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Nancy Guzman is an Expert Realtor for the Metro Denver Colorado area, who can help you decide where to live. Because, Nancy understands finding your special place means taking in many factors that include accessibility to work, education and recreational activities. It also includes the size and style of your home, the style of the neighborhood that will make you feel more at home. All of these factors must come together to make your new Metro Denver Colorado home, feel like home.
Insurance Information
Library for Metro Denver Colorado.
Basic Home Insurance Policies Homeowners with mortgages are required by their lenders to have home insurance. Many people may think that the policy terms required by their lenders represent "OK" levels of insurance but this may not be true. Lenders want to make sure their exposure is covered but that can happen without you being fully protected. So it's important that you determine your needs as well and make sure they are reflected in your coverage.
Six basic policies
HO-1Basic homeowner stuff. Covers your dwelling and personal property against losses from 11 types of perils: Deciding How Much Homeowner's Insurance You Need If your house burns down or is destroyed by a violent windstorm, or if your possessions are stolen, you don't want to suddenly find out that your homeowners insurance policy pays less than you thought it would. The information in this guide may help you avoid such unpleasant surprises if you file a claim. Here's what you can do to avoid being underinsured.
The amount of insurance you buy should be based on rebuilding costs, not the price of your home. The cost of rebuilding your house may be higher (or lower) than the price you paid for it or the price you could sell it for today. Your insurance company representative generally can calculate rebuilding costs for you or you can hire an appraiser to do the job. Your local real estate agent will be able to give you the names of appraisers. The cost of rebuilding your house is based on local construction costs and the kind of house you have, including the type of exterior wall construction-frame, masonry (brick or stone) or veneer; the square footage of the structure; the style-ranch or colonial, for example; the number of bathrooms and other rooms; the type of roof and the materials used; and whether it was custom built. Other things that affect the rebuilding cost are an attached garage, a fireplace, exterior trim and a home's special features, like arched windows.
A good way to get a ballpark estimate of the cost of
rebuilding your house is too calculate the square footage and multiply it by
local building costs per square foot for your type of house. For example,
suppose your home is 2,000 square feet (1,200 square feet on the ground floor
and 800 on the second floor) and that building costs in your community and for
your type of house are $80 per square foot. The cost to replace your home
would be approximately $160,000. You can ask a real estate agent or appraiser
for average building costs in your area.
Few homes are totally destroyed but yours could be one of those few. If it's insured for less than 100 percent of the rebuilding cost, you run the risk of not having enough money to replace it with one of similar size and quality.
Make sure your agent knows about any improvements or
additions to your house since you last talked about your insurance policy.
If
you don't increase your limits to cover the cost of rebuilding the new deck, a
second bathroom, a larger kitchen or other improvements that have increased
the value of your home, you may save a little money on your insurance premium
but you risk being underinsured. Depending on the kind of policy you
have, if you don't have sufficient insurance, your insurance company may only
pay a portion of the cost of replacing or repairing damaged items.
Look at your policy to see the maximum amount your insurance
company would pay if your house was damaged and had to be rebuilt.
The limits of the policy typically appear on the Declarations Page under Section 1, Coverage's, A. Dwelling. Your insurance company will pay up to this amount to rebuild your home.
Some banks require you to buy homeowners insurance to cover
the amount of your mortgage. If the limit of your insurance policy is based on
your mortgage, make sure it's enough to cover the cost of rebuilding.
If the limits of your policy haven't changed since you bought
your home, then you're probably underinsured. Ask your insurance agent
or company representative about adding an "inflation guard clause".
This automatically adjusts the dwelling limit when you renew your policy to
reflect current construction costs in your area.
Most policies these days cover replacement cost for structural damage, but it's wise to check with your insurance agent or company representative. A replacement cost policy will pay for the repair or replacement of damaged property with materials of similar kind and quality. The insurance company won't deduct for depreciation-the decrease in value due to age, wear and tear, and other factors. If you own an older home, you may not be able to buy a replacement cost policy. Instead, you may have a modified replacement cost policy. This means that instead of repairing or replacing features typical of older homes, like plaster walls and wooden doors, with similar materials, the policy will pay for repairs using the standard building materials and construction techniques in use today. Insurance companies differ greatly in how they insure older homes. Some won't insure older homes for 100 percent of replacement cost because of the expense of re-creating special features like wall and ceiling moldings and carvings. Other companies will insure older homes for 100 percent of replacement cost as long as the dwelling is in good condition.
If you can't insure your home for 100 percent of replacement
cost or choose not to do so-in some cases, the cost of replacing a large old
home is so high that you might not want to replace it with a house of the same
size-make sure the limits of the policy are high enough to provide you with a
house of acceptable size and quality.
Building codes require structures to be built to minimum
standards. If your home were severely damaged, you might have to rebuild it to
comply with the new standards. In some cases, complying with the code may
require a change in design or building materials and may cost more. Generally,
homeowners insurance policies won't pay for the extra expense but some
insurance companies offer an endorsement that pays a specified amount toward
these costs. (An endorsement is a form attached to an insurance policy that
changes what the policy covers.)
A guaranteed replacement cost policy will pay whatever it
costs to rebuild your home as it was before the fire or other disaster, even
if it exceeds the policy limit. This gives you protection against sudden
increases in construction costs due to a shortage of building materials, for
example, or other unexpected situations but it generally doesn't cover the
cost of upgrading the house to comply with building codes. A guaranteed
replacement cost policy may not be available if you own an older home.
If it is, contact your insurance agent or the Federal
Insurance Administration at (800) 638-6620 and ask about the National Flood
Insurance Program. Remember: Your homeowners insurance policy does not
cover flood damage. If you buy a federal government flood insurance
policy, consider insuring your home for 100 percent of replacement cost and
buying insurance to cover the contents of your home as well as the dwelling.
This includes everything you and your household own in your
home and in other buildings on the property, except your car and certain kinds
of boats which must be insured separately. Among the things you should include
are indoor and outdoor furniture; appliances, stereos, computers and other
electronic equipment; hobby materials and recreational equipment; china,
linens, silverware and kitchen equipment; and jewelry, clothing and other
personal belongings.
The total is the amount of insurance you would need to replace
the contents of your home with new items if everything were destroyed.
The limit of the policy is shown on the Declarations Page
under Section 1, Coverage's, Personal Property. The contents limit generally
is 50 percent of the amount of insurance on the dwelling but may be as high as
75 percent. On a home insured for $100,000, for example, the contents limit
would be $50,000 (50 percent) or $75,000 (75 percent). Now compare the
contents limit with the total value of the items on your list of personal
possessions. If you think you're underinsured, discuss this problem
with your insurance agent or insurance company representative.
There are two ways of insuring your personal possessions. If you have a homeowners insurance policy, find out whether claim payments for damage to your personal property would be based on replacement cost or actual cash value. Check your policy under Section 1, Conditions, Loss Settlement or ask your agent. As with insurance for the structure, a replacement cost policy pays the dollar amount needed to replace a damaged item with one of similar kind and quality without deductions for depreciation. An actual cash value policy pays the amount needed to replace the item, minus depreciation.
Suppose, for example, a tree fell through the roof onto your
eight-year-old washing machine. If you had a replacement cost policy for the
contents of your home, the insurance company would pay to replace the old
machine with a new one. If you had an actual cash value policy, the company
would pay only a percentage of the cost of a new washing machine because a
machine that has been used for eight years would be worth less than its
original cost. That means that you would have to either buy a used machine or
pay the difference between the amount your insurance company paid you and the
cost of a new machine.
This information is in Section 1, Personal Property, Special Limits of Liability. Some insurance companies also place a limit on what they'll pay for computers. If the limits are too low, consider buying a special personal property "endorsement" or "floater."
An endorsement is an addition to your policy. A floater is a
form of insurance that allows you to insure valuable items separately. Under a
floater, you'll be able to insure these items for higher amounts than you can
under a standard homeowners policy.
If you have a claim, the more information you have about the
damaged items-a description of each and the date of purchase and purchase
price-the faster the claim can usually be settled. Videotape or take
photographs of rooms and their contents. Note where and when you bought each
item and the price. Write down the brand names and model numbers of appliances
and electronic equipment. Add new items as you buy them. Keep receipts with
the list. Store the list, photos and other records somewhere safe off the
premises-in a bank deposit box or with a neighbor or relative-so that they
aren't destroyed if your home is damaged.
Ask your insurance company representative questions about your policy. Ask your representative to explain what factors were used to calculate the policy limits for the dwelling. If you don't understand the answers the first time, ask again. Check with friends. If you still have a problem or need more information, call NICH (National Insurance Consumer Hotline) at 1-800-942-4242.
Or write to:
Western Insurance Information Service Sources: Western Insurance Information Services, Insurance Information Institute. Frequently Asked Questions about Homeowner's Insurance INDEX What is homeowners insurance and who should buy this type of coverage? Homeowners insurance is one of the most popular forms of personal lines insurance on the market today. The typical homeowners policy has two main sections: Section I covers the property of the insured and Section II provides personal liability coverage to the insured. Almost anyone who owns or leases property has a need for this type of insurance. And many times, homeowners insurance is required by the lender as part of the requirements in obtaining a mortgage. Why is homeowners insurance sometimes referred to as a "packaged policy?" What are the major parts of the package? Before the 1950's, if a person wanted to purchase all the coverage that the modern day homeowners policy provides, he or she would have had to purchase at least three separate policies: one policy to cover personal property and the dwelling, a separate policy to cover losses due to theft, and a third policy to cover losses due to personal negligence. Changes in the laws which regulate the sale of insurance now allow the insurance industry to sell policies which combine the separate coverage's into one all encompassing policy. The main advantages of combining the various coverage's are lower expenses, and therefore lower cost to consumers, and the convenience of being able to purchase the property, personal liability and other coverage's in a single policy. The standard homeowners policy can have up to six different coverage's. Coverage A covers the main dwelling being insured. Coverage B covers any other structures that are on the premises but are not attached to the main dwelling. For example, losses to a detached garaged would be covered under Coverage B. Coverage C covers the personal property of the insured. Coverage D covers the additional cost incurred by the policyowner when the premises cannot be used because of an insured loss. For example, if a tree falls through the roof of the main house and the policyowner has to live in a motel for two weeks, the cost of the motel room would be covered under Coverage D. The last two coverage's provide personal liability coverage to the policyowner. Coverage E protects the insured from losses due to his or her negligence and provides this protection anywhere in the world. Coverage F provides medical payments to other persons who are injured either on the policyowner's premises or by the actions of the policyowner. Do all insurance companies offer the exact same coverage in their homeowners insurance contracts? Or does the coverage differ among insurers? Many insurance companies use standardized policy forms in lieu of developing their own company-specific contracts. One of the most popular homeowners policy forms used in the United States was developed by the Insurance Services Office (ISO), an industry consulting and statistical agency. Comparing premium quotes from different insurers is relatively easy when the quotes are based on the same policy form. Because some insurers use their own company-specific contracts, customers should examine whether the policy forms are the same when comparing premium quotes from different companies. What are the key differences between the various homeowners policy forms? The major policy forms offered by the ISO include: HO-2 is a named perils policy HO-3 is an all risks policy HO-4 is designed for tenants and therefore omits Coverage's A and B. HO-6 is a named perils policy designed for the owners of condominiums. HO-8 is a named perils policy designed for owners of older homes where the cost of reconstructing the home in the event of a catastrophic loss exceeds the market value of the home. What is the difference between an "all risks" policy and a "named perils" policy? A named perils policy covers losses that are due to only those perils listed in the policy. The perils typically covered include fire, windstorm, hail, and other direct physical losses. An all risks policy covers losses that are due to any peril except those specifically excluded in the policy. It is important to note that all risks policy provides broader protection than do named perils policies. What are the policy limits (i.e., coverage limits) in the standard homeowners policy? How are they determined? [Note: this answer is based on the Insurance Services Office's HO-3 policy.] Coverage's A and B provide protection to the dwelling and other structures on the premises on an all risks basis up to the policy limits. The policy limit for Coverage A is set by the policyowner at the time the insurance is purchased. The policy limit for Coverage B is usually equal to 10% of the policy limit on Coverage A. Coverage C covers losses to the insured's personal property on a named perils basis. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A. Coverage D covers the additional expenses that the policyowner may incur when the residence cannot be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. The coverage limit on Coverage E - Personal Liability - is determined by the policyowner at the time the policy is issued. The coverage limit on Coverage F - Medical Payments to Others - is usually set at $1000 per injured person. What is the difference between actual cash value and replacement cost? Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used the policyowner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policyowner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices. What does it mean to schedule personal property? What types of property would I most likely want to schedule? Certain types of personal property are subject to maximum dollar limits that the insurance company will pay in the event of a loss. Two classes of personal property are usually subject to these limits. The first is property that is particularly valuable that not everyone would own. For example, a collection of antique china dolls would be subject to a separate, smaller limit under the standard homeowners policy. The second class of personal property for which coverage is limited under a standard HO policy consists of is personal articles that should be covered under other types of insurance contracts. For example, a computer in the home that is used for business purposes should be covered under a commercial property policy, not a personal homeowners policy and is therefore subject to a limit of liability. You can purchase additional coverage for these articles by adding a scheduled personal property endorsement to your policy. This endorsement will accomplish two things. First, any article listed in the endorsement will be covered on an all risks basis instead of the usual named perils coverage provided in Coverage C. Second, when you schedule personal property the insurance company will ask you for the verify the replacement cost of the article. This is usually accomplished by having an appraisal of the article completed and then forwarding a copy of the appraiser's report to your insurance company. The replacement cost reported in the appraisal will then become the coverage limit which applies to that article, regardless of the limit listed in Coverage C. Examples of property you should schedule include expensive jewelry and a silverware, fine art, coin collections and the like. How does the coinsurance clause work in the typical HO policy? The coinsurance clause in the standard homeowners policy only affects claim payments resulting from losses covered under either Coverage A - dwelling, or Coverage B - other insured structures. Losses are paid on a replacement cost basis as long as your policy limit is equal to at least 80% of the replacement cost of the dwelling. For example, assume you own a home with a replacement cost is $150,000 and the home suffers $20,000 in covered damages. As long as your Coverage A limit is $120,000 (i.e., 80% of $150,000) or more, the full $20,000 loss will be covered. When the limit on your homeowners policy is less than 80% of the replacement cost of the dwelling, a coinsurance clause then applies. In this case, the typical homeowners policy will pay the greater of either (1) the actual cash value of the damage, or (2) a percentage of the replacement cost of the damaged property where this percentage is equal to the amount of the policy limit divided by 80% of the replacement cost of the dwelling. It is recommended that you carry a policy limit equal to at least 80% of the replacement cost of your home. This will ensure that you will always receive the full value of any partial loss. You may, however, want to carry an insurance amount equal to 100% of the replacement cost of your home. In this way, if you suffer a complete and total loss, the insurance company will pay the full replacement costs of your home. Otherwise, the insurer will only reimburse you up to the policy limit. What is the inflation-guard endorsement? Most policyowners purchase enough insurance to cover at least 80% of the replacement cost of their home. By purchasing this much insurance, the policyowner can avoid any coinsurance penalties that otherwise might apply under Coverage's A and B. However, many policyowners forget to increase their policy limits as the value of the home appreciates. An inflation-guard endorsement can be added to your homeowners policy which will instruct the insurance company to automatically raise your policy limit at each policy renewal according to some predetermined index of local home values. Policyowners should be careful, however, to make sure that the index used by your insurer matches the rate at which home values are rising in your neighborhood. If I have an accident which I think is covered under my HO policy, what should I do? Insurance contracts are conditional contracts, which means that policyowners have certain duties that they must perform if a covered loss occurs. Failure to complete these actions can, and sometimes does, result in non-payment by the insurance company for losses that otherwise would have been covered. Required duties include: (1) notifying the insurance company or the agent that a loss has occurred -- this should be done as soon as you discover the loss; (2) protecting the property from further damage and/or to making any repairs necessary to prevent further damage; (3) preparing a detailed list of the personal items damaged which contains a description of the items, their actual cash value, or their replacement cost if you have added the replacement cost endorsement to your policy; (4) being prepared to show the company and/or the insurance agent the damaged items; (5) completing a statement for the insurance company that details the events that led to loss -- for example, the time the damage occurred, the cause of the losses, etc. Do I need earthquake coverage? How can I get it? Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. However, unless you live in an area that is prone to earthquakes, you probably do not need this coverage. If you do live in a part of the country with high earthquake activity you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements. Where and when is my personal property covered? Coverage C, which provides named perils coverage, applies to all your personal property (except property that is specifically excluded) anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit - even though the dresser has never been in your home before. Do I really need liability coverage? How much should I have? It should come as no surprise to most people that both the frequency and severity of civil lawsuits have been on the rise in this country for a long time. Accordingly, everyone should have liability insurance coverage to protect their personal assets. The standard homeowners policy offers at least $100,000 of liability coverage and this amount can often be increased to $300,000 or more at very little additional cost. How much liability insurance coverage you require depends primarily upon the value of your personal assets. People with more personal assets to lose in a lawsuit will typically carry higher liability policy limits. Individuals who require more liability coverage than their homeowners policy can provides can purchase a personal umbrella policy where liability coverage limits of $5-$10 million are possible. Who pays for my legal defense costs if I am sued? In the unfortunate event that you are sued, your homeowners policy will not only cover the cost of your legal defense, but your insurance company will also provide the legal counsel. What does it means to have a per occurrence policy limit? The policy limits in Coverage E -personal liability- are per occurrence policy limits. Per occurrence limits apply to either one specific accident or to a series of continuous and related incidents which lead to a specific bodily injury or property damage loss. For example, suppose your policy limit in Coverage E is $100,000. If you were found to be negligent in two unrelated incidents and the court awarded damages of $50,000 and $60,000, respectively, your insurance company would cover both losses fully even though the total damages incurred in the lawsuits exceeded than $100,000. What factors should I consider when purchasing HO insurance? There are a number of factors you should consider when purchasing any product or service, and insurance is no different. Here is a checklist of things you should consider when you purchase homeowners insurance. First and foremost, purchase the amount and type of insurance that you need. Remember that if your policy limit is less than 80% of the replacement cost of your home, any loss payment from your insurance company will be subject to a coinsurance penalty. Also, determine the amount of personal property insurance and personal liability coverage that you need. Second, determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement or the earthquake endorsement? Finally, once you have decided on the coverage you want in your homeowners insurance policy, you can now decide which insurer you would like to purchase the insurance from. Some people like the idea of purchasing insurance from a mutual company rather than a stock company. You should also decide whether you would like an insurance agent to assist you in your purchasing decision or if you would like to buy the product directly from an insurer without the assistance of an agent. What factors can affect the cost of HO insurance? There are many factors which can affect the cost of your homeowners insurance. Some factors, such as location, type of construction, and age of the home are beyond your control. However, there are other factors which you can control. The type of policy that you purchase will affect the cost of your insurance. For example, adding a personal property replacement cost endorsement to your homeowners policy will increase the cost. The amount of deductible you choose will also affect your cost. Selecting a larger deductible will lower your cost of insurance. Finally, the financial strength of the insurance company offering the product can affect the cost. Financially healthy companies can usually command a slightly higher premium because the guarantee made to the policyowner is a stronger one. What can I do to lower the cost of my HO insurance? There are a number of things you can do to lower the cost of your homeowners insurance. The best thing to do is to shop around. It is not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, but this is not always the case. Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with the them. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask your agent or company about discounts any that you may qualify for. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible. Source: Georgia State University's Department of Risk Management and Insurance, Atlanta, Georgia.
FLOOD INSURANCE Did you know that most homeowners insurance policies do not offer protection against flood losses? Standard homeowners policies will cover the damage a storm might cause to your home and possessions, but exclude damages from what is known as "rising water." Why? Insurance is essentially a device to spread risk, and few homeowners really need or would purchase this coverage. It is not feasible for a private insurance company to collect enough homeowners insurance to be able to afford to cover those who suffer the loss from flood. This would make the price an insurance company would have to charge to cover its losses too high. However, flood insurance is available through the federal government's National Flood Insurance Program and can be purchased through any licensed property and casualty insurance agent. The NFIP requires all homeowners in all flood hazard areas in the country to purchase flood insurance thus spreading the risk over the greatest number of people and making the coverage both affordable to consumers and actuarially sound for the government to underwrite. Flood is a "special occurrence coverage" limited to specific areas in which all the homeowners would likely experience significant losses at the same time. This special insurance is available for property in designated "flood zones" where the community has adopted sound flood management practices. Currently, there are about 18,000 communities participating in the NFIP throughout the United States. Flooding is defined by the NFIP as a temporary condition of water overflowing normally dry land from inland or tidal waters or the unusually and rapid accumulation of surface waters from any source including rain. Mudflows and mudslides are also covered by the NFIP because they are flood conditions in which there is a flow of liquid mud over the surface of normally dry land,. In this case, the mud is carried by a current of water. Although floods and mudflows are covered by the NFIP, landslides are not because it is a condition in which dry or damp earth or rock moves. Water does not directly contribute to the damage, even though a flood may trigger the slide. Your insurance company will investigate the direct cause of the damage and determine if your homeowners or NFIP policy covers your loss from flood, mudflow, mudslide or earth movement. For more information, call the National Insurance Consumer Helpline (NICH) at 1-800-942-4242 Or write to: Western Insurance Information Service Sources: Insurance Information Institute, Western Insurance Information Service. Twelve Ways to Lower Your Homeowners Insurance Costs Insurance is a highly competitive business and the price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Companies offer several types of discounts, but they don't offer the same discount or the same amount of discount in all states. That's why you should ask your company representative about any discounts available to you. Here are some things to consider when buying homeowners insurance.
The insurer you select should offer both a fair price and excellent service. Quality service may cost a bit more, but it provides added conveniences, so check THE NATION'S LEADING INSURANCE COMPANIES SECTION to get a feeling for the type of service they give. Check the financial ratings of the companies, too. Then, when you've narrowed the field to three insurers, get price quotes.
The Homeowner's Insurance Center makes the process of shopping
for home insurance simple and convenient. Simply fill out the single, ON-LINE
HOME INSURANCE APPLICATION, check off the insurance companies you prefer and
submit the form. The application will be electronically forwarded to the
companies you have selected. You will receive quotes in a timely manner. Its
that simple.
Deductibles are the amount of money you have to pay toward a
loss before your insurance company starts to pay according to the terms of
your policy. Deductibles on homeowners policies typically start at $250. By
increasing your deductible to $500, you could save up to 12 percent; $1,000,
up to 24 percent; $2,500, up to 30 percent; and $5,000, up to 37 percent,
depending on your insurance company.
Some companies that sell homeowners, auto and liability
coverage will take 5 to 15 percent off your premium if you buy two or more
policies from them.
Consider how much insuring it will cost. Because a new home's electrical, heating and plumbing systems and overall structure are likely to be in better shape than those of an older house, insurers may offer you a discount of 8 to 15 percent if your house is new. Check its construction, too. Brick, because of its resistance to wind damage is better in the East; frame, because of its resistance to earthquake damage, better in the West. Choosing wisely could cut your premium by 5 to 15 percent. Avoiding areas that are prone to floods can save you $400 or so a year for flood insurance. Homeowners insurance does not cover flood-related damage. If you do buy a house in a flood-prone area, you'll have to buy a flood insurance policy, too.
Does your town have full-time or volunteer fire service? And
is your house close to a hydrant or fire station? The closer your house is to
firefighters and their equipment, the lower your premium will be.
The land under your house isn't at risk from theft, windstorm,
fire and the other perils covered in your homeowners policy. So don't include
its value in deciding how much homeowners insurance to buy. If you do, you'll
pay a higher premium than you should.
You can usually get discounts of at least 5 percent for a
smoke detector, burglar alarm, or dead-bolt locks. Some companies offer to cut
your premium by as much as 15 or 20 percent if you install a sophisticated
sprinkler system and a fire and burglar alarm that rings at the police station
or other monitoring facility. These systems aren't cheap and not every system
qualifies for the discount. Before you buy such a system, find out what kind
your insurer recommends and how much the device would cost and how much you'd
save on premiums.
Smoking accounts for more than 23,000 residential fires a
year. That's why some insurers offer to reduce premiums if all the residents
in a house don't smoke.
Retired people stay at home more and spot fires sooner than
working people. Retired people have more time for maintaining their homes,
too. If you're at least 55 years old and retired, you may qualify for a
discount of up to 10 percent at some companies.
Employers, alumni and business associations often work out an
insurance package with an insurance company at very competitive rates. Ask
your company's personnel manager or your association's director if such a
package is available to you.
If you've kept your coverage with a company for several years,
you may receive special consideration. Several insurers will reduce their
premiums by 5 percent if you stay with them for three to five years and by 10
percent if you remain a policyholder for six years or more.
You want your policy to cover any major purchases or additions
to your home. But you don't want to spend money for coverage you don't need.
If your five-year-old fur coat is no longer worth the 20,000 you paid for it,
you'll want to reduce your floater and pocket the difference.
If you live in a high-risk area -- say, one that is especially vulnerable to coastal storms, fires, or crime -- and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market. If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you're shopping around for a policy. For example, if you're like the steadily increasing number of persons who are running a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need. For more information, call the National Insurance Consumer Helpline (NICH) at 1-800-942-4242
Insurance Information Institute
How to File an Home Insurance Claim Knowing just what to do when you have a claim can help you get the best value for your insurance dollars. Insurance Companies pay more than $75 billion each year in claims from policyholders. Those claims result from losses suffered during fires, hurricanes, tornadoes, robberies, auto accidents, dog bites, falls and a host of other traumatic incidents. Instead of waiting until an accident strikes you or your family, save time, money and anxiety by doing these important things now:
Home Insurance Claims Those crumbs in your toaster start a fire in your kitchen.... Little Suzy from next door falls out of the tree house in your backyard.... A tornado damages your home, forcing you to move temporarily to a motel.... Your homeowners policy provides insurance coverage for each of these situations and many more because it is a "package" of insurance for (1) your house, furniture and personal belongings, (2) your ability to others and (3) additional living expenses you may incur if our home is severely damaged. Before You Have A Claim Be sure you know the answers to these questions before you have to file a claim:
Filing Your Claim Here's what to do when you have a home insurance claim:
For more information, call the National Insurance Consumer Helpline (NICH) at 1-800-942-4242
Or write to: Source: Insurance Information Institute.
You Can Reach Your State Insurance Department at:
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