Homeowners Insurance Ins and Outs - Part I

Posted By David Whitton @ Mar 25th 2011 5:52am In: Salem Oregon Home Ownership

Congratulations! After a long search, you have finally found "the" home, your offer has been accepted, and you've signed innumerable documents. Now what? Before you begin to actually move, you need to find a homeowners insurance policy that protects your large investment and meets all the needs of your Salem OR real estate. At this point a wise purchaser will make another investment--one of time--to find the right policy in terms of cost, coverage, and service.

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  • The amount of your insurance should cover the cost of replacing or rebuilding your Salem OR real estate. That amount is not the same as market value (or even what you paid) since you already own the land. To determine the replacement cost of homes, many insurance companies use software that considers the features of your home and calculates the cost to rebuild. In addition, most policies include coverage for up to 125% of that cost.
  • Personal property. Most policies cover personal property at 50% to 75% of the replacement value of the home. Consider adding separate endorsements (also called riders or floaters) for valuables such as fine art, expensive collections, jewelry, etc. How much extra does each of these "extras" cost?
  • Explore consumer guides and online sites and interview agents for price quotes. The site for state insurance departments will give you typical rates charged by major insurers in your state. Check Ambest.com and Standard and Poors to ascertain financial stability of the companies you're considering.
  • Don't consider price alone. Look for quality service and a solid track record. Registered complaint information can be found at NAIC.com.
  • Discounts. Many companies will give you a discount in price if you insure both your car and your Salem OR real estate with them. Ask about other discounts for adding preventative devices such as smoke detectors, deadbolts, security systems, storm shutters, roof reinforcement, modernized plumbing, heating and electrical systems, etc. In addition, because they are at home more often and thus able to quickly detect problems, over 55 retirees often receive discounts.
  • Credit rating. Since insurers are increasingly using credit information to influence the price of policies, the higher your credit rating, the lower the cost.
  • Long -term customers sometimes qualify for discounts, generally 5% for a 3 to 5 year relationship and 10% for 6 years or more.
  • Deductibles The higher the deductible (the amount you pay out of pocket for each claim), the lower the premium. Insurers are currently recommending a $500 deductible, but if you raise that figure to $1000, you can save as much as 25%. Your financial situation will be the deciding factor here.

Coming in PART II...INSURANCE COVERAGE AND SERVICES



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David & Dewey Whitton
The Salem Real Estate Group
6444 Fairway Avenue SE
Salem, Oregon 93706

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