A brewing crisis is emerging around homeowners insurance and thus far the finance and insurance community has not offered any viable solutions.
The annual number of weather/climate-related disasters exceeding $1 billion per event has more than doubled over the last five years from historical averages. Homeowners in affected markets have experienced increases in premiums that threaten their financial soundness or are finding cancellation notices in their mailboxes.
Major credit investors such as Fannie Mae and Freddie Mac, which require such policies, are acutely concerned about the long-term prognosis of traditional insurance in light of extreme weather trends.
An overhaul of the homeowners insurance market is in order to prevent an impending catastrophe in the mortgage market.
Premiums on homeowners insurance policies soared more than 20% from last year, reflecting increased rebuilding costs from more natural disasters. In areas hardest hit by recurring disasters such asFlorida,premiums have risen 35% with many homeowners experiencing much higher rates. And that’s where policies are available.
Several major insurers grabbed headlines this year by announcing their withdrawal from some markets, such as State Farm deciding not to offer new policies on homes in California due to major disasters like destructive wildfires that have plagued the state in recent years.
Insurers are squeezed between state insurance commissions, reluctant to allow rate increases reflecting the recent trends in claims, and reinsurance companies raising premiums on insurers looking to offload significant risk exposure from natural disasters.
State-run insurance programs including Florida’s Citizens Property Insurance Corp. have been reeling from the exodus of private insurers in their state. The dependence of a functioning insurance market on the decisions of 50 different state insurance commissions, poorly operating state-run programs and the volatility of reinsurance premiums imperils this market and has spillover effects onto the mortgage market.
To ensure the vitality of both homeowners insurance and mortgage markets, a combined private-public insurance solution at a national level is required to distribute natural disaster risk more efficiently, thereby lowering the costs and access to insurance and helping reduce pressures from a housing affordability crisis already in full bloom.
This could be attained by creating a new government-sponsored enterprise (GSE) under the regulatory purview of the Federal Housing Finance Agency (FHFA) thatalreadyregulates Fannie Mae and Freddie Mac. The existing National Flood Insurance Program (NFIP) would be restructured into this new hazard insurance GSE.
Importantly, this new GSE would be run by property and casualty (P&C)insurance, finance and weather/climate experts. The GSE structure would provide a nationwide platform providing hazard insurance to every homeowner against major natural disasters beyond flood risk. Providing fairly priced hazard insurance to homeowners given the trajectory of natural hazard events is in the national interest and funding this business in part with low-cost debt is critical to keeping costs down and access to insurance available to all.
By providing coverage only for natural hazards via this federal hazard insurance GSE, private insurers would be able strip out costly provisions of existing homeowners policies, turning them into basic policies covering other non-hazard related risks such as damage from a water line break.
This would reduce the overall costs of these standard policies. The federal hazard policy could be quasi risk-based, into several risk-based tiers to spread costs across a broad base of homeowners and make the policies affordable but also provide pricing disincentives to homeowners attracted to risky areas.
On the back end, the hazard insurance GSE would issue climate risk transfer (ClRT) securities much like Fannie and Freddie’s credit risk transfer (CRT) securities for mortgage credit risk.
Tranches of hazard risk would be sold off to private investors, most of which in this case would be insurers and reinsurers that could take positions in hazard risk based on their risk preferences. This would more efficiently distribute hazard risk and with sufficient interest, build liquidity in such a market which over time would help lower premiums while also reducing systemic risk to the taxpayer.
Some might say that the federal government’s track record with national flood insurance has not been good, so why would a federally chartered hazard insurance GSE present a viable solution? Actually, the housing GSEs have been incredibly effective at lowering the cost of homeownership since their inception and even following the Global Financial Crisis of 2008, have generated a profit for the US Treasury.
Establishing a hazard insurance GSE would bypass the insurance rate-setting problem that exists across 50 state insurance commissions that can limit insurance availability, and combined with a new ClRT security, would create an efficient market for broad distribution of hazard risk to the private market. The close linkage between homeowners insurance and mortgages would also be preserved by having the FHFA oversee GSEs engaged in these activities.
A vibrant housing finance system is dependent on a functional homeowners insurance market. As the pace of natural disasters rises, the provision of homeowners insurance needs to adapt to a rapidly changing environment. A federally sponsored corporation is best suited to address inherent frailties of today’s homeowners insurance markets.
Clifford Rossi is Professor-of-the Practice and Executive-in-Residence at the Robert H. Smith School of Business at the University of Maryland. He has 23 years of industry experience having held several C-level executive risk management roles at some of the largest financial institutions.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Clifford Rossi at [email protected]
To contact the editor responsible for this story: Sarah Wheeler at [email protected]
Adopting a rescue or shelter dog doesn’t just give a needy animal a home. It can provide a playmate for your kids, a jogging buddy for you and a loyal companion for everyone to cuddle with on the couch. But a new pet can also come with unexpected vet bills, which is why you might want to consider pet insurance.
Pet insurance policies can help pay for treatment if your furry friend gets sick or hurt. In some cases, they may also cover vaccinations and other routine care. Here’s how to decide whether pet insurance is right for your rescue dog.
Estimate the cost of vet care
It’s impossible to know which medical problems a given pet may have in the future. However, researching the breeds you’re interested in can help you get a sense of which health conditions are most likely to crop up, says Dr. Antonio DeMarco, chief medical officer at GoodVets, a chain of animal hospitals with locations across the U.S. Some of these conditions can be both serious and expensive to treat, he says.
For example, large-breed dogs like golden and Labrador retrievers are prone to hip dysplasia, a deformity of the hip joint. Some dogs may need surgery to treat it, costing thousands of dollars.
A local vet can advise you on potential health concerns and how much it might cost to manage them. They can also help you estimate the price of routine care.
Understand pet insurance
Pet insurance likely won’t reimburse every dollar you spend at the vet. For example, most plans won’t cover pre-existing conditions that your dog had before you bought the policy. So if you adopt a senior dog with diabetes, you’ll need to pay for the treatment yourself.
For the same reason, you can’t simply wait to get a policy until your vet diagnoses an injury or illness. DeMarco has had pet owners ask him if they can buy insurance after their dog tears an ACL. “[You] sure can, but this isn’t covered,” he tells them.
Most pet insurance plans pay to treat illnesses and injuries but won’t help with routine care unless you buy extra coverage. That coverage may be worth adding for certain dogs, says Maureen Sosa, director of pet support at the Humane Rescue Alliance in Washington, D.C. Smaller dogs are more prone to dental disease and benefit from regular cleanings, which wellness plans can help pay for.
When shopping for pet insurance, check for deductibles and copays. Say your plan will pay 80% of your expenses after you’ve met the $500 annual deductible. That means you’d have to spend $500 on your pet’s treatment in a given year before your plan would start reimbursing you.
Your policy may also have a maximum payout limit, such as $5,000 or $10,000 per year.
Get pet insurance quotes
The average cost of accident and illness coverage for a dog is about $640 per year, according to the North American Pet Health Insurance Association. However, you might pay more or less depending on where you live, the coverage options you choose and the breed and age of your dog.
You can get online quotes from most pet insurance providers. Check rates from at least three companies to make sure you’re getting the best price for the coverage you want.
Pet insurance isn’t worth the cost for every rescue dog. Policies may be prohibitively expensive for older dogs, especially if they already have chronic conditions that the policy won’t cover. In these cases, you may be better off skipping insurance and setting up an emergency fund for vet expenses.
Consider your peace of mind
One of the biggest benefits of pet insurance is avoiding heart-breaking financial decisions. Sosa has seen owners forced to surrender pets because they couldn’t afford to treat their medical conditions. “The economy is in a really bad place,” she says. “That’s trickling down and affecting what people are able to afford.”
Even worse, some owners may have to euthanize their dogs if the treatment for a serious condition is simply too expensive, DeMarco says. “As veterinarians, that is the worst-case scenario for us.”
You may go years without having to use your pet insurance. But in a crisis, having the policy can give you peace of mind, DeMarco says. You’ll know that “if those situations arise, you’re going to be able to handle them financially and not have to make decisions based on finances rather than what’s best for your animal.”
This article was written by NerdWallet and was originally published by The Associated Press.
If you’re worried that your loved ones would struggle to cover your end-of-life expenses, funeral insurance may be an option. Funeral insurance is a small life insurance policy that’s intended to pay for your funeral, cremation or burial, plus other outstanding expenses such as medical bills.
What is funeral insurance?
Funeral insurance policies are typically capped at low amounts, often between $5,000 and $25,000. The reason the payout — or death benefit — is small is because it’s meant to take care of a specific set of expenses.
Technically, your life insurance beneficiaries can spend the money however they choose. But it’s common to use the death benefit to pay for funeral-related expenses, including:
Funeral service, including viewing.
Burial or cremation.
Medical bills and other debt.
Probate costs.
Most insurers don’t require a medical exam for funeral insurance. Instead, approval is based on your answers to a health questionnaire. Some burial insurance policies are guaranteed issue policies that will cover any applicant, even if they have major health problems. However, these policies usually come with a two-year waiting period. That means if you die during the first two years that the policy is in force, your beneficiary will only receive a refund of your premiums plus interest instead of the full death benefit.
How much does funeral insurance cost?
As with any life insurance policy, your premiums will vary based on factors like your age, gender, health and tobacco use. For a 50-year-old, a $10,000 burial insurance policy with Lincoln Heritage may cost as little as $25 or $30 a month. But someone who’s 80 could pay monthly premiums as high as $150 to $190 for $10,000 of coverage.
Funeral insurance vs. preneed insurance
Both funeral insurance and preneed insurance are designed to cover final expenses. The key difference is that funeral insurance is a type of life insurance policy, while preneed insurance is a prepaid funeral plan.
You can buy funeral insurance through a life insurance company, while you would purchase a preneed plan directly from a funeral home. Unlike a funeral expense policy, a preneed plan doesn’t pay out to your loved ones when you die. Instead, the money goes to the funeral home — so you’re essentially prepaying for your funeral costs.
The terms of preneed plans vary by funeral home. Some services are guaranteed, which means that even if the costs go up after you purchase the plan, they’ll be covered by the funeral home. However, some services may not be guaranteed, meaning your family could have to pay extra if costs increase.
Open enrollment is no one’s idea of a good time, but health coverage is a crucial part of your financial health. Whether you’re getting insurance through an employer or the Affordable Care Act marketplace, it’s important to ask the right questions before you choose a health plan for 2024.
“Open enrollment is a great time to do a personal health audit,” says certified public accountant Charlene Rhinehart, a personal finance editor at drug savings site GoodRx. “Understanding your current and anticipated health care needs will help you decide which plan is the best fit.”
Here’s how to weigh your options.
Are your doctors in network?
Plan networks change from year to year. If you love your doctor or specialist, make sure they’re still in the network of the plan you’re considering for 2024.
You should also consider whether you want the option to go out of the network — which you can usually do in a preferred provider organization, or PPO, plan, although it will cost more. Health maintenance organizations, or HMOs, tend to be cheaper but lack the out-of-network flexibility.
Are your medications covered?
If you’re on prescription medications, check plan formularies to make sure you understand how your drugs will be covered in 2024. Drug coverage can change from year to year, even if you stick with the same plan.
“Even if you were in an Aetna plan before, and you say, ‘Well, I’ll stay with Aetna again,’ you still want to look and make sure the medication you’re taking is still on the formulary,” says Abbie Leibowitz, chief medical officer and co-founder of Health Advocate, which provides integrated health advocacy and health benefits programs.
What are the out-of-pocket costs?
Every plan has set costs, like the monthly premiums, plus the costs of care, which include the deductible and any copays and coinsurance. Comparing plans means estimating how much health care you’ll use next year.
On the one hand, you have the costs you’d pay if you don’t use the plan much beyond preventive care. On the other hand, you have the maximum amount you could pay in each plan if you’re a heavy health care user. You can easily compare these situations.
There’s a squishy middle ground, however, where the best plan for you depends on the amount and type of care you’ll need next year.
“The tricky part is we never really know how much we’re going to spend in a given year if we’re in the middle,” says Adam Rosenfeld, a health care benefits expert and president of employee benefits company Rubicon Benefits. The best thing, he says, is to look at your current claims information and imagine that the next year will be identical. On which plan would you be better off?
“It’s the best predictive modeling you can do at this point,” Rosenfeld says.
Is a high-deductible plan right for you?
A high-deductible health plan, or HDHP, in 2024 is defined as a plan with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage, with out-of-pocket maximums of no more than $8,050 or $16,100, respectively. HDHPs usually have lower premiums, and sometimes companies kick in a contribution to a health savings account, or HSA, to help cover the deductible.
An HDHP can be an appropriate plan for people in a variety of health situations, as long as they’re prepared to pay the deductible if they need health care.
“The question is, ‘Can you afford it?’” says Adria Gross, an insurance broker, consultant and founder of MedWise Insurance Advocacy, which helps clients and attorneys with medical claims issues. If you’re healthy, Gross says, go for the HDHP. But in the case of a bad accident, you’ll want to make sure you have the means to pay the full deductible.
Can you stack benefits?
You might have access to voluntary benefits through your employer that can help cover costs that your insurance doesn’t cover. For example, Aflac policies can help pay expenses if you have an accident or get cancer.
You may find that you can get a high-deductible health plan plus a supplemental plan that would help you cover your deductible for less than the cost of a traditional health plan. “It can be a lot less than moving to the next tier where the deductible is lower,” Leibowitz says.
Do you have special care needs?
Some insurance plans cover things like weight loss surgery or infertility treatments — but some don’t, and the exclusion can make a huge difference if it’s a procedure you’re considering. You might find that one insurance company covers a certain surgery or test while another views it as investigational and not medically necessary.
“I call them the fringes,” Leibowitz says. “They’re beyond the typical medical and surgery coverage.” The focus is narrow, he says, but the coverage can be important.
The underlying message, he says, is that just because it looks like the same plan from the same company you were with this year, don’t assume that it hasn’t changed in ways that are important to you. “Network, formulary, benefits,” Leibowitz says, “you have to do your homework.”
This article was written by NerdWallet and was originally published by The Associated Press.
Like human health insurance, pet insurance helps cover unexpected medical expenses for our furry friends. One crucial component of that coverage is your pet insurance deductible. Understanding how deductibles work can help you choose the right plan for you and your pet.
What is a pet insurance deductible?
A pet insurance deductible is the amount you pay out of pocket for your pet’s veterinary care before the insurance company starts covering costs. It’s a set amount you choose when you purchase your policy.
For example, if your deductible is $250 and your pet’s vet bill is $1,000, you’ll pay the first $250, and the insurance company will help cover the remaining $750, depending on your policy’s terms. If you have an annual deductible, you’d have to pay this amount only once per year.
How do pet insurance deductibles work?
A deductible is a way for insurance companies to share the cost of vet bills with pet owners. Once you’ve met your deductible, the pet insurance company will pay any remaining portion of your vet bills that qualify for coverage.
In most cases, you’ll need to pay the full vet bill yourself and then file a claim for reimbursement with your pet insurance company. If there are any expenses insurance doesn’t cover, like taxes or waste disposal, the company will subtract them along with your deductible before reimbursing its share of the bill.
Raising or lowering your deductible will affect how much you pay for pet insurance. Selecting a higher deductible usually lowers your insurance premium but means you’ll pay more out of pocket when your pet needs care.
🤓Nerdy Tip
The amount you pay for routine care like vaccines or wellness visits usually doesn’t count toward your deductible. Even if you have separate coverage for preventive care, the deductible typically applies only to covered illnesses and accidents.
Types of pet insurance deductibles
There are two main kinds of deductibles: annual and per condition.
Annual pet insurance deductible
An annual pet insurance deductible is a set amount you pay each year before insurance starts covering your vet bills. You pay this deductible only once per policy term. It doesn’t reset until your policy renews, regardless of how many claims you make. This is the most common type of pet insurance deductible.
Say you have a $300 annual deductible. If your pet has a minor accident and the vet bill is $150, you pay the entire amount since it’s less than the deductible. (Note that you’d still want to file a claim so your pet insurance company can apply the amount you’ve paid toward your deductible.)
Later in the same year, your pet gets sick and racks up a $500 bill. You’d pay the remaining $150 of your deductible, and the insurance would cover a portion of the remaining $350, depending on your policy’s terms.
If your pet has more health issues within the same year, the insurance would continue to help cover the costs since you’ve already met the deductible. But once your policy renews, your deductible will reset and you’ll need to pay it again before receiving more insurance coverage.
Per-condition deductible
With a per-condition deductible, you pay a set amount out of pocket for each illness or condition your pet has. This type of deductible may also be called a per-incident deductible.
For example, if your pet gets an ear infection and later breaks a leg, you would pay your deductible twice: once for the ear infection and once for the broken leg.
After you pay the deductible for a specific condition, insurance helps cover additional costs for that condition over the life of your pet. This is beneficial if your pet develops a chronic problem that needs ongoing treatment each year. Once you meet the deductible for that condition, you don’t pay it again, whereas you’d pay it each year with an annual deductible.
The downside is that if your pet needs care for an unrelated problem later in the same year, you’re stuck paying the deductible all over again.
Did you know…
Very few pet insurers offer per-incident deductibles. Most have annual deductibles, so pet owners have to meet the limit only once per year.
Deductibles vs. copays and reimbursement rates
Deductibles, copays and reimbursement rates are different parts of how you and your insurance company share costs. Once you’ve paid your deductible, the insurance company uses the copay and reimbursement rate to calculate how much of the remaining vet bill it will cover.
A copayment, or copay, is your share of the vet visit cost after you’ve met your deductible. The reimbursement rate is the percentage of the bill the insurer will pay. For example, if your policy has a 70% reimbursement rate, that means your copay is 30%.
To see how these policy limits work together, imagine you have a $200 deductible, a 20% copay and an 80% reimbursement rate. If your pet’s vet bill is $1,000, you’d pay the $200 deductible first. Then, of the remaining $800, the insurance would pay 80% ($640), and you’d pay the 20% copay ($160). So, for a $1,000 vet bill, you’d pay $360, and the insurance would cover $640.
In general, a policy with a higher reimbursement rate will be more expensive, but the insurance company will cover more of your vet bills.
🤓Nerdy Tip
In addition to deductibles, copays and reimbursement rates, most pet plans have an annual coverage limit, which is the most your insurer will reimburse for vet care in a 12-month period. This limit is often customizable, and you may have the option to choose unlimited coverage. Your annual coverage limit is another factor that can influence the cost of pet insurance.
How to choose a pet insurance deductible
The goal when choosing a deductible is to strike a balance between good coverage and manageable out-of-pocket expenses.
First, determine how much you can comfortably pay for vet care. Imagine if your pet needed to visit an emergency vet tomorrow. How much of a deductible could you afford to pay? You shouldn’t struggle to cover your deductible in an emergency, so choose an amount that fits your budget.
Remember, the deductible is just one part of your policy. Consider it alongside copays, reimbursement rates and annual coverage limits to get the full picture. The more costs you take on yourself, the less you’ll pay for insurance, and vice versa.
If you’ve had your pet for a while, looking at what you’ve spent in vet care over the past year may help you predict future costs.
Compare deductible options from popular pet insurance companies
Pet insurance company
Deductible options
$100 to $1,000 annually.
$100 to $500 annually.
$100 to $1,000 annually.
$250 to $2,500 annually.
$100 to $1,500 annually.
$100 to $500 annually.
$100 to $1,000 annually.
$100 to $500 annually.
$250 to $1,000 annually.
$0 to $2,500 annually.
$250 annually. (Other options may be available.)
$50 to $1,000 annually.
$100 to $1,000 annually.
$100 to $1,000 annually.
$0 to $1,000 lifetime per-condition deductible in most states; some states have no deductible.
Buying a home is an exciting—and typically very expensive—venture. Understanding the mortgage process, your financial status, and what you really want and need in a home are all important to ensuring a desirable outcome when you begin your home search. But what you might not realize is that when you do find the home that ticks most of the boxes, you don’t necessarily have to pay what the seller is asking. Learn more about negotiating house prices below.
Tips for Negotiating House Price
Can You Offer Less Than Asking Price on a House?
It may feel odd to haggle over house price, but you can offer less than what the seller is asking for a home. That’s why it’s called making an offer. The seller doesn’t have to accept the offer, though, and you might find yourself entering into negotiations if you do want the home. During this process, it’s important to balance your desire for the home with a practical approach to how much you should, can, or even want to spend on it.
Tips for Negotiating House Prices
Knowing how to negotiate house price is important because it helps you get a better deal. But you aren’t the only one that might be making an offer, so you also want to follow some best practices so your dream home doesn’t get scooped up by someone else while you’re hedging your bets with the seller.
1. Partner with a real estate agent who can help.
You might start by entering the homebuying process with a bit of help. A qualified real estate agent can serve as your partner as you look for homes and make offers. Here are some of the services a real estate agent can do for you:
Help you drill down to what you really want in a home
Offer greater understanding of the local real estate market
Find homes that meet your criteria that you might not know were for sale or be able to find otherwise
Arrange showings
Act as your go-between and advisor during negotiations with sellers
It’s important to note that not all real estate agents have negotiation experience or even offer this service in an aggressive manner. As a buyer hiring an agent, make sure you look for one with experience writing real estate contracts and negotiating on behalf of clients.
2. Understand how motivated the seller is.
Try to gauge how motivated a seller is to determine where you can start your negotiation. For example, a seller that must sell one home before buying another may be motivated to sell at anything but a loss. But one that doesn’t have to sell the home or is listing a property just to see if it might sell isn’t that motivated and may be able to reject any offer under asking price.
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A good real estate agent can also help you understand seller motivation. Here’s some information that can help you gauge it:
How long the house has been on the market. In general, the longer a home is on the market, the likelier a seller is to accept a lower offer.
How many offers have been made. If the seller hasn’t had any offers over a period of time, they may be more willing to consider yours. If they’ve declined many offers, it could be a sign they aren’t super motivated.
Whether the seller is on a deadline. If the seller has to move or needs to sell the home in a short time period for any other reason, it may put you in a good position as a buyer.
The home has been foreclosed on, which means the lender may be motivated to sell it to recoup whatever it can.
3. Be realistic with your offer.
Whatever state the markets and the seller are in, make sure you’re realistic when you make an offer. First, that means being realistic about what you can pay every month and whether you can get approved for a mortgage for the offer amount.
Getting pre-approved for a mortgage before you start negotiating can be a good idea. This process lets you know around what amount you’re likely to be approved for, how much down payment you might need, and whether you can get an interest rate that works for you. It also demonstrates to sellers that you’re a serious buyer and that you are likely to be able to obtain funding if your offer is accepted. That can make a difference in negotiations.
On the flip side, you should also be realistic about what the seller is likely to accept as an offer. Lowball offers can be seen as insulting and don’t set you on a good foundation for future negotiations.
What is considered a lowball offer? That varies, and your real estate agent can help you determine an appropriate offer in each case.
4. Show enthusiasm but don’t be too tied to the property.
The art of negotiation involves keeping a straight face, right? Actually, in the homebuying process, it might benefit you to demonstrate that you do really like the home in question. After all, the seller may have called this property home for a number of years and be personally attached to it. Selling it to someone else who will genuinely love and care for it could be important.
If it comes down to two similar offers from separate buyers and you’re the one who was delighted with the home and the seller saw you connect with the property, the odds might balance out in your favor. Just don’t overdo it and ensure that you’re making logical choices about financial matters no matter how much you love a house.
5. Put a deadline on the offer.
Finally, put a deadline on your offer. That helps reduce the chances that competing offers might come in and pushes the seller to make a decision or counteroffer so you can move on with the negotiation or your hunt for a different home.
What Else Can You Negotiate with Home Sellers?
If the seller’s firm on the price, you might be able to negotiate other things. Here are some tactics to consider:
Ask the seller to pay some or all of the closing costs.
Use the home inspection to point out items of concern and ask the seller to make repairs to the home in exchange for you paying the full asking price.
Agree to make certain repairs yourself, but ask the seller to agree to a cash payout at closing. This means they come to closing with a check for you to cover the costs of the repairs.
Get creative and ask the seller to leave certain appliances, such as a washer and dryer or refrigerator in the home.
Shop Mortgages Online
If you’re ready to buy your next home, you can start the mortgage process online. Follow these steps to get started.
Check your credit. You can sign up for ExtraCredit to see 28 FICO® Scores, including those commonly used by mortgage lenders.
Make sure your credit score is accurate by challenging inaccurate negative items, if necessary.
Continue to make strong financial decisions to help boost your score so you stand a better chance at getting approved for a mortgage.
Shop mortgage rates at Credit.com, get pre-approved or apply for a mortgage with one of our partner lenders.
New American Funding’s partnership with Matic Insurance and OneSource Solution will provide insurance and home setup services for existing and new customers while NAF is processing the loan.
NAF Insurance and NAF Concierge will be integrated into NAF’s loan process to remove friction from the mortgage, home buying and moving experience, the California-headquartered lender said.
Mortgage customers can bundle food, wind, auto, pet, life and other personal lines of insurance through NAF Insurance, which is powered by Matic.
Borrowers can work with a NAF Concierge, powered by OneSource, to find local movers and set up key utilities like electricity, gas, and water. Services and support also include assistance with internet and TV services and help with smart home security systems, the lender said.
“Our goal has always been to fully support the homeownership experience for our customers. Adding these new valuable services will allow NAF to serve as a true home for our customers’ entire journey,” said Rick Arvielo, co-founder and CEO of NAF.
Founded in 2003 by Rick Arvielo and his wife, Patty Arvielo, New American Funding offers a variety of conventional, government, adjustable-rate and non-qualified mortgages.
NAF has a servicing portfolio of more than 250,000 loans representing about $66.1 billion in value, according to the lender. Licensed in 50 states and Washington, D.C., the lender has 189 active branches nationwide with 1,696 sponsored MLOs, NMLS data showed.
In April, NAF announced it would enter the joint ventures arena to go after the purchase business market.
NAF was looking for a 50/50 joint venture between the California-headquartered lender for virtually any size real estate brokerage, a larger agent team, a new home builder and a wholly-owned mortgage business.
The firm ranked as the 32nd largest lender originating $4.7 billion in production volume in the first half of 2023, according to Inside Mortgage Finance (IMF). As with most lenders, NAF saw production drop 48.4% from the first six months of 2022.
Many or all of the products featured here are from our partners, who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.
On average, homeowners insurance in the United States is $1,424 annually and about $118 per month. This price varies based on the state you live in, along with other factors like previous home insurance claims, credit score, and the age of your home.
If you’re buying a home, there are a lot of cost considerations, from the monthly closing costs to the mortgage payments and interest rate. One factor many people often overlook is the additional cost of home insurance. To properly budget for your new dream home, it’s helpful to know the average cost of home insurance in your state.
Today, we’ll go over the average insurance cost for each state, which companies have the best rates, and what factors can affect your rates. By learning more about home insurance, you can find the best deals to save money and enjoy the experience of moving into your new home. If you’re considering moving to a new state, this information may also help influence your decision.
Table of contents:
Homeowners Insurance Facts
The cost of your homeowners insurance is affected by various factors. The cost of homeowners insurance can vary by state because some states are more prone to natural disasters than others. For example, Florida is more prone to hurricanes than other states, so the average cost is higher than in a state like Nevada.
As you’ll learn, homeowners insurance can range from less than $1,000 to over $3,000 per year. Here are some key facts about homeowners insurance in the United States:
The average annual cost of homeowner’s insurance in the United States is $1,424.
The state with the cheapest homeowners insurance at $382 per year is Hawaii.
Oklahoma has the highest homeowners insurance rates, averaging $3,659 annually.
Portland, Oregon, is the most populous city with the lowest average annual insurance rate at $686 per year.
People with a credit score of 740 or higher have the lowest average insurance rates at roughly $1,207 per year.
Average Cost of Home Insurance by State
The overall average cost of home insurance in the United States is $1,424 annually or $118 per month.
The following chart and table show the average cost of home insurance for each state and includes Washington, D.C. These prices are based on $250,000 for dwelling coverage.
Top 5 States With the Cheapest Homeowners Insurance Rates
Hawaii has the lowest annual rate of $382 per year, which is 73% lower than the national average. Vermont, Delaware, Utah, and Oregon are also in the top five states with the lowest homeowners insurance rates, and each is close to 50% lower or more than the national average.
Hawaii: $382 per year
Vermont: $658 per year
Delaware: $679 per year
Utah: $696 per year
Oregon: $723 per year
Top 5 states With the Most Expensive Homeowners Insurance Rates
The states with the most expensive homeowners insurance rates in the country are Oklahoma and Kansas at $3,659 per year and $3,083 per year respectively. Some of the other states with the highest rates include Nebraska, Colorado, and Arkansas.
According to Insurance.com, these states have high rates because they’re more likely to experience tornadoes, hurricanes, hailstorms, and other natural disasters.
Oklahoma: $3,659 per year
Kansas: $3,083 per year
Nebraska: $2,951 per year
Colorado: $2,152 per year
Arkansas: $2,123 per year
Average Cost of Homeowners Insurance by City
The city you live in may also determine the cost of your homeowners insurance rates. In addition to the possibility of natural disasters, population, crime statistics, and local materials and labor costs are also factors.
The following cities are the 25 largest cities in the United States, organized alphabetically. The table includes their average annual and monthly rates.
How Much Does Homeowners Insurance Cost by Company?
As with all forms of insurance, it’s typically a good idea to shop around for the best rates. Your rates may change depending on the provider based on the size of your home, claim history, and additional factors. And keep in mind that the level of coverage will also change the cost of your insurance premiums.
The following table shows 11 of the country’s most popular homeowners insurance providers sorted by annual rates.
4 Factors That Can Affect Homeowners Insurance Rates
Outside of your home’s location, some other factors can determine the cost of homeowners insurance. We’ve listed four of the most common factors that could affect your insurance rates.
1. Credit Score
Some states may look at your credit score to help determine your rates. Your credit score may be a factor because a low credit score or bad credit history can be considered a risk factor.
There are some exceptions. According to Experian®, states like California, Hawaii, Maryland, and Massachusetts prohibit using credit scores as a determining factor for insurance rates.
Credit Score:
Poor (300-579)
Fair (580-669)
Good (670-739)
Excellent (740-850)
Average Annual Rate:
$3,274
$1,571
$1,428
$1,207
2. Claims History
Similar to automotive insurance rates, if you have an extensive history of home insurance claims, this can raise the price of your rates. Although you have less control over the damage that may happen to your home, insurance companies require higher premiums to help cover the costs of damages or injuries.
This table shows what types of claims may raise your rate based on the average amount paid out for the claim. The average payouts are taken from the Insurance Information Institute’s research for dwellings with $250,000 in coverage.
Type of Claim
Average Dollar Amount of Claim Paid Out
Average Annual Rate After a Claim
Wind
$11,650
$1,570
Liability
$30,324
$1,749
Theft
$4,415
$1,763
Fire
$77,340
$1,773
3. Deductible Amount
Your deductible is another factor to consider. Some people opt for a higher deductible because it lowers their rate. Should something happen to your home, you’ll have a higher out-of-pocket expense due to that higher deductible. This is helpful to remember as you budget around your home insurance costs.
Another consideration is that while you may save money while paying for your homeowners insurance, you may face financial hardships should you need to file a claim.
Deductible Amount
Average Annual Rate
$1,500
$1,368
$2,000
$1,273
$5,000
$1,111
4. Age of Home
If you own an older home, it may be more expensive to repair the home if it’s damaged. Older homes typically have higher rates due to these higher costs for repairs. The repairs are often more expensive, and the contractors may need to bring the home up to the most current building and safety codes. The first year of recorded data was in 1959.
What Does Homeowners Insurance Cover?
Knowing what your homeowners insurance policy covers can help you better prepare for situations when you might need to use it. With a better understanding of what is and isn’t covered, you can protect yourself from the potential of financial losses if you need to file a claim.
Depending on which insurance provider you choose, they may offer some or all of the following coverages.
Dwelling coverage: The averages listed throughout this post are based on the dwelling coverage of $250,000, which means the insurance will cover up to $250,000 in repairs. Should you get a policy with a higher dwelling coverage amount, more repairs will be covered.
Additional structures: Basic dwelling coverage covers damages to your home, but if you have other structures like a guest house, shed, or detached garage, you’ll need this extra coverage. This coverage is often 10–20% of the dwelling coverage’s limit.
Medical payments: If someone who doesn’t live in your home gets injured on your property, you can get coverage for their medical payments. Medical payment coverage usually ranges from $1,000 to $5,000 of coverage.
Personal liability: Personal liability coverage can be between $100,000 and $500,000, which is for property damage to someone else’s property or if you’re legally liable for injuries on your property. Personal liability coverage may also cover legal fees if someone were to sue you after being injured.
Loss of use: If your home gets damaged to the point where you cannot live there until the repairs are done, this coverage will help cover living expenses. Loss of use coverage can range from 10% to 30% of dwelling coverage.
Personal property: Ranging from 50% to 75% of your dwelling coverage, this provides coverage for the personal property in your home, like clothing, furniture, and electronics. If you have this coverage, be sure to read the details because it may have a max limit of coverage on certain types of items.
What Characteristics Affect Homeowners Insurance?
Earlier, we went over different factors that can affect your homeowners insurance, like your credit score and history of claims. Home and location characteristics may also give you lower or higher rates.
Home Characteristics
Various characteristics of your home and how it’s built may make it more at risk for damage. As with other forms of insurance, if there are higher risks, they can increase your rates.
One of the common characteristics affecting your rates is the condition of your roof. Your roof is a primary part of your home that protects the inside of your home. If you have an older roof that may not withstand harsh weather or is made from poor materials, you may have to pay a higher insurance rate.
Some insurance providers may also have higher rates for special features. Some of these include having a pool, hot tub, sauna, or any other feature that may cause an injury.
Location characteristics
Earlier, you learned how the average home insurance cost varies from state to state, and much of this has to do with the area’s characteristics. In addition to weather risks, home insurance rates are often higher in areas prone to wildfires. Some insurance providers calculate risk based on how close the home is to fire stations and fire hydrants.
Another location characteristic that home insurance providers look at is crime rates. Home insurance policies may have theft coverage, but in higher crime areas, the rates will be higher due to a higher likelihood of break-ins. Sometimes, you can lower your insurance rates by installing security measures like cameras and alarms.
8 Ways to Lower the Cost of Your Homeowners Insurance
Your mortgage is the primary expense for your home, and it’s important to factor in the cost of your homeowners insurance as well for budgeting purposes. Fortunately, there are ways to lower your homeowners insurance through different methods. Here, we’ve listed different ways you can get better rates for your home insurance.
Improve your credit score: Many states allow insurance providers to use your credit score as a factor. By improving your score, you can likely lower your rates.
Bundle your policies: You may be able to bundle your home and car insurance for a better price on both.
Do some renovations: An old roof or out-of-date parts of your home may increase your rate, so it might be worth it to do some renovations.
Opt for the higher deductible: Although you’ll have to pay more when you file a claim, a higher-deductible policy can save you on your annual rate.
Compare insurance quotes: There are many different homeowners insurance providers, so it may be helpful to shop around to find the best price.
Try an independent agent: You don’t have to work with an insurance company directly. Some independent agents are licensed insurance professionals who can offer you a good deal.
Get the right coverage: Educate yourself about what coverages you need and which you don’t. Some people may pay for coverage they won’t need to use.
Check for discounts: There are a variety of discounts you could get in addition to bundling your policies. Your provider may offer a loyalty discount, an alarm system discount, or a claims-free discount.
Methodology
The primary source of this data comes from Bankrate. To conduct their analysis, Bankrate uses the data provided by Quadrant Information Services. The data comes from various insurance providers across all 50 states as well as Washington, D.C., for 2023.
The average rates use the following base insurance profile:
Homeowner: Male, 40 years of age
Dwelling coverage: $250,000
Personal property coverage: $125,000
Liability coverage: $300,000
Loss of use coverage: $50,000
Medical payments coverage: $1,000
Repair Your Credit Before Getting Homeowners Insurance
Depending on your state, your credit score may play a significant role in your homeowners insurance rates. By improving your credit score, not only can you potentially save on your home insurance rates, but your credit score can also help you when purchasing or refinancing your home.
Credit.com offers a free credit report card that provides you with an analysis of your credit health. You can also utilize our ExtraCredit® subscription for additional credit reporting and other services.
Only 3 in 10 Medicare beneficiaries shop around during open enrollment, according to a 2022 analysis from KFF, a health policy nonprofit — and only 1 in 10 Medicare Advantage enrollees voluntarily switch plans. But a 2020 analysis of Medicare Advantage plan choices by the National Bureau of Economic Research found that more than half of beneficiaries overspent by more than $1,000 due to the plan they selected.
Medicare open enrollment is Oct. 15 to Dec. 7, giving people with Medicare a chance to change plans for the upcoming year. Although potential Medicare Advantage enrollees may be swayed by $0 premiums and extra perks like vision and dental coverage, there are more important features to explore when you’re choosing next year’s coverage.
Here are some practices to avoid as you shop for Medicare Advantage this fall.
1. Thinking Medicare Advantage is Medicare
If you’re considering Medicare Advantage, understand that it’s not the same thing as government-provided Medicare. It offers the same benefits, but Medicare Advantage is run by private health insurance companies and it operates differently.
“You are essentially taking the Medicare coverage that you’ve been provided by the government and turning that in,” says Melinda Caughill, co-founder and CEO of 65 Incorporated, which offers Medicare guidance.
You can switch back to Original Medicare during each year’s open enrollment period, but you may not be able to qualify for an affordable Medicare Supplement Insurance, or Medigap, plan once you’re past the one-time Medigap open enrollment period. (Medigap helps with certain out-of-pocket costs not covered by Original Medicare.)
2. Assuming your doctors are in network
Medicare Advantage plans operate within networks of medical providers, and you usually must see in-network doctors for covered care.
“A lot of people don’t realize that — especially those $0-premium plans — they tend to have fairly confined networks,” says Emily Gang, CEO of the Medicare Coach, a site that provides Medicare guidance. “You want to double-check that your doctor is actually an approved provider in that network.”
Ask your providers what insurance they’ll be accepting in 2024, suggests Sarah Murdoch, director of client services for the Medicare Rights Center, a nonprofit consumer advocacy organization. It’s easier than trying to check each plan’s network individually.
3. Not checking your drug coverage
Like network providers, Medicare Part D prescription drug coverage can also change each year. Your drug plan might cover one of your medications differently in 2024, leaving you with more out-of-pocket costs than you expected.
“If you take even one brand name medication, your need to compare plans is incredibly high,” Caughill says. No brand names on your list? Shop around if you take five or more medications in general.
4. Buying for the dental benefits
Medicare Advantage plans usually include benefits that aren’t part of Original Medicare, such as dental, vision or hearing coverage. These extras may be appealing, but don’t let them steer your plan choice.
“First of all, it’s health insurance — so how is it going to cover your health care providers and your medications?” says Katy Votava, who holds a doctorate in health economics and nursing and is president and founder of Goodcare, a consulting firm focused on the economics of Medicare. “If you pick [your plan] for a benefit that isn’t health insurance, you’re often picking wrong. And the dental benefit is pretty limited in all these plans — it’s a couple of cleanings and some bite wings.”
5. Looking at the premium only
The majority of Medicare Advantage enrollees are in plans with no premium, meaning you pay nothing each month for the plan. “People see that $0 premium and they’re like, ‘Oh, it’s free,’” Gang says. “And it’s not.”
Research the rest of the plan’s costs before you sign up, including deductibles, copays, coinsurance and the out-of-pocket maximum, which is the most you might have to spend on covered care in a year. In 2023, the out-of-pocket max can be as high as $8,300 for in-network care.
6. Buying because your friend has it
People eligible for Medicare are bombarded by information during open enrollment, and it can be overwhelming. “They don’t shop,” Votava says. “They go with name recognition or what their friend has.”
The better choice: Focus on your own situation and find the plan that meets your needs.
If you need help, contact your State Health Insurance Assistance Program, or SHIP, for free Medicare guidance. Just don’t wait until the last minute, because appointments fill up, Votava says. “If you need individual help, you’d better get on the list.”
This article was written by NerdWallet and was originally published by The Associated Press.
Are you quickly approaching the limit of your unemployment benefits? We’ve created a quick guide here to help walk you through your next steps. In this article, we’ll show you how to create a financial action plan, and then we’ll guide you through the latest extension to unemployment benefits. Finally, we’ll explain a few government-sponsored programs, some of which could help you make ends meet.
What Does It Mean to Exhaust Your Benefits?
Individual states manage and regulate their own unemployment benefits policies and requirements. On average, these benefits last for 26 weeks or about 6 months.
When you apply for unemployment benefits, caseworkers review your case and approve or disapprove benefits. If approved, a maximum amount is set for the value of benefits you can receive while you’re approved for benefits. Once your benefit payouts reach this maximum amount, you’ve exhausted your benefits.
What to Do If Your Benefits Are Exhausted
Once the unemployment office notifies you that your benefits are exhausted, you won’t receive any more payments after the designated date. This doesn’t mean you don’t have other options. Depending on your state regulations, you may be able to reapply for unemployment benefits.
If you receive a letter stating your benefits are ending or your renewal application for benefits has been denied, you have the right to file an appeal and try to overturn this decision. Instructions for how the unemployment benefits appeals process works in your state should come with your letter. Typically, you must submit a detailed letter explaining why you believe your benefits should be reinstated.
While you are waiting for the appeals process, consider applying the following steps. Think of them as a backup plan if the appeals process doesn’t go the way you want:
1. Create a Financial Action Plan
Before you do anything else, create an emergency financial action plan. You might not be able to overhaul your finances completely—but you can stem the flow of money to some degree. You might be able to shave a few dollars off your expenses every month, or temporarily stop making mortgage or loan payments. Here are a few ideas to get you started:
If you feel frustrated or helpless between jobs, create a daily schedule to motivate yourself—and stay as physically and mentally active as you can.
2. Apply for Government Assistance Programs
If your unemployment benefits run out, there are numerous other government assistance programs that may provide financial aid. Below is a look at several of these programs. In many cases, you can check your eligibility or even apply for these benefits online.
WIC
The Women, Infants, and Children, or WIC, program is a federal nutrition program that provides healthy foods to women who are pregnant or breastfeeding and children under the age of 5. The program gives eligible participants coupons they can exchange at the grocery store for specific food items, such as milk, cheese, and cereal.
SNAP
The Supplemental Nutrition Assistance Program, or SNAP, provides low-income families with financial support to purchase food. To be eligible, you must meet specific income guidelines and resource limits. This support can help cover a portion of your grocery budget until you can secure a job.
Medicaid
If you don’t currently have health insurance, you may want to see if you qualify for Medicaid. This health insurance program helps income-eligible adults and children obtain health insurance. While Medicaid is a federal government program, each state sets its own eligibility guidelines. If you’re currently not working or working limited hours, you may qualify for Medicaid.
CHIP
If you don’t qualify for Medicaid, you may still be able to obtain health insurance for your children under the Children’s Health Insurance Program, or CHIP. In some states, pregnant women may also qualify for CHIP. There are no waiting periods or open enrollments with CHIP insurance. Instead, you can apply for this insurance at any time throughout the year.
Social Security Retirement
If you’re aged 62 or older, you may qualify for Social Security retirement payments. You should talk directly to a representative at your local Social Security office to find out how much you can earn a month on Social Security if you retire right now. Keep in mind that the longer you wait to start collecting Social Security, the higher your monthly payments may be.
Social Security Disability
If you have a medical condition that prevents you from working and is expected to last longer than 1 year, you may qualify for Social Security disability, or SSID, payments. The application and approval process can take 6 months or more, so it’s recommended to apply for these benefits as soon as possible if you believe you qualify.
SSI
If you or one of your dependent children has a medical condition that prevents or limits you from working but you’re low-income or don’t have enough work credits to qualify for SSDI, you may qualify for Supplemental Security Income, or SSI. If eligible, you can receive monthly payments and typically qualify for Medicaid automatically.
State and Community Benefits
Depending on where you live, there may also be a number of state and community programs that can provide extra support until you can find a job. For example, many local communities have food pantries and soup kitchens that may be able to provide you with supplemental food options. Some states also offer reduced or free internet and mobile phone services to low-income families. Your local public assistance office or county government offices should provide a list of services for you.
Grants, Scholarships and Loans
If you decide to use your time off to acquire new skills through a training or college program, you may be eligible for various grants, scholarships, and student loans. In some cases, the combination of these programs can cover your cost of living while you’re in school.
Housing Choice Voucher Program (Section 8)
Losing a job can make it difficult to keep up with your rent payments and put you at a higher risk for eviction. To help low-income families maintain secure housing, many states have a Housing Choice Voucher Program, also referred to as Section 8. If you qualify, this program can cover a portion or all of your rent to ensure you don’t lose your housing. Many areas have a waiting list for this program, so it’s recommended to apply for these benefits as early as possible.
3. Look into Self-Employment Assistance Programs
If you’re self-employed, you might be eligible for PUA and PEUC. Other programs, including grants and loans administered by the Self-Employment Assistance Program (SEA), are also available. Reach out to your nearest Secretary of State office to learn about state-centric programs for self-employed people and small business owners.
4. Consider Freelance or Part-Time Work
If you’re currently unemployed and finding it tough to get another job, you could consider part-time or freelance work—or you could start your own small business. Here are a few ideas to get you started:
You might find a permanent full-time job again soon, but why not use this time to study, or to try something completely new? To learn new skills at home, check out Coursera, and create a ZipRecruiter profile to keep looking for employment online.
5. Reach Out for Help
If you’ve gone through all the suggestions listed above and nothing feels doable, reach out for help. Resources like United Way 2-1-1 can help you find ways to pay for food, housing, medical, and financial expenses. Local charities, churches, and community organizations might also be able to help.
What Are Extended Benefits?
Extended benefits are extra benefits the government offers in emergency situations. For example, when the pandemic hit, many states offered extended benefits to deal with the high unemployment levels.
Will Unemployment Benefits Be Extended Again?
While pandemic-related extensions are now over, that doesn’t mean an end to unemployment benefits extensions. If unemployment rates are particularly high in a specific region of the country, the government may decide to offer extended benefits. If these extended benefits are in place, it allows you to receive benefits for a longer period.
Can I Get an Extension on Unemployment Benefits If I Have Exhausted My Benefits?
If your unemployment benefits have been exhausted, you may qualify for extended unemployment benefits if they’re available in your area. To apply for these benefits, you must complete the application. In many states, this application is online. If your area isn’t currently offering extended benefits, you can reapply for unemployment benefits to see if you qualify. If you think your benefits ended too soon, you can always appeal the decision.
