5 Things You Need To Know About Homeowners Insurance

Image via Wikipedia

I am coming up on my homeowners insurance renewal time. Going through Money Magazine I found a great check list of ways to save money on your homeowners insurance. My insurance went up last year 20%, quite a leap. I was glad to have it because it is hard to get insurance in South Florida with all the fears of hurricanes. 

It's so bad many companies have bailed out of the state or are just refusing to write new policies. It was back after Hurricane Andrew when I had State Farm insurance. Just four years after, I missed a premium and they dropped me. They would not take me back even though I had my car insurance with them. Also multiple vehicles and equipment insured with them under my company. They had no loyalty to me even though I had coverage with them for the last 15 years.

Choosing Homeowners Insurance, just like all business decisions, comes down to dollars and cents. So for you and me, we must also do what's right for us. Here are 5 tips to help in your adventure in purchasing your homeowners insurance.

A Homes History Matters.

If your shopping for a new home it may seem unfair but claims associated with the property before you by it can result in your paying more than you would otherwise. Certain locations may be more prone to certain kind of claims.

To get past info on claims ask for a copy of the homes CLUE (Comprehensive Loss Underwriting Exchange) report. this will show all past claims. The homes past history of claims will impact all future insurance rates. If you like the house and purchase it you will be stuck with it's history. This could work in your favor because if the report is negative you could negotiate a lower price for the home.

Small Claims Can Cost You Money.

Go with the highest deductible you can afford and use the savings for all minor repairs. If you file a claim for every broken window or leaky pipe you can drive up your premiums 10 to 15 percent. Insurance agents say even just inquiring about a claim can raise red flags. Increasing you deductible from $500 to $1000 can substantially save you money on your premium. Check with your insurance agent for quotes of insurance with higher deductibles.

A Bad Reputation Can Cost You Higher Premiums.

When insurance agents give you an insurance quote they tap into the Comprehensive Loss Underwriters Exchange to see your relationship with past insurance companies. They want to see your history of past claims. To many claims raises a red flag and may increase your premiums.

You can check your insurance report for errors at Choicetrust.com, it's free if you have been denied coverage, otherwise it costs $19.95.

You May Have to Much Coverage.

You may have an inflation-protection clause in your policy. This automatically increases your premium with inflation rising. This adjustment may be erroneous. Switch it off and keep an eye on your home value yourself. Sometimes the costs of replacement could be less than when you originally purchased the policy. You could of paid a premium for your home, way above the actual replacement value. Check on your actual replacement cost and lower your premium.

Loyalty is Overrated.

Insurance companies that are associated with banks may be using you to make up for losses in the banking part of the company. Remember insurers are still competing for your business. You may be able to get a better deal as a new policy holder than as a existing one. When it's time to renew check Insweb.com and Netquote.com to see if you can get a better deal. Try to bundle it with your car insurance company, you may get a premium cut of 5% to 15%.

Check out Money Magazine online

Here are some Related Stories:

Insurance Coverage Changes If Your Home Is Uninhabited or Rented

Get a CLUE Report if your buying a home

Related articles

• Why Your Homeowner's Insurance Bill Is Still Through The Roof (walletpop.com)
• Top 7 Ways to Save on your Homeowners Insurance (homeownersinsurance.org)
• Know What Your Homeowners Insurance Covers (homeownersinsurance.org)

Insurance Coverage Changes If Your Home Is Uninhabited or Rented

Image via WikipediaIn today's times many houses are empty waiting to be sold or foreclosured on. Who's looking after your house since you moved, your neighbor? You say it's insured so what's the big deal. It may be a problem if your insurer has different rules for an unoccupied home. 
 
Standard insurance policies are designed to cover homes that are occupied. If you leave your home for a month or longer, your policy may not cover damage or losses. If someone gets hurt on your property,because your not occupying it, your insurance may not protect you from the liability. 
 
In regard to fire claims, if your home is vacant or unoccupied for 30 days, some insurers exclude coverage for fire damage. For some insurers it could be 60 days. State Farm homeowners policies won't cover vandalism if the home is unoccupied for 30 days. Also if a frozen pipe bursts when the home is vacant they won't cover it. 
 
If your home is going to be vacant for 30 days or more here's what you should do. Contact your insurer and notify them about the situation. Maybe your insurer might not be effected by your unoccupied status, but they probably will. If you are effected your agent will adjust your policy to one that covers vacant properties. If you know the length of time it will be vacant you can just purchase one that will cover that time frame. You'll probably be paying a higher premium but it's better than being on the hook for repairs or replacing your home. Maybe your insurer doesn't have policies for vacant homes so be ready to look at other companies that will. An independent insurance agent will be able to get a policy for you from a broad range of company's, so check them out. 


What if your house is rented? 
If you are able to rent your home you'll be able to get coverage to also cover the mortgage payment in case it unoccupied during the rebuilding process. Don't forget insurers consider a rented home a higher risk because renters have less interest in caring for the home. So what your getting is a landlord policy for your home and be sure your tenants have renters insurance for the contents of the home. Renters insurance is not very expensive, it usually around $150 to $200 per year. 
 
While we are at it, you also must have an increase in liability coverage in case your sued by your tenant. Whether inside or outside you can be held liable. 
 
After being a landlord for almost 30 years, running and maintaining apartments, a fire or someone getting hurt is possible, but rare. Protect yourself, get proper insurance. 

Get a CLUE Report if your buying a home

The purchase contract for a home usually contains a stipulation for financing and a home inspection. These stipulations allow the buyer to back out of the contract if they cannot get a mortgage or the inspection turns up something wrong. But another not well known report to show the buyer the insurance history of the house should always be requested. That report is called the homes CLUE report. 
 
The Comprehensive Loss Underwriting Exchange (CLUE) report will tell you what kinds of insurance claims have been filed by the previous owners. Why is this important to you as a buyer? The current owner may have forgotten to tell you about some past damage to the house. The CLUE report will tell you the exact date of loss, type of loss (water damage, mold, fire, etc.) and the amount of loss for all claims. Also it will tell you if it has a long history of claims which may get you denied home insurance which will impact if you can even get a mortgage. You may not get denied coverage, which is rare, but you may be put in a high risk pool or paying more than you should if the house was not messed up insurance wise. 
 
If you are going into contract it makes sense to put the CLUE report stipulation in it. This way you can make sure it's clean and if not straighten out the inaccuracies. Go to Choicetrust.com for the report.