4 Things to Consider While Buying Homeowners Insurance

Carrying the right homeowner's insurance is essential because if something happens to your house, your policy will shield you from financial loss and ensure your life isn't severely disrupted by the incident.

With that in mind, here are four things to consider when getting your homeowners insurance

1. Shop around and compare coverage - Mortgage lenders typically require borrowers to carry homeowners insurance coverage. Depending on where your house is located, you may also need additional protection, such as flood insurance. However, you aren't required to purchase a homeowners policy from a particular insurer. To get the best deal, you should shop around and compare customer reviews, prices, and coverage. Price shouldn't necessarily be the prime consideration; you should also consider value. Moreover, as you'll have to deal with insurers if disaster strikes, you should ensure your insurer has a good rating and great customer reviews.

2. Track your insurance premiums on mortgage payments - Consider combining your insurance payments with your mortgage check in an escrow account. Your mortgage lender will then pay your premiums (and typically your property taxes) out of the escrow account. Mortgage lenders prefer this alternative because it assures them that you're paying your insurance premiums and, thus, their investment is adequately protected. However, you'll likely need to pay for one-year insurance coverage before closing.

3. Ensure you are getting adequate coverage - One of the most important aspects of insuring your home is the kind of coverage you get. You should avoid overpaying. Here are the most common kinds of coverage:

   • HO-2 ' A broad policy that covers 16 risks that are listed in the policy.
   • HO-3 ' A broader policy that covers all risks except those explicitly excluded in the insurance policy.
   • HO-5 ' A premium policy that covers well-maintained and newer homes: it covers all perils except for those specifically excluded.
   • HO-6 ' Insurance for condominiums/co-ops, which includes liability coverage, coverage for any improvements to the unit, and personal property coverage. The actual structure is typically covered by the association's insurance policy.
   • HO-7 ' A policy that is similar to HO-3 but meant for mobile homes.
   • HO-8 ' A policy that is specifically meant for older homes, with coverage that is similar to an HO-2 policy.It provides actual cash value coverage.

4. Understand all aspects of your policy - Besides getting the right level of coverage, you should also understand all aspects of your policy before you buy it. Here are some common homeowners insurance terms that you should be aware of:

   • Deductible ' This is the amount you have to pay out of pocket before your insurer picks the tab; the higher your deductible, the lower your annual premium.
   • Liability coverage ' It covers medical and legal costs resulting from someone being hurt on your property, typically due to your negligence
   • Personal property ' Refers to the contents of your house, including clothing, electronics, and furniture
   • Premium ' This is the amount you pay for your insurance, usually monthly or annually
   • Replacement cost ' This is a type of policy that pays the entire cost of replacing personal property or dwelling
   • Actual Cash Value ' This type of policy factors in depreciation and covers the current cash value of your dwelling or personal property
   • Sub-limits ' This is the maximum amount your insurance company can pay for a given type of loss
   • Riders ' These are additional coverage options you can include in your policy to protect specific items like expensive artworks, jewelry, and antiques

If you need a homeowners insurance policy that will sufficiently protect your home in King County, reach out to us at Humble & Davenport Insurance Brokers, Inc. today. Our team will help you find a policy that suits your unique needs.