Over 85 percent of all homeowners have homeowners insurance, and according to a recent JD Power survey, nearly half of all homeowners insurance policy owners don’t know what types of damages are covered under their policies.
Last year, natural disasters like wildfires, hurricanes, floods, and tornadoes caused $160 billion in property damage, and some homeowners were in for a big surprise when they later found out their policies didn’t cover them.
Homeowners insurance offers coverage from damage to a home’s structure, your personal property, and liability coverage in the event that you are at-fault for any injuries or deaths.
Over 76% of all homeowners insurance claims are caused by damage from wind, non weather-related water damage, hail damage, and weather-related water damage.
There are also many other perils and types of damage covered by homeowners insurance, including fire and lightning, theft, volcanoes, riots, aircraft damage (for real), vandalism, burst pipes, explosions, smoke, and electrical damage.
Home insurance policies cost an average of $1,083 per year. Most mortgage agreements require the purchase of homeowners insurance, though it is not federally mandated for homeowners to purchase homeowners insurance.
Your premiums will also help pay for additional living expenses if your home is destroyed in a natural disaster, such as hotel bills.
Many homeowners insurance policy owners mistakenly believe their policies cover flooding and earthquakes, though nearly all homeowners policies do not.
Many policies do cover wildfires, though homeowners living in high fire-risk areas are experiencing extreme premium hikes and even policy cancellations from their insurance companies.
Your homeowners insurance also doesn’t cover acts of war or government (such as eminent domain), nuclear accidents (though you probably won’t be around to make the claim) and sinkholes (unless you’re in Florida or Tennessee).
The 2019 hurricane season is currently underway, with tropical storm Barry brewing off the coast of Louisiana. Southern California experienced yet another 4.0-magnitude aftershock from the recent Ridgecrest earthquakes on July 16.
Wildfire season has already begun, with an increased threat for the northwestern US due to a rising heat wave.
Last year was the worst year in history for wildfires in the state of California, burning more than 2,849 square miles and destroying more than 17,000 homes and 147 million trees.
The state is already bracing for impact this year with a $21 billion fund for future wildfire damage claims.
Despite a wet May, the Office of Wildland Fire for the Interior Department has also declared many parts of California to have above-normal potential for large fires this year.
Many insurance companies are declining to offer coverage in general on homes that have too much fire risk associated with them. For an insurance company, a $400,000 house burning down can cost an insurance company more than $1 million.
The issue is further compounded when you consider that development companies want to build homes specifically in cheap, fire-prone areas. According to the UC Berkeley Institute of Governmental Studies Poll, 66% of respondents support the idea of the state limiting construction in areas at high risk of wildfire.
While natural disasters can make for great movies, including the new movie “Paradise” about the Camp Wildfire, the reality of natural disasters is anything but entertaining.
If you’re a homeowner, your house is both the most valuable and vulnerable asset you own, subject to any number of perils and injury liabilities.
Despite being an industry of gargantuan proportions, cheap homeowners insurance is hard to come by. In California, monthly premiums run customers $81, or $974 yearly.
Surprisingly, some of the most affordable homeowners insurance can be found on the west coast. Oregon and Washington both make the list of top five most affordable states for homeowners.
There are several factors that affect your homeowners insurance premiums apart from location.
The most influential factor is the amount of dwelling coverage you purchase, which should be enough to cover the cost of replacing your home and any other structures you own. The more coverage you purchase, the higher your premium will be.
The amount of liability coverage you purchase also affects your homeowners premium, along with your “home contents coverage,” which protects the belongings in your home.
Selecting a policy with a high deductible can decrease your premiums while selecting a policy with a low deductible will increase them.
You can also become eligible for discounts on your premium by buying home security systems and bundling your auto and home insurance.
Buying an old home with structural damage might be cheap, but you’ll face as a higher premium for your insurance company as a consequence.
Brick homes, for example, are seen as less risky to insure than wooden homes because they preclude the risk of termites and rotting while mitigating fire risk.
Similarly, if you’ve ever made any homeowners insurance claims in the past you’ll be labeled a high-risk customer and your premium will increase.
Even if past residents of your home have filed homeowners claims, you might face increased premiums due to the fact that your home will be considered high-risk.
Homes are valuable not only in the dollars they represent but in the memories they allow us to create, the warmth and protection they offer, and the legacy they carry on. Let us protect yours.
Ask your Frontlight insurance broker how to get the best coverage for your home and family and so that even in tough times you can feel more at home, at home.