Home insurance basics
When shopping for home insurance, there’s much more to consider than how much your coverage will cost.
You need to buy the right type of policy. You need the proper level of protection, plus special provisions for valuables such as jewelry, your computer equipment and other possessions. You might also need additional coverage for such things as earthquakes or flooding.
Lending institutions usually require mortgage customers to purchase homeowners insurance. Don’t rely on the coverage levels mandated by your bank or mortgage company. Those levels are designed to protect the house itself, but not necessarily your possessions. That’s why it’s important to check with your agent or insurance company, to make sure you have adequate coverage.
Starting an application
When you apply for homeowners insurance, you’ll provide a great deal of information. The insurance company will ask you about your current occupation and employment history, marital status, previous addresses, and date of birth and Social Security number. The insurer will check your criminal, credit, and insurance history to see if you are a "good risk." The insurance company also will look at your "loss history" to see what kinds of home insurance claims you've made in the past.
Then, you’ll have to decide what type of homeowner’s policy you want, the deductible, and how you’ll pay for the coverage. Your agent or insurance company will determine how much it would cost to replace your home and many of the items inside. For more expensive property, such as jewelry and computer equipment, you might need special coverage in addition to the basic policy.
Analyzing your home
Many factors go into determining the premiums for a homeowner’s policy. The age of your home, the materials used to build it, where it’s located, the square footage, and the number of rooms all plays a role.
How do you heat your home? What’s the overall condition of the house? How many people live in your home? How close is your home to the nearest fire station and fire hydrant? The answers to these questions also help determine how much you’ll pay for your homeowner’s policy.
Ways to save
If your home is equipped with an alarm system, smoke detectors and deadbolt locks, you could save money. Those items help make your home safer and more secure. If you have an in-ground pool or a trampoline, you might pay higher premiums. You can also expect to pay more if you are located in a higher risk area, such as a coastline. Your insurance company will also want to know if you plan to use the home for any business purposes, of if you plan to rent all or part of the house, both of which can increase liability.
Armed with all this information, insurance companies can determine how much to charge you for insurance, sometimes in a matter of minutes.
About the Author: Home Insurance
More articles by rghins
Print Article | Download PDF | 9 views | Mar 17 2008
|
|
