Buying a home is one of the most exciting times of your life. After finding the property meant for you, it’s important to protect your investment. As a home buyer, not only do you need insurance to protect the property, but also for your personal and financial well-being. Below are several important factors to consider when discussing coverage with your agent.
What is Homeowners Insurance?
Homeowners insurance is, as the name implies, insurance that provides coverage to help repair or rebuild your home (subject to policy limits and exclusions) in the event that it is damaged or destroyed by a covered peril (often things such as fire, theft, vandalism, etc.). In addition, homeowners insurance policies typically provide a certain amount of coverage for the repair or replacement of your home’s contents if they are damaged as a result of a covered peril, as well as liability coverage for bodily injury and property damage sustained by others while on your property (again, subject to policy limits and exclusions). Homeowners policies can vary with respect to coverages, exclusions, and limitations, and so it is a good idea to speak with an experienced insurance agent. The following are key questions to consider when speaking to an agent about coverage.
How Do I Know What’s Covered?
- Always Ask – a licensed agent will be able to talk you through the various coverages that are included in a particular policy, and can explain available options for additional or different coverages.
- Homeowners Coverage – As mentioned above, there are multiple levels of coverage that come with a homeowner’s policy. These can include (but are not limited to):
- Other Structure
- Medical Payments
The above coverages come with exclusions and inclusions (most companies have different levels of coverage). Your agent should review and talk through these with you. Some typical exclusions include (but not limited to):
- Flood Insurance
- Excess Liability Insurance
- Valuable Articles Insurance
- Equipment Breakdown Insurance
- Water Back up coverage
Many of these coverage types can be endorsed onto your policy or written on a separate policy. You should let your agent know if you are interested in exploring your options for purchasing one or more of these coverage types.
How Much Insurance is Appropriate?
Obtaining an appropriate amount of insurance for your home is vital to protecting your investment. Most companies offer “Guaranteed Replacement Cost” coverage on the dwelling coverage of the policy (always ask your agent to confirm whether such coverage is available through a particular insurance carrier). It is typically wise to consider a policy with Guaranteed Replacement Coverage, as it usually provides a greater level of protection than certain other types of coverage.
Figuring Replacement Costs on Home & Contents
Every home is unique. So, there are different factors insurance companies use to determine a replacement cost value for the home structure. These can include:
- Square footage
- Building Materials (ex: brick, wood, roofing finishes)
- Building Finishing (ex: custom work, upgrades, built-ins, etc.)
Most companies will complete an external inspection (and sometimes internal one as well) that will help generate a replacement cost value.
Homeowner’s policies usually include contents coverage. However, you and your agent should review and determine the existence and amount of any contents coverage that is included within your policy. You know more about how much you’ve invested in your home’s contents (your clothes, furniture, anything you can carry out of your home if you moved, etc.) than any insurer, and sometimes it may be in your interest to increase the amount of this coverage. Note: Be sure to inform your agent if you have valuable or collectible items (jewelry, antiques, artwork, collector items, etc.), as you may want to consider obtaining additional and/or separate coverage for those items.
The goal of replacement cost is to insure your investment accurately and adequately. Your Daigle & Travers insurance agent will discuss these factors with you to give you a reasonable replacement cost estimate.
Factors that Determine Your Insurance Rates
- Replacement Cost
- Deductible Amount
- Prior Losses
- Credit Rating
- Level of Coverage
Saving Money on Homeowners Insurance
Higher deductible – Having a higher deductible option can lower your overall premium. Check with your agent to see the levels of savings and affordability.
Security Systems – Installing an alarm system will not only save on your premium, but will be an extra level of protection. This can help to prevent losses and keep your property safe.
Multiple policies – Carrying multiple lines of coverage with the same company can reduce your premium. Consider insuring your cars and life with the same company for discounted rates.
Review and check available discounts the insurance companies offer (Some may offer AAA discounts, safe driver course credit, etc.)
One of the best ways to save money on home insurance is to talk to a licensed insurance agent/broker. Independent agents like Daigle & Travers have access to highly respected A.M. rated insurance companies, and these relationships can save you time and money. At Daigle & Travers, our goal is not to only give you a competitive price, but also to make sure that you understand your options for selecting coverage to protect your home investment.
To find out the cost of insuring your home, give us a call at (203) 655-6974. The Daigle & Travers insurance agents are here to help you explore your options.