5 Tips To Homeowners Insurance For Complete Coverage Of Your Home For Fire & Liability Insurance

www.axtellgroup.com

For most people, their Home is the most important asset and the foundation of their family´s financial security. Yet very few people know what coverage their Homeowners Insurance policy provides, and even fewer understand what coverage they need. Like any product or service what you have may not be what you need. The role of a professional insurance agent is to help guide you to the appropriate coverage to make sure you will be made whole in the event of a fire, theft or liability claim.

With the help of a veteran insurance professional specializing in Homeowners Insurance, this article hopes to help you understand what a Homeowners Policy should include to protect your family. I asked Jonathan Axtell, MBA President of The Axtell Group Insurance to provide the 5 most important tips to maximize your insurance coverage and minimize costs.

He points out that you need to understand why you are buying the policy to help make important coverage choices.

Tip #1: Understand why you are buying a Homeowners Insurance policy?

1. You need to protect your Home & Personal Property from fire, theft, vandalism, storm damage and other direct physical damage.

2. You need protection in case someone is injured on your property (Liability coverage).

3. Your lender requires the Dwelling be insured to 100% of Replacement Cost. You need to be able to rebuild your family´s primary residence.

Suggestion: Imagine coming home and everything is gone. What would it cost to replace all of your personal property (clothing, furniture, electronics, etc)? Without insurance do you have the money to replace the items your family needs?

Tip #2: Make sure the "Dwelling Limit" is sufficient to rebuild your home

Mr. Axtell points out that during any 10-year period residential construction cost will increase due to inflation. To protect against inflation your policy must include two components:

(1) "Inflation Guard": which increase the Dwelling coverage every year by 2-8% depending on your specific region of the country.

(2) "Extended Replacement Cost": provides a safety valve allowing your Dwelling limit to increase by 25%-100% in the event of a claim.

The Dwelling Limit should be in the range of $150-$500 per square foot depending on where you live and level of construction of your home (standard tract to highly custom).

Suggestion: Ask a local contractor to give you a better idea of your local construction costs.

Tip #3: Make sure your "Personal Liability Limit" is at least $500,000

Personal Liability coverage is critical to protect your family from financial loss due to someone being injured on your property. What most people don´t know is they are financial responsible for anyone injured on the property (even if you don´t invite them).

Suggestion: Your limit of Liability coverage should be equal or greater than your "net worth". You can purchase up to $1,000,000 limit on your homeowners policy.

Tip #4: Make sure your policy includes "Loss of Use" coverage

"Loss of Use" coverage is often overlooked or simply defaulted to a basic limit. This can be a costly mistake. This coverage provides you with money to provide alternative housing and additional living expenses during the repair of your home. Remember your mortgage, property taxes and utility bills don´t stop even if you can´t live in the house.

Suggestion: Check the rental rates in your area and make sure your Loss of Use limit is equal at least 12 months and preferably 24 months.

Tip #5: Reduce insurance cost with higher Property Deductible

The most effective way to reduce your insurance cost without compromising important coverage is to increase your "Property Deductible". The Deductible is a finite loss that you can absorb without getting into financial distress. Reducing coverage limits is never advised as that can cost you tens of thousands of dollars..

Suggestion: Select the highest Deductible you can afford (at least $2,500) and you will save 10-30% premium.

In conclusion, the biggest decision you will make in the process of shopping for Homeowners Insurance will be the selection of the right insurance agent. This person can use their experience and local knowledge of building costs and specific coverage issues in your area to create the right policy at the right price. It is important to keep in mind that your claims experience will be determined the day you purchase a policy. If the policy is set up correctly any claims experience regardless of insurance company will go smoothly. Most complaints about claims come from individuals who did not want to spend a little extra time when they buy the policy.

For more information or to discuss your specific situation you can reach Jonathan Axtell at his office.

Jonathan Axtell, MBA

The Axtell Group Insurance

310-375-3580

www.axtellgroup.com