10 Important Things You Need to Know When Getting Homeowners Insurance

What if disaster strikes and your insurance can’t cover everything?

For a homeowner, this is a major nightmare. But that nightmare can come true very quickly if you don’t choose the insurance that is best for you.

Fortunately, it’s easy to learn everything you need to know about getting homeowners insurance. Keep reading to discover our helpful guide!

• Read – Must Have 4 Types of Insurance Policies for One and All

1. Know the Terms

When you are getting homeowners insurance, the first step is to really do your research. And that means understanding the different terms that insurance carriers use.

For instance, it’s important to know what an adjuster does and the role they will play in your emergency. And it’s important to understand what exclusions are so you will know what is not actually covered by your policy.

It doesn’t take long to learn the lingo. And once you know it, you can dive deeper into the insurance world.

2. Check the Policies

There are many different types of insurance policies. It’s important to understand what they are so you can choose what is right for you.

As an example, actual cash value policies cover the specific value of your home. However, it’s important to know that this may not cover the full cost of rebuilding your home.

One cheap option is a named peril policy. This gives you protection from only what you specify, but this opens the door to other, more unforeseen disasters.

The opposite of that is an all-risk policy, which covers everything that the carrier doesn’t specifically exclude. Make sure you pay attention to the exclusions, though!

Finally, there’s the replacement cost coverage policy. This covers both repair and rebuilding cost, making it one of the safer kinds of policies.

3. Know What’s Covered

We touched on this earlier, but let’s be specific: it’s quite important to know what is covered in your policy and what is not!

Sometimes, residents are surprised to discover that their all-risk policy excludes earthquakes.

And sometimes homeowners only discover they lack flood insurance after their home looks like the Seven Seas!

Long story short? Know what’s covered before you sign anything.

4. Scope Out the Options

It’s good to know what options you have when it comes to additional coverage. And it’s even better to know how you can get such coverage.

For instance, it’s usually easy to add something like earthquake coverage to an existing policy.

But adding something like flood coverage usually has to be purchased as an entirely separate policy.

In many cases, you can add additional protection for very little “extra” per month. But it’s good to know if you really need that extra coverage.

5. Specific Costs

Sometimes, homeowners get a bit of sticker shock when they are checking out different policies. That’s why it’s important to understand the average insurance costs in your state.

In some states, the average cost of insuring a $160,000 home would be $800 per year (assuming you have good credit). In other states, that amount could easily be higher or lower.

Find out what costs are like in your state so you’re not taken by surprise!

6. Maintenance Matters

As a homeowner, you are hopefully doing lots of solid maintenance on your home on a regular basis. But did you know that this kind of maintenance is critical to your insurance?

First, homes without regular maintenance may be more susceptible to certain kinds of disasters. To best protect your home, you need to keep it maintained.

And if your insurance carrier determines a disaster was caused due to your own negligence, they may be able to deny your insurance claim. That will leave you in the middle of a mess and holding the bill!

7. What Are the Deductibles?

Before you get too excited about what insurance will and will not cover, you’ll need to come back down to earth. And that means knowing more about how deductibles work.

As with medical insurance, you must typically meet a certain deductible amount before your insurance pays anything. And the amount of the deductible can vary significantly from plan to plan.

Basically, policies with a higher deductible will typically have a lower premium. So you must figure out whether you wish to save on your premium or on your deductible.

8. Secrets of Savings

Speaking of saving money, there are different ways to do this when getting homeowners insurance. To save the most money, you’ll need to master a few of these secrets.

For instance, you may be able to get your automobile insurance and homeowners insurance through the same carrier. And in most cases, this gives you a chance to save on each policy.

Alternately, you may be able to make green home improvements or perform home maintenance that keeps the costs down. In this way, paying a little upfront can actually save you a lot of money in the long term.

9. Credit Matters

Credit plays a major role in the entire process of buying a home. Therefore, it’s no surprise that credit plays a major role when getting homeowners insurance.

If your credit is only fair, then you might be paying thirty percent or more versus someone with good credit. And those with poor credit may pay up to twice as much more!

It’s good to determine what your credit is and to possibly take steps to drive your credit score higher. This can ultimately save you money on your insurance.

10. Claims History

Our final thing you should know before getting homeowners insurance is also the simplest: the claims history of your house.

The big question when getting insurance is, “do I really need this particular coverage?” Checking the claims history of the house is the best way to see what coverage you might need in the future.

Getting Homeowners Insurance: The Bottom Line

Now you know the secrets of getting homeowners insurance. But do you know how else you can enjoy a better, safer home?

At Get That Right, we are devoted to making each day better than the last. To plan your next home improvement, browse more of our home articles today!