Home owner’s insurance. Are they all created equal?
Is your policy the same as your neighbor’s policy? No, they are not all created equal. There are so many different factors that go into a home insurance policy. Stop looking at only the price. That’s the last thing you want to be looking at to make sure you’re covered properly.
Let’s List Some Things That Could Be Different:
Actual cash value verse replacement cost.
We just did a video & blog post about this here. Do you want your things completely replaced or do you want to get depreciated value?
HO-3 policy verse HO-5 policy.
This can mean a world of difference when you have a claim. In very simple terms, all that means is if it’s not specifically covered, then you’re not going to have coverage in a claim. Versus a HO-5, if it’s not specifically excluded, then it’s going to be covered. That’s a huge difference when it comes to a claim that you want to be covered one hundred percent.
Sewer line coverage.
What happens when the sewage line going from the street up to your house breaks? And it floods your yard and it needs to be replaced? What are you going to do then? Does your home insurance cover that?
Water backup coverage.
What happens when your sump pump fails? What happens when your toilet overflows and floods your house? All of these things do not come standard on a normal home insurance policy.
What happens when your dog attacks someone and causes tons of medical injuries? Is a liability on your home insurance going to pay for that? Or is your specific breed of dog excluded?
Stop Worrying About Price!
Like I said in the beginning, the last thing you should be worried about is getting the cheapest price. Saving a hundred dollars a year on your home insurance. That’s a good thing, but the first thing you should be focusing on is what is actually covered and what is not covered.
When you go buy a new home and your mortgage broker says, “Hey, I actually found this policy that’s $150 cheaper a year.” Don’t say, “Okay, great. Sign me up.” First, pull out your current policy and pull out the policy that’s being offered, and compare the coverage. Make sure you’re getting the coverage that you need, specific to your own individual needs.
So no, home insurance policies are not created equal. There are huge differences from policy to policy, and company to company. Make sure you check with an independent broker and make sure they break down your policy, and make sure you have the right coverage for your specific needs.