Homeowners Insurance

[wonka27]

Anyone have suggestions of companies to check out?

Also, can anyone explain how you determine what to insure for? They say your policy should be for what a replacement house would cost? Will that be more or less than the house I am buying? Is there a number somewhere that I can use, or do you use the purchase price?

This topic is a complete mystery to me and I want to gain some knowledge before I start calling for quotes.

 

[aljdewey]

Wonka, try to search for a policy that does exactly that.....covers the cost to replace (rebuild) the *house*.

That shouldn't equal purchase price, because part of your purchase price is the land the house sits on, and that won't burn down, etc.

 

[fire&ice]

We have Allstate "replacement policy". A replacement policy is what you want. Also, they have forumlas they use for how they insure the property & contents. When you call for quotes, ask for a replacement policy (in other words, if you have hardwood floors w/ intricate flooring patterns, then they will have to replace with the *same* & not a subsitute). You can give them a ballpark regarding how much the house is worth (the appraisal & mortagage company will ultimately determine "worth" to the insurance company). With that information, they should give you a formulated number for contents. Now, fine art & jewelry i.e engagement ring (not covered in a bulk 1500.oo loss), will have to go on a "rider". Ask how much they charge per 100.00 for objects listed on the rider. Make sure you tell them you will have a smoke alarm as you get a discount! Also, does the home have an alarm system?

It's really not rocket science. I would get a hold of someone's policy & read it through if you want to make sure all your questions are answered up front.

I've said this before. An insurance carrier is only as good as the agent & the relationship you have with them. Who insures you car? You get a multiple discount. Find one you are comfortable with. We have all (both homeowners, all cars) our policies with Allstate. We have no complaints.

Fireman's fund, Allstate, Statefarm, Chubbs, Erie - can't remember the rest - just a few to contact.

The biggest decision is not how much the house will be insured for (the bank dictates that- remember *you* don't own that house - the bank does

)but what your deductible will be. We have 1k on our house here. Most claims are going to have to be well over 1k for you to make a claim. But, if you don't have as much of a cushion use $500.00. Price them both out (and if you want price out the $250.00 - but really, unfortunately, making a claim under 1k isn't going to set kindly w/ the insurance company).

Except for my scheduled jewelry, we see insurance claims for more of a catystropic problems. We've never used it to replace our gutters during a storm, etc.

Whatever you do. Don't go with the cheapest. And, the carriers will give you a nice rate upfront to earn your business. Expect them to raise the rates next year.

 

[wonka27]

Thanks for the help. I will definately give those companies a try and will definately request a replacement policy.

Fire - Thanks for the thoughts on the deductible! My realtor was telling us a story about a guy who had a house that had some roof damage from ice in the winter. It cost approx $2500 to repair. He went through his homeowner's insurance to get it fixed, and immediately following the repair, they dropped him. He called to other companies and none would give him insurance because he was flagged from the claim. About a week later, his original company called him and said they'd be happy to take him back, at double his original premium. I guess the moral of the story is, homeowner's insurance protects you, but you should probably use it for more extreme cases. $2500 is a lot of dough, but probably worth parting with on your own to keep relations good with your insurer. Guess you need to let them handle the super big ticket items!

 

[fire&ice]

The 2500.00 was marginal but not unreasonable. I'd like to hear the "rest of the story". Not that insurers don't do that - but some people take advantage of the situation. How many claims did this person have *prior* to this one? And, some people put in claims for an entire new kitchen when they had a grease fire that may have damaged one cabinet. You can't imagine the amount of fraud that goes on in the name of "I've paid enough premiums". In the end *we* pay for that.

We did submit a rather large claim this summer (200 year old *healthy* Oak tree feel on our house & our neighbors house). We were very fortunate no one was killed. We needed an 80+ ton crane to remove the tree from our houses. The tree removal alone was well over 4k. Surprisingly, the damage was minimal because the tree branch lodged itself into the ground before full impact could happen. Anyway, in the end, the claim went smooth as silk. And our policy renewed this Oct. w/ no price increase. We do have a strong relationship w/ Allstate; but, we are reasonable people. Our deductible at that house is $500.00 (didn't save that much by going w/ 1k for some reason). Our deductible on our country house is 1k & we saved $200.00 a year - worth raising the deductible. Though the value is significantly more on our country house. Maybe they have breaks like that.

And, my point about not going into debt or using all cash reserves on furniture. Houses need maintaining & things happen. Getting people to walk in the door will cost over $100.00. Another thing, get all the names of who maintains what from the original owner. You may choose not to use them; but, it's a great resource.

Good luck.

 

[bar01]

I had Farmers and did not like them.

State Farm has been very good. Although they (and farmers) tried to underinsure me. Land vs house costs can vary depending on where you live.

At the time I bought my home they told me that the land I had was twice the cost of my house!!! (I bought the smallest home in the richest neighborhood I could afford). Anyway - because my area is so expensive to build in - I had to pay ($200) a local home builder/remodel - to come out and tell me what it would cost to build my home from scratch if it was totally lost. I also am a member of www.consumerreports.org and their web site has a free home rebuilding calculator that was very detailed. From these I was able to go back to my insurer and make sure the insured replacement cost was for the full amount.

You can see the pay site for rebuilding costs:

www.castledataservices.com

Also look into code upgrade riders. That is if part of your home has to be rebuilt to current building code standards - they will pay extra.

Also if you have a finished basement - look into sewer and water backup riders.

 

[wonka27]

Bar -

Thanks for the ideas! I may look into those additional coverages...especially the water & sewer, as this home does have a finished basement (not the greatest in the world, but with time it will be

)

 

[EdSkinner]

Good luck with the house. My insurance is through USAA and they are great, but you have to be either an officer in the military or directly related to one. I had Cumberland Mutual before that and they are one of the worst. Just for the record, if something happens and your company drops you, you can always get insurance throught the mortgage company. Only problem with that is that it is usually really expensive, but it can be a stop gap while you are looking for another policy. Good luck. Oh yea, I have heard good things about Allstate.