Some people decide to buy online by using popular websites and some stay with a local agent. Whatever choice you make, knowing and understanding your insurance coverage is important.
There is usually a deductible when filing a home insurance claim unless noted. Individual policies are determined by named perils and exclusions in a policy, with some exceptions to the rule, of course.
It is not unusual for agents to receive last-minute frantic phone calls from title or escrow companies requesting a home insurance binder. To save yourself a lot of trouble, it is a good idea to start shopping for a homeowner policy as soon as your purchase offer is accepted.
Your agent needs extensive information from you to quote you the best rate for your coverage. To determine insurability, an agent will ask information about the year the house was built, the age of electrical and plumbing, roof type, square footage, and location.
If the house is located in a rural area without a nearby fire department or there is no fire hydrant on the street, some companies may refuse to insure it. In that case, you may have to inquire at a specialty or surplus-lines company, and this quote will take longer to obtain.
You can save money by having a higher deductible on your coverage. Typically, insurance companies will start giving discounts at a $500 deductible and increase the discount as your deductible increases.
Most companies offer deductibles up to $10,000, but be careful because many mortgage companies will not allow you to exceed a $1,000 deductible. Most agents use a cost estimator to figure cost replacement estimates.
This will ensure that your house is insured for the correct amount. Insurance companies do not insure dirt so if you buy a house that includes a large lot, do not be astonished when you receive a policy for a lot less than what you paid for the house.
This is because you are buying coverage for the house and not the land. Replacement Cost Coverage means each company designates a percentage of additional protection on top of the insured amount.
This is designed to protect the homeowner who has suffered a loss from having to pay additional construction costs to rebuild. It can cost more to build because of inflation or simply because material prices have increased.
Most homeowners should get a 200 percent replacement cost coverage, which gives homeowners double the protection. You have other choices on your coverage that you can tailor.
Liability coverage is a part of your homeowner’s insurance policy that is often overlooked. This protects the insured against claims arising from bodily injury and property damage to others.
For example, if your five-year-old was playing with matches and set your neighbor’s house on fire, your liability coverage would pay for this damage. You might have to move out of the neighborhood, but your coverage would pay your neighbor.
It is common to see $300,000 in protection for liability, but the cost to raise it to $500,000 is about $20 more a year. You can have up to a $1 million coverage on most policies after which you need an excess liability policy or “umbrella” policy.
Umbrella policies give you additional $1 million liability protection for a $300 to $500 premium. Make sure that you are getting all of the credits for which you are eligible.
If you have an alarm system that reports to a central station, in some cases, you can get up to a 10 percent discount. Companies have different names for age preference policies, from senior discount to mature policyholder discount.
The most common discount is the multi-policy discount which will save you money on your house and auto insurance. By combining the two policies with the same company, you are given a certain percentage discount on both.
Call your agent and review your homeowner policy at least every three years. You should stay up-to-date on your insurance because you never know when you will need to rely on it.
Ronald has been an insurance consultant for the past 10 years. He has written hundreds of articles dealing with the advantages of different insurance types. He recommends (http://laboweninsurance.com) for auto insurance in Utah.
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