When considering your homeowners insurance policy, many people falsely assume that they have few options when selecting their coverage or paying rates. Although your mortgage lender may have requirements concerning your coverage, you as a homeowner can make wiser decisions on what is covered and the homeowners insurance rates you are paying.
Why Do I need Homeowners Insurance?
A homeowners insurance policy provides financial compensation should you have losses related to your home. Your policy will pay for the structure and contents of your home if they were damaged or destroyed, as well as legal costs if someone is injured in your home or on your property. The two driving factors that cause homeowners to purchase insurance: 1. to protect your assets, and 2. to satisfy the requirements of your mortgage lender.
TIP: Know your rights. There are no Virginia state regulations requiring homeowners insurance; however, the Virginia State Corporation Commission (SCC) outlines homeowners rights concerning issuing, canceling and renewing policies. If an insurance company refuses to issue a homeowners policy or cancels or does not renew your policy, Virginia law requires that the company tell you the reason why. If you are denied insurance based on incorrect information, the company is required to allow you to copy its file concerning you and to correct any incorrect information that the file may contain. For more information visit Virginia Commonwealth SCC at: https://www.scc.virginia.gov/boi/cons/ho_rts.aspx
What does homeowners insurance cover?
The homeowners insurance policy is a package policy that combines more than one type of insurance coverage in a single policy. Homeowners policies typically cover all or part of your financial losses related to:
- Property Damage: The home itself, including the structure and its plumbing, electrical wiring, central air and heat systems, and other structures on your property such as sheds and fences if they are damaged or destroyed by certain causes. Also includes your possessions such as electronics, appliances and clothes, even when they aren’t located on your property.
- Loss of Use: Pay for you to move into a motel or apartment temporarily and will cover certain other additional living expenses when you cannot live in your home due to damage covered by your policy.
- Liability: Covers costs if you cause another person to be injured or another person’s property to be damaged or destroyed.
- Medical Payments: Pay for medical treatment for a person injured injured in your home and certain situations away from your home.
What type of coverage do I need?
Most insurance companies offer the same basic coverage; however, Virginia has a regulation that provides minimum standards for coverages that must be included in all policies. Depending on the insurance company policy names will vary. For the most part, standard policies are often referred to as:
- HO-2 Broad Form (Named Peril)
- HO-3 Special Form
- HO-4 Renters Insurance (Contents Broad Form)
- HO-5 Comprehensive Form (HO-3 with HO-15,Special Personal Property Coverage)
- HO-6 Condominium Unit Owners
- MV Market Value or Older Homes Forms (Modified Coverage Form)
The different types of homeowners policies vary according to the types of property they are designed to cover and the number of “perils” (causes of loss) that they cover. For a summary of coverage under each type see the Homeowners Insurance Consumer’s Guide Prepared by Commonwealth of Virginia State Corporation Commission at: http://www.scc.virginia.gov/boi/pubs/hoguide.pdf
How much homeowners insurance do I need?
The homeowners insurance coverage and policies you choose will depend on the type of protection you want. In the hopes of reducing homeowners insurance rates, the most common mistakes made are not buying enough coverage, and/or renewing the policy at the same amount of insurance year after year without reviewing the value of your home due to inflation and improvements. It is important to check your insurance policy every year to ensure you have adequate coverage. When deciding how much insurance you need, you must also decide the following:
- Peril Policy: Whether you want to purchase an “open perils” or “named peril” policy.
- Property and Belongings: The type of housing you have, ad the replacement costs of dwelling, possessions, valuables and deductibles.
- Self Protection: The amount of liability coverage to protect against lawsuits resulting from your negligence or events that could occur on your property.
- Lender Requirements: Your mortgage lender will require you to cover the house for at least the amount of the mortgage or the replacement cost of the dwelling.
- Policy Requirements: Insurers may impose some coverage requirements for replacement cost protection. Preferred plans usually require policy limits at 100% of replacement cost. Standard plans usually require policy limits of at least 80% of replacement cost.
TIP: Know common and costly claims in your area that can effect your homeowners insurance rates. When selecting the coverage you want on your homeowners policy, it can be helpful to ask your agent what common claims homeowners near you have filed. Understanding what those claims are can help you see what types of risks your home might be susceptible to, so you can consider adding coverage to your policy that can help protect against those risks. In Virginia Beach, common claims were water damage, wind damage, theft/burglary, and lightening damage. The most costly claims were dog bite liability, fire, and damage from freezing water/bursting pipes.
How can I reduce the cost of my homeowners insurance rates?
In addition to selecting a plan specific to your needs, WBR Insurance offers homeowners the following discounts if you qualify that may assist you with your homeowners insurance rates:
- Multi-policy discount: Get up to a 20% discount on a home insurance policy when you bundle your homeowners and auto insurance with Nationwide.
- Protective device discount: Get up to a 15% a discount if your home has smoke detectors, fire alarms, burglary alarms or other qualifying devices.
- Claims-free discount: You may qualify for a up to a 20% discount on your home insurance when you stay claims-free.
- Age of construction discount: Earn up to 30% savings on your homeowner’s insurance coverage based on your home’s age.
- Age of insured discount: A homeowner’s insurance discount of up to 15% may apply if you’re 60 or older.
- Personal status discounts: If you’re married or widowed, you may qualify for up to 5% discount on home insurance.
At Virginia Beach insurance company WBR Insurance we offer a full portfolio of policies, including homeowners insurance. We pride ourselves in establishing personal relationships with our customers to assist you in protecting what matters most. To get a free quote for your Virginia Beach homeowners insurance needs at competitive rates, give us a call at 757-340-0028 or visit our website www.WBRInsurance.com.
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