Saturday November 9, 2013
The dream of home ownership isn’t fully realized until you have the type of security only a comprehensive insurance policy can offer. Why shop around when one local, independent agent can find you the best and most affordable coverage available. The advantage of using an independent agent is the ability to search many policy options from many carriers. After you decide to finance a home, your Fort Collins homeowner’s insurance is one of the most important decisions you will make. One phone call to Insurance By Phone can put you on the road to finding the right policy for you.
Why do you need Insurance?
Home insurance is required for any mortgaged property. Your lender wants to make sure that the property is protected from damage, natural disasters, or other catastrophe that destroys the property or diminishes its value. You need insurance to protect your own personal property and cover your liability in case of unforeseen accidents.
No home and no neighborhoods are completely safe from extreme weather, the potential for theft and vandalism, or other accidents that harm the value of your property. Homeowner’s insurance is designed to protect your mortgage lender, and protect yourself so that these occurrences don’t ruin your financial investment.
What Types of Insurance are Available?
There is often a certain degree of choice when you select a homeowner’s policy. You can help determine the level of coverage and the level of deductible obligation. Your policy premium will increase if you select a lower deductible, limiting your out-of-pocket responsibility for home replacement or repairs. Generally, insurance deductibles range from around $500 per event, to $1,000 per event, with a deductible percentage calculated for catastrophic events.
Your independent agent can help you select the levels of coverage you and your lender need. Lenders and state regulatory agencies often require you to purchase insurance that covers between 80% and 100% of your home’s property value. This means that your home can be replaced in the event of a total loss due to fire, extreme weather, or other catastrophe. Your policy will determine what type of events are covered, and which events are specifically included.
Your homeowner’s insurance should cover the following:
- Home Damage – Your policy will cover the main structure of your home from external damage. Your lender will generally require a minimal amount of coverage for replacement of the main structure of your house
- Other Structures – This includes sheds, garages, fences, or other structures on your property
- Personal Property – This covers your most valuable possessions when they are destroyed or stolen
- Additional Living Expenses – Some policies cover living expenses when your home is damaged after a fire or natural disaster
- Personal Liability – Negligence that results in others’ loss is covered under liability coverage. Other than exclusions for automobile or boating accidents, this type of coverage follows you wherever you go
- Medical Coverage – This is additional coverage for personal injuries occurred by others on your property. Medical coverage on your homeowner’s policy is paid whether or not you are found legally liable
- Private Mortgage Insurance (PMI) – For properties mortgaged with less than a 20% down payment, your mortgage lender may require you to carry PMI. This protects the lender from non-payment or foreclosure
It is important to remember that flood damage is generally not covered under your primary insurance. You can seek flood insurance through a separate private insurer, or through the National Flood Insurance Program. Other natural disasters are often covered, and you may have the option to add certain addendums for specific catastrophic events, such as earthquakes.
How is my Premium Determined?
The premium you pay for insurance coverage is determined by a variety of factors. Your own personal choice in developing a deductible that you can live with will affect the homeowner’s policy premium. Overall, the premium is determined by the prospective risk or security of your home and neighborhood. Here are some other factors that go into your premium:
- The Bad – Homes constructed with wood, rather than brick, can mean higher premiums, so can features such as wood-burning furnaces. Swimming pools or other recreational features can increase your personal liability rates, and certain policies require a higher rate for certain breeds of dogs
- The Good – Smoke detectors and security systems are items that can make your premium less expensive. Your home’s proximity to emergency services can also reduce your payment
Deciding which policy to purchase is one of the most important decisions you can make to protect yourself and your property. Whichever type of Fort Collins homeowner’s policy you choose, let Insurance By Phone help you find the right policy and the right rate for you. Your coverage is only a phone call away.