Knowing the benefits of home insurance

Financial expert Rachel Langlois from Cyprus Credit Union talks about the benefits of insuring your home.

Here are some tips she mentions:

When Purchasing

  • Credit score matters, can affect premium pricing. Low credit pays on average 32% more.
  • Bundle coverage
  • Understand your coverage:

You need additional coverage for floods or earthquakes if in risk areas.

Dwelling structure:

Most plans cover open perils, unless excluded

Personal property/possessions:

HO5: open perils (covers all, unless stated), burden of proof on insurance company

HO3: typically covers 16 named perils, claimant must prove coverage. Perils include:

  1. Theft
  2. Fire or Lightning
  3. Explosion
  4. Smoke
  5. Freezing
  6. Vehicles
  7. Falling Objects
  8. Volcanic Eruption
  9. Windstorm or Hail
  10. Riot or Civil Commotion
  11. Damage caused by Aircraft
  12. Vandalism or Malicious Mischief
  13. Damage due to weight of Ice, Snow, or Sleet
  14. Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
  15. Sudden & Accidental Damage from Artificially Generated Electric Current
  16. Accidental Discharge or Overflow of Water from Plumbing, Air conditioning etc.

Cash value vs replacement value coverage

  • -  Cash value will provide market value, so what the item was originally worth less depreciation.
  • Replacement value will provide funds needed to completely replace item at current prices.

Maintaining Your Policy

  • Keep current with maintenance. Claims can be denied if it was due to neglect.
  • Inform insurer if you make improvements that increase home safety, such as alarm systems
  • Create home inventory
  • Belongings, what you paid, serial numbers
  • Video/Photos of contents of every room, closets and cabinets

Making a Claim

  • Some items have coverage limits/caps, consider adding riders for high value items
  • Personal items may be covered outside of home, but often at smaller percentage
  • Don`t make small, frivolous claims

Average premiums increase by 9% after one claim

Stays in database (CLUE) 7 years, view yours for free every 12 months (at LexisNexis)

Even talking to an agent about a claim can be noted on your account

  • Reporting window of 14 days