Challenging is a word used quite frequently in ones pursuit of the perfect Homeowners Insurance Policy. Whether you are a first time homeowner or you have done this before, there are many ways to receive quotes on insurance; but, beware… there are liabilities outside the norm that can affect your coverage. It would be wise to do research first, then contact more than one Insurance Company before making your final decision. The basic limits of coverage will likely be addressed in most of your quotes, but be careful; there are often hidden components that can be costly. Here are four factors that you may not be mindful of:
Dogs- Although dogs have come to be more like family than just pets, consequently they also bring a higher liability risk to your homeowners insurance policy. Owning a dog is a policy underwriting factor and insurance companies take it very seriously.
An oversight by many homeowners insuring a home with a dog is ignoring the fact that they need to report it to their insurance carrier. Whether they choose to do this because they already have an affordable policy or leave off the information on an application on purpose, to save money; remember, knowingly omitting pertinent information from the application is grounds for policy cancellation.
The insurance industry is getting tougher on dog owners: They are banning sales of policies to owners of certain breeds; leaving out dog bites and other injuries that are dog inflicted, from the coverage. This means that the dog owner is covered for some things, but not canine inflicted injuries.
SOME of the specific breeds that are red flagged by many home insurance companies include; Rottweiler, Doberman Pincher, Pit Bull, German Shepherd and Chow. These breeds may generate a higher rate because of their negative reputations or the insurance company could deny you coverage.
Previous Claims on Home- If you have filed multiple claims against your homeowners policy, this could lead to higher premiums or cancellation of your policy; in turn, may also lead to your insurance company reporting the claims to the Comprehensive Loss Underwriting Exchange (CLUE).
-CLUE- is a database that is shared among insurance agencies. If your rates go up because of excessive claims or you are denied renewal of your policy by your current insurer, any agency that you go to for a new policy can track your claims history and consequently, charge you.
When purchasing your homeowners policy, contemplate going with a higher deductible. Deductible is the dollar amount that you, the insured, agrees to pay out-of-pocket in the event of a loss. This may be one of the easiest ways to reduce home insurance premiums without forfeiting coverage. Deductible amounts vary by state, but are usually from $50 to $2500. The deductible amount will represent the amount of money that you will need to be accessible in the event of a loss; choose wisely, so as not to be caught short. Any claim may trigger a rate increase. This may be a reason for you to consider paying the cost of minor losses yourself.
Fire Stations-distance affects coverage- Sometimes you pay less for insurance if you buy a house in close proximity to a fire hydrant or in a community that is protected by a professional fire department rather than a volunteer fire department.
Homeowners discounts may be available for things like deadbolts, smoke alarm and fire extinguishers; install a UL-approved smoke detector on each floor, replace the batteries yearly; install a UL-approved dry-chemical fire extinguisher in the kitchen for grease fires, make sure it is fully charged by checking it periodically; if you have a fireplace, make sure the flues and chimney are cleaned regularly to prevent chimney fires and smoke damage.
Alarm System-discounts- You may find that posting a sign naming a Security Company on your window may deter would-be burglars, although, it is smarter to educate yourself on security systems to determine if an alarm system is right for your home. Even though the advantages of a home security system can save you 5%-20% on your homeowners insurance policy, it can also provide you and your family with the peace of mind you need to know you are safe.
Owning a home is a great accomplishment! Once you find the right homeowners insurance policy for your home, check with your insurance agent at least once a year to make sure it provides adequate coverage. Any type of additions or changes may add value to your home, and therefore increase the replacement cost.
sources: http://www.dogbitelaw.com/index.html, http://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm