Homeowners insurance is a financial protection policy that pays a single payout amount if your home is damaged or destroyed by fire, weather, theft or vandalism, or other disasters. Most homeowners who have a mortgage are required by their mortgage company or bank to buy homeowners insurance. But there are different types of home insurance and it is important to learn what coverages you might need before making a decision. Understanding exactly what is and isn’t covered, and the coverage amounts for the policy’s different components, is very important before deciding on a policy.
Understanding Home Insurance
In an effort to better inform our customers, following is an overview of the basics of homeowners insurance for single-family homes. Apartment insurance and condo insurance have some key differences that we also cover here.
Components of Homeowners Insurance
Homeowners policies are actually a combination of four different insurance coverage types. This ensures that not only your home is covered, but also your belongings inside the home and other events that can affect you and your home.
- The home
- Your personal belongings and any contents in the home
- Protection to cover legal liability for accidents incurred by others at your house
- Coverage called loss of use to pay for temporary housing while your house gets repaired
Homeowners Insurance Costs
Homeowners insurance costs vary by state. No matter where you live, the easiest way to lower your homeowners insurance rate is to choose a policy with a higher deductible. The higher your deductible in the event of a claim, the lower your monthly premiums will be.
However there are are a few discounts available to make homeowners insurance cheaper. If you qualify for any of them, make sure to ask your insurer when getting a quote. Many home insurance companies offer discounts for:
- First-time homeowners
- Added security measures
- Non-smokers
- Couples
Home Insurance Companies Coverages
While home insurance companies typically offer policies offer in the four categories mentioned previously, it is important to understand specifically what is covered and under what circumstances. To get a better understanding of what kinds of events will trigger a payout on your home insurance, you first need to understand the two basic types of home insurance:
Named perils: Covers only the types of disasters named in the policy
Open perils: Covers all disasters except exclusions specifically named in the policy
The events that are commonly covered by homeowners insurance are:
- Fire
- Smoke
- Explosion
- Lightning
- Theft or vandalism
- Windstorm
- Hail
- Lightning
- Riot
- Vehicle collision
A named perils policy will cover the events above, while an open perils policy will cover them and also any peril not specifically named as an exclusion. It is important to understand that there are also various levels of named perils policies. A basic named perils policy will cover only the conditions listed above, whereas a broader policy will also add:
- Pipe freezes
- Weight of snow or ice
- Accidental water damage
- Falling objects
The most common named exclusions that are not covered by a homeowners insurance policy regardless of your insurance carrier are:
- Intentional acts
- Earthquakes
- Power failure
- War
- Nuclear explosion
- Flood
- Neglect
- Ordinance of law
- Intentional acts
To be covered in the event of an earthquake or flood, you will need to carry a separate flood insurance or earthquake insurance policy. The price of earthquake or flood insurance can vary widely given that there are areas that are at a much higher risk for these events when compared with others.
If you own an apartment or condo, you’ll need a homeowners insurance policy that falls into a different class. Condo insurance, or apartment insurance, protects the contents of your home and the ceiling, floors, and walls from certain types of damage. However damage to the apartment building itself is covered by a different policy held by the owner of the property.
About Monona, WI
Originally part of the Town of Blooming Grove, Monona was incorporated as a village on in 1938. The area had consisted mainly of farmland and summer homes before this. With more private homes and businesses dotting the area, it became time to incorporate. After becoming a village, the area developed many public services including police and fire protection, street maintenance, and the planning and development of sewer and water utilities. During the 1950s, the village grew from 2,544 to more than 8,000 residents. This made it the fastest growing area in the state during that decade.
The population boom necessitated expanding the village’s facilities and services. In 1963, the village built a community center and adjacent swimming pool in an area easily accessible to residents. In 1967, the first public library was built in the village. After Monona changed to city status in 1969, a City Hall was built across from the library. The building across from the library housed all city operations including the fire and police departments.
During the 1960s the area’s growth continued and there was a significant increase in commercial development in Monona. Monona annexed a substantial number of properties in the 1960’s and 1970’s for industrial, residential and commercial purposes. By the 1980’s, there was no additional land available for annexation when Monona became landlocked by the City of Madison and the bodies of water that surround the area.
In the 1970s and 1980s the area continued to grow and expand and previously undeveloped parts of Monona were developed and continue to grow today. With the completion of major U.S. Highway 12, the city continues to work to find the most suitable ways to develop and redevelop the area along the Broadway Corridor. The River Place, Pier 37, and Ahuska Park developments are the result of these efforts. Careful planning will continue into the next millennium as the city seeks to balance the interests of current residents, businesses, city government, and potential developers. In additions, environmental and economic concerns must be balanced to ensure a healthy future for Monona and its residents.
Homeowners Insurance Quotes
When working on qualifying a home for a mortgage, the homeowner is required to provide proof of insurance on the property before the lending bank can issue him or her that mortgage. The property insurance can be acquired by the lending bank or separately by the individual. Homeowners who prefer to get their own insurance policy have the opportunity to compare multiple offers and pick the plan that works best for their needs. If the homeowner does not have a policy that covers their property from loss or damages, the bank may obtain one for them at an extra cost. In this case, payments made toward a homeowners insurance policy are usually included in the monthly payments of the homeowner’s mortgage. The lending bank that receives the payment deposits the portion of the payment set aside for insurance coverage to an escrow account. When the insurance bill comes due, the amount owed is settled from this escrow account.
A homeowners insurance policy usually covers four incidents on the insured property – interior damage, exterior damage, loss or damage of personal assets/belongings, and injury that may occur while on the property. When a claim is made for any of these incidents, the homeowner is required to pay a deductible, which is the only out-of-pocket cost for the person insured. As an example, a claim might be made to an insurer in the event of a fire that occurred in a home. The cost to bring the property back to livable conditions might be estimated by a claims adjuster to be $15,000. When the claim is approved, the homeowner is informed of the amount of his or her deductible according to the policy agreement. The insurance company will issue a payment of the excess cost, minus the deductible amount. The higher the deductible on an insurance contract, the lower the monthly or annual premium will be for the home insurance policy.
Acts of war or acts of God such as earthquakes or floods are typically excluded from standard homeowners insurance policies. A homeowner who lives in an area that has a higher risk for these natural disasters may need to get separate coverage to insure his or her property from floods or earthquakes. Most basic homeowners insurance policies cover events like hurricanes and tornadoes.
Every homeowners insurance policy has a liability limit, which determines the total amount of coverage that the insured would be able to collect in the event an unfortunate incident occur. The standard limit for a homeowner policy is usually set at $100,000, but the policyholder has the option to opt for a higher limit. In the event of an insurance claim, the liability limit stipulates the percentage of the coverage amount that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live in temporary housing while the property is worked on.
Homeowners insurance policy is different from a home warranty. A home warranty is a contract taken out that provides for repairs or replacements of home systems and appliances such as ovens, water heaters, washers/dryers, and pools. These contracts usually expire after a certain time period, usually twelve months, and are not mandatory to have in order to be issued a mortgage. While homeowners insurance does not cover damages that result from poor maintenance or inevitable wear and tear, a home warranty can cover such issues.
A homeowners insurance policy differs from mortgage insurance, which is typically required for home buyers who make a down payment of less than 20% of the cost of the property. Mortgage insurance covers the lender for issuing a loan to a home buyer who otherwise might not be able to get the loan required given the lower down payment. To keep it simple, a homeowners insurance policy protects the homeowner and a mortgage insurance policy protects the lender.
Free Homeowners Insurance Quote
If you have done a little research you know that it is possible to buy homeowners insurance online, over the phone, or at a local office. All we will need are a few pieces of information to give you an accurate quote, including:
Who lives in the home?
We’ll ask a few basic questions about who will be in and out of the property, including whether or not you will be running a business from the home.
How was the home built?
You will need to provide details about your home’s construction, such as when the roof and utilities were last updated.
Who is the home owner?
Will you have a co-owner or co-applicant? Their social security number will be required to identify them.
Do you currently have home insurance?
Who is your current provider and how long have you been insured? This will allow us to get a complete picture of your claims history.
Once we have your answers, we’ll find the best homeowners insurance policy for you.
When You Need Homeowners Insurance
Homeowners insurance is for you if you own a home, vacation home, or are purchasing a home. Your mortgage lender will likely require you to get a policy to insure your property, plus you’ll want to safeguard what is likely your most valuable asset. Simply get a homeowners insurance quote online and we’ll help you get the coverages you need and take care of the details with your lender.
If you own a condo, townhouse, or row home you will need condo insurance instead. For renters living in an apartment, dorm room, condo, or house, we offer renters insurance to help protect your belongings. Renting a property to someone else? Contact us to learn about our specialized coverage for landlords.
Find the Best Policy
Homeowners insurance is designed to protect you from the things that can damage your home, belongings, or hurt you financially. It covers wind/hail damage, fires, lightning, theft, and more. Plus, it covers injuries that occur on your property and lawsuits against you, such as someone suing you because they were hurt at your home.
When you get your free homeowners insurance quote, many of your coverages will be automatically included. Plus, you can add even more. That’s just one of the many reasons we’re #1 in online home insurance quotes.* Get a quote today – we have expert agents standing by to guide you through your choices.
What Affects the Cost?
The cost of your homeowners coverage is largely determined by five factors:
Estimated replacement cost– This is not the same as the current tax assessment or market value of your home, and accounts for the actual cost to rebuild your home. For example, if your home was destroyed in a storm, how much would it cost to rebuild it? That amount is the replacement value. Materials and labor considered, as well as construction costs, inflation and the availability of building materials.
Age and condition– This is determined based on very specific details like building materials, age of the roof, and the furnace’s condition. For older homes, whether the building materials are still available and their current market price is also factored in.
Location– Risks like extreme weather, crime rate, and distance to a fire station can all have an effect on your rate. For example, you might pay more for your insurance if you live on waterfront property or if you’re located in an area prone to mud slides. Construction costs also vary by region, which also has an effect on your homeowners rate.
Safety devices– Dead bolt locks, security alarm systems, smoke detectors, and other home safety features will all help you stay safe and lower the cost of your home insurance policy.
Your deductible– In short, the lower your deductible, the higher your premium.
If you are searching for homeowners insurance in Madison, WI, choose the company that stands with integrity. Contact a Cliff Insurance Agency, Inc representative today!