Protect Your Biggest Investment: A Comprehensive Guide to Homeowners Insurance

Your home is likely your most significant investment, and protecting it should be a top priority. Homeowners insurance is designed to safeguard your property against various risks, from natural disasters to accidents on your premises. At O1ne Mortgage, we understand the importance of securing the right coverage for your home. Call us at 213-732-3074 for any mortgage service needs. This guide will help you navigate the complexities of homeowners insurance and ensure you have the protection you need.

Understanding What’s Covered

Most standard homeowners insurance policies include several types of coverage:

• Liability Protection: Covers injuries or damages caused by you or your family members to others.
• Dwelling Coverage: Covers the cost of repairing or rebuilding your home.
• Personal Property Coverage: Covers personal belongings that are stolen, damaged, or destroyed by a covered event.
• Additional Living Expenses Coverage: Covers the cost of living elsewhere while your home is being repaired or rebuilt.

Standard policies typically cover events such as smoke, windstorms, hail, lightning, theft, falling objects, and certain types of water damage. However, they usually do not cover damage caused by earthquakes or floods, so you may need additional policies for these risks.

Estimating Your Coverage Requirements

Most mortgage lenders require homeowners insurance, but even if your home is paid off, it’s a wise investment. Here are some factors to consider when determining how much coverage you need:

• Rebuilding Costs: Calculate the cost of rebuilding your home by multiplying the average building cost per square foot in your area by your home’s square footage.
• Personal Belongings: Take an inventory of your belongings and assign a cash value to items like antiques, artwork, and electronics.
• Additional Living Expenses: Consider the costs of temporary housing, meals, moving expenses, and commuting if you need to live elsewhere during repairs.

Considering Add-On Coverage

Standard policies may not cover all your needs. Here are some additional coverages to consider:

• Dwelling Extras: Extended replacement coverage can increase your dwelling coverage by an extra 20%, and an inflation add-on will adjust your coverage annually to keep up with rising costs.
• Liability Extras: Consider purchasing $300,000 to $500,000 of liability coverage. An umbrella liability policy can provide higher coverage amounts and more robust protection.
• Personal Property Extras: Extend coverage for high-value items like electronics, artwork, and jewelry. Replacement cost coverage can ensure you receive enough to replace destroyed items with new equivalents.
• Specialty Insurance: If you live in an area prone to floods, earthquakes, mudslides, or sinkholes, consider purchasing specialty insurance policies.

Comparing Home Insurers

The average homeowners insurance premium in 2020 was $1,311. To find the best deal, gather the following information for quotes:

• The year your home was built
• Your home’s square footage
• The age and material of your roof
• Details of any detached structures like a garage or gazebo
• Information on home improvements

Collect quotes from multiple insurance companies, either through an insurance agent or online tools like Gabi. Compare premiums, deductibles, and coverage amounts to find the best policy for your needs.

Finding Ways to Save

Even if you already have a policy, there are ways to reduce your premium:

• Bundle Policies: Combine your home and auto insurance for up to a 25% discount.
• Increase Your Deductible: A higher deductible can lower your premium.
• Enhance Home Safety: Installing security systems or safety measures can reduce your risk and premium.
• Limit Claims: Avoid filing unnecessary claims to keep your premium low.
• Maintain Strong Credit: A good credit score can positively impact your insurance rates.

The Bottom Line

This guide covers the essential steps for finding the right homeowners insurance policy. Determine your coverage needs, compare insurers, and look for discounts to get the best rate. Remember, your credit health can also affect your insurance costs. At O1ne Mortgage, we are here to help you with all your mortgage service needs. Call us at 213-732-3074 to learn more about how we can assist you.

Learn More About Homeowners Insurance

Do You Have to Have Homeowners Insurance?
While not required by law, lenders typically mandate homeowners insurance to protect their financial interest in the property.

How Much Does Homeowners Insurance Cost?
The average annual premium is $1,411, according to the National Association of Insurance Commissioners.

What Does Flood Insurance Cover?
Flood insurance can save you thousands of dollars on damage caused by storms or other unpredictable disasters, even if you don’t live in a flood-prone area.

For more information and personalized assistance, contact O1ne Mortgage at 213-732-3074. We are committed to helping you protect your most valuable investment.