By Becky Quinten
Homeowners insurance provides two benefits: It protects your property and assets, and it’s required by your mortgage company. If you fail to obtain homeowners insurance, your lender is able to provide it for you. That may be a costly error on your part. Renters need renters insurance to protect their property, as your landlord is not responsible for your personal property.
Your homeowners insurance covers your home and other structures on your property, your personal property, loss of use, medical payment in case of an accident on your property, your personal liability in case of an accident on your property and peril (fire, smoke damage, theft, ice damage, etc.)
Policies are usually bundled and additional coverage, such as sink hole and earthquake insurance, must be added to your basic policy. There is an additional fee for these policies.
Flood insurance is normally not covered by your homeowners policy and usually is covered by The National Flood Insurance Program. You can determine if you need flood insurance before you purchase a property by having a flood survey done on your property. The survey is not expensive.
Title insurance purchased when you buy a home does not cover the homeowner — it covers the bank against loss. Separate title insurance is available protecting the homeowner.
Like your health insurance your homeowners insurance has a deductible. Premiums are based on your home’s characteristics. Do you have a pool? What will it cost to rebuild your home? How is it constructed? How far away is it from fire services? What is the age of the property? What is your community’s insurance claim history? Are your pets considered a liability? Do you have a home business?
Insurance companies’ premiums vary widely. Purchasing bundled policies (home and auto) may qualify you for lower premiums. Don’t be shy about asking for discounts. Your insurance company may ask to examine your roof, fireplace or wood stove to confirm they are up to code and safe.
Often, once we purchase the original policy, renewals are shoved into a drawer and forgotten. This is a mistake that could cost you thousands of dollars. You may be underinsured, overinsured, missing significant discounts and paying too much.
Be ready to provide proof you installed a new roof (you may get a discount) or improved the property in a manner that could reduce potential claims. Keeping your property in good condition will decrease your insurance risk, keep the value of your home up and provide a more comfortable dwelling for your family to enjoy.
It’s a good idea to check the state’s insurance department website. It provides information about rates and coverage comparisons and gives you talking points when shopping for coverage. Also check independent rating agencies to confirm the insurance companies’ financial stability.
Talk with your neighbors and ask who insures their property, and find out if they are satisfied with their coverage and service. Word of mouth and unbiased personal narratives can be invaluable when selecting an insurance provider.
Above all, it is critical to get identical coverage estimates so your comparison will be fair and you don’t lose coverage you may regret losing. Always get the quotes in writing and confirm the agent is a licensed insurance agent.
Review your insurance annually when your policy rolls over into the New Year and document your valuables with photographs or videos.
By Becky Quinten