I called up Geico, with whom I have an automobile insurance policy, to see about getting homeowner’s insurance because I’ll need a policy in place before we close on Friday. I was basically completely unprepared for the battery of questions the CSR asked me but we struggled through it and came up with a quote on a $295,000 policy with a $500 deductible of $843/year. I’ll be sure to compare that rate with other insurers but $70/month seemed reasonable to me at first glance but I have no experience with homeowner’s insurance. However, I probably answered some of the questions inaccurately so if you’re going to get a quote, here are the questions you should have answers to:

These were sent to me in an email by the CSR, who worked for Travelers (underwrites policies for Geico):
Here is a list of questions of good to know information because they will probably ask this of you.

• Address of home
• County
• Year of construction
• Type of construction
• Square footage of home
• Type of roof material
• Condition of roof (Excellent, Good, Fair)
• Type of heat (Oil, gas, electric, other)
• Any form of alternate heat (woodstove, kerosene heater, or electric space heater)
• Distance to fire hydrant (in feet)
• Distance to fire department (in miles)
• Is there a garage?
• Is there a porch, deck, breezeway attached? What dimensions?
• Security/protective devices:
• Deadbolt locks?
• Are there smoke detectors?
• Do you own a fire extinguisher?
• If home is older than 1990
  • Year roof was replaced or original
  • Year heating was updated or original
• Electrical service- circuit breaker or fuse box?
• Purchase price/Current coverage amount
• If purchase price- contact person for lender, phone # and if possible, fax #

I hope that comprehensive list is helpful for someone so you don’t sound like a dope when you call in.

One company I’ve been told we should check out is Liberty Mutual because they give discounts to my alma mater. I’ll probably give them and perhaps one other company a call just to get an idea of the quality of the $843 quote.

My girlfriend received the strangest letter in the mail at the beginning of the month, it said that her company’s Employee Retirement Savings Plan (fancy term for 401k) has a feature called [Company Name] Match. My interpretation of the letter was that if you don’t contribute enough pre-tax to your 401k, the company match feature will pay out enough so that you get the maximum company match had you contibuted more pre-tax. The letter came from the company servicing her 401k (T. Rowe Price Retirement Plan Services, Inc.). I’ve typed the letter in its entirety (removing company name and specific dollar amounts) and I want to know what you guys think. Does this sound too good to be true or have I misread it?

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Unfortunately, the iPod offer is gone but the $24 for a referral is still around. This is a ridiculously easy promotion to take advantage of. Email me using this form with your first and last name and I’ll hook you up with a signup link. You just need to signup, deposit $100, wait ten days (it’ll take that long to clear), and then withdraw $124. Withdraw $100 minimum deposit after only 10 days. No trades required to receive $24 bonus! I will also earn $24 for referring you.

Then, after you’re done, you can just sign up a significant other and then sign yourselves up again with a joint account. So you’ll pocket around $120 for all your trouble.

[ Related Ex24 Posts]

I read an article in CNNMoney today that made me cringe – J.P. Morgan Chase & Company will be offering a swipeless credit card that give holders the option of swiping or just waving their cards in front of a reader. These cards have a special chip that the card reader will detect and charge and the card holders won’t even need to sign. While it rates very high on the “cool meter,” it scares me how much credit card fraud is going to increase with the removal of several key security features.

Let’s take the low-tech route and think about these cards. If you never have to show the cashier the card, you have rendered the signature and photo portrait security mechanisms useless. When used, both mechanisms probably could stop credit card fraud in its tracks but we’ve come to expect that cashiers don’t verify either as often as they should. Also, without actually needing verification of payment (signature), could you pay for something unwittingly with one credit card in your wallet/purse while hard-swiping another? What if you’re maxed out on the “blink” card and wanted to swipe another card? J.P. Morgan Chase is going to get rich off this! I’m sure these are questions they’ve asked but… as history has shown, sometimes the most obvious things are overlooked.

Let’s go high-tech fraud then… what prevents someone from sniffing out these “special chips” and collecting a whole bunch of data? You sit there with a transmitter/receiver, a signal processor, and write up some software to decode the transmission and you have yourself a credit card collector. You fake being a reader yourself and just query one of the chips for sensitive data. It probably isn’t hard to payoff someone manufacturing these readers to sell you one (because you’re a vendor of course!)… so there you go.

Finally, what are you really saving? Time? Is it that hard or that time-consuming to hard-swipe your card in the reader as opposed to waving it in front of it? I honestly don’t think the tradeoffs make any sense whatsoever and we’re just looking at a gimmick by J.P. Morgan Chase & Co. at trying to get a few more card holders.

One of the concerns when we “won” the house for $295k, when it was listed very low at $270k, was that the home would appraise at under the purchase price. In the event that you purchase a home and it is appraised for under the purchase price, the buyer must come up with the difference. The reason is if you were to default on the loan, the lender will forecloses on the home and sell it. If the home is worth less than the loan it will sell for less than the amount of the loan and the bank loses money, that’s why you have to make up the difference in cold hard cash. Luckily for me, the house was appraised at $299k so the nightmare scenario of an under-appraisal didn’t materialize.
In Search of a Home
I called up my mortgage consultant (lender), Nick, to ensure that everything was progressing smoothly and that he needed all the information required of me. I was pretty sure he would’ve called me if there was anything he needed but it is better to be safe than sorry. He assured me that everything was on track and we are going to meet the deadline of closing next Friday (May 27th). This was also when he told me about the appraised value of my new (to me!) home.

As for the roof concerns, after faxing the request off to the seller agent, we received signed confirmation that the sellers (who have been accommodating and extremely polite the one time I met them) agreed to the request. A roofer will begin the repairs on Monday, May 23rd, and we will have a final walkthrough on Thursday, May 26th, a day before closing. While I am concerned that we didn’t spell out specifically what needed repair, the roofer must give us a certification (I will have to research what that means exactly) after the work is complete.

Finally, I have to look into the logistics of how the rent back will work and getting home owner’s insurance. The rent back agreement is that they’d cover my mortgage, taxes, and insurance so I have to double check what will come out of my pocket.

So close…

With readership increasing and your comments coming fast and furiously (I appreciate it!), I wanted to learn more about you folks. So, to facilitate this I’ll be holding a two-week “contest.” All that you need to do to enter is write (a comment with) a little blurb about yourself, how you found this site (via another site, search engine, etc), and, if you’d like, let me know what you thought of it (what’s good, bad, ugly, etc.). Also, if you have a blog and choose to link to me (or already link to me) – that’ll be worth another entry for a maximum of two entries per person.

In return, I’ll draw one of the name’s out of a hat and mail you a hardcover copy of The Millionaire Mind by Thomas Stanley. This means that you’ll need to leave me your email (or some way to contact you), which will remain hidden and I’ll never use for anything, so I can reach you on June 19th May 19th. (Wow, how’d I mess up that one)

Thanks and good luck!

Update: Contest closed. Thank you for everyone who entered, I’ll contact the winner in the next few days and get your address. Thanks again for participating and for the positive feedback. Cheers!

Winner: Incidentally, the winner of the book was Lore and I’ll be shipping out the book in few days. Thanks everyone for entering!

The Fair Credit Reporting Act (FCRA) mandates that consumers are allowed to review their credit report for free every 12 months. This rule covers all consumer reports, to include specialty reports like insurance and check writing. Until the FCRA mandate, you had to pay to see your report!

Initially there is a rollout period so that the three credit unions don’t get clobbered all at once but by now everyone can get a free credit report at AnnualCreditReport.com.

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Actuaries get paid a lot of money to figure out how much to charge you for insurance. In fact, when I was going through school my guidance counselor told me I should consider a career in “actuarial science” because of my math skills but I told her I wanted to make a quick buck on this “internet” thing. Too bad the “internet” didn’t pan out otherwise I’d be filthy rich. Regardless, someone at Fatwallet posted a link to State Farm’s insurance scorecard (for the lack of a better term) which gives you a really good idea of what to expect when you decide to go insure your car.

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