Before a storm like Hurricane Sandy, not afterwards, is the time to ask the 
question, “Is my Columbia SC home properly insured?”
Just as there are different home styles, insurers offer a menu of different policies. For the majority of single-family Columbia SC homeowners, the most appropriate policy is the HO-3, sometimes called the special policy. It insures all major perils, except flood, earthquake, war, and nuclear accident.
For flood damage like that suffered by many homeowners at the hand of Hurricane Sandy, special flood coverage is needed. Floods aren’t covered by ordinary homeowners insurance. Flood insurance is available through the Federal Emergency Management Agency. You may need earthquake coverage; check with your insurer.
You’ll need deep coverage, up to and including 100% of your Columbia SC home replacement cost. By insuring at, say, 90%, you’re making the reasonable bet that your home won’t ever be a complete loss. That may be a reasonable bet, but if you want to play it safe, insure at 100%.
Insure your Columbia SC home for its replacement cost — that is, the amount it would cost to rebuild it if it were totally destroyed. That means determining the average local building cost in your region, and applying it to your home’s size, style, and quality of construction.
Your best resource for this is a builder. For a flat fee, you may be able to have a local contractor go through your Columbia SC home and provide an estimate. Try to find someone who builds individual, custom homes that doesn’t benefit from the economies of scale that tract homes offer.
Traditional guaranteed replacement cost coverage promises to pay whatever it takes to rebuild your home, even if it costs more than the original limits you purchased. That’s crucial in the event that labor and building costs balloon after a major disaster like Sandy. In many states, large insurers now cap the guarantee at 120% to 125% of purchased limits.
Your safest bet is to seek a company with no cap. However, if you’ve properly valued your home’s replacement cost, the caps shouldn’t scare you. It’s unlikely that building and labor costs will go up to more than 120% of your home’s insured value.
You’ll be most satisfied with your settlement if you know in advance what’s covered. That means eyeballing your policy now. Pay particular attention to the exclusions section, which as the name implies, outlines what’s not covered.
Check out the declarations page, which outlines the limits of your coverage. Coverage D of the homeowners policy, for instance, outlines how much an insurer will cover if you have to relocate temporarily. Does your insurer pay up to 10% of your home’s insured value, or offer to pay “reasonable” expenses over 12 to 24 months?
Finally, update your policies regularly. Inform your insurer of improvements and additions to your Columbia SC home — including redecoration — of $5,000 or more.
We hope you never have to file a homeowner’s insurance claim, but hopefully this article will help you prepare yourself ahead of the next storm.
Your Columbia SC home becomes more vulnerable to thieves around the holidays, and with them fast approaching, now is the time to analyze whether there is anything you need to do for tightening security around your home.
Around the holiday season, thieves tend to hit homes they suspect are vacant, even if for the day while you work. And the closer we get to Christmas (when gifts have been purchased and are under the tree) the more home break-ins occur.
The advent of automated electronics has been a big relief to those of us who may have to leave our Columbia SC home empty. It’s now quite simple and relatively inexpensive to attach your lighting system to a series of timer switches. They’ve been developed to look a lot like dimmer switches, to make them even less detectable. They operate the lighting throughout your house on a set pattern, so you can program them to turn themselves off at the time you would normally go to bed, to come on in the evening etc. Televisions and radios can also now be given timers, often integrated into the hardware itself without the need for additional technology.
If you have a dog that doesn’t mind being left alone and the weather is warm enough, consider leaving it outside while you’re away. Having the run of your garden with a kennel to shelter and sleep in, your dog will often be happy enough as long as somebody is feeding it. If you don’t have a dog, you might want to consider making it look like you have one even if you don’t. Putting a kennel in your garden or a wooden stake in the ground with a chain attached to it will fool inexperienced thieves, especially if the chain is thick and long. Consider even buying a dog water bowl and leaving it outside near an entry door within reach of the dog chain.
Last of all, consider installing a burglar alarm! They’re half the price they were ten years ago, and they’re twice as good. In most cases, installing an alarm will save you on your homeowner insurance, so be sure to notify your insurer if you go this route. Just seeing a blinking blue box in the front of your Columbia SC home will deter any individuals with ill intent, the prospect of a wailing screech as soon as they enter your house will frighten them away. And after all, who’s to know if that alarm is real or even works?
There are many other ways to keep your Columbia SC home safe from would-be burglars this coming holiday season. But now is the time to prepare, not the week before Christmas.
Columbia SC home sales are typically strong during the spring and summer, mainly because a lot families are trying to relocate between school years. But fall is a great time to buy a Columbia SC home as vacations have wound down, and most potential home buyers want to be in their new home in time for the holidays.
Why Buyers Want a Columbia SC Home in the Fall
40 percent of survey respondents like fall for homebuying because of the “back to school” and starting fresh mentality that hits when September and October come around. Twenty percent cite wanting to be in their new home in time for the holidays. And 10 percent want to take advantage of the tax benefit of buying and owning a home before the end of the year.
For the same reason sellers want to sell and close on their home sale before the end of the year, buyers can often times find better deals during the fall due to those sellers being more anxious to sell by year-end.
How the findings will affect what happens this fall remains to be seen.
The National Association of Realtors reports pending home sales in August 2012 declined after reaching a two-year peak. But the August figures are higher than August 2011.
Lawrence Yun , NAR chief economist, said some volatility can be expected in the monthly readings. “The performance in month-to-month contract signings has been uneven with ongoing shortages of lower priced inventory in much of the country, and across most price ranges in the West, but activity has remained at notably higher levels this year,” Yun said.
If you’d like to take advantage of the great fall home market in the Columbia SC area, give us a call or contact us through our site. We’d be happy to help you find a new Columbia SC home in time for the holidays.
Tax advantages of owning a Columbia SC home are probably not the number one motivating force behind buying a home. But the tax advantages associated with owning your own home are significant, and may be a factor in your decision to buy a home.
Mortgage Interest Deduction
If you itemize deductions you’re generally able to deduct the interest you pay on debt resulting from a loan used to buy, build, or improve your principal residence, provided that the loan is secured by your Columbia SC home.
The ability to deduct mortgage interest also generally applies to second homes, though special rules apply if you rent the home out for part of the year. Interest you pay on up to $1 million in mortgage debt ($500,000 if you’re married and file a separate federal income tax return) can qualify for the deduction (different rules may apply if you incurred the debt prior to October 14, 1987).
Interest on qualifying home equity debt of up to $100,000 ($50,000 for married individuals filing separately) is generally deductible regardless of how the loan proceeds are used. If you’re subject to the alternative minimum tax (AMT), the AMT calculation doesn’t allow a deduction for interest on debt that’s not used to buy, build, or improve your Columbia SC home.
Qualified mortgage insurance premium payments made prior to 2012 can be deducted in the same manner as qualified mortgage interest, provided the mortgage insurance contract is issued after 2006. Congress is debating this tax deductible interest subject, and have been for several years. Each year, the possibility of this valuable deduction evaporating becomes more and more possible.
Could the mortgage interest deduction ultimately be eliminated? That seems unlikely, but elimination or reduction of the deduction has remained part of the ongoing debate, and was included among the recommendations contained in the National Commission on Fiscal Responsibility and Reform’s December 2010 report.
Deduction for Property Taxes
If you itemize deductions, in most cases, you can deduct the real estate taxes you pay on your Columbia SC home in the year you pay them to the taxing authority. If you pay your real estate taxes through an escrow account, you can only deduct the real estate taxes actually paid by your lender from the escrow account during the year. For purposes of calculating the AMT, however, no deduction for state and local taxes, including any real estate tax, is allowed.
Capital Gains on Your Columbia SC Home
If you sell your Columbia SC home at a gain, you may be able to exclude some or all of the gain from federal income tax. For the most part, capital gain (or loss) on the sale of your principal residence equals the sale price of the home less your adjusted basis in the property. Your adjusted basis is the cost of the property (i.e., what you paid for it), plus amounts paid for capital improvements, less any depreciation and casualty losses claimed for tax purposes.
If you meet all requirements, you can exclude from federal income tax up to $250,000 ($500,000 if you’re married and file a joint federal income tax return) of any capital gain that results from the sale of your Columbia SC home. This exclusion can be used only once every two years. To qualify for the exclusion, you must have owned and used the home as your principal residence for a total of two out of the five years before the sale. If you fail the two-out-of-five-year test, you might still be able to exclude part of your gain if your Columbia SC home sale is due to a change in place of employment, health reasons, or certain other unforeseen circumstances.
Special rules apply in a number of situations, including one in which you maintained a home office for tax purposes or otherwise used your home for business purposes. Special rules may also apply if you are a member of the uniformed services. Check with a tax professional about current laws that may affect the tax advantages of owning a Columbia SC home.
For more on current tax laws, visit the IRS website.
Knowing if your Columbia SC home is adequately insured from peril or not is more difficult than it used to be.
According to a study released by the Consumer Federation of America (CFA), insurance companies are cutting coverage and paying fewer benefits for damage due to hurricanes, tornadoes, floods and other natural disasters.
The CFA report says that Columbia SC homes have seen an increase in premiums and a decrease in coverage. Homeowners are exposed to higher disaster payouts because they have less money available to help themselves.
Columbia SC Home Insurance Going Up?
As if rates weren’t already high enough, 11 states have recently received requests for homeowners’ insurance rate increases of 18 percent or more. It is expected that insurance commissioners will block many of these pending rate increases because of the financial burden it will place on homeowners. Many homeowners are already coping with severe financial difficulties in this bad economy.
The study concludes that the insurance industry has shifted from a calculated risk-taker to a risk-avoider. Not only have insurers insulated themselves from their historic share of hurricane risk, they have made no serious effort to cover risks associated with floods or terrorism, which are entirely backed by federal taxpayers.
Spring storms have already wrecked havoc on many areas not normally prone to major natural disasters. As if things weren’t bad enough, the Atlantic hurricane season begins June 1st. 2011 was one of the most expensive years in history for insurance claims, and this year is on track to match or exceed 2011.
Now would be a good time to check and see if your Columbia SC home is adequately covered in the event of natural disaster. Remember, homeowner insurance policies do not cover flood damage. You will need a separate flood insurance policy to cover damage from flooding. Talk to your insurance agent to see exactly what you are covered for, and what you may need to add to make sure your Columbia SC home is protected the way you think it should be.