Unfortunately, disasters and accidents can happen at any time. Therefore you need to make sure you home and belongings are protected in case something happens like a theft, fire, flood or other natural disaster. Additionally, you need to protect yourself if you are sued due to accidents that occur on your property. Otherwise you may face financial ruin.

In our last blog post, we talked about three things you need to know when purchasing homeowners’ insurance:

1. What’s covered in a basic homeowners’ policy.
2. How you determine how much coverage you need.
3. What optional coverages you need to add onto your policy.

In this blog post, we’ll cover three more things you need to know about homeowners’ insurance, according to Eric Smith, vice president of property and casualty at the St. Joseph Agency in Indianapolis.

What endorsements or riders should I include on my policy?

While your base policy covers your contents, there are certain items that have limits. Therefore, if you have a rare or high-value item like jewelry, decorative carpets, firearms, silver service, crystal, photography equipment or electronics, you may want to have your insurance company schedule it, says Smith. The reason you want to schedule the item is to make sure you have an agreed value (usually the appraised value of item) between you and the insurance company. “So if a loss were to occur, as long as the claim is covered, you would be paid at that dollar amount for that item,” says Smith.

What deductible limit should I set?

“You need to think of a homeowners’ policy as catastrophic coverage for your structure – at least on the property part,” Smith says. “Don’t think of it as something that you can make a small claim of $1,000.” Most insurance companies will cancel your policy renewal if you have more than two claims within five years. So don’t make a claim on something you can pay for out of pocket to get fixed. Generally, Smith recommends setting your deductible at $1,500 as a starting point.

How often should I review my policy with my insurance agent?

This depends on the type of agent that you have, Smith says. There are two types of agents:

• Captive agents work for one company, such as State Farm, Allstate and Farmers Insurance Group. They only sell policies for that one particular company.
• Independent agents work with a brokerage firm that has contracts with different insurance companies like Travelers, Safeco and Indiana Farmers. Independent agents can only sell policies for the insurance companies they are contracted with. They cannot sell policies for captive insurance companies.

Since premium rates for insurance companies can go up or down each year, depending upon their total amount of losses for the prior year, Smith recommends checking insurance rates every 3 to 4 years to see where the rates are at with all of the other insurance companies.

Additionally, at least every 3 to 4 years, you should make sure all of your coverages and liability limits are still adequate for your situation in life.

If you need to buy homeowners’ insurance, contact Eric Smith at 317-564-4949 or via email at esmith@stjosephagency.com.

Buying a new home and need a mortgage?

Grandview Lending in Indianapolis can help you with your needs. “I’ve been impressed with all of the individuals that I have worked with at Grandview Lending,” Smith says. “They respond when I need something and they have the expertise in the field. Mike Farrell (owner of Grandview Lending) is a standup guy. I would trust him to write my loan.”

Call 317.255.0062 and talk to the mortgage specialists at Grandview Lending. They can help you in securing a loan for your new home and walk you through the financial maze.

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