Small Steps to Better Financial Health

By December 23, 2020Connections
See the Dragonflies

TIP: If you live in a condominium or an Issaquah Highlands Community Association (IHCA)-managed townhouse in Issaquah Highlands, make sure you have HO6 condominium insurance, not HO3 house insurance. You have the wrong coverage in place and are probably overpaying to boot.

Do you live in a condominium? When you purchased your Issaquah Highlands home, you received a copy of the Covenants, Conditions, and Restrictions (CC&Rs) dictating how your home and neighborhood are governed and your homeowner responsibilities. (Yes, that more than 50-page document very few people read.)

Surprisingly, many homes in Issaquah Highlands, especially townhomes, are set up where the Issaquah Highlands Community Association (IHCA) is responsible for the structure and must carry insurance to rebuild. This includes neighborhoods like Sunset Walk, West Highlands Park, Westridge, Crofton Springs, z-Homes, and others. For these communities, you need HO6 condominium insurance, not HO3 house insurance.

Why is that important?

  • You may be overpaying for insurance.
  • You may be paying for dwelling coverage you do not need because the IHCA may provide it.
  • In case of a large loss, beware of the large $15,000-$25,000 deductible you may be responsible for on your homeowner’s association policy. An HO3 house policy would likely not pay this deductible, only a properly constructed HO6 condo policy will pay this deductible.

Have your local insurance agent review your homeowner’s association building certificate to clarify.

TIP: Take time to check your life insurance policy’s beneficiary list and make sure no unintended beneficiaries are still listed.

The purchase of life insurance policies is typically triggered by a life event (marriage, having kids, buying a house, etc.). If your policy is buried in some manila envelope you haven’t opened since your college-age kids were in diapers, it’s time to check the beneficiary list.

Make sure the primary beneficiary is who you intended. Formers partners, ex-spouses, and elderly parents were some of the unintended beneficiaries we’ve uncovered. If your kids are age 18 and older, you can add them as beneficiaries.

TIP: Consider consolidating all your separate workplace retirement plans into a single IRA to allow ease of administration and rebalancing.

Have you had five different jobs since college, with a trail of 401K plans? Have you moved multiple times and crossed state lines? Is it easier to find your high school yearbook than the details of all your retirement savings accounts? Consider consolidating all your retirement plans into an IRA and make it easier when you must rebalance. If you are rebalancing annually, a local financial representative can help.

TIP: Let your insurance agent know about planned home renovations or additions to ensure you have the appropriate amount of house insurance.

People may not be spending money on vacation right now, but they are spending money on their house. Maybe you want to add a soaking tub that requires you to also upgrade your water heater. Or upgrade your outdated kitchen with marble countertops and high-end appliances? Are you considering adding a  new media room, wine cellar, or another bathroom? Be sure to tell your insurance agent ASAP.

All house insurance policies have co-insurance rules. You are required to insure the full replacement cost of your home or risk a prorated (reduced) claim payout based on the percentage under-insured.

– David Ngai, Allstate Agent, Highlands Council Board of Trustees Treasurer, and Issaquah Highlands Resident

As published in January 2021 Connections >>