Everyone says “home sweet home.” They say it for a reason.
Home is the place where we unwind after a hectic day at work. Where we see our kids grow. It’s a world of our own where outsiders don’t have entrance, unless we allow them.
Home insurance reminds us of unfortunate incidents. Fire, hurricane, any other natural calamity – these are every homeowner’s worst nightmares. Paying the insurance premium (which is often a hefty sum), is also a concern for many. But just as bitter pills are taken to keep us healthy, home insurance is there to ensure there’s always a roof above our head.
Here are few home insurance tips for you. Follow these tips to get quotes on the most comprehensive and competitively priced home insurance policy:
Identify the risk factors
Like every insurance type, home insurance premiums are affected by few factors. The risk factors are those that increase the premium cost. Homeowners need to identify these factors to cut down on the cost of premium. There can be hundreds of such factors, but insurance companies mostly observe:
- Characteristics of the area in which you live – an area with high crime rate translates to risk of home invasion by burglars. Also, proximity to an industrial business may create a fire hazard.
- Trampolines and pools can increase the premium. A pool in the backyard or a trampoline is great for recreation. But family members and even outsiders can get injured.
- Age of the house is another risk factor. An old house is vulnerable to damage. That’s why, there’s a separate insurance market for homes older than 50 years old. Repair cost usually increases with time.
These are among the common risk factors, but there can be plenty other factors. Talk to your insurance agent to know about them in detail.
Poor credit score
Having a poor credit score is like a weak immune system, which makes the body susceptible to diseases. A poor credit score can trouble every financial aspect of your life, irrespective of where you live. If you are looking for to buy a house in upstate New York, and needing home insurance Rochester New York quotes, a poor credit score throws a wrench into your chances of finding a low-priced homeowners insurance policy.
However, you can have a home insurance policy despite having a bad credit score as some carriers do not factor in your credit score when determining your rate. But, if you want to search all viable options to find the lowest rate, most carriers will factor in your credit. With a bad credit score, insurers will conclude that you don’t pay your bills on time and impose a higher premium. So, improve your credit score.
Is your home safe?
You may have a new and well-furnished home, but if it’s not secured, insurance premiums will go up. To secure your home, install fire and burglar alarm, update the heating system, and make sure the backyard, the driveway and the stairs are all well-structured and don’t present any hazards.
It’s wise not to have a wood burning stove in home. If you have one, send proof to your insurance carrier that a licensed professional has installed the stove, meeting all the code requirements. Additionally, install smoke detectors in your home and test them regularly.
Understand your coverage
Home insurance coverage is limited. For instance, insurance companies refuse to cover acts of God. Also, earthquake or flood victims cannot expect insurance providers to pay for fixing their houses (unless you purchase that coverage separately). There are other conditions that limit your home insurance coverage. Talk to the insurance company and ask them upfront what you will be covered for.
Here are some of the important aspects of a home insurance policy:
- Normal replacement cost: Insurance companies are liable to pay full replacement cost if the house is destroyed.
- Declaration pages: The policy should have an embedded annual statement from your insurance provider, revealing your coverage and premium amount.
- Guaranteed replacement cost: What if the cost to replace your house outreaches your coverage? If you have guaranteed replacement cost coverage, the insurance company will still pay. It won’t pay an infinitely high amount, though. Typically, insurance companies pay 20% to 25% more than the actual coverage.
Look for these clauses in the policy. Whether you are shopping for Rochester NY home insurance or elsewhere, buy a policy only if you’re comfortable with the terms of the policy.
Check with local builders on construction values
Many homeowners ignore checking into this. Checking with local builders prior to buying home insurance can save you plenty of money. First, it can give you a fair idea of how much you must spend to rebuild your home. Simply consult with a local building contractor for a quick estimate.
Besides cost estimation, get yourself familiar with the latest building codes in your locality. The codes tend to change from time to time. So, get yourself a copy of the most updated building codes.
Correct valuation
Above everything, you need to have a correct valuation of your house. Contact an assessment company and have an assessment done. Don’t depend on any guesswork that’ll overvalue or undervalue your home as you may end up choosing a policy coverage that’s either not sufficient or unnecessarily high.
Summing up
None of the tips discussed in this article are difficult to follow. You don’t need to be an expert in home insurance to understand them. So follow these tips and select a policy that is easy on your wallet, yet meet your home insurance needs.
It’s good to know that there is guaranteed replacement cost clauses to help ensure that the insurance company will cover all the costs of replacing your home. It makes sense that rebuilding your home would cost more than your house originally since the materials would all have to be brand new. I know I would want that guaranteed replacement cost for my own house!