When you purchase renters insurance, you're buying coverage for the contents inside your home or apartment. Homeowners insurance on the other hand, covers not only the contents of your home, but also the structure itself. However, those values aren't the only factors determining the cost of your insurance premiums. Geographic location, as well as proximity to fire departments, water pressure and security, can affect your homeowners insurance premiums. In general, a renters policy only costs roughly 10-20% of what a homeowners policy will cost.
2. A High Deductible Can Really Pay Off.
One thing to pay close attention to is the price of your deductible. Not only will a higher deductible save you money on your monthly premiums, but it could really pay off in the long run. Unlike with health insurance, where you probably don't want to be stuck with a high deductible, you can choose a higher deductible with homeowners insurance without as much risk. Most people only file a homeowners insurance claim every 8-10 years. For this reason, many people opt for the highest deductible that they could afford in the event of a loss. A higher deductible saves money year after year and keeps monthly costs affordable to you.
3. There's a Difference Between Cash Value and Replacement Costs.
The dollar value of everything in your home from appliances to furniture differs from the amount of money it would cost to replace everything. Due to depreciation, your home's contents aren't worth what they were when you first bought them. For this reason, it's important that you insure your home based on what it would cost to replace everything in the event of a total loss. In addition, the price you paid for your home is irrelevant in the event you have to rebuild the entire thing. Building material costs and labor costs have likely increased and you want to ensure the cost to rebuild it exactly as it was is covered under your policy. While your premiums may be a little higher than if you just base it on cash or market value, you'll avoid having to foot half the bill in replacing your property in the event of a loss. Talk to your agent about the type of coverage your receiving and how you'll be reimbursed in the event of damage to or loss of your home.
Did you know that the claim history of your home can affect your insurance premiums, whether you had anything to do with that claim or not? Think of your homes claim history as a "credit report" for your home, that contains all the records of insurance claims on the house. A claim filed on your property in the last 5 years, whether you lived there then or not, can affect your insurance premiums. Not all claims are negative though; if your roof was recently replaced, your premiums could actually decrease because the need for a new roof in the near future is unlikely. If you're looking at buying a home, try to get a copy of the home's claim history to see how it could affect your insurance if you were to purchase it.
5. Flooding Isn't Covered Under Your Standard Homeowners Policy.
Make sure you know what's covered under your standard homeowners insurance policy. There are a number of perils that typically aren't covered, such as earthquakes and floods. Keep in mind that 30% of flood losses in the United States happen to homes that are not in flood zones. Even a small amount of water can cause thousands of dollars in damage to your home, which may not be covered if you don't add a flood policy on top of your standard homeowners insurance. Talk to your Lake of the Ozarks insurance agent about other risks you may be subject to as well.
For all your Lake of the Ozarks insurance needs, trust Insure the Lake! As an independent insurance agency that has direct contracts with over 50 insurance companies and access to even more, we can shop the marketplace in order to give you the most comprehensive coverage at a competitive price. Give us a call at 573-348-2794 to discuss your homeowners insurance, or any other insurance, needs today!
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About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.
Steve Naught, CIC
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral
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