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Homeowners Insurance – Get Your Insurance Right

Want to buy homeowners insurance that perfectly meets your requirements and looking for tips on how to do it?  Selecting and buying homeowners insurance is not that complicated. Here we bring you valuable tips on how to get the best homeowners insurance.

Home Insurance

How to Get the Best Homeowners Insurance

Coverage for Dwelling

Before buying homeowners insurance, you should have clarity on things to be covered through the insurance. Generally, homeowners insurance doesn’t cover jewelry, artwork, and other valuables. If you have a structure like a pool, trampoline, or other that may pose a threat to others and increases your liability an additional coverage may be required. If your area is flood-prone or disaster-prone a separate policy may be required. Enough information on flood-prone, disaster-prone, and earthquake-prone areas can be obtained from US Geological Survey Website (https://www.usgs.gov).

Coverage for Your Belongings

Such types of coverage protect you against damage to your property. Such belongings include electronics, clothing, and furniture among the others. Your pipe may have leaked, damaged due to natural disasters, your property may be vandalized. In such a case, your insurance coverage will pay for replacing them. Here is a word of caution. Some luxury items may not be protected by a homeowner’s insurance and you might have to get additional coverage for them. So, if you have jewelry, artwork, or collectible as your belongings, you need to have a separate insurance cover for it.

Coverage for Liabilities

While buying insurance, you should also look for liability coverage. With this coverage, you would be able to pay the legal fees if you have been sued for an injury or damage done at your home. A visitor might get injured due to a dog bite, slip and fall, and some other reasons and you may be ordered to compensate for it through a lawsuit. With liability coverage, you may be able to pay for the damage.

Coverage for Loss of Use

There are times when you are not able to use your home due to a natural disaster like a hurricane. In such a case your home might get infected with mold, pests, and other kinds of harmful organisms that may make your home inhabitable and you may be forced to live outside. In such a case, your insurance will cover the living expense that includes hotel bills, food, and other things required for living outside.

Coverage for Additional Things

Apart from these basic types of coverages, there are instances when your home may be falling in an earthquake or flood-prone area and you might need additional insurance for that. If you are running a business and operating it out of the home you should consider adding a separate cover for your business.

Decide Your Home Insurance Coverage

While buying insurance, you must decide on how much coverage you need to have. It is only obvious that you need to have an inventory of all your personal belongings. You should take an inventory of it. Taking an inventory is easy if you have the receipt of all the purchased items. You should estimate your building and structure and per square foot cost of construction if you need to rebuild it, if struck by a disaster. A construction company or a realtor might help you in this regard. Some people also prefer to add coverage for identity theft.

Home Insurance affordable

Factors That Incur High Home Insurance Premium?

There are several factors that may lead to a higher insurance premium for your policy. Here we discuss major factors among them.

Your Building is Old

An old home may have gone through wear and tear that may have weakened its structure. In the long years, the structure may have weakened which may have increased the risk. Such things may lead to a high premium.

Materials Used in Building

There are some materials that are more prone to rotting and dangers than others. Some are more susceptible to fire and termite. The insurance for home with asphalt roofs are higher than those using tile or metal roof.

Location of Home

Some areas are more prone to natural disasters than others. Areas with stormy weather increased crime rates and are distantly located from a fire station require more premium than those that do not have such disadvantages.

Pets at Your Home

There are times when you have an aggressive dog that may attack your guests and you may have to compensate for the losses. Such things are covered under the liability insurance cover. So, if you have an aggressive breed of dog you might end up paying a high premium. More details on dog bite liabilities can be had on the Insurance Information Institute website.

Attractive Features

Your building might have a hot tub, trampoline, or swimming pool that might add to your luxury quotient. These things may sound attractive, but they may put your guests at threat. Houses with such features may incur a high premium.

How To Cut your Homeowners Insurance Premium?

Want to buy home insurance without splurging? It is worth doing. There are certain things you can do to get homeowners insurance for a small premium.

Update your Security System

Homes with state-of-the-art security systems often incur a small premium. You should have the latest security equipment along with an alarm that is monitored by a central security station. If your security alarm is connected to your local police station then it is better.

Not only you should have a theft alarm but your home should also have a smoke alarm so that any type of fire eruption can be checked in time and the fire can be immediately put out to avoid any further damage. Most of the modern buildings have CO detectors, deadbolt locks, and a sprinkler system. Having modern fire safety can cut your annual premium significantly.

You should ask your homeowners insurance agent to know which types of security systems are approved by insurance companies.

PIC2

Increase Your Deductible

Like other forms of insurance like car insurance and renter’s insurance having a higher deductible may reduce your annual premium. But there is a flip side to it as well. If it is a small amount and can be adjusted to your deductible. Your insurance agent will guide you better on this. You can also seek a quote from your homeowners insurance provider mentioning deductibles.

Bundle it with Auto and Health Policies

The companies that sell homeowners insurance also sell health and car insurance. And they are able to provide you with low premium homeowners insurance if you bundle it with health and auto policies. You should compare it with other companies to know whether you are getting the cheapest homeowners insurance.

Look for Other Discounts

Some insurance companies offer discounts that are exclusive to their own or some particular types of age groups. For example, some insurance companies offer house insurance to retired people at a reduced price. They have reason to do it. For them retired people stay more at home as compared to working people so their homes are less prone to burglary or theft. In the same vein, as they stay more at home, they can spot fire in their home and the losses can be checked in time.

Have a Good Credit Statement 

Like other forms of loan and mortgage, good credit history is required to get homeowners insurance at a small price. Because insurers go through your credit history before offering you a reduced premium. The improvements in credit scores can be made by following a few simple steps.

Pay your credit card bills as per schedule.

Keep your outstanding balance 30 percent or even less of your credit limit.

  • You should limit your request for hard inquiries.
  • You should try to improve your thin credit file.
  • Use your old accounts to improve credit history.
  • Pay your old debits to improve your credit history.

Compare Different Companies

Want to get the cheapest homeowners insurance but don’t know how? You should compare quotes from different insurance companies. You should take an inventory of items to be covered and talk to insurance agents who will guide you with which house insurance provider covers you the best at the lowest price. You can also request quotes from the leading insurance companies by using the request a quote option available on their website. Once you have quotes from different companies, comparison becomes easy.


Cheap Home Insurance

Know That Market Value and Insurance Value are Different

While buying insurance you should have some basics clear. We should understand that market value and insurance value are different.

Your home’s market value can be defined as the price it worthwhile buying or selling it.

The insurance value can be defined as the value of the coverage you need to rebuild the house if your house is destroyed due to some natural disaster.

While determining a homeowners insurance coverage, you should not include the land value to it. Because insurance covers the cost of repair and replacement in the case of damage. You can take the help of a property estimator

Review Your Property Early

You cover a lot of things with house insurance. Some of the things that are covered are furniture, appliances, and other household items. No doubt jewelry and artwork have a different package. But there are times when you want to remove some of these belonging from your list. You might consider giving them to some relative as you are not using them. If you do such a thing, you need to review your property. If your coverage gets reduced your premium will also get small. So, if you are looking for the cheapest home insurance, then these efforts are worth it.

Different Types of Homeowners Insurance

One size doesn’t fit all and there are different types of home insurances to meet different types of homes. Here we turn the spotlight on different types of homeowners policy.

HO-1 Policy

It is the simplest form of policy that covers some basic perils. It is also called bare bones home insurance.

The policy is meant for dwelling or home structures.  The policy provides protection against 10 perils that are as follows.

  • Fire or lightning.
  • Hail or windstorms
  • Riots or civil commotion
  • Damage from aircrafts
  • Damage from vehicles
  • Explosions
  • Smoke
  • Malicious mischief or vandalism
  • Theft
  • Volcanic eruptions

You might think that it is a big list but it misses some of the big things like protection from flood, earthquake, and falling objects.

HO-2 Policy

This homeowners insurance policy provides coverage to all the things covered under the HO-1 homeowners policy. In addition, it provides coverage to two extra perils that includes damage done due to falling objects, excessive water flow due to flawed plumbing, HVAC and home appliances. In a broad sense, it covers your home and personal property. Here is the list of coverages.

  • Discharge or overflow of water or steam
  • Burning, cracking or damage to some household system.
  • Heating of air conditioner or freezing of pipes
  • Damage done due to electric current
  • Damage done due to a falling object

House Insurance for Protection


HO-3 Policy

HO-3 also called special form policy is one of the most common types of homeowners policies available. The policy is very popular as a single-family home policy Apart from your home, the policy also covers your personal property, liabilities, medical bill and living out expenses. Here is the list of perils covered under this policy.

  • Threat due to defective construction
  • Issues Related to Building Foundation
  • Government Regulations
  • Damaged due to pet or animals
  • Damage caused due to corrosion
  • Damage related to pollution
  • Losses due to theft or vandalism
  • Regular wear and tear
  • Flood
  • Earthquake
  • Birds, rodents or vermint
  • Mechanical issues
  • Mold and Fungus
  • War and Nuclear Hazards

HO-4

Even though we are listing it here but HO-4 is essential a renter’s insurance. As renters don’t own a home property so this insurance doesn’t provide coverage to a building structure. It is beneficial for renters as it provides coverage to personal property and liabilities. In case they require to move outside their homes they will be provided with living expenses.

HO-5

In several respects, this policy is similar to HO-3 but it covers almost all forms of perils unless they are excluded. Due to its wide coverage, this policy is costlier than HO-3. It provides coverage on an open peril basis. It is also referred to as comprehensive home insurance.

HO-6

HO-6 homeowners insurance policy is designed for condo-owners and co-op tenants. Through this policy, the walls of the condo and everything within are covered. It provides coverage to liabilities and living expenses. As condo owners only have propriety over their units only. It is why the condo association has insurance to cover common areas.

HO-7

HO-7 is akin to HO-3 in various respects but it has been extended to cover mobile homes. This policy is covered as a single-family home policy. Some of the major things covered under this policy are as follows.

  • Trailers of different kinds including fifth-wheel trailers
  • Single wide mobile homes
  • Double wide mobile home
  • Belongings
  • Liabilities
  • Medical payments

HO-8

This homeowner’s insurance is designed for homes that don’t meet the standard criteria set for the insurance. Buildings with high-risk fall in this category. Older and dilapidated homes fall under this category. Similar to HO-1, it is also called a peril policy and provides coverage to 10 perils.

Homeowners Insurance with Good Coverage


Home Insurance - Optional Coverage

Flood Insurance

This coverage protects your home and belongings in case they get damaged due to a flood. So, if you are living in flood-prone areas this optional house insurance is worth considering. Here it is worth noting that this is a separate policy with its own deductible.

Earthquake Insurance

Like flood insurance, earthquake policy also has its own deductible.  The policy protects you in the event of damage caused due to an earthquake. 

Water Backup of Sewer

Most of the homes face the problem of water backup of sewer and drain. You can buy insurance to safeguard against this peril.

Insurance for Other Structures

Is there any building or structure that is unattached to your home and you are seeking insurance for it? You can have a gazebo, shed, or garage. You can get insurance for them.

Personal Umbrella Insurance

As the name suggests, a personal umbrella liability insurance coverage provides coverage beyond your policy limits. Bodily injury, personal injury, and property damage are some of the common things to be covered.

Medical Payment Coverage

This insurance provides for medical expenses which are caused due to an accident at a customer premise. This insurance provides immediate expense for treatment without getting into details of who is at fault.

A Brief Profile of Best Homeowners Insurance Companies

Homeowners insurance is a crowded space. There are a large number of companies making big claims. Due to the large number of options available, insurance seekers always find them in a tight spot. Here we profile some of the prominent insurance companies.

Amica

Full Name - Amica Mutual Insurance Company

Location - 100 Amica Way, Lincoln, RI

Year of Foundation – 1907

Official Website - https://www.amica.com/en.html

Rating – A+

Financial Strength

Assets as of Dec. 31, 2019 – $5.4 billion

Policy counts as of Dec. 31, 2019 – 1.6 million

Subsidiary Companies:

  • Amica Life Insurance Company
  • Amica Property and Casualty Insurance Company
  • Amica General Agency, LLC
  • Services offered –
  • Auto Insurance
  • Home Insurance
  • Life Insurance
  • Condo Insurance
  • Renters insurance
  • Flood Insurance
  • Retirement Solutions
  • Marine Insurance
  • Motorcycle Insurance
  • Small Business Insurance

Auto-Owners

Full Name – Auto Owners Insurance

Location - Lansing, Michigan, United States

Year of Foundation – 1916

Official Website - https://www.auto-owners.com/

Rating – A++ (The AM Best Company)

Financial Strength –

Total assets US $29.7 billion (2020 Annual Report)

Subsidiary Companies  

  • Auto-Owners Insurance Company
  • Auto-Owners Life Insurance Company
  • Owners Insurance Company
  • Home-Owners Insurance Company
  • Property-Owners Insurance Company
  • Southern-Owners Insurance Company
  • Atlantic Casualty Insurance Company
  • Concord Group Insurance Companies
  • Capital Insurance Group
  • Services Offered
  • Insurance
  • Mutual Funds

Erie Insurance

Full Name – Erie Insurance

Location - Erie, Pennsylvania, United States

Year of Foundation – 1925

Official Website - https://www.erieinsurance.com/

Rating – A+ (The AM Best Company)

Financial Strength –

Total assets - US $29.7 billion (2020 Annual Report)

Subsidiary Companies  

  • Erie Insurance Property & Casualty Company
  • Flagship City Insurance Company
  • Erie Insurance Company
  • Erie Insurance Company of New York
  • Erie Family Life Insurance Company
  • Services Offered
  • Homeowners Insurance
  • Renters Insurance
  • Condo Insurance
  • Mobile Home Insurance
  • Personal Valuables Insurance
  • Flood Insurance
  • Auto Insurance
  • Motorcycle Insurance
  • Boat Insurance
  • Collector and Classic Car Insurance
  • Life Insurance
  • Business Insurance
  • Restaurant Insurance

American Family

Full Name – American Family Insurance

Location - Madison, Wisconsin, United States

Year of Foundation – 1927

Official Website - https://www.amfam.com/

Rating – A (Better Business Bureau)

Financial Strength – $31.1 billion USD

Subsidiary Companies 

  • American Family Mutual Insurance Company (AFMIC)
  • American Family Brokerage, Inc. (AFBI)
  • American Family Insurance Company of Ohio (AFICO)
  • American Family Life Insurance Company (AFLIC)
  • American Family Securities, LLC (AFS)
  • American Standard Insurance Company (ASIC)
  • American Standard Insurance Company of Ohio (ASICO)
  • Amfam.com Inc. (AMFAM)
  • HomeGauge
  • Homesite Group Incorporated
  • Main Street America Insurance
  • Moonrise, Inc.
  • Networked Insights
  • PGC Holdings Corporation

Services Offered 

  • Vehicle Insurance
  • Car Insurance
  • Motorcycle Insurance
  • RV & Camper Insurance
  • Boat Insurance
  • ATV Insurance
  • Snowmobile Insurance
  • Classic Car Property & Business
  • Home Insurance
  • Renters Insurance
  • Condo Insurance
  • Manufactured Home
  • Farm & Ranch Insurance
  • Business Insurance
  • Landlord Insurance
  • Life Insurance
  • Umbrella Insurance
  • Identity Theft Insurance
  • Credit Monitoring
  • Health Insurance
  • Travel Insurance

Nationwide

Full Name – Nationwide Mutual Insurance Company

Location - One Nationwide Plaza, Columbus, Ohio, U.S.

Year of Foundation - 1926

Official Website - https://www.nationwide.com

Rating - A+ p (AM Best)

Financial Strength

Total Assets - US$253.6 billion (2019)

Subsidiary Companies

Nationwide is a group of several companies that deals into property, casualty, farmland, insurance, retirement and asset management. He we list some of them.

  • Nationwide Affinity Insurance Company of America
  • Nationwide Assurance Company
  • Titan Auto Insurance of New Mexico, Inc.
  • Titan Indemnity Company
  • Victoria Automobile Insurance Company
  • Victoria Fire & Casualty Company Allied General Agency Company
  • Allied Group, Inc.
  • Allied Property and Casualty Insurance Company
  • Nationwide Agribusiness Insurance Company
  • Scottsdale Insurance Company
  • Scottsdale Surplus Lines Insurance
  • Nationwide Affordable Housing, LLC
  • Nationwide Alternative Investments, LLC

Service Offered 

  • Business Insurance
  • Auto Insurance
  • Life Insurance
  • Pet Insurance
  • Homeowners Insurance
  • Renters Insurance

USAA

Full Name – United Services Automobile Association

Location - San Antonio, Texas, United States

Year of Foundation - 1922

Official Website - https://www.usaa.com/

Rating – A++ (AM Best Company)

Financial Strength

Total Assets - $173.732 billion

Subsidiary Companies

  • United Services Automobile Association
  • USAA Casualty Insurance Company
  • USAA General Indemnity Company
  • Garrison Property and Casualty Insurance Company
  • USAA County Mutual Insurance Company
  • USAA Limited
  • USAA S. A.
  • USAA Insurance Agency
  • USAA Life Insurance Company
  • USAA Life Insurance Company of New York
  • USAA Life General Agency, Inc.
  • USAA Investment Services Company
  • USAA Federal Savings Bank Member FDIC
  • USAA Savings Bank (USAA Credit Cards) Member FDIC
  • USAA Residential Real Estate Services, Inc.
  • USAA Acceptance, LLC
  • USAA Acceptance III, LLC
  • USAA Mortgage Solutions
  • USAA Alliance Services, LLC (ASC)

Service Offered

  • Auto Insurance
  • Renters Insurance
  • Homeowner Insurance
  • Rental Property Insurance
  • Valuable Personal Property Insurance
  • Condo Insurance
  • Flood Insurance
  • Life Insurance
  • Annuities
  • Umbrella Insurance
  • Motorcycle, RV & Boat Insurance
  • Small Business Insurance
  • Manage Policy
  • Additional Insurance Solutions

Geico

Full Name – Government Employees Insurance Company

Location - Chevy Chase, Maryland, United States

Year of Foundation - 1936

Official Website - https://www.geico.com/

Rating – A++ (AM Best)

Financial Strength

Revenue - $35.093 billion USD (2020)

Subsidiary Companies

Geico is the subsidiary of Berkshire Hathaway Inc.

Service Offered 

  • Auto Insurance
  • Property Insurance
  • Boat Insurance
  • Collector Auto Insurance
  • Business Owners Insurance
  • Commercial Auto Insurance
  • Travel Insurance
  • Identity Protection Insurance

Allstate

Full Name – The Allstate Corporation

Location - Northbrook, Illinois, U.S

Year of Foundation - 1931

Official Website - https://www.allstate.com/

Rating – A+ (AM Best)

Financial Strength

Total Assets - US$119.950 billion

Subsidiary Companies

  • Allstate Fire and Casualty Insurance Company
  • Allstate Insurance Company
  • Allstate Indemnity Company
  • Allstate Life Insurance Company
  • Allstate Vehicle and Property Insurance Company
  • Allstate Property and Casualty Insurance Company

Service Offered 

  • Auto Insurance
  • Home Insurance
  • Renters Insurance
  • Condo Insurance
  • Motorcycle Insurance
  • Business Insurance
  • Life Insurance
  • Roadside Insurance
  • Identity Protection Insurance

Progressive

Full Name – Progressive Corporation

Location - Mayfield, Ohio, United States

Year of Foundation - 1937

Official Website - https://www.progressive.com/

Rating – A+ (AM Best)

Financial Strength

Total Assets - $64.098 billion (2020)

Subsidiary Companies

  • Drive New Jersey Insurance Company
  • Progressive American Insurance Company
  • Progressive Bayside Insurance Company
  • Progressive Casualty Insurance Company
  • Progressive Classic Insurance Company
  • Progressive DLP Corp.
  • Progressive Hawaii Insurance Corp.
  • Progressive Michigan Insurance Company
  • Progressive Mountain Insurance Company
  • Progressive Northern Insurance Company
  • Progressive Northwestern Insurance Company
  • Progressive Preferred Insurance Company
  • Progressive Security Insurance Company
  • Progressive Southeastern Insurance Company
  • Progressive West Insurance Company

Service Offered 

  • Auto Insurance
  • Car Insurance
  • Boat Insurance
  • Condo Insurance
  • Flood Insurance
  • ID Theft Insurance
  • Motorcycle Insurance
  • Pet Insurance
  • Renters Insurance
  • Travel Insurance

Cheapest home owners insurance


Homeowners Insurance Common Q & A

Is homeowners insurance mandatory?

The US law doesn’t force you to buy homeowners insurance. However, banks consider it for a mortgage. Although not mandatory, home insurance saves you from financial losses. If someone gets injured at your home or someone’s property gets damaged at your home, a homeowner’s insurance can cover these expenses.

So not having such insurance is not illegal. But it is always wise to protect your home and its content with homeowners insurance.

What is the 80 percent rule in Insurance?

The 80 percent rule in homeowner’s insurance says that the insurance company will only pay for the complete damage to the house if the owner has insurance coverage that is a minimum 80 percent of the house's total replacement value. If the insured amount is less than 80 percent the insurance company will only pay the difference.

What do homeowner’s insurance policies cover?

The coverage under homeowners insurance differs from one policy provider to another. Generally, the coverage includes dwelling, personal property, protection against liability, and medical protection for guests. However, you should seek standard coverage to meet to get complete protection. The best idea is to discuss the matter with your homeowner's insurance provider and get a customized package. You can seek homeowners insurance quotes from different insurance providers and compare them.

How are homeowners insurance claims paid?

Most of the people seeking homeowners insurance have a question regarding how these claims are processed when your house gets damaged.

The process is simple. A claim adjuster will make an estimate on the money needed to fix and repair your damaged house. He will also make an estimate on damaged items so that they can get replaced.

The best way to get your claim processed fast is to make an inventory. You can make such an inventory on paper or using a device.     

What is the average cost of home insurance?

On average, a homeowner costs $1500. But you know that the cost depends upon a number of factors that include state laws and regulations, the location of your home, the coverage, and whether it is bundled with auto or car insurance.

Which are the most expensive states for homeowners insurance?

Here is the list of US states with the most expensive homeowners insurance.

  1. Louisiana
  2. Florida
  3. Texas
  4. Oklahoma
  5. Kansas
  6. Rhode Island
  7. Mississippi
  8. Colorado
  9. Massachusetts
  10. Nebraska

Which are the most expensive states for homeowners insurance?

Here is the list of US states with the cheapest homeowners insurance.

  1. Oregon
  2. Utah
  3. Idaho
  4. Nevada
  5. Wisconsin
  6. Arizona
  7. Delaware
  8. Washington
  9. Ohio
  10. Maine

Also Read

How to Get an Insurance - A Complete Insurance Buying Guide

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