Home Insurance Daily Journal

by mheo soriano

One of the ways to lower your annual premiums is to establish a security system such as a burglar alarm that is connected to a local police station. The discount is usually about 5%. In order to claim the discount, you usually have to give a proof of central monitoring in the form of a bill or a contract to the insurance company.

Smoke alarms are also essential. Putting up smoke alarms may cut 10% or more from the annual premiums. Even though it is expensive you will benefit from the deductions, plus a good home security system will add safety to your household as well.

Cast a wide net

First, check what’s out there. Get quotes from at least four carriers.

Try a free database such as InsWeb, which offers quotes from up to 8 insurers, or Quicken InsureMarket, which provides up to 16 quotes. The larger the database, the better.

Try these options.

Companies like State Farm and USAA that deal directly with consumers without using independent agents are called “direct writers.” In theory, they can pass on their savings by eliminating the middleman.

Read your junk mail. Direct marketers like Geico and Progressive Insurance Co. save on overhead – and pass on the savings – by marketing by phone, mail, or the Internet.

Let your state be your guide. Most state insurance departments offer online shopping guides for homeowners insurance. Your state’s guide may identify little-known companies with competitive rates. Insure.com can link you to your state guide.

Look at service

No discount in the world will make up for slow claims processing, so find out as much as you can about a company’s service before you sign on. Consumer Reports periodically publishes service ratings for large insurers. You can also ask a representative about a company’s claims turn-around time; a shorter turn-around is an indication of better service.

Focus on financials

Several insurers were hit hard by Hurricane Katrina in 2005 – the industry paid out nearly $60 billion to cover losses from the storm. For that reason, it’s wise to look at the financial ratings of your home insurer. Ask the company for that information, or check out one of the financial ratings services on the Web.

An A rating or higher from Standard & Poor’s or an AA ranking or better from Moody’s Investor Service is a good indicator of strength. Weiss Ratings, the most independent of the ratings services, and arguably the most stringent, publishes a list of the currently weakest homeowners insurers.

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Continued from Getting Proper Coverage (part 1)

Get these types of important coverage, too:

Inflation guard

This option annually increases your premium at the rate of local building-cost inflation.

Ordinance-and-law coverage

This rider, which covers the costs of bringing your home into compliance with current building codes, is a must if your home is more than a few years old.

Limit your liability

Your homeowners policy protects against lawsuits for accidents that happen on your property. It also covers you if your dog bites someone.

You might also consider umbrella liability coverage, which is additional coverage over and above your regular homeowners liability limits.

Consider these options:

Displacement

Your homeowners policy also provides for living expenses if you’re displaced; replacement of structures such as garages and sheds; and limited medical coverage for someone injured on your property. Don’t buy more than the minimum offered. Depending on your situation, however, several other types of coverage may be worthwhile:

Floods

Floods aren’t covered by ordinary homeowners insurance. Flood insurance is available through the Federal Emergency Management Agency. In California, you may need earthquake coverage; check with the California Earthquake Authority.

Home business coverage

Business property worth more than $2,500 isn’t covered by a homeowners policy, so buy a separate policy – also known as a rider – to fill the gap. Business liability coverage must be purchased separately, too.

Riders for valuables

A standard policy provides only minimal coverage for antiques, collectibles, furs, silver, jewels, cameras, computers, musical instruments, and firearms. For these, you need separate coverage.

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Just as there are different home styles, insurers offer a menu of different policies. For the majority of single-family homeowners, the most appropriate policy is the HO-3, sometimes called the special policy (in Texas, for some reason, it’s known as the HO-B). It insures all major perils, except flood, earthquake, war, and nuclear accident.

You’ll need deep coverage, up to and including 100 percent of your home’s replacement cost. By insuring at, say, 90 percent, you’re making the reasonable bet that your home won’t ever be a complete loss. That may be a reasonable bet. The basement usually remains intact almost regardless of what happens to the rest of the house. Still, victims of the devastating Oakland Hills, Calif. fire in 1991 witnessed the destruction of even their basements. If you want to play it safe, insure at 100 percent.

Insurers generally cover a home’s contents up to between 50 and 75 percent of the home’s value. Make a list of your home’s contents for a more exact estimate of your needs. That also provides a written record that’s useful when you file a claim. The industry-sponsored Insurance Information Institute provides useful instructions on how to put together an inventory.

You’ll also have to pick a deductible, which is the amount you pay yourself before the insurance kicks in. The higher you go, the more you’ll save.

Buy the guarantees

Traditional guaranteed replacement cost coverage promises to pay whatever it takes to rebuild your home, even if it costs more than the original limits you purchased. That’s crucial in the event that labor and building costs balloon after a major disaster. In many states, large insurers now cap the guarantee at 120 to 125 percent of purchased limits.

Your safest bet is to seek a company with no cap. However, if you’ve properly valued your home’s replacement cost, the caps shouldn’t scare you. It’s unlikely that building and labor costs will go up to more than 120 percent of your home’s insured value.

If it’s not built into your policy, ask for replacement cost coverage for your home’s contents. Without it, you’ll end up with just the depreciated value of any object that’s damaged or stolen.

One word: risk.

To an insurance company, you are a collection of risks. Your sex, your age, your marital status, and what neighborhood you live in all contribute to an insurer’s prediction of whether you’ll file a claim.

If, for example, you are a homeowner who lives in a coastal area prone to storms, or a rural region far from fire stations, you are judged to be a higher risk because people in such situations have tended to file more – and their claims usually are more expensive.

The good news is that all insurers don’t price the same risks identically. While insurers are highly regulated in many states, they still operate as competitive businesses, focusing on certain markets and avoiding others. What’s more, some operate their businesses more efficiently than others, passing on the savings to consumers.

That means you may be able to save hundreds of dollars a year by shopping regularly, even if your insurer rewards long-time customers. A great quote from a new carrier may trump the loyalty card.

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by mheo soriano

Having your home insured isn’t just plain luxury. Nowadays it can be considered as a necessity. This is because most mortgage companies wouldn’t make a loan or finance a residential real estate transaction unless the buyer provides a proof coverage of the property.

Insuring your home can be expensive. Especially those who live in high risk areas or the areas susceptible to natural disasters In fact, those in high-risk areas are often forced to pay annual premiums in the many thousands of dollars.

Even though you shouldn’t avoid purchasing a homeowner’s insurance, there are still ways to get around things and minimize the cost.

Home insurance is a good investment giving you a sense of security for the future.

Insurance is a form of safety net to cushion the impact of unforeseen events that may lead to losses or damage to property or worse to persons. Home insurance is an essential requirement in financing a home purchase and closing the transaction. Most common supplement to a home insurance is what is called a hazard or fire insurance. These also provide liability protection for the injury of persons while in your property.

Aside from these two common insurances, there are a number of insurance protections that home owners can take out in order to increase the protection on their property. Some of these are:
1. Private Mortgage Insurance
2. Title Insurance
3. Flood Insurance
4. Life and Health Insurance

Renters insurance is an inexpensive way of providing financial security for the contents of your home. Mostly, apartment or condominium tenants benefit from this form of home insurance because owners of the building have already taken out insurance for the structure. It is difficult to replace your precious belongings out of your pocket in case of an accident like for example a fire.

If you are sharing the rent with a roommate, you can even share in the renters insurance. Renters insurance will give you the peace of mind knowing that if everything you own is lost today you will not be starting from scratch. Remember that the policy of your landlord may not include you in the coverage so this is the best protection for you.

Buying that dream house is always a satisfying moment until you find out that the roof is leaking or there is an infestation. Many times, we are caught up in the moment that we tend to ignore some details that are telling signs of an impending or already on-going problem in the property. Hiring the services of a home inspector will give you that independent review to help you access the real value of your property and also help you in buying the right home insurance for it.

You can expect your home inspector to give you a detailed report about every inch of the house including the facilities. His expertise will give you insight about the home’s construction whether you can expect it to stand up for a long time. He will also go over every inch of the house inspecting the wirings, plumbing, ventilation, insulation and all particular aspects of your house to give you an accurate value of your property.

Keeping your home insurance valid would require the home owner to take some responsibility in keeping the property in good condition. Failure to do so may mean a lot of consequences that may even lead up to non-payment of claims. Make sure that you take a look at your policy and see what are the responsibilities expected from you by the insurance company.

Here are some things that usually need preventive maintenance from time to time to keep that valuable home insurance valid:
1.Gutters must be clean and in good condition to prevent water seepage into the walls of the house
2.Make sure no dampness accumulates on your house which may lead to costly maintenance later on
3.Check condition of your roofing
4.If you have a chimney make sure that it is clear of blockages
5.Maintain integrity of external house paintwork
6.Check your insurance company�s policy on wall climbing plants
7.Prune and maintain trees on your property
8.Look out for nests, rodents and any other pests that can damage your property
9.Have your gas line checked regularly