E4
insurance continued from E1
in expenses if you need to file a claim. Most insurers no longer cover sewage backups in their standard policies, which can be a surprisingly common and expen- sive claim. But you can add $10,000 to $20,000 in sewage backup coverage for about $50 a year, which pays for damage and cleanup if a sewage line backs up or a sump pump stops working and water pours into your home. Building ordinance coverage can be valuable for older homes. An insurance policy generally pays to replace your home as it is but doesn’t cover the additional
costs to make the house comply with new building codes, unless you have this coverage. Make sure your policy provides “replacement coverage” for your furniture and other possessions rather than “actual cash value” coverage, which only pays for the depreciated, thrift-shop cost of the old stuff. Most policies also limit cover-
age for jewelry, antiques, silver, artwork and collections (paying only $1,500 for all of your jew- elry, for example). But you can usually add extra coverage for about $10 per $1,000 in coverage for jewelry and $1.50 per $1,000 for other valuables, said Bill
A UCTIONS
Minimum Bid $
Previously Asking $
SUNDAY, APRIL 25th
,2010•1PM
18Waterfront toWnhomes • Water’s edge
• 4 Bedrooms / 3 Baths / Attached garage
BUILDER’S CLOSEOUT!
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OPEN HOUSES: April 10th
, 17th, 18th & 24th • 12 - 2pm
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In cooperation with Re/MAX Alliance J. DavidVillabona, Licensed MD Broker
75,000
700,000
KLMNO
Smart homeowners track insurance coverage, costs
Howard, an independent agent in Alexandria.
Consider flood coverage
Ordinary homeowners policies
typically cover damage that comes from the top down — such as rain and wind damage — but exclude damage from rising wa- ter and flooding. This became a big issue after Hurricane Isabel in 2003, when many claims were denied as flood damage. You can buy flood insurance through the National Flood In- surance Program. This is a good time to take action; there’s a 30- day waiting period before flood coverage takes effect. Flood insurance can be impor-
tant even if your lender doesn’t require it. “It’s not just a risk for someone who lives next to the [Chesapeake] Bay or a creek,” said Beth Sammis, Maryland’s acting insurance commissioner. Water-main breaks in Baltimore and near River Road in Mont- gomery County caused expensive flood damage last year, which wasn’t covered unless residents had flood insurance. You can get the maximum $250,000 coverage in a pre- ferred-risk area for as little as $348 a year. Similar coverage can cost about $1,500 in a moderate- risk area, or more than $2,600 in a high-risk area. A few insurers, such as Fireman’s Fund and Chubb, provide excess flood cov-
erage beyond the NFIP’s $250,000 limit. You can buy federal flood cov-
erage through your insurance agent, or you can find a local agent at www.floodsmart.gov, which also has tools to help as- sess the flood risk and premium for your address. The federal flood insurance program’s con- gressional authorization has temporarily expired, and the pro- gram probably will not be reau- thorized until Congress returns from recess in the middle of this month. Insurance agents are still writing policies, but such cover- age is on hold until Congress acts.
Shop around
Homeowners insurance prices
can vary widely. You can get a list of sample premiums for several insurers from your state insur- ance department (find links at www.naic.org) and can find an independent insurance agent at
www.iiaba.org.
An independent agent gener- ally works with several compa- nies and may know from experi- ence which ones are likely to of- fer the best deal and coverage for your situation. That can be par- ticularly valuable if you live in a higher-risk area such as a coastal community at higher risk of storm damage.
Sheila Gibbons Hiebert has lived in Colton’s Point, on the Po-
tomac River in St. Mary’s County, for 22 years and had homeown- ers coverage through Allstate. But Allstate notified her in 2007 that it was no longer selling new policies in the area. She could keep her current coverage but would have to find another in- surer if she moved to a new home nearby. “It had to do with risk manage- ment across the country,” said Allstate spokeswoman Debbie Pickford. “Looking at studies, if a hurricane came up the Chesa- peake, it would cause enormous damage.” The company stopped selling new policies in coastal areas around the Chesapeake Bay and nearby rivers and in the Nor- folk and Hampton Roads area as well as parts of the Northeast. When Hiebert moved to a new home in Colton’s Point a few months ago, about 120 feet up a gentle slope from the Potomac, she asked Brad Reeves, an inde- pendent insurance agent in Leonardtown, for help finding a policy. Reeves works with several in- surers, but some won’t cover homes within 2,500 feet of the Chesapeake Bay or the Potomac River. But he still found a few op- tions for Hiebert, who bought a policy from Brethren Mutual, which offered good rates and a low deductible to cover her house and barn. (Many insurers charge a special windstorm deductible of 1 to 2 percent of the insured value for waterfront homes.) Bill Howard, who insures a lot of homes in Old Town Alexan-
SATURDAY, APRIL 3, 2010
dria, generally chooses Fireman’s Fund or Chubb for historic homes because of the companies’ claims service and reputation for care when dealing with historic architectural details.
Boost your deductible
Increasing your deductible from $250 to $1,000 can reduce your premiums by as much as 25 percent and will prevent you from filing small claims that could cause an insurance com- pany to drop you. In Maryland, insurers can’t refuse to renew your policy for weather-related claims unless you have three weather-related claims in three years. But they can drop you ear- lier if weather isn’t the cause.
Check the home’s record
Before you buy a home, see if its history of insurance claims will make it more expensive for you to insure. Your homeowners rates are based on your own claims, as well as other claims connected to the home. The pre- vious owner’s claims could add an extra $80 to $100 to your pre- miums, says Jamahl Johnson of Johnson Family Insurance in the District. Ask the seller for a copy of the home’s Comprehensive Loss Underwriting Exchange re- port, or CLUE report, which lists the claims record. You can look up your home’s CLUE report at
www.choicetrust.com.
realestate@washpost.com
Kimberly Lankford is author of “The Insurance Maze” (Kaplan, 2006).
Forgetting last step in mortgage financing can haunt borrowers
jacobs continued from E2
Minimum Bid $
Previously Asking $
SATURDAY, MAY 1ST
,2010•1PM
15 Beach-Block condos! • DEWEY BEACH, DE
1, 2, 3 and 4 bedroom condominiums
•Walk to the beach, marinas, restaurants and nightlife • Luxurious baths with ceramic tile
• Low Delaware taxes! / Great rental properties • Gourmet kitchens w/ granite counter tops & stainless steel appliances • Private balconies with bay and ocean views
JUST ADDED TOAUCTION: 2,623+/- Sq. Ft. 4 bedroom, 3 bath Single Family in Rehoboth Beach Yacht & Country Club
OPEN HOUSES: April 11th
MAX SPANN
REAL ESTATE & AUCTION CO.
888-299-1438
WWW.MAXSPANN.COM
, 17th , 18th & 24th
• 12 - 2pm
The Delano • 1406 Highway1•Dewey Beach, Delaware 19971
In cooperation with Brandywine Fine Properties/Sotheby’s International Realty
85,000
550,000
cloud has just been created. If no one takes the final step of recording the release of lien, the old mortgage remains as a title cloud against the borrower’s property. Most borrowers do not discover this problem until later when they are selling or refinancing their home. At that time, the settlement lawyer conducts a new title search, which will reflect that prior lien as open and unreleased. Often there is time sensitivity caused by a pending sale or refinance, and those transactions will be delayed until someone obtains and records the release for that prior unreleased trust. A borrower might avoid the stress of an unreleased lien by taking a few simple steps.
First, each time a mortgage is
paid off in connection with a sale or refinance, the borrower should ask the settlement lawyer to give him a copy of the written title commitment. That document will list all the liens filed against the borrower’s home, the name of the originating lender, the date of the original mortgage, the date it was recorded in the land records, the book and page on which it was recorded, the names of the trustees under the deed of trust and the original principal balance of that loan. (The District files documents differently.) All this information will be required to complete the release. Second, the borrower should ask the settlement lawyer to promptly record the release and send the recorded release to him after recording it in the land
records office. Third, the borrower should
make a note to carefully examine the documents he gets back from his prior lender to see whether there is a release in that package. If there is, mail that original release to the settlement lawyer so he can promptly record it. Fourth, if neither the
settlement lawyer nor the borrower has received the release from the lender within about 90 days after payoff, the borrower or settlement lawyer should contact the lender to request the document. In the District, lenders who fail to deliver a release within 30 days of written request are liable to pay a $50-a-day penalty to the borrower, plus damages and lawyers’ fees. In Virginia, if a lender fails to record or deliver a
release within 90 days of payoff, it is subject to a $500 penalty payable to the borrower. In Maryland, a mortgage lien can be released by recording a certificate of satisfaction or by recording the original promissory note marked “paid” or “canceled.” Lenders who fail to deliver a release within 30 days of written request may be sued by the settlement lawyer responsible for the payoff and may be required to pay legal expenses.
hjacobs@jgllaw.com
Harvey S. Jacobs is a real estate lawyer in the Rockville office of Joseph, Greenwald & Laake. He is an active real estate investor, developer, landlord, settlement lawyer and lender. This column is not legal advice and should not be acted upon until legal counsel has been consulted.
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Offer valid on contracts accepted through 4/11/10 in select neighborhoods. Offer not valid on prior contracts. Prices subject to change without notice. Prices listed are base prices, and lot premiums may apply. This material shall not constitute a valid offer in any state where prior registration is required or if void by law. Photographs are for illustrative purposes only and are not intended to be an actual representation of a specific community, neighborhood, or any completed improvements being offered. Contact a sales associate for details. ©2010 PulteGroup, Inc. MHBR #516.
kbhome.com
Broker Cooperation Welcome. ©2010 KB Home (KBH). Placement on VIP list does not guarantee qualification for a loan, lot location or purchase of a KB home. Payment of Broker Co-op requires Broker to accompany and register buyer on first visit and comply with Broker Co-op Agreement. See Built to Order™ options and upgrades offered at KB Home Studio. All options/upgrades require additional charges, may require ordering at predetermined stages of construction and are subject to change/discontinuation anytime by KB Home. KB Home is not a custom homebuilder. Plans, pricing, financing, terms, availability and specifications subject to change/prior sale without notice and may vary by neighborhood, lot location and home series. Additional charges apply for lot premiums, options/upgrades. Buyer responsible for all taxes, insurance and other fees. HOA applies. Sq. footage is approximate. ARTIST’S CONCEPTION: Illustration shows upgraded landscaping/options and may not represent communities’ lowest-priced homes. Map not to scale. See sales agent for details. DC-85332
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Call (703) 655-9627 for more information or to become a VIP.
• convenient to shopping and dining at the Brambleton Town Center
Foley St.
Huntington Ave.
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