Insurance

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Homeowner's Insurance

Homeowner's insurance protects you and your mortgage lender from things that can
go wrong, including:

•        Casualty.
Insurance covers most types of damage to the structure of your house like fire, wind, or hail. In wildfire,
flood- or earthquake-prone areas, you'll probably need an additional policy to protect you from damage
from specific natural disasters.
•        Liability.
Insurance provides protection in case a visitor is injured in your home.
•        Theft or damage to personal property.
Insurance covers things like your furniture, clothes, and appliances.

Types of Homeowner's Insurance
There are four main types of insurance related to repairing structural damage:
•        Actual cash value.
This insurance covers an amount equal to the replacement value of the damaged property, minus a
depreciation allowance.
•        Replacement cost.
This insurance covers the cost of replacing damaged property without a depreciation deduction, but with
a maximum dollar amount.
•        Extended replacement cost.
This insurance covers the cost of replacing your home up to a stated percent (usually 20-30%) over the
amount insured.
•        Guaranteed replacement cost.
This insurance covers the cost of replacing damaged property without a depreciation deduction or a
maximum dollar amount.
The terms can be a little confusing. Be sure to ask an insurance professional to give you real life
examples so you can understand the differences.

Saving Money on Insurance:

•        Increasing your deductible.
The higher the deductible, the less expensive the insurance premium. But don't forget that, in the event
of a loss, you'll have to pay the amount of your deductible from your own money before your insurance
pays for any damages. Don't take a deductible that will be too much for you to pay in the event of a loss.

•        Consolidating your insurance.
If you buy homeowner's and autoinsurance with the same company, you may be able to get a discount.
•        Looking at the age and construction of your home.
Insurance costs tend to be lower in newer homes with new equipment. Construction designed to be
particularly resistant to wind and earthquake damage may also lower your rates.
•        Only insuring the value of the structure and its contents.
While your home and its contents are at risk from fire, theft, etc., the land your home sits on is not.
•        Being safe!
Install smoke detectors, security systems, deadbolts and other safety devices. Safety features can lower
insurance rates.
•        Quitting smoking.
Some companies offer reduced rates for nonsmokers.
•        Flaunting your age.
If you're over 55, let the insurance company know. You can probably get discounts.
•        Getting group coverage.
Your college, credit union, or business associations may qualify you for special rebates.
•        Staying with your insurance company.
Some companies reward loyal clients with reduced premiums.

Ways to Lower Your Homeowners Insurance Costs:

1. Raise Your Deductible
2. Don’t confuse what you paid for your house with rebuilding costs
3. Buy your home and auto policies from the same insurer
4. Make your home more disaster resistant
5. Improve your home security
6. Seek out other discounts
7. Maintain a good credit record
8. Stay with the same insurer
9. Review the limits in your policy and the value of your possessions at least once a year
10. Look for private insurance if you are in a government plan
11. When you’re buying a home, consider the cost of homeowners insurance