Smart Ways to Win at Homeowner’s Insurance: Part One

Weather events are worsening, in frequency and intensity. Hail damage is involved in nearly 50% of homeowner’s insurance claims, most around roof damage that is often hidden. It is increasingly important for owners to get maximum leverage from their coverage.  

Severe weather damage causes the most property and value loss, and the number of catastrophic weather events is rising rapidly. The dollar value of the damage they cause is setting a new record every year. Last year, Texas had a record year for hail damage, $5 billion, and that was just what was reported. The real total is unknown, because too many property owners don’t know when or how to use their homeowner’s insurance, and end up footing the bill for covered repairs themselves.

How many property owners ever file claims, while paying premiums for decades? Premiums go up 5-7% annually, and range from Florida’s average annual high of $2000+ to Oregon’s average annual low of $575. Over the past 10 years, premiums have risen 70%, compared to the 29% rise in overall inflation. Only about 5 percent of property owners file a claim in any given year, according to the Insurance Information Institute, and claims are filed on average, once every nine years.

Take some time to review and update your homeowner’s insurance, and learn how to win when you file a claim.

1. Get your ducks in a row

Start by gathering all of your important documents in one place.  Proof of loss is key to full recovery. Create a home inventory, with photos, receipts, and videos. Always store original documents in a fireproof container. Store copies off-site. To make it even more simple, use free apps. Sortly, MyStuff2, and Home Contents are among the most popular. There are specialty apps like iCollectEverything for keeping track of unusual assets. When you file your first notice of loss, which is when you report the damage to your insurance company, be ready with documentation.

2. See if you can reduce your premium:

Check last year’s rates against this year’s. If your rate went up more than 5%, ask your agent why. Knowing whether the increase came from changes in your individual risk profile or from across-the-board increases in your area helps you negotiate and comparison-shop at renewal time or at least every few years. This is especially important if you’ve had a recent claim, such as a new roof for hail damage repair. You’re a lower risk after repairing hail damage, and your rates should reflect that. You can also reduce premiums by making your home more disaster-resistant, by installing and using weather monitoring systems, security systems and storm shutters. Insure.com or InsWeb.com make it easy to shop around and get quotes. If you feel you need guidance or have an unusual asset, it may be best to work with an independent broker.

To continue reading, continue to part two of this post here.

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