Home inspection findings by Frank Schulte-Ladbeck, Professional Real Estate Inspector TREC# 9073

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Insurance Matters

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Some simple steps for improving your homeowner’s insurance, while finding a way to save money.

One form that I produce for my clients is to help them obtain the proper amount of homeowner’s insurance, with the information they need for a quote. The most important factor in our financial lives is understanding what it is that you are getting, and how much you are paying for it, so here are a few steps to take to help you find the right insurance.

Go to your state’s website. There will be a site for insurance department, agency, or office. States regulate how the insurance agencies operate in your area, and they will let you know about what is happening in that industry. These sites also provide a wealth of information for the consumer. For example, on the Texas site, you can compare estimates from different companies. Look on the resources page for a link to that sites, and others to help you. You have to spend some time moving about these sites, but they will give you an understanding of insurance quotes.

Before calling a firm, you will need some basic data, which can be obtained from your appraisal district or tax assessor. Here is what you need to know: year the home was built; the square footage of the home and any permanent outbuildings (like a garage); your security system; smoke detectors; type of roof; type of exterior wall; the value of the land; and the value of the improvements (buildings or other additions added to the land). The insurance company is trying to evaluate the risk associated with your house to determine cost. Security systems can be operated without being monitored, so some insurers will accept it being operated for a discount. Have accurate measurements for square footage, and check this figure on your quote. After a few years, one insurer determined that my outbuilding must be a garage, so they decided to increase the square footage, thus increasing my cost.

Two factors are necessary to examine when receiving quotes. You need insurance based upon the improvements value in most cases. You want money to rebuild the home, not the land. Every few years you should check if this cost has gone up, because you will need to increase your coverage. You should look at what is covered. When comparing quotes, look over the dollar values of pay outs for different coverages. One firm may cover you for $100,000 of personal property damage, where another only covers half of that, causing a price difference. You could tell them how much coverage you want for each line item. Although it might cost me $80,000 to replace all of my personal property if I bought everything new, I know that I buy used furniture to be repaired, so I could go with $35,000 to replace all of my personal property. The second factor is your deductible. A one percent deductible is common, but you could raise it to 2%. This means that you would pay more out of pocket when something happens, but your yearly rate is less. If you keep money in savings, then this option may not be bad for you.

Determining what you can afford and what your costs would be to replace your home and personal belongings is the most important tasks before you begin obtaining quotes. Proper coverage can save you money and give you peace of mind.

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© Frank Schulte-Ladbeck Professional Home Inspector Houston, Texas
Frank Theodor Schulte-Ladbeck
home inspector, TREC# 9073
Houston , Texas , 77063 United States

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