Homeowners Insurance – Get Your Insurance Right

Want to buy
homeowners insurance that perfectly meets your requirements and looking for
tips on how to do it?  Selecting and
buying homeowners insurance is not that complicated. Here we bring you valuable
tips on how to get the best homeowners insurance.

How to Get the
Best Homeowners Insurance

Coverage for
Dwelling

Before buying
homeowners insurance, you should have clarity on things to be covered through
the insurance. Generally, homeowners insurance doesn’t cover jewelry, artwork,
and other valuables. If you have a structure like a pool, trampoline, or other
that may pose a threat to others and increases your liability an additional
coverage may be required. If your area is flood-prone or disaster-prone a
separate policy may be required. Enough information on flood-prone,
disaster-prone, and earthquake-prone areas can be obtained from US Geological
Survey Website (https://www.usgs.gov).

Coverage for Your
Belongings

Such types of
coverage protect you against damage to your property. Such belongings include
electronics, clothing, and furniture among the others. Your pipe may have
leaked, damaged due to natural disasters, your property may be vandalized. In
such a case, your insurance coverage will pay for replacing them. Here is a
word of caution. Some luxury items may not be protected by a homeowner’s
insurance and you might have to get additional coverage for them. So, if you
have jewelry, artwork, or collectible as your belongings, you need to have a
separate insurance cover for it.

Coverage for
Liabilities

While buying
insurance, you should also look for liability coverage. With this coverage, you
would be able to pay the legal fees if you have been sued for an injury or damage
done at your home. A visitor might get injured due to a dog bite, slip and
fall, and some other reasons and you may be ordered to compensate for it
through a lawsuit. With liability coverage, you may be able to pay for the
damage.

Coverage for Loss
of Use

There are times
when you are not able to use your home due to a natural disaster like a
hurricane. In such a case your home might get infected with mold, pests, and
other kinds of harmful organisms that may make your home inhabitable and you
may be forced to live outside. In such a case, your insurance will cover the
living expense that includes hotel bills, food, and other things required for
living outside.

Coverage for
Additional Things

Apart from these
basic types of coverages, there are instances when your home may be falling in
an earthquake or flood-prone area and you might need additional insurance for
that. If you are running a business and operating it out of the home you should
consider adding a separate cover for your business.

Decide Your Home
Insurance Coverage

While buying insurance, you must decide on how
much coverage you need to have. It is only obvious that you need to have an
inventory of all your personal belongings. You should take an inventory of it.
Taking an inventory is easy if you have the receipt of all the purchased items.
You should estimate your building and structure and per square foot cost of
construction if you need to rebuild it, if struck by a disaster. A construction
company or a realtor might help you in this regard. Some people also prefer to
add coverage for identity theft.

Factors That
Incur High Home Insurance Premium?

There are several
factors that may lead to a higher insurance premium for your policy. Here we
discuss major factors among them.

Your Building is
Old

An old home may
have gone through wear and tear that may have weakened its structure. In the
long years, the structure may have weakened which may have increased the risk.
Such things may lead to a high premium.

Materials Used in
Building

There are some
materials that are more prone to rotting and dangers than others. Some are more
susceptible to fire and termite. The insurance for home with asphalt roofs are
higher than those using tile or metal roof.

Location of Home

Some areas are
more prone to natural disasters than others. Areas with stormy weather
increased crime rates and are distantly located from a fire station require
more premium than those that do not have such disadvantages.

Pets at Your Home

There are times
when you have an aggressive dog that may attack your guests and you may have to
compensate for the losses. Such things are covered under the liability
insurance cover. So, if you have an aggressive breed of dog you might end up
paying a high premium. More details on dog bite liabilities can be had on the
Insurance Information Institute website.

Attractive
Features

Your building
might have a hot tub, trampoline, or swimming pool that might add to your
luxury quotient. These things may sound attractive, but they may put your
guests at threat. Houses with such features may incur a high premium.

How To Cut your
Homeowners Insurance Premium?

Want to buy home
insurance without splurging? It is worth doing. There are certain things you
can do to get homeowners insurance for a small premium.

Update your
Security System

Homes with state-of-the-art
security systems often incur a small premium. You should have the latest
security equipment along with an alarm that is monitored by a central security
station. If your security alarm is connected to your local police station then
it is better.

Not only you
should have a theft alarm but your home should also have a smoke alarm so that
any type of fire eruption can be checked in time and the fire can be
immediately put out to avoid any further damage. Most of the modern buildings
have CO detectors, deadbolt locks, and a sprinkler system. Having modern fire
safety can cut your annual premium significantly.

You should ask
your homeowners insurance agent to know which types of security systems are
approved by insurance companies.

PIC2

Increase Your Deductible

Like other forms
of insurance like car insurance and renter’s insurance having a higher
deductible may reduce your annual premium. But there is a flip side to it as
well. If it is a small amount and can be adjusted to your deductible. Your
insurance agent will guide you better on this. You can also seek a quote from
your homeowners insurance provider mentioning deductibles.

Bundle it with
Auto and Health Policies

The companies
that sell homeowners insurance also sell health and car insurance. And they are
able to provide you with low premium homeowners insurance if you bundle it with
health and auto policies. You should compare it with other companies to know
whether you are getting the cheapest homeowners insurance.

Look for Other
Discounts

Some insurance
companies offer discounts that are exclusive to their own or some particular
types of age groups. For example, some insurance companies offer house
insurance to retired people at a reduced price. They have reason to do it. For
them retired people stay more at home as compared to working people so their
homes are less prone to burglary or theft. In the same vein, as they stay more
at home, they can spot fire in their home and the losses can be checked in
time.

Have a Good
Credit Statement 

Like other forms of loan and mortgage, good
credit history is required to get homeowners insurance at a small price.
Because insurers go through your credit history before offering you a reduced
premium. The improvements in credit scores can be made by following a few
simple steps.

Pay your credit
card bills as per schedule.

Keep your
outstanding balance 30 percent or even less of your credit limit.

• You should limit
  your request for hard inquiries.
• You should try to
  improve your thin credit file.
• Use your old
  accounts to improve credit history.
• Pay your old
  debits to improve your credit history.

Compare Different
Companies

Want to get the
cheapest homeowners insurance but don’t know how? You should compare quotes
from different insurance companies. You should take an inventory of items to be
covered and talk to insurance agents who will guide you with which house
insurance provider covers you the best at the lowest price. You can also
request quotes from the leading insurance companies by using the request a
quote option available on their website. Once you have quotes from different
companies, comparison becomes easy.

Know That Market
Value and Insurance Value are Different

While buying
insurance you should have some basics clear. We should understand that market
value and insurance value are different.

Your home’s
market value can be defined as the price it worthwhile buying or selling it.

The insurance
value can be defined as the value of the coverage you need to rebuild the house
if your house is destroyed due to some natural disaster.

While determining
a homeowners insurance coverage, you should not include the land value to it.
Because insurance covers the cost of repair and replacement in the case of
damage. You can take the help of a property estimator

Review Your
Property Early

You cover a lot
of things with house insurance. Some of the things that are covered are
furniture, appliances, and other household items. No doubt jewelry and artwork
have a different package. But there are times when you want to remove some of
these belonging from your list. You might consider giving them to some relative
as you are not using them. If you do such a thing, you need to review your
property. If your coverage gets reduced your premium will also get small. So,
if you are looking for the cheapest home insurance, then these efforts are
worth it.

Different Types
of Homeowners Insurance

One size doesn’t
fit all and there are different types of home insurances to meet different
types of homes. Here we turn the spotlight on different types of homeowners
policy.

HO-1 Policy

It is the
simplest form of policy that covers some basic perils. It is also called bare
bones home insurance.

The policy is
meant for dwelling or home structures. 
The policy provides protection against 10 perils that are as follows.

• Fire or lightning.
• Hail or windstorms
• Riots or civil commotion
• Damage from aircrafts
• Damage from vehicles
• Explosions
• Smoke
• Malicious mischief or vandalism
• Theft
• Volcanic eruptions

You might think
that it is a big list but it misses some of the big things like protection from
flood, earthquake, and falling objects.

HO-2 Policy

This homeowners
insurance policy provides coverage to all the things covered under the HO-1
homeowners policy. In addition, it provides coverage to two extra perils that
includes damage done due to falling objects, excessive water flow due to flawed
plumbing, HVAC and home appliances. In a broad sense, it covers your home and
personal property. Here is the list of coverages.

• Discharge or
  overflow of water or steam
• Burning, cracking
  or damage to some household system.
• Heating of air
  conditioner or freezing of pipes
• Damage done due
  to electric current
• Damage done due
  to a falling object

HO-3 Policy

HO-3 also called
special form policy is one of the most common types of homeowners policies
available. The policy is very popular as a single-family home policy Apart from
your home, the policy also covers your personal property, liabilities, medical
bill and living out expenses. Here is the list of perils covered under this
policy.

• Threat due to
  defective construction
• Issues Related to
  Building Foundation
• Government
  Regulations
• Damaged due to
  pet or animals
• Damage caused due
  to corrosion
• Damage related to
  pollution
• Losses due to
  theft or vandalism
• Regular wear and
  tear
• Flood
• Earthquake
• Birds, rodents or
  vermint
• Mechanical issues
  
• Mold and Fungus
• War and Nuclear
  Hazards

HO-4

Even though we
are listing it here but HO-4 is essential a renter’s insurance. As renters don’t
own a home property so this insurance doesn’t provide coverage to a building
structure. It is beneficial for renters as it provides coverage to personal
property and liabilities. In case they require to move outside their homes they
will be provided with living expenses.

HO-5

In several
respects, this policy is similar to HO-3 but it covers almost all forms of
perils unless they are excluded. Due to its wide coverage, this policy is
costlier than HO-3. It provides coverage on an open peril basis. It is also
referred to as comprehensive home insurance.

HO-6

HO-6 homeowners
insurance policy is designed for condo-owners and co-op tenants. Through this
policy, the walls of the condo and everything within are covered. It provides
coverage to liabilities and living expenses. As condo owners only have
propriety over their units only. It is why the condo association has insurance
to cover common areas.

HO-7

HO-7 is akin to
HO-3 in various respects but it has been extended to cover mobile homes. This
policy is covered as a single-family home policy. Some of the major things
covered under this policy are as follows.

• Trailers of
  different kinds including fifth-wheel trailers
• Single wide
  mobile homes
• Double wide
  mobile home
• Belongings
• Liabilities
• Medical payments

HO-8

This homeowner’s
insurance is designed for homes that don’t meet the standard criteria set for
the insurance. Buildings with high-risk fall in this category. Older and
dilapidated homes fall under this category. Similar to HO-1, it is also called
a peril policy and provides coverage to 10 perils.

Home Insurance –
Optional Coverage

Flood Insurance

This coverage
protects your home and belongings in case they get damaged due to a flood. So,
if you are living in flood-prone areas this optional house insurance is worth
considering. Here it is worth noting that this is a separate policy with its
own deductible.

Earthquake
Insurance

Like flood
insurance, earthquake policy also has its own deductible.  The policy protects you in the event of
damage caused due to an earthquake. 

Water Backup of
Sewer

Most of the homes
face the problem of water backup of sewer and drain. You can buy insurance to
safeguard against this peril.

Insurance for
Other Structures

Is there any
building or structure that is unattached to your home and you are seeking
insurance for it? You can have a gazebo, shed, or garage. You can get insurance
for them.

Personal Umbrella Insurance

Medical Payment
Coverage

This insurance
provides for medical expenses which are caused due to an accident at a customer
premise. This insurance provides immediate expense for treatment without
getting into details of who is at fault.

A Brief Profile
of Best Homeowners Insurance Companies

Homeowners
insurance is a crowded space. There are a large number of companies making big
claims. Due to the large number of options available, insurance seekers always
find them in a tight spot. Here we profile some of the prominent insurance
companies.

Amica

Location – 100
Amica Way, Lincoln, RI

Year of
Foundation – 1907

Official Website
– https://www.amica.com/en.html

Rating – A+

Financial
Strength

Assets as of Dec.
31, 2019 – $5.4 billion

Policy counts as
of Dec. 31, 2019 – 1.6 million

Subsidiary
Companies:

• Amica Life
  Insurance Company
• Amica Property
  and Casualty Insurance Company
• Amica General
  Agency, LLC
• Services offered
  –
• Auto Insurance
• Home Insurance
• Life Insurance
• Condo Insurance
• Renters insurance
  
• Flood Insurance
• Retirement
  Solutions
• Marine Insurance
• Motorcycle
  Insurance
• Small Business
  Insurance

Auto-Owners

Full Name – Auto
Owners Insurance

Location –
Lansing, Michigan, United States

Year of
Foundation – 1916

Official Website
– https://www.auto-owners.com/

Rating – A++ (The AM Best
Company)

Financial
Strength –

Total assets US
$29.7 billion (2020 Annual Report)

Subsidiary
Companies  

• Auto-Owners
  Insurance Company
• Auto-Owners Life
  Insurance Company
• Owners Insurance
  Company
• Home-Owners
  Insurance Company
• Property-Owners
  Insurance Company
• Southern-Owners
  Insurance Company
• Atlantic Casualty
  Insurance Company
• Concord Group
  Insurance Companies
• Capital Insurance
  Group
• Services Offered
• Insurance
• Mutual Funds

Erie Insurance

Full Name – Erie
Insurance

Location – Erie,
Pennsylvania, United States

Year of
Foundation – 1925

Official Website
– https://www.erieinsurance.com/

Rating – A+ (The
AM Best Company)

Financial
Strength –

Total assets – US
$29.7 billion (2020 Annual Report)

Subsidiary
Companies  

• Erie Insurance
  Property & Casualty Company
• Flagship City
  Insurance Company
• Erie Insurance
  Company
• Erie Insurance
  Company of New York
• Erie Family Life
  Insurance Company
• Services Offered
• Homeowners
  Insurance
• Renters Insurance
• Condo Insurance
• Mobile Home
  Insurance
• Personal
  Valuables Insurance
• Flood Insurance
• Auto Insurance
• Motorcycle
  Insurance
• Boat Insurance
• Collector and
  Classic Car Insurance
• Life Insurance
• Business
  Insurance
• Restaurant
  Insurance

American Family

Full Name –
American Family Insurance

Location –
Madison, Wisconsin, United States

Year of Foundation
– 1927

Official Website
– https://www.amfam.com/

Rating – A
(Better Business Bureau)

Financial
Strength – $31.1 billion USD

Subsidiary
Companies 

• American Family Mutual Insurance Company
  (AFMIC)
• American Family
  Brokerage, Inc. (AFBI)
• American Family
  Insurance Company of Ohio (AFICO)
• American Family
  Life Insurance Company (AFLIC)
• American Family
  Securities, LLC (AFS)
• American Standard
  Insurance Company (ASIC)
• American Standard
  Insurance Company of Ohio (ASICO)
• Amfam.com Inc.
  (AMFAM)
• HomeGauge
• Homesite Group
  Incorporated
• Main Street
  America Insurance
• Moonrise, Inc.
• Networked
  Insights
• PGC Holdings
  Corporation

Services Offered 

• Vehicle Insurance
• Car Insurance
• Motorcycle
  Insurance
• RV & Camper
  Insurance
• Boat Insurance
• ATV Insurance
• Snowmobile
  Insurance
• Classic Car
  Property & Business
• Home Insurance
• Renters Insurance
• Condo Insurance
• Manufactured Home
• Farm & Ranch
  Insurance
• Business
  Insurance
• Landlord
  Insurance
• Life Insurance
• Umbrella
  Insurance
• Identity Theft
  Insurance
• Credit Monitoring
• Health Insurance
• Travel Insurance

Nationwide

Full Name –
Nationwide Mutual Insurance Company

Location – One
Nationwide Plaza, Columbus, Ohio, U.S.

Year of
Foundation – 1926

Official Website
– https://www.nationwide.com

Rating – A+ p (AM
Best)

Financial
Strength

Total Assets –
US$253.6 billion (2019)

Subsidiary
Companies

Nationwide is a
group of several companies that deals into property, casualty, farmland,
insurance, retirement and asset management. He we list some of them.

• Nationwide
  Affinity Insurance Company of America
• Nationwide
  Assurance Company
• Titan Auto
  Insurance of New Mexico, Inc.
• Titan Indemnity
  Company
• Victoria
  Automobile Insurance Company
• Victoria Fire
  & Casualty Company Allied General Agency Company
• Allied Group,
  Inc.
• Allied Property
  and Casualty Insurance Company
• Nationwide
  Agribusiness Insurance Company
• Scottsdale
  Insurance Company
• Scottsdale
  Surplus Lines Insurance
• Nationwide
  Affordable Housing, LLC
• Nationwide
  Alternative Investments, LLC

Service
Offered 

• Business
  Insurance
• Auto Insurance
• Life Insurance
• Pet Insurance
• Homeowners
  Insurance
• Renters Insurance
  

USAA

Full Name –
United Services Automobile Association

Location – San
Antonio, Texas, United States

Year of
Foundation – 1922

Official Website
– https://www.usaa.com/

Rating – A++ (AM
Best Company)

Financial
Strength

Total Assets –
$173.732 billion

Subsidiary
Companies

Which are the
most expensive states for homeowners insurance?

Here is the list
of US states with the cheapest homeowners insurance.

1. Oregon
2. Utah
3. Idaho
4. Nevada
5. Wisconsin

6. Arizona
7. Delaware
8. Washington
9. Ohio
10. Maine

Also Read

How to Get an Insurance – A Complete Insurance Buying Guide