Valley Real Estate

Protect Your Investment

If you finance the purchase of your home or condo with a mortgage, your lender will most likely require you to get homeowners' insurance coverage to protect their investment in your home in case your house burns down or is badly damaged by a storm, tornado, or other disaster. If you live in an area that is likely to flood, you will also be asked you to purchase flood insurance.

After your mortgage is paid off, no one will force you to buy homeowners insurance. But it is not advisable to cancel your policy and risk losing what you’ve invested in your home.

Damage caused by most disasters is covered but ― there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility and there is help, here also, in the form of the "home warranty."

Your homeowners' policy will not cover you in the event your furnace doesn't come on next October. That's the job of the Home Warranty  - usually a one-year limited home service agreement that helps protect homeowners against the costs of repair or replacement of covered appliances and major systems that break down due to normal wear and tear (i.e. - they break down all by themselves and not because of a hazardous event).

5 Things to Understand About Homeowners Insurance

• Look for exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These coverages must be bought separately.
   
• Look for dollar limitations on claims. Even if you are covered for a risk, there may a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
   
• Understand replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
   
• Understand actual cash value. If you choose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.
   
• Understand liability. Generally your homeowners insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

11 Ways to Lower Your Homeowners' Insurance Premiums

1. Raise your deductible.

   If you can afford to pay more toward a loss that occurs, your premiums will be lower.

2. Stick with same company for all your insurance.

   Most companies will offer discounts to those who insure both home and auto.

3. Make your home less susceptible to damage.

   Keep roofs, down-spouts and drains in good repair.

4. Remove household hazards and add security

   Install smoke detectors, security lights,burglar alarms, and dead-bolt locks. All of these will usually qualify for a discount.

5. Understand the difference between replacement cost and market value.

   Remember to cover your home for replacement cost, which in some markets may be more than the market value of the home (the amount you could sell your home for).

6. Ask about other discounts.

   Many companies offer various unconventional discounts (ex. -  retired folks who are home more often than working people may qualify for a discount on theft insurance). You have to ask for some of these discounts however. They are not always freely tendered.

7. Stay with the one who 'brung ya'.

   In today’s tight insurance market, your more likely to maintain a lower rate with a long time current provider. However, sometimes it pays to shop, and bring cheaper competitors' rates to the attention of our agent. If your a long time customer, they just may lower your current rate to match.

8. See if your eligible for a group discount

   Some companies offer discounts to various associations, unions, alumni groups, etc..

9. Review your policy limits and the value of your home and possessions annually.

   Some items depreciate and may not need as much coverage.

10. You may be eligible for government assistance.

    In some high-risk areas, such as the coasts, federal or state governments may back plans to lower rates. Ask your insurance agent.

11. Stay creditworthy.

    Most insurers now use credit-based insurance scores when reviewing new applications and even renewals for homeowners insurance. As with a mortgage, a person with a good insurance score will usually pay less for insurance than someone with a poor score. Why? It seems that folks with good credit, file less claims than people with poor credit.

Ohio Shoppers' Guide
To Homeowners and Tenant Insurance

Offers suggestions on the types of home insurance. Explains what coverage is provided by each type, describes how each coverage works and shows  sample company premiums based on the type of policy you need, your home's structure, and where you live

Complete Guide in PDF

From the Ohio Dept Of Insurance.