How Do I Value My Contents
The best way to do value the contents of your property for insurance is to:
- Go through your house room by room and estimate how much it would cost to replace every single bit of furniture and electrical good, including white goods and gadgets
- Do the same for books, CDs, DVDs, clothes, shoes, and sporting equipment
- If you have particularly valuable paintings, silver, jewelry or antiques consider having them professionally valued
- Add it all up together
What Type Of Property Do You Want To Cover
Your home can influence what sort of policy you should get.
For example, most home insurance policies will cover you if you own a property of standard construction, but if your home is a listed building or has a thatched roof, you may need more specialist cover. Whether you rent or own your home can also affect the type of cover you need.
How Your Insurance Company Calculates Your Premiums
Premiums are the amount you pay to buy insurance.
When determining how much you’ll need to pay for premiums, insurance companies may consider factors such as:
- the type of residence you live in, such as a single family home, semi-detached, condo, rental property, or seasonal residence
- characteristics of your residence, such as materials your house is made of, age, size, location, replacement value
- value of your property and contents to be insured
- the distance between your home and a fire hydrant or a fire station
- the crime rate in your neighborhood
- your claims history
- the type of policy and coverage you selected
- the amount of your deductible
A deductible is the amount of your claim that you agree to pay before your insurance company pays the rest.
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Myth: If I Have Valuables They Are Covered
FACT: A standard home insurance policy covers your personal property and most valuables up to the selected limit of insurance. Its important to note that sub-limits often apply to specialty property, like jewellery or furs. For these items, you have the option of adding coverage to your policy. Often, you will need to provide proof of value .
A Home May Be Your Largest Investmentmake Sure You Adequately Protect It
If you own a home, you may wonder how much homeowners insurance you really need. After all, the more coverage you have, the higher the premiumsand you probably want to avoid paying more than you need to. Still, if you dont have enough coverage, could you afford to rebuild your home and replace your belongings if a disaster were to strike?
The good news is that you can fine-tune your homeowners insurance policy to make sure you have the right typeand right amountof coverage.
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What Is The Claims Response Like
If you find yourself in the position of filing a claim somewhere down the road, you want to make sure that the company you work with has an easy and well-functioning claims process. Your real estate agent should be a good resource and can probably tell you what they know about how different companies respond to big problems.
Youll also want a clear understanding of who will handle your claims calls and what kind of settlement rate and response time you can expect. Ask these questions upfront, before choosing a provider.
If You Have A Mortgage
Buildings insurance will be a condition of the mortgage and must be at least enough to cover the outstanding mortgage. Your lender should give you a choice of insurer or allow you to choose one yourself. They can reject your choice of insurer but can’t make you use their own insurance policy unless your mortgage package includes insurance.
If you buy a house you should take out buildings insurance when you exchange contracts. If you sell a house you are responsible for looking after it until the sale is completed so you should keep your insurance cover until then.
If your mortgage lender repossess your home you’re responsible for insuring it until it is sold and you should tell your insurer that you are no longer living there, otherwise you may not be covered.
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Why Should You Update Your Coverage
Before you renew your coverage, you should list any significant new purchases. Also, be sure to make note of any home improvements you’ve made. Let’s say you decide you want a higher level of coverage, but you’re leery of the higher premiums. Ask your agent how much you would have to increase your deductible to get the extra coverage.
If you are thinking about changing your insurance company and have a history of not making claims or making only minimal claims, ask your current insurer for a letter of claims experience. It might help you lower your premiums.
It Pays To Replace Your Belongings If Theyre Damaged Or Stolen
Homeowners insurance also covers your personal property, meaning your clothing, furniture, appliances, and other personal items if theyâre stolen or damaged by any covered perils listed in your policy. This coverage also applies to damage or theft away from home.
Genius tip
Most insurance companies offer a variety of optional coverages that can add an extra layer of protection for the structure of your home, increase coverage limits on expensive items like jewelry, and expand coverage to protect against losses that arenât normally covered by a standard policy, including plumbing backups, appliance breakdown, and service line damage.
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What Is Home Insurance And How Does It Work
Home insurance is a type of insurance policy that covers your home in the case of fire, flood, damage or theft of contents. Youll pay a premium based on your level of cover and risk, allowing you to make a claim when needed. There are three types of home insurance:
- Buildings insurance: This protects the physical building the outer structure, fixtures and fittings of your home. It covers anything that cant be removed, like doors and bathtubs . The average buildings-only policy costs £113 per year, but this price wont stay static. Its subject to annual increases and, in the UK, premiums have increased every year since 2017. Buildings insurance is a legal requirement unless you own your home mortgage-free and even if you do, its considered reckless not to have it.
- Contents insurance: This protects your belongings in the house, garage and shed, such as furniture, white goods or televisions. The average cost of contents-only cover is between £59 and £66 per year. Tenants who rent property or buyers who only own a propertys lease will only need to take out this insurance, since the buildings insurance will be handled by the owner or freeholder. Given the low cost, its worth having unless your possessions really are limited.
- Combined buildings and contents insurance: This policy combines the two and, as a result, is often cheaper than having two separate policies. Its suitable for freeholders who live in their homes, and averages between £146 and £152 a year.
Talk To A Real Person
Stauffer feels the best way to get quotes is to go directly to the insurance companies or speak to an independent agent who deals with multiple companies, as opposed to a traditional captive” insurance agent or financial planner who works for just one home insurance company. Bear in mind, though, a broker licensed to sell for multiple companies often attaches their own fees to policies and policy renewals. This could cost hundreds extra a year, he notes.
Bank urges consumers to ask questions that give them a detailed sense of their options: You want to consider different deductible scenarios to best weigh if it makes sense to opt for a higher deductible and self-insure, he says.
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Reasons Why Rates Are So Low In Some Areas
Hawaii ZIP 96859 has the lowest average home owner insurance cost in the nation, but dozens of other Hawaii ZIP codes are also among the cheapest in the country. So, why does Hawaii have such low home insurance rates? It may be that standard home policies in Hawaii do not absorb high claims costs for hurricane damage.
One major factor in Hawaii is the fact that most standard homeowner insurance policies do not cover hurricane damage. Hurricane Iniki, which hit in 1992 did so much damage that the majority of insurers excluded hurricane damage from their coverage. Homeowners in Hawaii now have to purchase a separate hurricane damage policy, says Michael Barry, spokesman for the Insurance Information Institute.
Barry also points to Hawaiis underwriting laws, which prohibit the use of credit ratings. The fact that Hawaii does not consider credit ratings could also be a factor, he says, but probably has a bigger impact on car insurance rates than homeowner premiums.Other locations on the cheapest list are low compared to the rest of the country, in part, because of the following factors:
- Few major weather related losses.
- A low crime rate.
- Relatively few major liability lawsuits filed.
- Many well organized neighborhood watch groups.
Barry agrees, saying, in general, that Neighborhood watches are a factor that would be consider by insurers and can have an impact on rates. These groups help prevent vandalism and theft leading to fewer claims, and lower rates.
What Is An Endorsement On A Home Insurance Policy
Since weve addressed the types of policies available in Canada, lets move onto endorsementsadditional protection or add-ons. Denobrega suggests asking your broker or agent what they recommend based on your plan and your needs, noting common endorsements that might save you money in the long run include earthquakes, identity theft and personal property, for any high-value belongings. Learn how earthquake insurance works.
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As A Landlord What Insurance Do I Need
While not legally required, its recommended that a landlord takes out specific landlord insurance, which can cover not just their building and fixtures and fittings, but also rental income, public liability and accidental damage.
You may need landlord insurance to be approved for a buy-to-let mortgage.
What Is Excluded From Homeowners Insurance
Home insurance policies never include coverage for the perils listed in the table below. These require additional and different policies however, there are also some exceptions for perils that would normally be covered.
Normally excluded from homeowners insurance:
- Earthquakes, landslides and sinkholes
- Loss of property caused by bad zoning, faulty construction and lack of maintenance.
High-risk flood areas
If your area is deemed high-risk by the Federal Emergency Management Agency , youll be required to purchase flood insurance for your property as an add-on to your policy.
The National Flood Insurance Program provides flood insurance for property owners, renters, and businesses and is available for anyone living in one of the 23,000 participating NFIP communities. For more information about whats covered and how to purchase flood insurance, visit FloodSmart.gov.
Hail and wind
Depending on where you live, there may be additional weather-related exclusions. For example, homeowners insurance policies issued for coastal homes in Texas dont cover wind or hail damage.
Earthquakes
Power outages
Depending on your home insurance policy, some items such as spoiled food or frozen pipes may not be covered in the event of a short or prolonged power outage. However, its not as clearcut as floods or earthquakes, so make sure to check directly with your insurer beforehand to see whats covered and whats not.
Wildfires
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What Properties Are Difficult To Insure
Some properties can be difficult to get insurance for, as they are not normally covered by mainstream insurers. You may end up having to go to a specialist insurer, which could cost you more. However, no property is uninsurable it might just cost you more. Properties that can be difficult to insure include:
- Listed properties
Whats Usually Not Covered
All insurance policies have exclusions, and home insurance policies are no different. In addition to general wear and tear, and the optional extras like accidental damage cover, home insurance policies have some common exclusions. Examples of these are:
- Frost damage
- Storm damage to gates, fences, and hedges
- Any deliberate damage caused by a member of your household
- Damage caused by birds, insects, and other pests
- Damage caused by pets
Another expensive part of your home that may break, but isnt covered by a standard home insurance policy, is your boiler. If youre a homeowner, you may want to look into boiler cover.
And remember many insurance policies are invalidated if your property is left unoccupied for more than 30 days. This is because the risk of damage and/or theft goes way up when homes are empty for that long.
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Your Homes Claim History Matterseven From When You Didnt Live There
Whether youve just begun your home search or lived in your home for years, its never too late to get familiar with your homes claim historyand how it might be affecting your homeowners insurance rates.
Its all summed up in a nifty database called the Comprehensive Loss Underwriting Exchange, or CLUE. Essentially the equivalent of a credit report for your home, the CLUE contains all kinds of records of insurance claims on the house.
Thats important to know because a claim filed for the property in the past five years could cause your rates to inch upward, even if you didnt own the home at the time of the claim.
But take heart, dear home buyernot all prior claims have a negative effect.
Some recent claims can have a positive impact, because replacing a roof damaged by a windstorm could make the house more desirable to an insurance company, Worters says.
If youre looking to buy a home and want a copy of the CLUE report, check with the sellers . Theres no guarantee theyll fork it over, but theres no harm in asking. If you already own the home, you can get a free report from database giant LexisNexis.
Does Home Insurance Cover Storm Damage
Most building and contents insurance should cover storm damage to the property and your belongings inside however you need to check the policy carefully.
There is a chance your provider could refuse to pay out based on their definition of a storm, which generally involves a one-off event with violent winds accompanied by rain or snow, that can damage property.
You may also have a claim rejected if your property was in a state of despair or already damaged before the storm struck.
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Types Of Complaint We See
Some complaints we see involve disputes over which items should be classed as contents or buildings for insurance cover. Its up to insurance companies to make sure the cover they sell is suitable for you and that you understand what youre buying.
The following are examples of complaints we see.
- The insurer has done the repairs but they havent fixed the problem.
- The insurer says it can repair the damage but you think the item should be replaced.
- The insurer has decided the value of the buildings or contents that the customer has insured isnt enough to cover the claim .
- The insurer says you carelessly, or deliberately didnt tell them the true replacement cost of your home contents or the rebuild cost of your home, and has cancelled the policy.
- Youve been offered a replacement by the insurer but its not the same as what you lost.
- Youve been offered money by the insurer, but its not enough to have the repairs done or replace what was damaged.
The types of damage to properties that may have caused you to complain about a claim include:
What Are Some Common Exclusions
Flood insurance if you live in a flood prone area, or have been flooded before, it is notoriously difficult to find an insurer that will cover you for risk of flood.
Subsidence, if your property has experienced subsidence before.
Acts of God insurance-speak for major natural phenomena such as tidal waves, hurricanes, cliff-falls and other landslides, earthquakes and volcanic eruptions. Many insurance policies exclude or limit their liability for such events.
Acts of war and sonic booms from aircraft: so if France invaded using Concorde and your house was damaged this would not be covered.
Frost damage is also a common exclusion.
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Are You Working With A Reputable Company
McCurdy says that there are some red flags to watch for when it comes to choosing a reputable insurance company. If someone is just dictating a price to you but wont provide a full report of what youre being sold, or provide a quote in writing, thats a red flag, she says. On the other hand, A green flag is someone who asks a lot of questions.
Its important to check your insurers credit rating and find out if there are consumer complaints against the company. When doing some digging to make sure youre working with a trustworthy company, Consumer Reports can be a good resource.
Clark advises making sure the company you choose is domiciled within the United States. Those that arent Tend to charge more for the same coverage in order to cover the additional cost of doing business here, he says. That can also make claims handling problematic in the event of a loss. Select a company with offices and claims staff located near the home being insured.