Entries Tagged 'Home insurance' ↓

How much should I pay for my home insurance?
As little as possible? Obviously nobody wants to pay more than they need to, but you need to be careful not to pay so little your coverage is meaningless. That could cost you more than is bear thinking about. To illustrate this we are going to have to fall in the scare mongering techniques I generally despise but I feel make the point here nicely. We live in a world where a burglar that comes in your house can sue you for injuries he suffers when he is trying to carry out his job, which is to rob you from your valuables.
So if a burglar can sue you for tripping in your premises imagine what a worker fixing your bathtub or a distraught mom whose son got permanently injured by your lawn mower. You guessed, it just got much worse.

There is therefore little doubt that home insurance is necessary. How much do you need? Enough. Enough to cover any liability you have for damages and injuries occurring in your home. You also need to have enough money to rebuild your house in the event of a natural disaster or accident. This is where things get tricky. It would be difficult if not impossible to have insurance coverage for every possible eventuality; it would cost an absolute fortune to start with. However it would be much more expensive to be the victim of a flood, and lose everything you have, including your home.

Nobody can really tell you what you should and shouldn’t pay or include in your home insurance. What we can do it point out some holes in your coverage you would like to fill in.

Home contents.

Sometimes the contents of your homes, the electronics, clothes, jewelry, cash, cars, speed boats, yachts, etc… cost more than the damages to the structure, roof or walls of a house. A key point to look out for in this setting is the limits on your home contents. For many insurances the combined limit on all the contents of your house is $1000. This is obviously not enough if you have any amount of valuable in your home.

Check out your existing home contents to see if you have enough cover. If you don’t, you are not paying enough for your home insurance.
Special hazards. It is impossible to cover for all possible risks. You need to prioritize. It is theoretically possible for a house on mount Fuji (Japan) to get flooded, just extremely unlikely, you are better forgetting about flooding and making sure you are covered for earthquake, you do live on the arch of fire, one of the most earthquake prone areas in the world. However if you live in New Orleans, mmm, you get my drift, right? Flooding maybe should be a little bit of a priority for you.

These are just a few of the concerns you must address when deciding if your home insurance is adequate or not.

Home Insurance facts for new home owners and dummies

If it is the first time you get home insurance or you have never spent any time or effort looking into your home insurance, you are in for a surprise. There are many savings you can make by just taking some simple steps.

But let’s start with the basics, we did say it was an article for newbies and dummies : 0p
Here are some basic facts that will help you understand how insurance companies work and why they work like that. Home insurance companies are in the business of paying for the damage caused by accidents and natural disasters. These accidents may or may not happen. These accidents are more likely to happen to some people than others. Home insurance companies love to insure low risk customer (not prone to accidents and natural disasters) they would rather not insure the high risk / expensive clients that are likely to cost them more than they pay. Obviously your job is to make yourself look as low risk as possible.

What makes you a high risk customer?

-    Where you live. Living in a high crime rate part of town will increase the risk of burglary and with that your premium.

-    Your habits. Smokers pay more insurance because they are more prone to home fires. Home insurance companies offset this increase in risk by upping the home insurance premium policy.

-    Your home safety. If you house is safe and is as burglar proof as possible, home insurance companies will acknowledge this by reducing your premium.

-    How often you make a claim. Customers who claim all the time for every little thing are expensive both in cash and time for home insurance companies. Home insurance companies will respond by either denying insurance coverage for you or increasing your premiums astronomically.

What can you do to counteract these high risk high risk factors. Here are a few examples:
1)    When buying or renting a house it is worth considering the crime rates and type of neighborhood it is, home insurance rates being the one of the least important reasons to do so.
2)    Stop smoking. Again the reduction in home insurance premiums is the least important reason why.
3)    Increase your home safety. You can do this any number of ways: Install a home security and alarm system. Install dead bolt locks that will minimize the chances of accidentally leaving your door open. Both these security measures have ulterior benefits like the safety of your family.
4)    Deductibles on your home insurance mean that the customer, i.e. you, will pay for a variable initial amount. For instance, if you agree to a $500 deductible you will be responsible for the initial $500 of any claim. This is probably the most effective way of reducing your insurance premium.