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Homeowners Insurance Basics
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Are you buying insurance on a new home, selling a home, or just wanting to gain a better understanding of the factors that affect your ability to get and keep affordable homeowners insurance? Let Delaney Insurance Agency, Inc. provide you some of the major keys to how homeowners insurance works, help you avoid common pitfalls and offer some ways you can save money.
 
Most lenders won't provide a mortgage without homeowners insurance coverage, so work with your insurance company or agent, together with your Realtor, to help you move into and protect your dream home.

  • Know what your homeowners insurance covers.
  • Know the factors that affect your homeowners insurance cost and policy renewal.
  • Avoid common pitfalls that may result in higher premiums or even losing insurance.
  • Keys to saving on homeowners insurance.
  • Home Buyer Checklist

Download the brochure or request a copy by mail. Please include your mailing address.
 
Know what your homeowners insurance covers.

  • It typically covers damage from fire, windstorm, hail, water damage (excluding flooding), riots, explosion, as well as other sudden and unexpected losses., i.e. theft, and the extra cost of living elsewhere while your home is repaired or rebuilt.
  • It covers your legal liability (up to policy limits) if you, members of your family or even your pets hurt other people or their property, not just your house, but away from it, too.
  • Do annual insurance policy "checkups" to keep up with local building costs, home remodeling and inventories of personal belongings. Make sure that you have updated insurance to rebuild or repair your home for what it would cost in the current building market. Accurate inventories of personal possessions make for faster and smoother claims' settlements. Photos and videos offer easy ways to document your stuff.

Key Tip:
 
Understand what is and isn't covered by your homeowners insurance policy to ensure that you are able to rebuild your home and replace your personal belongings.

  • Tips for insuring your home's structure, and insuring to value
  • Tips for insuring your personal belongings
  • Home inventories

Know the factors that affect your homeowners insurance cost and policy renewal.

  • The square footage of the house and any additional structures, such as a detached garage.
  • Building costs in your area.
  • The type of construction, materials, and features on your home, including the roofing.
  • Crime rates in your neighborhood.
  • The likelihood of damage due to a disaster, such as a wildfire, hail or wind. For example, Colorado's homeowners insurance rates are impacted by the state's volatile catastrophe trends. Click here for a Colorado analysis from the Insurance Research Council'sTrends in Homeowners Insurance, 2015 Edition.
  • Distance to a fire hydrant and a fire station, whether your neighborhood is protected by professional or volunteer firefighters, and any factors that affect the time it would take to extinguish a fire in your area.
  • The condition of the plumbing, heating and electrical systems in your home.
  • Many companies use good credit history to offer you a discount or as one of the factors in deciding to sell a policy to new customers.
  • The number of claims you file over a certain period of time can put you at risk for non-renewal or higher premiums. Insurance is designed for large, "sudden and unexpected" losses, not for minor "wear and tear."

Key Tip:
 
Many factors determine what you'll pay for homeowners insurance, so whether you're buying or building a new home or just reviewing the cost and coverage under your current homeowners insurance policy, be aware of what affects your bottom line.

To learn more about the cost of homeowners and renters insurance, or to view state-by-state costs and statistics, click here to see Insurance Information Institute data.
 
Avoid common pitfalls that may result in paying higher premiums or even losing insurance.

  • Consider carrying a higher deductible. It will save you money on your premium and discourage you from filing small claims that may put you at risk for non-renewal.
  • Do routine home maintenance check-ups. Preventing damage from water losses and other typical in-home disasters that can often be avoided may save you from future headaches and financial risk.
  • Get insurance early! Learn the claims history on the property you own and the property you're buying. If you want to know of prior losses that may impact the availability or price of your new home's insurance, ask the seller to provide a copy of the home's loss history report (called a CLUE ® or A-PLUST Report) with the disclosure statements. This is a record of home insurance claims that have been reported or filed in the past five years. Finding out what claims have been filed in recent years, such as water loss claims, can affect whether the property is considered higher risk. When you're selling your home, also make sure you know what the loss history is on your own home.
  • Do your homework. To order a CLUE ® Report, see www.choicetrust.com. To order a copy of your A-PLUST Report, call 1-800-709-8842.

Key Tip:
 
The more information you have going into the home buying process, the less likely you are to encounter pitfalls along the way. You wouldn't even think about buying a used car without knowing its history. The same goes for your dream home.
Keys to saving on homeowners insurance.
 
Consider taking some steps to make yourself a better risk and save money.
 
Install safety & security devices. You can often save up to 15 percent on you premium with deadbolt locks, fire extinguishers, smoke alarms, burglar alarms and fire alarms that alert your local police and fire stations. Check with your agent to see if your insurance company has specific requirements to qualify.

  • Increase the deductible on your homeowners policy. Increasing your out-of-pocket payment from $250 to $500 or even $1,000 can save you money on your premium and it will discourage you from making small claims, which could put you at risk for being non-renewed.
  • Check into a multi-policy discount. Some companies offer a price break for having more than one type of policy with the same company.
  • Maintain good credit. Many companies provide discounts or consider good credit as one of the factors when selling new policies, so it can really pay off to manage your personal finances.
  • Invest in hail and fire resistive roofing products. Your roof is the most vulnerable part of your home and many companies consider the roofing materials into the premium you are charged. Depending on where you live, some companies charge a percentage, rather than a dollar deductible or surcharge on a roof made out of high-risk materials, like wood shingles or shakes.
  • It pays to shop around for insurance coverage. Keep in mind that the cheapest policy is not necessarily the best. Selecting a company that provides good customer service and one that fits your personal needs is critical, especially when it comes time to file a claim.

Your Personal Belongings
 
Two ways to insure your personal belongings:

  • Replacement Cost Coverage. Insurance that pays the dollar amount needed to replace damaged personal property with items of like kind or quality without deduction for depreciation.
  • Actual Cash Value. Insurance under which the policyholder receives an amount equal to the replacement value of damaged property minus depreciation. Unless a homeowners policy specifies that property is covered for its replacement value, the coverage is for actual cash value.

Here are a few things to keep in mind when you're insuring your stuff:

  • Check the limits of your policy on personal items, such as jewelry, silverware, furs and computer equipment. If the limits are too low, consider buying a special personal property endorsement or a "floater." An endorsement is an addition to your policy. A floater is a form of insurance that allows you to insure valuable items separately.
  • Make an inventory of everything you own in your home and in other buildings on the property. Write down major items you own along with all available information, such as (a) serial numbers (b) make and/or model numbers (c) purchase prices (d) present value (e) date of purchase. Click here for more on home inventories.
  • Document your inventory. Take either still or video pictures and attach receipts to the inventory when available. Store the inventory and visual records AWAY from your home—perhaps in a safe deposit box.
  • Update the inventory when you make major purchases.
     

The most important thing you can do to safeguard your home and property is to understand that your insurance policy is a contract and you need to know what's in it. Your insurance agent or company representative will be able to walk you though it and answer any questions.
 
The bottom line: Don't put your policy up on a shelf somewhere and let it collect dust! Review your policy every year.

When Buying a Home, Put Insurance on the Top of Your "To-Do" List.

Contact Bill Furtado, V.P. Personal Lines, to answer any of your questions or needs and to get a quote.

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