Wednesday, June 15, 2022

What To Know When Shopping For Home Insurance

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Here are some things you can do to lower the cost of your house insurance quotes:

  • Increase your deductible – it’s a sign you won’t be filing small claims because you can afford to pay more if a risk becomes a reality.
  • Install an alarm system and smoke detector – bonus points if everything is centrally monitored by a third-party who can action a problem with emergency services while you’re away.
  • Upgrade your electrical, heating and plumbing – old components breakdown increasing the risk of fire and flood.
  • Be proactive and protect your home from severe weather and water damage – reducing the risk of claims means you don’t file them as often, which means you’ll pay less.
  • Ask for discounts – it never hurts to ask and if they want your business, they’ll work to find something for you.
  • Pay your premium annually instead of monthly – if you can afford it, it can save you 10-20% off your home insurance premium.
  • Insure your home for the cost to rebuild it, not its market value – you own the property whether there’s a house on it or not. Don’t insure the lot.
  • Bundle with your car insurance provider.
  • Compare home insurance quotes from multiple providers.

Why You May Need Home Insurance

Home insurance may help protect your home and its contents in case of theft, loss or damage to the inside and outside of your home or property. It may also help you cover additional living expenses if you’re temporarily unable to live in your home. These additional living expenses may include living in a hotel or renting a home.

Home insurance may cover:

  • damage or loss to your home
  • damage, theft or loss of your personal possessions
  • personal property stolen from your vehicle
  • damage or injury to others who visit your home or property
  • accidental damage you cause to somebody elses property

Insurance companies may refer to home insurance as property and casualty insurance. Property and casualty insurance also includes car insurance, business insurance and disaster insurance.

Try Looking For A Package Of Insurance Coverage

Take a lesson for your cable bill when it comes to shopping for your insurance coverage try bundling some of the insurance together. Many insurance companies will offer both home and auto insurance, for example, in one package. If you decide to lump your home and auto insurance in on the same bill every month, you might get a discount on your insurance rates. Check around for different companies in the area, or ask people you know about their own experiences. Get a few quotes from different sources to see which ones have the best rates, and then decide.

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How To Get Cheap Home Insurance Quotes

  • Shop around and compare

    At Ratehub.ca, we take the work out of monotonous phone calls and visits to many different brokerages repeating the same information over and over. By entering your information, we can give you several home insurance quotes from Canadaâs top home insurance providers in minutes.

  • Bundle policies

    Insurers will often give a discount to consumers who get both their home and auto insurance from them. If you can, look to have both your house and car protected by the same insurer.

  • Monitored alarm systems

    If you have a monitored alarm system installed, providing communication between your home security system and the central station of your security provider, you could receive a discount. This typically does not include your own cameras and motion sensor lighting. To get the discount, you must have a central station that protects your home.

  • Increase your deductible

    A standard home insurance deductible is $500. If you increase your deductible, the amount you must pay before the insurance company pays the rest, they will often decrease your monthly premium.

  • Renovations

    If you upgrade your electrical from knob & tube to copper wiring or upgrade your plumbing from iron and steel to plastic and copper you could see a reduction in your premiums. However, if you upgrade with more expensive finishes that would cost more to replace, youâll likely pay more

  • Prepare For The Insurance Inspector

    Shopping for Homeowners Insurance? 3 Things to Know

    Your home insurance carrier will typically perform an inspection of the property to make sure everything is in order and reported as quoted. If anything is off or you forgot to mention something in your application, your adjuster will take note of the errors and omissions and youâll see it reflected â for better or worse â in your next bill.

    For example, maybe your roof is about 10 years older than you stated on your application or on the flip side, maybe you forgot to mention that your home has certain protective features like a security system or stormproof windows that could lower your rates.

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    Am I Required To Have A Home Insurance Policy

    In a word, yes. Your home insurance policy covers your home as well as your household goods, but also provides liability coverage in case someone gets injured on your property.

    If you take out a mortgage to buy the property, which is usually the case, the mortgage holder is interested in recovering their investment should your house sustain any damage, either from fire, wind, or any other unusual occurrences. Without insurance, you’d be responsible for repaying the mortgage on a damaged house, and the assumption is, you would not have the necessary funds to repair it.

    So, a homeowners insurance policy has two main functions: it covers the mortgage if the home is destroyed in any way, and it provides you with the funds to rebuild in case it sustained material damage. However, there is no such thing as a one-size-fits-all home insurance policy, so its smart to talk to your realtor and insurance agent about the options that would work best for you.

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    Recommended Coverage: As Much As You Can Afford

    Liability coverage is the part of your homeowners policy that kicks in if someone is hurt on your property. According to NetQuote, five common liability claims that homeowners face are:

    • Dog Bites. Some dog breeds are considered high risk and arent covered by standard policies. Check with your insurance agent if you have a pit bull, an Akita, German shepherd, or another dog breed that could be deemed dangerous. Also check to see whether you are covered if your dog bites someone who is not on your propertyat a park, for example.
    • Home Accidents. Youre liable even if someone comes onto your property uninvited and gets hurt.
    • Falling Trees. You may be liable if a tree on your property falls and hurts someone or damages a car or neighbors home.
    • Intoxicated Guests. If one of your guests becomes intoxicated, you could be liable for any harm that person causes other people or property.
    • Injured Domestic Workers. If you hire people to clean your house or take care of your lawn, you could be liable if theyre injured on the job.

    Most homeowners insurance policies have at least $100,000 in liability coverage. Its a good idea to bump that up to at least $300,000or more if you can afford to do so.

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    Settling A Claim If You Have A Mortgage

    If you have a mortgage, your home insurance policy will usually include a loss payee clause. A loss payee clause makes your mortgage lender your beneficiary. In case of loss or damage to your home, your insurance company will pay your lender up to the remaining balance of your mortgage when you submit a claim.

    When you make a claim, your insurance company may, at their discretion, give the money to either:

    • you, so you can fix your home when you submit a claim
    • your lender, who would then give you the money for repairs or replacement after you submit receipts proving they were done

    What Are The 3 Basic Levels Of Coverage That Exist For Homeowners Insurance

    How to shop for home insurance

    Homeowners insurance offers three levels or tiers of coverage for the residence and personal property.

    Actual cash valuecovers the cost of the house plus the value of your belongings after deducting depreciation .

    Replacement value covers the replacement cost of your home and possessionsthe current prices you pay for new, comparable things, so you’re able to repair or rebuild your home up to the original value. Of course, you can’t spend more than the overall amount of insurance you’ve taken out.

    Guaranteed or extended replacement cost/value is inflation-buffer coverage that pays for whatever it costs to repair or rebuild your homeeven if it’s more than your policy limit. Certain insurers offer an extended replacement, meaning it offers more coverage than you purchased, but there is a ceiling typically, it is 20% to 25% higher than the limit.

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    Expand Your Coverage With Endorsements

    Talk to your insurer if you have concerns about damage and events your policy doesnt cover. In many cases, you can add what are called endorsements which usually cost extra to provide more coverage.

    Below are a few of the most common home insurance endorsements. Note that availability may vary by state and company.

    Scheduled personal property covers a specific valuable item, such as a ring or musical instrument. An appraisal may be required.

    Ordinance or law coverage pays to bring your home up to current building codes during repairs or rebuilding.

    Water backup coverage pays for damage due to backed-up sewer lines, drains or sump pumps.

    Equipment breakdown coverage pays for HVAC systems and large appliances if they stop working for reasons other than normal wear and tear.

    Service line protection pays for damage to water, electric or other utility lines that youre responsible for.

    Identity fraud coverage pays expenses associated with identity theft, such as lost wages and legal fees.

    Buying A Homeowners Insurance Policy: 7 Questions You Need To Ask

    Through our years of experience as disaster restoration professionals, weve seen so many new homeowners caught off guard by the details in their home insurance policy. When the adjuster says youre on your own dealing with sewage backup or mold removal, you know youre in trouble.

    If youre buying home insurance for the first time, ask these seven important questions about your homeowners policy.

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    Boost Your Liability Protection

    The liability insurance limit included in homeowners policies usually starts at $100,000. But depending on where you live, you could be sued for almost all your assets including investments, real estate, and personal property. So increase your liability limit if the value of your assets exceeds $100,000.

    Your safest bet is to buy coverage worth at least as much as your assets. Umbrella or excess liability coverage can provide this added protection. It increases your liability protection beyond the limits of your home and auto policies in case youre sued for accidental injury or property damage. It can also cover additional perils, including lawsuits against you for libel or slander. To get it, you may have to raise the liability coverage limits on your auto and home policies first.

    A $1 million umbrella liability policy generally costs a few hundred dollars per year. Buying more umbrella coverage can be cost-effective. State Farm, for instance, says that on average, raising $1 million in coverage to $2 million costs 75 percent of the additional premium.

    Tips On How To Lower The Price Of Your Home Insurance

    Top 5 things to know when shopping for homeowners ...

    Getting insurance for your home is easier than you think. To get the lowest rate possible, the Financial Consumer Agency of Canada recommends following these steps when shopping for home insurance.

    Compare home insurance quotes from various providers.

    Ask your broker or agent about bundling your home and car insurance policies.

    Ask your broker or agent about which discounts you qualify for.

    You might be able to further reduce your by increasing your deductible and by offering to pay your insurance bill annually instead of monthly.

    Increasing your deductible is a great way to save on home insurance in the short term, just make sure you have money reserved for this purpose. Focusing on finding cheap quotes isnt always a good idea. Having the right amount of coverage now that should always be the goal.

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    Homeowners Insurance Policy Options

    In addition to standard coverages, youll also need to make several choices about policy options when you request and compare home insurance quotes, including:

    • Your deductible. This is the amount you pay out of pocket before your insurer will cover any damages typically $500 to $2,000 for homeowners insurance. Choosing a higher deductible can be a smart way to lower your premiums, if youre sure you can afford to pay the deductible in case of a claim.

    • Earthquake, flood or windstorm coverage. Standard homeowners insurance doesnt cover earthquake or flood damage, and windstorm coverage is limited in some hurricane-prone regions. If you live in an area affected by these risks, you may want to ask about optional coverage. Flood insurance is required for some properties in high-risk zones.

    • Replacement cost coverage for your belongings. Most standard homeowners insurance policies wont pay to replace old items with new ones unless you choose this upgrade.

    • Extended or guaranteed replacement cost coverage for your home. Standard policies wont pay more than your dwelling coverage limit to fix your house. Extended replacement cost coverage will pay out more if repairs require it, up to a specified limit, and guaranteed replacement cost coverage will pay the full cost.

    Eight Tips For Buying Homeowners Insurance

    People purchasing their first homes represented 31 percent of all buyers in September, according to the National Association of Realtors. Among the many steps in the process is purchasing homeowners insurance.

    Home buyers especially first-time home buyers often dont think about budgeting for home insurance when looking for their dream home, but they should, Sean Harper, co-founder and CEO of Kin Insurance in Chicago wrote in an email.

    Where you live can have an enormous impact on your home insurance rates, Harper added. For example, homeowners near open space in California and on the coast of Florida are more exposed to extreme weather , and insurance in these areas will usually cost more because of it. Home buyers should also be aware of local flood disclosures laws when buying a house in a flood zone. Youll want to know if flood insurance is required for the property and whether the home has experienced any flood damage in the past.

    Buyers should start looking for a home insurance provider as soon as they have a contract accepted to buy a home.

    Most mortgage companies require proof of insurance before closing, wrote Bill Gatewood, corporate vice president at insurance brokerage Burns & Wilcox in Detroit. Homeowners should begin shopping around at least 30 days prior to closing waiting until the last minute can delay the process.

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    Be Aware Of Exclusions

    Depending on where you are shopping for home insurance, there will be a list of things that won’t be covered on a standard policy. These include earthquakes, landslides, mudflows, and flooding.

    If you’re at risk for a peril that isn’t covered on your policy, ask your home insurance agent or company if there’s an option to purchase protection for excluded incidents.

    Consider Flood Insurance Even In A Low

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    Homeowners policies will cover flooding only if its caused by a pipe or another system that breaks in your home. Protection against flooding and mud flows originating from the outside must be covered by flood insurance.

    That coverage can be a very worthwhile purchase, even if you dont think your property is vulnerable. The National Flood Insurance Program , sponsored by the federal government, says that more than 40 percent of the flood losses it paid from 2015 to 2019 were for properties outside of high-flood-risk areas.

    The NFIP underwrites most flood policies in the U.S. you can buy that coverage through most insurance agencies that sell homeowners and car insurance. The standard NFIP policy insures dwellings for up to $250,000 and contents for up to $100,000 its sold mainly through private agents. You also can buy additional coverage through a private flood insurance carrier.

    The median annual cost for homeowners in a high-risk area is $797, according to the NFIP. Its $516 in other areas. For renters in high-risk areas, its $298 for belongings only elsewhere, its $216. Go to the NFIPs FloodSmart website for an estimate of what it will cost to cover your home.

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    How Do You File A Home Insurance Claim

    Different home insurance companies will offer you different avenues for filing a claim. While some will require you to file a claim over the phone, others will allow you to file a claim through a mobile app.

    On LowestRates.ca, weve profiled several different home insurance companies to get you started. Find out more about them here.

    Get 15+ quotes in 3 minutes.

    Get The Best Home Insurance Quotes By Comparing The Market

    Your home might be the biggest purchase youll ever make. Protect it with a great home insurance policy. LowestRates.ca will bring you the cheapest house insurance quotes from all the top providers in your area.

    Compare home insurance quotes from 75+ of Canada’s leading insurance providers in just 3 minutes.

    See how much you could be saving on home insurance.

    Type of home

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    Damage To The Interior Or Exterior Of Your House

    In the event of damage due to fire, hurricanes, lightning, vandalism or other covered disasters, your insurer will compensate you so your house can be repaired or even completely rebuilt. Destruction or mutilation from floods, earthquakes, and poor home maintenance is generally not covered and you may require separate riders if you want that type of protection. Freestanding garages, sheds or other structures on the property may also need to be covered separately using the same guidelines as for the main house.

    Clothing, furniture, appliances, and most of the other contents of your home are covered if they’re destroyed in an insured disaster. You can even get “off-premises” coverage, so you could file a claim for lost jewelry, say, no matter where in the world you lost it. There may be a limit on the amount your insurer will reimburse you, however. According to the Insurance Information Institute, most insurance companies will provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home. For example, if your house is insured for $200,000, there would be up to about $140,000 worth of coverage for your possessions.

    If you own a lot of high-priced possessions , you might want to pay extra to put them on an itemized schedule, purchase a rider to cover them, or even buy a separate policy.

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