Thursday, September 27, 2018
By Kelsey Comyack
Why Have Insurance

Why Have Insurance?

guest blogger: Nicole Moody


     Can you ever recall a burglary victim mention, “I knew someone would break into my home today while I was at work, so I left my valuables behind and went to work anyways?” Most likely not. But what you may hear is the victim, fortunately, had homeowners insurance and will be compensated for the stolen or damaged items. Insurance is the preparation made for life’s most unexpected devastation. If you are a first time home buyer, don’t worry! Nobody knows the importance of home insurance like your mortgage lender, but once your home is paid off, it is important to continue your insurance, so you are not potentially left in the ruins of the biggest investment of your life. Variables to keep in mind include, what exactly do you want covered, what is or is not insurable and of course comparing insurance companies.

    What is covered?

If you are still paying on your home, your home is probably insured for current market value. This simply means if your home is worth $100,000 and is destroyed in a flood, you / the lender will get back exactly $100,000 to cover the loss. In this case, your lender will be satisfied as they come out even, but you are now left with the ruins of a house to clean up out of pocket. Here is where it would be wise to have added “replacement cost” coverage to assist in demolition costs or even “extended value” coverage to protect you from the laws of supply and demand when prices rise quickly during natural disaster restoration periods. Other additions that you may include in your insurance plan are “liability” to protect you if someone else is hurt on your property and chooses to sue you or even “personal property protection” to protect the “stuff’ you value in your home. This is all considerations to speak with your insurance agent about to choose the plan that works best for your home and financial situation.

    What is not covered in homeowner's insurance?

Standard homeowner’s insurance policies generally do not insure against floods, earthquakes, among other natural disasters. If you live in these high-risk environments, your lender will probably require you to purchase additional insurance for specific hazard coverage, but even if you are not required, consider asking your provider what those plans may cover in the case a disastrous event were to happen in your area. These additional coverages may end up being a very small price of comfort when disaster strikes.

    Considerations when comparing insurance companies.

Notice it states, comparing insurance companies and not finding one as they are a dime a dozen as I am sure you have heard the saying. If you can’t think of at least three off the top of your head, just ponder some of the best commercials on television, at least one of those is bound to be for insurance. From there, talk to trusted friends and relatives about who they chose and the important elements they get from their insurance providers. Some providers offer multiple insurance types and will give special rates if you hold all of your policies with their company. For example, if you have homeowners insurance with one company and car insurance with another, it may be more affordable to move both to the same company. Other discounts may be included if you have an alarm system, live in a gated community or even have a sprinkler system. Once you have it narrowed down always triple check with your state insurance office to see if the company you are considering is compliant with your territory.

    After your mortgage is paid off, only you can decide what the peace of mind is worth to you in the consideration of homeowner’s insurance. But once you have examined these simple elements of insurance, you should have a better grasp of what you have to value in your home.


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Jeff Cook

Jeff Cook Real Estate

Charleston | Columbia | Greenville