July 9, 2018
The Importance of Homeowner’s Insurance
It is an aspect of owning a home that often gets overlooked by many first-time buyers: homeowner’s insurance. Just like car insurance and health insurance, it is a necessary evil that must be bought in case of a tragedy. Just like any type of insurance, it is important to shop around, consider what one believes to be the most imperative for coverage, compare prices and plans in proportion to income. Let’s go over the basics of homeowner’s insurance while settling into your new home.
Florida has the highest average homeowner’s insurance premiums in the United States at $3,575 – far more than the second-highest, Louisiana, which is $2,979. This is no coincidence. Florida’s coastal geography, vulnerability to hurricanes, coastal erosion, sinkholes and constant lightning strikes have driven the insurance price tag to almost twice the national average of $1,228. For Gainesville, the average insurance premium is around $1,300.
There are many factors at play when purchasing homeowner’s Insurance, including physical location, insurance provider, and condition of both the inside and outside of the home. However, the aspect that is most easily manipulated is, by far, the insurance provider, which could range from well-known national companies, such as GEICO, State Farm, and Progressive, to non-profit, tax-exempt government entities such as Citizen’s Property Insurance Corp. They each offer different coverages at different premiums, so it is important to compare across not only policy plans, but also across companies.
Let’s tackle the coverages. The standard homeowner’s policy breaks down into two coverage types: property and liability. Property coverage normally covers your home’s infrastructure, any attachments, other infrastructure, personal property, and expenses accrued at the loss of your home’s functionality, such as the cost of a hotel should one experience a fire and need somewhere else to stay. Liability coverage, on the other hand, deals with personal liability coverage and medical payments coverage, which protects the homeowner should there be any sort of injury on their property.
It is important to note that earthquakes and floods, also known as acts of God, are usually excluded from standard policies, and so those who reside in areas prone to such disasters must acquire a special policy to protect their property. Homeowner’s insurance also does not cover damage caused by normal wear and tear or poor maintenance – that’s the job of a home warranty. However, basic policies tend to cover damage from hurricanes and tornadoes.
Like anything else with a big price tag, homeowner’s insurance is something that demands extensive research. Insurance contracts of any sort are oftentimes long-term, making it difficult, and sometimes expensive, to back out. Get in touch with neighbors, friends and anyone else who may be knowledgeable about homeowner’s insurance, and you can rest easy knowing your home is a safe one.