DISB Commissioner Offers Consumer Tips on Homeowner's and Renter's Insurance (Cont.)

Important Considerations for all Homeowners/Renters

Consumers should understand the major factors that affect their homeowner's/renter's insurance costs:

Where a consumer lives makes a big difference in the cost of coverage. People in states prone to hurricanes, high winds and/or hail typically pay higher premiums for homeowner's insurance, as those risk factors have a big impact on insurance costs. According to the most recent NAIC data, in 2003 the average cost to insure a home was $668.
Many consumers are not aware that they have the option to insure their home and belongings for either the replacement cost or the actual cash value. Actual cash value is the amount it would take to repair a home or replace damaged possessions after factoring in depreciation. Replacement cost is the amount it would take to repair a home with materials of similar kind and quality, or to purchase new possessions without deducting for depreciation. Understandably, insuring property to cover replacement costs is more expensive than insuring it for its actual cash value, but may be worth the difference if a consumer can afford the higher premiums."
Another simple tip that can save consumers time and aggravation if they ever need to file a claim: make an inventory of personal belongings and save receipts for major items, along with a photograph or video of each room. This documentation should be stored in a safe place outside the home, such as a safe deposit box, in case the dwelling is destroyed."
As many consumers learned from last year's violent hurricane season, damage to a home or belongings caused by flooding is NOT typically included in a homeowner's policy. Consumers who live in areas prone to flooding should inquire about flood insurance through the federal government's National Flood Insurance Program (NFIP)."
People who own expensive valuables-like jewelry, antiques or art-will probably want to purchase an endorsement to their homeowner's policy, as these types of valuables are typically not covered by basic policies.

Tips to Help Consumers Lower their Homeowner's or Renter's Premiums

Many factors that affect insurance costs are within the control of consumers:

Shop around and compare the costs of comparable coverage from different insurers to get the best value.
Install smoke detectors in key locations; keep fire extinguishers handy, especially in the kitchen.
Install dead-bolt locks and a burglar alarm system, particularly one that directly contact the police or fire department or an external monitoring service.
Keep up a solid credit history, as many insurance companies offer better rates to individuals with good credit ratings.
If you can absorb the higher out of pocket expenses in the event of a loss, select a policy with a higher deductible (the amount not reimbursed by your insurance); the higher the deductible, the lower the premium.
Consolidate homeowner's and auto policies with the same insurer to qualify for a multi-policy discount.

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