Homeowners Insurance
Homeowners insurance offers you and your family peace of mind as it protects you against the unexpected. Having the correct type of insurance and coverage limits is crucial as it ensures that you are financially able to face whatever life may throw at you.
While you can get insurance coverage for nearly any situation, reviewing your coverage is vital to ensure that you're sufficiently covered and taking advantage of potential discounts. But even with homeowners insurance, some things aren't common knowledge that could save you money and provide you and your family with better protection.
Facts to Consider About Home Insurance
Coverage Varies
Not all home insurance policies are created equal, as every policy provides a different level of protection based on the individual. However, you'll purchase home insurance not only because it's mandatory for most mortgage lenders but it protects your home and personal property.
Most standard homeowners insurance policies cover the structure of your home, your belongings, and liability protection for injuries or property damage. Additional living expenses may be covered if you cannot live in your home during repairs.
If you have expensive items or live in an area prone to natural disasters, you can add additional coverage at an additional cost to cover these items.
Standard Policies Don't Cover All Losses
A standard home insurance policy does not cover flooding or excessive wind damage. You need to purchase separate policies to be protected from these disasters. Living in Saratoga Springs has an increased chance of home damage from severe winter storms and flooding, so these are policies to consider closely. If you live in a flood-prone area, your lender may require you to purchase insurance through the National Flood Insurance Program before they approve your loan.
Market Value vs. Replacement Cost
Market value is the current purchase price of your house, while replacement cost is what it will take to rebuild your home at today's prices in the same spot, same size, and same quality of construction. Insurance companies use the replacement cost valuation, which can be completely different than the market value. The insurance company seeks to insure the home for the total replacement value, not the current market value.
For insurance purposes, insure your home to 100% of its replacement cost, ensuring you can rebuild your entire house the way it is now in the event of a total loss.
Revisit Your Personal Property Protection
Standard homeowners policies place a maximum dollar limit on valuables when protecting or replacing your home's belongings. Keep an ongoing inventory of all your belongings and their value, and schedule an annual review with your insurance agent to ensure your personal property protection is adequate.
If you own expensive items (e.g., jewelry, fine art), a standard policy may provide inadequate coverage should anything happen to your belongings. Consider adding an endorsement to provide extra coverage for these items.
Check Your Credit Score
While your home, location, and contents help determine your insurance premium costs, another factor often overlooked is your credit history. If you have a higher credit score, you'll likely have a lower insurance premium. According to Experian, insurance companies can check your credit periodically. Therefore, the best practice is maintaining a good credit rating, saving you money on your home insurance for years.
Poor Maintenance Can Cause Denials
As a homeowner, it's essential to perform regular maintenance on your home to protect it and prevent damage. Your insurance company may deny a claim if the claims adjuster finds the