Great Home Insurance Ideas

Homeowners generally understand the need for Homeowners Insurance, which provides you with financial protection against damage to your home from disasters, theft, vandalism and accidents. Your house is probably your most valuable possession. The threat of something or someone harming it and you having to bear the cost of repair or replacement motivates 95% of Americans to invest in this important insurance. But did you know your Homeowners policy also covers the contents of your home, any risk to you from someone getting hurt in your home, property damage your family may cause to others, and even living expenses if you have to relocate while your home is repaired? A glossary defining the coverages making up your Homeowners Insurance is provided at the end of this article.

But first, allow me to provide a quick overview of the risks to your home and their potential price tags. And I’ll offer numerous tips for reducing your home insurance premiums. I’ll also cover tips related to wildfires and fire prevention, and tips for house-shopping with your Homeowners Insurance in mind.

The Price of Typical Home Damage Situations

About one in 15 homeowners files an insurance claim related to home damage every year, according to the Insurance Information Institute. So assuming it won’t happen to you is really not an option. It’s just a question of when.

The average claim for the most common types of damage or loss are:

• Fire and lightning: $50,315
• Bodily Injury and property damage: $23,010
• Water damage: $9,633
• Wind and hail: $8,625.

Clearly no one wants to be faced with that type of bill when something unexpected happens. That’s why Homeowners Insurance is a must. The good news is, you do have some control over what you pay for that insurance.

Ways to Reduce Your Premium 

Certain safety and security measures can make your home a better risk to insure, which lowers your home insurance premium. Consider taking the following steps at your house:

• Store jewelry, electronics and important documents in a safe
• Keep home cleaning products where children (and pets) can’t reach
• Close your garage door when you're not home — many people think they do this but don’t actually check
• Lock your doors and windows at night and when you leave
• Purchase an alarm system
• Install security lights.

California Wild Fires

Everyone knows California is experiencing the worst wildfires in the state’s history, resulting in massive loss of property and the tragic loss of lives.

We can’t tell you how to stop a wildfire, but we can advise on how to minimize the chance of a fire starting in your home. Humans cause more than 90% of wildfires, and in 2017, a home fire occurred every 88 seconds, so please heed this advice:

Have working smoke detectors in every room and replace batteries every month; it’s a small price to pay for the safety of your family and everyone around you

• Never leave hot irons or grills unattended.
• Never leave candles burning unattended.
• Water your Christmas tree regularly.
• Use noncombustible materials for roofs and decks; these are readily available today as a quick Internet search will show.
• Plant lawns around your home as a fire barrier.
• Thin your trees and prune dead branches.
• Remove dead vegetation around your house.

More Tips for Reducing Premiums

Working with an experienced insurance agent, you can lower your Homeowners Insurance premium with adjustments to your policy. For example, you might:

• Increase your deductibles
• Get a discount by obtaining more than one type of insurance (for example homeowners and auto insurance) from the same insurer
• Value your home at replacement cost not market value
• Develop a home inventory (more on that below)
• Ask your agent about any other discounts offered by the insurer; for example, some companies offer loyalty discounts for long-term customers.

Shopping for Your Insurance

The best Homeowners Insurance for you is the policy that provides all the protection you need at the best price.

Notice I didn’t start with price. That’s because the cheapest insurance may not be the best insurance. Now everyone likes to save money. But when it comes to your home, remember this saying: An ounce of prevention is worth a pound of cure. Ask yourself: Is it worth reducing your protections to save $150 now if you might face a $10,000 claim later that your policy doesn’t cover?

When you work with Leap / Carpenter / Kemps, we’ll do everything in our power to get you the best value for your insurance dollar. We’ll start with a list of the coverages you need based on discussion with you. Then we’ll shop among the more than 60 insurance companies we work with to find you the best deal.

Contact us, and we’ll be happy to provide a no-obligation review of your current policy and a competitive quote.

Glossary of Home Insurance Components 

Homeowners Insurance should include the following: 

Coverage For The Structure

Your insurance should cover the cost of repairing, replacing or rebuilding your home when it is damaged or destroyed by a covered loss. “Covered loss” simply means the cause of the damage is covered by the insurance company. Most home insurance policies do not automatically include flood or earthquake damage as covered losses; these need to be added under a separate policy.

Common causes of damage to your home’s structure are fire, wind, hail and lightning. We recommend that your policy have replacement cost coverage, which is enough to allow you to restore or replace your property to its former condition.

Coverage For Personal Property

The personal property piece of your Homeowners Insurance protects the contents of your home: furniture, clothes, electronics, art, sports equipment, tools etc. Trees and landscaping can be included but usually with limitations set by the insurance company. Limitations also apply to items like guns, jewelry and art; sometimes additional coverage can be purchased for those.

Tip: The only way you can be compensated for your personal property is if you can provide details to your insurance company. Use this worksheet from the California Dept. of Insurance to create your home inventory, which is basically a detailed list of your home’s contents. It’s a great rainy day project.Liability Coverage

Liability simply refers to something you are responsible for. So the Liability component of your Homeowners Insurance protects you when something or someone in your home causes damage to another person or their property. Examples are a visitor falling down your stairs, or your daughter accidentally firing a baseball through the neighbor’s window.

Your Homeowners covers repairs and replacement of your neighbor’s property. And it covers medical bills, “pain and suffering” damages and even lost wages if your visitor can’t return to work for a while.

Should someone sue you, your Homeowners pays for legal fees and any damages the court requires you to pay (up to your policy limit). Damages and fees add up quickly in a lawsuit so we recommend at least $1,000,000 of liability insurance protection.

Coverage for Additional Living Expenses

If damage to your home makes a temporary relocation necessary while repairs are made, you can only call on your relatives for so long. Luckily, your Homeowners Insurance can pay for your hotel, meals and other living expenses, giving you another option.

Sidebar: Things to consider when purchasing a home

Consider the following factors when shopping for a new house, as they may affect your home insurance premium.

• Proximity to a fire department — homes near highly rated, full-time fire departments may cost less to insure
• Distance to the nearest fire hydrant — obviously closer is better
• Proximity to the coast and high winds can raise your premium
• The older the home, generally the more it costs to insure
• The condition of the roof affects your premium.