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What All New Homeowners Should Know About Home Insurance: An Interview with Zaid Zayto of Signature Insurance Agency

By Zaid Zayto

Tell us a little bit about your company and the services you offer.

Signature Insurance Agency Group, Inc. is an independent insurance brokerage based in Warren, Michigan. We service the insurance needs of clients in our local community, the Greater Detroit Area, and essentially throughout Michigan. Established in 2005, we set forth on our mission to grow with one single ideology, that is, "find our client the best rate while providing them with exceptional service and treating them with the utmost respect." And, we've never looked back! Homeowners, Auto, renters and commercial insurance are a few lines of insurance we write. Each of our policies are tailored to fit the needs and budget of our clients. In order to construct a "tailor-fitted" policy we start by getting to know our client- asking questions about their likes, dislikes, hobbies, etc. Then we channel in on what it is exactly they are looking to have insured. With that information in hand, we set out to seek a realistic amount of coverage for the most affordable rate. This is done by shopping the market of insurance carriers we are appointed with and presenting the best rate to our client.

Is there something about getting insured that most new homeowners don't know that they should know?

At times home insurance can seem downright puzzling. There's a lot that a new homeowner may not know about the basics of insuring a home. Frequently, clients ask "why is my coverage amount greater than the actual cash value of my home?" The reason why there is more coverage than what the home was purchased for (actual cash value) is because insurance companies typically insure the "replacement cost" of the home, meaning how much it would cost to completely reconstruct the home if a catastrophe were to occur. It is more expensive to rebuild a home than it is purchase an existing one. As such, it is not uncommon to see a coverage amount that is 1.5 times greater than the purchase price.

How would you suggest that a new homeowner approaches "shopping" for home insurance? At what point should they start the process?

New homeowners have a lot going on, it's dizzying! Calling the movers, adjusting to having a mortgage payment, dealing with home maintenance and, for some, even getting the Feng Shui just right! Where is one to start? Most often, insurance isn't the first thing to come to mind during this hectic and chaotic time. But, at Signature Insurance we feel as if it should definitely be on the list of a new homeowners' top priorities.

Some new homeowners wait till the day of closing with the mortgage company to start searching for a homeowner's policy. That's mind boggling to us! There's such a tremendous amount of pressure placed on the borrower at that point that we tend to see clients settle for whatever rate is presented to them. What is a good time for a new homeowner to search for a policy? As soon as they know the address! This gives them ample time to fully understand the coverages and shop the market for the most competitive rate.

What do you consider "adequate" coverage for a new home and how do you determine the amount?

Adequate coverage for a home would entail ensuring that all contents, valuable articles and the home itself are insured appropriately. That is, enough coverage is given so to cover the client in case a catastrophe occurred and nothing was salvageable.

A lot of new homeowners don't realize that certain belongings they may have may not be insured under a "normal" homeowner policy. Take for example expensive collectibles or an expensive vase- the average homeowner wouldn't have these articles in their home, therefor, they wouldn't be covered under your average homeowner policy. The client is responsible to mention belongings of this nature so that they may be listed as a scheduled property on the policy.

Whereas these scheduled properties may have a stated value (a set rate the client requests to insure them for in case of loss), the replacement cost value of the home is determined by a computing system called a Replacement Cost Estimator. This system takes into consideration various details about the home and constructs an estimated set value to rebuild the home in the case there were a total loss.

At Signature Insurance we strive to bring up these points to the insured, whereas a lot of other agents may not. Adequate coverage means having a peace of mind knowing if anything were to happen your insurance company will try to get everything back to normal for you.

Why do home insurance rates/premiums increase? Is there any way to prevent this?

There are a number of variables that play a role in determining home insurance rates/premiums. As of late, the general trend in Michigan is that home insurance rates have been increasing. The reason why? Several.

Some reasons are: claims the homeowner may have filed on their current or prior insurance policy within the last five years, a general increases in losses (theft, fires, etc.) in a neighborhood or general area. Companies also look to be profitable, otherwise they wouldn't be in business- for this simple reason, if there are more claims payouts in a given area than there is revenue coming in the premiums will increase. These are a few reasons home insurance premiums are increasing amongst many others.

Sometimes rate increases from insurance companies are city, county or even state-wide and while most factors are outside the client's control certain steps can be taken to prevent further rate increase. Such steps would include maintaining the condition of the home so to prevent or mitigate deterioration and corrosion over time which may lead to a loss. Also, adopting simple safety habits can help prevent a loss and consequently a rate increase. Some such safety habits are: not to leave an open flame unattended, keepings a fire extinguisher in the home, having a safety plan in case of a fire and checking the batteries of your smoke detector.

What are some of the most important decisions that new homeowners need to make about their coverage?

The single-handed most important decision a new homeowner can make about their insurance coverage is not settling for inadequate coverage due to a premium. Great coverage can be found at an affordable rate, you just need to search for it! Be patient and do your due diligence when it comes to searching for a policy and you will be satisfied with what you find.

What's the best way for people to contact you and your company?

Anyone interested in any line of insurance may contact us at Signature Insurance Agency Group, Inc. by calling us at (586) 274-9600 or emailing us at signatureinsurance@yahoo.com. You may also visit our website at www.signatureinsurancemi.com. We look forward to meeting you!

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