All About Homeowner’s Insurance
Leo Desselle of Pennant Real Estate sits down with Phil Schmitt of Schmitt Insurance to discuss common topics relating to homeowner’s insurance.
1. What is homeowner’s insurance?
Homeowner’s insurance is an insurance policy similar to health insurance that protects the homeowner in the event that an issue or damage occurs to the home. In a standard policy you typically have 5 types of coverage.
Coverage A- structure of the home
Coverage B- other: any structure not connected to the roof line of the home
Coverage C- personal property
Coverage D- loss of use such a a fire
Coverage E- liability such as someone tripping on a tree root in your yard and getting hurt
2. Why do we need homeowner’s insurance?
Well, if you have a mortgage on your home, the mortgage company will require it to protect them against their investment in your home. Second, you need it to protect yourself against things you can’t control such as wind and hail. A home is typically one of the largest investments you make in your lifetime and can also be one of the most costly if not properly protected.
3. Does characteristics of the home being covered in the policy affect the rates?
Absolutely! Things like the age of the home, the location, the neighborhood, age of the roof and other structural components all play a part in the policy and rates for a particular home. It is all about perceived risk when an insurance company evaluates a home for coverage.
4. So is it safe to say that a new construction home is likely to get a better home owner’s insurance policy rate than a home that is older?
Definitely! Again, it is all about perceived risk. New construction homes are the most sought after by insurance companies but it is least likely that something will go wrong with a new home.