Homeowners Insurance

Homeowners Insurance: What Homeowners Need To Know

What is homeowners insurance and why do I need it?

Home insurance protects your home and your family from many of life's unpredictable situations. For many people a home is the largest and most valuable asset they will ever own. For this reason most people choose to cover their homes with some type of personal insurance policy. In many cases you are required to purchase home insurance. For instance, if your home is mortgaged then your are required to have a homeowners policy with the bank listed as an additional interested party.

Home Insurance Basic Concepts

Dwelling: covers your home and structures such as a garage or deck that are attached to your home.

Other Structures: covers structures such as a detached garage or shed that are separate from the house.

Personal Property: covers your belongings such as furniture and clothing

Liability Protection: helps protect you against law suits most commonly encountered if someone is injured on your property.

Living Expenses: what if your home is damaged and not livable after a fire or other event?

Medical Payments: what if a guest is injured in your home and needs immediate medical treatment?

What are the most important factors when purchasing homeowners insurance?

Getting the coverage you need at an affordable price should be expected when purchasing a homeowners insurance policy. One of the most important steps you should take to find the right protection is to determine the replacement cost of your home.

Replacement cost can be calculated by most insurance agents using a standardized estimation method. But be advised, the policy premium is heavily weighted on this replacement cost, (otherwise known as dwelling coverage) giving insurance agents an incentive to inflate this value. Make sure you request a copy of the replacement cost details in writing to ensure your home is covered for the correct amount.
 

After determining the replacement cost you should decide how much liability coverage you require. Insurance agents will not play the role of your accountant, only you know the total value of your asset. Therefore, you should take great care in considering liability limits above the baseline of $300,000 if your personal financial situation requires it.

Many people will also elect to purchase an umbrella insurance policy to further protect their nest egg. Higher liability limits and umbrella policies are very inexpensive ways to protect the assets you've acquired from frivolous law suits and claims.

How can I save money on my homeowners insurance?

Many companies offer discounts that can help you save on your insurance. For instance, you may qualify for a discount if your home has had renovations in the last 10 years. Or if you are 55 years or older and not working full time. If your home has protective devices such as smoke alarms, fire extinguishers, dead bolt locks, a sprinkler system, or a security system you will also receive a discount. In many cases new homes or new home buyers receive discounts as well. Ask your insurance agent about any discount you may qualify for.

The most effective way to save money on your home insurance is to insure both your car and home with the same company. In this instance you will maximize your savings on both the auto and home policy, and you have the added convienence of having both policies serviced by the same agent and carrier. Our Pawling insurance agency can help you select the best coverage for your unique needs.