25 FAQs About Homeowners Insurance

25 FAQs About Homeowners Insurance

by | Aug 23, 2016

The Top 25 Most Frequently Asked Questions about Homeowners Insurance

Owning a home is the American Dream for many people. Single moms are no exception. But owning a home is more than a mortgage. You have to protect your asset as well.

Do you know the worth of all your assets? Could you recover in case disasters like a fire or flood damaged your home? Could you recover from the theft of your property?

Homeowners insurance is one of the best types of coverage you can purchase if you own the home you live in. With this coverage, you can be sure of keeping a roof over your head and a shirt on your back. Homeowners insurance protects your property as well as your family and even your pets.

While many households have invested in homeowners insurance, not many truly understand its importance, or what it covers. Here are 25 commonly asked questions asked by consumers about homeowners insurance.

  1. Do I really need homeowners insurance?

If you don’t want to pay out of pocket for property damage and liabilities – such as medical fees for dog bites – you need homeowners insurance. The cost of recovering from theft or damage as well as defending yourself in a lawsuit can run into the thousands of dollars. Unless you have no attachment or need to replace the items you own (including your home), you should have some level of homeowners insurance.

  1. What does homeowners insurance cover?

This depends on the type of insurance policy you buy. According to a survey by the National Association of Insurance Commissioners (NAIC), 33 percent of Americans mistakenly believe that their homeowners insurance policy will cover them for flood damages.

A standard-form insurance policy doesn’t cover flood damage. Standard insurance policies usually cover damage by:

  • Smoke
  • Vehicles
  • Falling objects
  • Explosions
  • Fire
  • Lightning
  • Weight of snow, sleet or ice
  • Frozen plumbing and other household systems
  • Theft and vandalism

You may have to get extra coverage for other disasters.

  1. Is homeowners insurance expensive?

According to a February 2016 study by the NAIC, the average cost of homeowners insurance increased by 6 percent to $1,096 in 2013. This is an average of $91 per month. This is much less than the thousands of dollars you would have to pay in case of a disaster or liability.

You can reduce the cost of homeowners insurance by comparing home insurance quotes online and searching for the best deal.

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  1. Is my backyard shed included in my homeowners insurance policy?

Yes. Real property is included under the policy. Real property includes your home, any shed on your property, the garage and any other structure on the property.

  1. How much is my shed insured for?

The value of coverage for any auxiliary structure on your property such as a shed or garage, is dependent on the value of the main structure (i.e. your house). If the house is valued at $80,000 for example, then the shed will be covered for 10 percent of that value (i.e. $8,000).

  1. Who decided how much my property is worth?

This is determined based on state laws. Insurance companies will base the value on various common methods including actual cash value, replacement coverage and extended replacement cost.

  1. Are my valuables and jewelry included in the cover?

Standard policies have a limit to the coverage provided for jewelry. You may need to add extra coverage to ensure you are fully covered.

  1. Am I covered for flood damage?

No. If you live in a flood-prone area, you may need extra flood insurance.

  1. What about earthquake damage?

No. You will need additional insurance.

  1. Will my policy protect me if my neighbor slips and falls on my porch steps and threatens to sue me?

Yes. Your policy will cover the damages if you are found liable.

  1. Am I covered for damages if a tree on my property falls on my house in a storm?

Yes. You will be covered for damage of the roof and removal for the tree.

  1. Am I covered for the removal of a tree that falls during a storm but doesn’t damage my property?

No. Your trees are covered for risks such as fire and vandalism but not wind damage.

  1. Are my children who are away in college covered by my policy?

If your children are full-time students and still part of your household, they will be covered to a limit of 10 percent. Coverage for children living away from home varies from one insurance provider to another.

  1. Is my mother-in-law who lives with us covered under the policy?

She will be considered as part of the household and will have her property covered under the policy.

  1. Is my vacation home in another state covered under the same policy?

Insurance providers operating in multiple states can issue a policy to cover your vacation home. However, the second policy will only cover the property (i.e. a dwelling policy).

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  1. I work from home. Is my business property covered?

Yes. However, the coverage is limited. It is therefore best to have additional coverage.

  1. Am I covered for natural disasters?

Natural disasters, also known as ‘Acts of God,’ are not covered by standard policy. Additional insurance is required.

  1. How much will I be paid in case of damage to my personal property?

This is outlined in your insurance policy under special limits. The amount paid will depend on your cover and the insurance provider.

  1. Are my possessions covered even when I’m on vacation?

Yes.

  1. I rent out a room to a tenant. Are they covered under my policy?

No. Tenants are not covered under homeowners insurance.

  1. Where should I start after losing my property?

Begin by taking inventory and then contacting your insurance provider.

  1. What do I do when my property is stolen?

Contact your insurance provider immediately.

  1. Is insurance for my condo different?

The coverage offered for condo owners insurance covers the same general areas as homeowners insurance. However, there may be some differences based on the specific requirements of the condominium unit owners.

  1. Are there exclusions in homeowners insurance policies?

Yes. These include intentional loss, neglect, damage caused by war or general power failure.

  1. My golf clubs were stolen from my car. Are they covered?

Yes. Homeowners insurance covers your property anywhere in the world.

Now that you have the answers to the most frequently asked questions are you ready to buy a home? If you already have a home do you have the protection you need? Be sure the home insurance agency you choose can answer all of your questions and give you the best value for your money.

The Best Advice I’ve Received About Insurance and Child Support

The Best Advice I’ve Received About Insurance and Child Support

by | May 13, 2014

…or a better title could be, “How to Guarantee Child Support by Insuring Your Ex”.

The other day in a conversation with a friend we talked about the wisdom of taking out a life insurance policy out on our exes. As morbid as it sounds it made sense, especially if said ex is regularly engaged in high risk activities. Jail. Drugs. Military. Race Car Driving… you get the picture.

If he dies then you are left with no child support or any other financial support that’s needed through the rest of your child’s life. A million dollar policy would take care of (more…)

5 Easy Ways Every Mom Can Reduce Their Homeowners Insurance

5 Easy Ways Every Mom Can Reduce Their Homeowners Insurance

by | Jul 13, 2012

More than ever, people are looking to trim their budget wherever possible. As a mom, you’ve probably tackled the grocery budget, housekeeping budget, and maybe even the car payment. However, you might be missing a less obvious budget item that can be trimmed — your homeowner’s insurance payment. Try out these five tips and see how much your insurance payment drops:

1. Install a home security system.

A home security system, such as those found at wirelessalarmsystems.com, will not only cause your insurance premiums to drop, it will also help to ensure the safety of your family and all your belongings. You can’t put a price tag on that kind of security. Talk to your insurance broker to find out which discounts are available depending on the home security system you choose.

2. Combine your policies.

Are you purchasing your auto insurance and homeowners insurance from different companies? Contact both of these companies right away and find out how much you can save by combining policies. You could lower your premiums by 5 to 15 percent.

3. Improve your credit score.

In these times, it’s easy to let your credit score slide; however, if you do that, you could wind up paying some serious penalties, including higher premiums on your insurance policies. Most insurance companies today are pricing your premiums according to your credit score. Make sure that all your bills are paid on time — not just your insurance payments — and look for ways to pay down your credit cards. The effort you put into improving your credit score now will pay off huge dividends in the future.

4. Review the value of your possessions.

If you haven’t made any large purchases in a while, you might be paying too much to insure them. Your possessions, especially electronics, have probably depreciated over time, so make sure that your policy accurately reflects their current value.

5. Ask about additional discounts.

Many insurance companies offer a variety of discounts, but you often have to ask specifically about them. Call up your insurance broker and ask if you qualify for additional discounts. Many employers offer discounts on insurance to their employees. If you stay at home with the kids, you might also qualify for additional discounts since you are at home more often than someone who works outside the home, and your house is less likely to be burglarized.

Taking the time today to review your policy and look for additional discounts could save your family a good deal of extra money in the long run.

My Uncle Died; Why Single Moms Need Life Insurance

My Uncle Died; Why Single Moms Need Life Insurance

by | May 21, 2012

I heard a long time ago that one of the reasons some families remain wealthy is because of insurance. The father (or mother) makes sure there is adequate insurance to cover the funeral and the lose of their income. There is often multiple policies in place to make site the family never has to worry about money.

You are probably wondering why I am talking about insurance and death right? Its because my uncle passed away on Friday. He was a good man; kind, funny, and always smiling. But he had been sick for the last couple of years. This illness left him financially devastated and his family unprepared for his death.

There is no insurance to cover the funeral service and burial, so the family has to rely on the kindness of others to help cover the expenses. It’s good for people to help, but insurance usually covers all this. It takes the financial burden out of the equation so the family has time to mourn.

This scenario is an example for everyone, especially single moms. We are solely responsible for the welfare of our children so it is important to have life insurance to cover funeral expenses. The insurance should also cover the lose of yearly income three or four times over.

A friend of mine had already taken care of her funeral expenses so her family doesn’t have to worry about it. Making these decisions while you are still alive is an option that can save your family time and expense. It relieves them of the burden of planning.

I know all this may sound morbid but the reality is death is a part of life. We are born, we live, than we die. My uncle’s death just makes it very relevant for me right now.

I must get life insurance for myself as well as look into pre-planned funeral services. I’m sure there is a lot to think about and options to consider when choosing a service. I have had my will drawn up so that’s a step in the right direction. I also need to get short and long-term disability insurance. All this is important to good financial health for you and the children you may leave behind (God forbid).

Do you have life insurance? Is it enough to cover funeral expenses and provide 3-4 times your yearly income? Do you have disability insurance? Do you have a will?

Self-Employment Tips: How to Save on Health and Dental

by | Nov 15, 2011

Anyone who is self-employed has had to face the insurance conundrum.  Do you spend an arm and leg to insure yourself (since there’s no corporate umbrella to absorb a portion of the cost) or do you risk losing an actual arm or leg because you can’t afford the cost of medical care without insurance?

While there are certainly benefits to being self-employed, such as working from home, setting your own schedule, and taking only the jobs you want, one of the major drawbacks of freelancing or staring your own company is that the cost of medical and dental falls squarely on your shoulders.  Luckily, there are a few ways to cut back on these costs.

Here’s how to save when you’re self-employed:

Preventive care

There is no better way to dispel the costs of medical and dental procedures than to continue practicing preventive care.  Early detection is often the key to ensuring that health issues never get to a critical (and expensive) stage.  So whether or not you have insurance, try to find a way to keep up with your annual visits (physicals, dental cleanings, and so on), especially if you have a family (or personal) history of problems.

Pay in cash

Many doctors and dentists are sympathetic to patients that lose their job or insurance (often both) and can’t afford to pay for treatment at full price.  Some are even willing to make concessions if you pay in cash as a way to keep you on track with your health.  So if your doctor or dentist might normally charge the insurance company $100 for your visit, they’ll allow you to pay as little as half when you offer cash.  Simply ask at your doctor and dentist offices to see if they’re willing to make such an arrangement.

Shop around

You comparison shop for everything from cars to jeans to canned vegetables, so why wouldn’t you do the same with doctors?  While it’s true that visiting a physician is a rather intimate experience, the truth is that you’re going to be poked and prodded one way or another.  So look into prices and how they vary from private practices to hospital staff to clinics; you’re bound to find something in your price range that suits your medical and dental needs, and you may be eligible to pay on a sliding fee scale (or even get services for free).

Prescription assistance

Even after you visit the doctor or dentist, you’re bound to be on the hook for additional costs thanks to prescription medication.  Some people can save by going for the generic brand while others will order via apps or the internet (finding the best cost locally or getting medication from other countries where it may be sold cheaper).  But if you simply can’t afford the cost of medications that you need in order to survive, look for prescription assistance programs that operate on donations (government, private, or other) so that you get the prescriptions you need at low or no out-of-pocket cost.

Discount plans 

There are companies out there that offer individuals like yourself both medical and dental discount plans.  You won’t pay much for membership (generally up to about $30 per month) and the plans will cover as much as 60% of your costs.  This is a good way to ensure that you won’t be tanked by potentially costly problems, without spending a boatload on pricy insurance that you may never use.

Evan Fischer is a freelance writer and part-time student at California Lutheran University in Thousand Oaks, California.