contractors before starting the overall restoration. There are general contractors who will seek 6 to 19 bids to get the lowest possible bid, but we don’t recommend this at all. If you’re flipping this property than you know time is not on your side. Every month of waiting for a bid equals: 1 more month of taxes, insurance, electricity, potential exposure to theft, and vandalism.

    • Advice: Review their trade license’s, insurance (is it active), and verify it with the village. Seek references from family and friends.
  5. Always over budget and add 3 months.

    For a peace of mind simply add 5% to the job cost and expect the project to be finished 3 months longer. We are aware that ROI (Return on Investment) is the reason for getting involved and this new venture is not for entertainment. However, projects can get dragged out due to weather constraints especially for exterior contractors, permitting, unexpected building finds, village inspections, home inspections, rental inspections, and more unnecessary politics.

    • Advice: It may be cost-effective to use a general contractor to manage the 1st restoration for yourself. They may already have pre-screened contractors whom are qualified and do quality work. We recommend shadowing and observing from them.
  6. Homeowners Tax Exemption (Rentals)

    This is the most common thing I’ve learned with 1st time landlord’s is they get bug-eyed after they see their taxes increase in the 2nd year. Often, it’s because the village discovers you do not live there.  If it’s not your “true” residential home and an investment property, you’ll more than likely lose the homeowners tax exemption. I agree, various communities taxes such as Park Forest, Illinois – $7,000 a year) are criminal,  but you should know this before investing. DO NOT TRUST ZILLOW OR TRULIA’S TAX RECORDS.

    • Advice: Understand the tax rate of the town especially if the intentions are renting the property. As previously mentioned with Park Forest, Illinois $7,000 a year in taxes = you’re splitting your ROI with the village.
  7. Know your goal (Rental or Flip)

    “Know your goal?” I want to make money! We mean are you renting or flipping the property? This can change the selection of products, colors, flooring, and exterior products you use. If you’re flipping the property you may install more trending products, but if you’re renting you’ll want to be cost conscience on the products to maximize your return. Also, if you’re renting a property you might get by without replacing items until you have too.

  8. Partner with a Lowes Pro, Home Depot, local building supply, or Menards credit card.

    If you can pay cash great, but you’re leaving a lot points/discounts on the table. The benefits of some of these programs: it’s easy to track receipts and previous purchases, which allow you to uncover your true cost on the restoration. Menard’s and Lowe’s often give a 5% discount on items purchased using their Pro-Cards, which can help you. Keep in mind all these building stores have a varying levels of product quality.

    • Advice: If you follow through on #10 by creating an LLC, than you can obtain a business credit card and avoid future personal credit issues.Project lao
  9. Don’t install appliances until you have too

    There’s no rush to install the appliances! We know you’ll probably be purchasing washer/dryers, stoves, refrigerators, and other premium items, but hold off. Theft is extremely high in renovation units and they’ll break in if $1,000 + of appliances is seen. Even if you have an insurance policy on the home, it’s generally not worth the claim. We know kitchens are exciting to see completed, but honestly if you want to fall within your budget and keep a sound mind, hit the brakes on the appliance installation.

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  10. Create a LLC. for the property

    If you know your goal is to rent the property then you should create a LLC. for the specific property. Consult with your chosen attorney. This is not uncommon, we know many investors that do this to eliminate potential financial risk from the tenants. A Limited Liability Company can protect your personal assets and avoid this side hustle from ruining your future.

We hope this help’s you a little. If you’re interested in venturing into the restoration industry please contact us at Total Roofing & Construction Services, Inc. or  Emerald Managment   Contact us today because there’s much more information and fact’s to be aware before purchasing property.