9 Tips Your Customers Should Know About Homeowners Insurance
Published on November 10, 2015

photo credit: Victorian House via photopin (license)
1. What It Covers
A typical policy will pay for damage to your property and your possessions in the event of certain storms, fire, theft or vandalism. Like renter’s insurance, it also provides liability coverage if someone gets hurt on your property and decides to sue.
Homeowner’s insurance can protect belongings outside the home, too. If something is stolen from your car, auto insurance won’t cover it—but your homeowners policy likely will.
2. What It Doesn’t Cover
A standard policy has exclusions, including earth movements (landslides, earthquakes, sinkholes), power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding. Windstorms are typically covered, including tornadoes, although insurance companies exclude tornadoes or hurricanes in some high-risk areas.
Water damage is tricky. As a rule of thumb, water from above (rainwater or a burst pipe in an upstairs apartment) is usually covered, but water from below (backed-up sewers or ground flooding) generally isn’t. If your region is prone to floods and earthquakes, you should ask your agent about supplemental coverage.
3. Which Preventive Actions Can Reduce Premiums
According to insuranceagents.com, you can reduce your premium by about 5% if you install something as a simple as a deadbolt, and up 15-20% for a burglar alarm system.
Ask your local agent about what preventative measures could qualify you for reduced rates.
4. How Replacement Coverage Differs From Market Value
There are two key distinctions that every homeowner should know: “replacement cost” versus “market value.” Replacement cost covers repairing or replacing your entire home. Market value is how much someone would pay to buy your home and accompanying land in its current downtrodden condition.
While a Market Value policy may be less expensive, it may not cover the full costs of rebuilding in the event of a loss. This is why the cheapest policy is not always the best policy. Take coverage-type into consideration when choosing your policy.
5. Why You Shouldn’t Wait to File a Claim
When buying a policy, make sure to ask about time limits to report a claim, and then abide by them! If you wait too long, you may not be eligible for benefits—especially if waiting has made the problem worse.
6. Why You Should Write Everything Down
Homeowners must document everything that occurs during a loss, do as much as possible to mitigate the loss.
In addition to saving receipts, contracts and appraisals, document phone calls by writing down who you spoke to and when. And be sure to stow it in a secure place! Consider keeping digital copies online using a program like Dropbox.
7. How Jewelry Is Covered
When signing up for homeowner’s insurance, note the limits on jewelry. Things like wedding rings and other expensive jewelry may not be covered and needs to be scheduled on a supplemental policy to be covered.
8. How to Save by Bundling
One way to save money is to bundle your homeowner’s insurance with other policies that you already own. A common discount package is to bundle your auto and home insurance together with the same company.
9. When to File a Claim
A bad windstorm took roof shingles off of Theresa Roma’s house, and she almost didn’t file a claim because it didn’t feel worthwhile. In the end, she received over $25,000 for a new roof.
The obvious mishaps aside (fire, major flood, etc.), it can be beneficial to file a claim when in doubt, but Ms. Derrick, an insurance professional cautions restraint. “Don’t file a bunch of frivolous claims,” she says. “The claims history for your property is also what determines your rates, so it’s better not to cry wolf, unless you have a real claim.” The repercussion if you file needlessly? A possible uptick in your premium.
Note for Insurance Agents:
Homeowners 3, 4, 6 & 8
A+ Rated, Admitted & Non-Admitted
Preferred and Standard coverages are available for owner occupied homes with limits from $100,000 to $50,000,000. Credits are available for higher deductibles, burglary and fire protection. Condo and renters coverage available if written as a package with an auto policy.
A small sample of homes that may be eligible:
- Preferred Homes
- Standard Homes
- Homes with losses
- Fire Classes 8, 9, & 10
- Designated Brush Areas
- Older Homes
- Home Day Care coverage available
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Abram Interstate Insurance Services, Inc. is a California wholesale insurance broker (CMGA) that has licensing and expertise to place business in both admitted and non-admitted markets for Personal Lines Insurance, Commercial Lines Insurance, and Agribusiness Insurance in California and surrounding areas.