Protect Yourself against Liability

Let’s say that your dog bites a guest at your annual summer party. If you don’t have homeowners insurance, you could pay for the damages that the victim incurs, and those damages could run as high as $100,000 or more. Homeowners insurance can also protect you financially if someone is hurt slipping on your icy driveway or tripping over a rug while inside.

You Get Protection for Everything inside of the Home

If your home was burglarized, your homeowners insurance policy will likely pay for anything that goes missing. The same is true if items are damaged in a home invasion. Your policy will likely cover the cost of repairing or replacing lost, stolen or damaged items inside of a shed or garage. Carports and similar structures on your property could also be included in your policy.

Homeowners Insurance Is Relatively Inexpensive

Homeowners insurance polices generally cost less than $1,000 per year. The payments can be rolled into your mortgage, so you don’t have to worry about making them on time. Before you purchase a policy, be sure to shop around to see what local insurance providers offer both in terms of cost and coverage levels. Independent brokers may be able to scour offerings made by all companies in your area to find the best policy.

What Happens If the Roof Is Damaged?

A powerful wind storm could result in shingles being blown off of your roof. It could also result in the entire structure being separated from the home. Regardless of the extent of the damage, it is important to fix it as soon as possible. With an insurance policy, you can get the money needed for repair work in a matter of hours or days. From there, you should look for a residential roofing professional.

Buying homeowners insurance provides you with a variety of benefits that are well worth the cost. While you hope that you never have to use it, it can save you thousands of dollars in repair or other costs if disaster strikes on your property.

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Not Everything Is Covered

Common sense dictates you need homeowner’s insurance when you buy a home, but you might not realize it’s not all comprehensive. Your policy might not cover things like flood damage, or it might cover certain types of flood damage but not others. Just because you’re protected from storm surge caused by a hurricane doesn’t mean your insurance company is paying out for a burst pipe and the water damage that occurred because of it. Companies such as Northeast Insurance Agency and other local agencies recommend you discuss the type of coverage you know you need and what you might need when you ask for insurance rate quotes to compare prices.

Your Belongings Aren’t Automatically Covered

You have a policy for your home, but did you know it might not cover everything you own? It only covers up to a certain amount for specific items, and most policies don’t insure any one item for more than a small amount. Let’s say you have your grandmother’s diamonds that are worth $100,000. They’re stolen from your home, but your insurance company might not pay you that amount of money. They might only pay you about $1,000 to $2,000 unless you have special coverage for exceptionally valuable items. Keep this in mind when you buy a policy.

Your Claims Can Be Denied

You have a large tree that’s been touching the side of your house for months due to overgrowth, and you know you need to cut it down. If it falls onto your home during a storm, your insurance company might deny the claim if they find out you knew it was a problem for months and failed to take the required precaution to remove the tree or the branches putting your home in danger. Be sure you’re always keeping up with your maintenance if you want your claims approved.

You Want the Insurance

Even with potential that your claims can be denied, you still want the insurance. It is better to have it and not need it than need it and not have it at all. You want to make sure that your home is taken care of at all times. If something were to happen, it could cost you a lot of money. In some cases, it can cost more than what you are able to afford on your own. Therefore it is better to have the insurance just in case the worst were to happen.

Homeowner’s insurance is no fun to deal with, but you’ll be so glad you have it if anything should happen to your home. Now is the time for you to review the policy you’re thinking of buying and be sure it has everything. Talk to your agent about adding additional coverage as needed.

Establishing Risk:

Looking at your home insurance policy as a way of establishing risk with your insurance company. Once you have established the risks of your home your agent will help you choose a policy that best suits your needs. However, keep in mind the higher the risk the higher your premium will be each month.

What does your homeowner’s policy cover?

Most homeowner’s policies cover damage from weather and fires. That includes coverage of both the structure and the contents. According to Meyer’s Insurance Ltd., homeowner’s policies also cover loss from theft and provide some level of personal liability coverage to protect you from things such as your dog biting someone or a guest to your home slipping and falling on ice and getting injured. In addition, homeowner’s policies have "loss of use" coverage that pays for you to live somewhere else if your home is uninhabitable because of a covered event.

What does your policy not cover?

Though your homeowners insurance covers many types of damage and loss, most policies specifically exclude certain types of disasters. Homeowner’s policies do not cover damage caused by flood, although they will cover water damage caused by a burst pipe or damage from rainwater that gets in your home because of other storm damage, such as a hole in your roof or broken windows. Most policies also do not cover damage from earthquakes, airplane crashes or acts of war. Homeowner’s policies also do not cover damage to your home that is preventable, such as mold growth or termite damage.

What influences your rates?

Unlike auto insurance rates, which are largely influenced by factors you can control, homeowner’s insurance rates are influenced mostly by factors over which you have little or no control. Among the most important factors in setting your rates are the size and value of your home, where you live and the history of claims on the home. For example, if you live somewhere where hail or hurricanes are common, you will likely pay more than if such risks were not present. The same can also be said if you home is in a high risk area for theft and other crimes.

How much coverage do you need?

At a minimum, you need enough insurance to cover the value of your home. So if your home is worth $250,000, you need at least that much coverage. However, it’s better to cover the replacement value of your home, which often is higher than its current value, and you also should increase coverage periodically to reflect rising values.

Understanding your homeowner’s policy will help you make more informed decisions about how much coverage you need and what uncovered perils you may need to account for. The easiest way to look at it is that it is about establishing risk with your insurance company.

What does homeowner’s insurance cover?

Homeowner’s insurance covers damage to your home caused by wind, hail and fire. Most policies also cover damage caused by theft or vandalism. Homeowner’s insurance will pay to repair or replace structural damage or loss as well as loss or damage up to the limits in the policy. Homeowner’s insurance also offers personal liability coverage for things such as dog bites or injuries people sustain while on your property.

What does homeowner’s insurance not cover?

Homeowner’s policies do not cover damage from flooding, unless the flood is caused by a burst pipe in your home or from water that got into your home from storm damage, such as a hole in the roof. Most homeowner’s policies also don’t cover damage from earthquakes, plane crashes and acts of war.

How much insurance do you need?

At a minimum, you need enough insurance to cover the appraised value of your home. But it is better to get a policy that covers the replacement value of your home, which is what it would cost to build a similar home today. You should also have a policy that automatically increases your replacement value coverage annually to keep up with inflation.

How can you lower premiums?

Many of the factors that go into setting your homeowner’s insurance premiums are things you can’t control: how much the home is worth, where it’s located, the history of claims on the property. But there are some things you can do to lower your premiums. Carrying a higher deductible, meaning you will pay more out of pocket when you file a claim, will lower your premiums. You can also lower premiums by having a home security system and avoiding owning a dangerous breed of dog.

Can your insurer cancel your policy?

Unlike health insurance or life insurance, where you can’t lose your insurance as long as you pay the premiums, your home insurance company can cancel your policy if it feels its risk exposure has changed. In such a case, the insurer will have to refund any premiums you have prepaid.

Homeowner’s insurance is complex, and you should make sure you fully understand your policy so you don’t have an unwelcome surprise after a disaster.

Informational Credit to Steers Insurance Limited

Take a Home Inventory

The first step in this process is to determine what it would cost to rebuild that perfect home and the possessions in your home. The easiest way to determine what it would cost to rebuild is to take the square footage of your home and multiply it by the local cost of building materials. The cost of building materials can be found by contacting the local builders association or a real estate agent.

You may be surprised to find that your cost to rebuild is considerably higher than what you paid for your home. Insure for the rebuilding cost; replacement coverage is usually more expensive than cash value, but is well worth it. Remember to include the cost of replacing garages or sheds on your property.

Personal Belongings

It is easy to underestimate the replacement cost of our belongings. Your insurance agent can help you determine the coverage needed to replace the contents of the home. If you have antiques, special family belongings, or expensive jewelry, increase the amount of the policy.

Protecting Your Family from Accidents

Your homeowner’s insurance covers accidents on the property, such as falls, dog bites, or falling tree limbs. Be sure you have adequate liability coverage against the huge lawsuits that can result from such accidents.  

Mortgage Coverage

Many financial institutions will require you to carry adequate homeowner’s insurance to cover your mortgage. In case of fire, damage or disaster, be sure you also have enough coverage to rebuild your home.

Special Considerations

If you have an upgraded home, consider a homeowner’s policy that covers 120% above the replacement cost to cover the extras. Replacing an older home may also be costly, according to a specialist from Thomson Schindle Green Insurance & Financial Services Ltd, because updated building codes may add to the replacement cost.

For peace of mind, be sure your homeowner’s insurance policy covers replacement cost of your home, liability against accidents, the complete contents of your home, and any special antiques or family pieces. Also add coverage for temporary living situations for your family if your home is damaged. Homeowner’s insurance is a necessary cost, but the peace of mind it brings is priceless.

1) Your Price Depends on Your Risk

The most important thing to know is that your price is going to depend on your risk. If you live in a flood zone or an area prone to natural disasters, you will be charged more. Those who take steps to lower their risk such as installing an alarm or thick windows will pay less.

2) Discounts May Be Available

Never be afraid to ask for discounts on your policy. Insurers generally have discounts available for those who bundle, those who don’t file claims and for those who are able to pay their premium in full every six months. Some companies, like Steers Insurance Limited, allow you to get home, auto, pet, travel and more combined for better rates and less hassle for you.

3) How Much Is Your Home Worth?

It is critical that you know how much your house is worth before buying a policy. This is because the value of your home will determine how much protection that you will receive. If you have to replace your home, you probably won’t get more than the replacement value for it.

4) Insure as Much as Possible

Do you run a business from your home? If so, it may be worthwhile to get a property replacement policy. This will pay for the cost of replacing computers, furniture or any other property that allows you to run your business from home.

5) Understand the Details of Your Policy

Read the details of your policy before you buy it to ensure that you are getting what you need. Your insurance company may have specific definitions regarding market value of your home or how to file a claim. Knowing these details now can help you get the most from your policy.

6) Get a Plan That Fits Your Needs

The most important thing is that you get a plan that fits your needs. If you don’t have coverage for the things that mean the most to you, it may not provide as much value as it could. Therefore, review your needs and your family’s needs before buying a policy. Many insurance companies can tailor your needs to a specific plan made just for you.

Your home is the biggest investment that you will make. Therefore, you need to protect it as best you can. With a good policy, you limit your financial exposure in the event of a natural disaster or any other event that could cause damage to your home.