MAKING THE MOST OF YOUR HOMEOWNERS’ INSURANCE

How your actions can impact your policy costs & coverage

You might think that homeowners’ insurance is homeowners’ insurance. Pretty much all the same and not that different now from when your grandparents got their first policy. 

But that’s not true. With most things related to your home, insurance changes with the times. And your choices can make an impact on your policy, too. 

Duke Baldridge, president, and Mark Lowman, private client manager, from Dominion Risk Advisors in Roanoke help us understand how what we do can affect costs and coverage. 

What is happening in the home insurance industry today?
This is a difficult insurance market for homeowners. Several things have contributed to this reality. The occurrence of natural disasters has increased, along with the costs of construction and the number of large claims and lawsuits. This combination has forced insurance carriers to evaluate the type of homeowners’ policies that they want to write, the types of coverage they will offer and the premiums they will charge. 

Can homeowners do anything to lower their insurance costs?
A key consideration from insurance carriers is the quality of the maintenance of your home. The age and condition of your roof, plumbing, electrical and HVAC systems will have a direct impact on your premiums. Many carriers will not insure homes with a roof more than 20 or 25 years old. Insurance carriers will take photographs and may ask to tour your home. These factors will have a direct impact on your long-term insurance costs. 

Other important ways to control your homeowners’ insurance premium are to have: 

• deadbolt locks 
• fire extinguishers 
• a centrally monitored burglar and fire alarm system
• an impact-resistant roof
• an automatic back-up generator
• a water cut-off system

If homeowners maintain a good credit score, carry higher deductibles, and avoid filing small insurance claims, these actions will hold down premiums. 

Finally, you will usually get better homeowners’ insurance rates when you buy your home, auto and umbrella coverage from the same insurance carrier. 

What raises homeowners’ insurance costs?
Insurance companies are wary if you have hazards that pose a greater-than-average risk to your property and/or your guests and others. If your home and yard have these types of exposures, many insurance companies will not be willing to offer coverage. If it is harder to place your coverage, it is likely to be much more expensive. 

For the property itself, insurance carriers may surcharge you for a wood stove and may choose not to insure you based on the proximity of trees to your home, and the age and condition of your roof and mechanical systems. Liability concerns include swimming pools, certain breeds of dogs and trampolines. 

Do energy-efficient appliances, doors or windows have any impact on insurance? What about solar panels?
There is no direct impact on your insurance cost for buying energy-efficient appliances, doors or windows. You do need to ensure that the replacement value of your home includes more expensive finishes, such as energy-efficient doors. The only additional cost associated with solar panels is that you need to add their value to your home or treat them like other structures. If you choose a non-covered contractor because their quote came in at a lower cost, know that you are absorbing that risk. 

Do you need any special insurance while your house is undergoing renovations?
Absolutely. When you are renovating your home, you need to add a builders’ risk policy or an installation floater, depending upon the nature of the work. This can be added to your home policy or can be purchased by your contractor. 

Do I need to tell my insurance company about renovations?
Yes. You should contact your agent to discuss the project and make sure that they add the proper coverage. In addition, you should notify your agent when you update your roofing or mechanical systems.

What kind of documentation do I need to provide my insurance company?
If you are renovating your home, you should make your agent aware. The insurance company may ask for a copy of the contract and a description of the scope of the work. You will need to notify your agent when the work is complete. 

What other tips are helpful?
The purpose of a homeowners’ policy is to protect your family and your home, which is one of your largest investments. You should review your insurance policy carefully and go over additional considerations with your agent such as: 

• service-line coverage (for repairing or replacing damaged utility lines that run to your home) 
• back-up sewers and drains 
• earthquake 
• flood 
• cyber insurance 

The standard homeowners’ policy will have limited coverage for jewelry, furs, guns, silverware and fine arts. We suggest you get appraisals of these items and have them specifically scheduled on your policy. If you are able, we recommend that you have high deductibles and high liability limits. We recommend that you look at insuring these items as protection from a catastrophe rather than as a maintenance policy. 

In addition, to protect yourself before a loss, video each room of your home, your closets and the inside of drawers. This will help you document what you own before you have a loss. 

Whenever you have a major event in your life, you should discuss that with your agent. This includes a minor receiving a learner’s permit, a young adult moving out of the home, a wedding or a significant investment in your home or other assets. If you are unsure, contact your agent. They are motivated to protect you, your family and your assets. 

By speaking with your insurance agent and making careful decisions, you will be able to make the most of your homeowners’ insurance – ensuring you have the coverage you need and are making the right choices for the biggest impact. ✦