Buying a home is a cornerstone of the American dream. It’s a place to build your white picket fence and play catch in the yard with your 1.5 kids. While it’s important to protect one of the biggest investments of your life, figuring out homeowner’s insurance can be as easy as doing a 20,000-piece jigsaw puzzle, upside-down while blindfolded...Or losing weight.
In the era of everything-can-be-done-online, our tendency is to avoid help from local insurance agents, aka humans. While independence is certainly a noble ambition, uninformed independence can lead to unpleasant experiences down the road.
Here are a few key items you should note to make sure the roof over your family’s head stays there:
1. Your policy will only pay the amount necessary to restore your home to its original condition, so insuring your $700,000 home for $1.5 million is a waste of your hard-earned cash. Insurers calculate replacement costs based on the composition of your home, and will usually offer up to 50% additional dwelling coverage in case their calculations are off.
2. Increasing your deductibles can bring your rate down, but if you have a claim, then you’ll have to pay your deductible before your policy covers any losses. If it’s too high, then you could pay more on a claim than you saved on your premium.
3. Speaking of deductibles, some carriers have a separate one for hurricanes, which can be as high as 5% of your dwelling coverage. That said, a hurricane deductible only applies to damage caused during the period that 74-mile-per-hour sustained winds are recorded somewhere in the state, and for 12 hours before and after.
4. Finally, homeowner’s policies do not cover flood damage. If your home is in a high-risk flood zone, you will need to get a separate flood policy.
Looking for more advice? Contact me, Ilya Perlovsky–Insurance Guy Without a Tie–to learn more about our complete coverage plans designed to protect you, your home, and your automobile. libertymutual.com/agent/ilya-perlovsky