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5 Times It Doesn't Pay to File a Homeowners Insurance Claim

by Kathy and Michael Rain - The Rain Team

Great insurance policies help homeowners sleep better at night. If something bad happens, at least you can call your insurance company, right?

Unfortunately, not being careful with your homeowners insurance claims could turn a real-life disaster into a financial catastrophe. Submit too many claims? Your premiums might rise. Submit the wrong claim? Again, your premiums might rise—and you'll still have to cover the cost of the damage.

Truth be told, homeowners insurance isn't as simple as "Submit claim, get paid." To save money in the long run, you need to think carefully about whether you want to file that claim. Here are five scenarios that might end up costing you.

1. When the cost is within 20% of your deductible

Don't treat your homeowners insurance deductible like your medical insurance deductible. Just because your insurance company will cover part of the cost doesn't mean you want it to do so.

"I would never recommend that one of our customers turn in a claim that, after the deductible, is only going to pay out a couple hundred dollars," says Will Tucker, who owns an independent insurance agency, Tucker Agency. "We advise our customers to pay cash until it becomes painful."

Submitting multiple small claims may ultimately make you "uninsurable," Tucker says. Soon, you'll see higher premiums, and you might even struggle to switch insurance providers.

Financial planner R.J. Weiss advises homeowners to "avoid filing a claim within 20% of your deductible." So if your deductible is $2,000, don't submit anything to your insurance if it costs less than $2,400.

2. When it was avoidable

We're going to use a very, very broad definition of "avoidable," here. Avoidable doesn't mean "your fault," or even anyone's fault, per se. Think about it from the insurer's perspective: Would better locks or a different property location have thwarted the thief who stole your television? Would a newer stove or frequent maintenance have prevented that kitchen fire?

"Not all losses are created equal," Tucker says. Take hail, for instance: There's nothing you can do to keep a freak storm from battering your roof.

"A theft or fire claim is always going to be worse," Tucker continues. That means your post-claim insurance premium increase will be proportionately worse, too.

While this shouldn't keep you from filing a claim if your losses were severe, consider paying cash if you can afford to do so.

3. When you are responsible

If you're filing a claim because of homeowner negligence, consider carefully whether you can afford to fix the problem yourself first.

"If the damage is due to your lack of maintenance, your claim may be denied," says Katie Tu, an insurance specialist with QuoteWizard. Even if your claim is denied, it's still noted on the Comprehensive Loss Underwriting Exchange—or CLUE—which means that it can affect your premiums.

If your insurance company believes you're not capable or interested in maintaining a safe home, that can affect your insurance, too. Immediately maintaining or repairing any issues when they show up "can prevent you from filing frivolous claims," Tu says.

4. When your local agent tells you not to file

Having a local insurance agent can be a lifesaver, especially if you're trying to avoid premium increases.

"I take pride in advising my clients and helping them decide the best course of action regarding the claims," says Julian Conner, a private insurer with Mints Insurance Agency. "If you call the carrier directly, they'll often funnel you right to the claims department. Even if you're only looking for the answer to a couple of questions, this often triggers the start of the claims process."

Talking to a local or independent agent first can save you the trouble of filing a claim you really shouldn't have—and which also might increase your premiums.

"Most agents have seen a lot," Weiss says. "In addition, many agents can call your insurance company—without giving your name and policy number—to inquire about the chances of your claim being denied."

5. When there aren't long-term home repercussions

Here's a tricky homeowners insurance claim scenario: water damage. Let's say a pipe burst in your second-floor laundry room, soaking the first floor. Your deductible is $3,000, and repairing the pipes and cleaning the water costs about $3,500. You shouldn't put in an insurance claim ... right?

Maybe you should. If damage might worsen over time, filing a claim now is the right course of action.

"You may be able to dry your floor and call it a day," Conner says. "But did the moisture seep into the subfloor, starting the beginning of a mold problem? If you report this claim right away, the loss will likely be covered. However, if you wait two years until you discover the mold, the carrier will likely deny it."

Figuring out which insurance claims are worth making can be a tricky business. Knowing how best to evaluate a problem—and understanding whom to call if you can't make a decision—will prevent you from paying more in homeowners insurance costs over the long run.

 

Photo by Le Creuset on Unsplash

What to expect under President Trump: Silicon Valley

by Kathy and Michael Rain - The Rain Team

Andy Block
Mortgage Advisor and Personal Finance Advisor
NMLS 293174 ,
While Opes Advisors, Inc

Tech stocks have lagged behind the broader market gains since Trump’s win, as investors chalked the tech sector into the election’s “loser” column. Trump successfully voiced the fears of Americans who aren’t confident about their economic prospects during the tech-powered revolution of the past two decades. Silicon Valley now faces the unsettling prospect of less friendly policies, as Trump intends to launch a counter-insurgency against globalization and restore job growth for US workers through infrastructure spending, immigration restrictions and protectionist trade policies. 

For more on how the Trump Administration may impact the Silicon Valley economy, read our expanded commentary below.


The government has taken a laissez-faire attitude toward the tech industry for many years, providing limited oversight and friendly policies, such as an Internet tax ban and support for network neutrality and the “open internet.” With Trump, the tide may be turning. While local businesses will welcome lower corporate taxes and reduced regulations under Trump, Silicon Valley remains uneasy about the next four years. Tech manufacturers have a lot to lose under a protectionist trade policy and immigration restrictions. Major area employers are concerned about brain drain if hiring of highly skilled immigrants is curtailed while businesses are incentivized to use and train American labor.

 

 

Topic  Trump's intention Possible Outcomes
Tech Industry
Jobs and Stocks

• Create millions of jobs by spending more than $1 trillion improving US infrastructure.

• Impose taxes for importing or exporting goods.

• Push US companies to bring jobs outsourced to other countries back to the US. Trump has repeatedly called on Apple to stop manufacturing overseas.

• Withdraw from or renegotiate trade deals, including NAFTA and TPP.

Nearly all voters and politicians agree that infrastructure improvements are sorely needed. More jobs would boost the economy and expand the pool of Americans who can afford to buy homes. However, these jobs would be temporary, and many Republicans in Congress are hesitant to borrow the money and increase the national debt. Also, economists predict that such spending, combined with tax cuts, is very likely to increase inflation.

Local companies, such as Apple, HP, Intel, and Cisco rely on Chinese imports as part of their global product supply chain, where overseas workers build most tech gadgets. Tariffs would make tech products more expensive, hurting tech manufacturers and adversely affecting jobs in the US. Tariffs may benefit companies like Tesla, whose manufacturing facilities are in the US. 
 
Overseas markets accounted for 58% of tech industry revenues in 2015. China accounts for half of the US trade deficit, so an all-out trade war would hurt tech firms by disrupting their global supply chains and diminishing their overseas market.

Foreign Tech Workers • Opposes H1B visas for foreign workers.
• Ensure open jobs are offered to American workers first.
Tech companies prize highly skilled immigrants, and may struggle to import necessary workers. However, immigration initiatives would likely be delayed by higher priority matters, such as eliminating the Affordable Care Act and tax reforms.
Internet Regulation • Overturn “net neutrality” regulation, which prevents Internet providers (like Comcast and Verizon) from charging websites like Netflix and Facebook a fee to access users at faster speeds. Could hurt Netflix, Facebook and Amazon’s profits, by enabling ISPs like Comcast to charge for faster service to end users. Immediate impacts are unlikely, as unwinding current net neutrality rules is not a top priority for the Trump Administration.
Taxes
Corporate Taxes  

• Reduce the 35% corporate rate to between 15–25%.

• Offer corporations a "tax holiday" that would allow them to bring $1.2 trillion in profits held offshore back to the US at a one-time tax rate of 10%.

Local businesses would experience gains through tax cuts, which Trump says would create millions of jobs.

Whether the funds are spent improving corporate infrastructure or used to buy back stock, such an option would benefit the tech industry and lead to greater capital spending and more jobs.

Personal Taxes • Abolish the Alternative Minimum Tax (AMT). If it happens, tech workers who exercise stock options will no longer trigger AMT tax, helping them accumulate down payments faster.
Biotech Industry
Pharmaceutical Companies  • Less chance of government restrictions on drug prices.   Drug stocks like Gilead and Genentech got a bump after the election.
 Renewable Energy Industry
Alternative Energy

• Roll back federal subsidies on renewable energy. 

• Cut incentives for alternative energy development.
 

Cutting tax credits for solar installations could slash consumer demand, hurting local solar firms like Solar City. Now that batteries are more energy efficient and alternative energy prices are almost as low as fossil fuels, such action may have limited impact.
California Agriculture
Immigration Reform

• Seal southern border.


• Require mandatory e-verification of workers to ensure they’re in US legally.

• Deport undocumented workers.

 Immigration raids would keep some workers from crossing the border, exacerbating the current shortage of farm laborers.

Many farmers and ranchers depend on cheap labor from Mexico, and favor immigration reforms that allow workers to legally cross the border to work here and then go home.

Some California farmers may move their operations south, across the border.

Tariffs • Increase tariffs on imported and exported goods.  Reduced trade of US farm goods, as some countries would likely retaliate with tariffs on imports from the US.
Taxes and Regulation

• Lower taxes. 
• Reduce industry regulations.

Lower cost of food production.
 

 

While Opes Advisors, Inc. uses all reasonable efforts to ensure that the information contained in this email is current, accurate and complete on the date of publication, no representations or warranties are made (express or implied) as to the reliability, accuracy or completeness of such information. Opes Advisors, Inc., therefore, cannot be held liable for any loss arising directly or indirectly from the use of, or any action taken in reliance on, any information appearing in this email.

 

Insurance Industry Reacts To Climate Change: What This Means To You As a Coastside Homeowner

by Kathy and Michael Rain - The Rain Team

When shopping for a new home along the coast, there are few questions about the property that you need to ask yourself beyond how many bedrooms and bathrooms it has.  Ask yourself how well the home will stand up against climate change.  While climate change is still highly debated, insurers are taking notice.  As a response to what insurers believe is climate change, they’re responding and experimenting with their new disaster-modeling methods that they anticipate will be able to better predict losses that may occur around the world.

According to Chad McGuire, professor of environmental policy at the University of Massachusetts-Dartmouth, “Storms are getting more intense, they’re occurring more frequently and the duration is increasing. “As a result, this means homeowners along the coast and the nation will be filing more insurance claims.

Here is what you can do as a coastside homeowner.

Take steps now to prepare for natural disasters. With an El Niño winter expected there are things we can all be doing now to prepare.  If you are in the market to buy a new coastside home start by looking for ones that are soundly constructed, as it can impact how well they withstand nature’s events.

If you already own a coastside home and are not planning on buying anytime soon, mitigate risk by moving your valuables to the attic. I know this sounds silly, but it could provide you a discount on flood insurance.  Also evaluate your home’s electrical outlets and power connections and elevate them if possible.  Impact-rated roofs have been known to make a startling difference when it comes to high winds or even hail. Consider these when it’s time to replace your current roof.

As a homeowner, all you can do is protect your home to the best of your ability from natural disasters, but they still may occur. To combat this make sure you have adequate insurance coverage.

Living along the coast we experience some of the greatest weather in the country, but at times it can be dangerous. Stay prepared and safe.

If you are looking to buy a new home or sell your existing home, we’d love to hear how we can help you with your real estate goals. We can also offer you a Comparative Market Analysis (CMA) of your home to advise you what it is worth. Contact us today via email or give us a call at (650) 888-6903.

The Rain Team offers unparalleled service to ALL clients in the San Mateo County, including areas such as Half Moon Bay, El Granada, Moss Beach, Montara, and Pacifica. Your complete satisfaction with our service and representation is our number one priority.

Housing to Be More Affordable For Coastside Buyers in 2015

by Kathy and Michael Rain - The Rain Team

Earlier this month President Barack Obama announced that the Federal Housing Administration (FHA), the government backer of home loans, will make moves to lower the annual insurance premiums from 1.35 percent to 0.85 percent. This move comes after the rates were increased sharply during the most recent financial downfall and they have not been lowered until now, even though we have steadily seen the housing market improving.

The decrease in insurance premiums will make housing more affordable in San Mateo County and across the country.  The new reduced insurance premiums are expected to save the first-time homebuyer on average $900 a year on insurance, according to the White House.   Existing coastside homeowners who refinance their FHA mortgage will also be eligible for the new lower insurance premium rates.

At this time the new lower rates are expected to assist over 800,000 homeowners on their mortgage. The White House is also anticipating 250,000 new home buyers will save with the new lower rates over the next three years.

“This action will make home ownership more affordable for over two million Americans in the next three years," said Julián Castro, U.S. Department of Housing and Urban Development Secretary. "Since 2009, the Obama administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we're helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures."

The FHA loan has been the only low down payment product available for quite some time, requiring only 3.5 percent down. However, Fannie Mae and Freddie Mac recently announced they too will be offering a new 3 percent down payment loan that would also require private mortgage insurance.

If you are looking to buy your new home in 2015 contact us. The Rain Team offers unparalleled service to ALL clients in the San Mateo County, including areas such as Half Moon Bay, El Granada, Moss Beach, Montara, and Pacifica. Your complete satisfaction with our service and representation is our number one priority.

If you are looking to buy a new home or sell your existing home, we’d love to hear how we can help you with your real estate goals. Contact us today via email or give us a call at (650) 888-6903.

Coastside Homeowners Encouraged To Use Licensed Contractors For Home Repairs

by Kathy and Michael Rain - The Rain Team

If your Coastside home suffered property damage as a result of the storms we experienced a few weeks ago, the California state board is encouraging you to use licensed contractors in the repair work process. Many Half Moon Bay residents are facing the reality of needing home repairs as a result of those storms, and unfortunately there are a few not so legit contractors that would try to take advantage of this situation.

The Contractors State License Board recommends that any construction job that is estimated to cost more than $500 with combined labor and material costs should only be performed by a state-licensed contractor.

Contractors licensed with the California Business and Professions Code are required to be bonded and to carry workers’ compensation coverage for all their employees.  If you experienced damaged trees to your home and now require tree-trimming work done on any tree 15 feet or taller the tree-trimmer must be licensed through the state of California. Always double check that anyone doing work on your home property is properly licensed.

Contractors working on your home that are bonded and insured are more likely to complete the job properly and at a reasonable price.

If you need help finding a licensed contractor in our area visit www.cslb.ca.gov or visit checkthelicensefirst.com.

If you are looking to buy a new home or sell your existing home, we’d love to hear how we can help you with your real estate goals. We can also offer you a Comparative Market Analysis (CMA) of your home to advise you what it is worth. Contact us today via email or give us a call at (650) 888-6903.

The Rain Team offers unparalleled service to ALL clients in the San Mateo County, including areas such as Half Moon Bay, El Granada, Moss Beach, Montara, and Pacifica. Your complete satisfaction with our service and representation is our number one priority.

Insurance Trends in San Mateo

by Kathy and Michael Rain - The Rain Team

Realtors and home experts will tell you that Homeowner’s Insurance in San Mateo has continued to rise in recent years to the point in which homeowners are getting very concerned. The concerns are not only the raising rates, but also some new home buyers are facing challenges in finding companies to cover their property to begin with.

Sadly, existing homeowners are also seeing policies cancelled after years of rate increases. So why the sudden increase in property insurance and denials? Buyer beware: Chinese drywall and other inferior materials.

Recently, Consumer Reports has highlighted an issue with faulty Chinese drywall. Bought cheaply, thousands of complaints are stating that the product is not only inferior and likely to fall apart. More serious than that, it is actually a health hazard. Though not widespread, it presents enough of a trend that insurers are covering their bases by excluding it from coverage or raising rates as a preventative measure against possible claims. 

Location, location, location – and if your dream home is on a coastal waterway in Montara, be prepared to pay more for your homeowners insurance. What’s more, insurance companies are requiring separate deductibles for coastal property – primary insurance and secondary wind, water or specifically hurricane risk.

If you file often, be prepared to go without; frequent claims cause insurers to cancel or not renew. Lower home prices in Half Moon Bay are also driving rates up and replacement or rebuilding coverage down. Even if the value of your home falls, you still need to shop around for the best price on covering your home in the event of a disaster. Also make sure you have adequate coverage in the event a disaster does occur.

Another factor that can drive rates up on homeowner’s insurance is bad credit scores. If you have a bad credit score, you are considered to be a high risk for responsible behavior and or may have a financial struggle in your future. The high unemployment rates and prices of homes falling, causing poor credit to drive up the rates across insurance plans.

If you aren’t quite sure you understand your current homeowners policy and the coverage you are paying for, be sure to speak to your agent and be sure to shop around. Comparing companies and coverage could pay off in the end. Contact me if you have any questions! **

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The Rain Team
CA# 01169588 | CA# 01125976 | CA# 01908304
248 Main Street, Suite 200
Half Moon Bay CA 94019
Michael: 650-888-6361
Kathy: 650-888-6903
Fax: 866-396-0207

Kathy and Michael Rain of Coldwell Banker provides real estate services in the San Mateo County, California area including the surrounding communities: El Granda, Half Moon Bay, Montara, Moss Beach, Pacifica and San Mateo. Search for homes in San Mateo County. We list and sell residential real estate, investment properties, vacant land, lots for sale in the San Mateo County, California area.

Licensed in the State of California

Kathy Rain - CA BRE# 01169588 | Michael Rain - CA BRE# 01125976 | Coldwell Banker - CA BRE# 01908304  

Email: therainteam@coastal-realestate.com
Cell Phone: (650) 888-6903 * Direct Phone: (650) 712-0411
San Mateo County Real Estate and Homes for Sale

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