Different from auto insurance, some people may not have many opportunities to apply for housing insurance claims. After all, many old and worn-out problems are not covered by housing insurance, and some small problems may be better dealt with by paying for the repairs yourself. It is not worthwhile to apply for a claim and then raise the premium.
However, there are times when home insurance is the only option. Claims application procedures, compensation price coordination, payment speed, etc. are very important for those who are in urgent need of insurance reimbursement for house damage.
The following is an insurance company’s score from the authoritative journal Consumer Reports based on a total of 6,940 user questionnaires that have applied for housing insurance claims.
Purchase enough insurance coverage
The insurance coverage of home insurance does not equal the market value of the house. The market value of the house includes both the house and the land. Even if the house is destroyed, the value of the land has no effect. So when considering the dwelling coverage, you should consider all the costs of the house in case of total destruction, cleaning up the remnants, rebuilding the house’s materials, and labor. This can be calculated by consulting the local construction company’s construction fee x house area, or asking the insurance company if there is an automatic inflation setting.
The coverage of other structures and personal property is generally calculated by the insurance company automatically multiplying the dwelling insurance amount by the percentage. Usually, the insurance coverage of other buildings is 10% of the main building insurance amount, and the personal property insurance amount is 40%-70%. There is also a loss of use insured amount of around 20%.
Different insurance companies will have different calculation ratios. When buying insurance, they should adjust or purchase additional insurance according to their own circumstances. You can use an app like Encircle to help with statistics on the home, to understand the total value, and to see if the insurance coverage is sufficient. If you have more expensive personal belongings such as jewelry, or other special circumstances, it is best to buy extra insurance.
Liability insurance is a self-selected insured amount, usually starting at $100,000, but it is usually recommended to purchase $300,000-$500,000 or higher than your own net worth. If your net worth is quite high, you can also consider buying extra umbrella or excess liability insurance.
How do you reduce housing insurance costs?
Home insurance is an unsustainable and persistent expenditure for most homeowners. When buying a house, you should consider this issue first because one of the important factors affecting the price of home insurance is the geographical location.
If the house is in a region with frequent natural disasters, at high risk of disasters, or has insufficient security, the premium will definitely be more expensive than a safer area; usually, the housing premium near a fire station will be lower than for a house farther away, for example. Another example is Florida, where hurricanes land frequently; Florida is the most expensive state in the United States.
The level of insurance coverage and deductible are also two major factors affecting premiums. Compared with reducing the amount of insurance, it will be more appropriate to increase the deductible.
When compared to auto insurance, the difference in housing insurance premiums may not be as large, but it can still save a part of the cost in different insurance companies. Understand the insurance discounts that companies can give. For example, buying car insurance and life insurance together means you can usually enjoy bundle discounts and help reduce premiums.
Low-risk house premiums are also relatively low, and increasing the safety of the house usually also results in a certain home insurance discount. According to Consumer Reports, there are usually 5% off premiums for installing smoke detectors, anti-theft cameras, deadbolt door locks, etc., and up to 15%-20 if you have automatic sprinklers and an automatic alarm system connected to the outside world.
When applying for housing insurance claims, the insurance company will send an adjuster to investigate the loss situation and make a compensation price against the insurance clause. However, the insurance company may set a compensation price that is different from its ideal number. According to CR’s survey statistics, 10% of the housing insurance claims for more than 20,000 claims are not satisfied with the amount of compensation set by the insurance company; and those who bargain with the insurance company can get an average of more than $6,000 in compensation.
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