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IPS / Lighthouse Insurance Group Blog: homeowners insurance

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When a building is insured, a policy written for “replacement cost” provides for the repair or replacement of the damaged portion of the building with like kind and quality of materials.  That’s the good news!

The bad news can be that, when a building suffers damage, there may be one or more local building code ordinances that come into play.  The building ordinance in many cities may say that, if a certain percentage of a building is damaged, the undamaged portion of the building must be demolished and thereby requiring the entire structure to be rebuilt.  For example, if the city’s threshold is 50% and 60% of the building is damaged the city can require the undamaged 40% to be demolished so that the entire building needs to be replaced.  Even if the limit of insurance was adequate to replace the entire building, the standard replacement cost insurance will not pay to tear down and replace the undamaged portion.

Another example is that, maybe an undamaged portion of the building doesn't need to be demolished, but in order to rebuild even the damaged portion, an elevator, or handicapped accessible entryways and rest rooms, or fire suppression sprinklers may need to be added to bring the building up to code.  

These additional costs are not covered by the standard Building and Personal Property Coverage form found within most commercial policies.  However, they can be covered with the addition of Ordinance or Law Coverage.

Ordinance or Law Coverage has 3 components:

·         Coverage A – applies to the loss of value to the undamaged portion of the building

·         Coverage B – applies to the cost of demolition to the undamaged portion of the building

·         Coverage C – applies to increase expenses to

o   Replace the property to comply with current building, zoning, or land use ordinances

o   Repair the undamaged property to comply with current building, zoning or land use ordinances

o   Or to reconstruct or remodel the undamaged portion so that it complies with current building, zoning or land use ordinances

Properly structuring Ordinance or Law Coverage within your commercial policy can make the difference between being forced out of business due to the inability to pay for these additional costs that result from a covered loss, or enabling your business to spring back after a loss. 

Ordinance or Law Coverage is available in most homeowner’s policies as well.  If there was a covered loss to your home, would your city require you to upgrade the plumbing or electrical?  Things like this can be very expensive and the upgrade can only be covered by Ordinance or Law Coverage.

Review your policy to make certain that your insurance is properly protecting you.  If you have questions, call us at 800-220-5582 or contact us on the web.

Electrical Panel
Did you know?

  • An estimated 53,000 electrical fires occur in U.S. homes each year.  These fires cause more than 500 deaths, 1,400 injuries, and $1.4 billion in property damage
  • The leading causes of building fires is poor maintenance of the electrical system
  • Most electrical fires and injuries could be prevented if homeowners would take the time to have their electrical systems inspected

Health home tips on electrical safety

  • Have the wiring in your home inspected.  Owners of homes more than 10 years old should be considered for inspection.  If your home is over 40 years old, an inspection is overdue.
  • Install ground fault circuit interrupter (GFCI) outlets in the kitchen, bathroom, and laundry area of your home
  • Never place electrical cords under rugs or bedding.  Heat or sparks from these cords could cause a fire.
  • Frequently tripped circuit breakers, shocks and hot electrical switches are warnings that something is wrong with your electrical system or with an appliance in your home.
  • Hire a licensed professional to make repairs or modifications to your home's electrical system.
  • Install cover plates on all electrical outlets and switches.
  • Use 3-pronged plugs properly.  The third prong is there because the appliance must be grounded to prevent electrical shocks.
  • Be aware not to overload outlets.  Extension cords shouldn't be used as permanent fixtures in home rebuilding.
  • Once a building reaches 30 years, the wiring needs to be upgraded, updated or replaced to meet current code.

Article source: Michigan Millers Insurance Company

Jet SkisIt’s that time of year when many people take trips to the lake and rent Jet Skis or Wave Runners for some fun but you have to be careful! Many rental agencies will advise that coverage is afforded by a homeowner policy but that is only partially correct. A standard homeowner policy will provide liability coverage when someone rents a personal watercraft as long as it has less than 50 horse power. It is rare to find any personal watercraft with horse power that low. We highly recommend checking with the rental agency to see if they offer coverage that can be added to the rental agreement.  

Image courtesy of arztsamui /

image of kid jumping on trampolineThough trampolines are a popular toy among young children, they are also dangerous enough to raise red flags for many insurance providers. In 2010, trampoline injuries resulted in over 92,000 trips to emergency rooms. 40 percent of these injuries involved strains and sprains, 30 percent involved fractures, 13 percent involved lacerations and 11 percent involved more serious injuries. It’s easy to bruise or break a bone from an improper landing, but the most common injury occurs when two people collide midair.

Because of the very high risk for injury, some insurance providers will not offer coverage to homes with trampolines, while others require you to take certain safety measures for continued coverage. Your agent can help you determine if you need to take any steps before and/or after purchasing a trampoline. It’s important that your agent knows about your trampoline because if you file a claim for an injury sustained and your insurance provider did not know about your trampoline, that provider has the right to deny your claim.

Despite the dangers of trampolines, there are safety precautions you can take to reduce the risk of injury:

·         Always supervise children while on a trampoline

·         Prevent children and pets from going underneath a trampoline while in use

·         Do not allow roughhousing or flips

·         One jumper at a time is the safest way to use a trampoline

·         Children under age 6 should not jump on a full-size trampoline

·         All springs and hooks should be covered with padding

·         Use net enclosures to prevent falls from atop the trampoline

Purchasing a personal liability umbrella policy will give you additional protection for claims that exceed the liability limits on your Michigan homeowners insurance. These umbrella policies can be bought in $1 million increments. Your agent can help you determine the right amount for your needs.

Trampolines are fun toys that have the potential to cause large amounts of financial liability. Call Insurance Planning Service at 800-220-5582 for more information on homeowners insurance.

Home InsuranceBroadly speaking, homeowners insurance covers you for potential loss resulting from risks such as burglary or theft, severe storms, fire and also your personal liability. The specific risks you may face as a home owner could include floods and earthquakes, which you must cover with separate policies, as these disasters are not included in home insurance.

Your home liability coverage protects you in the event that someone is injured on your premises or you are responsible for damage to someone else’s property. Your homeowners insurance can even protect you against injury you cause to another person off-premises under certain circumstances. Note that liability insurance will not cover acts of violence or intentional damage.

Your liability insurance would also typically provide coverage if:

  • Your child throws a baseball through the neighbor’s window
  • Your dog bites a visitor to your home
  • A visitor is injured on your backyard swing set or trampoline, or by falling on your icy sidewalk
  • A dinner guest gets food poisoning and is hospitalized

If someone files a liability claim against you, your insurance can pay for property repairs, medical or funeral costs or even a lawsuit if the injured party chooses to launch a legal process.

When evaluating the amount of liability coverage that makes the most sense for you, be sure to fully discuss your limits and deductibles with your agent. Take time to understand your risks, and determine whether you will be well covered in various circumstances. In the event of a disaster, the costs of recovering can devastate household finances. Quality home insurance can make a difficult situation bearable and help you get your life back on track.

Call INSURANCE PLANNING SERVICE at 800-220-5582 or contact us on the web today!  We would be happy to help you evaluate your insurance and to provide a no-obligation quote!


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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake