As your home is a substantial financial investment, finding an adequate home insurance policy is a must for all property owners. Below are a few factors to consider when purchasing a homeowners policy.
Homeowners Insurance Premium: A premium is the amount that you pay for the policy. The premium is quoted on an annual basis.
If you have a mortgage on your home and the loan to value (LTV) ratio is more than 80 percent, your lender will typically require that the insurance premiums be impounded, in which case, you will pay the insurance premium as part of your monthly mortgage payments and your lender will pay the premium to the insurance company annually. It is important to ensure that those insurance premiums are being paid. Most lenders now have online account statements that will allow you to see the total amount of your prepaids as well as when the premium was paid.
Homeowners Insurance Deductibles: One of the factors that determines the amount that your premium will be is the amount of the deductible required by your homeowners policy. The lower the deductible, the higher the policy premium.
Homeowners Insurance Policy Coverage: A typical homeowners insurance policy covers the dwelling and will pay for the cost to rebuild or repair. A policy will also cover additional structures; however, it is important to have your policy adjusted if you make major improvements to your home.
Homeowners insurance also covers the contents, or personal property, in your home. This can include electronics, appliances, furniture, etc. If you own personal property that has a high dollar value, it may be a good choice to have those items, such as jewelry or art work, appraised and a separate rider written for them.
Personal property is an area of homeowners insurance where the advice of an expert insurance agent is welcome. A policy may look appealing at first glance; however, if it only allows for reimbursement of the current value of your personal property, you may find yourself coming up short when you try to refurbish your home. A policy that provides coverage to replace your contents is a much better value.
Another factor to consider when purchasing a homeowners policy is whether or not it covers the expense of temporary living expense or loss of use of your home.
Exclusions: Pay close attention to any items or situations that are excluded from the coverage. Does it cover flood and wind? Living on the Gulf Coast, hurricanes are a yearly threat.
Homeowners Insurance Companies
As an independent insurance broker, Sparks Insurance will search through our database of insurance carriers to find the most cost effective policy and advise you on the best policy for your unique situation. Some of the more commonly known insurance carriers we work with are:
- State Farm Insurance
- Allstate Insurance
- Farmers Insurance
- Nationwide Insurance
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