Home insurance isn’t always the most fun thing to deal with. It can feel really intimidating to go through the process of getting home insurance – kind of like someone threw you into the deep end. Or like a pop
Insurance agents’ top six things to know about home insurance.
1. There are a lot of things that affect your home insurance premium.
So, first and foremost, getting a home insurance quote is a bit more than just having an agent spit out a ransom number. There are a lot of factors that come into play when it comes to setting home insurance rates, so there are going to be a few questions you’ll have to answer to start the quoting process. The insurance company needs to figure out how likely you are to file a claim – your rates will reflect how “risky” you are to insure, meaning how likely you are to ask the insurance company for money.
A few of the things that can have an effect on your rates are:
- Your location
- Natural disasters your area is prone to
- The crime rate in your area
- The material your home is made of
- How close you are to a fire department
- Your past claims
- Your roof
- Your credit score
2. You can save money on your insurance by bundling your home and auto.
Bundling means that you get multiple lines of coverage from the same insurance company. The neat thing about bundling is that a lot of carriers offer a discount to people who take advantage of the opportunity to get both their home and auto insurance from them. It’s an easy way to score some quick savings on your insurance, so it’s definitely worth considering. It’s also convenient – you’ll only have to work with one insurance company. So, ask your agent about bundling and whether it’s a good option for you.
3. Flooding isn’t covered.
This is a really important thing that insurance agents want you to know about your home insurance. Flooding is generally not covered by home insurance policies. (When we say flooding, we mean that there’s a lot of water on the ground that isn’t usually there and it’s invaded your home, such as after a heavy rain.) Many homeowners think that their insurance covers flooding, and unfortunately many find out after they’ve experienced a major flood loss to their home.
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To protect your home from flooding, you would need a separate flood insurance policy. You can go through an agent and get a policy from the National Flood Insurance Program (NFIP). Keep in mind that flood insurance policies take 30 days to become effective, so you have to plan ahead and get your flood insurance policy before the rainy season. There are not many exceptions to the waiting period (one of which is if you need the flood insurance policy to get, extend, or increase a loan for a mortgage.)
4. It’s best to insure your home for its replacement cost.
Your home’s replacement cost is different than its market value. The market value is what the home would reasonably sell for in today’s market. Your home’s replacement cost is the amount that it would take to completely rebuild your home from the ground up, like you would have to do if it burned down. And this amount can be different than the market value and the amount you paid for the home, so don’t be taken off-guard. You need to have enough insurance to completely rebuild your home in case it’s destroyed, and that’s why you need to insure it for its replacement cost.
5. Having a security system could mean saving money on your home insurance.
Many insurance carriers offer a discount if you have a monitored home security system. Don’t forget to let your agent know if you do indeed have a security system, and let them know if you get one installed. The reason for the discount is that they’re a deterrent to burglars, and they’ll bring the police to your home ASAP in case of a break-in.
6. Your home insurance pays if your neighbor’s tree falls on your house.
Okay, so this is a classic (and perhaps frustrating) situation. If your neighbor’s tree crash-lands onto your house and damages your roof, it’ll be your home insurance company that pays out for the claim, not your neighbor’s. (Which means that yes, you’ll have to pay your deductible.) The same goes if your neighbor’s tree falls through your fence.
Now, to reverse the situation, if your tree falls on your neighbor’s house or through their fence, it would be their home insurance that would cover the loss – not yours. And that might not make them happy, but it’s the way it works. Trees don’t give much consideration for which way they fall, so it’s important to understand the tree-falling-over situation.
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Hopefully that helps give you some insider information about home insurance. To get started with Alabama home insurance quotes, fill out our online quote form or give us a call. We’re here to help with your insurance.