Homeowner's Insurance - Do You Have Enough?

Do you have enough house insurance?  Recent statistics show that more and more homeowners don't adequately insure their home.  If you haven't evaluated this recently, you may benefit greatly from digging out your house insurance policy and looking seriously at how much you're covered for.  It might be a great time to get several quick and easy house insurance quotes.  When you have a catastrophic loss, you don't want to be stuck rebuilding 80% of your house.

Sixty-four percent of U.S. homes in 2008 were undervalued for insurance purposes, according to a Marshall & Swift/Boeckh survey. That’s an improvement from 73% in 2002, but the average homeowner still has only enough insurance to rebuild about 81% of his or her home. Complicating matters for homeowners is that 31% don’t know how much their home is insured for and 46% don’t know what coverage their homes’ contents have, according to an August survey by MetLife.

6 Common (and very expensive) House Insurance Mistakes

Know what you're house insurance covers?  More importantly, do you know what is NOT covered.  Here's a really good article about common exclusions that many people think are included in their house insurance policy.  Make sure you review your policies on a regular basis and every so often get several house insurance quotes just to re-evaluated your coverage and your premiums.  
 
Earthquakes, unexpected deductibles, and flooding are just a few of the costs your homeowners policy might not cover. But if you’re like most Americans, you probably don’t realize it. According to the MetLife Auto & Home Insurance Literacy Survey, many homeowners are clueless about the ins and outs of their policies, which means they could easily end up paying a lot more money than they expected after damage to their home.

(sent via Shareaholic) 

You live in a flood zone!

Interesting article on flood insurance from the Fort Morgan City Times.  Of particular note were the clarifications that were spelled out regarding flood insurance
 
In fact, everyone lives in a flood zone, said FEMA insurance specialist Norm Ashford — the only differences are whether their homes or properties are located in what are considered low-risk or high-risk flood zones.

You may not know it, but you live in a flood zone.  Insurance companies will assess your risk as high-risk or low-risk based upon flood hazard maps.  But, no matter where you live, you should consider flood insurance when getting a house insurance quote.  More often than not, this is not included in your standard house insurance policy.

American Excess Announces 100 Percent Retention

Anybody that can keep 100% of their customers for 5 years running is definitely doing something right.

via Insurance Journal on 9/7/10

The American Excess Insurance Exchange has achieved 100 percent renewal retention for the fifth year in a row. Managed by Charlotte, N.C.-based Premier Insurance Management Services Inc. , AEIX ...

House Insurance for Vacant Properties

Insurance companies don't like to write policies on vacant properties.  In fact your policy may specifically exclude coverage if you home is vacant for a specified number of days, often 30 or 60 days.  If there is no one in your home, the risk increase for the company.  If damage occurs to the house, there will be no one there to report and mitigate the damage.  

"A typical insurance company would not issue a policy at all knowing that it's [the property] vacant," said Chris Hackett, director of personal lines for the Property Casualty Insurers Association of America. Unoccupied homes present a greater risk for theft, vandalism, malicious mischief and fire, among other concerns.

"From an insurer's perspective, vacancy is considered a substantial increase in risk," said Hackett. "If, for example, a pipe breaks and it's vacant, it can be days or weeks before it's discovered."

from article:  As Number of Vacant Homes Rises, Insurers See Opportunities at InsuranceNews.net

If you find yourself needing to insure a home that has been on the market for a long time, or for another reason you anticipate may be vacant for a while, you should investigate getting house insurance quotes from companies that specializes in vacant property insurance.

What should my house insurance deductible be?

In his book, Insurance for Dummies, Jack Hungelmann says this:
 
It’s been my experience that the average home property claim occurs once every seven to ten years. My advice is to pick the deductible that has a seven- or eight-year payback period. You determine that by dividing the extra risk of a higher deductible by the annual savings. If you can recoup, in premium savings, the added risk in eight years or less, pick the higher deductible. Remember the payback period is the result of dividing the difference in deductibles by the difference in premiums.

So, if you could save $200 per year on your house insurance premium by raising your deductible by $1,000 then it is probably worth it to go ahead and take the higher deductible.  If, however, you were to only save $50 per year then it would not be a good decision to go with the higher deductible.  It would take you 20 years to recoup the difference in deductibles with the premium you would be saving.  Chances are, you'll have some claim between now and then, and you'll wish that you had been paying the extra couple of bucks a month.  

The key really is - How much would it hurt?  If you drove in your driveway to a completely demolished house and you had to pay a certain amount out of pocket, what could you afford?  Could you afford $250 out of pocket? $1000...$5000?  Everyone is different, but your deductible should be as high as your could tolerate, but no more.  When you're getting house insurance quotes, be sure that you don't under or over-insure yourself.

Homeowner's Insurance and Your Pet

One issue to look for when you're getting a house insurance quote is the effect that you pet may have on your premium or even your insurability.  The Insurance Information Institute released a study stating that:
 
Dog bites account for more than one-third of all homeowners insurance liability claims, costing $412 million in 2009, up 6.40 percent from 2008, according to the Insurance Information Institute (I.I.I.). An analysis of homeowners insurance data by the I.I.I. found that the average cost of dog bite claims was $24,840 in 2009, up slightly from $24,461 in 2008. Since 2003 the cost of these claims has risen nearly 30 percent. Additionally, the number of claims has increased 4.8 percent to 16,586 in 2009 from 15,823 in 2008.

Insurance companies want to keep their payouts low in dog bite claims, so your coverage may be limited in the case that your dog bites someone.  Be sure that you know the liability limits on your policy.  And, if you own certain breeds of dogs, you may face higher premiums or be asked to sign a liability waiver that would specifically excluded dog-related claims from your policy.