2022 US Home Insurance Buying Guide|Home Insurance Buying Advice, Ways to Reduce Premiums, How to Quote to the Cheapest Premium

2022 US Home Insurance Buying Guide|Home Insurance Buying Advice, Ways to Reduce Premiums, How to Quote to the Cheapest Premium

When buying or renting a house in the United States, you must understand the details of Homeowner Insurance. This article will lead you to understand home insurance, policies, claims coverage, precautions, and how to reduce premiums and other home insurance issues.

01/ Buying a house in the United States must buy home insurance

Homeowner Insurance or Hazard Insurance: Generally refers to the insurance that buyers buy for their own houses, which is the most basic insurance. The main guarantee is that when the house encounters an accident or sudden disaster, the owner can get compensation and claims to reduce the property loss caused by the disaster.

Tips

Tips: Home insurance mainly protects the loss caused by fire to the house, so it is also called fire insurance (Fire Insurance). But in fact, home insurance also covers damages caused by many other reasons to the house or personal property, as well as accidents that occur to guests and even passers-by.

  • Loan buyers: The lending bank will require the buyer to purchase home insurance before the transfer, otherwise the loan will not be approved.
  • Buyers in full cash: Although the law does not expressly stipulate that you must buy home insurance, to avoid losses caused by house accidents, homeowners usually buy home insurance as protection.

02/ Home Insurance Online Price Comparison Free Tool

In addition to the traditional practice of quoting through offline insurance brokers, there are now many online analytical tools (see below) developed for free use by the general public. Homeowners looking to purchase home insurance can use the list to browse home insurance companies in their state and choose based on rating recommendations. After filling out a simple message on the website, you can get a quotation and make a preliminary comparison.

  • Choose the state of residence: Each state has different housing insurance companies with good evaluations. Choose the state of residence to make the most suitable recommendation.
  • Fill in the address Zip Code: Even in the same state, the best home insurance companies in different cities will be different. After entering the Zip Code, a list of the most suitable recommended insurance companies will appear. Homeowners choose according to the characteristics of each insurance company and their ratings Quote.
  • Inquiry Quote: After reading each feature, you can go to the company’s official website to inquire. The online inquiry will usually give preferential discounts together.

Will this tool ask me to keep personal data?

  • After selecting the state of residence, a list of recommended insurance companies will appear. This step does not require you to leave a contact message.
  • Go to the website of a specific insurance company to ask for a quote. The insurance company will ask about the house information and some personal background data of the homeowner. Some insurance companies may ask for the phone number and email address during the online quotation stage so that the offline agent can take the initiative to contact the homeowner to provide better discounts. the price of.

03/ How to reduce home insurance premiums?

The premium of home insurance will vary by hundreds of dollars due to factors such as coverage, self-payment, and different insurance companies. Mastering the following details to choose home insurance will help you save a lot of premiums.

  • It’s not a disadvantage to shopping around. Although it takes time, it can save you a lot of money. Asking more and asking more prices can not only help you understand the details of insurance terms, but also understand the service quality of various insurance companies, buy the most suitable home insurance for you, and don’t forget to ask them what they can do to save you premiums.
  • Increase the deductible. The deductible is the amount of damage the homeowner is solely responsible for before the insurance company begins to claim. Most insurers now recommend a $500 deductible, but raising the deductible to $1,000 could save you about 25% of your premium. However, if you live in a disaster-prone area, it is recommended that the insurance clauses have separate deductibles for these special types of losses. For example, if you live in an earthquake-prone area, the earthquake deductible is best set out independently.
  • Don’t confuse the purchase price with the cost of rebuilding. The land beneath the house is free from theft, storm, fire, and other risks included in your home insurance policy. So don’t include the land value when deciding on the insurance amount, or the premium to be paid will be higher.
  • Tie home and auto insurance together. If you buy home insurance and auto insurance with the same insurance company, the insurance company usually offers a 5% to 15% premium discount. (There are some exceptions, so please make a comparison before deciding)
  • Improve housing resilience. Examples include adding storm shutters, strengthening roofs, renovating older homes, and strengthening electrical systems to save on premiums.
  • Improve home security. Such as installing smoke alarms, burglar alarms, and anti-theft locks, you can get about 5% off your premium. Some insurers even offer a 15 to 20 percent discount on premiums for fire and burglar alarms that install sprinkler systems, notify police fire or monitor stations. However, this type of system is usually not cheap, and not every system can get a discount, so please calculate whether it is true or not, and understand what systems are supported by the insurance company before making a decision.
  • Learn about other discounts. For example, retirees typically stay at home for longer periods, thus reducing the risk of theft or early detection of fires. Some insurance companies offer partial premium discounts for retirees over the age of 55.
  • Good credit history. In addition to home insurance, as long as you have a good credit history, no matter what kind of insurance you choose, you can reduce your premiums.
  • Become an old customer of an insurance company. Some insurance companies will provide about 5% of the premium discount for old customers of 3 to 5 years, and old customers of more than 6 years may even get a 10% discount. (Of course, it is recommended to compare prices to see if it is cost-effective)
  • The condition of the house itself. If the house is near a fire hydrant or in a community with a professional fire department, you can pay less for insurance; or if the power, heating, and plumbing system are less than ten years old, the insurance will be cheaper; or in the east, it is more wind resistant Concrete brick houses and building materials with good earthquake resistance on the West Coast can also reduce insurance premiums by about 5% to 15%.

04/ What does home insurance cover?

  • Part of the compensation to the homeowner or the loan bank after the disaster.
  • Buildings, including the house itself, fences, garages, driveways, swimming pools, etc.
  • Personal belongings, including furniture, electrical appliances, books, collections, documents, etc.
  • The homeowner cannot use the home due to the disaster, and additional living expenses incurred while the home is being repaired.
  • Homeowner Accident Liability Insurance, which protects homeowners or visitors in the event of an accident inside or outside the house, can provide compensation.

Tips: When purchasing home insurance, the homeowner must inform the insurance company whether the home is for rent or self-occupation.

  • Own Occupancy – The insurance company will add insurance on the private property inside the home.
  • Rent – The homeowner does not need to insure the contents of the home, which can save on insurance premiums. (Usually, tenants can purchase “tenant insurance” by themselves to protect their property interests from a loss at the rental property).

05/ What are the common claims coverage of American home insurance?

Common home insurance claims coverage can be divided into the following categories:

1Coverage for the Home’s Structure

  • Coverage A – Dwelling Coverage: Protect the main structure of the house. (For Condo Insurance, this excludes façades and common areas as those are the responsibility of the HOA)
  • Coverage B – Other Structure on Your Property: Covers buildings other than the main body of the house, such as independent garages, independent tool rooms, etc. This part of the insurance amount is usually 10% of the main insurance (actually based on the content of the policy).

2Individual Property Coverage

Coverage C – Personal Property / Contents: Covers all personal property in the house, such as furniture, home appliances, mobile phones, clothing, etc., if the loss of personal property due to accidents such as disaster theft can be claimed.

3Coverage for Temporary Living Expenses

Coverage D – Loss of Use: Additional living expenses such as accommodation, food, etc. incurred due to damage or repairs to the house, resulting in the insured being unable to live in the house. Usually, the upper limit is 20% of the main insurance (actually based on the content of the policy).

4Legal Responsibility

Coverage E – Personal Liability Insurance: If someone is injured or has an accident in the house, such as slipping and falling on the stairs, a worker is injured at work, a child playing a ball at home and smashing the valuables of the neighbor next door, etc., legal disputes and other expenses arising from the lawsuit.

5Medical Payment

Coverage F – Medical Payment coverage: Medical bills for the injured person whose house caused damage to others but was not prosecuted. For example, someone slips on your steps and doesn’t sue you. Whether or not the homeowner is responsible, the insurance company can claim compensation under this clause.

other

  • Deductible (All Peril) Deductible: Refers to the above items, unless otherwise specified, all deductibles are XX yuan; the excess part of the cost will be intervened by the insurance company.
  • Water Backup and Sump Overflow: Refers to damage caused by sewer backflow or water overflow. A sewer rupture is not part of Water Backup or Sump Overflow.

06/ What kinds of home insurance policies are there in the United States?

In the United States, the commonly used home insurance policies (Policies) have the following categories: (HO is the abbreviation of Home Owner)

HO-1 Basic Coverage

Covers damage to the home due to fire, lightning, smoke, wind, hail, robbery, theft, explosion, broken glass, airplanes, cars, riots, disturbances, and vandalism. Basic insurance also ensures bodily injury, damage to other people’s property, attorney fees, medical expenses, indoor personal property, and additional housing living expenses after damage to the house.

HO-2 Broad Coverage

In addition to HO-1, it is insured for damage caused by electric shock, heavy snow and ice pressure, frozen water pipes, falling from the sky, water heater or air conditioning system broken and burned, and indoor water leakage.

HO-3 Full Insurance (Special Form)

The most common type of home insurance purchased by the general public. In addition to HO-1 and HO-2, almost everything except war, nuclear disaster, flood, earthquake, subsidence is also added. It also indemnifies guests for accidents that occur indoors and outdoors, accidents that happen to passers-by outdoors, and compensation for medical expenses and attorney fees after pets bite people.

HO-4 Tenant’s/ Renter’s Policy

P&I pays for the personal property of the tenant inside the rental property.

HO-5 Comprehensive Insurance

The coverage is wider than HO-3, and the premium is more expensive.

HO-6 Condominium Coverage

Indemnity for condo homeowners and indoor personal property, guests and passers-by accident, fire, theft, water leakage in and out. Homeowners need to read the Condo HOA Bylaws carefully to determine the number of insurance premiums to be purchased.

HO-7 Mobile Home Coverage

Indemnity for condo homeowners and indoor personal property, guests and passers-by accident, fire, theft, water leakage in and out. Homeowners need to read the Condo HOA Bylaws carefully to determine the number of insurance premiums to be purchased.

HO-8 Older Home Policy

The market price of an old house is lower than the rebuild price. Old home insurance allows homeowners to insure at market rates below the rebuild price.

07/ What type of home insurance should I buy?

To buy a house type to explain:

1Single Family House: Buy HO-3

  • The homeowner owns the entire house, the foundations, and the lot and is, therefore, responsible for it all.
  • In the Cost Approach in the Appraisal Report, there is a column “Total Estimate of Cost-New”, which is an estimate of how much it will cost to rebuild the house. The amount of insurance required by the lending bank is the lower of the loan amount and the Total Estimate of Cost-New.

Tips: It is recommended to buy according to the Total Estimate of Cost-New. Some insurance companies will also provide 120%, 125%, 150% of the Cost to Rebuild New/Replacement Cost claims plus purchase items (or 20%, 25 %, 50% Extended Dwelling Coverage). Example: At 150% Replacement Cost Coverage, the homeowner’s actual maximum payout for a $200,000 Dwelling Coverage purchase is $300,000.

2Townhouse: Buy HO-3

Ownership and responsibilities of Townhouse owners are similar to Single House. Master/HOA Insurance information if HOA is available.

3Condo: Buy HO-6

  • Usually, lending banks will require HO-6 and Master/HOA Insurance. If the Condo’s Master Insurance covers the inside of the house in addition to the common areas, then there is no need to purchase HO-6 separately.
  • The ownership of the condo owner only includes within the wall (within the unit), so the responsible party is limited to the wall, so the insurance only covers this part. Roofs, aisles, elevators, sewer pipes between walls, house structures, community roads, public facilities, etc. are all HOA responsibilities, usually by Master/HOA Insurance. So Condo home insurance is usually much cheaper than a Single House and Townhouse.
  • Lending banks usually require the Dwelling Coverage of HO-6 to be at least 20% of the Appraisal value.

By aamritri

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