Home insurance is necessary to protect not just your belongings, but also your physical home. While no amount of money can replace pictures of your children, the coffee table you bought when you first got married, or the energy that you put into making your house a home, home insurance exists so that when you start over from a theft or storm or fire, that you don't have to go into your own pocket to begin anew.
Home Insurance Basics
Before you sign any policies, it's important that you know the home insurance basics so that you make an informed decision with full context. Don't be alarmed if you paid $200,000 for your home and it's only insured for $100,000. Remember that your lot has value even without a house on it, and that property won't burn down even if the house does. So the "dwelling" coverage is always going to be less than what you paid for the house.
Home Insurance Dwelling
Property/Dwelling/Contents--There are three figures that will surround any policy: the cost of the property (what you paid for your home), the dwelling insurance rate (cost to replace your home in full), and your contents rate (cost to replace all of your possessions).
"Contents" is basically anything that would fall out of your home if you turned it upside down and shook it. If you own a lot of expensive things, it's best to:
get higher contents insurance and
video tape your belongings to prove to adjusters what you own in case you ever need a claim for your home insurance.
What's Not Included, Home Insurance Riders
There will be a few things that are not going to be covered under the typical home insurance policy. Anything that is not covered on your policy, but is covered on a separate, appended policy is called a "rider." For example Jewelry is covered, but usually only up to $1,000. To protect any family heirlooms or your wedding ring, you'll need to take out a separate rider for those items. Another example would be Home Flood insurance, which is often required in certain areas, is a separate piece to your home policy. The same goes for wind and hail.
Is Home Insurance Required?
If you are buying a house, you will need to secure home insurance before you close. The bank will require this so that you protect their investment. If you own your house outright (i.e. there is no mortgage on it), you technically do not have to carry home insurance. It's a great idea so that you don't get left holding a big bill and nowhere to live should the worst occur, but technically, it is your property and if you don't want to insure it, you don't have to. The wise thing to do is to keep a home insurance policy even once the title is transferred upon payoff.
The Hidden Secret of Home Insurance
Here's the thing. Just like the gas station and the grocery store, insurance companies are constantly changing their rates. When they go through a low claim period, they have more revenue and can offer bigger discounts. During a high claim period, rates often go up. So the idea is to research home insurance at least twice a year to see if there are significant savings at other agencies. Homeowners have saved as much as $1,000 a year on the exact same policy just by researching.Remember you can always save on home insurance.
Home and contents insurance and home contents insurance is sometimes used synonymously but can be different things depending on your circumstances. Home and contents insurance is an all-inclusive home insurance policy that will protect the home itself and the personal belongings inside the home. Home contents insurance is a policy that includes only personal belongings and is also known as renter's insurance. Okay, this sounds simple enough, and it would be except that there are a number of different policy decisions and coverage limits that must be understood to make the best purchasing decision possible for your insurance policy. And, to that end, here's what you need to know.
Different Levels of Home Protection
Home and contents insurance has become the most common form of home insurance and is also more common than renter's insurance. But not all home and contents insurance is created equal, either. Along with a basic recognition that not all home insurance policies cover contents, it's important to understand the different levels of home protection.
HO-1 and HO-2: These are the basic types of home insurance. HO-2 covers more perils than HO-1 policies, but neither typically cover the contents of your home. In rare cases, it may be cost-effective to buy a supplemental insurance rider for contents insurance, but most of the time, a more comprehensive policy is the way to go.
HO-3 and HO-5: When it comes to home and contents insurance, HO-3 is the most confusing, although also the most popular form of home insurance. HO-3 policies will cover any damage to your home not explicitly excluded in the policy typical exclusions cover things like nuclear war, acts of God, governmental action). But most HO-3 policies only cover personal belongings in specific, enumerated cases. HO-5 policies, by contrast, are the most comprehensive types of home insurance policies and typically cover home and contents in all cases not explicitly excluded in the policy.
Don't Underestimate Home Contents Insurance
Whether it's part of a home insurance policy or a separate renter's insurance policy, too many people underestimate the importance of home contents insurance in light of how much stuff they actually own. You probably know the price tag for your television and computer, but once you take an honest look at your closet, furniture, golf clubs, exercise equipment, vacuum cleaner, etc. you have many thousands of dollars worth of belongings. Keep in mind that in the event of a fire, burglary, or other insured peril, you will need a check for the replacement costs, not current market value, to get your life back in order.
Home Contents Insurance Tips
If you're renting a property and already have auto insurance, you may be able to obtain home contents insurance for just a few dollars a year. Most insurance companies offer multiple policy discounts, and by applying this discount to a renter's policy, the leftover costs may be peanuts compared to the financial protection.
One of the biggest policy decisions you'll need to make is whether you want the coverage to account for the actual contents of your home or a set dollar amount. If you have high-value assets, you may need to give the insurance company an inventory of the items you want insured. If, on the other hand, you have but the usual clothes, TV, computer, etc., a fixed ten-thousand dollar coverage limit might be the easiest and most effective policy.
on't take renewal for granted. Not only should you look at different quotes each policy term, but if your insurance includes an itemized list, it can be critical to keep your insurance company updated on any significant changes in value, such as antique that has appreciated over the last year.
Finding Home and Contents Insurance Quotes
The best way to find quotes for either home and contents or just home contents insurance is with an online referral service, like Happy Hour. To get the best deal and insurance value possible, you need to get quotes from several different reliable insurance companies. This is precisely what we offer at Happy Hour when you take but a few minutes to fill out a simply online form with some very basic information. Better yet, you can review quotes and talk to insurance agents from the comfort of your own home, giving you the home field advantage and reducing overhead costs for the insurance companies, allowing them to offer more competitive rates.
See how much you could save today on your home insurance. Get your free home insurance quotes today!
Home burglaries are on the rise, and law officials are tying the cause to the current economy. Have you taken a home inventory of all your new holiday gifts? Did you know that if you were one of the many victims who had their new flat screen TVs, digital cameras, computers, or jewelry stolen, that your home insurance policy limits coverage of valuables to $1,000 for jewelry and $5,000 for antique furniture and electronics --combined?
In addition to taking precautions to prevent criminals from breaking into your home, it's smart to take a home inventory of all your new holiday valuables and add an endorsement, or floater, to your home insurance policy. For a small, additional amount per year, you'll be able to protect all those new holiday gifts and start your New Year off on the right foot.
Taking Home Insurance Inventory --
An effective way to take home inventory of all your valuables is to use that new digital video or digital camera you received during the holidays. Going around your house, take digital images of all the items you want covered on your home insurance endorsement, remembering to include serial numbers of electronic items. It's also important to keep all your receipts in a safe place, keeping extra copies in your safe deposit box, or scanning and keeping electronic copies of receipts on your computer just make sure to back it up). You'll thank yourself later when you have a full home inventory each year due to big purchases.
Actual Cost Value vs. Replacement Cost --
Just like a new car, electronics such as a flat screen TV loses value the minute you drive it off the parking lot. So as you're making your home inventory, it's important to know that there are two types of endorsements for coverage of valuable items --the actual cost value of the item determined by the insurance company versus the full retail cost you would receive to replace the lost, stolen or damaged item. While replacement cost coverage does cost a bit more, talk to your insurance agent to determine which type of coverage works best for you. It's smart to do some research and consider at least three Home Insurance Quotes
Valuables Appraisal --
In line with the actual cost value versus replacement cost coverage, if you're adding an endorsement for a new piece of jewelry or valuable antique, you'll need to determine the level of coverage through an appraisal. As with the purchase receipts, keep an extra copy of all appraisal documents in a safe place.
Keep Your Home Safe --
In addition to taking a home inventory, it's smart to take precautions to prevent criminals from breaking into your home in the first place.
Use sensor lights outside your property.
Automatic timers for inside lights will give the impression that someone is always home, even when you're not.
Install a security alarm and heavy grade locks. Ask your insurance agent about potential discounts on your homeowners insurance policy you can receive as a result of these security measures.
Install solid core or metal doors, along with double-pane deadbolt windows, which can be a significant deterrent for criminals.
See how much you could save today on your home insurance. Get your free home insurance quotes today!