Are you a new home buyer or a current homeowner?
Its summertime, interest rates at all-time lows, and the real estate market is HOT HOT HOT. Many people are moving right now! Whether you are buying a home for the first time or the third time it is still a process!
Home insurance is just a piece of that process, but we like to try and make it the smoothest piece you’ll have to deal with! We wanted to outline some pieces of coverage, so you know what you are looking at when you sit down with your insurance agent.
It can be overwhelming, so we are highlighting some of the more important pieces to know!
What do you need to know about your home insurance?
Let’s start with Dwelling coverage: This is simply the dollar amount your insurance company is saying it will take to rebuild your home from the ground up if it burns down. This amount does not include your land and DOES NOT COVER YOUR LOAN!!!!
You could have a loan for 400k on a smaller home in Atlanta but, it would only take 300k to rebuild that home because you paid 100k just for the lot. We would want dwelling coverage at 300k.
Personal Property – If you take your home and flip it upside down your personal property is everything that would fall out. This covers everything from electronics, clothes, and furniture. The piece you want to MAKE SURE to have is that your personal property is covered by REPLACEMENT COST. This means they aren’t going to give you $50 for a 10 yr old tv, they will buy you a brand new one.
Personal Liability – This is very important and often overlooked by agencies. This covers you in the event you are liable for something that happens on your property. The base policy usually comes with 100k but here at North Point Insurance Group we always raise this as the cost of raising the liability is pennies on the dollar for the coverage you are getting. If your policy has 100k personal liability change it IMMEDIATELY and then call us 😊
Loss of use – If something happens that forces you out of your house (kitchen fire or tree falls through the roof) this coverage pays for you to stay in a hotel while your house is being fixed or rebuilt. IMPORTANT to ask how long the coverage is provided, it can be 12 or 24 months! Sometimes rebuilding a house can take longer than 12 months, just something to keep in mind!
Roof coverage – One major factor in the price of a home insurance policy is the AGE of the roof. If a company knows your roof is nearing the end of its life and you will likely need a new one soon they are going to charge you more. The biggest scam to watch out for is what’s called ACV or Actual cash value coverage on your roof. You can simply ask your agent the type of roof coverage you have whether it is ACV or “Replacement cost”. ACV roof coverage means you will get the depreciated value of your roof instead of the price of a brand new one. A 20-year-old roof might be worth $5k w depreciated value but the replacement cost of the whole roof is 15k. You want the latter.
Deductibles – This is an area where agents can trick you. There are multiple deductibles in some policies NOT ALWAYS just one. There might be an “all other perils” deductible as well as a “wind and hail” deductible and a “hurricane deductible”. Beware when an agent says you have a $1,000 deductible because they may have raised your wind and hail deductible to 10k or more, which lowers the premium of the policy. Wind and hail are the more common causes of home damage.
Limits on Jewelry – Something to keep in mind if you have ANY PIECES of jewelry that iare more than $1,500 or more than $2,500 total you want to tell your agent. Most base home insurance policies will limit jewelry PER PIECE at $1,500 and the TOTAL amount of jewelry you own up to $2,500. You can schedule each piece you have to get the right amount of coverage and for anything over 5k you will need an appraisal done in the past 2 years!!!
Water backup – This coverage should be included on every single home policy but is often left off as it is an extra add on. This covers if your toilets and sinks back up and overflow due to a blockage or problems with your plumbing., Some insurance companies wont cover it if the blockage originates off your property which is why it is so important to have this endorsement. It costs anywhere from $20-$60 per year to add on to your policy
I don’t have an agent. The customer service reps I talk to are really nice though!
Here’s the issue with not having an agent. WE have your best interest in mind. WE are literally here to be your advisor and make sure YOU don’t get screwed by big name insurance carriers. Its like going to a restaurant and asking them if their food is good……OF COURSE they will say it is amazing. We are the table next to you who tells you their food is just ok.
We have access to over 25 different companies and can truly say we are our customers advocate!
I have a claim on my record, but they never even paid me anything?! How is that possible????
This is why having an agent is important. We have a customer who had a small leak showing in her townhome ceiling on the first floor. She called us and we advised BEFORE calling the company to have a plumber come out and give an estimate. This ended up costing $165 to fix.
HAD SHE CALLED directly to the carrier……they immediately record what is happening as an “incident”. This “incident” now goes on your record for 5 years whether they pay you anything or not. This incident makes you lose your “claims free discount” and raises your premium hundreds of dollars a year.
Why is my home insurance price so high??!!!
As a general rule of thumb when looking at home insurance, the older the home the more expensive the insurance will be. Older homes tend to have more problems than newer homes.
If you are buying a brand-new home and paying over $1,000 for home insurance….do yourself a favor and CALL US.