So you’ve found the perfect partner and the perfect home; now it’s time to find the perfect homeowners insurance policy. Scary as it may seem, getting the right insurance is one of those things in life that you should research thoroughly. Though many first-time homeowners simply consider the financial burden of making monthly insurance payments, those who are more experienced know that making a good choice is a more complex process. What follows are three tips on what to consider when making an insurance rate comparison and buying your first homeowners insurance policy.
Tip #1 Does the insurance policy offer enough coverage? In the event of severe damages or even total destruction of your home, you’ll need to know that your insurance policy offers sufficient coverage. It’s important to know that repair and replacement costs run higher than in some areas than others, so do some research to find out how much coverage you realistically need for your home.
Tip #2 Does the policy take devaluation of your property into account? You should decide whether you want a policy that gives you the current replacement value of your property. This may be more expensive, but it can be worth it to keep your own costs low in the event of a claim.
Tip #3 Does the policy include homeowners liability insurance? You need to be legally protected in the event that somebody is harmed or injured while in your home, and you also need to be able to meet any medical costs that might arise as a result of injury.
An auto insurance policy isn’t like a cell phone plan. Just because you’re on a monthly car insurance payment schedule that automatically renews itself doesn’t mean that you have to wait to switch providers. You can walk away at any time. But if you fail to first notify your insurer, you could cause a few unwanted complications.
You can let your auto insurance policy cancel on its own simply by not making your scheduled monthly car insurance payments, but doing so has a couple of risks involved. First of all, you could get hit with a cancelation penalty if you cancel in the middle of your term without giving proper notice. Second, if you don’t already have coverage lined up through another provider, letting your insurance lapse could be costly. If you’re caught driving without it, you could face some serious legal consequences. And finding a new insurer after you’ve been caught driving without insurance will be much more difficult because you’ll be a high risk client.
The Best Way to Walk Away
Always submit your notice of cancelation in writing, and far enough in advance to cover you in the event of any clerical snafus. Regardless of whether or not your decision to switch insurance companies was based on having found a better price elsewhere, or being extremely dissatisfied with the service you’ve received, don’t shoot yourself in the foot by failing to give advance notice. Although the best time to cancel your insurance policy is immediately before it renews, you can always get a pro-rated adjustment that pays you back for coverage you won’t be using.
You’re probably well aware of what a home insurance deductible is. And if you’ve paid really good attention, you might even know what yours is. But these days, with insurance companies offering a broader range of options when it comes to how much money you’ll have to pay out of pocket before insurance payments kick in, it’s getting a bit tougher to keep everything straight. There’s a big difference between percentage and flat rate deductibles.
What’s a Flat Rate Deductible?
If you have a flat rate deductible, it means that you’re required to pay a fixed amount of money before the insurance company will step in to pick up the rest of the bill. If you have a flat rate deductible of $1000 and your home damage repair estimate is $750, this means that you’ll have to pay the full amount because it doesn’t exceed your deductible limit. If, however, your repair estimate comes to $5000 and the damages are covered by your insurance policy, your insurance company will pay the full amount while you pay only $1000 out of pocket.
What’s a Percentage Deductible?
Percentage deductibles are more commonly used for hurricane and earthquake insurance, and set your deductible at a fixed percentage of your home’s insured value instead of a flat dollar amount. What this means is that if your home’s insured value is $250,000 and your hurricane deductible is 3 percent, the amount you’ll end up paying out of pocket for an insurance claim is $7500. The percentage range can vary widely depending on where you live, and in some instances are set by state law.