Choosing the Right Homeowners Insurance
There are very few products we buy and hope we never have to use. Homeowners insurance just happens to be one of those purchases. Because of this, it may be tempting to buy the cheapest policy instead of the right policy for your home.
However, should you ever need to rely on your homeowner’s insurance, the cheapest rarely will be sufficient to make you and your family whole. Consider the factors below next time you shop for homeowners insurance.
Homeowners insurance provides coverage for the residence you live in. Insurance policies use the term “dwelling” to describe your home. Homeowners insurance policy will pay for damage caused by a multitude of perils unless otherwise excluded.
Common perils excluded from coverage include:
- Equipment breakdown
- Back up of sewer or drains
- Ordinance or law / code coverage
Insurance companies offer endorsements to add excluded perils onto a policy for an additional premium, usually with their own deductible and limits of coverage. If you have freestanding structures such as a shed, carport, or detached garage, you will also want to make sure your policy extends coverage for those buildings as well.
How much you will receive in the event of a claim will depend on two factors.
- Valuation – Policies will pay for damage or replacement using either replacement cost or actual cash valuation methods. Actual cash value pays only the cost after subtracting depreciation. This means the older your home, the less you would receive with actual cash value. Agents commonly recommend adding guaranteed cost coverage to pay for potential increases to costs and labor.
- Deductible – Deductibles come in two forms. Flat dollar deductibles are common for most perils and can range between $500 and $10,000 for most policies. Percentage deductibles require you to pay a percentage of the limit of insurance (not the amount of damage). Your deductible will be subtracted from your total claim amount.
A common mistake when purchasing homeowners insurance is determining how much coverage to buy. Purchasing an amount equal to your mortgage will leave you underinsured in the event of a large loss. On the other hand, insuring to market value instead of the cost rebuild may result in over-insuring your home. Your insurance agent has access to replacement cost calculators that can dial in the near exact amount of insurance you need.
We have more things than most of us can remember. While most insurance policies will provide personal contents coverage equal to 50% of the dwelling limit, it is recommended to take an inventory of your personal items.
Personal contents coverage includes everything from clothing to furniture, toys to technology. However, there are certain items which may be excluded from coverage under the policy or be limited to a lesser amount of coverage such as:
- Power tools
- Designer clothing
Riders can be added to your policy to provide sufficient coverage for special items. Also, be aware the breakdown of appliances is not covered under a homeowner policy. Although more insurance companies are offering this additional coverage.
Property damage is what most people think of when it comes to homeowners insurance. But your liability as a homeowner is a significant exposure you carry. Homeowners insurance policies provide liability coverage in the event someone is injured on your property or suffers property damage at your home due to your negligence.
It is important to know certain liability exposures may not be covered by your insurance policy. For example, there are a handful of dog breeds some insurance companies will not cover. Additionally, criminal or wanton actions that result in injury or property damage will also likely be excluded from coverage.
Loss of Use
In the unfortunate event your home becomes uninhabitable due to damage or destruction, your homeowner’s insurance policy can reimburse you for costs associated with hotel stays, meals, and travel. Make sure to review your options for loss of use coverage as the daily available limit and the duration of coverage can be increased or decreased to meet your needs.
How to Save On Homeowners Insurance
Armed with the factors to look for when purchasing homeowners insurance, it is also helpful to know a way to save on your premiums. The most common premium savings tactics include:
- Increasing your insurance policy’s deductibles
- Installing an insurance company approved security system
- Bundling homeowners coverage with other insurance policies
The most effective way to obtain the right coverage at the most competitive premium is to work with an independent insurance agent. As an independent insurance agency, we have access to many different insurers who compete for your business. Contact us today to review your Homeowners Insurance options.
- Aging and Our Body’s Ability to Heal Itself
- What is Credit Health Insurance?
- Keeping Health Insurance After a Layoff
- Waking Up to the Impact of Insomnia
- How Life Insurance Benefits Women
- Electric Car: To Buy or to Lease?
- What experts say about raising the retirement age
- Coverage for healthcare treatment denied? Here’s what you can do.
- How are the proceeds of a life settlement taxed?
- Sharing the Road with Cyclists
- Buying Life Insurance for an Elderly Parent?
- What Every Renter Needs to Know about Renters Insurance
- Medicaid Unwinding: Your Questions Answered
- Does Uber Insurance Cover Passengers?
- Living Your Best Life After 60
- Weird Things Covered by Home Insurance
- Buying Health Insurance: A Millennial’s Guide
- Self-Love Ideas for Valentine’s Day
- Life Without Clutter
- Set Yourself Up for Success with Your Fitness Routine
- When to Upgrade Your Auto Insurance
- Winter Hydration – Do I Need It?
- What Does My Home Insurance Policy Cover?
- I’m 60+; Do I Need Life Insurance?
- Why Do I Keep Breaking My New Year’s Resolutions?
- Closing Out the Year with a Smile!
- How to Enjoy a Long Layover
- Are You Paying Too Much for Auto Insurance?
- 6 Cold Weather Safety Tips
- 10 Tips for Managing Cholesterol Levels
- How Social Security Cost-of-Living Adjustments Affect Your Taxes
- How Much Life Insurance Do You Need Right Now?
- 3 Top Tips for Better Posture
- Fun Part-Time Jobs for Retirees
- Building Bone Density for Seniors
- Living Outside Your Comfort Zone in Retirement
- 16 Tips for Keeping Your Home Secure While You’re Away
- 3 Top Habits that Lead to a Happy Life After Retirement
- Should You Insure Your Gifts?
- Everything You Need to Know When Retiring Under 65
- The Most Important Fall Home Maintenance Tasks
- 7 Benefits of Slow Travel
- Do you need $1M to retire?
- Utilizing Medicare Preventative Services
- The Harsh Reality of Credit Card Fees
- Keeping Your Health Insurance Affordable
- How to Retire Early
- 7 Tips to Weather Challenging Periods in Your Life
- What is a Variable Annuity? 4 Key Details You Should Know
- Financial Planning After Saying “I Do!” – 3 Crucial Steps
- 4 of the Best Ways to Stay Healthy this Summer
- 4 Boat Safety Precautions to Take this Summer
- How to Prevent Sun Damage to Your Eyes
- 3 Tips for Safer Grilling
- Rental Car Road Trip? Consider Buying This Coverage
- When the Sun is NOT Your Friend (What You Need to Know about Sun Exposure)
- Tips to Avoid Stress Eating
- Lifestyle Changes in Retirement that Will Impact Your Finances
- Common Exercise Pains – How to Work Past Them and When to Call for Help
- Signs Your Identity Has Been Stolen (and what to do about it)
- Are Annuities a Good Investment?
- How Does Inflation Affect Life Insurance?
- Know the Benefits of Walking
- Do Brain Food Supplements Really Work?
- Using Life Insurance in Estate Planning
- Ways You Can Spend Less on Gas
- Is Your Retirement Income Keeping Pace with Inflation?
- What Are Alternatives if LTC isn’t Right for You?
- 4 Tips for a Less Stressful Summer
- 6 Factors Impacting Homeowners Insurance Costs
- Veteran and Medicare Benefits Work Together
- What are the Safest States From Natural Disasters?
- How to Protect Your Home from Wildfires
- How to Choose an In-Home Care Provider for Your Loved One in 5 Steps
- 7 Myths About Your Back Pain
- How to Prepare for Retirement Considering Inflation
- 5 Foods that Will Help Keep Your Mind Healthy
- Don’t Throw Away Those Used Coffee Grounds
- I’m 50 Years Old. Should I Keep My Life Insurance?
- Are Personal Items Covered by My Auto Insurance Policy?
- How to Spot Government Imposters
- 5 Mistakes to Avoid When Buying a Life Insurance Policy
- Do I Really Need Condominium Insurance?
- Happiness Through Healthy Food
- 5 Step Checklist to Choosing a Health Insurance Plan
- The Cost of Home Ownership
- 5 Creative Spring Décor Ideas
- 10 Ways to Maintain Healthy Joints
- Death and Taxes (and Insurance?)
- 3 Incredible Healthcare Smart Technologies Coming Your Way
- Do I Need a Long-Term Care Plan?
- Aging In Place – What You’ll Need
- Senior Diet: To Meat or Not to Meat
- What Is Road Trip Insurance?
- How to Take Care of Your Personal Intangible Assets
- Dream All-Inclusive Trips to Escape the Cold
- Choosing the Right Homeowners Insurance
- How to Get Health Insurance if You’re a Freelancer
- Safety Tips for Driving in Winter
- What to do if Your Travels Get Delayed Due to Weather or Flight Cancellations
- Ways to Locate a Lost Life Insurance Policy
- Critical Times in Life that You Need Life Insurance
- Is Working from Home Covered by Homeowners Insurance?
- Giving and Forgiving
- Overlooked Products to Consider When Planning for Retirement
- Why Buy Life Insurance on Children
- Things We Are Grateful for This Year
- What to Avoid When Switching to Medicare from the Public Health Exchange
- Maintenance Checklist for the Year-End
- How to Host a Successful Virtual Holiday Party
- Is One of These Factors Keeping You from Seeking Life Insurance?
- Is Pet Insurance Worth It?
- Ben Franklin: Father of Modern Insurance
- Who Invented Insurance Anyway?
- Common Senior Micronutrient Deficiencies
- Stacked vs Non-Stacked Uninsured Motorist Coverage
- The Art of Aging Well
- Insure What? Celebrity Body Parts Insured
- Using HSAs in Your Retirement Planning
- 6 Strange Insurance Policies You Can Buy
- How Much Do Millennials Actually Need to Retire Comfortably?
- How Valuable Is Cash Value Life Insurance?
- Mistakes You Can Make When Exercising at Home
- Why You Should Never Lie to the Underwriter
- Baby On Board! 9 Tips for Carrying Precious Cargo
- Forget Salad Recipes, Try a Salad “Matrix”
- Mortgages Dissected: Details to Know
- Will My Life Insurance Policy Cover Me If Something Happens While Traveling?
- 5 Most Common Estate Planning Mistakes
- I’ve Been Denied a Life Insurance Policy. Now What?
- Bucket List Ideas and Why It’s Important
- Insurance Coverage All Small Business Owners Must Consider
- Getting Fit Before the Medical Exam
- The Basics of Insurance APIs
- Don’t Lose Non-Refundable Down Payments with Travel Insurance
- 8 Gas Savings Tips During Summer
- It’s time for your end-of-the-year insurance review
- Wishing You a Happy Holiday Season And Healthy New Year
- Do You Know What These Key Insurance Terms Mean?
- Dates and deadlines for 2019 Individual Health Insurance Coverage
- It’s Medicare Open Enrollment
- It’s Medicare Open Enrollment Period – Let Us Help You Get Ready
- Answer These Questions to Help You Make the Best Medicare Coverage Choices