Learn About Homeowner’s Terminology and Cost Factors
April 7, 2017
Most of homeowner’s insurance are under-appreciated until they are needed, this is when you thank god that you have one. Learn as much as you can about homeowner’s insurance and you will have the knowledge necessary to choose an affordable comprehensive coverage plan for your home.
For example, you must know what is Actual Cash Value (ACV) coverage. ACV means your house replacement cost minus depreciation. This also applies to your belongings. You might also have a coverage plan that provides Replacement Cost. Replacement cost is the cost of replacing a property period (plus depreciation). Guaranteed or Extended Replacement Cost coverage is all-inclusive because it pays for whatever it costs to build or fix your home. These are just a few terms to know about homeowner’s insurance.
Another thing to start education yourself on are what factors contribute to its cost. The average home premium has almost doubled in the last 10 years from $590 to $1,000. These are some factors that could influence your premium quote: The market value of your house, your household inventory, your zip code, if you live in a high-crime area, the size of your house, how close is it to a fire hydrant, the condition of your plumbing or heating or electrical system, how many claims were filed against the home you’re seeking to insure, even sometimes your credit score details.
Also, some other factors may contribute to the premium that you do have some fault at. For example, some issues faced by uninsured homeowners are if you drop prior insurance coverage and then try to get back into the market, insurers generally see you as a worse risk and you’re likely to pay more for it. This is because many companies won’t consider you if you have dropped your homeowner’s insurance. It shows an indication that you couldn’t afford it in the past and therefore might have problems meeting premium payments now. Companies might suspect that you’re trying to get insurance because you know you have an imminent claim coming. Believe it or not, some insurance companies use your credit as a rating factor as well.
Follow this blog to stay more educated on insurance. You will continue to learn and make wiser decisions in regards to your home.
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