10 Homeowners Insurance Tips the Pros Want You to Know


Reading time: 5 minutes 

Owning a home is a grand adventure. Some days, you fix the house. Some days, the house destroys your bank account with flood damage. However, you can save your home – and your wallet – with the help of homeowners insurance.

Insurance can be complex, but having the right coverage, agent, and carrier can help you navigate any surprise claims. Recently, we welcomed Michelle O'Connor of O'Connor Insurance Associates Inc. to the vipHome Podcast to find out what new – and existing – homeowners need to know about their homeowners insurance.

Michelle has more than 25 years of experience in the insurance industry and has owned an agency for more than two decades with her husband. O'Connor Insurance Associates Inc. specializes in personal, business, life, and disability insurance, which they provide to more than 1,500 clients.

Watch the full episode below, and read on to have your homeowners insurance coverage explained. 

 1. Not all insurance policies are the same. 

Standard policies include coverage of property damage and liability from an unexpected event, such as severe weather. The "property" is your dwelling or the actual structure you're purchasing. Personal property includes all the items inside the home that you'd take with you after a home purchase. Liability coverage protects you if something happens to a guest visiting the property.

Most insurers offer policies called "HO3," which are the standard homeowners insurance policies. Comprehensive policies are called "HE7 with the 21."

"That sounds like total insuranceez," laughs Michelle. "The best way to explain it is the 'HE7 with the 21' is like the Cadillac."

Talk to an agent to find the best policy for you.

The HE7 with the 21 policy gives a homeowner the maximum coverage available in the form, which includes issues such as sewer and drain backup problems.

"If your toilet overflows and leaks through the house, that's covered on the HE7 with the 21 standard," says Michelle. "You have to add that coverage to the HO3."

Before deciding on your policy, check with your agent for the best insurance rates.

"In some instances, the HE7 with the 21 can actually be the same or not that much more than the HO3," says Michelle. "It's really just a few extra dollars, and the extra coverage you get is worth it."

2. Insurance is state-specific.

Insurance differs by state.

"If you moved from North Carolina to South Carolina, which folks do every day, we have to write a completely new policy for you," says Michelle. "The laws and the coverages in that state are different than the state of North Carolina, and New Jersey has its own set of interesting laws as well."

3. Take the time to explain your needs and understand your coverage.

Have an in-depth conversation about your insurance coverage.

"The mistake I really see people making is not taking the time to truly understand it and dig into their policy," says Michelle.

Just a few minutes can make all the difference as Michelle doesn't see many clients having excessive coverage but rather the reverse.

"People want to make a quick five-minute call to the agency," says Michelle. "They don't really want to take that extra time to understand and let us ask the questions that we need to, to make sure they get the coverage they need."

 4. Review your policy at least once a year.

Review your policy once a year.

"Sometimes you make changes you didn't even realize were going to impact your insurance," says Michelle.

This includes major additions to your home. Even jewelry or gifted items can result in revisions to your insurance policy.

"If you told me that your great grandmother had left you a diamond ring that was quite valuable, then we would want to add some coverage on there for that," says Michelle. "I'd want you to understand what was covered under the home policy, if you didn't."

A quick, 20-minute call can help to update your policy and make sure you have the right amount of insurance coverage for your property and personal possessions.

5.  Do not take the lowest deductible.  

Save money by raising your deductible.

The higher the deductible, the lower your insurance payments will be. If you can comfortably write a check for the deductible amount, then do not pick a deductible below that amount.For example, if you can write a $1,000 check because you keep that amount in savings, then consider at least a $1,000 deductible.If you take smaller deductibles, you are paying more for your insurance than you should.

A typical deductible for home insurance is between $500 to $1,000, but many of Michelle's clients choose a $1,500 deductible or even a $2,500 one. Along with your annual review of your policy, Michelle also suggests evaluating your deductible amount.

"You may want to increase or decrease your deductible depending on the financial situation that you're in," adds Michelle.

6. You don't have to be in a flood plain to need flood insurance.

Flooding happens in many areas, not just around rivers and lakes.

 Assess your geography before you decide not to buy a flood policy.

"Flood is not covered under any standard home policy," says Michelle. "You have to purchase a separate policy for it."

However, flood areas aren't limited to places where bodies of water exist. Recently, Michelle has seen instances in North Carolina and other southern states where flooding becomes an issue when the ground fails to absorb rapidly falling rainwater.

"Even not being in a flood plain, or having a pond in your backyard, flood insurance should still be a serious consideration," says Michelle.

 7. Do not confuse flood insurance with water damage. 

Flood insurance covers natural rising waters that occur outside the home. Mishaps and malfunctions that happen inside your home are not part of flood insurance.

"If you leave the water running, that's covered on your home policy," says Michelle. "If your toilet overflows, though, and it's considered coming up from the sewer and or the drains, that's actually a separate coverage." 

8. Contact your insurance agent before you start any home improvement projects. 

Before you start a home improvement project, call your agent.

While homeowners may be hesitant to reach out to their insurance agents, Michelle assures an agent wants to answer your questions. In fact, agents might be able to help homeowners save money and reduce the risk of claims on their policy.

"A good example of that is when you're getting ready to do a kitchen remodel and hiring contractors," says Michelle. "There's a lot involved there. Now, I know the insurance requirements that contractors need to have, but a lot of my homeowners don't."

Homeowners need to make sure contractors have insurance and the right kind of insurance for the project. Also, homeowners should ask for a certificate of insurance before hiring the contractor

Obtain a certificate of insurance from your contractor.

If the contractor has the proper coverage and makes a mistake during or on the project that causes damage to the home, the damage may be covered under the contractor's policy rather than your home insurance.

Says Michelle, "You can send the certificate of insurance to your agent to make sure the contractor is insured properly."

 9. Your insurance agent should be the first call after an incident. 

Do you need to file a claim?

Especially if you have an independent agent.

"We don't have to turn a claim in because we had a conversation with you," says Michelle. "If you call an insurance company directly, depending on the insurance company, that may or may not be the case."

Your agent can help you decide the best course of action.

"That's the value of the relationship part of it," says Michelle. "If you call me, we can talk through it together. We might not even need to turn it in if the estimate is under your deductible."

Mitigate the damage first.

However, if you or your independent agent decide to submit a claim, the agent will walk you through your coverage, deductible, and claims process. They will then connect you with the insurance company, who will send an adjuster within 24 hours.

"On your end, the most important thing is getting the damage mitigated," says Michelle. "Whether it's a broken pipe or a window or a tree that landed on the house, it's just stopping them from further damage."

 10. Find a good independent insurance agent. 

Choose an independent agent.

"When it comes to insurance, an independent insurance agent will have access to lots of different insurance companies," says Michelle. "They have a lot of knowledge in the products, so they can really take your individual needs and what you're buying, and match that with the carrier that is going to give you the best coverage for the best price."

Understand your home

vipHomeLink can help!

Now that you understand your insurance policy, it's important to understand your home and how to keep it functioning. vipHomeLink can help. Our home management app helps homeowners by sending personalized reminders for home maintenance and tailored recommendations for home improvement. It also gives homeowners a place to store all their home information, such as their homeowners insurance policy, all in one place.

Give your house a home with vipHomeLink. Subscribe today with a monthly or annual membership. 

Originally published on July 22, 2020; updated on October 28, 2020

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