Home Insurance-an Important Piece of Homeownership

Real Estate

Home Insurance-Selecting the Right Policy for YOU and YOUR Family...

While you may have shopped long and hard before settling on the insurance policies for your family's health and for your car, you should also compare prices just as carefully when insuring your home. With a little research, you could save yourself hundreds of dollars a year on home insurance. In fact, you may be able to save using the same insurance carrier you have for auto, renter's or other types of insurance.  Begin by taking these simple steps:

** Increase your deductible. To reduce insurance costs, make sure you carry the highest deductible possible. The higher the deductible, the lower the premium you will pay. Your savings could be as much as 25% simply by increasing the deductible from $100 to $1,000. Just make sure you have enough available cash set aside to cover the larger deductible should an expected event occur.

** Improve home security. Most insurance companies will offer a discount off your policy premium if your home is equipped with smoke detectors, a burglar alarm, dead bolts, fire extinguishers, and possibly when your home is in a Neighborhood Watch area.  Alarm systems connected to a third-party monitoring system will earn an even higher discount.

** Consolidate your policies. As stated above, you may be able to insure your home with a company you already do business with. You can receive “multiple coverage” discounts by using one insurance carrier for all of your insurance needs.

** Verify distance to fire stations and windstorm areas.  Your premiums will be lower if your home is located within five miles of the nearest fire station and within 1,000 feet of a fire hydrant, because these enable public services to respond quickly to emergencies. In hurricane-prone areas of the country, you can reduce your insurance premium by installing approved hurricane shutters.

** Check for available record and renewal discounts. If you have gone without a claim for 3-5 years, you may be eligible for a discount. Most companies that service a policy for three consecutive years will also offer a discount based on longevity of service, so remember to ask about this once you've been with a company for awhile.

** Mortgage-free home additional discount.  If your home is paid for and you do not have a mortgage in place, some insurance companies offer a discount.  Make sure you ask about this if you own your home outright.

** New construction and newly renovated homes discount.  Be sure to ask if you qualify for discounts if your home is new or has been rebuilt within recent years.

** Investigate additional incentives. Non-smoker discounts, early retirement incentives, and discounts for homeowners with live-in housekeepers are some other possibilites to inquire about.

Mortgage lenders require borrowers to carry home insurance, but even those who own their homes outright should choose to be protected. The typical homeowner policy covers loss or damage to the property as well as personal liability, which covers lawsuits from injuries or illnesses related to the property. Losses under a homeowner’s policy will be paid out on either the actual cash value basis or on a replacement cost basis. With the “actual cash value” method, the policy owner will receive the depreciated value of the damaged property. The older an item is, the less money you may receive for its replacement. Under the “replacement cost” coverage method, the policy owner is reimbursed the amount it costs to actually replace the lost or damaged items.  The premium on this type of policy is generally higher.

Consider the difference between policies considered “all risks” or “named perils.”  "All risk" policies cover any losses due to any peril not specifically excluded from the policy.  "Named peril" policies cover losses due to perils specifically listed in the policy, such as fire, windstorm, hail, and other weather-related losses.

Common Coverage

Homeowner’s policy packages combine more than one type of insurance coverage. There are four basic types of coverage:

1) Dwelling and Personal Property — If a car plows into your home's picture window, your homeowner’s policy will most likely cover the cost of repair to the damaged structure.

2) Personal Liability — If someone trips on your front steps and is injured, your policy may cover the legal fees if they decide to sue you.

3) Medical Payments — If your home has high radon levels, medical treatment for visitors to your home who suffered radon poisoning may be included in your coverage.

4) Additional Living Expenses — If your home becomes uninhabitable and you have to move out temporarily, you may be paid expenses for time spent in a hotel. 

How to Collect on Your Policy

All insurance companies operate under conditional contracts, meaning that policy owners are responsible in part for loss recovery.  In other words, if you have an insurance policy and suffer a loss, you must do these things:

1) Notify the insurance carrier ASAP after a loss has occurred.

2) Protect the property from further damage by making repairs.

3) List personal items damaged to include descriptions, actual value, and replacement cost.

4) Be prepared to show an insurance company representative the claimed damage.

5) Complete an accurate statement for the insurance company, explaining circumstances surrounding the loss.

The process of choosing the right Home Insurance Policy can be daunting. Finding out which companies are out there, asking the right questions as outlined in this article, and then deciding what is best for you and your family can seem overwhelming.

The Reviews.com team can help guide you. After reading hundreds of reviews and talking to service contract experts, making multiple phone calls to quiz various providers on their coverage and critiquing their service agreements, this company believes they have found the ones that rose above the competition. Their guide to choosing the best home warranty system is now available to you and you can access it here on their website.

In addition, here are some local companies you can contact to inquire about what they have to offer here in Delaware:

Kitty Lyons, Liberty Mutual | 302-369-9904 x53418 | catherine.lyons@libertymutual. com

Provey Powell, Jr.-Powell Insurance Agency LLC, Allstate | 302-992-0100

Bob Simmons, State Farm Insurance | 302-698-1970