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Homeowners insurance tips and facts

Posted On Tue, August 9, 2011

Some people paying homeowners insurance rates are unaware of exactly what their policy entails. A recent article by TheStreet highlights a number of things homeowners need to be aware of regarding their insurance policies.

When shopping for a new home, TheStreet recommends getting several quotes from different insurers. It isn't wise to rely on estimates from a real estate agent or the previous owner, as rates can change between owners of the same home.

Wayne Cox, an agent with the Cox Insurance Agency in Florida, told the source that buyers should "be sure to ask for replacement cost coverage, for the structure and the contents of the home, because a lot of cheaper policies only cover the actual cash value of the structure."

TheStreet notes that the location and composition of a home can affect insurance premiums. For instance, cement-block homes are generally cheaper to insure than wooden houses in Florida. Taking the time to have the roof inspected for weather damage can also help lower rates.

Many people are unaware that flood damage is not covered by traditional homeowners insurance. If a home is located in a flood hazard area, as determined by the Federal Emergency Management Agency, TheStreet recommends looking into specialized flood insurance.

According to a 2008 study by Marshall and Swift/Boeckh, 64 percent of American homes are under-valued for insurance purposes, and the average homeowner only has enough coverage to rebuild about 81 percent of their home.

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