Between deciding on your new home, packing up tons of boxes, and planning where everything is going to go – there is an important step to ensure that your home and everything (and everyone) inside is protected.

Homeowner’s Insurance.

Yes, this is often a step that can be confusing, with too much paperwork, too many quotes, and not enough help. As a first-time homebuyer, all of this can be overwhelming.

One thing that makes Swisher Insurance different, is that our agents are always here to help you along the way, answering any questions you may have throughout the process. This article serves as a resource for anyone looking into home insurance for their first home. (If this is you – congrats!)

What is Homeowner’s Insurance?

At its most basic definition, homeowner’s insurance is a contract between you (the homeowner) and the insurance company. The insurance company pays to repair or replace your house and personal property if they are damaged or destroyed. You agree to be honest with the insurance company about your home and personal property and pay your premiums as required.

Check out this article for help understanding all terms you may come across while looking for home insurance.

What is covered?

A basic homeowner policy will cover three main areas: perils, personal property, and liability. Each of these areas have separate requirements, limits, and coverage options. What is, (and what is not) covered in your basic policy is largely determined by where you live. Most standard homeowner’s policies in Kentucky include the following coverage:

Perils:

In Kentucky, tornadoes, wind, fire, storms, and hurricanes are covered by homeowner’s insurance. But what about flooding, earthquakes, or hail damage? Homeowner’s policies can be tricky if you do not understand them completely. For example, you may be covered for tornadoes, but if the tornado causes a flood, you might be out of luck. In this case, you can purchase additional coverage for your policy.

Extra Coverage (Endorsements)

Some of the most common endorsements include:

Personal Property:

Your homeowner’s policy is designed to cover not only your home, but also everything inside. From your couch and 60″ flat screen TV to your kitchen spatulas and underwear, personal property insurance replaces everything in case of complete disaster.

How Much Do I Get?

Homeowner’s policies establish coverage for your personal property as a percentage of the amount of your dwelling. For example, the company will assume that if you own a $100,000 house, everything inside is worth no more than $40,000. This is rarely the case, especially if you have valuable electronics, jewelry, or rare collections. In this case, you can buy additional personal property coverage.

How Much Do I Need?

The best way to determine how much personal property insurance you need is to complete a home inventory. With a video camera and a notebook, it is simple to make a written home inventory. List each item, its purchase date, value, and serial number.

Photograph or videotape each room, including closets, open drawers, storage buildings, and garage. Keep the inventory and receipts for major items in a fireproof safe or another location. This valuable information makes the claims process much easier as well.

Personal Property Caps

Although you may have $50,000 worth of personal property insurance, this is divided up into categories within your policy. Many homeowners are surprised to learn that although you have plenty of coverage, only $2,500 or less is designated for electronics, $1,500 for jewelry, etc. If you have an extensive art collection, heirloom jewelry, or designer clothing, you may be able to buy additional coverage for these specific areas.

Liability:

As a homeowner, you are now open to a wide range of liability. From the neighborhood, kid who gets hurt while playing in the backyard to the mail carrier who slips on your icy steps. You may be shocked how much legal fees and medical bills can cost if someone decides to sue you because they were injured on your property. Homeowners insurance covers injury or property damage suffered at your home by a non-resident, up to your policy limits.

Personal Umbrella Liability Insurance

An umbrella policy is an over-arching protection against massive liability. Typically, an umbrella policy provides $1 million or more in coverage to protect against catastrophic accidents.

COST OF POLICY

When it comes to homeowner’s insurance, location dominates your premium. Urban areas or areas prone to bad weather, crime, or those near the borders have higher premiums. The age of the house and its construction also contribute to the overall premium cost. Rates and coverage vary from company to company, so it’s a good idea to shop around.

Choosing a Policy:

• Decide which coverage and an estimation of coverage amounts you need.
• Consider higher deductibles. Your deductible is your out-of-pocket responsibility before the insurance company will pay. The higher the deductible, the lower your annual premium.
• Compare the same coverage options across several different companies.
• Ask about available discounts such as bundling options.

Costs and Discounts:

Your policy is determined by several factors including location of the home. There are, however, a few things you can do to lower your overall costs and take advantage of available discounts.

Your claims history plays a role in the cost of your policy. Avoid filing claims for small damages because future insurance companies use your claims history to determine what to charge you for your coverage.

Monitor your credit score closely and notify your insurance agent of any major changes.

Install additional security systems, fire sprinklers, or burglar alarms.

Some home improvements such as solar panels or improving your outdoor areas to avoid negligent injuries reduce your premiums.

Bundle other insurance policies with the same company such as auto and life insurance.

If you have any additional questions, or would like to start the process of getting homeowner’s insurance for your new home, reach out to us today here!

Talk to an agent now: (502) 340-1200