Tag Archives: 22902

A Few Homeowners Insurance Questions Answered

I like experts. My clients come to me seeking solutions and part of the solution is helping them assemble the right team to help throughout the process. Everyone needs homeowners’ insurance and I tend to recommend Gary – I’ve found him to be helpful, knowledgeable and willing to share knowledge. I asked him to answer a few questions that most (new) homebuyers have.

By Gary Albert with State Farm.

Q: What is the purpose of home insurance?

A: For many, your home is the most important investment you make. So it makes sense that you would

want to protect that investment through homeowners insurance. The fundamental basis of insurance is the transfer of risk from one person or entity to another. We make decisions daily about risk in our personal lives, and each of us have a different tolerance for retaining risk compared to our neighbors. As it relates to homeowner’s insurance, the premium we pay speaks to how much of this risk we are retaining versus how much we are transferring to the insurance company.

Q: Tell me more about deductibles.

A: When you file a claim, the homeowner is responsible for a predetermined part of the costs. This is called a deductible. As a general rule, a low deductible will result in higher premiums, and a higher deductible will result in lower premiums. There is no template rule of what deductible to carry. There are some that advocate for the lowest deductible available and some that lean toward the other end of the spectrum, looking for the higher deductible options. It’s best that you figure out what works best for your particular situation.

To help make this decision, consider your financial situation and personal emergency savings in the event of a large loss to your home.

Q: How are rates set? Do weather disasters in other parts of the country impact the rates we pay here in Virginia?

A: At State Farm, we use claims experience from the past several years to project the cost of future claims. The ratemaking process also factors in trends such as the costs for construction, medical payments and other variables.

Rates are based on each state’s claims experience. This means premium dollars stay within the state and do not compensate for losses in other states. So a wildfire in California will not have an impact on our rates here in Virginia.

Q: What about homes that need some work? Is there anything from an insurance point of view you should know when buying a fixer-upper?

A: First, make sure you work with reputable contractors. Get quotes from a few licensed contractors to find the best deal. You also want to make sure the contractor has liability and workman’s compensation insurance to protect you if someone is injured on the job.

Once you are done fixing up the house, make sure you check in with your insurance agent to see if you need to change your coverage. The upgraded kitchen you added could increase the cost to rebuild if something were to happen, and you want to make sure you’re adequately covered.

What’s a CLUE Report? How is it used in the home buying process?

Comprehensive Loss Underwriting Exchange, 7 year database of claim information. Only the owner or the insurer, or lender can access the information. This service is maintained by Lexis Nexis.

When considering making a purchase of a home, involve an insurance company early in the process to run this report. Some carriers may not do this upfront, so be sure to ask if this report is being run at the time of the quote. If there are prior losses on the property, the insurer (and prospective home buyer) will want to research the repairs and get ahead of any potential loss/insurability concerns. I recommend doing this before the home inspection.

Q: Anything else to add?

A: Insurance can be very personal. Meet with your insurance professional on a regular basis to make adjustments to your coverage as needed for updates, improvements, additions, and endorsement review. Our community has many local, reputable insurance agents. If you’re unsure of whom to speak with, ask your neighbor, good neighbors are usually good sources of information.

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Looking Back at 6 Things in Charlottesville – #6 – Apartments

Crane at West Main Plaze in City of Charlottesville

In January I mentioned 6 things that we should watch in 2013 – inventory, home prices, distressed sales, confidence, buyer frustration and apartments. Being nearly September, I figured it a good time to look back at where these things stand. I’m going to be looking at these six things over the next few weeks. Starting with Apartments.

Apartments – there are going to be a lot more available in 2013 and 2014. A few of the new complexes: Arden Place (Rio Road), The Pavilion at North Grounds (Millmont/UVA), Stonefield Commons (Hydraulic & 29), The Reserve at Belvedere (Rio), the Plaza on West Main (UVA), City Walk (Downtown – more on the Coal Tower). As I said, a lot more apartments will be coming on the market soon.

City Walk is taking shape, the Plaza on West Main is moving fast, The Pavilion at North Grounds has people moving in (and presumably Sedona Taphouse is loving life), Arden Place and Stonefield Commons are leasing.

And …

Another 192 apartments will be coming to West Main Street directly across from the Plaza on West Main – called “The Standard” :

“We’re proposing a new multifamily apartment complex and we’re working now on a design that will cater to the surrounding uses of the university and the hospital,” said Jason Doornbos, vice president of development for Georgia-based Landmark Properties.

And …

Another 56 units are proposed for 10th and Market Streets Downtown:

In all, the developers have proposed 56 units and 20,000 square feet of commercial space on the ground and first floors. A structured parking garage with 100 spaces is also planned underneath the building.


The ramifications for bringing all of these are apartments at pretty much the same time … staggering. The first few thoughts and questions that come to mind:

- To my mind, this is confirmation that the 0-5 Buyer is GONE. The buyer who would move to Charlottesville, buy and then sell in under 5 years: thing of the past. (really, read that story if you’re interested in this trend)

- If you’re looking to buy an investment property in the City, you would probably be advised to think about the competition against which you’ll be renting.

- Transportation. I really hope these new developments actively promote bicycling and walking as opposed to being purely car-centric. Adding about 1,000 new apartment units in the City of Charlottesville will presumably add a commensurate number of vehicle/pedestrian/bicycle trips.

- Where are these people working? UVA? Startups? Restaurants?

- Will any be designated “affordable”? And whose definition of “affordable” applies?

- Parking. Each of the two new proposed developments above seem to have about a 2 to 1 ratio for spots to units; presumably the commercial development will use some of these spaces as well.

- Maybe this is a sign that we’re in the midst of a more mobile economy

- Or maybe it’s a reaction to the trend that driving isn’t cool (if you’re a millennial).

- Maybe it’s a reaction to the forthcoming “renter nation” many have discussed for so long.

But really the number of new apartments in Charlottesville is a reaction to the better economy. Financing is available and developers are obviously confident that there is demand for these products – commercial and residential. Who is the market for these apartments? If it’s not the “families” some in the City of Charlottesville would like to see, why are they approving them?

And finally, how do these all fit into the just-adopted Charlottesville Comprehensive Plan?

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Paying More for Walkable Homes in Charlottesville?

That’s the theory put forth by the Piedmont Environmental Council and reported on at Bacon’s Rebellion.

The conclusions apparently found in their study of 120 homes aren’t a surprise to readers of RealCentralVA (see links at the end of this post), but I wanted to differ with one of the conclusions with three points:

Many people continue to prefer living in the suburbs. But Werner’s divergent trend lines make it clear that supply-side of “walkable urbanism” housing is severely under-served.

– With a reference to a story I wrote in January (and will be revisiting soon)

Apartments – there are going to be a lot more available in 2013 and 2014. A few of the new complexes: Arden Place (Rio Road), The Pavilion at North Grounds (Millmont/UVA), Stonefield Commons (Hydraulic & 29), The Reserve at Belvedere (Rio), the Plaza on West Main (UVA), City Walk (Downtown – more on the Coal Tower). As I said, a lot more apartments will be coming on the market soon.

– And also point out that there are quite a few new construction neighborhoods in the City of Charlottesville that offer true walkability for those wiling to live that urban lifestyle (and can afford to do so).

– And that buying a car just isn’t a desired option for a lot of millennials; many of them want the urban lifestyle (and often that means renting rather than buying):

Economic realities: The costs of owning a car just keep increasing. A 2012 AAA study found the expense of having a car totaled $8,946 annually on average, nearly 2 percent more than the previous year. As transportation alternatives increase, the desire to own your own car diminishes. You’ve got I-Gocar sharing and Zipcar. I love Zipcar’s slogan — it says it all for this generation: “The car for people who don’t want one.” There are also shared ride programs, company-provided transportation plans and the old reliables: biking and walking. The Gen Y stats (16- to 34-year-olds) are pretty impressive: Driving was down from 2001 to 2009 (23 percent), biking was up (24 percent) and walking was up (16 percent), according to the National Household Travel Survey.

Related reading:

- Where Are the Walkable Neighborhoods in Charlottesville/Albemarle? (2008)
- Charlottesville is the 3rd Most Walkable City in Virginia (2010)
- Choosing Where you Want to Live in Charlottesville – Walkability and Safety Top the List (2013)
- Walkability=Affordability= Profitability=Livability (2009)

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Two Upcoming Bicycling Events in Charlottesville + a Thought about Community

Update 5 July 2013 -

One way to commit myself is by signing up for a 100 mile bicycling challenge. Which I just did. Feel like supporting the Boys and Girls Club? (Please click through to the bottom of this post.)

Charlottesville is known to be a great bicycling community … a community I’m just starting to discover.

Years ago someone described the Charlottesville community as being lots of circles that never touch – a not-quite-venn-diagram if you will.

Concentric Circles

Funny how these things work. Start a new sport, and a new community emerges. People I know and see in one community are people I’m starting to see in the bicycling community. There are lots of ways to connect to Charlottesville; biking is but another.

As my foray continues I’m starting to pay attention to the bicycling news and world and have found a couple challenges -

The Boys and Girls Club Challenge – 15 September 2013 – 25, 50, 75 and 100 mile options are available.

Gran Fondo Virginia – 8 September 2013 – 22, 52 and 104 mile challenges from which to choose.

So far, some of the best resources I’ve found as I start this new adventure:

Blue Ridge Cyclery – (where I bought my bike) at least three of my friends/clients either spoke highly of, and/or I’ve seen them wearing Blue Ridge Cyclery’s jerseys.

Charlottesville Bike Club – I haven’t interacted yet with these folks, but the information has proven useful

Strava and Mapmyride.com – sites/apps, both of which seem to have particular strengths I’m still discovering and exploring.

Bike Charlottesville – information and advocacy group

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Help Kickstart Charlottesville Tomorrow’s Education Coverage

I’ve long said that I’m better positioned to represent my clients’ best interests because of the knowledge and information that Charlottesville Tomorrow shares.

Now they’re asking for the community’s help to Kickstart their foray into covering the education side of the news.

Charlottesville Tomorrow has provided something extremely valuable – consistent reporting for many years. Here’s hoping they’re able to replicate this success in the school reporting arena.

Keep in mind – “Distance from Schools” and “Quality of Schools” are the two least-likely-to-compromise criteria for home buyers.

* Disclosure: I donated $50.

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City Walk is Moving A LOT of Dirt

I stopped by Beer Run this afternoon (those not in Charlottesville – it’s more than beer!) to pick up a gift and noticed that the City Walk apartments are well underway. That’s a lot of dirt.

Lots of dirt moving at City Walk

More about City Walk at Charlottesville Tomorrow (including the site plan).

The apartment boom that is currently underway is going to change the Charlottesville real estate landscape – significantly. Continue reading

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Another Call for Population Growth in Charlottesville and Albemarle

Source: http://virginialmi.com/report_center/community_profiles/5121016820.pdf

I’m still working my way through the new report produced by Advocates for a Sustainable Population (ASAP) in which they quantify the costs of growth (it’s a lot) and describe how adequately growth pays for itself (it doesn’t).

Growth is expensive, and costly – environmental, quality of life, general change – but what are the solutions? Other than more taxes, (a local income tax? Seriously?) specific solutions aren’t proposed. What exactly is an “informed population polic(y)”?

Keep in mind that this is the group that wants to limit populations (of Charlottesville and Albemarle).

You’ve heard of how Charlottesville used to be a (relatively) well-kept secret, and how as soon as someone moved here they’d want to close to the gates and keep others from moving in? The author of the study fits that mold; he moved here in 2007.

Personally, I’ve struggled with the growth of my hometown* for years and my internal struggles haven’t abated. Intelligent implementation of building, infrastructure, etc is crucial, but these are things that seemingly local (and state, and national) governments fail at implementing every day. What are the solution? I don’t know, but a cap on population seems short-sighted and more difficult to implement than building the Meadowcreek Parkway.

If you’re short on time, read ASAP’s 5 page Executive summary.

Update: Neil Williamson of the Free Enterprise Forum offers a strong rebuttal of the ASAP report.

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Primer for 1st Half 2012 Real Estate Market Update

30-year fixed-rate mortgage - Wolfram|Alpha

I’m going to be running numbers next week – give some time for realtors to enter the closings in the Charlottesville MLS and for the delayed (there are so many*) closings to finally close.

This is just a primer for what is likely to be a long and comprehensive post next week.

Contracts written 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 213

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 51

Contracts written 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 255 (up 16%)

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 32 (down 37%)

Looking at the above data, a quick conclusion could be reached that more buyers are shifting towards purchasing single family homes as home prices have dropped. Next week, I’ll separate the City from the County, product mixes, and the rest of the Charlottesville MSA.

These numbers are likely representative, but not an entirely accurate picture of the Charlottesville real estate market because most closings tend to happen at the end of the month … come back next week.

Closed sales 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 230

Attached homes in Charlottesville and Albemarle: 74

Condos in Charlottesville and Albemarle: 41

Closed sales 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 229

Attached homes in Charlottesville and Albemarle: 60

Condos in Charlottesville and Albemarle: 36

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