Homeowners insurance is designed to bring your home and possessions back to the same condition they were in before a loss occurred. It covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people, including injuries caused by your household pets.
Understanding Your Homeowners Insurance Policy
There can be a huge difference in the type of coverage needed for a home built in the 1920’s and one that is newly constructed. It is also important that you make sure that if you had a total loss of your home tomorrow, your homeowner’s insurance policy would pay enough to build the exact same house in the same location. The key to having the right coverage for your home is to understand what is covered under your policy.
Guaranteed Replacement Cost
At the time of a loss you want to be sure you have an adequate amount of coverage on your home. This can be accomplished by adding a Guaranteed Replacement Cost endorsement to your policy. For example, a home destroyed by fire that has an appraised value of $450,000 could cost more to rebuild. Our insurance companies will guarantee to pay the amount it will take to rebuild your home—even if that amount is over $450,000! This endorsement gives you the peace of mind of knowing you are protected. We automatically include this endorsement on our policies. While it is meaningful to have this coverage on every home, it is especially important with older and turn of the century homes.
Scheduled Personal Property
Homeowner insurance policies have a built-in limitation for theft of jewelry, silverware and furs. In most cases, the insurance company will pay only a small amount of the replacement value of these items if they are stolen.
The additional protection far outweighs the cost. Other items, such as fine arts, collectible, bicycles and musical instruments can be scheduled as well.
Included with your homeowner’s policy is coverage for personal liability. A standard policy has $100,000 of personal liability coverage included and would typically cover these types of situations:
- A visitor to your home, slips, falls and gets hurt.
- The lawnmower you borrowed from your neighbor is damaged.
- Your dog bites someone.
- While visiting a friend, your cigarette burns a hole in the carpeting.
Those are great examples of when personal liability coverage would be important. Depending on your personal circumstance, a standard policy might offer good coverage for you.
Water Backup Coverage
Most homeowner insurance policies do not cover damages caused by the backup of water from sewers or sump pumps. Damage from these types of storms can be extensive, so we include Water Backup Coverage on all eligible policies.
By the way, this water backup coverage is NOT flood insurance. We will be happy to explain the difference! Contact us at 800.277.0013.
Homeowners Insurance Discounts
Insurance companies offer a wide range of credits and discounts that can make your home insurance premium even more affordable. Here are some ways you can save:
- Multi-Policy Discounts – You can save by combining your home insurance with other policies like auto, umbrella, boat, and personal articles floaters.
- Higher deductibles – A deductible is the amount you pay before the insurance company pays on a covered loss. Deductibles can be $250, $500, $1,000 or more per incident. As the deductible is increased, your premium will be lowered.
- New Home Discount – This discount is available to customers who have purchased their home within the prior 12 months of the policy effective date.
- Loss Free Discount – Loss free discounts are offered to customers who have not experienced a loss within a specified period.
- Protective Device Discount – You can earn discounts if your home is equipped with smoke detectors, interior sprinkler systems, centralized home security system and 24-hour security guard.
Buying homeowners insurance can be a bit complicated if you don’t understand how certain risk factors affect policy rates. When determining homeowners insurance rates, insurers look at a number of factors. Here are few examples:
Credit score – Credit scores, along with other factors, help insurance companies predict the likelihood of an applicant having an accident or filing a claim. The higher a homeowner’s credit score, the lower their risk level.
Home location – Where your home is located will affect your home insurance premium. You will pay more for homeowners insurance if you live in an area prone to tornadoes, floods and other natural disasters.
Your neighborhood can also affect your homeowner’s insurance policy. For example if your home is far from a fire hydrant or a fire department, your rates will increase. Living in a high crime area will also raise your insurance rates.
Breeds of Dog – The presence of certain dogs in the home could raise your premiums, especially if you own a dog breed deemed “aggressive” or an exotic animal.
Age of the Home – Insurance companies will take into account the age and condition of key components of a home. A new home’s overall structure is likely to be in better shape than that of an older home. Therefore, newer homes have lower homeowners insurance rates than an older home or one that is not well maintained.
We’ll work with you to develop a homeowners insurance plan that fits your needs and your budget. Contact us at 800.277.0013.