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Home Sweet Home - Protecting Your Greatest Investment

By
Industry Observer with Retired

 

Home Sweet Home - Protecting Your Greatest Investment

For most Americans the purchase of a home is the greatest investment they will make. With the recent severe weather, including tornadoes and hurricanes, many people have been reminded of the importance of insuring their homes and protecting them from nature.

There are many other issues, however, that people should consider when getting their house in order. Many challenges that arise from home ownership are easily preventable, but diligence is necessary.

First and foremost, understand your mortgage. After the foreclosure crisis hit a few years ago, many people learned this lesson the hard way. Mortgages are either open or closed. An open mortgage can be paid off at any time; a closed mortgage cannot. What is the interest rate on your mortgage? Is it possible that it may rise in the future? Think long and hard about obtaining a reverse mortgage. While reverse mortgages may be appropriate in some situations, they can be complicated transactions and should not be used without legal advice.

Second, review your insurance policies frequently. If a home is not properly insured, damage may not be covered after a loss. Even when proper coverage is in place, some acts of nature may not be covered by a policy. If you live in a flood zone, then you should have a flood insurance policy. If you have built a free-standing addition to your home, then it may not be insured by your old policy. Homeowner's insurance policies often do not cover expensive jewelry or other personal items that may merit individual policies.

Third, always read your policy thoroughly before calling the insurance company after suffering a loss. Be especially aggressive if you see any kind of mold in your home. Some kinds of mold are covered by homeowner's insurance and others are not. Because there are so many different kinds of water damage (rain, floods, tidal erosion, groundwater, frozen pipes, sewage, septic, etc.) insurance companies often dispute a claim involving mold, or at least dramatically delay the payment of the claim by requesting laborious documentation. Avoid this situation by fighting mold early and often.

Ask the local fire department to conduct a fire safety inspection of your home every few years. Finding and fixing potential fire hazards could save not just your life, but it could also prevent your insurance company from claiming that your own negligence caused a fire.

Also be aware that if you call the insurance company with a question about coverage for minor damage, the company may flag your file, and if you do file a claim for more serious damage in the next year or two, then the company may consider you a high risk and drop your coverage.

Finally, make sure you know how your home is titled and the tax basis of your home. Homes can be titled in tenancy by the entirety, joint tenancy with right of survivorship, fee simple, or tenancy in common. If a home is not properly titled, significant problems can occur when one attempts to sell it to a new owner or devise the property in a will. Additionally, whenever you improve or renovate your home, be sure to keep all receipts, because this will increase your tax basis in the home in case you sell it during your lifetime.

The attorneys at The Estate Planning & Elder Law Firm can assist clients with their estate, financial, insurance, long-term care, veterans' benefits, and special needs planning issues.

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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.lifecareplanning.com.

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Enjoy the holiday season and be sure to have your camera in hand to capture those special moments.  Please share photographs from your favorite places in the comments for this post.

 

Brookside Gardens Dahlia Show.  Photograph by Roy Kelley

Roy and Dolores Kelley Photographs

Posted by

Roy Kelley, Retired, Former Associate Broker, RE/MAX Realty Group

Gaithersburg, Maryland  

Comments (14)

Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

Hi there Roy-very well written and informative. So many of "us" never take the time to pay attention tho the small print. Have a great weekend!

Nov 25, 2011 12:40 AM
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

Good advice. I bet there are a lot of us that need to follow those suggestions.

Nov 25, 2011 12:50 AM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

What a great newsletter! Hope you had a wonderful Thanksgiving yesterday with family and friends!

Nov 25, 2011 01:57 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Great commentary! People should heed the advice and ask questions. The answers they get may very well not be what they expected! A thorough review can prevent catastrophic results. Thanks for the reminder! 

Nov 25, 2011 02:38 AM
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Hi Roy

A well written and informative post.  Ever once in a while we all need a good reminder.  Have a great day and best regards from the Q

Nov 25, 2011 02:44 AM
Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Roy, thanks for bringing to my attention on item #3 , "ask the local fire department to conduct a fire safety inspection of your home every few years". Have a great day.

Nov 25, 2011 02:56 AM
Debbie Walsh
SHAHAR Management - Middletown, NY
Hudson Valley NY Real Estate 845.283-3036

Roy I hope you and your family had a wonderful Thanksgiving! 

 

Nov 25, 2011 05:02 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Good Morning Roy,  Very good information for all.  When it comes to your home you need to beware of all options.

Nov 25, 2011 05:21 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Roy that is the best advice one could ever give. Knowing what you have for insurance as opposed to what you need is important. When you expereince a loss is not the time to start reviewing ones; policy. I Hope you had a good thanksgiving, have a great Friday.

Nov 25, 2011 07:33 AM
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Hi Roy.

I hope that your Holiday celebration went well.

Have a nice weekend.

 

Nov 25, 2011 07:57 AM
Roy Kelley
Retired - Gaithersburg, MD

Good afternoon to all.

I hope you are having an outstanding Thanksgiving weekend.

Autumn Colors in Kentlands.  Photograph by Roy Kelley.

Roy and Dolores Kelley Photographs

 

Nov 25, 2011 08:44 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Very important information for homeowners, Roy!  I had a family friend remind me of something recently.  She said, "Isn't it ironic that renters and homeless people can have an easier time recovering from a natural disaster than homeowners, who can lose everything?"  She was speaking of experience.  She and her husband had built their dream home on the shores of Bay Saint Louis, Mississippi.  The eye of the great storm Katrina went right over that area.  Their home was destroyed.  The insurance company said it wasn't the winds of Katrina that totalled the house, but the storm surge and high water.  They fought with the insurance company for months.  There home was nearly paid for.  Had they been upside down, they may have simply walked away.  Those that have done the right thing financially, are often in a position to lose the most.

Nov 25, 2011 03:38 PM
Roy Kelley
Retired - Gaithersburg, MD

Thanks,Myrl for sharing this story.  A good reminder for everybody to update their insurance coverage.

Enjoy the weekend and the holiday season.  Please share your photographs of those special moments.

Brookside Gardens Dahlia Show.  Photograph by Roy Kelley

Roy and Dolores Kelley Photographs

Nov 25, 2011 10:43 PM
Roy Kelley
Retired - Gaithersburg, MD

One of my daily habits is to follow at least five additional members of ActiveRain. This is an easy way to pay it forward.

Aug 30, 2017 07:35 AM