Explain why it's important to insure your home.
Your home is likely to be your most valuable asset. Your insurance protects the investment. While having insurance won’t prevent problematic scenarios, it can protect your financial health if they occur. Most of us would not have enough cash on hand to pay for something catastrophic happening to our homes. So, even though it’s technically legal to skip insurance if you aren’t financed, it can absolutely be costly.
What kinds of things should a homeowner think about in regards to coverage?
It’s important to consider that in different locations, different coverage likely applies. So, for example, out West, you might need earthquake coverage — but you won’t need that here in Birmingham. It’s also important to consider the individual property and what unique exposure the property might have, such as proximity to water.
Homeowners will also want to factor in major renovations and updates. For example, if you’ve recently replaced your roof or expanded the square footage of your home, you want to make sure you are insuring the property for adequate replacement costs. Some people buy insurance, then don’t think about their policy for a decade, then update their home — but they need to reexamine their policy and make sure they have adequate coverage.
How are quotes determined? Are all assets considered?
Yes, all assets are considered, and you should have an in-depth conversation with your insurance professional because your assets include your home’s contents, personal belongings, such as jewelry, and the quality of your decor. We will get several calls during a year when a homeowner asks about something substantial they are considering purchasing and what it costs in terms of insurance. We will get questions about artwork, for example. If a painting is appraised at thousands of dollars, your insurance professional can guide you on insuring it.
What does a homeowners insurance policy not cover?
One of the most prominent misconceptions about homeowners insurance is that it’s like a home warranty. General wear and tear, neglect and maintenance problems are not covered by homeowners insurance, which exists to cover catastrophic events.
While the notion of “full coverage” exists for car insurance, it’s not the same for homeowners insurance. Homeowners insurance is more itemized and more specialized, and it’s tailored to your specific needs. It’s best to sit down regularly with your local agent and discuss how to protect your home and the assets inside.
How should a person shop for homeowners insurance?
I feel it is best to work with a local agent. Your local agent is trained to know if you’re getting the right coverage in your area at the right price. They can provide guidance for your needs and understand the local insurance. For example, I am trained in Alabama insurance, but I can’t provide advice for Georgia insurance. You need locality to get that expert opinion.