Whether you own a home or rent, you need home insurance to protect your personal property. Everyone needs protection against liability for accidents that could injure other people or damage their property. To get the best rates and coverage, know what to look for when shopping using these valuable tips.
Amount of Coverage You Need
If a disaster strikes, you want to have the best possible coverage. It means you will pay less out of pocket if you do. Your lender may designate the amount of coverage you need based on the mortgage terms. It’s important to know that the amount of coverage you buy for your house, contents and personal property will affect the final amount of your house payment.
Select the Right Deductible
Make sure when choosing your deductible that you’re comfortable paying that amount if you make a claim. You pay a deductible on each claim you make and it applies to coverage on your house and personal property. The lowest deductible most insurance companies will do is 1 percent; some companies cap it at 2 to 5 percent. A few companies will do a split deductible 1 percent (and up) Wind and Hail and $1,000 on all other. Higher deductibles may be available at a reduced price. That’s a question for your independent insurance agent.
Which is Best, Replacement Cost or Actual Cash Value?
There are two options when insuring your home and belongings -- replacement cost or actual cash value. Replacement cost is the cost to replace or rebuild your home or repair damages with materials of similar kind and quality, without deducting for depreciation. It is important to insure your home for at least 80 percent of its replacement value. Actual cash value is the dollar amount it would cost to repair or replace damage to your home after depreciation.
Choose Your Insurance Company Wisely
You’re not required to buy insurance from the company your lender recommends. To find out what different insurers charge for identical products and services, speak with your independent insurance agent, or consult with your state insurance department or consumer publications.
Ask Your Independent Agent About Discounts
Discounts are available in some states for things such as bundling your home and car with the same company, installing deadbolt locks or alarm systems or replacing the roof. Your independent agent will know.
Basic Available Coverages
Whether you own or rent, there are different packages of home insurance offered to protect your home and possessions. Each package protects against a specified number of events that cause damage to property. Three examples are fire, windstorm and theft. In addition, each package policy usually contains four additional types of coverage: property damage, additional living expenses, personal liability and medical payment.
Understand Your Policy and Review It Annually
Remember, a home insurance policy is a legal contract. Your rights and responsibilities as well as those of the insurance company should be clearly stated. When you purchase home insurance and receive your policy, read it carefully to make sure you understand the language and contents.
Keep your policy in a safe place and know the name of your insurer. If you make changes to your home such as an addition an additional room, new insulation or remodeling, discuss this with your independent agent. These changes add value to your home and may increase replacement cost.
We at Killebrew Insurance are available to assist you in your insurance questions. Give us a call today!