If you’re a smart homeowner, you want to trim expenses wherever you can. That’s why it makes sense to compare home insurance quotes with multiple carriers. There’s a chance you could lower your homeowners insurance premium, as not all carriers price their policies the same way.
What Home Insurance Covers
Before you can compare quotes, you should understand what a standard homeowners insurance policy covers. A typical insurance policy includes these coverages:
Dwelling
Pays to repair or replace your home if it’s damaged by a covered event like a fire or storm.
Other Structures
Covers those structures on your property that are detached from the main house, like a garage, fence or shed.
Personal Property
Covers the cost of personal property damage or theft. Applies to items such as furniture, TVs and computers.
Additional Living Expenses
Reimburses you for lodging, meals and other expenses if you need to vacate your home due to severe damage.
Personal Liability
Pays for legal expenses, medical bills and other costs if the homeowner is legally responsible for property damage or injuries to others.
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If you choose, you can purchase additional coverage beyond the standard ones listed above. These optional coverages are designed to maximize your protection based on your particular needs.
For example, if you live in a low-lying area, you may want to add Water Backup coverage to your policy. If your sump pump fails, Water Backup can help cover the cost of the damage, saving you from an expensive repair bill.
How Much Coverage Do You Need
Once you understand what homeowners insurance covers, the next step is to determine how much coverage you actually need. This will ensure that you’re getting a quote that’s right for you.
Dwelling Coverage
The first question you should ask yourself is, “How much money would it cost to rebuild my home from scratch if it was completely destroyed?” Your independent insurance agent or a local builder can help you determine that figure, so you may want to ask them for help.
Factors Impacting Rebuilding Costs
- Square footage
- Roof type
- Construction materials
- Labor costs
Whatever the overall rebuilding cost is, make sure the Dwelling limit in your homeowners insurance policy is enough to cover it. For example, if the cost to rebuild your home from scratch is approximately $290,000, you should consider setting your Dwelling limit at $300,000.
Personal Property Coverage
You also want to make sure you have enough Personal Property coverage in case you need to replace all of your belongings. The best way to determine that amount is to create an inventory of everything you own—from furniture to electronics to clothing—and then estimate the value of each item.
Most policies offer Personal Property coverage that is between 50% and 75% of your home’s Dwelling limit. So, if your Dwelling limit is $400,000, you should have between $200,000 and $300,000 of insurance coverage for your belongings. Check your policy’s declarations page to confirm your exact coverage limits.
How Are Premiums Priced
Before you compare homeowners insurance quotes, it also helps to know how insurance carriers determine their rates. These are some of the factors they consider:
Weather Exposure – Homeowners insurance can cost more if your home is located along the coast, because you’re at a greater risk for damage caused by high winds, hurricanes and flooding.
Size of Home – On average, a larger, complex house is more difficult to rebuild and replace than a smaller, simpler home. As a result, you will pay less to insure a smaller home.
Age of Home – Homes that endure more wear and tear are more likely to cause you problems. That’s why home insurance premiums for newer homes are typically less than older homes.
Number of Claims – The more claims that are filed across your state, the greater the average cost of homeowners insurance. The total value of those claims can also affect the cost.
Here are a few more things you should be aware of before you compare quotes from multiple homeowners insurance carriers:
One way to lower your homeowners insurance premium is to raise your deductible. Smart homeowners have figured out this makes sense, as the chance you’ll ever file a claim is small. Not surprisingly, more and more people are raising their insurance deductible every year.
Bundling refers to buying home and auto insurance from the same carrier. Most carriers will offer customers a discount if they bundle. It’s one of the easiest ways to lower your insurance premium.
Umbrella insurance is extra liability insurance that protects you above and beyond the existing limits of your home policy. It can provide an extra layer of coverage for injuries, property damage, lawsuits and personal liability situations.
NOW LET’S TALK ABOUT YOU
Do you have the right coverage? We’d love to chat with you about it. Call us at 844-235-3604or speak to a local agent. If you’d rather not talk, you can get an online quote in just 5 seconds.
The above content is for general informational purposes only and does not replace or modify any provisions, limitations or exclusions contained in any insurance policy.
