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Selecting the right homeowners insurance will protect your property and help you manage risk. But with so many options available, finding a policy isn’t a snap decision.
“You need to take some time to analyze your new home and your financial situation before you decide on the coverage that’s right for you,” said Justin Vedder, Vice President at CastleLine Risk and Insurance.
Here are four key elements to keep in mind when choosing homeowners insurance.
1. Type of Residence
Based on the type of home you live in, there are different ways to customize your homeowners policy. If you own a single-family home, you may need to include coverage for other freestanding structures in addition to the home, such as fences or separate garages. If you live in a condominium or community with an association, the association’s policy may cover damage to the outside of your home. In this case, you’d only need to insure your personal property and the interior of the structure. The exterior materials of your home may also be a factor — brick or masonry materials are often considered safer than wood, for example.
2. Safety and Security
Safety and security features in your home may net you a discount on a policy. Smoke alarms and home security systems certainly count, but other factors like living in a gated community may also bring down the cost of coverage, as could additional security items such as deadbolt locks. According to the Insurance Information Institute, making your home more disaster-proof is another way to bring down premiums. This effort might include upgrades like a roof replacement with enhanced shingles or replacing older plumbing and electrical systems. Although these renovations can be expensive, lower insurance costs could be a benefit of making changes to your home.
3. Cost to Rebuild
Knowing the cost it would take to rebuild your home will help you to select a policy with the correct amount of coverage. You don’t want to value your home at a lower price and wind up paying out-of-pocket if you suffer a loss event. On the other hand, you don’t want to pay a higher premium than necessary. The cost to rebuild doesn’t necessarily equal your home’s current market value, either. Make sure you research the kinds of investments it would actually take to rebuild your home in the event of a disaster, and structure your policy around those costs.
4. Personal Finances
Your financial circumstances also play a role in your ultimate choice of a homeowners policy. If you’re looking to save money, you may want to consider a policy with a higher deductible. Chances are, you’ll only file a claim in the event of a significant loss, so a small deductible may not be worth the extra cost. You may also want to reassess the value of your personal property, especially high-value items that you’ve scheduled into your policy, such as jewelry. Ask your agent about the many policy discounts available. In addition to the security system discounts, you may be able to cut costs by using the same agent as you do for auto insurance or by paying your premiums once per year rather than monthly.
Weighing the pros and cons of different policies is an important step when choosing homeowners insurance. Some home insurance options are customizable, so don’t hesitate to ask your agent to help you select a policy that meets your needs. Check out Owners.com for additional resources to make this process even easier.
The information contained herein is not an offer to sell or a solicitation to buy any insurance product. No insurance product is offered or will be sold in any jurisdiction in which such offer or solicitation, purchase or sale would be unlawful under the insurance or other laws of such jurisdiction. Some products and services may not be available in all jurisdictions. The information contained herein is provided for general marketing purposes only. For terms and conditions of coverage, please refer to the specific insurance policy.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Owners.com, Altisource or any other Altisource® business or entity. The foregoing content is not intended to constitute, and in fact does not constitute, financial, investment, tax or legal advice by the author, Owners.com, Altisource or any other business or entity.
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