Insurance 101 - Homeowners Insurance Coverage | The Ultimate Guide to Home Insurance

Insurance 101 - Homeowners Insurance Coverage | The Ultimate Guide to Home Insurance

When I first bought my house I wish that someone would have taught me the different types of insurance that they offer in what I was looking for because when I purchased the home insurance I just followed the natural flow someone referred another person I bought insurance from them and then I just kind of crossed my fingers and hoped it worked out today’s video we’re gonna go through the top five things you need to

Know about house insurance hey guys this is Mark Flockhart if you’re new here this channel is all about home auto all types of insurance and how you guys can learn the tips and tricks of how to get you the best rates on your insurance so if that’s interesting to you it might be a good idea to subscribe I will also put in the notes below a lot of the stuff we’re talking about today so that way you can read it as well if you want to read it just in write written form I’m

Trying to start a blog I’m just kind of created a website that I’ve started using so it’s kind of a tool for you guys to use hopefully it’s helpful if you do get good value out of it definitely let me know if you have other things you want me to talk about please leave that in the comments below as well according to the National Association of Insurance Commissioners the average cost and house insurance is eleven hundred and ninety two dollars per year keep in

Mind the prices do vary from state to state because if you’re in Kansas or Florida or Texas or Louisiana you guys are the highest in the nation so your averages are gonna be about three to five hundred dollars per year more than the national average so you’re looking at anywhere from fifteen hundred dollars per year up to about to almost two thousand dollars per year for house insurance now those states even though the high you will find some people there

That are only paying six or seven hundred dollars a year it really just depends on the location for example I am living in Michigan and my average is about twelve hundred dollars per year we’re pretty normal as far as the home insurance goes not so much on the auto but as far as that goes we’re great but I have people I ensure that our six hundred dollars four hundred dollars eight hundred dollars it’s not uncommon to be around that nine hundred dollar

Range even though the typical home is right around that eleven to twelve hundred dollar range location plays huge factor being in the city versus being in the country you would think that the city is more expensive and there are some factors if you’re in a high-risk area so the zip code has like a lot of theft and stuff like that you’re gonna have some stuff there but that’s kind of a separate piece theft

And all those claims are more so not really the amount of activity but it’s more whether you’ve cleaned that stuff right if you’re in the country you’re likely gonna pay a little bit higher of a premium reason that is is because you guys are gonna have less of a response time for any fire claims and that’s a huge thing so if the fire station is over here near the city you’re off in the country house starts on fire you call them help me help me help me

By the time they get there half of your house or all of your house has already burnt down we’re in the city they’re near everybody within ten minutes there at your house they’ve put the fire out and maybe the kitchen burnt up a little bit you’re talking about a ten thousand dollar claim versus a hundred and fifty thousand dollar claim there’s a huge difference so that is gonna play a very large factor the age of the home makes a big difference the older the house is

The riskier it is because the updates no one’s gonna dig up the plumbing and change it some people do there is a discount for that but that’s not common right if you have a house that’s built in 1968 that’s gonna naturally pull in a higher cost than a house built in 1998 your deductible plays a very very large piece now I prefer to stay with the common which the most common deductible that you’re gonna see is a thousand dollars

So if you have a house claim you out-of-pocket a thousand your insurance will pick up the rest if that’s a covered peril as they call it there’s two pieces of the deductible you have they’re all perils which covers pretty much everything except for wind and hail so it’s like fire vandalism theft any of those typical things that’s gonna happen you know your house burns down tomorrow that’s an all peril deductible and then you have wind and hail deductible which

Is usually wind and hail that’s the roof basically it covers the siding but it’s very rare that the siding is really the part that got damaged so if there’s a huge thunderstorm that comes through hail dropping everywhere you can actually pick a large deductible on either or most commonly you’re not going to be able to pick a larger deductible all perils unless you’re wind and hail deductible matches that or is higher so you’re not gonna be able to do like a

Five thousand all peril the duck table and a 1000 wins and he’ll it’s not common most companies will actually deny that type of a deductible if you did one thousand dollar deductible on your all peril deductible then you can probably put your wind and hail at twenty five hundred five thousand even ten thousand a lot of companies offer should you do it probably not most of the time that $1200 average range if you’re comfortable with that that’s gonna be a

Thousand dollar deductible on average that’s the most common thing that people do but just know if you’re trying to close on a house and they’re just saying we need to get the insurance down because we need to show that your your mortgage needs to show that you have more debt to income your mortgage person is gonna come to me and say how do we get this insurance down then that’s our first option I would rather not lower your coverages because I don’t want to

Under insure you I’d rather just have a larger deductible so I’m not gonna lower the house from a $200,000 house down to 150 because if it burns it down tomorrow I want it covered I’d rather have you out-of-pocket ten thousand dollars versus losing a hundred thousand dollars there’s a big difference same thing with liability I know they’re not have eeeh add a three hundred thousand liability when you were five hundred because we needed to get the

Price down rather raise that deductible so that the price lowers and then if it’s for closing yeah sure if you need to close it and you choose to put it back up the next day the next month whenever you can change those coverages like you do on car insurance so you could get that price close on the house and then if you change your mind and decide you know what I really am not comfortable with that I’d rather have that larger deductible you can raise

That typically your mortgage will pay the difference but just keep in mind they may ask you to pay the difference your credit history pays a factor in this so if you have good credit just like your mortgage loan you’re gonna get a better or lower interest rate same thing with insurance in most states they allow credit to be a factor so if you have really bad credit you’re gonna have a higher cost and your insurance good credit lower cost now this it

Doesn’t really play as big of a factor as people think we’re auto insurance it’s different in auto insurance because it’s so risky your credit you’re more likely to walk away from your car then you will walk away from your house that brings us to our second point which is understanding the values or the coverages so to speak there’s really only a few different coverages that our primary coverages in your home policy you have coverage a b c

D e and f what are those you’ve got coverage a that’s your dwelling that’s the physical house the cost to rebuild that house to rip it down take all the stuff away that’s that’s removing everything and then to build that same exact house how much that gonna cost keep in mind it’s not the value of the house the value of the house includes the land the location all the features that they put into it sure you’re gonna get those rebuilt but the cost to

Rebuild them is sometimes more expensive than the cost to buy them today so that’s one thing to be mindful of coverage B is going to be other structures so that’s gonna be if you have a shed in the backyard if you have a fence around the house if there’s a pool not attached to the house anything that’s disconnected from the house that’s gonna be your coverage B coverage C is going to be your actual property damage so the actual stuff you won’t my

Shoes my couch my TV the one thing that you always always always want to make sure that you get with that is something called replacement cost and what that is is it basically means that no matter how old the TV is how old the couch is how old anything is you’re gonna get full value that doesn’t mean you’re gonna get the full value that you paid for it it means you’re gonna get what today’s value is so you may bought a TV for a thousand dollars five years ago that TVs

Probably worth $200 today so if you don’t get full replacement cost you’re only gonna get $200 back if you have a fire imagine that times your whole house take 80% of what you own and you’re only getting 20 to 30% back that’s crazy it’s not worth it and it’s not expensive to do full replacement cost full replacement cost is gonna mean if that TV was a thousand dollars five years ago it’s probably the prices have gone down on TVs a little bit so you it’s probably

Only $800 or $600 in store today but it’s a lot better than getting a $200 cash back you’re gonna have enough to buy that exact replacement model of that TV same thing with your couch if it’s a ten-year-old couch you paid $1,500 for it if non replacement cost it’s only going to give you a fifty to a hundred dollars back we’re a full replacement cost is probably going to give you anywhere from 800 up to the 1500 if it was three

Thousand today then you’re gonna get the $3,000 back it’s full replacement cost coverage D is loss of use so it’s what it means loss of you if you let’s say you have a thirty thousand dollar claim and it’s in your kitchen right the kitchen caught fire it’s gonna take three months to replace that so you have to get moved out of the house or you have to live in the house if you choose to while they’re remodeling that kitchen what that’s gonna do is that’s gonna pay

Any living expenses that you incur because of that loss so if you have to go rent another house similar size and shape and it’s $1,500 a month then that’s part of that living expense it’s gonna pay that bill if you have to pay someone to come over mow the lawn because you can’t do it anymore because you just can’t get back to the house between the distance of your rental and work and all that if you can’t cook up the food like you used to for the next

Week or a month and a half then you have to they’re gonna cover those living expenses that you incur so that way you’re not gonna actually pay out-of-pocket all of these extra pieces it’s covered with that policy normally they’re gonna give you quite a bit it’s usually 20 30 even $50,000 for that coverage which doesn’t seem like a lot especially if your house is like a 200 or 300 thousand dollar house but think about it if you had let’s just say

Thirty six thousand dollars and it took your your rebuild of your house 12 months which it never should but let’s just say it did right took you 12 months that’s $3,000 a month to live off of of 24 36 thousand per year and so our total if it took you 12 months to do that it’s usually enough in most cases that coverage is gonna cover roughly about 5,000 on average per month and you’re never gonna use that so just know that coverage it doesn’t have to be

High it’s really a mostly defaulted so then coverage II is going to be personal liability that’s if somebody’s going to sue you for any reason anything you’re liable for the easiest way to think of it is it’s not only inside your house it’s actually outside of your house as well so if you’re at the zoo and you drop the alka-seltzer in the monkey cage right and they eats it and it dies they’re gonna sue you because they’re they’re

Gonna want that monkey to either have all the medical bills paid for or replace him to go purchase another one that’s three hundred thousand dollars to ship them and all that stuff so that’s gonna go towards your home liability if you have a friend over and they trip down the stairs and they get hurt and it’s fifty thousand dollars worth of medical in your medical payments that’s the next coverage coming up doesn’t pay enough of that which it

Won’t they’re gonna have to sue you they’re gonna sue your insurance not you that’s the reason you have the insurance is they’re likely gonna go after that liability now keep in mind if you have more assets oh I own a Ferrari and I have a really nice million dollar house and that’s paid for you should be looking at a lot higher than a half a million dollar liability you will probably max it out at a million and then you’ll get something

Called an umbrella which is 1 million two million up to ten million even and it can go higher but then you’re getting the more specialized companies nice pieces coverage F which is your medical payments or medical coverage it doesn’t cover you or direct family that live in the house so it’s more so if like friends or family are over for a visit and they get injured they fall down the steps break an arm it’s four thousand dollars for their deductible through

Their medical and that medical that you’ve chosen let’s say you chose five thousand as your coverage is gonna cover that bill so they don’t have to sue you they don’t have to sue your insurance it’s basically paying for a reason for them not to have to go after you what coverage should you carry this is so so simple for you to calculate the average across the u.s. some states are a little bit less and if yes if you have a really nice home and you have special features

Crown molding everywhere granite countertops really upgraded stuff it’s gonna be more but typically the ease of the easy way to calculate it is take the square footage so we’ll say a 2,000 square foot house multiply it by about a hundred and fifty to 106 two dollars we’ll use 150 in most examples $300,000 to insure a 2,000 square foot house now if it’s a brick home that’s a different type of material so that’s going to take longer to

Rebuild and that’s a lot more labor-intensive so something like that you’re gonna want to do closer to like 160 to 180 per square foot as far as calculating that and that’s the major things companies look at is how large of a house is it square footage that’s above ground so if you walk in the front door if you have a basement that walks out that’s not above ground so that doesn’t count for square footage it’s anything that’s above ground and that’s

The square footage that they’re gonna base it off of take note of everything that you have so do you have specialized stuff in your house like built-in cabinets built-in bookcases you’ve got Jacuzzi towels you’ve got speakers in the ceiling those are all additional pieces that aren’t typically calculated in it unless you are gonna speak up and say something if your agents smart they’re gonna pull up your house on Zillow or online and if there’s photos

The kind of browse through them and make sure that they’re not missing pieces so we’ve got our value so our 2000 square-foot house is $300,000 for dwelling a ok the coverage separate structures depending on the company is either 2 or 10 percent more often it’s 10 percent it’s gonna be 30 thousand for the shed and the fence and all that now you can raise that if you want so that’s not going to make a big deal but if you have like a pole barn in the back you’re

Gonna want to notate that and then raise that coverage B up to a higher amount that’s sixty or seventy thousand that it cost to rebuild that pole barn personal property it’s always ridiculously high don’t bother with this coverage it’s gonna be a hundred and fifty two hundred thousand dollars it’s crazy but if you lower it nine times out of ten it doesn’t even change the price so let it be as high as it wants just make sure you have enough to cover your

Personal belonging loss of use same situation usually defaults a little bit higher than average not a big price changer so there’s no point even playing with this coverage just make sure you have enough that you could live on for at least three to six months if something did happen and you had to move out of the house medical payments more often than not we’re going to do five thousand if you have some extra money you don’t mind having a little bit

Your policy than shirt 10,000 maybe good but usually it stops right around that $10,000 range mainly because the next part is going to be the liability portion nine times out of 10 I quote 500,000 liability I just want you to be protected as well as possible if you have a lower income a little bit less of a house then sure you can bump down to 300,000 liability as long as you have enough less assets than what they’re gonna go after you for so that way

They’ll go after the insurance and not you if you have more like I mentioned earlier then make sure you go higher up to a million but more often than not you’re gonna keep that 500,000 liability and then you’re just gonna add an umbrella on top of that because the umbrella is gonna give you the million two million three million dollar coverage and it’s not gonna stop at the house it’s gonna cover your auto liability your car your home liability

Anything that you’re doing it’s going to umbrella that’s why it’s called umbrella it’s gonna over cover all of your assets that way if something happens it’s cheaper to buy that than it is to up the home and that something happens outside of the home where it’s not tied to that and then the umbrella kicks in and that’s gonna give you a better benefit the third piece I hope you’re staying with me if this is too much let me know I can make this into multiple videos I

Am going to go in-depth with some computer screenshots of some Zillow things and show you different types of houses in one of the next videos otherwise the third pieces don’t accept the referral and what that means is when you go and purchase a house your Realtor is gonna refer you to an insurance person your mortgage person is going to refer you to an insurance person and I want to kind of preface this because I told my wife this and she’s like what

You get referrals from them all the time I’m like yes I know but the reason I’m saying that is and I’m really moreso saying do some research on the back end more often than not a person will get a referral from the realtor because they trust them and that realtor sometimes works with a really good more a really good insurance person but a lot of the times they’re all just trying to build a network where I’ll give you a lead and you give me a lead and a lot of the

Times or half of the time I would say they don’t really know that person they’re just given the referral because they’re really nice they had a really good meeting with them maybe maybe twice they might have just become Facebook friends and that guy brings me Donuts every month right that’s really the thing about referrals you got to do some research that way you’re not gonna just jump in because I’ll tell you straight up seven out of ten people when

I get a referral purchase that’s the numbers the more referrals that you get the higher converting they are is because you’re not gonna worry about shopping everywhere you’re just gonna go to that one person if the price sounded okay or if you’re really close to the time you had to close on the house then you got stuck you bought that policy and a couple years later you may think about it like wait did I make the right move so do a little bit of research maybe

Google the person or Google their company and just see what kind of reviews they have and that kind of leads me into the fourth point which is do your own research this doesn’t have to be a 30 40 50 hour long thing of you doing research pull up a Zillow listing or a redfin listing on your house look at the square footage take the value you can really lit you can literally do this on a piece of paper take this here footage times 150 and then 10% for

Separate structures X percent for this X percent for that and you can literally just write down what it should be as far as the coverages go and then you can check a couple different places what I typically do is because I work with an agency that checks up to 17 different places so when you call me that’s one of the reasons we have a lot higher of a conversion is because when I’m checking it I’m telling you a triple-a and progressive and citizens and all those

Guys Westfield and and all the major carriers and I’m gonna be able to just show you the differences and let you kind of decide what’s the best fit for you okay well triple-a doesn’t care about the pit bull in this state but progressive does so we know progressives not the option for you you have a pool triple-a doesn’t care about the pool westfield doesn’t care about the pool they rate for them they may have an extra charge but then when you go to

Those other companies some companies don’t want any pools so you join a company they send an inspector out and all of a sudden you’re dealing with the cancellation doing a little bit of research in the background knowing your coverages it’s a really good thing to have I’ll try to create a cheat sheet for you and I’ll put a link below that way you can go right to my website and then you can download that we that way you’ll have an idea of what

You’re looking for with that being said the last part is gonna be the bundle discussion mark don’t no no no don’t leave don’t leave yet don’t leave please I want to tell you it’s so important aah okay the first thing a lot of you probably thought of just now was like no you’re trying to sell me on a bundle I’m not doing bundles right I like my guy who does my auto I like my God to do the house I’m just gonna do whatever does that okay I get that here’s what I’m

Saying if you love the guy that does your Auto turn this video off now go talk to him about your house bundle your house in your auto no matter what is best for you if you are shopping for home insurance and you don’t call the guy that does your auto if you like him or her then you’re doing them a disservice more than you would by saying no to other people put your house with them if it’s a hundred bucks more and you really think they’re good fit for

You pay the extra hundred dollars it is worth it to have the right agent that will stand beside you when you have a claim so having someone that can fight for you in a battle like that especially if you have a house fire one hundred thousand two hundred thousand dollar claim if your agent knows what they’re doing knows what coverages they gave you and is willing to take the extra 20 minutes out of their day to fight for you then you know you got a good one pay

The extra hundred dollars to be with that person it is worth it I’m telling you right now with that being said the bundle saves you 20 to 30 percent off home and auto so take whatever you’re paying on your auto and knock off to a fifteen percent twenty percent or whatever that company’s discount is that’s huge so you’re gonna save money they’re in here it’s worth it no matter which way you go it’s a bonus round all right we

Made it just let’s see in the fates I’m sorry all right so I wanted to go over the most important things that a lot of you want to hear discounts I’m gonna rattle through some discounts that I think you guys should be mindful of and don’t worry about writing them down right now I’m gonna put them in the description below first-time home buyer if you’re a first-time home buyer you usually will get a discount there are some companies out there that I’ve

Worked with that give hundred of dollars off if you’re a first-time homebuyer updating the roof that’s huge if you have a new roof you’re gonna have to prove or get documentation showing that the roof is new but it’s gonna help a lot if you’ve updated the electrical the plumbing the heater all of that stuff matters going paperless also paying in full those are two discounts that just have to do with the billing you actually pay the bill yourself

Sometimes they give it as count for that versus going through the mortgage because they’re submitting all the paperwork and dealing with the mortgage company so that’s more of a service and you’re paying for that extra service being part of an affinity group so that means you’re part of a credit union you’re part of a triple-a membership or you have RV membership club or harley-davidson membership club any of those things there’s a whole bunch of

Them we’ll give you a discount for that now keep in mind you don’t have to necessarily know what they are now so when you get the price from your agent ask them is there any additional affinity groups that I can be part of that will give me an additional discount having high credit like we said before credit matters so if you have really good credit they’re gonna give you a little bit better of a deal doing in your early shopper a little bit

Sometimes they do sometimes they don’t being a nonsmoker not just you it’s anyone in the house so if there’s four people in the house if none of them smoke they’re gonna give you a discount for that mainly because it’s a lower risk there’s less chance of a fire having a security system especially one that notifies the police so if it’s a central security system and there’s gonna be an alarm going off when someone tried to break in the house they smash

The window and there’s sensors that go off because of that if you have one that notifies the police digit station that’s going to give you more of a discount same thing with fire so if you have a fire extinguisher you’re gonna get a discount for that but also if you have a fire alarm system that either one notifies sends an alarm out we move and so that’s going off right that’s that’s a discount if it notifies the fire station that’s another discount quicker

Response time they’re gonna get to the house quicker versus the half hour later where half the house is gone tying in to that is something called smart devices so if you have a smart home where your thermostat connects to your cell phone or ring doorbell where it has a camera on it you have the central fire alarm system or notifies them you got the central I mean having those things are going to be a high safety feature and that’s gonna give you a lower price

On the cost and the last major one is having a hail resistant roof if you have a hill resistant roof that makes a huge difference with insurance if you’re in states like Pennsylvania and anywhere near the coast they also give one for having hail resistant shutters so storm shutters that way they’re gonna close off the glass if hail comes through or wind comes through and it’s gonna protect the home essentially the more stuff features that you have that are

Gonna protect your house are going to be beneficial anyways guys if you aren’t interested and don’t have a specific agent that you love if you love them this is my agent and the video give me the thumbs up have a great time if you don’t have that agent he’s just not pulling your heartstrings she’s just not doing you’re not sure if they’re doing the right thing right I will put a link in the description below that way if you are interested in getting a quote

Typically right now what it does is it comes directly to me so it may take a day for us to respond but what it does is I’ll take that information and I’ll look at it or pass it on to one of my guys and they’ll actually work up quotes for you either way don’t forget this match the like button share the video with anyone that you know is buying a house if they are buying the house they need to see this this could save them several hundred dollars a year on their

Insurance it’s definitely worth it just to give them the advice just so that they know what they’re walking into alright guys I will see you in the next one

Post a Comment

Previous Post Next Post