Law-and-order endorsement can be a smart addition to insurance policies
Q. We recently received the renewal letter for our homeowners insurance, and our broker is pushing us to add a “law-and-order endorsement” to our policy. We trust our broker, but it seems like the endorsement would simply duplicate the coverage we already have. Would adding the endorsement be a good idea, or would it just be a waste of money?
A. Generally speaking, the older a home is, the more sense it makes to have a law-and-order endorsement. Adding such an endorsement to your existing policy would allow you to be reimbursed if your home is damaged or destroyed and extra costs are incurred because the repairs must meet higher construction standards than your property does today.
Let’s say you live in an older home that has a woodshake roof, but you’re in one of the many communities that have recently changed their building codes to require more expensive, fire-resistant tile roofs in all future new-construction and repair jobs.
If you have a standard homeowners policy and your roof was damaged or destroyed, the insurer would be required only to reimburse you for the cost of a new wood roof. The cost of upgrading to the more expensive tile roof in order to meet the new building code would have to come out of your own pocket.
However, if you had added a law-and-order endorsement to your policy, the insurer would have to pay for the upgrade instead of you.
The endorsements are relatively inexpensive and are certainly worth considering, especially if you live in an older home that may not meet today’s stricter building requirements. But if your house is relatively new, you probably could skip such an add-on — at least for now — if the home was built using the latest construction materials and techniques.
Q. I live in an older home that does not have any smoke alarms. Are these devices required by law?
A. Most cities and counties require that each home have at least one smoke alarm, and many have stiffer ordinances that require alarms to be placed in each bedroom or even every room. Some municipalities actively inspect individual properties to ensure compliance, while others only enforce their smokealarm laws when a home is sold and the transaction goes into the closing process.
Relatively few communities across the U.S. have no alarm policies at all, instead leaving the decision to install the devices up to the individual owner. But with topquality, battery-operated alarms now available for between $10 and $20 each, there’s really no reason for owners not to have at least two or three alarms
spread across their homes.
Fire-department officials have said that the batteries in such easy-to-install alarms should be changed at least twice a year. A good way to remember to make the semiannual switch is to replace the batteries when daylight saving time begins in the spring; then do it again when you move your clock backward in the fall.
Q. I already know that I can sell my own home without having a real estate license because I have done it before. Now I have inherited my late brother’s small home that’s a few blocks away through the living trust he created about four months ago. I would like to sell it myself, too, but would I have to get a sales license first? I wonder, because the trust is a legal document, and the property is not my personal residence.
A. No, you won’t be required to get a sales license. Your late brother’s home now belongs to you, so you can sell it yourself, hire an agent to market it for you or simply rent it to tenants for some extra monthly income.
Your brother was wise to form an inexpensive living trust. That thoughtful action allowed his home to pass quickly to you instead of making you suffer through the long and costly probate court proceedings that would have been required if he had made only a will.