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Home Inspector Insurance Tips

Home Insurance Tips


Why You Need Homeowners Insurance


The largest and most expensive purchase you ever make is most likely your home. Homeowners insurance will help protect your home, possessions, and liability. Homeowners insurance is a package type policy. It contains four types of coverage. Dwelling and personal property, personal liability, medical payment, and additional living expenses.


Property Damage Coverage



Dwelling and personal property coverage will pay for damage to the structure, personal property, including household furniture, clothing, and other personal belongings. It will also cover damage to other structures such as a detached garage and other out buildings on the property. The amount that is paid for personal property and out buildings is usually a percentage of the main policy. You should check with your agent to be sure the coverage is sufficient for your situation. Coverage is usually for "cash" value rather than "replacement cost. Again, check with your agent to make sure you have the correct coverage for your needs.


Personal Liability Coverage


Personal liability coverage is for non-auto related claims. If the injury or damage is caused by you, a member of your family, or your pet the liability coverage in your policy pays both for the cost of defending you and paying for any damages that you must pay. Liability insurance does not have a deductible that you must meet before your insurer begins to pay losses. Check with your agent to make you have enough coverage to protect your assets.


Medical Payment Coverage


Medical payment coverage is for someone outside your family, This means if a friend or visitor is injured at your home, regardless of fault they are covered. This includes payment for reasonable medical expenses incurred within one year from the date of loss. This portion of your homeowners policy will also pay if you are involved in the injury of another person away from your home in some circumstances.


Additional Living Expenses


Additional living expenses coverage is for just what it sounds like. If it is necessary for you to move into a motel or apartment temporarily because of damage to your dwelling for a covered event, your insurance company will pay an amount up to 20% of the policy limit on your dwelling for these expenses. It will not pay if you stay with a friend or family member, you must actually incur expenses.


Home Business


If you operate a home business full or part time, you will want to check with your agent to see whether or not you have coverage for a business at home. Most policies have no coverage or very little coverage.


Prices vary quite a bit
from one insurance company to the next.
Here are some things to consider when buying
homeowners insurance:


Shop Around


Insurance is a very competitive business, just like many other businesses, you can find some deals on your insurance payments. Talk with several agents about what you own and what the best types of coverages they offer are. Then compare policies and prices. You might save a substantial amount of money by making a small adjustment in your coverage. Different companies insurance things differently.


Consider having a Wind Mitigation
or 4 Point insurance inspection done.


A Wind Mitigation is a type of inspection that tells the insurance company how your roof is attached to your home. Items that are looked at are, what type and age is the roof covering. What types of nails and/or fasteners hold the sheathing or roof deck to the trusses. How the trusses are connected to the walls, is it clips, straps, or toe nailed? The insurance company will apply credit to your premium based how many and what types of these features your home has. In some cases homeowners can save between $200-$400 a year off of their insurance premium.


A 4 Point Inspection is an evaluation of the 4 major areas of the home. They are the roof, plumbing system, heating and cooling system, and electrical system. Insurance companies use this report to determine the level of risk they will assume if they place coverage on a home. The better the condition of your home, the lower your insurance will be. This inspection is used mainly for homes 30 years of age or older. If you own an older home and have done some upgrades, such as installed a new heating and cooling system, or upgraded your electrical panels, a 4 Point inspection might help lower the cost of your premium. If you have questions about this please give us a call or ask us the next time we do a maintenance inspection.


Raise your deductible


Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible, the lower your premium will be. If you live in a hurricane prone region, you may have a separate windstorm deductible. Just make sure you have access to the funds to cover the deductible if disaster strikes. For example if you normally have a couple of thousand dollars in a savings account, consider using that money if needed and raising your deductible to lower insurance premiums.


Don’t confuse what you paid for
your house with rebuilding costs


Do not insure the land for which your house sits on as part of your replacement costs. The land will not go anywhere. Understand that what you paid for your house is probably less than what it would cost to rebuild it in the event of a total loss. Ask your agent about how much you are covered for.


Buy your home and auto policies
from the same insurer


Group all of your insurance policies together with one company. Many times insurance companies will offer discounts if you combine home, auto, life, etc together.


Improve your home security


Some insurance companies will offer a discount if you install a security system. Some offer discounts for a sprinkler system of fire alarm system. Not all of these systems are cheap, you will want to check and see if the savings are worth it.


Maintain a good credit record


Insurance companies look at your credit score in calculating how much you will have to pay for insurance. Having a good credit score can help lower your premium.


When you’re buying a home,
do not forget to consider the cost of
homeowners insurance


Many factors play a part in this cost. The age, type, size, and location are just a few factors. Speak with a couple of agents in your area before house shopping to see what they recommend. This could be a significant savings.

Also remember that if you live in an area prone to disasters like hurricanes or floods, special types of insurance may be required. Those policies are usually an additional cost.


Below is a list of questions you should ask your
insurance agent to make sure you have the
right coverage:


  1. Am I covered for direct losses due to fire, lightning, tornadoes, windstorms, hail, explosions, smoke, vandalism and theft?


  2. Are my jewelry and other valuables covered?


  3. If my house is totally destroyed in a fire and I have $150,000 worth of insurance to cover the structure, will this be enough to rebuild my home?


  4. Am I automatically covered for flood damage?


  5. If a pipe bursts and water flows all over my floors, am I covered?


  6. What if water seeps into my basement or slab from the ground am I still covered?


  7. A neighbor slips on my sidewalk or falls down my porch steps and threatens to take me to court for damages. Does my policy protect me?


  8. A tree falls and damages my roof during a storm. Am I covered?


  9. During a storm, a tree falls but does no damage to my property. Am I covered for the cost of removing the tree?


  10. If a storm causes a power outage and all the food in my refrigerator and freezer is spoiled and must be thrown out, can I make a claim?


  11. My children are away at college. Are they covered by my homeowners insurance?


  12. My golf clubs were stolen from the trunk of my car. Does my homeowners policy cover the loss?


  13. I have a small power boat. If it is stolen, am I covered? What if there is a boating accident and I get sued? Am I covered for that?


  14. My house is close to the ocean. I’ve heard that if it is destroyed by the wind, the town's new building code requires me to rebuild the house on stilts. This will add $30,000 to the cost of rebuilding my house. Am I covered for this extra cost?


  15. Am I covered for “acts of God”?


  16. What should I do if my policy provides less coverage than the HO-3?


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