Homeowners insurance insures the structure of your house as well as your belongings from damage, destruction and other disasters.
Protect Your Home and Save
Home insurance rates change daily, and if you have not compared rates within the past year, you’re probably paying too much. If you have a mortgage, your lender requires homeowners insurance, but it still makes sense to buy home insurance to protect your greatest asset even if your home is paid off. As market factors change, so does the price of labor and supplies, which may raise your insurance rate.
Instead of spending hours on the phone, giving various agents the same information, SmartFinancial can find you the best coverage at the most affordable prices after you fill out one simple questionnaire to start receiving free quotes right away.
The Basics of Home Insurance
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Key Terms to Know
Homeowners Insurance is a contract between the insured and an insurance company. If the insured suffers a covered loss, the insurance company will help pay for expenses to repair or rebuild the home and for damaged belongings. A policy lists all coverages, exclusions, limits as well as a deductible amount.Learn More
Over time, our belongings and a home’s components lose value due to wear-and-tear. For instance, if you file a claim for a faulty roof when it’s three years old, you’ll receive a much bigger payout than filing a claim for a 10 year old roof, which will need to be replaced in another 10 to 15 years.Learn More
Frequently Asked Questions
Homeowners insurance has three coverage options in how you will be paid out if you file a claim. The first option, which most homeowners have, is called an Actual Cash Value policy. With this type of policy, you will be paid out for repairs and losses up to limits but with depreciation deducted from the total. With a Replacement Cost policy, you pay more but will receive two checks, first with depreciation deducted and a second check that makes up for the difference. The last option is the Guaranteed/Extended Replacement Cost policy which is the most expensive of the three and offers the highest level of coverage. If you have a Guaranteed Cost policy, the insurer will cover all necessary costs for rebuilding your home, even if you surpass the coverage limit. An Extended Cost policy will cover up to 20 or 25% more than the limit.
The type of home insurance you buy depends on the value of your belongings as well as how much it will cost to rebuild your home with the right materials. During times of inflation, materials and labor cost more and you may end up being underinsured. Or, your rate may go up at renewal due to inflationary prices. It’s important to calculate what your losses will be if a disaster strikes and consider whether or not it is worth it to pay more for a Replacement Cost or a Guaranteed/Extended Replacement Cost homeowners policy. A standard Actual Cash Value policy deducts the depreciation on losses but costs significantly less than the others.
Floods and earthquake damage are not covered with home insurance and each needs to be bought separately. Wear-and-tear and issues related to neglect are not covered by home insurance and neither are infestations, like bed bugs, termites and mold. Landslides, mudslides and sinkholes are not covered without a specific endorsement, and certain breeds of aggressive dogs may not be covered with your policy. If you live in a hurricane-prone or tornado-prone region, you may have to buy a separate wind policy or endorsement with an additional wind deductible. Government actions, like property seizure, and nuclear hazards or accidents are never covered with homeowners insurance.