Home Owners Insurance Basics What is it and why do we need it

What is Homeowners Insurance Home owners insurance provides security for your home and financial assets. It helps you pay to pay to repair or rebuild your home, replace personal property and provide liability protection if an accident occurs on your property. Save for youtube clip

Home Owners Insurance has Two Main Coverages Property CoverageLiability Coverage

Property Coverage Property Coverage insures your home, structures and contents against loss or damage against certain things listed in your policy such as hail, wind, lightning, fire, and theft.

Property Coverage IMPORTANT! Home Owners insurance policies do not cover flood damage or damage caused by rising waters! If you live in an area that could be flooded, consider buying federal flood insurance.

Property Coverage Dwelling Your home and structures attached to your home Other Structures This includes sheds, fences, sidewalks, etc. Personal property or contents This includes your furniture, clothes jewelry, etc. Loss of use This covers living expenses while you cant live in your house due to damage What does property coverage actually cover? These are only examples of types of coverage, each policy is different so read your policy to see what is covered.

F.A.I.R. Plan Fair Access to Insurance Requirement Plan The State of Kansas created the FAIR (Fair Access to Insurance Requirements) Plan to insure property that insurance companies refuse to cover. The FAIR plan is funded by assessments of voluntary member companies that write property insurance in Kansas. If you cant find a company that will insure your property, the Kansas FAIR Plan may. This plan provides a Fire and Extended Coverage policy, with optional theft and liability coverage. This coverage is not as comprehensive as homeowners insurance.

FAIR Plan requirements You must be declined by 3 homeowners insurance companies before you can apply for the FAIR Plan You can apply for the FAIR Plan through any insurance agent who sells property coverage Inspectors who work with FAIR will inspect your property to determine eligibility Approval in the FAIR Plan is not guaranteed

Liability Coverage Liability Coverage insures for bodily injury and property damage of others in case of an accident on your property by providing coverage against a lawsuit. Also included in this coverage is payment of medical expenses for injuries to anyone other than you or your household members living with you. If someone gets hurt on your property, they can sue you.

Liability Coverage Personal Liability This protects you from a lawsuit if a person is injured on your property as a result of your personal actions, for example, someone slips and breaks their arm because you didnt shovel your sidewalk. Medical Payments This protects you from a lawsuit if someone is injured on your property regardless of who is at fault; people can sue you if they get hurt on your property even if it isnt your fault. There are two parts to Liability Coverage

THE BIG QUESTION: How much property insurance is enough? Property protection The better your policys coverage, the less you will have to pay out of pocket if disaster strikes. Your lender will require you to cover the house for at least the amount of the mortgage. Liability Protection Always carry enough liability coverage to protect you and your assets (like your house) from lawsuits resulting from your negligence.

Deductibles The deductible represents the amount of money you pay before the insurance begins to pay for a covered loss. Choosing a higher deductible will reduce the cost of your insurance premiums (the amount your pay for your insurance). Deductibles will influence the cost of your insurance and how much you have to pay if you need to use your insurance

Replacement Cost vs. Actual Cash Value Actual Cash Value An insurance policy that only pays the actual cash value of items insured only pays how much the item is worth when it is damaged or destroyed. Usually, this is less than what it would cost to actually replace the item. Replacement Cost An insurance policy that pays for the replacement cost of insured items pays how much it would cost to replace the item even if the actual value of the item is less then the replacement cost; an older TV would get replaced by a similar newer model even though the old TV may not be worth much money. It is important to understand if your insurance covers the replacement cost of insured items or the actual cash value of those items

Replacement Cost vs Actual Cash Value Insurance that only covers actual cash value is cheaper Insurance that covers the replacement costs of covered items is more expensive

Take Personal Inventory of Your Possessions Take personal inventory of your belongings before you need to file a claim Take photographs of each room and/or item Try to include a description of each item and serial number when possible Keep a backup copy of your inventory at a location away from your house Use a safety deposit box or a trusted relative Your inventory wont do you any good if it is lost in a fire or tornado

Factors that Affect Insurance Premiums Insurance Premiums are the cost of an insurance policy Decisions you make will affect that cost

Factors that Affect Insurance Premiums Personal Credit History You will have lower insurance premiums if you have good credit. Personal loss history If you file a lot of claims for your house, your insurance premiums will go up Amount of Coverage More coverage will be more expensive (make sure to cover all of items-the insurance will be less than replacing all your items) Amount of the Deductible You will have lower premiums with a higher deductible

10 Ways to Reduce the Cost of Homeowners Insurance Shop around for competitive quotes-make sure your needs are covered by the policy 1. Increase your deductibles 2. Combining home and auto insurance may get you a discount 3. Find a home in good condition 4. Purchase a central burglar/fire detector connected to a security company 5.

10 Ways to Reduce the Cost of Homeowners Insurance Equip your home with smoke detectors, fire extinguishers and deadbolt locks 6. Dont own a trampoline 7. Organize your personal finances; a better credit history will lower your premiums 8. Maintain your home 9. Understand your insurance basics! 10.

Paying Your Insurance Premium Out of pocket You can pay your insurance premium from your own account whenever it is due Paying through an escrow account with your lender An escrow account is where you pay a little extra money with your mortgage payment every month to cover your insurance and taxes Your lender holds that money for you and then pays the premium and taxes when they are due This is the most common way to pay your homeowners insurance premium There are two ways to pay your premium

Tips for Submitting a Claim When possible report the damage directly to your local agents office You have the right to file a claim, but it stays on your record for 3- 5 years regardless if you receive any money Take precautions if the damage forces you to leave your home Lock your doors and windows Photograph or videotape the damaged area Keep a detailed record Make temporary repairs to prevent further damageStudy your policy limits and coverages

Tips for Submitting a Claim You may need to submit a claim form Make sure you keep an inventory of your items After speaking with your local agent, an adjuster will be assigned to assess the damage and estimate the cost of repair If possible be present when the adjuster makes the estimate Your settlement, the amount paid for your loss, is not determined by your local agent. Be wary of fly-by-night contractors; stick with local, reputable contractors

Finding an Agent Finding the right insurance agent for you is a personal choice. Each agent is unique. Choose an agent you are comfortable with.