In some cases it is very obvious when a homeowner’s insurance claim should be filed.  If there has been a fire, a burglary, or major vandalism, there is no doubt you should call your insurance company right away.  But in other cases, some small claims might be best kept off your insurance records.  It all depends on the cost of the damage, the amount of your deductible, and how it could affect your future premiums.

How Much Is Your Deductible?

If the amount of the damage or loss is less than or even right around the amount of your deductible, there is really no point in filing a claim.  You won’t really get anything out of it other than a claim on your record and a potential increase in your monthly premiums.  Whenever something occurs such as damage to your home, get an estimate on the repair before you call in a claim.  It might not be worth it to get the insurance company involved.  It’s a personal choice how far beyond the deductible amount the cost of repair or replacement needs to be before the claim is worth it.  Remember that it can hurt you in the future if you make too many small claims.

Increases In Premiums And Worse

The more often you use your homeowner’s insurance to make a claim, the more likely it is your rates will rise.  Worse than that, if you have too many claims your insurance company may set your policy to non-renew.  That means they have decided that you are too high a risk to insure any further and will not allow you to renew your policy when it expires.  Although few people make enough claims for this to happen, a lot of small claims can get you there.

Before you make a claim against your homeowner’s insurance, make sure that it is worth it financially, that you will actually get something out of the claim, and that it won’t hurt your future with the insurance company.  Increases in rates are not unusual and will usually go back down again after a certain period claim-free.  When you decide to make a claim, make sure that the increase in premium balances out against what the insurance company will pay out on the claim.  If the loss is a small amount in relation to the deductible, consider paying it out of pocket rather than filing a claim.



When To File A Homeowner’s Insurance Claim

Whether it’s damage due to a natural disaster or an unexpected accident or break-in, knowing when you should file a home insurance claim and what the consequences will be either way, is important.  So when should you file a home insurance claim and what will that mean for your future rates?  Here are some things to consider before contacting your insurance company.

Assess Your Options

The first thing to consider when making a home insurance claim is whether your current policy will cover the claim or not.  You should know exactly what your insurance covers before you ever need to make a claim; however, checking on the specific claim you are going to make-before contacting your insurance company-will give you the upper hand.

Once you have determined whether you are eligible or not, the next thing to consider is whether a claim is necessary.  There may be instances when the deductible for your particular claim is higher than the costs, and in that case a claim would be a waste of time.  You may also want to consider if the overall cost is worth any potential rate increases that may result from a claim.

Contacting Your Insurance Company

If you do decide to make a claim, arming yourself with all the necessary information will make the process go quickly and smoothly.  Be sure you have all your insurance policy documents readily available, as well as any documents that relate to the claim-repair estimates, police reports, and photographs.  It is also a good idea to keep track of all contacts with your insurance provider, in case a dispute occurs.

In most cases, making a claim on your home insurance is a good idea.  Keeping calm, organized, and informed can make the process stress free as well.

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Your homeowner’s insurance protects you from what are known as perils-the things that might cause damage or loss. A good homeowner’s policy is set up to provide coverage for the most likely perils that affect homeowners, such as fire, theft, and vandalism. However, there are some perils that are specifically excluded from the average homeowner’s policy, and depending on where you live, these exclusions could be serious.

Earthquake Coverage

Most homeowner’s policies do not provide coverage for damage caused by an earthquake. If you live in an area where earthquakes are common and a serious earthquake is a real risk, you should consider taking out a separate earthquake insurance policy. Your homeowner’s insurance agent can point you in the right direction.

Flood And Water Damage

Water damage is a tricky area when it comes to homeowner’s insurance. Some types are covered, while others are not. The most commonly excluded type of water damage is from a flood. This usually means a natural flood, from rain or rising water. For anyone who lives near a river or other body of water where flooding is a possibility, flood insurance is a good idea.

Water damage that is caused by negligence is also usually excluded. If you knew your pipes were leaking and did nothing to repair them, the resulting water damage will likely be excluded and not covered. On the other hand, if a pipe suddenly bursts with no forewarning, your homeowner’s insurance should kick in and take care of the damage. It’s best to verify these grey areas with your insurance company or agent.

Mold Exclusions

Many insurance companies do not provide coverage for mold, because it is considered to be the result of negligence. This is another grey area where some types of mold may be covered and others may not. Again, this is a good one to discuss with your insurance company.

Maintenance Issues

Homeowner’s insurance is there to get you back to normal after a loss or damage. It doesn’t provide you with free maintenance on your home! Any damage to your home caused by your failure to properly maintain it will not be covered by homeowner’s. Thus, roof repair for wind damage is covered, but a roof that has simply gotten old will not be. If that were the case, homeowner’s insurance would be very expensive indeed, with everyone getting repairs done to their home every time something wore out!

It’s important to know what your policy covers and doesn’t cover, so that you are not stuck paying big bills for a catastrophic event. Ask your agent or read your policy, and obtain extra coverage when you can.

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Using Your Home Insurance As A Tax Deduction

Home ownership is an expensive part of any family’s life, and cutting down costs related to owning a home is always welcome.  Most people recognize that home insurance is a necessary and essential expense, but you can use it to decrease your taxes.  There are some cases when home insurance can be used as a tax deduction; here are just a few ways that you may be able to qualify for this type of deduction on your next tax return.

Do You Have A Home-Based Business Or Work From Home?

If you operate a business from your home or if you frequently work from home, you may be able to use a portion of your home insurance as a tax deduction.  It is a good idea to have separate business insurance in this case, but if your particular situation does not require this, and especially if you don’t need the liability insurance, this is a definite deduction that you should bring up with your accountant.

Do You Pay Home Insurance For Rental Properties?

Rental property insurance is tax deductible for the owner of the property since it is considered a business related expense.  If you own rental properties, this type of insurance will protect you from property damage your tenants could cause.  It is a good idea to tell your tenants that they are required to have renter’s insurance as well.

Using Damage Costs That Were Not Covered By Home Insurance

Property damage is considered a tax-free occurrence, and the money you spend repairing that damage may be included as a tax deduction.  This can include any out-of-pocket expenses related to an insurance deductible.  There is a specific calculation involved in this deduction, and it is not a dollar for dollar deduction; however, depending on your circumstances, it may be worth contacting a tax specialist.

It is always a good idea to keep yourself informed about any potential ways in which you can save money.  An insurance agent is a wealth of information, and can give you some great ideas for saving money on your insurance.

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Times are tough and finding ways to save money are always welcome, but often we don’t think of essential expenses such as insurance when considering ways to cut back on those expenses.  Here are a few tips for saving money on your home insurance, while still keeping yourself and your home protected-ten things you can do to save money on your home insurance!

Shop Around-Just as with any major purchase, shopping around will ensure that you are getting the best deal possible.

Consider A Higher Deductible-The higher the deductible the lower the premium. If your particular financial situation allows you a higher deductible should damage occur to your property, you can save a considerable sum by using this tip.

Combine Policies-Most insurance providers offer discounts when you combine policies.  This is a particularly popular option for the two insurance policies you most need most-car and home.

Install Home Security-If you have a home insurance policy that covers theft and damage due to a break-in, installing a home security system may reduce your premiums.  There are other home security measures you can take that may also reduce this rate.  One example is to have deadbolt locks on all of the doors, a smoke detector on every floor, and a fire extinguisher.

Know If You Qualify For Additional Discounts-Some insurance companies offer special discounts for seniors, students, or employees of particular organizations.  Checking to see if you qualify for any additional discounts could mean considerable savings.

Keep A Good Credit Score-Insurance premiums can be affected by your credit score, so ensuring that you have a good credit rating can reduce your premiums.

Use The Same Provider For All Your Insurance-Often insurance companies can offer you discounts if you have existing policies with them.  This is also the case for financial institutions that offer insurance, as well as brokers.  Some companies are offering discounts for clients that purchase life insurance in addition to their home and auto combined discounts.

Look For Comprehensive Coverage-Comprehensive coverage offers you complete protection for a rate that is, in most cases, less than if you were to get each type of coverage separately.  This includes basic homeowner’s insurance as well as disaster, theft, and liability coverage, all in one policy.

Review Your Policy Often-Your homeowner’s insurance often is fairly short term, and keeping your eyes open for better deals, or re-evaluating whether the type of coverage you currently have is more than you really need, can save you money.

Protecting Your Home From Loss Due To Theft

Your home is filled with memories, personal mementos, and most importantly, your family; the risk of losing your valued possessions to theft is a situation you never want to encounter.  Ensuring that damages and loss due to theft are covered by your home insurance is important.  Here are the questions you should ask yourself and your insurance agent about protecting your home in case of a break-in, and things you can do to protect your home and reduce your insurance rates.

Look Over Your Existing Policy

The first step in protecting your home is to see if your existing policy covers both your property and the contents of your property in case of a break-in.  Most basic homeowner’s policies do not cover these, and so you’ll want to get a clear picture of what you need before proceeding.

Asking Your Agent

There may be a number of things you can do to reduce the amount you will pay for theft protection, including combining existing policies and making changes to your home’s security.  If you already have homeowner’s insurance, adding theft protection may be cheaper than buying a separate policy, especially if you were to go with a different company or broker.  Installing an alarm system, adding locks to windows, and other types of home security protection may qualify you for a discounted rate on your insurance.

Creating Peace Of Mind

Regardless of the insurance issues, protecting your home and family in case of a break-in is important to your peace of mind.  Things such as simply hanging a security sign in your window, leaving lights on when you are not home at night, and changing your routine can deter theft.  They may not qualify you for a reduced insurance rate, but may protect your home nonetheless.

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You have homeowner’s insurance to protect your home and everything in it from an accidental and unexpected incident that causes a major loss.  If something catastrophic like a fire should occur, you will be called upon to provide a list of everything that was in the house, and in some cases, even proof.  To protect the insurance company from paying out fraudulent claims, an insured may be asked for photographic or other evidence of valuable possessions.  Here are some easy ways to be sure you keep good records of your home and its contents.

Documented Evidence

For expensive and valuable possessions, it’s a good idea to keep purchase receipts and appraisals where appropriate.  These things, being paper, won’t survive something like a fire, so purchase a fireproof box in which to keep them or arrange for storage off-site.  Ask a friend or relative to hold onto them for you, or place them in a safety deposit box if you have one.  Some insurance companies will also scan these items for you and keep them in their computer system for future reference.

Photographic Evidence

One of the most popular ways to keep records of your personal property is to take photographs, and again, keep them somewhere safe.  When taking photos of your items, be sure they are clear and where possible get close-up shots of model and serial numbers, especially on electronics.  Digital cameras have made it easier than ever to store large numbers of photographs, and you can back up your photos to a server where they can be kept safe in case they are needed and the original files have been lost or destroyed.

Photographs can also be used to document the features of your home so that should it need to be rebuilt, you can return it back to its original state.

Video Evidence

Video cameras are also a popular choice for documenting your home, as you don’t need to snap a picture of each individual item, but can pan the room, zoom in where necessary, and just keep one file with all of the evidence you need.  Again, digital video makes it easy to store the files in a safe place where even a total loss of your home won’t damage it.

A good record of the things inside and outside of your home helps your insurance company to restore you to your position prior to the loss.  The more information they have, the easier it will be to reconstruct your home and replace your possessions.  It’s up to you to create and store this evidence, so take the time to make sure the records are created and kept safe.

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Most people think of homeowner’s insurance as a policy that is there to protect their house and property.  Although this is a major feature of a homeowner’s policy, there is another main coverage that comes with all homeowner’s insurance, and which can really save you in case of a lawsuit directed at you for a negligent act.  Your liability insurance will give you coverage for a wide variety of situations you might otherwise find yourself paying for out of pocket.

What Is Liability Coverage?

The liability coverage on your policy is there for any situation in which you are held responsible for damage or injury to someone else’s property or person.  In order for liability coverage to kick in, you have to be found negligent in the incident.  For example, if you left your dog off the leash and he ran out to the street and bit someone you are negligent, because your dog should legally remain contained in your home or yard.  You have broken a leash law and thus the person who was injured can sue you.

How Much Liability Coverage Do I Need?

Some homeowner’s policies start with a low end limit of $100,000 for liability, and go up to $1 million.  The average coverage is somewhere in between.  How much coverage you need depends on what assets you have to protect.  What could you lose in a lawsuit?  The more you have, the more likely people are to sue-sad but true.  So if you are fairly affluent, more coverage is always better.  Liability coverage is usually a very affordable option, so going up by several hundred thousand dollars isn’t going to cost a whole lot more.

What Else Am I Protected From?

Liability coverage protects you from a wide variety of potential lawsuits.  If a tree in your yard is not healthy and falls on your neighbor’s house, your liability coverage will protect you.  If your child breaks a neighbor’s window playing baseball, you are covered.  There are many cases in which liability coverage will kick in for you.

Your insurance policy also ensures you won’t ever face a lawsuit alone.  If it is agreed that you are negligent, a claim can be made against your policy without going to court.  But if you disagree that you are responsible, and your homeowner’s insurance company agrees, they will pay to represent you in court to fight the charges.

Liability is an invaluable coverage to have on your homeowner’s policy, and the more you have the better off you will be.  In a society well known for suing at the drop of a hat, protecting yourself is just the smart thing to do.

A Trusted Agent

A lot of people simply allow the real estate agent or mortgage broker to handle finding the insurance policy.  Usually they do know some good people, but do you really want someone you have never even spoken to insuring your biggest investment?  If you already have an insurance agent for your auto coverage, give them a call and find out if they can quote your homeowner’s.  This way you will have someone you know and trust handling it for you.  If you don’t have an agent, ask for referrals and then make a few phone calls.  It’s best to actually speak to the agent yourself before you hand over your business.

Concerned About Commissions

One fallacy is that going through an agent costs more money than going to the insurance company directly to purchase an insurance policy.  The reality is that those companies that do not use agents have to put the money that they would normally pay agents into advertising.  Some of the best known companies that you see on television everyday pay staggering amounts of money for advertising in lieu of paying agents.  So, commission is not a dirty word.  The benefit of using an agent is that they have been trained (and are legally held responsible) to provide you with the appropriate policy.  When you call a call center for insurance (for them) it is about how many policies they can write in a day.  It is not about you.

Look At The Replacement Cost Calculations

No, it’s not going to be what you paid for the house or even what it’s worth.  The replacement cost is simply how much it would cost to rebuild your home from the ground up.  And an accurate replacement cost calculation depends on accurate information about your home.  Most companies will use information from the most recent appraisal of the home to gather this information.  It’s still a good idea to ensure that it’s all accurate.  Look for errors like listing the wrong type of flooring (is it hardwood or laminate?), errors in the number of bathrooms, and missing special items such as a wet bar or Jacuzzi tub.  Every company looks at those types of items differently when it comes to setting the replacement cost amount.

Cover Your Property

What the agent can’t get from an appraisal is the value of the things you will be putting into the home.  Be sure there is enough coverage for everything you own, including high value items like jewelry.  This is something that is often overlooked when shopping for homeowner’s insurance because the focus is on the house and not the things inside it.

Accuracy is the key to a homeowner’s policy that covers everything you own properly, along with valuing your house appropriately.  Take the time to shop around, look at the policy, and talk to people you trust.  If you ever have a claim, you will be glad you did.

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How Much Home Insurance Do I Really Need?

Home insurance is an essential part of home ownership and is a cost usually considered as part of the regular maintenance and protection of your home. In most places it is also required by your mortgage lender, but how much home insurance do you really need? The minimum coverage may suit some homeowners, but most need additional types of coverage that the minimum polices do not include. So what are the types of coverages home insurance policies typically provide, and how do you determine how much home insurance you really need?

Do I Need Disaster Insurance?

While disaster insurance that covers natural occurrences such as floods, earthquakes, and hurricanes can be expensive, if you live in an area where these types of events occur frequently the cost of replacing your home will certainly far exceed the cost of the insurance. In the case of disaster insurance it is a matter of balancing risk, financial situation, and peace of mind.

Do I Need Additional Content Insurance?

While most basic homeowner’s policies include content coverage, the amount of this coverage and the cost of the deductible may not be appropriate for your particular situation. If you have a number of valuables, such as jewelry or rare items such as antiques, your basic coverage will not protect these in case of theft or damage. On the other hand, if you have few belongings, choosing a policy with a high deductible to save money may not be worth it, as the value of your items may not be much more than the deductible itself.

Do I Need Theft Protection?

Again, most basic home insurance plans do not offer extensive coverage for loss from theft or damage due to a break-in. If having the peace of mind that comes with this kind of protection is important to you, then this additional coverage will definitely be worth the cost.

Do I Need Liability Coverage?

If you have a home-based business or own a condo, having homeowner’s liability insurance is important. If a client had an accident on your property or your negligence caused damage to a fellow condo owner’s property, liability coverage would protect you from the potential costs associated with this, including legal costs.

Seeking the professional advice an insurance expert can help you determine how much home insurance you really need.