Because your home is among the largest, most expensive purchases you’ll ever make, you want to make sure you’re protected against possible damage, in whatever form that may take. Carrying adequate insurance is the best way to do that. Before you sign a policy you may want to take a look at these little known facts about home insurance.
Types of Coverage
Homeowner’s insurance comes in many forms. If you have the money to spend, you can protect yourself against virtually anything, but there are a few things you absolutely need to be insured against. Among them are protection against damage to the home due to storms or fire, personal property replacement due to storm damage or theft, liability coverage in the event someone is injured while on your property, or loss of use protection so you will have somewhere to stay and money to live on if your home needs extensive repairs.
What Isn’t Covered
Unless you ask specifically for coverage in certain areas, you won’t usually be covered by your homeowner’s insurance policy. These include natural disasters, such as floods, tornados, hurricanes, or earthquakes. If you live in a part of the country that’s prone to these types of events, you may need the extra coverage. Taking precautions against natural disasters can reduce the amount of money you’d have to pay for this extra insurance. For instance, if you live in an area that is periodically struck by a hurricane, you can install storm resistant roofing which will help protect the home, and cost less to replace. If you live in an area where earthquakes strike from time to time your home could be built to sway with the shaking, so the potential for damage would be reduced, and so would your insurance rates.
Changes in the Law or a Local Ordinance
If your home undergoes damage due to a storm or anything else your homeowner’s policy would normally cover, the terms of the policy apply as it was written. In the event a new law or local ordinance was passed that changed the building code it could affect replacement costs. Unless you request that your policy includes a clause stipulating that any increased costs be included in your coverage, you’d have to make up the difference out-of-pocket.
Abandonment or Neglect
Another part of your homeowner's policy that could cause out-of-pocket expense for you is called a neglect clause. If your home is left vacant for an extended period of time, some policies suspend coverage. If you don’t plan to live in the home, or will be away for a long time, check with your insurance agent to make sure your present policy will remain in effect.
The material with which your home is constructed can have a tremendous effect on the cost of insuring it. It also depends on your location as to what type of building material will keep your insurance rates down. If you live in an area prone to earthquakes, it will cost less to insure a wooden home than one built with concrete, because wood will bend a little more during quakes. On the other hand, if you live in an area that is often subjected to high winds, a concrete home will cost less to insure, because it’ll withstand the winds better than a wooden home.
More Location Variables
Another way the location of your home can affect insurance rates is its proximity to a fire station. Traditionally the further you live from a fire house the higher your rates will be. The thinking behind this is that it will take the firefighters longer to get to your home, which reduces their chances of preventing extensive damage, thus making your claim higher.
Pets Make a Difference
Because certain types of dogs are considered to be more vicious than others, the type of pet you own could adversely affect the price you pay for insurance. If you have a Rottweiler or a Pit Bull, you may have to pay extra for liability insurance.
If you don’t smoke, you may be entitled to a non-smokers discount. If you accept the discount, you will have to make sure that no one is allowed to smoke in your home or on your property.
Your homeowner’s insurance will cost more if you have a swimming pool, because they’re considered to be a liability risk. If you do have a pool, you can reduce the cost somewhat by making sure the pool area is fenced and the gates are kept locked, making the pool inaccessible to anyone not invited.
Guest post from Casey Lynch. Casey writes about home insurance for HomeInsurance.org.