Milwaukee, Wisconsin 2021-01-14 16:49:28 –
By SARAH SCHLICHTER
Buying insurance may not be as fun as choosing a new piece of furniture or paint color, but it’s a big part of buying a home. Your homeowners insurance is an economic safety net in the event of a disaster, so you’ll want to ask some important questions to make sure you have the compensation you need at an affordable price. Probably.
What is the range of dwellings per square foot?
Imagine a fire burning down your house and not paying enough to rebuild it. It can happen if the coverage of your home (part of your policy covering the structure of your home) is too low.
To prevent this, simply do not accept the initial housing coverage recommended by your insurance company. “Insurers use replacement cost calculators, but they are by no means 100% accurate,” said Ryan Andrew, president of Andrew Agency, an independent insurance agency that serves Virginia, Maryland and Washington, DC. Says.
For a more accurate quote, ask the insurance company to send someone to your home for an alternative assessment, suggested by Amy Bach, executive director of United Policyholders, a nonprofit advocacy group for insurance consumers. To do. You can also ask a local builder who specializes in new construction to estimate the cost of rebuilding a home per square foot.
Once you have selected the appropriate housing restrictions, consider adding extended replacement cost coverage to your policy. Within this coverage, your insurance company will pay 10% to 50% more than your housing coverage to help you rebuild. This can save thousands of dollars if the price of a building soars for unexpected reasons, such as a shortage of timber or high demand after a disaster.
Usually, the more expensive option, guaranteed replacement cost coverage, pays to rebuild your home regardless of cost.
Did I get a lot of deductibles?
Homeowners may not be aware that some policies may apply higher deductions to claims resulting from wind, hail, storms, or other disasters.
For example, let’s say a hurricane causes wind damage to the roof. According to Andrew, the insurance policy may include a wind deduction equivalent to 5% of the coverage of the residence, rather than the $ 1,000 deduction that applies to most other claims. .. Therefore, if your home is covered for $ 250,000, you will have to pay the first $ 12,500 damage before the insurance company pays anything.
Obtaining quotes from many insurance companies can help reduce or eliminate these high deductions.
What isn’t covered?
You may be uncomfortable with the exclusion of policies. “Flood insurance, which is excluded by almost every homeowner’s policy, is definitely a big deal,” Andrew said, adding that this is especially important for homeowners with completed basements.
According to Andrew, even homes that are not near the body of water can be flooded during heavy rains, and standard homeowner policies may not be able to cover the damage.
You can purchase flood insurance through companies that participate in the National Flood Insurance Program. The program’s average flood bill payment for 2019 was $ 52,000.
Andrew also suggests adding a water backup range to the policy. This comes at the cost of damage caused by water flowing back into the house from sewers, drainage pumps, or other water pipes.
Another general lack of coverage is to keep up with current building codes. “If the code has changed since the house was built and you need to make improvements when repairing or replacing (the house), the usual policy excludes that,” says Bach.
This can be particularly expensive for older homes, but “even homes built five years ago are out of the code,” Andrew says.
Both Bach and Andrew recommend adding the scope of the ordinance or law to the policy to handle these costs.
How can I save it?
In general, it is more important to have a reasonable coverage than the minimum payment, but there are discounts to facilitate policy payments. Andrew proposes to buy cars, homeowners and other insurance through the same company to take advantage of bundled discounts. This saves more than 20%.
“The best way to lower prices without sacrificing coverage is to increase deductions,” says Bach. Being willing to pay for small repairs yourself, rather than filing a complaint, will help keep your insurance premiums low.
If you are confused about coverage and discounts, please contact your insurance agent to discuss your options. “Take a little extra time to figure out what you’re buying,” says Andrew. “For most people, homes are the most expensive asset they have.”