Insurance World

Is there such a thing as cheap home insurance? There may be a better question. Is home insurance really that expensive? Homeowner’s insurance may very well be the consumer’s best buy when it comes to insurance. There are multiple benefits and features that make the home policy unique. Most everything that the homeowner owns including the dwelling can be covered in some way by homeowner’s insurance. When you think of the magnitude of the coverage afforded by homeowner’s insurance versus the premium paid then you would have to agree that homeowner’s insurance is a very good buy. The rates on property insurance in general, have increased over the last ten years. Much of that has to with increased catastrophes like the hurricanes in Florida. The toxic mold problem that originated out west has also caused premiums to increase on a national basis. The home insurance buyer really needs to focus on a few areas to get the most for the premium dollars paid.

Accurate Dwelling Amount – This is the first most critical decision that you will make. The square footage of your dwelling has to be correct in establishing the replacement value of your home. The market value is of little use to you when you purchase insurance to rebuild the structure. Replacement cost is better for homes that have been built within the last 40 years. Check with your insurance company underwriting guidelines.

Replacement Cost or Actual Cash Value – This facet of your home insurance policy should be clearly understood. Replacement cost insurance on both your dwelling and its contents means that the insurance company will rebuild or replace your loss with like kind and quality. Actual Cash Value will calculate the replacement cost and then subtract for depreciation. The actual cash value policy is cheaper but you will have to come up with the depreciable amount out of your own pocket.

Deductible – Higher deductibles bring your premium down substantially. $500 to $1000 deductibles are common. This is a huge savings to you over the years and is your most valuable tool in lowering the cost.

We buy insurance all of our life. We sometimes do it indiscriminately. There are times when people will buy a home and the homeowner’s insurance policy is just something that is needed to make the closing run smooth. The home policy protects the largest asset that most of us will ever purchase and so it makes sense to learn the basics. The Homeowner’s policy has multiple benefits and features and is probably the best and most affordable policy that we will ever purchase. There is clearly a misconception about what homeowner’s insurance covers and what it does not cover. The homeowner’s policy protects us our home against perils. Perils are unforeseen events like fire or explosions. The home policy does not cover maintenance problems. This is where the misunderstanding begins. Deterioration or poor craftsmanship buy a tradesman is not covered under the homeowner’s policy. That kind of blanket coverage would make the homeowner’s policy unaffordable.

The homeowner insurance policy is very comprehensive. It protects all of your personal property along with the dwelling. Most policies are written on a replacement cost basis. That means that in the event of a total loss that your home and all of its contents will be replaced with like kind and quality of materials. Shopping for a homeowner’s policy is so much easier. Make sure that you have your current declarations page. You can either go online or contact a local agent. It is better to combine an auto and home quote to get the multi-policy discounts available.

There are a lot of additional riders that you can purchase on a homeowner’s policy. If you have items like jewelry, fine arts, and collectibles then you can schedule them with an all risk type of coverage. There are a lot of new endorsed benefits like identity theft and home day care coverage. The homeowner insurance policy is one of the most important insurance purchases you will ever make. Don’t sell yourself short. Explore all the possibilities when covering your assets. Use higher deductibles to lower the overall premium so that you can cover some of your most valued assets with scheduled riders.