Author Topic: Homeowners Insurance  (Read 253 times)

joenorm

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Homeowners Insurance
« on: October 22, 2020, 06:05:49 PM »
Hello,

I just built a new house and need HO insurance. I know nothing about it and if there is any strategy for saving money on the premiums.

I have been talking to a broker and we seem to be valuing it pretty arbitrarily. I think my premium is going to end up around $650 a year for a $450K house valuation.

Any thoughts on how I should be approaching this?

thanks

maizefolk

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Re: Homeowners Insurance
« Reply #1 on: October 22, 2020, 06:09:46 PM »
Get several competitive quotes. In non-coastal markets some home insurance may cover you for the market value for your house and some for the rebuild value (if it would cost more to rebuild your house than it is worth) if the latter is more expensive than the former. Depending on where you live things like a metal roof may decrease your premiums.

But in generally I've found there is much less "strategy" to getting lower cost home owners insurance than there is with auto insurance where you can play around with deductibles, what is and isn't covered, and maximum liability.

YttriumNitrate

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Re: Homeowners Insurance
« Reply #2 on: October 22, 2020, 06:28:33 PM »
Hello, I just built a new house and need HO insurance. I know nothing about it and if there is any strategy for saving money on the premiums.
Much like dealing with the cable companies, I've found that the best way to get good rates is to switch providers every few years.

Valley of Plenty

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Re: Homeowners Insurance
« Reply #3 on: October 22, 2020, 07:35:51 PM »
I'd like to piggyback into this thread because I also am in the process of acquiring a home, and know nothing about homeowner's insurance.

My situation is a bit different though. I'm buying a triplex and living in one unit while renting the others out.

I'm unsure to what degree having 2 rental units in the building changes things from an insurance standpoint. I've heard people talk about umbrella policies, but I don't know what makes those different from a regular plan with a high coverage amount. I'm also not clear on what is covered. For example, if I have a tenant who trashes the place, will my insurance cover that or am I SOL?

SndcxxJ

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Re: Homeowners Insurance
« Reply #4 on: October 22, 2020, 09:03:03 PM »
I have some thoughts and strategies on insurance I can share.  I come up with a replacement price per square foot in my mind.  If you can't do a decent job of estimating costs yourself, your broker can run those numbers.  I include garages in my replacement square footage, even though they are considered not habitable space so they aren't counted as the official property square footage, but to me they are part of the asset so I want them fully covered.  For me in the Bay Area, I am currently using $325.00/sq ft.
Now, I always have an emergency fund so I go with a high deductible of $5,000.00.  This tends to save me about a third of the annual premium compared to a $1,000.00 deductible.  I always go with a extended coverage option, which covers 50% more than the limit if I actually am rebuilding a structure and am going to run over the limit (very rare, but this option is cheap).  I also get a coverage that I forget the exact name, but it is a code upgrade coverage which basically covers the structure given that you will need to bring it to modern code which may not be in place with the existing structure.
For a $450k limit, and these options and the $5k deductible I would expect insurance to run around $600/year.  So your quote from your broker is probably pretty close.
One word on the higher deductible, this means that anything minor is basically on you.  I am hands on and handy so I don't mind this extra risk, and would rather have the savings on the premium.