Ruffcorn Insurance header image

What’s the difference between Replacement Cost and Market Value?


actual cash value and replacement cost explained


When home market values drop, it’s not uncommon for us agents to get concerned homeowners who ask why their house is being insured for more than it’s worth.


“It doesn’t make sense that my 20-year old home should be insured for $300,000.”


Well the fact of the matter is that most homeowners will miss the difference between the Replacement Cost and the Market Value of the home. They are two very different considerations. Let’s take a closer look.

Market Value of your home

The market value of your home is the value that is determined by a real estate appraisal that has everything to do with the overall economy, the property values in your location, the condition of your home, the type of materials used in your home, and how much it’s worth in the market. It has nothing to do with how much it would cost to rebuild the home in case of some damage.


Replacement Cost

The replacement cost is appraised by someone associated with the insurance company which accounts for the cost of replacing or rebuilding the entire damaged house. Meaning the total cost of labor, activities, and materials to put the structure back to the way it was before the damage. This would include costs related to clearing and cleaning up the damage -activities that come before actually rebuilding the structure.


Let’s say it will cost $200,000 to rebuild your home. Even though your home’s market value will vary between locations, the cost to rebuild your home will still be $200,000 or remain relatively the same, given the accessibility of standard building materials. So it’s not so much the market value that drives the cost to rebuild your home, but the materials and labor.


Remember that Insurance is a Contract

A homeowners insurance policy is a financial guarantee to a homeowner to help rebuild the damaged home for covered perils.


For this reason, insurance companies will base the cost of your insurance premium on the replacement cost of your home, and not the market value. Oftentimes, insurance companies require that your insurance covers at least 80% of the replacement cost of your home in order for them to fully cover your replacement costs.


So if your home replacement cost is $100,000. You will have to get an $80,000 policy so your insurance will cover the entire cost to rebuild your house.  


Remember that the insurance company (NOT your agent) determines your premium

Agents collect all the necessary information from the homeowner, but the company calculates the cost of your premium. Every company will have a different formula for valuating your cost, but your agent will be the expert on helping you choose which insurance option to choose based on your situation.
The important thing to know is that you are insuring your home based on the cost it would rebuild the structure of your house, independent of the market price, your mortgage, or property values.




Why is my homeowners insurance more expensive than my neighbors?



It’s a great question and it’s not uncommon to find a similar looking house that cost less to insure. We work to educate all our clients about the variables that affect the cost of their homeowners insurance. We also work to inform our clients about the simple decisions they can make that can help lower the cost of their insurance.


The most important thing to remember, however, is to make sure that you purchase enough insurance to realistically cover your home and all your assets, rather than purchasing the cheapest policy available. This is important because if you purchase insurance coverage that doesn’t completely cover your home, you may end up paying for repairs and replacements out of your pocket in the event of an accident.


Here are 7 things that can affect the cost of your home insurance:


1. Age of home

The age of your home can affect the cost of your home insurance because a new home is more likely to be in better shape than an older home. One thing you can do as a homeowner is keep your home, new or old, up to date with current electrical, plumbing and HVAC systems. Also, homes that are constructed with fire-resistant materials like brick and stone are cheaper to insure than homes made out of flammable material like wood.


2. Size

Usually, the bigger your home, the more expensive it will be to insure. The types of materials you use to build your home will determine the cost of insurance as well. The more expensive materials you use, the most costly your insurance.


3. Discounts for updates

Updating your home can either do one of two things–boost the value of your home and leave you with insufficient coverage or trigger lower premiums as a reward for reducing risk in your home. For example, a new roof can cut your premiums by 10 to 20 percent.


4. Claim history

Homeowners who file frequent claims pay higher rates for homeowners insurance.


5. Multi-policy discount

Bundle your policies to save up to 25% on your homeowners insurance premium. Bundling means working with one insurance provider on all your insurance needs for your home, car and life insurance.


6. Marital status

If your marital status changes, it’s important to tell your insurance advisor immediately. Your agent will review your policy with this new information to make sure your policy information and coverage are up to date. You may need less coverage if divorced, or more coverage if recently married.


7. Credit score

The higher a homeowner’s credit score, the lower their risk level and the less likely they are to file an insurance claim. Because of this, homeowners with good credit have cheaper insurance rates.


It never hurts to ask about your homeowners insurance cost

The 7 factors listed above are just a few of many things that play a part in the cost of your insurance. Talk to your insurance agent (844-272-3420) to be sure that you are getting the best deal and the best coverage for your unique needs. After all, it never hurts to ask about saving money!




Does homeowners insurance cover my dog?


rottweilerDogs are often treated like a member of the family. As “man’s best friend,” they provide comfort, companionship and love.


Unfortunately, no matter how well-trained or loving your dog may be, it’s possibly for an accident like a dog bite or other dog-related damages to occur.


As the dog owner you have “assumptive liability,” which means if your dog causes harm to someone or something you are 100% responsible and must cover the damages.


Are dog owners covered for any incidents or damages their dog may cause?


Including dogs in your homeowners insurance is possible and important because of the risk that dogs pose. However, not all insurance companies may cover dogs and some may deny coverage for specific breeds so it takes a little extra research when looking for insurance providers.


Spending the extra time to ensure your dog is covered in your homeowners insurance is necessary because if your dog isn’t covered, you will have to pay for future dog-related damages out of your own pocket.


How do I know if my homeowners insurance will cover my dog or not?

One thing to note when searching for insurance companies is some companies will not insure dogs breeds that tends to be more aggressive or territorial. To be sure, ask your agent if they have any breed restrictions.


Here is a list of dogs that most insurance companies will not insure:

  • Akitas
  • Doberman Pinschers
  • German Shepherds
  • Great Danes
  • Pit Bulls & Staffordshire Terriers
  • Presa Canarios
  • Rottweilers
  • Siberian Huskies
  • Wolf-hybrids
  • What if I don’t tell my insurance company about my dog?


Some homeowners may hide the breed of their dog from their insurance agent out of fear the agent will deny them coverage. While this may seem like a good idea, if there is an accident your insurance company may deny you any claims because you weren’t up-front about your dog’s breed; meaning you will be stuck with the cost of any damages or lawsuits related to the incident.


Avoid this potentially expensive situation by being upfront with your insurance company. If one company will not cover your dog, there will be another insurance company that can offer the complete homeowners insurance coverage you are looking for.


Add “man’s best friend” to your homeowners insurance


Dogs of all shapes and sizes can be the perfect companion, however, no matter how loving or well-trained your dog is, they still come with risks. Always tell your insurance agent what kind of dog you have and double-check that your dog is covered in your homeowners insurance policy. If your current insurance provider will not cover your dog, then keep looking for another company that will cover your beloved pet.


Including your dog in your homeowner insurance policy protects you, your pocket book and ensures coverage of any future dog-related accidents.




Keokuk Business Highlight: Cramer Real Estate


Each month we are going to feature a local business in Keokuk for delivering outstanding services to the community. We are proud to work, or network with these businesses and would like to share our experiences with them, with you.


Keokuk Business Highlight


It’s hard for me to remember the exact moment or place where I met Vicki Briscoe, owner of Cramer Real Estate as she’s always out and about in the community. But ever I since I met her I’ve been impressed with her work ethic and the real estate services she provides. We decided to partner together on her business and personal insurance policies and she has been a pleasure to work with.


This month I am excited to share the story and services of Cramer Real Estate, owned and operated by Vicki Briscoe in Keokuk.


About Cramer Real Estate


Cramer Real Estate has been a family-operated business since 1972 and Vicki Briscoe has been involved at the company since 1974! It’s safe to share she nearly been there since the beginning. She began working in real estate as a secretary with Cramer Real Estate and then continued to move into various positions around the office as her experience grew and she got her real estate license. Soon she was promoted to office manager and eventually became an owner five years ago. She’s happy to keep the family-business going and currently gets to work with both her son and daughter-in-law and a few other employees that feel like family, having been with the business for over 25 years.


Making Keokuk real estate down-to-earth

What makes Cramer Real Estate unique is the home-like feeling every person who walks through their door receives. They are a down-to-earth group that strives on providing real estate services to people of all backgrounds and homeowners of all budgets.


They don’t specialize in a particular type of real estate and can handle residential, commercial, and agricultural properties, as Vicki put its they are a “jack of all trades.” They are members of the Keokuk Area Multiple Listing Service, Keokuk board of Realtors, Iowa Association of Realtors and the National Association of Realtors.


Staying and supporting the Keokuk community

Vicki has been working and living in Keokuk all her life and her favorite part of being here is her family. “I have four grandkids, they are all teenagers and two are graduating this year,” Vicki shared.


While Vicki enjoys her downtime with her family after work, many of the Cramer Real Estate employees volunteer with various organizations throughout Keokuk. Two of her sales team members are auctioneers and enjoy providing their auctioneer services at a lot of charity auctions; one employee is on the Keokuk Library Board and another employee is on the Arts and Cultural Board.


Keeping Keokuk local

It’s so exciting to meet and learn about the different family run businesses in Keokuk. The amount of successful local businesses here just goes to show how supportive our community is  and that makes me proud to live and work in Keokuk. If you ever see Vickie out and about be sure to say hello, or check them out for your next real estate needs!




What is an umbrella policy?

umbrella policyClaims that can’t be covered by your existing auto or home insurance can be covered by an umbrella policy. Umbrella policies give you an extra layer of financial protection.


Without an umbrella policy you run the risk of paying claims out of your own pocket, but with umbrella insurance the umbrella policy will help pay off the unexpected costs.



How does an umbrella policy work?

Imagine this – you are out driving with two of your friends and you accidentally run a stop sign and broadside a car. While everyone is alive, one of your friends has a broken arm, the other car is pretty damaged and your car is totaled.


Luckily you have auto insurance! All the damages (after hospital bills, auto repairs and the court filing against you for running the stop sign) the total cost in claims from the accident is comes to $450,000. Your auto insurance policy covers up to $300,000 in claims. How will you cover the remaining $150,000 in damages?


If you had purchased an umbrella policy, this is when it will come into play.


Umbrellas provide protection

Rightfully named, an umbrella policy provides an extra layer or protection and goes above and beyond what your auto or home insurance can cover.


Umbrella policies can offer coverage from 1-5 million dollars. So, similar to the example above, if you have an umbrella policy for 1 million dollars in coverage, your auto insurance will cover the limit of $300,000 and the umbrella policy will cover the remaining bill of $150,000.


Do you need an umbrella policy? Take these factors into account to help you decide:

  • Do you have significantly valuable assets?
  • Do you have any risks as a homeowner or a renter?
  • Do you have a long commute to work?
  • Do you participate in any potentially dangerous activities or hobbies?


Are umbrella policies expensive?

Umbrella policies can cost from $150 to $300 for 1 million dollars in coverage. In order to purchase an umbrella policy, you need to be carrying the highest limit in both your home and auto insurance. You cannot pay the lowest premium for auto or homeowners insurance and then add on an umbrella policy.


Using your umbrella in a rain storm

Just like using an umbrella to protect yourself from rain in a storm, an umbrella policy protects you when your home or auto insurance policies have met their limits. While it’s a policy everyone hopes to never have to use, it’s a policy that can make or break your bank when an unexpected accident comes along.


Talk to your insurance agent to find the right umbrella policy for your budget and lifestyle. (844-272-3420)




Ice Dams and Your Homeowners Insurance


photo credits: wikipedia

photo credits: wikipedia

Since it’s been a mild winter so far, now is probably a good time to revisit how to deal with ice dams.


Whenever we experience snow there’s bound to be a few calls from random people shopping around inquiring whether or not homeowners insurance is supposed to cover damages caused by ice dams.


Ice dams usually occur after a snow pour, when ice builds up on the edge of your roof and prevents melting snow from running off the roof. Water damage from ice dams can ruin your roof, insulation, and the inside of your home. Sometimes, you don’t even realize that the mold growth in your roof is caused by slow water leakage caused by ice dams in the winter. Regardless, you want to know how much you’ll have to pay out-of-pocket.


Does homeowners insurance cover water damage caused by ice dams?

Unless your policy specifically excludes snow/snowstorms, or ice dams, most homeowner policies will cover damages caused by ice dams. If you submit a claim for flooding or water leakage, be sure you assess whether or not it’s worth your deductible, and also consider if the issue is bound to occur again. Filing a claim every year whenever a snowstorm hits, may push cause your policy to become non-renewable.


Does homeowners insurance cover ice dam removal from my roof?

More than likely, an insurance company will not pay for ice dam removal if there are no related damages to the home. If there is leakage or water damage that is evidently from the ice dams, then your insurance company will likely pay for the ice dam removal.


Again, be aware of how you report the damages since you will only be covered for anything they assess to be causing actual structural damage to your home. For example, if an ice dam 5 feet away is responsible for the water leakage in the kitchen, but you assume that it’s the ice dam directly on top that’s causing the damage, then the insurance company will only pay for the removal of what you claim.


Ways to prevent ice dams

We’re always about safety and prevention here at Ruffcorn. Taking the right steps can help prevent danger and costly damages. To avoid being in icy situations, be sure to keep these things in mind this winter.

  • Clear snow off your roof. If you can access the roof the ground, clear snow and ice from your roof before it beings to melt.
  • Get a contractor. If you can’t do it yourself safely, don’t waste your time finding DIY solutions. Let the pros handle it.
  • Never chip on ice with a mechanical device. This may only damage your roof.
  • Clear your gutters.
  • Get proper insulation and ventilation in your attic to help reduce the chances of snow melting on the roof and refreezing at the edges of your roofs.


If you’ve had problems with ice dams before, leave us a comment and share some helpful information regarding your experience.




How to save money on your homeowners insurance premium


keokuk houseIt’s an unfortunate truth that homeowners insurance costs have been rising over the past few years in Keokuk. We get a lot of questions from clients asking us if there are ways they can lower their homeowners insurance premium, luckily our answer is “Yes!”


The good news is there are quite a few ways to significantly lower your insurance premium, it just takes research and a conversation with your insurance agent.


Discounts and credits depend on a lot of factors and vary person-to-person and state-to-state.


Here are some discounts and credits to ask your independent insurance agent about:


Bundling Discount

This discount involves letting one company handle all your insurance products: your home, car, and other personal property. So you would be saving an overall cost versus saving money just on one insurance package. Bundling your insurance may also allow for paying just one deductible expense versus paying multiple deductibles for different insurance policies. Try combining your home and auto insurance together and expect to save about 20%.


New Home Discount

To an insurance company, a new home means less risk because everything in the home is brand new and should be working properly. Luckily, in insurance terms a “new home” includes homes up to 10 years old, so this is a discount you should definitely look into if your home is 10 years-old or younger.


Depending on the state (if you aren’t living in Keokuk, IA, check with your agent) a new home discount can save you around 15%.


Non Smoking Home Discount

Yes, in a world where tobacco has been proven dangerous to your health, some companies actually reward you for being tobacco free. And even though smoking is becoming less common, one of the main causes of home fires still remains to be fires caused by smoking. If there is a smoker in the house, your insurance company is likely to raise your rates because of the increased risk of fire. However, if your home is smoke-free, you may be eligible for a discount. While it’s not a huge discount, you can expect to save around 5% with a non-smoking discount on your homeowners insurance.


Security Alarms and Smoke Alarms

Installing security alarms in your home helps reduce the risk of theft or burglary. Homeowners can expect to save around 10% on their homeowners insurance by installing an alarm system. The same discount goes for smoke alarms. Smoke alarms and fire extinguishers help reduce the risk of fire in your home and can save you around 2% on your homeowners insurance premium.


Get Credits

Credits are another way to potentially save money on your homeowners insurance. Credits are given when you upgrade something in you home to set standards specified by your insurance company. By updating your home, you are ensuring your home is up to code and has less reason for risk.


Here are three types of credits to check with your homeowners insurance provider for:


New Wiring

If your home is of a certain age, consider having it re-wired by a professional. This will help improve the safety of your home by lowering the risk that your home will catch on fire because of electrical problems.

Check with your homeowners insurance provider to see what kind of wiring credits they offer, as discounts can be as large at 10%.


No Claims Discount

If you have been with the same homeowners insurance provider and have not filed a claim for a number of years, ask your provider to see if there are any “no claim” credits available.


This is like a reward for not damaging or needing to cash in on your insurance policies. The discount can range up to 20 percent!


Getting Older

Retired homeowners more often have lower risks because they are spending more time at home; meaning their home is less likely to be broken into or have an unexpected fire.


Retired homeowners also tend to take better care of their homes because they happen to have the time and homeowner insurance companies are willing to credit that for around 10 percent!


It never hurts to ask

Homeowners insurance can be expensive but with discounts, credits and by simply speaking with your Keokuk insurance agent you can learn how to save more as a homeowner.


It’s important to know that discounts do vary depending on the city and state and Keokuk homeowners make sure to discuss discounts or credits with an insurance agents that is familiar with the Keokuk area. (Ask now: 844-272-3420)




Is there such thing as snowmobile insurance?

snowmobile-606516_640Every time anyone gets behind the wheel of a car, jumps into a game, or dives into the water, they are taking a risk and have a responsibility to themselves and other participants -snowmobiling is no different.


Just like operating any other motor vehicle, snowmobile drivers should know how to ride responsibly because their safety and the safety of anyone who comes in their path, lays in the driver’s hands. And where there is potential risk, there is insurance to protect you from those damages.


But no matter how well snowmobile insurance covers your damages after the fact, the best way to protect yourself is by following safe snowmobile driving standards. We put together some typical scenarios that occur when we deal with snowmobile insurance claims. Safety is always the best policy, no matter how experienced you think are.


Snowmobiling Scenario #1: Snowmobiling too fast

Jesse has been riding snowmobiles with his family all his life and decides to hit the trails alone one day in a public park. He’s cruising around, not paying too much attention to his surroundings because it’s getting late and no one is out. Then, Jesse drives around a corner and nearly collides with a park ranger who is out on the job maintaining the trails.


Safety tip: Alway operate at a reasonable speed to prevent potential injury to yourself and those who may be ahead of you, around corners, and over hills. Try to stay off the freshly groomed portion of the trail if it is wide enough. If you are with a group merge into a single file line.


Snowmobiling Scenario #2: When cell phones don’t work

Marie is bored one brisk winter afternoon and decides to hit the trail on her family snowmobile alone. She’s been riding all her life and is well versed in how to safely operate a snowmobile. Figuring she will only be out for a little while, she doesn’t leave a note or let anyone know she is going out.


While cruising down the trail by her home at a reasonable speed, a deer jumps out in front of her causing her to swerve and flip the snowmobile. While she isn’t terribly injured, it looks like her ankle is broken. Unable to walk, Marie is stranded on the trail and no one knows she is there.


Safety tip: Never ride alone! Always use the buddy system, or if you do go out alone, let someone know where you are going and when you plan to be back. This way, if there is an accident they will know where to find you.


Snowmobiling Scenario #3: When your headlights don’t work

Brianna and a few friends do a custom winter snowmobile night ride every year – it’s their chance to get together, catch up and have a little adventure. This year, Jess noticed her headlights are out. Figuring she will be okay since she will be with a group, she decides to head out anyways. Without the light, she doesn’t see a large tree route that is sticking up out of the ground and runs over it, ruining the tread on her snowmobile.


Safety tip: Always be certain that your headlight, tail lights and brake lights are working before you leave. Check them frequently and remove ice or snow build up while riding.


Snowmobiling Safety first!

Are you planning to hit the trails on your snowmobile this winter? Make sure your snowmobile is in safe running order and stock up on warm clothes and emergency items at a sporting goods store.




Setting smart goals in the New Year


Where will you be celebrating New Year’s eve in Keokuk? A fun night out at Shooters Lounge or a relaxing weekend at the River’s Edge Bed and Breakfast? Maybe you plan on a night in with family and friends to watch the ball drop. Whatever your plans are, we wish you a cheerful one!


Other than “what are your plans,” another question always seems to come up at the end of the year, “do you have a New Year’s resolution?”


piggy bankWhether or not the answer is yes or no, why not make 2016 the year to focus on setting goals and saving money? The two really go hand in hand. Of course, other great resolutions include joining Anytime Fitness and pledging to shop local, but why not pledge to make small financial changes that will improve your lifestyle in a big way?


We talked about getting out of debt in our last blog, but we wanted to re-emphasize six tips for smart goal setting and financial planning in the New Year:


1. Record what you spend

The most important step in saving money is understanding what you’re spending your money on. For the month of January, keep a record of everything you spend, including coffee, snacks and random knick-knacks. After one month, organize everything into categories–groceries, gas, clothing–and see where you spent most of your money. Find a cool notebook at McFarland Swan Office Supply Company to record all your purchases in!


2. Create a budget

Now that you have an understanding of where you spend your money, build a budget for February. Factor in regular expenses, planned events, savings and emergency funds. The general rule for saving is to try to take at least 10-15 percent from your paycheck and put it into a savings account. If your expenses don’t allow for you to save that much, cut back and look for areas in your spending to save money, like only eating out at Angelini’s Pizza once a week (even though it is so good).


3. Make savings goals

Creating goals makes it easier to know where to start. Think about short-term goals, like saving money for a vacation, or buying a new car. Also keep in mind long-term savings goals, like saving for retirement or putting money away for your child’s college education. Don’t have a savings account set up? Set up an appointment with a few different banks to see which is right for you. Check these Keokuk banks out: First Community Bank, State Central Bank or Pilot Grove Savings Banks.


4. Bundle your insurance policies

Insurance companies often offer discounts to attract customers needing more than one type of insurance. For example, it may end up being cheaper to insure both your house and your car with one company, rather than insuring your house through a one company and your car through another company.


Bundling insurance isn’t always the first thought that comes to mind when setting financial goals, but the bottom line is bundling your policies can save you money compared to having a variety of carriers at once. Also, another plus, when one insurance company is handling all your insurance policies, that’s less time for you to spend sorting through and paying each policy. Afterall, time is money!


5. Set up automatic transfers

Check in with your bank and set up automatic monthly transfers to your savings account. If the money isn’t in your checking account, it is harder to spend!


Start the New Year off right!

By making just a few smart financial decisions, you can make a big different in your spending and saving habits. Having a better handle on your money can help you achieve other life goals – like traveling, affording college or finally enjoying a weekend stay with your significant other at the beautiful Grand Anne Bed & Breakfast.


Give us a call (844-272-3420) and we can help look over your insurance policies to look for any savings opportunities. It never hurts to ask!


What other goals are you setting for 2016?




How to get out of debt in the New Year

new-yearresolutionslistThe best thing about goal setting and starting fresh in the New Year is that everyone can do it. Regardless of income, if someone sets a goal and determines simple actions needed to accomplish that goal, it’s possible!


One resolution that most people seem to make every year is to get out of debt, which is a great goal to have. But, without the proper goal setting strategy, it’s easy to give up or revert back to old spending habits.


This year, stick to your resolution and your goal of living debt free with these simple and effective tips:


  1. Save loose change. Think about it this way, putting aside $.50 per day will allow you to save nearly $250 a year!
  2. Keep track of your spending. Determine what type of method works for you – from online options like that automatically track your spending, to keeping an envelop with receipts. Tracking your spending will help show where your money is going and in what areas you can save.
  3. Start a budget. Once you have an idea of what you are spending (see tip 2) create a budget that can help guide your spending and saving decisions in the future.
  4. Think over each expensive purchase for at least 24 hours before actually buying something. This will help eliminate impulse purchasing and will leave you with far fewer regrets and far more dollars in your savings account.
  5. Bundle your insurance. Most people may not know that bundling their insurance policies can save money! Contact your insurance agent (844-272-0525) and discuss the kind of rates you can receive if you move all your policies to one insurance company.

Reach your goal

Reaching a goal, or in the case of this blog, the goal of financial independence, has nothing to do with luck or magic. It’s simply a matter of setting good financial goals and making simple changes that will help you reach them. Working towards your goal will become part of your life, as will achieving financial freedom.
How do you plan to reach your New Year’s resolutions this year?




Register For Important Updates

Once in a while I send out important news and notifications that effect you, like rate increases, and industry news like changes in legislation and insurance regulations