04 Sep Homeowner’s Insurance Basics to Know
When purchasing a home, you’ll need to purchase homeowner’s insurance to cover your investment. For beginners and experienced homeowners alike, it can be rather confusing to understand how much coverage you’ll need, and which policy is right for you. Thankfully, our in-house insurance agency, Caine Hayes Insurance, can help!
Though every policy is different, we asked them to break down the basics. Here are some answers to the most frequently asked insurance questions, along with a few of their best tips.
Frequently Asked Questions:
What’s typically covered under a “normal” homeowner’s insurance policy?
Homeowner’s insurance typically covers damage to your home, possessions, and personal liability (when you or your family injures someone or someone is injured on your property).
What’s NOT covered under a “normal” homeowner’s insurance policy?
You’ll need a separate policy for floods (Note: A flood is defined as rising water). Earthquake coverage can be added as an endorsement. Other structures coverage for a driveway, fence, pool, or detached building is normally included, but you should review the amount regularly.
What’s the difference between a homeowner’s insurance policy and a home warranty?
Homeowner’s insurance covers damage caused by occurrences like fires, hail, and lightning. It does not cover normal wear and tear or other repairs that need to be made to keep up your home’s condition. Homeowner’s insurance is required by mortgage companies, while warranties are not.
A home warranty is a year-long service contract that can cover what your home insurance policy doesn’t, like repairs needed when your air conditioning goes out, water leaks, or toilets overflow to name a few examples. Click here to read more in our previous post, Home Warranties: Explained.
What will an inspector look for?
After the issue of a new policy, most insurance companies will send an inspector out to take pictures of the home. If the home’s coverage amount is over $500K, they will also likely set up a time to come inside and do an interior inspection.
The purpose of the inspection is to identify potential risks that need to be addressed as well as to accurately appraise the home’s replacement cost. The inspector will look for items like if the home is vacant, if there is any visible damage to the home, and if there are risk factors like stairs without railings or pools with diving boards or slides.
What CANNOT be insured, and what could put you at risk for your coverage to be canceled?
Trampolines are a no-go for most companies. Many people have them, but if their carrier was aware, they would not renew their coverage until given proof that it has been removed.
When it comes to your pups, make sure your carrier is aware of yours, as some have a prohibited breed list. If your dog has a recorded claim in the past from a bite, finding coverage will be very difficult.
Helpful Tips from the Caine Hayes Team:
Get a CLUE report. Request a Comprehensive Loss Underwriting Exchange (CLUE) Report on your new home to see claims the homeowner filed. If an insurance company sees an excess of claims in recent years, you could end up paying higher rates or being declined coverage.
Don’t skimp when it comes to liability coverage. Often making a major jump in your liability coverage (i.e. from $300K of liability coverage to $500K of liability coverage) doesn’t dramatically increase your cost. Our society is more litigious than ever, and the liability attached to your homeowner’s can protect and your family in many circumstances.
If you’re planning on renovating your home before you move in, prepare for extra insurance costs. Many companies require you to be living in the home within 60 days of the policy being issued, or they will cancel your coverage. Vacant homes can be difficult to place and expensive. If you’re doing an extensive renovation that may go over the 60-day mark, you’ll want to purchase a builder’s risk policy instead.
Worried about a tree or branch in your neighbor’s yard? Send them a certified letter to cut it down. If you’ve done so and it falls, you’ll have proof that you asked them to act, and they did not, meaning it becomes their responsibility. If you haven’t sent a certified letter and it falls, then it’s up to you to make the claim with your policy.
If you sell your home, you need to call to cancel your policy. Though it seems like a no-brainer, your insurance company is not notified when you’ve sold your home. You are responsible for calling to cancel your policy and getting a refund.
Re-quote your policy every two years. As an independent agency, Caine Hayes Insurance has access to more than 100 different companies to meet your needs. They re-quote their clients’ policies every two years to ensure that they are getting the most competitively priced coverage.
Need a property quote? Click here to learn more about Caine Hayes Insurance, and submit your information.