Arizona Home Insurance
Buying a house is one of the biggest investments you’ll ever make. And while your mortgage lender may require you to carry a minimum home insurance policy, you’ll want to make sure your property and belongings are adequately protected in case disaster strikes.
(1) It protects you from legal damages if someone is injured on your property
(2) It provides you with funds should you be unable to live in your home after a disaster like a flood or fire
These additional provisions can be especially valuable if the unexpected strike.
Types of Policies
According to the Insurance Information Institute (I.I.I.), there are two main types of home insurance policies—HO-2 and HO-3.
HO-2 is a basic policy protects you against 16 different perils including:
An HO-3 policy covers you from “all” perils, except for those named in the policy. Common exclusions from HO-3 policies include:
Important note: Home insurance does not protect you from flood damage. If you’re interested in buying a flood insurance policy, just ask your home insurance agent!
Actual Cash Value v. Replacement Cost
Once you’ve decided which policy is best for you and your
home, you’ll need to consider which type of coverage best suits you. These
coverages are known as actual cash value, and replacement
Actual cash value: Pays to
replace your items minus a deduction for depreciation, up to your policy amount.
This means if you bought a TV two years ago for $3,000, the insurer will only reimburse you for its worth at the time of damage—which could be a considerable difference.
Replacement cost: Pays the actual cost of your possessions with no deduction for depreciation, up to your policy amount.
This means no matter when you
bought your TV, you’ll be reimbursed for the amount you paid for it.
Because replacement cost coverage doesn’t deduct any money for depreciation, it’s generally the best coverage for your bottom dollar and comes highly recommended by insurance experts.
How to Save Money on Home Insurance
While finding a good policy is important, there are a few ways you can keep your costs down:
Shop around. Prices differ
from one insurer to the next, so comparing free quotes is the way to go. Free
shopping sites like InsureMe.com allow you to compare multiple quotes from local
agents in your area.
Increase your deductible. Increasing the amount you pay for a claim out-of-pocket (before the insurer starts paying) automatically lowers your premiums. Just make sure you choose a deductible you can afford in case you have to file a claim.
Ask about discounts. Many insurers offer significant discounts if you have a home alarm system or insure your car with the same company. Ask your agent what other discounts they offer and see if you qualify.
Make some home improvements. Updating your home or making improvements can help your home better withstand tumultuous weather. Your insurer will take this into consideration while determining your premium.
If you own a home, home insurance is a fact of life. And
thankfully, the web makes it easy to find the coverage you need. Get started
with InsureMe.com and compare free