Building or buying a property is a great achievement for anyone. However, after acquiring your property, the next logical step is to protect it from damage and secure your investment. This homeowners insurance guide will help you choose the best plan and guide you on how to best protect your investment.
How to Choose the Right Homeowners Policy
Getting homeowners insurance coverage in California can be easy, depending on the steps you take. You can speak to an insurance agent and let them know your preferences so that they can help you choose the coverage that’s best for you. Following are a few factors that your insurer will consider while calculating your insurance premium.
● Your location- Disaster prone areas (brush fires etc.) tend to attract higher premiums.
● Crime rates in your locality- If your neighborhood is accustomed to high rates of burglary and break-ins, your premium rates can be affected.
● Size of your house- The larger your house, the higher your premiums will usually be.
● Property claims history- Insurers take into consideration past claims at a given property. Past history is often a future predictor of new potential claims.
Levels of Coverage
Following are the three ways to insure the structure of your home:
- Actual Cash Value: This policy covers the cost of your home minus the depreciation value. Depending on your property’s market value, the cost of replacing it may be more than the current value.
- Replacement Cost: In this case, the insurer will pay you the cost of replacing your property without deducting the depreciation value but limited to a maximum dollar amount.
- Extended Replacement Cost: Here, the insurer will cover the costs up to a certain percentage over a set limit.
What Does Homeowners Insurance Cover
The two significant areas that are usually covered by a homeowners insurance policy are
● Damages caused by natural elements or unforeseen accidents such as sudden burst of a water pipe, explosions, riots, theft, weather damage and fire.
● Protection from liabilities incurred by you or your family while on and away from your property. This includes bodily injuries and accidents involving third parties for which you or your family members may be held liable.
What Is Not Usually Covered By Homeowners Insurance*
Homeowners policies usually will not cover damages caused by
● Power Outages
● Pest Infestations/Molds
● Mysterious disappearance of personal property
● Poor Maintenance of Property
*for additional premium, endorsements may be added or perhaps a separate standalone policy.Factors that Affect Homeowners Policy Cost and Renewal.
Here are some of the key factors that affect the cost of your policy renewal and premiums.
- Size of your property
- Construction costs in your neighborhood
- Frequency of natural disasters in your area
- Frequency and number of claims previously filed
- Crime rate in your area
- Distance from emergency services
How Can You Save on Your Homeowners Insurance
Following are a few tips to help you cut your homeowners insurance cost.
- Consider a higher deductible- Home insurance should be used more for larger claims that you would be unable to easily pay for yourself. The premium savings stay in your pocket…and are potentially available if a smaller claim arises.
- Install and use of safety appliances at home- Installing smoke detectors, burglar alarms, or deadbolt locks will reduce the chances of fires, thefts, and other avoidable accidents. Also apps are now available to notify you if a water leak has occurred on your premises.
- Bundling other lines of insurance- Often carriers will give substantial discounts when home and auto are bundled together. In addition, other lines such as earthquake, umbrella and life insurance can earn additional discounts.
In this California homeowners insurance guide, we have broken down some basic and necessary information you need before buying a home insurance policy. For assistance with your personal homeowners insurance needs, contact our team of professionals at Burton A. Harris Insurance Agency today. We look forward to helping you with all your coverage needs.