Everyone has a dream home. It might be a spacious apartment in the middle of the city or a small cottage with a beautiful garden in the middle of nowhere. Regardless of where you live or would like to live, having comprehensive homeowners insurance is crucial.
Understanding Homeowners Insurance
Just as you would want the best home you can afford, you should want the best homeowners insurance you can afford as well. But before getting the policy, it’s essential to understand what it actually entails.
Homeowners insurance is a type of private property insurance that covers the infrastructure and the amenities of an individual’s residence. The policy provides coverage for events such as accidents, damages, robberies, natural disasters, and other various forms of liabilities.
Most home insurance has an extensive range. But insurance isn’t a one-size-fits-all product. You may need to customize your policy according to your home and your personal needs. The best homeowners insurance policy should cover:
- Interior damage
- Exterior damage
- Injuries that occur within the property
- Loss of assets or belongings
How Much Does the Best Homeowners Insurance Cost?
According to Bankrate, the average annual premium rate for homeowners insurance is $1,312. Many factors go into determining the cost of home insurance. Things such as your geographical location and insurance company make a big difference. Other factors include:
Price of Your Property
If you paid a significantly high price for your home, it will necessitate more expensive insurance.
There are policies which support full replacement if your dwelling is destroyed, but they may be quite expensive. If you want cheaper insurance, you might have to opt for partial replacement instead.
Age of the Home
According to BuyersAsk, the median age of a home is 37 years. The older your property is, the more it’s apt to need repairs. So, if your property is older than a few decades, your premium rate will be higher.
Size of Your Property
Big houses cost more money to rebuild or fix. It’s cheaper to insure a house that’s 1,800 sq. ft than a house that’s 5,000 sq. ft.
If you have more people living in a house, damage is more likely to occur. That means a home insurance premium is likely to be cheaper for a couple than a family of four.
Materials Used to Construct the House
The kind of cement, wood, or even paint used to build your house makes a big difference in calculating your insurance premium. If your home is made with better quality materials, then the premium will be less.
Areas exposed to the elements, such as roofs, windows, and doors, are more likely to sustain damage than interiors. So, a roof made from stronger material such as asphalt or metal may be cheaper to insure than a roof made of wood
Public Protection Classification (PPC)
PPC refers to your house’s distance from the nearest fire station, police station, or hospital. Having your property near these facilities will decrease the cost of your premium.
Your premium may be higher if you have a pet that bites. Some homeowners insurance covers dog bites. You could also opt for a pet insurance policy if you have pets.
People who have a lower credit score tend to file more insurance claims. So, they’re likely to be charged higher premiums.
If your property is disputed or has an unresolved claim problem, it can lead to expensive premiums.
Security and Alarms
If you have a robust monitoring system for robbery and fire, your insurance rates will be less expensive.
If you live in a neighborhood with a high crime rate, your agent may give you a higher quote for home insurance.
If you have “attractive nuisances” such as a pool, pond, garage, garden, farm, or trampoline, your premium cost may be higher.
Note: Not all carriers insure risks related to pools, trampolines, or similar recreational items on a property. Make sure you check your policies before you buy them.
Some Home Insurance Companies You Can Trust in 2023
According to Bankrate, for the best homeowners insurance, here are some companies you can trust:
|Insurance Company||Average Annual Premium Cost||Best For|
|USAA||$992||Current and former military members and their family|
|Allstate||$1,458||Transparency with clients|
Note: USAA only caters to current and former military personnel and their family members. Additionally, the rates here are taken from an external source, they may vary according to the property you want to insure. Please contact the company you’d like to buy your insurance from.
Beware of Fraud: You may find companies that claim to provide legitimate home insurance at low prices but are actually fraudulent. According to the FBI, insurance fraud costs an average American family between $400 to $700 per year. Make sure you do your due diligence on the company as well as the agent before you invest in an insurance company.
Substitute Home Insurance
Although it’s always a good idea to get it, homeowners insurance (also known as HO3 policy) is not mandatory if you buy a home outright. But, if you’re like the vast majority of people, you’ll need a home loan to buy your house, and the lender will require you to have homeowners insurance. And there are no policies you can substitute for it.
But there are, however, policies which are great add-ons and can help reduce your home insurance costs. Examples include:
Hazard insurance is a good way to secure your property from infrastructural damage. While home insurance hazard coverage is generally very specific to your contract, a separate hazard insurance policy is more general and is likely to give you overall protection from events such as storms, floods, fire, and earthquakes.
Pets are generally not covered under homeowners insurance. But you can get a personal liability insurance policy added to get partial coverage for your pets. You could also opt for a pet insurance if you want full coverage.
Personal Articles Insurance
While your standard home insurance may partially cover valuables, you’re better off with a personal articles floater insurance policy. With this added policy, you can reduce the cost of your home insurance and at the same time have maximum financial protection for all your valuables.
You can get a good home insurance coverage through Universal North America Insurance.
Best Homeowners Insurance Coverage: What Does It Cover?
Here is a list of things that your standard home insurance policy should include:
- Dwelling Coverage: This should be for approximately the replacement cost of your home. The policy helps you rebuild in case of a catastrophic incident.
- Personal Property Coverage: A standard home insurance policy not only keeps the structure of your house covered but also the valuables within.
- Liability Coverage: Your home insurance will only cover a certain amount of physical liability. It’s generally recommended that you get the coverage extended as much as you can afford. All of the people who live with you are generally covered under the policy.
- Additional Living Expenses: This coverage is a part of a standard home insurance policy. The coverage will help you pay for living and food expenses in the event that you have to temporarily vacate your home.
Note: Most of these endorsements are already a part of a home insurance policy. But their limits depend on the insurance company and its terms. Please check with your agent to get the exact details for your coverage.
Somethings Your Homeowners Insurance Will Not Cover
Your homeowners insurance may not cover you in the following scenarios:
- Natural disasters: Your home insurance may not cover all natural disasters. Even the ones which are included may only have partial coverage. Be sure to check with your insurance provider.
- Pets: A standard policy may not cover your pet. However, you can get in touch with your insurance company and get the policy added. It’s important to note that some dog breeds are not covered or are expensive to cover by homeowners insurance. For example, The Insurance Alliance says that dogs known for being aggressive such as pit bulls may be more expensive to cover with homeowners insurance.
- Cars: A typical policy will cover all your personal belongings. However, if your car breaks down in your garage, your home insurance won’t cover it. Car insurance is mandatory in almost all states and for good reason.
- Commercial property: If you use your home for commercial purposes then your standard home insurance will not cover the property. You might want to look into commercial property insurance.
Comparison Of Homeowners Insurance with Other Policies
Home Insurance Vs Home Warranty
Both home insurance and home warranties are integral parts of being a home owner. While both are contracts which offer financial protection for your home, their functions are quite different.
|Home Insurance||Home Warranty|
|A home insurance policy covers things such as dwelling, personal property, personal as well as third party liabilities.||A home warranty generally only covers the infrastructure and the main system such as electrical lines, heating/cooling system and waterlines of a house.|
|Home insurance costs about $1000 – $1500 annually.||Home warranty generally costs about $300 – $600.|
|For example: In case of a water damage, a home insurance policy will cover structural damage, property damage/loss and physical injuries.||For example: In case of a water damage, a home warranty system will only pay to fix the property damage caused by damage.|
|Home insurance is not mandatory.||Home warranty is generally included in your home ownership contract for the first year of the purchase of house.|
Homeowners Insurance Vs Renters Insurance
Homeowners and renters insurance are similar but used in different contexts. The main difference is that homeowners insurance is for people who own the property they live in, while renters insurance is for people who rent the property they live in.
While a homeowners insurance policy covers structural damages, renters insurance won’t.
Homeowners Insurance Vs Landlord Insurance
Landlord insurance is very similar to homeowners insurance. A landlord insurance policy will typically only cover the structural part of the property. To buy homeowners insurance as a landlord, you are required to live in the property you are renting out.
If you live on your property and only have tenants occasionally, it’s better to have homeowners insurance. For example, as with homeowners insurance, a landlord’s policy will cover broken pipes… But unlike homeowners insurance, it won’t cover property damage caused as a result of the pipe damage.
Why You Should Consider Using a Homeowners Insurance Agent?
One of the best things about purchasing a policy with an insurance agent is that their service is tailored to your needs. From finding the appropriate insurance, to answering the phone, expect everything from your local insurance agent.
Many independent insurance agents go the extra mile to further customize their services, so that you will tap into your network of friends and family to be part of their ever-improving offerings. Additionally, working with agents is a good idea because they are responsive and easy to contact when needed.
Get Expert Advice
Many people may not know the coverage they need or the insurance they need to protect their families. This is where cooperation with local insurance agents becomes important. They offer professional advice to their customers and will inform you about the best options out there.
An independent insurance agent, often representing multiple insurance companies and they will help you find the best deals.
Helps You Save Money on Insurance
An agent who works for an insurance company may not care if premiums go up. Local insurance agents are easier to find so you will be able to get in touch with them if you have concerns about premium increase. The agent will then help you find a cheaper and hopefully better alternative coverage. If anything, it will save you a lot of time and money.
Helps you in the claim process
Anyone who has been involved in an insurance claim will tell you that it is not a pleasant experience. However, an agent will make the process much easier. Not only do they help by enforcing the claim quickly, but they can also ensure that sooner or later you will be compensated.
Your insurance agent will also guide you and tell you if it’s worth making a claim or not. Knowing this will benefit you and will help you decide accordingly.
At Agency Height our insurance agents offer many opportunities for the customer to save money and get better, mostly customized service. We help you find an experienced insurance agent who is responsive, helpful and works with an extensive list of insurers. If you’re interested in finding best independent insurance agents near me and get homeowners insurance quote, you should get in touch with a local insurance agent.
Any questions or comments? Feel free to leave them below.
Top 5 Best Homeowners Insurance Companies in 2023
Read full review on best homeowners insurance companies and decide which company and policy suits you the most.
Frequently Asked Questions
Will Home Insurance Pay for Tree Removal?
Yes, homeowners insurance will also cover tree removals.
According to Lawnstarter, professional tree removing costs between $385 to $1,070. Your home insurance will only cover the tree removal if it’s a safety hazard or has fallen due to a storm. You will have to check with your agent to know if this coverage will be partial or full.
Will Homeowners Insurance Cover for Mold or Termite Damage?
Ideally, the best homeowners insurance policy should cover both. However, while mold damage is an obvious coverage provided under home insurance, termite damage may not be covered. Termite damage isn’t a sudden occurrence and if you haven’t invested in pest control then you may not get any financial compensation for it.
Will Homeowners Insurance Cover a New Roof?
Yes, homeowners insurance will cover a roof replacement. Most polices will only pay for a new roof if it’s a sudden occurrence. For example, if your roof got blown away by a storm, your home insurance will cover it. However, if it’s due to wear and tear for example, a gradual roof leak that destroys the whole ceiling, then your home insurance will not cover it.
According to Superstorm Restoration a new roof can cost you up to $30,000. However, many companies calculate the price according to square foot and the material you want to use to replace your roof. Check with your agent if you will get a partial or a full coverage on a roof replacement.
Will Home Insurance Cover My Pool?
Yes, homeowners insurance will cover a home with a pool, but only if you have the policy added. Pools are generally considered a detached structure of a house, so a standard homeowners policy may not cover it.
September 7th, 2023 · 9 mins read
- Understanding Homeowners Insurance
- How Much Does the Best Homeowners Insurance Cost?
- Some Home Insurance Companies You Can Trust in 2023
- Substitute Home Insurance
- Best Homeowners Insurance Coverage: What Does It Cover?
- Somethings Your Homeowners Insurance Will Not Cover
- Comparison Of Homeowners Insurance with Other Policies
- Why You Should Consider Using a Homeowners Insurance Agent?
- Top 5 Best Homeowners Insurance Companies in 2023
- Frequently Asked Questions
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