Cashing in on Prevention
It is no surprise that home insurance premiums are on the rise due to the natural disasters occurring across the United States. With frequent weather conditions driving more hurricanes, wildfires, and flooding, property damage claims are surging while insurance companies scramble to find geographic regions that are not as exposed to catastrophic weather events. However, recently, hurricanes Elsa, Henri, and Ida have proven that even the least exposed areas are subject to detrimental damage.
Submitting a claim on your home insurance policy is only a multiplier when future rates are determined. The term “Co-insurance” will become the foundation of future insurance plans.
Selecting a Policy
A critical piece of a well-crafted insurance plan is the foundation of any insurance policy. Insurance policies for your home come in 2 primary versions:
- The Basic form, which has a limited replacement cost or a full replacement cost coverage premium.
- A Premium policy, which comes at a higher cost and a guaranteed replacement cost contract on your home that does not depreciate the value of your belongings when replacing them.
In our expert opinion, the premium policy is worth the higher cost if a claim ever occurs.
A vital part in deciding your insurance provider is the company size. Elsa, Henri, and Ida showed that smaller insurance companies who rely more on independent claim personnel than on company staff do not do well during a disaster. You will get paid, but it may take some time to settle. An insurer with greater nationwide presence across the USA will provide better claim responses and more stable rates over a wider geographic spread
Fine Tune Your Coverage
Both forms of home policies are built on 6 types of coverage:
- Other Structures
- Loss of Use
- Medical Payments
There may be some restrictions, but you can match the coverage to your needs! To know the best coverage options, you should:
- Review the Exclusions and Limitation – No one likes finding out that a claim is not covered due to an exclusion or because recovery is limited by policy. Always make sure you ask!
- Identify Unique Exposures – After reviewing your coverage exclusions, identify any unique exposures and address what you will be insuring separately, or self-insuring including:
- Flood– (rising ground water or run off)
- Excess Liability (to protect your income and net worth)
Select Your Deductible
One of the best methods to protect your current and long-term costs of insurance is to take a high deductible and insure the first $10,000, $25,000, or even $50,000 worth of a loss. Taking ownership of smaller claims will protect you against rising costs.