Have your recently purchased a new home? By doing a little bit of research into home insurance policy basics, you can save on your yearly home insurance.
Here’s some quick tips to keep you in the know
Premiums & Discounts with Insurance
Higher deductibles will lower the premium that the insurance company charges. The key is to have enough savings in the bank to cover any emergency expenses. There are many discounts offered for things like smoke detectors, burglar alarms, dead bolts, fire extinguishers and more. Often, if you bundle your coverage (such as a home and auto bundle), you will be offered another discount. Take advantage of these, just make sure you’re getting the best deal that you can.
Going without a claim for 3-5 years may get you a discount. Some insurance companies reward long service with a discount. You can offer discounts to people who have paid off their mortgage. Don’t forget to let your insurance know if you are a non-smoker, taken early retirement, or have a live-in housekeeper. You can even get a discount if your home was built or rebuilt within the last 10-15 years. Need a new roof? Ask for a discount!
Home Insurance Coverage
Mortgage lenders require borrowers to carry insurance, even if you own your home. Policies pay settlements on the actual cash value or replacement cost. The “actual cash value” method entitles the owner to the depreciated value of the damaged property. The “replace meant cost” coverage model, however, costs more, but pays the same amount to actually replace lost or damaged items.
“All risk” policies cover losses from any peril not specifically excluded from the policy. A “named perils” policy covers losses from perils that are specifically listed on the policy. Be sure to check out flood and earthquake insurance instead of going for an “all risk” policy.
A Homeowner’s Policy Basically Covers:
- Dwelling and Personal Property. This should cover damage to structure.
- Personal Liability. If someone trips on your steps and sues you, this may cover any legal fees.
- Medial Payments. This may cover medical treatment for visitors who suffer injury or illness in your home.
- Additional Living Expenses. If your home becomes uninhabitable, this would cover expenses for your time in a hotel or alternate living solution.
You are responsible to notify your insurance for loss recovery. To prevent losing coverage and increase you ability to get a settlement, notify your carrier immediately, make repairs to prevent further damage, create a list of personal items damaged, schedule an insurance representative to see the damage, and, finally, complete a statement explaining circumstances for the insurance company.