How much you pay in homeowners insurance really depends on the calamities your home is likely to face. Urban areas are often more expensive than suburban and rural areas. Higher risk geographic regions, such as the high winds in the Great Plains and hurricanes in the Gulf region, are often pricier areas to insure. Then you have Texas, the most expensive state, where you have both the high winds and the threat of hurricanes!
Most expensive states to insure:
- Texas: $1,372
- Louisiana: $1,144/yr
- Oklahoma: Not listed. (oddly)
- District of Columbia: $963/yr
- Mississippi: $939/yr
- Florida: $929/yr
- California: $895/yr
- Rhode Island: $849/yr
- Alabama: $847/yr
- Kansas: $836/yr
Most Expensive States To Insure A Home [Forbes]
Lightning is one of the standard named risks or perils in most homeowners insurance policies, double check yours to be certain it’s listed, and one that has seen its claims rise in recent months. With the rise in claims, it’s important to double check what is considered lightening damage and what is typically covered.
As a named risk or peril, it’s treated just like theft, fire, smoke, and wind damages for your structure/dwelling and property. What about personal property such as electronics? Again, personal property is covered but you need to prove that the damage was caused by lightning and not something else (user error).
Insurance Journal reports that the average dog bite claim is over $24,000 in 2007, with claims totaling $356.2 million. That’s an increase of over 10% from 2006.
How does this affect you? Well, you need to be aware of the three types of laws governing pets and which ones affect you:
Dog-bite statute: The dog owner is automatically liable for any injury or property damage the dog causes, even without provocation.
“One-bite” rule: In some states, the owner is not held liable for the first bite the dog inflicts. Once an animal has demonstrated vicious behavior, such as biting or otherwise displaying a “vicious propensity”, the owner can be held liable. Some states have moved away from the one-bite rule and hold owners responsible for any injury, regardless of whether the animal has previously bitten someone.
Negligence laws: The dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.
ISO, Insurance Services Office Inc., has a Public Protection Classification service that gauges a local fire departments ability to respond to fires. They collect information regarding the responsiveness and effectiveness of local fire departments, analyze the data using their Fire Suppression Rating Schedule (FSRS) and then assigns a Public Protection Classification from 1 to 10. A rating of 1 means the best public protection while a rating of 10 means there’s no recognized protection whatsoever.
How does this information benefit you? The lower the rating, the lower the homeowners insurance premium for residents of that area since the severity of any fires should be mitigated, at least based on the protection class. ISO currently covers over 44,000 fire-response jurisdictions.
Residents of Dawsonville, GA recently discovered that their rating of six, down from 7-10, meant lower premiums for their residents.
The lowering of the PPC is effectively passed on to citizens in the form of savings on property insurance. According to Thurmond, “If you were a class nine or seven before this evaluation, you will save money on your property insurance.” Thurmond said this could mean an annual savings of $800 for a $250,000 home that was formerly rated class nine and will now be rated class six.
Do you have adequate flood insurance? Flood insurance is not on the typical homeowners insurance policy and every year a quarter of the flood losses happens to homes considered “low to moderate flood risks” by the Federal Emergency Management Agency (FEMA). That’s right, 25% of flood losses occur in areas where they’re not expected. This is made worse by the fact that if you don’t expect it, you probably aren’t insured, which means especially painful losses.
The Consumer Federation of America recommends getting flood insurance if there is any doubt you could be at risk, which goes against general insurance advice. It’s so significant that some mortgage lenders require it.
Your homeowner’s insurance will often have a jewelry provision in which there is a maximum payout in the event of a jewelry related claim. If you want higher levels of coverage for your jewelry, you’ll need to get a jewelry rider or separate jewelry insurance. When we had a piece appraised at a local jeweler, he included a brochure about an independent jewelry insurer and told us we should compare our homeowner’s rider premium against the independent insurer’s premiums.
What’s interesting about jewelry insurance is that it has nothing to do with you at all. The insurance is based on the value of the item, your deductible, whether you have a security system, and which county you live in. For example, everyone in Alabama will pay 1% of the appraised retail value of their piece each year as insurance if the piece is under $15,000. Everyone in Los Angeles County will pay 2%. Live in Delaware, pay 1.1%. If you have a central station security system, you can get a small discount.
Despite what you may have heard about endorsements or riders regarding jewelry, your jewelry is partially covered by your base homeowner’s policy. If you lose, damage, or otherwise destroy your jewelry, you can still make a claim with you homeowners insurance provider. Usually the upper limit is capped at your coverage limit of either $1,000 or $2,000 depending on your policy minus your deductible. So if your limit is $1,000 and your deductible is $1,000… unfortunately you’re “covered” but you will get nothing back. If you’re limit is $1,000 and your deductible is $500, you’ll be able to recover $500 - which may or may not be worth the effort (you may have to prove its value as well as file a police report so that an official record exists).
This is true for anything high dollar that could go missing or damaged, such as paintings, scultures, fine china, silverware, etc.
In my post about Adjusting Insurance Based on Home Price, I was called out by an anonymous commenter, who said I shouldn’t talk about things I didn’t know (which is probably good advice, but I’ve never called myself an expert), because I said you should reduce your insurance coverage because your home may be worth less. He or she was right, that was bad advice, I was merely reflecting my own situation in that my home value was higher than my replacement value and thus I was no longer obligated, by my lender, to insure at the higher value. That was the impetus for the original post and it made sense for me, but may not be for you.
Lately, life has been tough on homeowners as they watch their home values slip, fall, or tank and as a homeowner myself, I can say first hand that it’s a little disconcerting. Well, there is one home insurance related positive note that you can take advantage of and that’s the fact that you can reduce how much homeowners insurance you’re paying for since the value of your home has fallen. If your home was worth $500,000 a year ago, you were insuring it for approximately that much or a little less (depending on the rules of your insurance company and your lender). If your home is now worth slightly less than that, say $450,000 now, you can talk to your insurance agent and get your insurance reduced because your home is no longer worth $500,000 - the original amount. While it hurts to have to admit the loss in value, at least you can save a few dollars in your pocket.
If you are insuring your home based on replacement value, this little math won’t help you as much but every little bit helps!
Did you know that if your house is flooded and your car, sitting happily in the garage, is damaged by the water, then you should be covered by your car’s comprehensive auto insurance policy? It doesn’t matter that the car was garaged in the house, if it is damaged then it usually will be covered by your automobile insurance policy. While the prospect of recovering your car, given damage to your home, isn’t going to bring much of a smile to your face, it’s certainly better than nothing!
So, if you’re dealing with flood damage and your car was a victim, remember to contact your car insurance to file a claim.