7 Factors That Affect the Cost of Home Insurance

 

Homeowners insurance underwriters have a long list of factors to consider when writing a home insurance policy, all of which go into a formula for determining policy premium costs.  Two of the major factors determining the cost of your home insurance includes the geographic location of your home and how much it would cost to rebuild your home in the event that it's totally destroyed by a covered peril such as an all consuming house fire.

Here is a list of factors that affect the cost of your home insurance:

1.  Location, location, location.  Where your home is located is one of the primary determinants affecting your home insurance premium costs.  In states like Florida or Louisiana, where natural disasters are prevalent, premium costs may be as much as three times as expensive as costs in areas statistically safer from natural disasters such as Oregon or Utah.  Home insurance in North Carolina is the 30th least expensive of the 50 U.S. states.  Other location factors show policies are typically more expensive in urban rather than rural areas and in locations with statistically higher crime rates.
2. Home value and rebuilding costs.  Coverage for repairing or rebuilding your home is a major factor in the price of your home insurance.  Higher priced homes cost more to insure because they generally cost more to repair or rebuild.  These repair/rebuild costs will depend on the size of your home and local construction prices.
3. You'll pay more for more coverage.  Higher levels of coverage bring higher policy premiums.  The value of your personal possessions may be higher than standard policy limits and you may want to raise your limits, making your coverage more expensive.  Liability protection on your policy may be limited to $100K, but experts agree you may want to increase this limit to cover the total amount of your assets.  Consider an umbrella policy for extra protection.  This will add to the cost of your coverage.
4. Age and Condition.  An older home may be more expensive to insure.  Outdated electrical, plumbing and heating/cooling systems may be seen as higher risks by insurers.
5. Your credit history.  Many insurers use your credit history data when underwriting your policy.  Poor credit may mean higher insurance costs.
6. Deductible Amount.  Choosing a higher deductible amount should translate to a lower premium amount.
7. Ask about any discounts available from your insurer such as a bundling discount.  Other discounts may also be available.

Can You Dispute a Home Insurance Claim Settlement?

Your homeowner's insurance coverage helps protect you from financial loss should your house become damaged or destroyed as the result of numerous perils. The perils in a standard policy typically number about seventeen. These extend from something that may be minor, such as vandalism, to something that is catastrophic, such as a house fire that totally destroys your home and all your belongings within the home.

There's much more contained in your homeowner's policy than just structure and personal possessions coverage, including liability should someone get injured while on your property or in your home and later bring a lawsuit against you for damages.

Filing a Homeowner's Insurance Policy Claim

When something happens, you file a claim with your insurance company and await getting reimbursed within the limits and provisions of your policy. But what if the claim you submitted isn't settled to your satisfaction or gets denied completely? Unfortunately, this is not an uncommon occurrence and can be incredibly frustrating. There are a number of reasons an insurance company may deny a claim you've filed and that you think should be covered. Some of those reasons include:

• The damage you've reported isn't covered in your policy
• The damage you're claiming wasn't correctly reported
• The replacement cost of the damage you're reporting is less than the amount of your deductible

Disputing a Home Insurance Claim Settlement

If you believe your claim was unjustly denied or the payout amount was less than you should have received, you can dispute these results. While you may choose to hire legal assistance, this may be expensive. Many will choose to dispute a Home Insurance Claim Settlement on their own. Here are the steps to take:

1. Read and understand your coverage. You may have filed a claim for something you thought was covered but wasn't.
2. If your claim is denied, review the insurer's documentation explaining their disapproval. Contact your agent if you have questions. Assemble any documents proving why you're entitled to your claim.
3. Send a letter to the insurer's claims adjuster explaining your position. Include any evidence you have to show the claim was improperly handled. Request the adjuster review the claim and respond within a stated time frame. Send a courtesy copy to the adjuster's superior.
4. Request the insurer send a second adjuster to conduct a second inspection.
5. If the insurer won't change their position, file a formal complaint with your State Insurance Department.

What Does Other Structures Insurance Cover?

A typical homeowner's insurance policy provides four important types of coverage:

1. Coverage to repair or replace the structure of your home, should it become damaged or destroyed as a result of suffering from any of the variety of perils detailed in your policy. This includes things such as fire or smoke, hail, lightning, hurricanes, falling objects, theft, vandalism and more. Most homeowner's policies also include other structures insurance, which protects separate structures on your property for the same perils applicable to the coverage for your home's main structure.
2. Coverage to repair or replace your personal property if it becomes lost, damaged or destroyed by any of the same perils covered in your policy. This includes personal items in your home such as furniture, clothing, appliances, sports equipment, etc. Coverage is usually capped at around 50%-70% of the amount placed on the structure of your home. Your personal property is covered whether it's in your home or somewhere else, basically anywhere in the world. This “outside your home” coverage is typically capped at about 10% of the coverage you have for your personal possessions. You also have coverage for shrubs, plants and trees on your property, usually capped at about $500 per item or $1,000 on an HE-7.*might even put in a link to our HE-& comparison page
3. Liability coverage that protects you against lawsuits relating to alleged damages to have been caused to others or their property. This coverage will pay for your court defense and any court awards up to the limit stated in your policy.
4. Additional living expenses coverage pays your living expenses (hotel bills, meals and other costs) if you're forced to live away from home due to damage caused by a covered peril.

Other Structures Insurance

Typical homeowner's policies include something called other structures insurance, sometimes referred to as Coverage B in your policy. This provides coverage for the same perils for which your home is covered and is applied to separate structures such as:

• Detached garages
• Sheds
• Gazebos
• In-ground swimming pools
• Fences
• 
  

You'll find other structures coverage often limited to a percentage of your home's structure coverage. According to the III (Insurance Information Institute) this is typically 10%.

Personal property found in any of these other structures, such as a detached garage or tool shed, are dealt with separately from your other structures insurance coverage, under the personal possessions portion of your policy. Get with your agent or broker if you're unclear of your policy's provisions.

Homeowners Insurance: Options That Cover Your Assets

When taking out a Greensboro homeowners insurance policy, you'll be presented with lots of options of ways to fine-tune your protection to best fit your specific needs. Sometimes these various options can seem overwhelming and are best handled with the assistance of a trusted insurance broker who can help guide you along the path of obtaining the best coverage for the best price.

At its most basic, your Greensboro homeowners insurance coverage will be designed to protect your investment in your home as well as protect the financial risk your mortgage lender carries in the event your home should be destroyed as a result of a covered peril.

What Your Policy Covers

Homeowners insurance policies are made up of a variety of coverages meant to protect you financially. If your home were totally destroyed as the result of a house fire, your dwelling coverage should be sufficient enough to cover the costs of rebuilding your home back to its pre-fire state, according to today's building costs. If your dwelling coverage limits are too low, rebuilding your home after it's been destroyed will mean dipping into your own personal assets to pay the difference between the costs for rebuilding and the payoff from your insurer.

Personal Possessions

Your Greensboro homeowners insurance policy should also have a section that provides coverage to protect you from financial loss related to the damage, destruction or theft of the personal possessions in your home. It's important here to have limits high enough to cover the repair or replacement of these possessions at today's costs. You may have the option to choose coverage that pays true replacement costs or actual cash value (replacement cost minus depreciation).

Certain high-value personal possessions such as jewelry, artwork, furs or collectibles will have specific payoff limits on a standard policy. Adequately covering these items (and your assets) will require buying additional coverage by way of a rider (or floater).

Liability Coverage

An often overlooked but extremely important part of standard homeowners insurance policies is the liability coverage. This may, in fact, be your biggest asset protection in your homeowner's coverage, especially if you have risky items on your property such as a swimming pool, a treehouse or a trampoline.

Liability coverage protects you against financial loss related to someone becoming injured or killed while on your property. It even covers you if your dog bites someone off your property.

Greensboro Home Insurance Hazards: Storms

Your Greensboro home insurance policy likely covers many types of storm damage but not all. Flooding, for example, that occurs as the result of a storm will not be covered unless you've made flood insurance a part of your comprehensive homeowner's protection. This requires that you obtain a separate, special flood insurance policy, usually from the federal government's National Flood Insurance Program, available through FEMA Federal Emergency Management Agency). A few, select number of private insurers may also offer excess flood insurance.

It's interesting to note that, according to FEMA, 90% of the natural disasters that occur in the United States involve some form of flood damage. Even homeowners living in areas considered low risk for floods can see that, according to FEMA, flood insurance may be something to consider. It's affordable and easy to buy.

What Storm Damage Standard Greensboro Home Insurance Typically Covers

The types of storm damage typically covered by a standard homeowner's insurance policy include the following:

• Water damage
• Ice damage
• Lightning strikes
• Damaging power surges
• Wind
• Hail
• Fallen trees

Water damage coverage can vary, depending on your policy, so it's important to know what your particular policy will pay and for what. Ice or water damage to your roof is likely covered but water flooding your basement may not be covered.

If lightning strikes your home and causes fire or smoke damage that will likely be covered. Some, but not all, policies cover power surges that damage appliances or electronic components. Some policies may also pay for food ruined as a result of a power outage but this type of coverage is less common. Remember, however, that you can buy insurance to cover just about any type of peril if you're willing to pay the premium required. Talk to your insurance representative to determine what you have, what's available and what the costs are to put in place the exact coverage you want.

Other Storm Damage

Violent storms may be responsible for numerous different types of damage to your home, whether it's strong winds that dislodge roof shingles or knock a tree over into the roof, hail that dents your vinyl siding or hard-driving rain or snow that breaks a window and damages your home's interior or household possessions. All these are likely covered but, again, insurance policies are unique and yours should be thoroughly read and understood. Consult your insurance broker with any questions.  

Does Home Insurance Cover Roof Damage

Like many questions asked about what your Greensboro home insurance policy covers, the answer is often, “It depends.” Since insurance policies are unique to the particular company underwriting the policy, each contract may have unique specifics. The best advice is to thoroughly read your homeowner's policy and consult your insurance agent for further clarification.

What About Roof Damage?

Concerning roof damage of your home, there are a number of considerations to understand. The dwelling coverage portion of your Greensboro home insurance policy protects your home and any attached structures, such as your garage, from losses sustained from a number of different perils that are spelled out in the policy. This includes the roof.

The “other structures” coverage, which is included in most homeowner's policies, covers structures on your property that are not attached to the home, such as an unattached garage or a shed. The roofs on these structures are also covered for the same perils for which your house is covered, although there is often a coverage limit for these unattached structures. It's usually figured on a percentage of the coverage limit for the home. If, for example, your home has a dwelling coverage limit of $400,000 and your other structures limit is 10%, your claim for these buildings would max out at $40,000.

What if My Roof is Leaking?

Keep in mind that damage to your roof, in order to be covered, must be the result of one of the stated perils, such as damage caused by wind, fire, hail, vandalism or any of the others spelled out in your policy. Some policies may, however, have certain exclusions, such as an exclusion for wind or hail damage, but these are usually only found in policies written in areas where strong winds or hail are common (which doesn't include Greensboro or surrounding areas).

If your roof is damaged by one of the perils covered in your policy, and that damage produces a water leak that further damages parts of your home or personal belongings, these should all be covered by your Greensboro home insurance coverage. If your roof is leaking as a result of age or wear-and-tear, however, damage to the roof will be excluded from coverage, it being classified as an ongoing maintenance problem. Damage the water leak causes to your walls, floors, carpets or personal possessions, however, likely will be covered. Talk to your agent for clarification!