A Homeowner’s Insurance FAQ

AdminBy AdminOct 27, 20170

Q. What Will Homeowner’s Insurance Cover?

A. Homeowner’s insurance policies tend to come in two forms: policies that cover damages caused by every event except for a specific list of exceptions, and policies that only cover damages caused by events that are listed in the policy specifically. For the most part, homeowner’s insurance policies will cover theft, fire damage, wind damage and storm damage.

However, they don’t usually cover damages caused by flooding or earthquakes, which means you’ll have to purchase additional coverage if you want it. Homeowner’s insurance also provides liability coverage. This means that the costs associated with anyone or anything injured or damaged while on your property (such as medical bills, repairs or lawsuits) will be covered by your insurance.

Q. Am Am I Required To Get Homeowner’s Insurance By Law?

Q. Am I Required To Get Homeowner’s Insurance By Law?

A. No, you are not. You may, however, be required to purchase homeowner’s insurance if you are applying for a mortgage. Most lenders will not provide you with financing if you do not have homeowner’s insurance.

And even if you are able to afford purchasing your home outright, it’s a good idea to buy homeowner’s insurance in order to provide yourself with financial protection. If anything were to happen to your home in terms of damage or theft, you’d be left footing the bill if you don’t have insurance.

Q. What Affects How Much My Homeowner’s Insurance Premiums Will Be?

A. There are a number of factors that will determine how much your premiums will be. This includes the following:

  • History of claims

    If you’ve made insurance claims on past homeowner’s insurance policies, insurance companies will see you as more of a risk to insure, and will therefore charge you higher premiums.

  • Location of your home

    If your house is located in a bad area known for theft or property damage, it can affect your premium negatively. The same goes for homes located in areas that are often negatively affected by weather, such as flooding or tornadoes. However, if your home is nearby a fire station, it can actually help lower your premiums.

  • The condition of your home

    The age of your home, the type of structure, the roof and more all affect your premium. The older the features of your home are, the greater the possibility is that you will need to have something repaired or replaced in the future.

  • Your credit history

    A poor credit history makes for a riskier investment. So the worse your credit is, the higher your premium will most likely be.

Q. Can I Lower My Homeowner’s Insurance Premiums?

Q. Can I Lower My Homeowner’s Insurance Premiums?

A. Yes, you can. There are a number of ways that you can help to lower your homeowner’s insurance premiums.

  • Raise your deductible

    The deductible is the amount of money you’ll have to pay out of pocket in order for your insurance to kick in. The higher your deductible is, the lower your premium will be, and vice versa.

  • Combine policies

    By purchasing more than one policy from the same insurance company, such as a car insurance policy as well as your homeowner’s insurance policy, the insurance company will often provide you with a discount.

  • Implement safety measures

    By making your home more safe, such as by installing smoke alarms and carbon monoxide detectors, or by putting up a fence, you are improving the safety of your home. This can help you to reduce your premium.

  • Implement security measures

    By making your home more secure against theft, such as by installing a security system, you will be making your home less prone to intrusion and will often result in a lower premium.

  • Improve your credit score

    Begin paying off your credit cards and be sure to pay your bills on time in order to improve your credit rating. The better your credit is, the lower your premium could be.

Q. Will My Premiums Go Up If I File A Claim?

A. There are a number of factors that will determine whether your premiums go up if you file a claim. If you’ve never filed a claim before, your premiums will most likely remain the same. Unfortunately, there is a good chance that your annual rates will increase. The increase may be small, but it will be noticeable.

The reason that your annual rates will go up is because most insurance companies tend to provide discounts to their policyholders on a yearly basis as a reward for not filing any claims. Once you file a claim, you lose this discount, which makes it look like your annual rates are going up.

However, if you have filed more than one claim in the past, then there’s a very good chance that your insurance company will raise your premiums due to the fact that you are more of a risk to insure based on your past.

Conclusion

These are some of the more common frequently asked questions about homeowner’s insurance that should help you to improve your understanding of homeowner’s insurance as well as to help you decide what type of policy you need.

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