It’s an exciting time moving into your first home. You’re free do decorate, paint, and organize any way you want. You gain privacy with no tenants living in apartments upstairs or down the hall. And you’ll feel the pride in ownership that comes with your beautiful new home.
But you’ve also taken on a whole new responsibility. Whatever goes wrong with the house is your expense. Then there’s the insurance.
What You Should Know about Homeowners Insurance
Insurance on Your House
If you’ve been living in an apartment and you have a renter’s insurance policy, you’ve been paying only for insurance on your contents and liability. Now that you’re an owner, your homeowners insurance policy will cover your buildings in addition to the contents and liability.
The thing to remember is that in most cases, you want to insure your building for its replacement cost, not market value. For example, say you paid $150,000 for your home. That’s the market value. But if a major fire burns it to the ground, you will want to rebuild it as close as you can to what it was before.
That’s the replacement cost. And, as you can imagine, in the Utica area the cost to replace is most likely much more than the market price that you just paid for the property.
So be sure your insurance agent helps you calculate the replacement cost of your dwelling and quotes enough insurance to be within at least 80% of that figure. This assures partial losses are fully covered without depreciation.
Insurance on Your Contents
The insurance amount on your stuff is easier to calculate because your homeowners insurance policy automatically includes at least 50% of the dwelling coverage for contents. Here again, replacement cost is important because automatic coverage is Actual Cash Value, or replacement cost minus depreciation. So get a quote for replacement cost contents, which will also increase coverage to 70% of the dwelling coverage.
Personal Liability Insurance
Things happen. Friends come over and their child trips on your front steps. A neighbor informs you of a dead tree on your property and you fail to remove it before it crashes down on his house. Maybe your lawnmower throws a stone and hits your neighbor in the eye.
With ownership comes liability risks. But the good news is that insurance for these risks is very inexpensive. Be sure you ask you agent for quotes on higher limits than the minimum. And then buy as much as you can.
In fact, it’s a good idea to get a quote on a $ million umbrella liability policy. It pays in excess of both your homeowners and your car insurance limits. Also, like the liability coverage on your homeowners insurance, it’s relatively inexpensive.
Homeowners Insurance Deductible
It will seem that after buying your home for the first time, everything seems more expensive. You’re buying a lawnmower, snow blower, the furnace needs fixing. And paint is $50 a gallon!
So how can you save on your home insurance? Get a high deductible. Depending on the amount of insurance on your building, we recommend $1,000 deductible. Let us quote it because we think you’ll find that it saves enough to be worth it. But go ahead and ask us for a quote on a $500 and $2,500 deductible, too. You could put the savings in the bank every year and use it in case of a loss.
So if you’re a new home buyer, give us a call. We’ll shop our 22 insurance carriers to get you the right homeowners coverage at the best price.
And enjoy your new home!
Until next time,
Your SZW Team
SZW Insurance is your Utica area Trusted Choice™ independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000. Or request a quote here.