Like most policies, homeowners insurance can be overwhelming, confusing and too often forgotten about until you have a claim. In our quest to educate our clients and help protect their families and assets, here are five topics that need to be discussed with your agent and taken into consideration when purchasing homeowner’s insurance.
1. How much coverage do I need? It is critical to insure your home for the reconstruction value and not the market value. Not only do market values fluctuate depending on the economy, but it also includes the value of the land where the home is situated. If you have a total loss, having your home covered appropriately will ensure that you are able to rebuild a home of like kind and quality. We have tools available to help determine what it would cost to rebuild your home in today’s construction market. Year built, square footage, number of stories, roof and foundation type, bathroom details and custom features are just a few of the details that are taken into consideration.
2. What factors impact my homeowner’s premium? Each company takes into consideration a multitude of variables when determining premium. Variables may include the location of the home as it pertains to the nearest fire department, fire hydrant, loss history, insurance credit score and continuous coverage to name a few. In addition, things like number of bathrooms, roof renovation dates and heat type impact rates as well.
3. What is an appropriate liability limit for my homeowner’s policy? In today’s litigious environment, we recommend a minimum liability limit of $300,000. That being said, you can increase your liability limit to $500,000 for about $12.00 per year– significantly higher protection at a very reasonable premium. Now that you are a homeowner, you’ve got more assets to protect; so opting for a higher limit is a wise decision. If you feel the $500,000 limit is not adequate, a personal umbrella policy is a great way to obtain more protection with limits starting at $1 million and available with certain companies up to $50 million.
4. Will my policy cover flood or earthquake? No, these two perils are specifically excluded on a homeowners policy and must be either endorsed (added) on to a policy or require that a separate policy be written. If you have concerns about whether or not your home is prone to a flood loss, we can complete a flood zone determination and help you determine if this coverage is something to consider.
5. What discounts are available on a homeowner’s policy? The most significant discount is the multi-policy discount (home and auto), which can be as much as 20 percent with some companies. Additional credits include: new home credit, new roof, central station alarm systems, loss free. There are many more, so be sure to discuss with your agent.
Ultimately, our goal is to provide you with the confidence and peace-of-mind in knowing that your home, which is often times your biggest asset, is adequately insured. We are happy to guide you through the process and customize a policy that fits your needs.