The Importance of Accuracy & Honesty in Your Claims

Honesty is the best policy, right? So when it comes time to file any paperwork regarding homeowner’s insurance, be truthful and as accurate as possible. It’s like the Golden Rule of homeowner’s insurance basics. If you provide false information when filing a claim it can be grounds for your provider to cancel your policy.

If you provide false information when purchasing homeowner’s insurance and the company discovers this at a later date, it can also be grounds for terminating your coverage. Needless to say, these are situations that no one wants to have to deal with. They can cause you much difficulty financially and make it difficult to get insurance in the future.

If a contractor gives you a price quote, don’t tell your insurance company it is more than the figure quoted. Don’t provide false documents to try and get a few extra bucks. And don’t try and “pad the bill” and misrepresent the value of damaged or lost property as more than it actually is.

Cancellation Versus Non Renewal

When shopping for an online homeowners insurance quote, it is important to understand the difference between cancellation and non-renewal of a policy to assure you get the best rates. While the end result is the same—the homeowner is not insured—the reasons and results on future premiums can be very different.

• Cancellation. After 60 days, an insurance policy can only be cancelled due to non-payment of the premium or serious misrepresentation of information on the insurance application. Cancellation of a policy typically is due to an error, fraud or other homeowner-controlled action such as failure to pay.
• Non-Renewal. Unlike cancellation, non-renewal may not be under the control of the homeowner whatsoever. For example, the insurance company may decide to stop writing policies or reduce the number of existing policies in an area when it could lead to large claims or risk exposure. On the other hand, an underwriter may also decide not to renew a policy due to items under the control of the homeowner. Common reasons for non-renewal may include:
  • Failure to properly repair and/or maintain the property
  • Acquiring a violent pet
  • Excessive claim history

What To Do If Your Policy Will Not Be Renewed

Companies have the right to choose not to renew your insurance policy once it expires. Depending on your state, they must notify you within a certain time period before the current policy ends to let you know why. Sometimes a company simply chooses to reduce the number of policies they provide in given area. Other times it could be due to the company discontinuing a particular type of insurance policy.

If this happens to you, don’t waste time. Once you know your current coverage will not be renewed, start getting home insurance quotes from other companies. You want to make sure that you have a new plan in place before the existing one expires so there is not time in between during which you are not covered.

You can start by using a reliable site like QuoteScout.com to get a wide variety of homeowner’s insurance quotes online. The faster you act the better your chances of finding a new policy in time are. You don’t want to rush at the last minute and then settle for a less-than-ideal policy because you were going to be without insurance.

Special Homeowners Insurance Quotes Online

More homeowners are finding the need for special homeowners insurance quotes online, especially when a major underwriter leaves the area or stops writing new policies like in Louisiana or Florida after the storms. However, there are many reasons the average homeowner may find the need for specialized homeowners insurance quotes. Many towns may have only one provider that covers certain hard to insure situations, this includes the following:

• Flood Insurance
• Older Homes
• Home Business
• Partial Use of Home or Equipment for Business Purposes
• Mobile or Pre-Manufactured Homes
• Condominiums
• Multiple Residence Properties
• Bad Credit
• Extensive Prior Claim History
• Cancellation of Policy or No Insurance
• Major Remodeling of Home

Replacement Vs. Cash Value

Property values fluctuate all the time, and so does the cost of building materials. So something you should take into consideration when looking at homeowner’s insurance policies is replacement value versus cash value. Cash value will provide you with a settlement based on the value of the property in question minus depreciation.

Replacement value takes into consideration inflation, the cost of rebuilding/replacing and does not subtract for depreciation over time. What you paid for your home five years ago may not be enough to rebuild on based on contractor rates, cost of building materials and more today.

A high definition television you purchased two years ago for $1,500 might only be valued at $800 today due to depreciation. If your plan is for replacement value, you won’t have to pay the difference out of pocket. But this option tends to make your homeowners insurance rates a little higher, so it is a judgment call based on what you can afford to pay at a given time.

Decoding Home Insurance Quotes

The first step to decoding home insurance quotes is to understand the basics about policy types. It's easy with these standard classifications:

HO-1: This is a basic policy that provides protection for fire, lightning, hail, windstorm, explosion, riot, damage to your home from a vehicle or aircraft, smoke, vandalism, theft or volcano. The important consideration when buying HO-1 insurance is to fully understand what is not covered so you aren't caught unprepared in the event of a loss.

HO-2: The HO-2 policy provides protection for everything listed in HO-1 plus falling objects, damage due to the weight of ice, accidental flooding due to broken pipes or other items in the home, freezing of household systems or appliances, damage due to artificial current and other perils excluding flood, earthquakes, war, and others.

HO-3: A comprehensive policy, this will cover everything except those items specifically mentioned in the policy itself. It is a common choice for the homeowner desiring full protection.

HO-4: Also known as renters insurance, this policy only covers possessions. It's a good extension policy for those with children away at college.

HO-6: Comparable to the HO-2 policy, this is designed with the unique needs of condo owners.

HO-8: An alternative policy designed specifically for those with older homes. Replacement value may not be available on an HO-8 policy, but the premiums tend to be more affordable.

Receipts & Documentation

Homeowner’s Insurance Guide 101: one of the most common reasons for someone not getting the dollar amount you were hoping for when filing a home insurance claim for personal property is lack of documentation. Do you save your receipts or toss them in the trash along with the shopping bag and packaging that came with your purchase? More often than not people discard these.

You don’t have to go overboard and retain receipts for a spare pair of shoelaces or a $10 hat. But more expensive items like televisions, computers, artwork, large furniture and more should be your main focus. You want to make sure that items that would cost a significant amount of money to repair or replace are the ones that you retain receipts for. That way you have documentation that you can provide your insurance company with if needed.

It is best to keep these in a fireproof box or safe deposit box so that if something happens to your home, the receipts are safe. Do this with appraisal documentation of valuables like jewelry as well.

Homeowners Insurance or Extended Product Warranty?

Many people turn down extended warranty plans on purchases because they have homeowner’s insurance and believe that the item will be covered under that. Often times it may be, but not always. That is why it is important to know exactly what type of coverage you have for certain possessions and what is being offered in an extended warranty at the time of purchase.

If the manufacturer or retailer is offering technical support as well as replacement or repairs, it may be worth it. You have to judge for yourself if there is a likelihood that you will need technical support with the product. You also should consider the homeowner’s insurance deductible on your plan versus the cost of an extended warranty or service plan.

In some cases your typical homeowner’s insurance will provide you with the coverage you need. In other instances it might be better to get the added protection of a product service plan.

Get Valuables Professionally Appraised

Understanding homeowner’s insurance is important for your own protection. Many policies will include insurance for personal possessions in your home, but do you know exactly what is covered? It is a good idea to find out. Make sure you know everything that is covered under your policy.

You also want to have valuables like jewelry appraised and documented by a professional and then give that information to your insurance provider promptly. This way you are not struggling to prove the value of an item if you have to file a claim later on.

Here are a couple things you should double check to make sure you are insured for:

• Jewelry
• Artwork such as paintings, sculptures, etc.
• Expensive electronic equipment like computers, home media devices, etc.

Proper Notice Before Renovating

Timing is everything, right? Pay your bills on time and you keep your credit in good standing. Show up to work on time and you keep the boss happy. Well letting your homeowner’s insurance provider know about any changes to your home will keep both of you very happy.

Don’t wait until after you have already renovated a section of your home to inform the company of changes to your home. Contact your company and make sure they are aware of changes being made so you know that you will be covered. The longer you wait, the more complicated the claims process can become. You run the risk of having to wait a long time for a settlement or even not getting one at all.

Being punctual and always being prepared has always worked for the Boy Scouts. It is a good way to approach your homeowner’s insurance as well.