The average American homeowner spends more than $1,200 a year on homeowners insurance.
That’s about $100 a month, year after year, for a product most of us will never use. It makes sense to find the lowest rates possible.
But get this: The average homeowners insurance claim pays about $16,000 to fix damage caused by wind, fire, hail, lightning, and other perils.
If you needed to use your policy, you’d want a company that would come through for you. The $50 or $100 you’d saved on premiums this year wouldn’t matter anymore if the policy wouldn’t pay your large claim.
Why Homeowners Insurance Is So Important
“Insurance, generally and as a rule, is a trade-off,” said attorney Etienne Font of Merlin Law Group. Font has three decades of experience handling claim litigation for homeowners insurance.
“You have to determine if the amount of the premium is worth handing the risk over to the other side or if it’s better to keep it.”
Font also points out it’s up to you, the consumer, to find an insurer you can trust to accept your risk.
And risk is out there: With natural disasters on the rise — from wildfires in California to hurricanes and flooding in the Southeast — choosing the right home insurance company to protect your investment has become even more important.
Homeowners Insurance Quick Facts
We’ll explore ways to build the best homeowners coverage below. But if you’re in a hurry to get coverage, these three elements matter a lot:
Replacement Cost vs. Market Value
As you shop, consider choosing “replacement cost coverage” instead of “market value coverage” for your policy.
What’s the difference?
Replacement cost coverage can restore your home to its original condition, even if the repairs exceed the market value of your home.
Market value coverage (also called actual cash value) factors in changes in property values and construction costs which could lower your claim’s payout. Your policy would protect the dollar value of your investment but not necessarily the integrity of your home.
Why Deductibles Matter
A higher deductible can lower your premium, but you’d have to pay more out of pocket to unlock your policy’s coverage.
Well Chosen Add-Ons Can Save
Consider buying extra coverage for catastrophes not typically covered by standard home insurance policies.
Standard policies won’t cover damage from earthquakes and floods, for example. If you live in an area prone to these perils, consider paying more for this coverage.
To finish this very informative article written by Money Magazine by about homeowners insurance please use the link below:
Comments