Homeowners Insurance

Six Things You Should Know About Your Homeowners Insurance

April 3, 2020 | Tower Hill Insurance

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We’re guessing you don’t spend much time thinking about your homeowners insurance – until you need it! Here are six things you’ll want to know about your homeowners coverage before disaster strikes.

(1) My family situation has changed. What adjustments should I make to my coverage?

Whether you have a new baby on the way or a child moving out, it’s a good idea to get in touch with your agent to review your policy in case there’s a need to adjust policy limits and coverages.

(2) Do I need additional insurance if I’m remodeling or adding on to my home?

Some remodeling projects increase the value of your home. If this is the case, you’ll want to ensure your policy covers the cost of rebuilding your home (Coverage A). Insurance agents have access to a number of tools called Replacement Cost Estimators to calculate an accurate Coverage A limit for your home.

(3) What can I do to make the claim process easier?

One of the best ways you can make the process go smoother is to provide a home inventory. If you have good documentation of your personal property, it will speed the claim process significantly.

(4) What is the difference between a home’s Replacement Cost and Market Value?

Replacement cost is the cost to construct or replace an entire building in equal quality and utility. It uses the price of labor, materials, overhead, and fees to rebuild your home. This is what largely determines your homeowners policy’s rate and premium.

Market Value is the estimated price at which your property would sell on the open market between a willing buyer and seller under all the conditions for a fair sale.

(5) What do I pay if something happens to my home?

What you pay out of pocket depends on the specified deductible for the covered loss. For example, most policies have a separate hurricane deductible and an All Other Perils (AOP) deductible. Your deductibles, along with your other coverage summaries, are listed on your policy’s declarations page. Tower Hill customers can view their declarations page via Customer Portal. Your agent will be able to access this information for you as well.

(6) Why is my premium quote so different from company to company?

A number of factors weigh in to a company’s insurance rates. Market conditions, coverages provided, and reinsurance rates all have a bearing and can vary significantly between different companies. When you’re shopping for homeowners insurance, be sure you make an “apples to apples” comparison among your options. While one company’s rates may appear lower, you might not be getting the coverage you actually need.