Two Tips to Save on Homeowners Insurance

Two Tips to Save on Homeowners Insurance

A good time to start thinking about homeowners insurance is while you’re in the process of the buying a new home. A great time to start thinking about it is before you even start looking. An important factor in determining the cost of your homeowners insurance premium is going to be the home itself. Some homeowners insurance policies are based around something known as indemnification. Indemnification isn’t quite compensation, nor is it a reparation. Indemnification means that your homeowners insurance policy is designed to “make you whole” again by rebuilding your home to the same size and standard before it was damaged. Here are two things to consider before you start looking for a home. Size Because your homeowners insurance is based on the cost to rebuild your home, larger homes tend to come with higher premiums for one very simple reason: they require more materials to be rebuilt. Of course, some people have a certain size requirement, such as needing a certain amount of bedrooms, but to save on your insurance, try not to buy more than what you need. Quality The quality of the building materials your home is made of will also influence the price of your homeowners insurance premium. It’s going to cost a lot more to replace exotic materials. For example, your typical hardwood flooring costs anywhere from $3 to $9 per square foot. Or, you can opt for Macassar Ebony which runs for about $150 per square foot. Of course this is a pretty wild example, and most people who can afford Macassar Ebony flooring aren’t usually worried about the cost of replacing it....
Does my Homeowners Insurance Cover Improvements?

Does my Homeowners Insurance Cover Improvements?

Sometimes making additions and/or improvements to a home will increase its value, sometimes they won’t. Either way, making additions and improvements certainly increase the value of the home to the person making them. A common mistake among homeowners looking to do some work on their homes is assuming that their existing homeowners insurance policy will cover any improvements or additions. It’s not a difficult mistake to make – after all, the improvement is part of the home, and the homeowners insurance policy covers the home, so therefore it should also cover the improvement. Unfortunately, this isn’t always the case. Before you begin any project, you should check with your homeowners insurance company. It’s likely you’ll need to update your home insurance policy to reflect any changes you’re planning on making and to find out if you need financial protection during the process of making those changes. If you don’t get coverage, and the project is damaged for one reason or another, you may find that you’re not covered and stuck coming out-of-pocket for any repairs, or just to get your home back to the way it was. It’s also possible to get dropped from your homeowners insurance company if the changes you make are large enough, and you don’t first update your policy to reflect the changes. Even if the changes you’re making are purely cosmetic, such as hardwood or tile flooring, you’ll still want to check with your insurance company. If the upgrade to your home is particularly valuable, such as very expensive wood or tiles, you might want to purchase extra protection in the form of an...
Homeowners Insurance vs. Home Warranty – Realtors Know the Difference

Homeowners Insurance vs. Home Warranty – Realtors Know the Difference

When you buy something expensive, it will usually come with a warranty, and homes are no different. Most people who buy a home warranty do so once the sale closes, but not everyone realizes that a home warranty isn’t the same thing as homeowners insurance. A home warranty is essentially a policy that will pay for repairs if the appliances in your home break down. From air conditioning to water heaters, when these appliances break down unexpectedly, it can leave a new homeowner in a serious bind. They’ve just made a big purchase on a home, and now the fridge is on the fritz. Informing a client about the availability of a home warranty once the sale closes is ideal, but it’s always good to make sure they know that a home warranty and homeowners insurance are two separate things. Let them know what will be protected when they buy the home warranty. These include Plumbing Electrical Systems Heating and Cooling Washer and Dryer Oven, Range, and Garbage Disposal Homeowners insurance, on the other hand, covers structural damage to the home from a variety of sources. Making sure that your client knows the difference between the two is important, as they might think they’re buying one when really they’re getting the other. One of the great things about home warranties is that they aren’t all that expensive. General coverage starts at around $300, and more comprehensive coverage can be in the $600 range. Much like homeowners insurance, people can add extras to their warranty coverage like swimming pools or certain types of landscaping (fountains, wells, ponds, etc.). Ultimately, buying...