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All About Homeowners
Insurance Texas
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Tips on buying homeowners and
flood insurance. |
Everybody who owns a home should get
insurance on their property, and everyone who has a mortgage on their home
MUST get an insurance policy. The lender will force you to
carry a policy that covers fire and hazard insurance in order to protect thier
investment. In places like Florida you will also be required to take out
windstorm insurance (i.e. protection against hurricanes). If you don't take out
your own policy, the lender will take one out for you (which will be more
expensive than the one you would have gotten) and bill you for it. If you don't
pay what they bill you for insurance the lender can forclose on your home so,
the bottom line is that you should shop around and take out your own homeowners
insurance.
Homeowners insurance policies are
broken into two parts, property protection and liability. The property portion
reimburses you for damage to the home and contents. You are not required by
lenders to get contents insurance because they don't really care what happens to
your stuff inside the house as long as it doesn't devalue the home. The amount
of insurance coverage is usually based on the estimated cost of replacing the
entire home. The liability portion of the policy covers medical bills that
occur as a result of people being injured on the property. For example, if a
neighborhood kid trips on your property and breaks his leg or is bitten by your
dog you could be held liable. Your liability coverage will protect you against
this type of expense.
When shopping for homeowners
insurance you should get price quotes from at lest 3 companies.
Some insurance companies may give
you a price break if you have both your homeowners and auto insurance policies
with them. You should inquire about this.
Flood Insurance
One of the most important risk items excluded from most homeowners
insurance policies is damage caused by flooding. In some areas that are labeled
as being flood zones, the lender will require you to take out an additional
flood insurance policy. In some cases you can purchase insurance from the
government as part of the National Flood Insurance Program (NFIP).
Windstorm Insurance
Another exclusion in the standard insurance policy is "windstorm"
damage. Pay careful attention to the "Hurricane" deductable. This may be a
special deductable that is different that your other deductables in your
policy.
Earthquake Insurance
Earthquakes are another risk that are not covered be the standard
insuarance policy that you would have on the structure of your home. There have
been problems with the availability of Earthquake policies. If you have trouble
finding an earthquake policy,contact your state insurance commission.
Life insurance
Since you are now a homeowner, your family will be left with a HUGE
financial burden if something happens to the primary (or secondary)
wage-earner. Although we don't like to think about this sort of thing, it is
the responsible thing to do. You really should consider taking out a life
insurance policy to protect survivors from this burden. Some good places to
check out for life insurance are.
Things that can lower your
premiums:
-The higher the deductible, the lower your monthly premium will be. It
doesn't make sense to have any deductible below $500 or $1000 because you won't
want to put in claims for things that cost that little anyway. Remember,
homeowners insurance is like auto insurance. If you put in too many claims
they'll drop so fast you'll think you're skydiving.
-Bundle auto and homeowners insurance
-Smoke detector
-Alarm system
-Fire alarm: Centrally monitored, local (rings only at home).
-Buglar Alarm System: Centrally monitored vs. rings only at home (local).
-Distance to Fire Hydrants
-Distance to Fire Station
-Inside or Outside City Limits
-Storm Shutters
-New Home Discount (the age of your home matters)
How much insurance do you need? The
answer to this question is pretty simple. You should take out enough insurance
to cover the cost of rebuilding your entire home if necessary. Be careful here,
construction costs have probably risen since the house was built so take out
enough insurance to cover any inflation. Although complete destruction of your
home is rare, protect yourself so you don't get caught with your pants (or your
walls) down.
Always read the fine print
of your policy. Check your policy carefully for limitations,
exclusions and deductibles. For example landscaping, personal property, etc.
Unscrupulouse insurance companies can take advantage of you here.
Check the rating of any potential
insurance company. Many second rate insurance companies went out of business in
Florida when hurricane Andrew hit South Florida, which caused HUGE delays in
insurance payouts. This left many people homeless with no way to pay for
temporary living expenses. Some of the highly rated insurance companies are.
We recommend that you periodically
review your policy to insure that you have the coverages that you need and
discounts that you may be entitled to. Sometimes you may have added something
to your home that can reduce your premium since the policy was initiated. |
