Your Guide to Homeowners Insurance - Where to Start and What to Look for?
First, I must say congratulations on being a homeowner.
It's an exciting and rewarding endeavor.
It's also, for most of us, the largest investment that we make.
But how often and how much time does the average homeowner spend looking at their insurance? If you're like me before I got into the insurance business, hardly any thought goes into homeowners insurance.
I couldn't even tell you what I was paying every year for it.
I live in the Kansas City metropolitan and an average homeowner insurance policy here ranges from $1200 to $1400 per year, depending on a number of variables.
What does that cover? Well, that all depends on who wrote your policy.
Let me try to explain this without getting into too much insurance mumbo jumbo.
At the most basic level there are a few different homeowners policies that can be written.
Most companies stick to an HO-3 but there are some, such as Farmers Insurance that only write HO-5's which, simply put, just offer broader coverage for more perils.
From there, your agent will add the appropriate riders to cover your specific needs.
Riders will include any large amount of personal possessions most commonly, jewelry, firearms and various collections.
Now, the most important thing to look for, ACV.
Actual Cash Value.
ACV is a dirty word in my book and I will not write a policy containing it, but chances are it's on your policy.
ACV is the cost of replacement minus depreciation.
Essentially, if you take everything you own and put it out on your lawn with a sign that says "YARD SALE", that's the same payout that your insurance company will give you.
You want to see "Replacement Cost" on your policies.
Want to save money? Don't lower your coverage or go to a cut-rate insurer.
Raise your deductible.
It's not as scary as it sounds.
That's a whole other article so I won't get into it here, but you can also ask your agent to explain the benefits of high deductibles.
As a homeowner you may also want to revisit your auto insurance.
Most companies offer discounts for what has come to be called "bundling" or more reputable insurers refer to it as being a Preferred Client.
Whatever you call it, when you put all your policies together it usually adds up to big savings.
The process of finalizing your coverage is much simpler and faster than you might think.
Most agencies can take care of everything with a few minutes over the phone and a brief meeting in person.
Oh, and if you haven't met your agent in person, find a new one.
Don't waste your money on someone who can't be bothered to get out and talk to you face to face.
It's an exciting and rewarding endeavor.
It's also, for most of us, the largest investment that we make.
But how often and how much time does the average homeowner spend looking at their insurance? If you're like me before I got into the insurance business, hardly any thought goes into homeowners insurance.
I couldn't even tell you what I was paying every year for it.
I live in the Kansas City metropolitan and an average homeowner insurance policy here ranges from $1200 to $1400 per year, depending on a number of variables.
What does that cover? Well, that all depends on who wrote your policy.
Let me try to explain this without getting into too much insurance mumbo jumbo.
At the most basic level there are a few different homeowners policies that can be written.
Most companies stick to an HO-3 but there are some, such as Farmers Insurance that only write HO-5's which, simply put, just offer broader coverage for more perils.
From there, your agent will add the appropriate riders to cover your specific needs.
Riders will include any large amount of personal possessions most commonly, jewelry, firearms and various collections.
Now, the most important thing to look for, ACV.
Actual Cash Value.
ACV is a dirty word in my book and I will not write a policy containing it, but chances are it's on your policy.
ACV is the cost of replacement minus depreciation.
Essentially, if you take everything you own and put it out on your lawn with a sign that says "YARD SALE", that's the same payout that your insurance company will give you.
You want to see "Replacement Cost" on your policies.
Want to save money? Don't lower your coverage or go to a cut-rate insurer.
Raise your deductible.
It's not as scary as it sounds.
That's a whole other article so I won't get into it here, but you can also ask your agent to explain the benefits of high deductibles.
As a homeowner you may also want to revisit your auto insurance.
Most companies offer discounts for what has come to be called "bundling" or more reputable insurers refer to it as being a Preferred Client.
Whatever you call it, when you put all your policies together it usually adds up to big savings.
The process of finalizing your coverage is much simpler and faster than you might think.
Most agencies can take care of everything with a few minutes over the phone and a brief meeting in person.
Oh, and if you haven't met your agent in person, find a new one.
Don't waste your money on someone who can't be bothered to get out and talk to you face to face.