Top Tips for Buying Homeowners Insurance

Friends and family members are always asking us for tips and tricks for buying home owners insurance. Here are some of the best tips we’ve come across (please check back for articles with a further explanation for each tip):

1. Insure your home for 100% of the replacement cost new.

2. Buy earthquake coverage if the risk exists in your area. Earthquake coverage can be expensive, but it is well worth the price if you life in earthquake prone areas like California or Hawaii.

3. Buy a Home Replacement Guarantee that will rebuild your home even if the cost exceeds your insurance amount. Buy the guarantee without a percentage cap.

4. Buy liability limits equal to your auto liability limits.

5. Choose the highest deductible that still gives you an adequate premium credit.

6. Don’t just accept the normal or “standard” coverages for detached structures and contents. Make sure that the amounts of those coverages will fully cover what you own, including everything stored in the detached structure.

7. We know it’s boring, but READ YOUR POLICY and ASK QUESTIONS. Discover the types of personal property excluded from coverage and the limits of your policy. Talk to your agent about buying the optional coverages that might be needed to make up for those limitations and exclusions.

8. If you bring work home with you, buy the optional business liability endorsement to cover any injuries that could be associated with work related activities. If you have business at home, don’t buy the home-business endorsement (it is very restrictive). Buy the businessowners’s policy to protect yourself.

9. Buy the optional sewer backup coverage. Also buy flood coverage if you live in an area with heavy rains or that are at risk for flooding.

10. Buy the “special perils” coverage, which covers accidental loss not caused by a small group of excluded causes.