While no one wants another housing bubble, people across the U.S. are hopeful that housing prices will continue their recovery following the Great Recession.
In fact, earlier this week, the S&P/Case Shiller real estate index, which measures the home prices in 20 of the largest U.S. cities baselined to 2000, was announced through July -- and five cities have seen their prices skyrocket in 2013:
As you can see in the chart, the markets in San Francisco, Las Vegas, Atlanta, Los Angeles, and San Diego have led the charge for the recovery in housing prices. Meanwhile, cities like Charlotte, Washington D.C., Minneapolis, New York, and Cleveland have all seen their home prices grow slower than the U.S. average over the last year.
Month Over Month
Of the five cities that have had the best rebound in home prices this year, San Francisco has seen its prices recover the most since they bottomed out in March of 2009. Home prices in the City by the Bay have grown over 50% in a little over four years.
Surprisingly, according to the latest data from the FDIC, despite Wells Fargo (NYSE: WFC ) being headquartered in San Francisco, Bank America (NYSE: BAC ) has a commanding lead in market share, with over 50% of deposits in the area versus 19% for Wells Fargo as of June 2012. Considering those are two of the three of the largest mortgage originators in the country -- they could both be set to benefit as San Francisco continues to rebound.
Las Vegas is a great example of the roller coaster housing prices we all witnessed as it is one of the cities that saw its prices rise and fall the most during the mortgage boom and bust:
Home prices in Nevada fell over 60% from their peak in August 2006 to their low in March 2012, but they've rebounded 35% over the last 16 months. While Bank of America and Wells Fargo also have a major presence in Las Vegas, Citigroup (NYSE: C ) rounds out the top three. While Citi announced it was eliminating 1,000 jobs this week in its mortgage unit, it had more to do with the slowdown in refinancings than business conditions in specific markets. While Vegas may not see a spike in prices like it did from 2003-2006, it is certainly on the mend.
When compared to the other four cities, Atlanta is very unique in that it didn't see nearly the run up in home prices in the 2000s, as they peaked in January 2007 at a gain of almost 37% over the January 2000 levels. By comparison, home prices in San Diego rose 150% in a five-year period.
Surprisingly though, Atlanta has watched its prices come back incredibly strong, up 35% since March of 2012, which is only bested by San Francisco's 40% rise. Southern banking stalwart SunTrust (NYSE: STI ) could be the biggest benefactor here, as almost 33% of its loans are mortgages or home equity lines.
While Atlanta had the lowest peak, Los Angeles had the highest one before the crisis, as its home prices rose over 170% from January 2000 to September of 2006. Even despite prices falling 42% from top to bottom, Los Angeles has watched its housing prices jump the most of the 20 cities measured, as they currently stand more than double what they were in 2000.
Last, but certainly not least, is the third city in California in the top five, San Diego, where except for the fact that prices peaked earlier, its housing prices followed an almost identical path as Los Angeles:
Prices are still down around 25% from their peak -- but up almost 30% from the bottom seen in April of 2009. Surprisingly, one company poised to benefit from the jump in California residential real estate is Minneapolis-based U.S. Bancorp (NYSE: USB ) . While it is not broken out each quarter, as of December 31, 2012, almost 13.7% of its total residential mortgages held were located in California, versus just 11.7% in 2011, and the total balance of those loans grew almost 40% year over year.
Although all five of these cities may be below the peaks seen in the middle of the last decade, it is encouraging to watch them all rebound so well from the lows of just a few years ago. The trend of rebounding home prices will help both consumers and companies as we all continue to recover.
The banks stocks set to benefit
In fact, while many investors are terrified about investing in big banking stocks after the crash, the sector does have one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report.
Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaid balance goes down with each amortized payment made, the equity grows from two directions.
This dynamic leads to increasing a person’s net worth much faster than many other investments.
A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.
Mortgage management is something that the homeowner does have control. Making the decision to select a shorter term mortgage at a lower interest rate can have an impact on equity build-up. Lower interest rates amortize faster than higher interest rates which will also affect equity growth. Currently, it is possible to get a 1% lower rate on a 15 year mortgage than a 30 year mortgage.
Compare two alternatives of a 30-year and a 15-year mortgage. The payments will definitely be higher on the shorter term because it pays off quicker. However, if a person can afford the higher payments of $362.53 more per month in this example, the equity will be greater. Even after you take into consideration the higher payments, the increased equity is $17,236 at the end of the seven year holding period.
Another decision that can affect equity build-up is making additional principal contributions along with the regular payments. Whether you’re making an occasional lump sum payment toward principal or regular monthly contributions, it will save interest, build equity and shorten the term on a fixed rate mortgage. Estimate your personal savings with this Equity Accelerator.
It’s easy to make a big mistake in a bathroom remodel; with so many small pieces to consider, you’re liable to miss one. With some help from local bathroom remodeling expert BathExpress we’ve put together a list of the 13 Most Common Mistakes of Bathroom Remodeling.
It may not seem like it, but bathroom remodeling is a unique specialty in the world of construction. A typical bathroom remodel has more than fifty primary components that must be matched and installed properly. The subfloor, backer boards and other “non-visible” components MUST be installed properly to avoid annoying problems for years to come. Using a tradesman who builds decks, frames houses, installs windows and fixes porches may not result in the finished product you’re really hoping for.
On the other hand, there are several companies who do nothing but build bathrooms. Their installers typically understand the plethora of surprises and challenges that each bathroom can present. And like any specialist, they are usually better prepared to diagnose and solve the problem quickly and without undue expense.
Some of you won’t care that much about this one. BUT the folks looking to buy your house one day will. So here it is. If you choose a faucet that is finished in brushed nickel, make sure that your other components are also in brushed nickel. These other components include your towel bar (for bath towels), your towel ring (for hand towels), your bath tissue holder, your shower head, your shower trim kit (the area that has your on/off handle and temperature adjustment), your tub spout, your shower door and even the knobs on your cabinetry.
Be careful, one manufacturer’s brushed nickel or oil-rubbed bronze may not look at all like another company’s equivalent. When they don’t match, it just doesn’t look nice. If possible, buy your fixtures at the same place so you can compare finishes before it’s too late.
How many bathrooms have I seen that have a white sink, biscuit colored toilet and almond bathtub. They just don’t feel right. Some are downright unattractive.
The toilet, tub and sink should match. If you’re using white, use white on all three. Moreover, you’ll need to watch out for variations WITHIN a color. For example, Kohler’s biscuit colored Hourglass bathtub is slightly different in color than a biscuit colored American Standard toilet. Compare samples of the materials BEFORE you buy. Or run the risk of being annoyed every morning minutes after you’ve just awakened.
Who doesn’t want the best deal that they can find? The problem is this – in bathroom remodeling, price can be dramatically lowered by using the cheapest materials and even omitting critical components. But better materials work better, last longer and give you a much better chance of avoiding disasters. (Think flooding and electrical issues.)
In particular, NEVER cut corners on the following items:
Now don’t get me wrong, I know that installing tile all the way up to the ceiling CAN look good at times. I’ve even tiled one of my own bathrooms to the ceiling. BUT, more often than not it leads to annoying and difficult to remedy problems. You see, most ceilings lines (the corner line where the wall meets the ceiling) are not straight and level. However, shower wall tile is straight. So the space between the top of the tile and the ceiling is wider is some spots and narrow in others. Once the tile is set and grout is installed, that thick/thin grout line can become quite noticeable to the eye. Worse yet, it can be very difficult to maintain. Where the line is wider, the grout will often be concave creating a little “mold shelf” for years to come.
The better alternative – in most cases – is to set tile to a height of seven feet or so and use a finish or “bull nose” tile to create a neat, easy to maintain line. The remaining wall space can then be primed and painted and along with the rest of the bathroom. It should look better and be easier to maintain.
Watch out for the contractor who chooses to install green board (water resistant gypsum board) behind your shower tile. Over time, it doesn’t hold up well to moisture and is a poor foundation for heavier tile. For years, cement backer boards have been the gold standard. However, newer backer boards are not porous (cement boards are) and many are completely impervious to water.
On floors, cement board continues to be a good alternative, but something like Schluter-DITRA is definitely a better option as it is completely waterproof. In conjunction with two layers of thin-set cement, Schluter-DITRA can help the installer to “level” the floor before tile is installed helping to eliminate cracked tile and crumbled grout.
If you have ceramic, porcelain or natural stone tile installed, the grout lines (and the natural stone itself) must be sealed. Unsealed grout quickly becomes dirty and becomes a wonderful breeding ground for mold.
DO NOT cut corners on sealants. While a gallon jug of sealant can be picked up at the home improvement store for $20.00, I would skip it and drive straight to a tile store. Tile stores have access to the higher quality sealants that are guaranteed for twenty years or more. These newer sealants are pretty amazing. They are made to penetrate and fill the porous grout so that moisture cannot even enter that space. The better sealants often come in aerosol cans and can be applied better (including into the corners) than a liquid sealant and sponge can. Be warned, the best sealants smell pretty bad for a day or two, but they’re worth it.
Cheap caulk should be illegal. It starts wasting away as soon as it’s applied, and replacing can take up to a day of your precious time or a day of expensive labor time. All this can be avoided by using the highest quality caulk available (it doesn’t cost that much more) and using silicone where appropriate (for under mount sinks, backsplashes, shower door installations, etc.)
Cheap faucets look cheap and eventually leak. The finish can start to wear off within months and many need constant adjustment to stay tight. Be sure that your new faucets (and shower components) have ceramic disk valves (not rubber or plastic washers) and that the finish is of the highest quality. One quick tip here, oil-rubber bronze finishes can be beautiful. But they are hard to apply and often chip, wear off or simply change in color over time. Buy the highest quality you can afford if using bronze hardware.
Good shut-off valves (for hot and cold water under the vanity or for the toilet) are only a few dollars. Over the past forty years, homebuilders have typically used valves that have a rubber washer inside. The washer eventually deteriorates and the water either won’t shut off – or worse yet – it leaks. Why in the world would anyone leave these on when you’re remodeling the bathroom anyway? Be sure to install high quality new shut-off valves for the hot water supply, the cold water supply and toilet. If you’re lucky enough to have an access panel for the shower/tub water supply, install them here as well.
This is different than Mistake #1 (using a ‘Jack of all trades’ contractor), and oh man, I’ve seen this one over and over. The contractor with a clipboard quoting a price to do the “entire project.” This same individual will do it all…including the plumbing.
Plumbing is a specialty, and not even your specialty bathroom contractor should be directly doing it him/herself. Good plumbers can ensure that you avoid the most costly problems imaginable (i.e. flooding, tearing out shower tile to fix bad plumbing behind the walls, leaks that can never quite be located, but drip for years to come).
So… how much did you save by letting the non-plumber do the plumbing? Very little – if any. Contractor hourly rates and plumber hourly rates are not that different. Insist on a licensed plumber.
We’ve all heard of the “three bid” approach. Call or visit three contractors or home centers, get three bids and pick the “best.” Often, the contractor will quote a price for labor and rough materials and then recommend that you go out and buy your own materials. Sounds good, right?
Maybe. If you have a lot of time on your hands (months) and a flair for design, then this may be a fun project. For most…. It’s not. If you’re not really “into” this sort of thing, it can become a show-stopping nightmare. Many people think that a bathroom has three or four components (cabinet, toilet, tub…), but that’s not at all true. The typical bathroom has more than fifty components that need to be researched, matched, ordered, sized and brought to the home. It’s awfully hard to know which component to start with. The cabinetry? Maybe. How about the flooring? Everything should match that, right?
That’s why a high percentage of bathroom remodels start with a bathroom designer. These professionals can make recommendations, assemble sample materials, advise as to the pro’s and con’s of different brands and systems and help you make sound budget decisions.
But…does a designer add to the cost? Maybe, but many designers and design firms have access to lower prices for materials that can offset the cost of their time and expertise. Even if your new bathroom does cost a little more, it’s far better than being stuck with a poorly designed bath with cheap and/or unmatched materials.
Bathroom remodeling can be very expensive. There are a number of expensive trades involved (carpentry, plumbing, electrical, tile setting) and a lot of expensive materials packed into a small space. So, how can you make sure you’re not paying too much?
First and foremost, find a company or contractor that has an efficient process resulting in fewer days on site. For the most part, labor is the most expensive component. Ask your remodeler how long your project would take relative to the industry average. Also, be careful about working with a firm that uses the same custom carpenters for high-end kitchens with multi-piece crown trim (these guys aren’t cheap) and bathroom remodeling. A bathroom remodeling specialist can often do a better job at a lower price.
Real estate stocks rallied, and mortgage rates fell, as fears of Fed "tapering," at least in the short term, evaporated.
The Federal Reserve will continue to buy U.S. Treasury securities and agency mortgage-backed securities, both of which have kept mortgage rates well below historical norms for the past few years. Fed governors cited the recent rise in mortgage rates in their list of concerns that kept them from pulling out of asset purchases."It's a good day to get a mortgage rate," wrote Dan Green, author of The Mortgage Reports blog, immediately following Wednesday's Fed announcement.
But was it a good day for the housing market? What did it really say about the health of the recovery? It's like when you were a kid, and you don't have to go school because you are sick. Great! No school! Except you're still sick. That is exactly what the Federal Reserve's message was to the U.S. housing market.
"An insipid victory for housing markets," tweeted economist Sam Chandan. "Fed doesn't believe rebound can be sustained absent artificially low mortgage rates."
Ever since members of the Federal Reserve began hinting about a "taper" of asset purchases back in May, mortgage rates have been rising. The rate on the 30-year fixed conforming loan is over a full percentage point higher than it was in May; of course back in May it was near historic low.
The rise in rates put the brakes on the housing recovery, sending both mortgage applications and home sales lower during the summer months. While home builders continued to tout demand and affordability, they could not help but notice fewer buyers in their showrooms.
"We are experiencing the same as others who have reported, decent spring followed by a poor summer," said Stephen Paul of Mid-Atlantic Builders. "Through June, sales were up 16 percent then dropped off the table in July and August."
Home builder confidence stalled nationally in September, after rising steadily, especially at the beginning of 2013.
"While builder confidence is holding at the highest level in nearly eight years, many are reporting some hesitancy on the part of buyers due to the sharp increase in interest rates," said Rick Judson, the National Association of Home Builders' chairman.
If interest rates retreat to where they were at the beginning of the year, mortgage refinances will likely rebound again, especially since they have dropped so dramatically in the past six months.
As for home sales, that is not an easy call. Sales have been hampered not just by rising mortgage rates, but by very low inventory, anemic construction, and still-pervasive negative equity among potential move-up buyers. Lackluster job and wage growth, especially among younger Americans, has not helped either.
We also know that while the Federal Reserve may not be tapering now, it will have to eventually. Some say it should do so sooner rather than later.
"Rip this Band-Aid off already," said Peter Boockvar of the Lindsey Group. "There will never be the right time to cut back, and today was the perfect opportunity to do so because the market was ready for it. Playing games now over this with the market will not smooth the eventual ease."
Boockvar pointed to the home buyer tax credit, which boosted sales briefly, only to expire and send sales slumping again. The Fed is clearly afraid of stalling the housing recovery now.
"Clearly the Fed has been spooked by the extent of the surge in long-term interest rates over the past couple of months and the impact that now appears to be having on the housing market," said Paul Ashworth at Capital Economics. "But there is a dangerous circularity here because the initial rise in long-term rates was largely a response to the Fed hinting that it would begin to reduce its asset purchases sometime in the second half of the year."
The confusion the Fed has now created could in fact result in more volatility in the credit and housing markets.
Housing demand from move-up buyers — or existing homeowners selling their current properties to replace them with a more expenseive home — is on the rise as home equity levels improve.
As home prices continue to increase, so does demand from move-up buyers, who are now able to provide a substantial downpayment on a new home after gaining value on rising equity, the latest report from real estate data firm FNC revealed.
"An important sign of a healthy and sustainable recovery is increased housing turnover driven by trade-up buying, which is more or less discretionary spending," FNC Director of Research Yanling Mayer said. "These buyers are typically more responsive to market conditions and financial incentives," she added.
Much of the desire for move-up buyers lies behind rising mortgage rates. "They know if they don't move now, they might be kicking themselves all over again in three months,” said Redfin Los Angeles real estate agent Eric Tan back in July, when rates were throttling upward. Historically, rates remain very low, but experts predict they will continue to gain steam as we move into 2014.
According to Daren Blomquist, vice president of RealtyTrac, 18.5 million homeowners — 40% of all homeowners — have at least 20% equity or more, putting them in a prime position to sell.
"In addition, we show 8.3 million homeowners who are on the equity fence, and should have at least 20% equity in the next 15 months if home prices continue to appreciate at the same rate we’ve seen over the past 15 months," Blomquist said in an interview with HousingWire.
Blomquist noted that if 5% of these 8.3 million homeowners list their homes for sale, that’s an additional 415,000 homes that will be available for sale in the coming months.
"The increase in the share of equity sales reflects a market that is fully transitioning from investor purchases of distressed homes to primary home purchases by households," said California Association of Realtor Vice President and Chief Economist Leslie Appleton-Young in a recent equity report. "The market continues to improve as more previously underwater homes gain equity due to recent upward movements in price."
In the past couple of decades, many new custom-built homes have been built with super-sized master bathrooms. Although having all that space is nice when two people are trying to get ready for work in the morning, it can also feel like a cold, uninteresting space if it isn’t well-designed.
Here are some of our favorite design tips for large bathroom renovations:
• In a generously sized bathroom, toilets are often set aside in separate water closets. If you don’t like that idea, how about placing the toilet out of direct sightlines and adding a privacy panel to obscure the view?
• Large expanses of tile can be cold underfoot and make the whole bathroom feel cold. Have your remodeler install programmable in-floor heating system. You’ll be thankful for it on chilly mornings!
• Taylor your vanity to your particular needs. There is no better time than before starting a bathroom remodeling project to assess your specific needs: do you need two sinks or just one? Two grooming stations? A make-up vanity with extra lighting and seating? How much storage do you need in the bathroom and do you require a custom-built linen cupboard?
• Lighting is everything. (I know, I go on and on about this one, but trust me here!) A large bathroom requires layered lighting to ensure that each area is properly lit. Think about general overhead lighting in addition to sconces for the vanity, lighting in the shower and something special above the large soaker tub.
• Finishing details like selecting a warm, or even a dark color for the walls and textiles can also help make the space feel a bit smaller and cozier.
Whether you have a super-sized bathroom or a closet-sized bathroom, working with a professional bathroom remodeler can help ensure that your space has the right design and layout to make it functional and comfortable.
Do you have things in your yard like toys, broken vehicles, or an old boat? Get rid of them! Those things are the leading detraction factor in your yard. Any clutter will make your yard look ugly, even if you have landscaping and other beautifying elements in your yard. Remove all clutter from your porch, walkways, yard, and driveway to ensure your home always looks its best. There are some clever ways to refresh the look of your exterior space. And they don’t take much time or cost too much.
It is amazing what a little paint or siding can do for your home. Repainting, replacing siding, and even replacing or updating the roof can help you maintain the best look for the outside of your home. Choose a colour that matches your surroundings to prevent your home from sticking out like a sore thumb. If you’re looking for some more tips, a siding company can give you some other good ideas. Once you’ve painted (if you need to), you can also look at these quick exterior make-over tips to see if your home can benefit from any of them.
In today’s busy world, keeping up with the yard is difficult. However, if you neglect the appearance of your lawn, your house will look ugly and unkempt. Try to trim and mow your lawn at least once a week to keep it freshly trimmed and the weeks at bay. Watering, if necessary, can also help your yard look green and lush, even in the hottest days of summer. Fertilizing every couple of years can also help improve the health and appearance of your lawn.
Do you have something about your home that is simply ugly? Electric units, gas lines, and certain parts of the home are simply not attractive. However, if you cover these areas with strategic landscaping, viewers will never notice the ugly parts of the home. Talk with a local arborist or professional landscaper to determine the best way to landscape your yard. These design ideas for small gardens will also help.
The entrance to your home is what you want visitors and viewers to notice first. You can make your doorway attractive without much effort at all. Adding a simple wreath and welcome mat will help visitors feel at home. Painting your door a contrast colour to the rest of your home makes it stand out. You can also add a few pots of flowers by the door for additional colour. You can see a detailed article about front door painting with some great suggestions here.
These steps are simple ways to keep your home looking nice. If you take the time to implement a few of these tricks, you will find that the appearance of your home’s outside improves dramatically. If you liked 5 Shortcuts For A Beautiful Home Exterior, please share it on your social networking sites. Thank you.
A mortgage officer, in most cases is an employee and represents the company. And the same is true for a title or escrow officer. It’s important to understand the actual relationship to know what you can expect from them.
Any business person who wants to stay in business must treat their customers fairly and with a high degree of service. As a customer, you should be able to reasonably expect honesty and accountability. The difference is that employees owe their loyalty to their employer and agents owe their loyalty to their principal.
An agent owes more than just honesty and accountability. The principal can expect complete disclosure, obedience, loyalty, reasonable skill and care and confidentiality from their agent.
This advocacy is very beneficial during the buying or selling process to coordinate all aspects of the transaction. The agent can bring valuable experience to your side of the transaction to provide confidence that your best interests are being represented from start to finish.
Most states have a recognized procedure for the real estate professional to create a formal relationship between themselves and a buyer or seller. This requires a fiduciary/statutory responsibility that places the principals’ interests above the agent’s own personal interests.
When disaster strikes your home, home insurance is supposed to be there to help you pick up the pieces. Most of the time, it does.
But the coverage does have limits, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association, an industry group based in Greenwood Village, Colo.
"Many people don't take the time to understand what is and isn't covered and mistakenly assume insurance will pay for any type of damage," Walker says.
A Bankrate survey found that 81% were aware flooding is not covered by regular homeowners insurance. You may have heard earthquakes also require special coverage. Yet you may not know that there are other types of damage that are excluded from most policies as well.
Walker says many policyholders learn about the exclusions the hard way.
"We often hear from people that the only time they think about what their insurance covers is when they go to file a claim," she says. "Of course, then it's too late."
Following are six hazards a standard home insurance policy may not cover.
At least 1,000 species of mold are common to the United States, according to the New York-based trade group the Insurance Information Institute. A breakout of splotchy mold on walls not only looks disgusting but also is a health risk that the Centers for Disease Control and Prevention says can bring about symptoms similar to allergies or even breathing difficulties.
Despite the threat, a standard homeowners insurance policy generally either limits coverage for mold damage or outright excludes it, says Loretta Worters, an Insurance Information Institute vice president.
Some insurers offer an endorsement to expand coverage limits for mold claims but only if you are willing to pay more for your insurance, she says.
The best cure for mold is to prevent it from growing in the first place. If the basement floods after a rainstorm or a pipe is leaking, eliminate the moisture promptly, Worters says.
"Even a spill on the carpet should be dried within 24 to 48 hours," she says.
The U.S. Environmental Protection Agency says homeowners generally can clean up mold themselves if the affected area is less than about 10 square feet. Otherwise, it is best to call in an expert.
America's sewer lines are rapidly aging, with some more than 100 years old. As more homes have been connected to these out-of-date lines, sewage backups have followed.
Other sources of backups include pipelines that handle both stormwater and raw sewage -- and become overwhelmed in rainstorms -- and blockages from tree roots that work their way into sewer-line cracks.
When a sewer backs up into a home, it can damage floors, walls, furniture and electrical systems.
Walker says standard homeowners insurance does not cover sewer backups. If you are worried about being unprotected, she has some advice.
"Consider extra insurance that may be available as endorsements to your policy for risks such as sewer backups," she says.
The Insurance Information Institute says sewer-backup damage often can be covered for an additional premium of just $40 to $50 per year.
Sinkholes can seem like something out of a horror movie. For example, there was the Florida man who was swallowed up in early 2013 when a sinkhole opened without warning beneath his bedroom.
Sinkholes are sudden gaps in the earth's surface that occur after groundwater gradually dissolves rock such as limestone and carries bits of it away, creating large pores and cracks in bedrock. Once large cavities form underground, the land above it may suddenly settle or collapse, creating the sinkhole.
In the United States, sinkholes tend to cause the most problems in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee and Pennsylvania, according to the U.S. Geological Survey.
Most home insurance policies will not cover damage associated with "earth movement," such as an earthquake or sinkhole.
"Florida is the only state in which insurers are required to provide coverage for sinkhole damage," Worters says.
Florida insurers must include insurance for "catastrophic ground cover collapse" -- which refers to damage so severe, the home is uninhabitable -- as part of standard homeowners insurance.
Worters adds that in Tennessee, insurers must offer optional sinkhole coverage for an additional price.
"In every other state, earth movement is excluded from the insurance policy," she says.
Colonies of anywhere from a few hundred to several million termites can quietly and methodically devastate your home.
Wood, paper and dead plant material that is in contact with soil near the house provides termites with a ready source of food and an entry. And moisture accumulated around foundations and in poorly ventilated crawl spaces gives termites a source of water they need to survive.
Over time, termites can damage or destroy support beams and other wood features in a house. The National Pest Management Association estimates that termites cause $5 billion in damage in the U.S. each year.
If these unwanted guests cause wear and tear to your home, do not expect your insurer to bail you out, says Janet Patrick, a spokeswoman for the Illinois Insurance Association, an industry lobbying organization in Springfield, Ill.
"Homeowners policies do not pay for termite damage," she says.
For that reason, Patrick recommends having a licensed pest control company take a look at your home to make sure it is termite-free.
"Homeowners can avoid structural damage with early intervention," she says.
Nuclear plant accidents
The Federal Emergency Management Agency, or FEMA, says nearly 3 million Americans live within 10 miles of an active nuclear power plant. If an accident at a nearby reactor leaves your home uninhabitable, standard homeowners insurance will not cover the claim. But that does not mean you will be unprotected.
A 1957 federal law called the Price-Anderson Act compensates people in the United States for any damage or injuries resulting from a commercial nuclear accident.
The law was called upon after the nation's worst nuclear accident, at the Three Mile Island plant near Harrisburg, Pa., in 1979.
"The insurance paid for the living expenses of families who decided to evacuate," Worters says.
The Nuclear Regulatory Commission says an insurance pool of more than $12 billion is available to pay out claims.
Claims covered under Price-Anderson include:
Disease resulting in death.
Property damage and loss.
In addition, individuals evacuated from an affected area can expect reimbursement for reasonable living expenses beyond what you ordinarily pay. "The coverage does not pay your mortgage, does not pay for your normal food bills," Worters explains.
Acts of terrorism
The recent Boston Marathon bombings were a reminder that terror can strike at any moment.
The Insurance Information Institute says terrorist attacks using nuclear, biological, chemical or radioactive weapons are considered fundamentally uninsurable. Standard home insurance policies do not specifically reference terror attacks, Worters notes.
"However, the policy does cover the homeowner for damage due to explosion, fire and smoke," she says, adding that these are the most likely types of damage a home would suffer in a terrorist incident.
If you own a condominium or co-op, the policy you carry on your individual unit will protect your structure and possessions from damage related to a terrorist attack.
However, damage to common areas -- including the roof, basement, elevator, boiler and walkways -- is not covered unless your board purchases separate terrorism coverage, Worters says.