We revive several questions about Homeowner’s Insurance and figure we would attempt to address the need by creating a blog to answer some of the most common questions we receive. If you have a question not listed here or would like additional information, then feel free to give us a call and we will be happy to help!
What are some of the factors that affect homeowner’s insurance premium?
The factors that affect homeowner’s insurance premiums include:
- The location of your home: The location of your home can influence your homeowners’ insurance premiums. For example, your premiums are likely to be lower if your home is close to a fire station or higher if the area you live in commonly experiences natural disasters (like hurricanes, tornadoes or earthquakes) or is in a neighborhood more prone to theft.
- Characteristics of the home: Certain characteristics of your home, including its age, structure, wiring, garage, roof, etc. can also influence homeowners insurance premium. More so, other features including whether or not your home is brick, frame, stone, or has synthetic siding can also affect the premium.
- Personal habits: Your activities in your home can also affect your home insurance premium. For example, smokers are likely to pay for home insurance than non-smokers. In the same vein, those who have a bad credit history can also be charged higher for home insurance.
- The availability of protective or safety devices: Homes with protective devices such as fire extinguishers, smoke detectors, sprinkler systems or safety systems like burglar alarm systems and deadbolt locks can lower your homeowners’ insurance premium.
- History of claims: People with a history of claims on homeowners’ insurance policy are also likely to pay higher monthly premiums since you are considered a high risk to insure.
Do I need to have homeowners insurance?
Technically, you can own a home without a homeowners insurance. However, in some instances you may be required to carry homeowners insurance – like if your home is financed with a mortgage lender.
Also, if your home is in a designated flood zone, they may also require you purchase the separate flood insurance. Once you have paid off your mortgage, you can cancel your homeowners insurance but by doing so, you are at risk for all expenses relating to damage or loss after a covered event occurs.
Do I need to complete a home inventory?
It is important to create an up-to-date home inventory after purchasing a home and a homeowner’s insurance policy so that you can show proof of your belongings, the original state of the house, and the value of damage items – all things that can aid you in your claim settlement.
How do I complete a home inventory?
A home inventory is essentially a list of your possessions and their replacement value. Remember to describe each item in detail – the make and model, size/capacity, brand, where the item was purchased, etc. Keep the sales receipts for all big-ticket items if you can, purchase contracts and appraisals, then you should also include them in your inventory. Well, here a obtain an appraisal for extremely valuable items like jewelry and keep it somewhere safe. Take plenty of photos to document the belonging and its state before damage – video record a walk though of your home if you can.
Is there a difference between cancelling and non-renewing a homeowner’s insurance policy?
Cancelling and not renewing a homeowner’s insurance policy are indeed two separate things. That said, an active policy can only be cancelled if:
- It less than 60 days old
- You do not pay the monthly (or annual) premium
- You lied on your application
However, non-renewal of your homeowner’s insurance policy is a decision to discontinue coverage at the end of the policy term by either you or your insurance company.
What are the parts of a homeowner’s insurance policy?
Homeowners’ insurance policies may sometimes differ in structure. However, most of them contain the basic components below:
- A declaration page: The first page of your homeowners’ insurance policy that contains a summary of your name and address, amount of coverage, description of the property insured (main structure, separate structure, etc), premium amount, and the name and contact information of the insurance provider.
- Definitions: This is simply an explanation of the jargon used throughout the policy description.
- Coverage: This refers to the detailed pages of what is protected, for both the property and liability coverage.
- Exclusions: This refers to the detailed pages of what is not protected, for both the property and liability coverage.
- Conditions: Is an outline of the responsibilities of both the you and your insurance carrier under the policy.
- Endorsements: Includes riders, amendments, or attachments that have been added or make minor changes to the standard coverage previously described on the Coverage pages.