Many people think of home insurance as a necessary evil. The truth is that it might feel like that, but only until you need it. At that point, it will feel like a savior. You’ll definitely be very glad you have home insurance when you get your financial life back.
Home insurance is meant to protect what’s very likely your biggest and most valuable asset.
You’ve worked hard for what you have. You put in much time to be able to afford your home, and you now put in much time and effort in keeping up with that home. Therefore, it only makes sense that you you need to protect it from the myriad of things that can cause it harm.
The big problem is that most people are confused when it comes to insurance in general, much less something as important (and sometimes complicated) as home insurance. There are things that you need to understand about home insurance ahead of time, before an instance occurs where you end up needing it.
So in this post, we’re going to give you…
7 Tips to Buying Home Insurance, Getting the Best Bang for Your Buck, and Being Ready to Use It If Needed…
Tip #1 – Know the Exact Value of Your Home and How Much Home Insurance You Need…
One of the most important things to understand from the very beginning is how much insurance you’ll need. First you’ll need to know the actual value of your home. If your home is damaged or destroyed, you’re going to need to know what it will cost to replace the entire structure… or that portion of the structure which is damaged.
A home builder or assessment company should be able to give you the truest value.
This is not a time to guess. Establishing your home’s value is not a do-it-yourself project. Nor is it a good idea to allow your insurance agent to be the one to solely establish that value. Again, this is your biggest asset and you’ll want to be sure you’ve got the fairest value.
Tip #2 – Understand the Risk Factors That Your Premium Will Be Based Upon…
It’s important that you realize your premium is based around the risk that the insurance company is taking by selling you the policy. In other words, the higher the risk that something will happen and they’ll have to pay you for damage, the higher the premium will be.
Things like the crime rate in your neighborhood, your living habits, where on the block your home is located, how close you are to highways and busy areas, trees around or near your home…
everything that you can think of will be assessed and will take part in the factoring of your premium.
Going into it with this knowledge will actually help you and we’ll better explain how in Tip #3…
Tip #3 – Know and Utilize All of the Things That Can Actually Save You Money on Your Premium…
While there are tons of risk factors that can drive up the cost of your home insurance premium, there are also many factors that can save you money on your policy, too. It’s important to know this so that you get all the discounts available to you.
For instance some things that might earn you a discount include:
• A home burglary alarm system
• Dead bolt locks
• Fire alarms and sprinklers
• Updated heating systems
• Updated wiring and electrical system for the home
• A home near a fire hydrant or fire department
• A home located near a police department
• Well-structured and maintained stairs, sidewalks, driveways, and entrances (less chance of injury),
Basically… anything you can think of that might make your home safer, and less likely to catch fire or injure a guest or passerby can give you a discount on your premium. Furthermore, having good credit can save you money as well.
Tip #4 – Take Inventory Of Your Possessions and the Dollar Amounts…
Your homeowner’s insurance covers the structure and dwelling of the home, as well as the home owner’s possessions.
This also is not a time to guess. You likely have about $20,000 worth of personal possessions in your home at any given time. Looking around your home you may not realize that, but it’s absolutely true.
So make a list of all your belongings and the value of those belongings based on receipts and purchase dates. This way if you ever need it you’ll have a concrete list, and not something constructed from memory, where things could get forgotten or undervalued because you have no proof.
You may even want to take photographs of the items on your list, and definitely keep receipts for all new items purchased.
Tip #5 – Keep Your Inventory List Safe…
One thing you don’t want to do is take the time to create an inventory list and then not have that list available when you need it.
If you leave it laying in a filing cabinet or shoebox inside the home, chances are in the case of a fire or some other tragedy you will no longer have that list. That’s why it is recommended to keep the list inside a fire-proof safe (along with your insurance policy, copy of your mortgage, and important papers for family members)…
Or you can keep it in your bank’s safety deposit box.
Tip #6 – Know Exactly What Your Covered For…
and If You’ll Need Extra Insurance…
Something that happens much more often than it should is that people don’t understand their coverage. Of course it’s not always that simple to understand. People don’t read their policy because a) it’s boring as heck and b) it can be very complicated.
However, it’s crucial that you know what you’re covered for so that when it comes to filing a claim you’re absolutely prepared.
Understand that you you’ll likely not be covered for things like floods or earthquakes. These will be things that you’ll have to decide on getting extra insurance for.
If you don’t understand your policy take it to someone who does and have them look it over and explain it to you. A real estate lawyer, an attorney or accountant, anybody who can read and comprehend it better than you would be a good choice. If anything, simply write down the things that you don’t understand and bring those questions to the types of people who will.
Tip #7 – Get Exact Instructions on How to File a Claim, Including Numbers to Call and Who to Speak To…
The last thing that you’ll want to be doing in the face of a tragedy is scrambling to get the right people on the phone, and instructions on how to do things. You’ll want to move fast and get the ball rolling on your claim right away, so that you can more quickly be compensated for your losses and/or get funds to pay for any displacement you may experience.
So there you go. While there are plenty more tips we may cover in more detail in a later blog post, these are some basic things that you’ll want to think about when it comes to home insurance. – http://www.hanoverfire.com/