Why buy home insurance?

• Owners: Provides protection of home and property.
• Tenants: Protects personal property
• Everyone: Protects against financial responsibility for accidents that may hurt other people or damage what they own.

How much home insurance do I need?

• Asset Protection: The more insurance coverage you have, the less you have to pay in case of disaster. You must have sufficient liability coverage to protect you from legal action against you due to possible negligence.
• Lender Requirements: Some lenders require you to carry enough insurance to cover at least the amount of the mortgage on the home.
• Policy Requirements: Depending on the insurer, there may be some conditions for replacement cost protection for example, insurance of the property to value.

What affects home insurance prices?

• Type of Construction: Brick houses generally cost less to insure than frame houses.
• Age of House: Newer homes often qualify for discounts. Some insurance companies may offer partial coverage for older homes. Some don’t provide any insurance at all for older homes. Be sure to discuss this with your insurer.
• Local Fire Protection: Your area’s fire protection class is determined by the number and availability of fire hydrants and fire departments in your community. Your home insurance will be higher if you live in an area that has little or no fire protection.

What’s a peril?

A peril is a situation or circumstance that can cause a loss such as fire, windstorm, and theft.

What deductible should I choose?

The deductible is the amount you’re required to pay on each claim. Once you exceed the deductible amount, you’re able to collect.

What basic coverages are available?

Basic coverage includes: damage to property, living expenses, medical payments, and personal liability.

What does property damage cover?

Property damage insurance covers the cost of repairing damage done to your home by fire, lightning, windstorm or hail. Flood and earthquake insurance are not included on your policy. However, if you desire flood insurance and your insurer do not provide it, contact the National Flood Program (“NFP”) who will assist you with getting coverage at (800)-638-6620.

What does personal property insurance coverage include?

Personal property insurance covers all personal belongings inside your home. Generally your policy will compensate you up to 50% of the value of the contents in your home. You must list valuable personal property individually on your policy so that in case of a loss, you will be compensated according to its value.

What does additional living expense or loss of use cover?

Additional living expenses are extra costs incurred if you’re unable to live in your home due to an insured peril, repairs being made to the home, or if a government order denies you access to your home. The coverage is limited to normal living expenses as defined by your policy.

What is personal liability insurance coverage?

Personal liability coverage provides protection for you and members of your family in case a lawsuit is brought against you because of property damage or bodily injury or other individuals or businesses. That includes cost of a legal defense. Once your policy coverage is exhausted, your insurer is no longer legally obligated to defend you.

What does medical payments insurance cover?

Medical payment insurance covers the medical expenses of others who are injured on your premises or on adjoining areas such as alleys or sidewalks. This coverage does not pay for injuries to you or your family resulting from business activities taking place in your home.

What is replacement cost?

Replacement cost is amount necessary to replace, rebuild, or repair damages to your home using the same quality of materials without your home loosing its market value.

What is actual cash value?

Actual cash value is the amount needed to repair or replace the destroyed property at the time of the loss.

What should I do if my premium increases and I want to get quotes from other companies?

While each state varies, but insurers are required to give on average, 30 days notice before renewing your policy, which is not always sufficient time to compare other quotes. You may want to consider paying monthly until you make an informed decision regarding your home insurance.

Searching for insurance coverage can affect your credit score because each insurer has the option to check your credit. To will lessen the damage to your credit score, try to get all of your quotes within a two week period.

How can I get a lower premium?

Consider a higher deductible. The higher your deductible, they lower your premium. Many insurers will not renew polices of customers with a history of filing several claims. Some insurers may even refuse to accept new customers who have had prior claims in the past. Do not try to collect on small claims. Use your home insurance only for major disasters and use the money you save on paying lower premiums for minor repairs to damages to your home.

What if I receive a notice of non-renewal?

Offer to pay a higher deductible if they extend your coverage.

Meanwhile, apply with several different insurers. This will get you competitive rates and will also increase your chance of avoiding serious damage to your credit score.

Even if you have to pay more for your policy, it’s imperative that you get regular coverage. If you’re having difficulty finding a company that’s willing to provide coverage, contact the MO Property Insurance Placement Facility (FAIRPLAN) who provides fire insurance coverage but no liability coverage. FAIRPLAN will cover up to $100,000 for all contents combined.

If your coverage lapses, the bank that originated the mortgage loan may force place their own insurance on your home. However, this type of insurance is very expensive, and only covers its particular stake in the home’s value.

I had a loss, and my roof needs repair. The company is only willing to pay for repairing part of the roof even though the contractor has said that I need to replace the entire roof.

Your insurer is not responsible for any repairs made neither to the roof, nor for its replacement unless it’s damaged by an insured peril. Regular Maintenance of the roof is the sole responsibility of the homeowner.

I have replacement coverage for contents under a homeowner’s policy. Some of my property has been stolen. Can the company settle for an amount less than replacement?

The insurance company generally pays the actual cash value for the loss or damage until the he homeowner’s property has been replaced. Once the homeowner replaces the damaged property and provides receipts to the insurance company, the insured will be reimbursed.

I have had homeowner’s insurance with the same company for years. I had multiple claims last year, and now the company will not renew my policy. Can they do this?

In many states, yes. Check with your local state laws.

What protection does the personal liability coverage in my homeowner’s insurance policy provide?

Personal liability coverage protects you and all who live with you against lawsuits claims as a result of bodily injury or property damage for which you are found to have been negligent and legally responsible.

Does my homeowner insurance policy cover flood damage?

Generally, insurance policies do not cover flood loss or damages. The “Exclusions” section of your policy will highlight the type of damages not covered by your policy.

Flood insurance is available through the government’s National Flood Insurance Program. The Federal Insurance Administrator can direct you to licensed property/casualty insurance agents or private insurance companies that private coverage for flood damage.

What is credit scoring?

A credit score gives a snapshot of your credit. A mathematical formula called a “credit scoring model” is used to calculate your credit. This model weights various factors and summarizes it into a three-digit number that ranges from zero to 999.

How is credit scoring used?

Most insurance companies use your credit score in one of two ways:

• Underwriting — The Company may decide whether to approve or deny an application for a new policy. They may also decide whether or not to renew an existing policy.
• Rating — The Company may decide what “tier” or level to place you, which would affect how much you pay for your policy.

If you believe that your insurance rate is too high, don’t settle. Search for other options.