Insurance for Home Owners
Anyone who owns a home or plans to buy a house in the future should take the time to learn about insurance and home owner’s insurance companies. Home owner’s insurance must be purchased, according to law, at the time of closing. When purchasing home owner’s insurance, decisions must be made about how much to insure the home and its contents for, what kind of natural disaster coverage you may or may not want, and how large or small you want your deductible amount to be. It is important to consider all of these things carefully and to make yourself knowledgeable about insurance companies before you commit to coverage that you may find inadequate or unnecessary later.
Getting Insured
Many services and products can be obtained at the most reasonable prices by shopping around, and home owner’s insurance is no exception. Many home owner’s insurance companies exist, and researching and comparing them may help you to both learn more about homeowner’s insurance and get a better deal. Many companies offer free quotes, which can be the quickest way to compare rates. To compare specific policies and coverage, however, it may be necessary to speak further with an agent about your particular needs and situation. Although it takes more time and effort, it may be worth it to speak with and compare the offers of several different home owner’s insurance companies.
Things to be Aware of
There are several common characteristics of home owner’s insurance policies that some consumers are not aware of before gaining firsthand experience. One important concept is that you must insure your home for whatever percentage of its value you would like to be replaced in the event of a total loss. If you would like it to be completely rebuilt, you must insure it for 100 percent of its replacement value. Most policies pay to replace personal property inside the house only at the value determined after adjusting for depreciation, which is also something to keep in mind. If you have any items such as art or antiques that are particularly valuable, you will need a policy endorsement to cover them fully. People living in certain locations should be aware that damage caused by natural disasters such as flood and earthquakes is not usually covered in a standard policy. If a disaster causes you to evacuate your home, a typical policy will cover living expenses only up to 10 percent of your home’s coverage.
Tips for Buying Home Owner’s Insurance
If you are buying a new home, make sure to get a home disclosure report so that you are aware of any problems the house may have had. Large problems could potentially make it difficult for you to get coverage.
One thing that can help you get good rates on home owner’s insurance is maintaining good credit, because many industry professionals view your credit report as indicative of potential future losses.
Of course, it makes sense to find several home owner’s insurance companies that are known for being consumer-friendly to choose from. Consumer Reports magazine has a good list of companies based on a survey they did of over 14,000 people between 2000 and 2003.
Once you are in your home and have settled on a company and policy, you may want to be careful about making claims. Insurance companies track how many you file, and frequent claim activity can in some cases be grounds for non-renewal.
After you have owned your home for a while, you will probably want to check something called your CLUE, or Comprehensive Loss Underwriting Exchange, report. Insurance companies use this information to help gauge the risk of clients.
By Kristin Cleveland