Chances are that if you own a home you have Home Insurance or Condo Insurance. Even after people have paid off their mortgages, they often opt to keep their Homeowners Insurance policies active, even though it’s no longer required. Why? It is the only reliable form of protection for a very valuable asset. If you’re in the process of buying a new home or are considering other options for a carrier, it’s important to educate yourself on Homeowners Insurance coverage options and the factors that affect a person’s rate. Certainly, you never want to buy Homeowners Insurance from a less-than-reputable source. It’s always best to discuss your needs with a trusted agent who works with multiple insurance companies (888.772.4247). Below you’ll find information that will be helpful in your search.
Is Homeowners Insurance Required?
Nearly all mortgage companies require a Homeowners Insurance policy so they can protect their investment in your property until it’s paid off. Do not, however, confuse a Home Insurance Policy with a Home Owners Association Insurance plan (HOA). HOA fees will only cover costs if there are any maintenance and losses to common areas and damage to the outside of the building only. There is some limited insurance included in an HOA fee, but it won’t cover your unit or the contents within it.
Make Sure You’re Covered for Common Perils
Depending on where you live, you may be more prone to suffer losses caused by an earthquake, mudslides or tornadoes. You should always make sure that you have Flood Insurance because flooding is not covered in a standard Homeowners Insurance policy. Earthquake Insurance is also one that you should and need to add on to your policy. Location also determines what your Home Insurance coverage will cost. As expected, if the area in which you live is prone to natural disasters, this may reflect in a higher rate.
Does the Age of a Home Affect the Price of Homeowner’s Insurance?
Yes, older houses are quaint and charming but often more costly to insure, especially if the structure does not meet all new home building standards. Brick homes are usually eligible for lower Homeowners Insurance rates because they are not flammable. The more prone to fire and damage the construction material is, the higher your premium will be.
What Is Dwelling Coverage?
A dwelling is where you live. Dwelling coverage is simply the part of your Home Insurance policy that covers the rebuilding of the structure of your primary house if it’s damaged or destroyed by a hazard that is covered in your policy. This often includes sheds, pools and similar structures found on one’s property. Most policies cover damage caused by fire and/or smoke, lightning, windstorms (tornados), hail, vandalism and more. Speak with an agent if you’re not sure what your policy covers.
What Should I Know About Homeowners Insurance Deductibles?
You’ll always have to pay a Homeowners Insurance deductible in order to get reimbursed for damages or for rebuilding your home. The amount you select determines how high or low your premium will be. If you opt for a higher deductible, your premiums will be more manageable each month. However, that means you need to pay that amount before your claim is paid.
How Can I Keep My Homeowners Insurance Rate Low?
Don’t file unnecessary claims. A claim history full of small settlements will likely mean higher rates in the long-run. This could possibly amount to more than you received as reimbursement payments. Pick and choose your battles wisely. While credit scores are not taken into consideration in some states like California, they are evaluated in many states. It’s a good idea to keep your credit score high for a lower Homeowners Insurance rate.
Should I Choose to Insure for Replacement Cost or Actual Cash Value?
You do have the option of choosing between two value estimates. Replacement Cost will repair or rebuild your property with material of similar quality and does not take depreciation into consideration. Alternatively, Actual Cash Value will repair or replace your dwelling at cost after depreciation. You need to decide which option would be more advantageous to you.
How Do I Find Quality Homeowners Insurance Without Paying a Lot?
The best thing you can do is shop around for competitive rates. Just because it costs a lot doesn’t mean it’s the best. Finding a reliable and trustworthy insurance agent is always a good idea. Not only can they shop rates for you more quickly than you can, but they also have relationships with the carriers. This means they can probably find you better rates than you can. AIS Insurance agents do all that in one phone call without charging a fee.
Most Home Insurance policies need to be renewed annually. Usually, there is also a grace period, ranging anywhere from 10 to 45 days. As long as you continue to be on-time with payments, there is no reason your insurance would lapse or be canceled. In fact, insurance companies are required to give you several weeks’ notice if they decide to cancel your policy. Some reasons a carrier may cancel a Homeowners Insurance policy include the following: physical changes to your property, misrepresentation or failure to make payments on time. Yes, you risk a lapse in coverage if you forget to pay. So, make sure to go through your mail thoroughly! Pay attention to alerts via text or email.
What Happens if My Homeowners Insurance Lapses?
If your policy lapses, you could see a rate hike because the company sees you as a higher risk than before you failed to pay on time. Your insurance company may also refuse you, and you may have a hard time finding another company to insure you. Your lender most likely requires that you have Home Insurance so they may buy it on your behalf if they see you’re not covered. That transaction may raise your mortgage rates more than if you bought the insurance on your own. If these case-scenarios don’t sound awful enough, you may also be vandalized or have a house fire without any protection to help you pay for damages and repairs. Call an AIS Insurance Specialist today. They can find you a low rate and keep you on schedule: (888) 772-4247.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.