Homes With Polybutylene Pipes Are Not Insurable

One of the biggest problems facing homeowners is polybutylene, “poly,” plumbing. Polybutylene is a form of plastic resin that was used extensively in the construction of homes from 1978 until 1995. Due to the low cost of the material and ease of installation, polybutylene pipes were viewed as "the pipe of the future" and were used as a substitute for traditional copper piping. 

Apparently the chlorine found in municipal water supplies reacts with the polybutylene piping causing them to scale and flake and become brittle. The pipes become weak and potentially fail causing damage to homes and personal property. 

This is a multi-billion dollar problem in homes throughout the United States. Be sure to conduct a visual inspection for gray poly pipes. Look under the sinks and around the hot water heater. If you see gray pipes, you have a poly problem.

Polybutylene underground water mains are usually blue, but may also be gray.  A good place to check for poly is the main shutoff valve which is often attached to the end of the water main. Also, you should check at the water meter usually located at the street, near the city water main.  Check both ends of the pipe because there are cases where copper pipe enters the home, and poly pipe is at the water meter.

Replacing poly with copper is a must.

Your Homeowner’s Insurance Policy Made Simple

The HO3 policy consists of six basic coverage amounts followed by endorsements that allow you to customize a policy for varied personal situations.  Endorsements are additional coverage amounts for items that do not fall within six major policy elements.  These six basic coverage amounts are named:

A – Dwelling

B – Other Structures

C – Personal Property

D – Loss of Use

E – Liability

F – Medical Payments

Coverage A – This is also called “Dwelling A” and represents the amount of insurance on your home.  The value of Dwelling A does not take into account the land under the home.  It defines what it would cost to replace your home should it be completely destroyed.  The insurance companies rely on their agent to run an automated Replacement Cost Estimate (RCE) to determine Dwelling A.  If you feel your agent has determined a low RCE, then be sure to tell your agent about upgrades you’ve made to your home.  Things like granite counters, custom millwork, and upscale fixtures; these all make your RCE higher.  Although the HO3 policy is an all-risk, replacement cost policy, the insurance company will not pay more than the RCE or Dwelling A coverage – it’s their cap.

Coverage B - Other Structures are barns, sheds, guest houses, and the like.  Many people are under the misunderstanding that pools and screened enclosures are “Other Structures.”  They are NOT.  While an in-ground attached pool is covered as part of the home, the screened enclosure is often a structure that requires an endorsement (additional coverage amount).  There are VERY few insurance companies that include screened enclosures as part of Dwelling A.

Coverage C - Personal Property.  Here is the part of your homeowner’s policy that insures your personal items – your furniture, appliances, clothing, etc.  The coverage amount is determined as a percentage of Dwelling-A.  The amount is left to the homeowner to decide whether they want 25% or 50% (sometimes an amount in between) of Dwelling-A established as their personal property value.  The amount is “in addition” to Dwelling A.  Most insurance companies default to 50% when quoting a new policy.  This is a potential area where you can save money if 25% adequately covers the replacement of your personal property. 

Whether your Personal Property coverage amount is 25% or 50% of Dwelling-A, most insurance companies insure personal property as “actual cash value” or ACV.  Actual cash value is not replacement cost and subject to depreciation.  It often takes an endorsement to change from ACV to RC (replacement cost).  The endorsement is well worth the additional premium (cost) to eliminate the insurance adjuster telling you that your destroyed furniture is worth pennies on the dollar.  Get the replacement cost endorsement on personal property.

Coverage D - Loss of use.  OK, let’s say that a storm destroys your home and you have to live elsewhere until your home can be occupied again.  “Loss of Use” is the coverage amount that pays for this contingency.  The value is a default set by the insurance company and not a number you can request.  It is often 10% of Dwelling-A, but may be slightly different among varied insurance companies.

Coverage E - Liability.  This amount covers the homeowner for contingencies beyond the loss of their home.  Most homeowner policies provide a minimum of $100,000 in personal liability coverage, meaning the insurance company will pay up to the total to injured persons per accident. If you feel you need more protection, you can increase this amount to $300,000, or as even as high as $500,000.

Coverage F - Medical Payments.  This element of your homeowner policy is designed to pay for medical expenses to others who are accidentally injured on your location or by your activities.   You are covered for the neighbor who comes to a dinner party and walks through your glass sliding door and ends up with a slight injury.  Typical coverage amounts are $1000, $3000, or $5000 per accident.

That’s it – plain and simple.  Of course, you should give me a call to customize endorsements for antiques, guns, jewelry, furs, etc.  Of course, quotes are always free!

Loss Assessment Coverage

Suppose you live in a Homeowner’s Association (HoA) type of community and the HoA decides to assess each of the homeowner’s.  These assessments can happen as a results of hurricane damage that affects the entire community, or even for non weather events like new roofs, property upgrades, or common maintenance.

Most homeowner policies have $2000 of Loss Assessment Coverage.  This means that your insurance company will pay up to $2000 for any HoA assessment.  Good news, right?  Well, the Loss Assessment coverage is also subject to your All Other Peril (AOP) deductible.  Most AOP deductibles are $1000-$2500.

So, let’s say you have $2000 Loss Assessment coverage and your HoA sends you an assessment for $2000.  Let’s assume you have a $1000 AOP deductible.  You can submit a claim and your insurance company will pay $1000.

What is Law and Ordinance?

Let's say a storm causes flying debris to break windows in your home, insurance should pay for its repair or replacement.  What happens when the local building inspector comes in after the storm, and requires full replacement of all the obsolete windows with impact glass to meet the a local building code?   The owner has no choice but to replace tall he windows—even those that are not broken.  While fixing undamaged (but outdated) components of a house aren’t insured under a standard property policy, there is a solution.

The Ordinance or Law endorsement provides additional funds, commonly up to 10% of your Dwelling A, for costs due to the enforcement of any ordinance or law which requires or regulates. 

Some insurance companies include 10% - 25% Law and Ordinance in their standard HO3 policy.  Others offer Law and Ordinance as an endorsement.  Those that include 10% will likely allow you to upgrade to 25% as an endorsement.

We will likely continue to live with always changing building codes, it’s a good idea to buy at least 10% Law and Ordinance.  If you own an older home (pre-2002), it’s highly advised to have 25% Law and Ordinance.

Lenders are an "Additional Insured"

Mortgage lenders mandate to be listed as mortgagee or an additional insured on every homeowner’s policy.  This is a relatively simple process that begins with the homeowner contacting their mortgagee/lender and requesting that their insurance agent is provided the exact instructions for how the mortgagee/lender wants to appear on the policy.  Most lenders fax their requests to the insurance agency versus email or call. 

When refinancing, it is very important to contact your new lender to provide them with my fax number to send their additional insured request.  My fax number is 888-267-9143.

Flood Insurance

Presently, most flood insurance is provided by the National Flood Insurance Program (NFIP).  This program is administered by The Federal Emergency Management Agency (FEMA) and underwritten by many insurance companies on behalf of FEMA.  In addition to the NFIP, there are also private flood insurers.

Flood insurance is pretty simple.  You can insure a home (building) up to $250,000 – this is the maximum under the NFIP.  The maximum for contents is $100,000.  These cap amounts can be exceeded with private flood insurance. 

The NFIP charges an additional $250 annually for non-residents (secondary/seasonal) homeowners.

If you require flood insurance, give me a call so that I can provide you with the optimal quote for your home.  As always, my goal is the best coverage for the least amount!

What Flood Zone am I in?

ZONE VE:  Areas subject to inundation by the 1-percent-annual-chance flood event with additional hazards due to storm-induced velocity wave action. Base Flood Elevations (BFEs) are derived from detailed hydraulic analyses. Mandatory flood insurance purchase requirements and floodplain management standards apply.

ZONE AE:  Areas subject to inundation by the 1-percent-annual-chance flood event determined by detailed methods. Base Flood Elevations are created. Mandatory flood insurance purchase requirements and floodplain management standards apply.

ZONE AH:  Areas subject to inundation by 1-percent-annual-chance shallow flooding (usually areas of ponding) where average depths are between 1 and 3 feet. Base Flood Elevations are derived from detailed hydraulic analyses for this zone. Mandatory flood insurance purchase requirements and floodplain management standards apply.

ZONE A:  Areas subject to inundation by the 1-percent-annual-chance flood event and generally determined using approximate methodologies. Because detailed hydraulic analyses have not been performed, no BFEs or flood depths are created. Mandatory flood insurance purchase requirements and floodplain management standards apply.

ZONE X500:  Zone X500 is a moderate flood hazard area and is an area between the limits of the base flood and the 0.2-percent-annual-chance (or 500-year) flood. Mandatory flood insurance is not required.

ZONE X:  Zone X is the flood insurance rate zone used for areas outside the 0.2-percent-annual-chance floodplain. This zone is outside of the 500-year floodplain. No BFEs or depths are created for this zone and flood insurance is not required.

Most local county governments publish FEMA flood maps on their websites.  CLICK for flood zone maps

Replacement Cost

The RCE, or Replacement Cost Estimate, is the algorithm that insurance companies use to determine the maximum limit for a "Replacement Cost" policy. It is critical that your RCE reflects the options within your home. Do you know what your RCE is? Give me a call. I can help.

Roof Age

Insurance companies will only insure homes that have asphalt shingle roofs less than 20 years old. 30 years is the max for tile roofs. All replacement roofs must be permitted, including DIY. Be sure to check County Public Records to ensure roof permits are on file before you buy/sell a home.

Insurance companies will not insure any home with a trampoline!

Why Wagner Agency?

As an independent insurance agency, I represent most of “Florida’s Top 41” and have insured many homeowners in your neighborhood because they took just a few minutes to investigate why some polices are better than others. I can help by explaining the ABC’s of your homeowner’s policy.

Screened Enclosure Claims Aggravation

I want to share a recurring lesson learned as we clean and complete remaining damages caused by Hurricane Irma. South Florida homes are more secure than ever due to increased consciousness of homeowner’s and the 2002 Florida Building Code. Our homes are more sound and stronger than ever. Our screened enclosures, however, remain the single-most area of vulnerability.

Screened enclosures are not usually insured structures. Many people make the mistake of assuming that screened enclosures fall under the policy category of “B- Other Structures.” The definition of “Other Structures” is separate buildings like sheds, detached garages, and guest houses. Screened enclosures are not considered by insurers as “Other Structures” because they are so unique to Florida.

So how do we insure screened enclosures? By including a special endorsement. The endorsement is actually called “Screened Enclosure Endorsement.” If you do not see the Screened Enclosure Endorsement on your policy Declaration Page, then your screened enclosure is probably not insured. Only one Florida insurer (Olympus) includes screened enclosures as part of the “Dwelling A” (Replacement Cost Estimate) coverage. So why not always include the Screened Enclosure Endorsement on every policy? It’s very expensive and there’s a pretty good case to be made for NOT insuring the screened enclosure. Please see the article I’ve included called, Making A Case For NOT Insuring A Screened Enclosure.

I have many informative articles posted on my Facebook page. It’s worth taking a look every now and then to remain as informed as possible about your homeowner’s policy since not every endorsement or suggestion makes sense for every homeowner. Only you can tailor your insurance to meet your needs. As you agent, I can certainly offer advice based on what you tell me about your personal situation. I am always happy to listen and help you optimize your policy to meet your financial needs.

Eliminate Your Hurricane Deductible!

We’ve just experienced the worst hurricane on record to hit southwest Florida. The insurance industry experienced relatively few claims due to our 2002 Florida Building Code which hardened our homes and also gave us a standard to upgrade our homes to survive hurricanes. Even with our solid homes, many of us lost our screened pool enclosures. Then we learned that our 2% hurricane deductible hardly covered the replacement of the screened enclosure. Wouldn’t it be great to eliminate the hurricane deductible? We can. I have a separate insurer that specializes in insuring hurricane deductibles. Sure, it costs a premium of about $200-$600 annually, but losing a screened enclosure, or anything else due to hurricane, will be offset! Give me a call if you’re interested and I’ll work up a free quote.