"Cheaper" May Not Cost Less

02Feb

“Cheaper” May Not Cost Less

On: February 2, 2023 In: Homeowner's Insurance

Most Floridians would consider their home to be their most valuable asset. Naturally, many homeowners want to stretch their dollar as far as they can. Cheap homeowners insurance may cost you less up front, but that savings won’t pay if you have sacrifice coverage for a lower rate and end up facing an expensive insurance claim. Make sure you’re getting the right coverage from your insurance policy, or you might have to deal with extra hassle down the road. Use these tips to help you choose the perfect homeowners insurance for your family while still working within your budget.

What Should Homeowners Insurance Cost?

Homeowners insurance is a necessary factor in the overall cost of homeownership. There is no one size fits all model for a policy, insurance underwriters price policies based upon the risk that they will assume. They consider factors like the house’s age, location, and condition, previous claims made on the property, and of course, the home’s value.

Homeowners do have the ability to adjust things that may increase or reduce the premium. This is where you should be aware of the factors that are changing to ensure that you are still getting the coverage you need. These are some things to notice when comparing policies and quotes:

Deductible: This is the amount of money you have to pay before the insurance company will begin to pay for a covered incident. Choosing a policy, with a higher deductible, will cost less but that will mean more out of own pocket costs if you do need to make a claim. It’s up to you as the homeowner to decide what’s best for your financial situation, but it’s always smart to consult with your agent as well.
Coverage limits: This is the maximum amount that a policy will pay for a covered peril. Different kinds of coverage have different limits. Maximum coverage for structures should be based on the cost to rebuild. Depending on the age and location of the house, there might be higher than the cost of simply buying a comparable house. Home contents might only be covered for 50% of the limit for the entire home. You should check to see if your policy covers home contents at replacement value. Your standard coverage may also have strict limits for some items, like art or jewelry. If you have high-value items like these that are outside of your coverage limits, you may need additional policy riders or should consider an umbrella policy.
- Taking a detailed home inventory of your home contents is the best place to start determining how much replacement coverage you may need. An agent can help homeowners customize their Florida home insurance policy for their needs.
Things that aren’t covered: Standard Florida homeowners insurance won’t cover floods and may not cover windstorm damage. Flood insurance must be purchased through the National Flood Insurance Program, and your agent should be able to help with that.

Aren’t All Insurance Companies the Same?

Besides coverage options and premiums, it’s also important to find a financially stable company. After all, homeowners pay premiums to make sure their insurer will be around to pay the bills after a disaster. Southern Oak Insurance has earned a Financial Stability Rating® of “A-Exceptional” from Demotech. This is assigned to insurers with exceptional financial stability related to maintaining positive surplus as regards policyholders, liquidity of invested assets, an acceptable level of financial leverage, reasonable loss and loss adjustment expense reserves and realistic pricing. You can get a Southern Oak Insurance quote today and see if we can save you money on homeowners insurance.

Make sure you’re informed before you purchase a homeowners insurance policy. Click the image to find out what questions you should be asking your insurance agent, and be prepared for anything life may throw at you!