Eric Kossian, Leavenworth Insurance

When an affluent person buys homeowner’s insurance their lifestyle demands that they have insurance that matches their lifestyle.

For starters, an affluent client has a larger more expensive home ($400K market value+) that should be insured with no cap on replacement cost instead of limited “extended replacement” on 95% of policies offered.  They also need Comprehensive Perils coverage (everything that goes wrong that is not excluded is covered) instead of a list of Special or Broad Perils (only listed perils are covered).

An affluent client typically has fine art, jewelry, musical instruments or collectibles that they will have scheduled coverage for any direct physical loss to the item. Affluent clients typically have higher quantities of items that under typical policies limit coverage for theft of these items:

•  Firearms $2500 limit,
•  Jewelry, Precious Stones,Watches and Furs $1500,
•  Memorabilia $5000,
•  Securities $1500,
•  Silverware $2500,
• Personal Tools $5000

These theft limits are just way too low for most affluent clients since they often own 2 -10 times the theft limits of these items.

Home policies designed for affluent policyholders also typically cover ID Fraud Reimbursement of $25000 or more, Ordinance and law coverage ( to bring home up to current code after a loss) and include Personal Injury Liability.

Speaking of liability, affluent clients are also more likely to be sued because they are more in the public eye, more likely to own rental properties and more likely to have hired household help such as nannies, gardeners, cooks and housekeepers. They need much higher auto, boat and home liability via excess liability coverage of $1 – 10 million or more. Excess liability also covers the family for at fault skiing, snowboarding, boat, recreational vehicle and hunting accidents (think Dick Cheney!) as well as libel, slander, false arrest and defamation of character. An excess liability policy will also cover defense costs, lost wages, interest on unpaid judgments, and even premiums on appeal bonds. A good excess policy will include excess underinsured motorist coverage of a million as well.

Due to international travel a good policy will extend not just liability coverage but also auto physical damage coverage worldwide, so when renting a Mercedes on the Autobahn, the insured would be able to waive the expensive rental car coverage. The policy would also cover any loss of use or diminished value of the damaged rental car.

There are only a handful of carriers that cater to affluent clients with the broader coverage they provide. Believe it or not it might be only a few hundred more dollars a year, and is often a few hundred dollars less, due to large discounts provided by their high credit scores – the single biggest statistical determinate of loss.

Eric Kossian, is an Underwriting Specialist and Agency Principal for Leavenworth Insurance and InsurePro with affluent clients throughout Washington.  He can be reached at Eric@InsurePro.info or by calling 1-877-548-5488.

All in all, 2011 looked a lot like 2010.

The median home price in Leavenworth fell from $310,000 to $307,000. This is down 12% from a peak of $349,000 in 2008

Average home prices in Leavenworth fell from $362,000 to $353,000. This is down 15% from a peak of $415,000 in 2007.

The total number of home sales is up this year from 84 to 86, but down considerably (47%!) from 162 in 2007.

What can we expect in 2012?

I actually think my predictions for 2010 still hold true in 2012..

Here’s what I said at the end of 2009.

• I would guess prices will continue to muddle along. Some neighborhoods will see price drops and others won’t.
• Condo inventory will clear out.  I would guess that foreclosure or auctions will be part of this equation. ( We have two holdout projects still from 2007.)
• The overall number of foreclosures and short sales will remain low.
• Demand and prices for premium locations (waterfront properties) will remain strong.

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Required Disclaimer

NOTE: This representation is based in whole or in part on data supplied by the North Central Washington Association of Realtors or its Multiple Listing Service. Neither the Association nor its MLS guarantees or are in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the Market.

Photo courtesy of Jeff Turner aka @respres

How little?

Of the 98 single family homes and condominiums that sold in 2011 in Leavenworth and Peshastin (including Lake Wenatchee and Plain) only 4 homes were bank owned properties or short sales.

You read that right. About 4% of Leavenworth home sales in 2011 were foreclosures.

Nationally, about 19% of home sales were distressed sales so we are pretty lucky in that regard.

One of our biggest requests from clients is info about Leavenworth foreclosures. We get it. Everybody wants a good deal.  I am just not convinced that foreclosures are the place you will find the deals locally.

In 2011, the bank owned properties that sold in Leavenworth and Peshastin were an odd bunch:

• huge fixer upper project in Peshastin
• 600 sqft cabin in Chiwawa River Pines
• newer home in rough shape backing to the railroad tracks
• off grid home without winter access

Riverfront properties? None

Houses on Lake Wenatchee or Fish Lake? None

Luxury Homes? Nope – The most expensive house here sold for $204,000 (and this was a house that sold for $250,000 in 2006.) The other three sold for less than $150,000.

How did 2011 compare to 2010?

In 2010 we had 10 distressed sales and that number has dropped significantly.  However, there are 7 distressed sales that are pending/ under contract. 2011′s numbers maybe a little low because these pending sales took so long to close.

We certainly haven’t seen a rash of short sales or foreclosures come on the market. I see no signs nor have I heard anything that would lead me to believe that there is a large amount of “Phantom” inventory owned by banks or likely to be foreclosed on soon in the Leavenworth market.

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Required Disclaimer

NOTE: This representation is based in whole or in part on data supplied by the North Central Washington Association of Realtors or its Multiple Listing Service. Neither the Association nor its MLS guarantees or are in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the Market.

State Agency Grants Some In Leavenworth New Lower Fire Insurance Rating

(The following is a guest post by Eric Kossian of Leavenworth Insurance)

Some Leavenworth area residents will benefit from Fire Chief Kelly O’Brien’s successful effort to have the rating agency for fire protection classifications reevaluate Fire District #3.

Chief O’Brien was able to prove that those county residents that reside within 5 miles from a district fire station and have a standard fire hydrant should now qualify for a lower rating of 6, to match the 6 rating inside Leavenworth city limits.

 The Washington State Rating Bureau verifies the rating for each piece of property in the state for insurance companies. The better the fire protection, the better your insurance rate will be. While Seattle is a class 2, residents inside Leavenworth city limits have had a class 6 for years. However, a house just across the street outside the city limit, was higher, even though they both used the same hydrant and were serviced by the same fire trucks. Kudos to Chief O’Brien for getting that changed effective Dec. 1, 2011; it took several years of diligent effort.

This mainly will financially benefit residents just outside town who have had hydrants for years. But it will also affect some of the upper Titus Rd and Ski Hill area residents who had hydrants put in on their streets over the last decade but were outside the city limit, so did not previously qualify for a class 6. It also helps property owners trying to put in subdivisions in those areas.

Photo by Karin Beil on Flickr

Those with a rating higher than 6 that are still within 5 miles of a fire station pay a little higher insurance rate.  Those beyond 5 miles from a station (Class 9 & 10) pay a 3-5 times higher fire insurance premium than inside the city (Class 6), due to the higher risk of total loss of a remote property.

If your location was affected by the rate revision, your insurance premium should automatically go down, by your renewal at the latest, if your property was affected.

Click here to read the Fire District’s press release or to see a map of the Fire District.

 If you want to get a free report showing your specific fire zone rating for your property anywhere in WA state, feel free to email or call Eric. He has password access to the rating bureau and can email you a copy of the report for your home.

Eric Kossian, is an Underwriting Specialist and Agency Principal for Leavenworth Insurance and InsurePro. He can be reached at Eric@InsurePro.info or by calling 1-877-548-5488.

Photo courtesy of Daniel Moyle

As this blog continues to evolve over the years (has it been seven already?!!) I thought some New Year’s resolutions for this blog would be a great way of previewing some of things we hope to have in store for you in 2012.

More Videos in 2012

There is so much we want to do in the video realm.  It’s easy to post home videos that we shoot ourselves, but ideally we’d like the production value to be better than that.  This takes both money, in terms of equipment and software, and time for both shooting and for editing.  We may or may not decide to hire someone to help us with these projects, or even better, find an intern looking to build a resume.

Our ideas for videos:

• Home Tours
• Neighborhood Tours
• Interviews with Geordie and Allyson
• Stories of client experiences
• Interviews with insurance agents, mortgage brokers and home inspectors

In 2011 we actually filmed a series of educational videos about mortgages with local mortgage bankers, but couldn’t get the bank to approve them.

More Guest Posts in 2012

We love having guests add another perspective here on our blog. In the past we have had posts from local mortgage professionals like Darel Ansley of Peoples Bank in Wenatchee, insurance tips from Eric Kossian of Leavenworth Insurance, and home inspection info from Chip Roberson of Mission Home Inspection.

I would love to have more posts from these authors as well as other articles that would be helpful and educational to our readers.

Would you consider writing a post for us in 2012?

Expand Our Series “Life of a Leavenworth Real Estate Agent”

We have done just a couple of posts in this series. From the comments we have received, people really learn quite a bit about how we spend our time in these “behind the scenes” articles.

Did we miss anything?

What would you change or add to this blog in 2012?