5 Ways to Save Money on Homeowners’ Insurance

When it comes to homeowners’ insurance, customers get what they pay for. This creates a huge risk potential if homeowners’ opt for less coverage to save money in the short term. By neglecting coverage needs, homeowners may find they are underinsured or lack the coverage options they need in the event of a claim. That being said, there are several smart changes a homeowner can make to their home that reduces overall insurance costs without increasing the homeowner’s risk profile.

  1. Improve plumbing, heating, or electrical. Upgrading home systems can net homeowners some savings because their home is less vulnerable to fires or burst pipes. Replacing all the plumbing can net up to 6% savings while upgrading electrical can pull in another two percent. Discount potential: 6-8% depending on the upgrade(s).
  2. Increase home security. Installing a burglar alarm or a full security system can reduce insurance premiums because it reduces the likelihood of a burglary claim. In general, the more sophisticated the system, the greater the insurance discount. However, homeowners should be sure to obtain certification proving that their alarm system sends out a signal to local police or a security company. Otherwise, insurers may not provide a discount. Discount potential: 2-5%.
  3. Invest in water sensors. Most homeowners’ insurance policies cover flood damage due to burst pipes. However, by installing water sensors, homeowners can detect the presence of water right away before it can cause damage. Insurers often provide a discount for this as it reduces the likelihood of a water-related claim. Discount potential: 3%.
  4. Upgrade the roof. If it’s time to replace the roof, homeowners should consider upgrading to an impact-resistant roof. Most insurers cover roof replacement related to hail damage so they often provide a discount to homeowners that invest in fortified roofs. Discount potential: 5-15%.
  5. Install a generator. Generators keep major home systems and appliances running if a significant storm knocks out the power. For example, if the power goes out during the winter, pipes may burst without proper heating. A generator can prevent such incidents and the related claims. Discount potential: 4-10%.

Homeowners can take other measures to reduce their premiums as well. Increasing the deductible is a simple way to do so, but homeowners need to be sure they can afford it first. Increasing a deductible from $500 to $1000 or even $2000 will yield significant savings. Bundling insurance policies can reduce premiums as well. If homeowners are happy with their auto insurance provider, they should see if the company also offers homeowners’ insurance and compare rates.

If you have questions or concerns about your homeowners’ insurance, The Reilly Group can help. Contact us to learn more.

Are You Prepared for Climate Risks?

2017 was a record year for natural disasters. Hurricanes, fires, and flooding plagued much of the nation, and the total cost blew previous records out of the water. 2005 represented the previous record, with Hurricane Katrina and Rita racking up $214.8 billion in damages. In 2017, natural disasters totaled more than $300 billion in damages. As a result, many insurers are taking a harder look at how they incorporate climate-related risks into their long-term and sustainability planning.

Insurers Reigning In Coverage

Many insurers are now relying on high-tech modeling to get a better idea of risk areas and what counts as a risk factor. As a result, insurers may limit where they offer for coverage, such as restricting offerings for areas at high risk for tornadoes or wildfires. Homeowners need not panic quite yet, though. Insurers are not permitted to cancel policies during the contracted term and many must renew for the following year beyond the term’s expiration. After that, however, they do not have to renew the policy. They also do not have to renew policies in non-disaster areas, so those less at risk may find themselves without coverage.

Insurers Preparing Clients

Even though some insurers are reducing coverage options in high-risk areas, they are not leaving their clients high and dry. Many insurers are taking steps to educate homeowners in riskier areas of the natural disasters that can affect their home. This includes how to prepare for climate-related weather to reduce damage and protect personal property.

The Reilly Group can help homeowners determine if they live in areas at risk to natural disasters. Common examples in the Midwest include tornadoes and hail storms, though flooding and other climate damage is also a potential source of risk. If you’re at risk, we can help you determine what kind of coverage you need as well as steps to take to mitigate the likelihood of climate-related damage. Contact us today to learn more.

Homeowners Policies and Flood Coverage – Understanding What’s Protected

Whenever hurricanes threaten the coasts, homeowners begin to scour their insurance policies to see if they have coverage for water damage. While many believe their homeowner’s insurance will cover flood damage, this is an erroneous assumption. Homeowners need to invest in a separate policy to cover flood and water damage. While many homeowners associate flood damage with total loss, this is rarely the case. Most flood claims average around $40,000. Below are several other facts about flood insurance homeowners need to know.

All Homeowners Can Buy Flood Insurance

While homes in flood-prone areas are more likely to experience water damage, this does not mean homes farther inland are risk-free. Flooding can come from several sources, and homeowners should weigh the risks before foregoing flood insurance. Homeowners should also bear in mind that flood claims are one of the most common.

Some homeowners do not have a choice regarding flood insurance. The National Flood Insurance Program designates certain areas as hundred year flood zones. If an individual lives in one of these areas and has a federally backed mortgage, the program requires them to invest in flood insurance.

Homeowner’s Policy Coverage and Exclusions

Homeowner’s insurance policies are not devoid of water damage coverage. For example, if a hurricane blows out windowpanes or knocks a tree onto a home, a homeowner’s policy would cover that damage. Homeowner’s insurance covers any water damage related to the above examples as well. However, such policies rarely cover wind-driven rain damage under any other circumstances. Homeowner’s policies also exclude any damages as a result of water coming from the ground such as ocean waves.

Flood Insurance Coverage and Exclusions

Even if a homeowner invests in flood insurance, there are still some limitations. For example, flood policies take 30 days to go into effect. This means a homeowner cannot rush out to buy flood insurance when they learn of an impending storm. In addition, most policies peak at $350,000; this covers the home ($250,000) and personal belongings ($100,000). If a homeowner needs additional coverage, they will need supplemental policies.

Flood insurance comes with some hefty exclusions as well. Some examples include:

  • Below grade living spaces (i.e. basements)
  • Decks/patios
  • Pools/hot tubs
  • Wells/septic systems

If you live in a flood-prone area and want to learn more about flood insurance, The Reilly Company has you covered. Our insurance agents offer convenient insurance management options including phone consults, online comparison quotes, or an in-person visit. To learn more, contact us today.

Can You Answer These Questions About Your Homeowners Policy?

Buying a home can be a daunting prospect. Homeowners insurance should provide some peace of mind, but navigating different policies and coverage options can be overwhelming. There are several questions homeowners can ask their insurance agent to gain clarity and ensure they have the best coverage for their home.

Does Your Policy Provide Enough Coverage to Rebuild Your Home from Scratch?

Homeowners should make themselves aware of how much it would cost to replace their home. Once they have a rough estimate, they can invest in coverage equal to that number. Homeowners should try to work with local agents who are familiar with construction and material costs to provide the most accurate estimate. This number should include any upgrades performed on the house as remodels can increase the house’s value. What was once enough coverage may no longer be capable of replacing a renovated home.

Do You Know What Your Policy Does Not Cover?

Many homeowners focus so much on what their policy provides them that they may not consider what it does not cover. Some items, such as jewelry or expensive artwork, require a different kind of coverage. In addition, many homeowners insurance policies do not cover certain natural disasters such as floods and earthquakes. If a homeowner lives in an area prone to these disasters, they will need to invest in separate coverage.

Do You Know What Discounts are Available to You?

Many homeowners forget to ask if they are eligible for discounts. Many insurance companies offer discounts for having smart home devices, a home security system, or if the individual insures other items through the same company such as their car.

Other questions individuals should ask their insurance agent include:

  • Can I afford my deductible?
  • What claims are most common to my area and do I have enough coverage for them?
  • Do I need additional coverage if I rent out part of my home?

Asking the above questions can help ensure financial security for homeowners in the event that they need to make a claim. To learn more about homeowners insurance, contact the experts at The Reilly Company.

Homeowner’s Guide to Filing Claims

Having homeowners insurance is a necessary part of home ownership. However, having homeowners insurance and knowing how to use it are two very different things. Every policy is unique to the individual. It is best for homeowners to learn the facts and educate themselves on how to make the most of their coverage if they need it.

One of the most common sources of claims is water damage. This could be a leaking sink or a broken ice machine that seeps water into the floors causing damage. Below are guidelines for filing this type of claim as well as some tips for managing the resulting issues in the interim.

Prevention is Key

Maintenance is a big part of homeownership. If a homeowner notices a leak or dripping plumbing, they cannot afford to ignore it. Leaky faucets and toilets are often simple to fix if the homeowner addresses the issue right away. Failing to do so can cause mold and widespread damage. Making sure the roof is in good shape is another great way to prevent water damage before it can start.

Take Swift Action

Homeowners should contact their insurance company immediately after they notice any water damage. Not only will this help resolve the issue faster, it can prevent the problem from compounding. Homeowners should avoid hiring someone to make significant repairs before talking with an insurance agent. Many insurance companies have a local network of trusted contractors or guidelines homeowners can use to find a suitable service provider.

Owning a home is a major life goal for many individuals. It is important to protect such a valuable investment with the proper coverage. The Reilly Company can help individuals understand the nuances of their policy and decide how much coverage is best for them. To learn more, contact us.

Common Misconceptions About Flood Insurance

Homeowners and business owners alike have concerns about water damage related to flooding. This is especially true if they live in an area prone to flooding. However, there are numerous myths circulating about flood insurance that add further confusion to this type of coverage. For example, many individuals think of flood damage as a total loss, but the average flood claim is around $30,000. Below are some of the most common myths about flood insurance.

Only People Living in a Flood Plain Can Buy Flood Insurance

While mortgage companies may require people who live in a flood zone to purchase flood insurance, these individuals are not the only ones who can buy this kind of coverage. Almost anybody who wants flood insurance can obtain a policy. In general, properties in flood zones are more expensive to insure than those that are not. Even renters can obtain flood insurance to protect their belongings.

Flood Insurance is Only Necessary for Properties in Flood-Prone Areas

While properties in flood plains need flood insurance, all buildings face a certain level of flooding risk. About 25 percent of flood claims come from individuals who do not live in a flood plain. Property owners should take a hard look at the risk of flooding in their area and investigate what flood insurance options are available to them.

Individuals with Homeowners Insurance Do Not Need Flood Insurance

This myth can cost homeowners big time in the event of a flood. Homeowners and umbrella policies do not cover damage related to floods. If an individual lives in an area prone to flooding, they should invest in flood insurance. The one exception to this rule is storm damage. If a storm tears off a portion of a house’s roof, homeowners insurance covers the subsequent water damage.

Learning about your flood risk and if you live in a flood plain are vital to determining if you need this type of insurance. These factors also affect how much coverage you will need. To learn more about flood insurance, contact The Reilly Company.

Lesser-Known Facts About Homeowner’s Insurance

As most already know, homeowner’s insurance provides financial protection should a natural disaster or other calamity damage your home. This includes coverage for other types of losses that occur on your property. However, many homeowners are unaware of the specific nuances, details, and coverages within such a policy. Below are some often-overlooked facts that all homeowners should know about their policies.

Dogs Affect Available Coverage

Many policies provide coverage should your dog bite an individual on your property. However, many insurance companies place coverage restrictions on certain breeds. Some companies will not sell policies to individuals who own a dog regardless of breed. The risk of reduced or altered coverage increases with dogs that have a history of biting. In such cases, the insurance company may refuse to renew your policy, raise your premiums, or eliminate coverage for damages caused by the dog.

Homeowners Can Reopen Claims

After filing a claim, your insurance company will send an adjuster to evaluate the damages. After receiving the adjuster’s assessment, your insurance company will provide you with a check to cover the claim. However, sometimes you may not discover certain damages until after the company sends the check. Many homeowners’ policies allow them to reopen the claim to file for additional funds. In general, you have up to one year to file claims related to the damage.

Location Matters

Where you live matters when it comes to your homeowner’s insurance premiums. Your home’s proximity to a fire department can reduce your insurance costs. Some insurance companies keep a roster of fire departments and rank them against each other. If you live near a fire department with high ratings, your insurance company may offer you reduced rates. Having a fire hydrant within 1000 feet of your home can have a similar premium-reducing effect.

Buying a home is one of the biggest investments you will make in your lifetime. Having adequate coverage to protect your home is vital. To learn more about what your homeowners’ policy should cover, contact The Reilly Company.