PMI – Private Mortgage Insurance, also call mortgage insurance or MI, enables borrowers to buy a house with only a modest down payment. PMI is most commonly used by lenders for loans of which the borrower makes a down payment of less than 20%. These loans are generally considered more risky because the borrower has only minimal equity in the property and, therefore, is considered more likely to default. MI gives the lender added security to offset the risk of loans with smaller down payments. The borrower pays the mortgage insurance premiums, which are included in the monthly mortgage payment.

MI insures the bank that you will not default on your loan, or they will pay out a claim to help offset the loss incurred by the default.  As 20 year insurance agent, business owner, and homeowner, I’ve found that you also want to protect your investment.  One of the simplest and most cost effective ways for a home owner to protect themselves is through Life Insurance. As a home owner and provider for your family there are many forms of life insurance and there can be a couple of different ways to calculate how much life insurance is enough for you.  Below I have provided a simple tool that is commonly used, however, sitting down with a professional is always your best bet.   If you are looking for minimal coverage only to protect your mortgage/home then the product you will want to ask about is “Decreasing Term Life”.  It’s designed to decrease in value over time as you pay down your loan, so you are never over insured.`

The Acronym LIFE

Loans to pay off Mortgage, car loans & credit card debt

Income replacement of your annual income x 3

Final expenses: How much money is it going to cost to bury you

Expenses: Cost of taking care of family in the future that includes funding college

If you want to discuss Life insurance further please feel free to contact me.

by Mark Fortuna

in Homeowners Insurance

The number one misunderstood insurance term, hazard insurance, is a term most mortgage lenders use but not insurance agents. For this reason alone most customers don’t understand what hazard insurance is or what to expect for it.  The most common term is home or homeowners insurance.  Hazard insurance is a term that banks use to make sure that there home is protected against perils that could damage the home.  The most devastating perils that a home faces include fire, tornadoes, or hail damage.

Hazard Insurance, Home Insurance, Homeowner’s Insurance… all the same thing.

When Shopping for Homeowners Insurance These are the Things to Know:

Remember that all insurance companies collect information on the client and the home to create a rate. Most of the insurance companies score the client with metrics that  include FICO score and how they pay their bills. The pertinent information on the house are what the insurance companies use to come up with the replacement cost.

Replacement cost formulas vary from company to company. Refer back to my previous article on AMT.com to understand replacement cost estimators.

Another factor in creating the rate is the distance between the home and closest fire station. The greater the distance the more expensive the premium. This is why, back in the day, Hazard Insurance was called Fire Insurance.

How is Hazard Insurance affected in today’s real estate market of short sales and foreclosures?

A good tip for shopping hazard insurance is to note there is a difference between occupied and non-occupied homes. When purchasing hazard insurance, the rules for owner occupied and landlord properties are very similar. They are both preferred and the rates are cost effective. On the flip side, vacant investment properties (non-occupied) throw up red flags.

These  homes would be considered a higher risk and would be placed in a standard company versus a preferred company, which will result in a higher premium.

The consumer today is shopping their insurance with a greater frequency.  Above are the basics on what you need to know when you are shopping for hazard insurance.

If you have any questions, or would like to discuss any of these items in further detail, please feel free to Contact Mark Fortuna.

Homeowners Insurance: Replacement Cost Check Up

In general the consumer today is all about saving a buck! Lately I have taken a few calls regarding home insurance premiums going up because of the replacement cost increasing on the dwelling coverage part of the policy.

Home Replacement Cost Estimators

The following list of “calculators” was compiled to aid homeowners’ discussion about the adequacy of their homeowners insurance coverage with their insurance agent. These estimating services give differing construction cost estimates that can be used in evaluating the amount of replacement cost insurance on your dwelling.

Keep in mind, the coverage on your dwelling is to reconstruct your home in the event it is damaged or destroyed. Reconstruction costs, so are usually different from new construction costs. In addition, homeowners insurance does not cover your land, so the “market value” of your property is not indicative of the amount of homeowners insurance you need.

Homeowners might consider utilizing more than one estimator, but here is a brief list of some of the top estimators.

REPLACEMENT COST ESTIMATORS:

AccuCoverage by Marshall Swift Boeckh

Requires a fee; estimate based on details of home’s specific construction and characteristics.

XactValue by Xactware, Inc.

Requires “log-in” and fee; estimate based on details of home’s specific construction and characteristics.

Insure to Value by Bluebook International

Requires a fee; estimate is based on zip code or neighborhood and some home characteristics.

For additional tips on evaluating homeowners insurance, you can also see the “Homeowners Insurance Check Up” checklist on Arizona Department of Insurance ’s site.

Every day attorneys are penetrating our market with liability lawsuits.

Why not add umbrella coverage on top of your auto insurance and home insurance? Here is a perfect example that I have seen recently of why you should supplement your existing liability coverage:

The parents of a teenager gave him a car for his 17th birthday. The parents had an auto policy with a $500,000 per claim liability limit and an Umbrella policy with a one million dollar liability limit. One day, their son crossed over a median and collided head on with another vehicle. Two passengers in the other car were killed, and a third was seriously injured. The 17 year old driver was found negligent and ordered to pay $1.5 million to settle the injury claims.

Fortunately, the parents carried an Umbrella policy. The auto policy paid $500,000, and the Umbrella paid out the 1 million. A personal Umbrella policy offers additional coverage once the limits under your primary policy are used up. Your assets as well as your future earnings are protected.

In a world of frivolous lawsuits having an Umbrella Policy in place just plain makes sense… or cents.

It’s snowing in Northern Arizona – Should you carry Medical Expense Coverage?

All drivers need to realize how important it is to slow down and drive with caution on icy roads and snow. I know, I know – there isn’t much ice or snow here in the Valley, but what about when you go up to Northern Arizona for a quick trip?

Here is an example of just one of the real-life scenarios that I have seen:

A mother and daughter were driving north on highway 87 close to Payson. While driving with the flow of traffic the car hit a patch of ice and slid into the concrete barrier. The vehicle is totaled and mother and daughter sustain minor injuries. They are taken to a local emergency room. When she returned home she called in the claim with concerns about their medical bills.

What is Medical Expense coverage?

Medical expense coverage is insurance coverage that will pay for medical bills up to a specific amount, depending on how much coverage is purchased, whether or not the insured is at fault. Remember your liability insurance for your Arizona car insurance does not cover you and your passengers. Medical payments on your auto insurance policy is intended to cover smaller injuries for you and all of your passengers.

This is why I always try to recommend supplementing your current health insurance with a smaller amount of med pay or if you have no health insurance a larger amount. And as you probably already know, there are multiple discounts available if you also have  your Arizona homeowners insurance with the same agent that you have your auto and health insurance with.

The Medical Expense Coverage varies from $1,000 up to $100,000 with most insurance companies.

As always, be safe and cautious when driving in the snow and be sure to check with your agent about Medical Expense Coverage!

Open House: The Criminal Element in Desperate Times

Realtors hosting an open house on a clients property on any given weekend could lead to a burglary. Believe it or not the potential buyers walking through the house can create an opportunity for a future crime scene.

While walking through and casing the property the criminal will crack a window open or even unlock an exterior door. They will wait and let themselves in with no sign of forced entry and clean out the house literally!

Here is one example of a real-life situation that I have seen:

My client had her custom home up for sale and her Realtor was set to host an open house one weekend. After two days of showing the property to many people the Realtor shared that he was pleased with the amount of activity. The next week she left her home to go grocery shopping and did not set her alarm. The reason being
she would be back in an hour and half and felt safe because of living in a gated community.

To her surprise when she returned home her house was cleaned out.

The police said: “These are Professionals, they are fast and furious. No sign of forced entry!”

They had gotten in through the window they had cracked slightly during the open house. All the contents were covered with the policy but the gun collection and jewelry has limits. The policy coverage for guns is $3000 and jewelry is $5000 limits in coverage.

Realtors make sure to secure all windows and exterior doors after hosting an open house! If you are paying for an alarm use it at all times. Also check with your insurance agent about limitations in your homeowner’s insurance coverage.

Golf and sun might attract people to Arizona, but the state is also becoming a hot spot for identity-theft.  For the second year in a row, Arizona topped the Federal Trade Commission’s list of states with the most identity-theft complaints.

It’s more based on demographics, than geography.

Arizona official’s attribute their perch at the top to a couple of key demographic trends: a large elderly population that isn’t always aware of the latest identity-theft tactics, and high methamphetamine use.  Of course, those two key demographic points aren’t necessarily related to each other.  I’m not saying that Arizona has a large demographic of elderly meth-addicts that aren’t up to date on identity theft trends.  I promise, I’m not saying that.

Soooo…

One insurance remedy to this serious problem is Identity Shield Coverage added to your homeowners insurance policy.  This is a comprehensive solution to manage your identity. This coverage will monitor, insure and restore your identity.

What does it provide?

Loss Coverage

• Coverage up to $28,500 in expenses and $1,500 indemnity.

Credit Monitoring

• Continuous monitoring of credit files, as well as, publicly accessible records for fraudulent activity for two people.
• Annual identity report with details of the customer’s credit file and public records.
• Victims of identity theft, or those who suspect they may be victims, receive:
  • Identity resolution services for the entire household
  • Access to an advocate who will guide the victim through the identity recovery process 24 hours a day, seven days a week
  • Preparation of correspondence necessary to notify all relevant parties of the fraud (credit bureaus, financial institutions, etc.)
  • Assistance in placing fraud alerts and security freezes with credit bureaus

Identity theft is a growing concern throughout the United States, and it’s a threat from which no one is immune.  It has become so prevalent that most people, if not victims themselves, know someone who has been a victim.  The crime can be devastating, and is often costly and time-consuming to resolve.

You can add this coverage for around $65.00 per year.  A small price to pay for piece of mind.

If you have any questions, or would like to discuss this further, please feel free to contact me.

Why have a personal insurance agent?
Today’s life is more complicated and the insurance market is going to the internet! Is the internet the place to be shopping for personal insurance? For something as Individual as personal insurance, there are real benefits to working with a personal agent who can match your coverage with your changing life. And you don’t have to surf the Net for hours, getting prices and reading insurance glossaries to unravel the difference between UM and UIM coverage.

Here are more reasons to have a personal agent.

Your needs keep changing:
Life doesn’t stand still. The insurance you have today might not suit your life next month. Your agent can offer to review your coverage and make sure your insurance is keeping pace. Do you rent, have you bought your first home or are you looking to move into something larger? Did you just land that big job and treat yourself to a dream car? A personal agent can customize your coverage to fit your needs.

Your agent does business the way you want:
When you call you personal agent you get your agent— not some phone representative in a city across the country. Your agent can work around your busy schedule.

We’re local and convenient:
Because we live and work in the local community, your agent can get to know you and your family. And when you have a question, you don’t have to introduce your self to a 1-800 operator in another state because you aren’t working with a stranger…

You are working with a personal agent who cares about taking care of all your insurance needs.

This is the first post on my new blog, still under construction, at markfortuna.com.  We are working on setting up all the backend right now, and have just installed a writer program to make these posts easier to spin out.  So far, I’m pretty excited.  Stay tuned, world.  My thoughts and ideas are about to hit you hard.