When purchasing a home, the lender or mortgage company responsible for the home loan will ordinarily insist upon some degree of home owner’s insurance—the claim being that the lender, since their money is invested, needs an acceptable level of security should something happen. But the truth is that home owners have a great deal more at stake than lenders—in essence, not just the brick exterior, foundation, or track lighting, but sentiments, furniture, and all the trimmings and trappings that transform a house into a home. Consequently, home owners should take care to purchase coverage beyond the cost of the house, insuring possessions as well.
Oftentimes, home owner’s insurance provisions will be included within the monthly obligations of mortgage payments. Before soliciting home owner’s insurance ratings from competing companies, make sure you are not doubling up on coverage. If the bank has supplied some degree of insurance, examine the specifics—it may be possible, if you are dissatisfied with coverage limitations, to independently secure home owner’s insurance that better appeals to your circumstances. However, since banks and lenders buy home owner’s insurance in bulk, premiums and deductibles are routinely lower than singular plans offered by insurance providers (think Costco).
Many factors help determine premiums, coverage, and deductibles when soliciting home owner’s insurance ratings. Some are amendable (smoking, fencing off one’s pool); some are not (percentage of house comprised of brick, number of stories). Discounts for home owner’s insurance ratings include: Dogs (usually only guard dogs, like German Shepherds, can qualify), a home security system, fire extinguishers, and fire-repellent roof shingles. But, dozens of other variables are computed when determining home owner’s insurance ratings. The number of stories, date of construction, type of heating system, number of fireplaces, and Approximate Dwelling Value (which is the total home appraisal value minus the land value) all vie for an insurance agent’s attention.
There is a direct causal relationship between possible disaster and many of the aforementioned variables. For instance, if a home owner uses an unfenced swimming pool, the chances of an infant drowning are severely raised, thus premiums consequently rise. Conversely, a guard dog or security system or a dwelling on a higher floor decrease the chance of burglary, therefore premiums will, in turn, be decreased. Since so many factors enter into the equation, searching for competitive home owner’s insurance ratings can be a chore of enormous proportions. Fortunately, bevies of online sites allow home owners the ease of filling out only one application which is subsequently sent to several insurance carriers. Procedures such as these foster competition between home owner’s insurance suppliers and ultimately decrease premium amounts and increase coverage specifics. For this reason, if you are internet savvy, employ online options.
Home owner’s insurance ratings are easier than ever to procure; just be sure that the plan you decide upon is right for your situation. Make sure that you’re not doubling up on coverage and that you are receiving all applicable deductions (for instance: if you are a non-smoker you should demand lower premiums since the potential for house fires is significantly diminished). The important thing to remember, when considering home owner’s insurance ratings, is how important your home really is—make sure to spend adequate time and money for proper coverage. Otherwise, your house and home could go up in smoke.
By Jean-Pierre Lacrampe