05-29-2009 01:48 PM
As previously posted, we are finally purchasing our first house. One of the many things to deal with in homeowners insurance. Here's a couple things that I've learned so far.
*Don't let your mortgage company issue you insurance, you can get it much cheaper elsewhere.
*Shop around, the rates vary company by company. Up to 40%.
*Combine your auto insurance with your home. Most companies will give you discount. $200+
*Don't be shocked when they issue you only $250K on a house that you paid twice that amount for. They are insuring only the cost of house, not the land.
*Some insurance companies will not insure older homes unless the plumbing and electrical has been upgraded and foundation has been bolted. We also found out that one company will not insure houses with flat roofs.
*There is a Building Ordinance option that pays a percent of the insurance to bring the house up to current building codes. This is usually 10%, but can be increased. This is especially important on older homes that would need a lot more upgrades to current standards.
*Now that you're a homeowner, you might want to increase your auto liability limits, now that you have an asset worth suing for.
*The bigger the deductible the lower the cost. But one insurance agent mentioned that some mortgage companies will not allow you to go over $1000.
*Also as one agent said it " This is insurance for major repairs, not a home maintenance repair" Meaning that only use it when something major hits. Any claim will likely increase your rates. So when your water heater blows and causes $1200 dollars in damage. Don't automatically think that you'll file a claim and only get it repaired for $200. That claim could end up costing you more in the long run in higher premiums. I read some horror stories online whereby people only called the insurance to see if the damage was covered and it was filed as a claim. Regardless if they actually submitted it.
Here's a link to a 2008 JD Powers rating of insurance companies.Ratings
I think thats most of it for now. Hope it helps. Please add anymore advice, cause I'm still learning too.
05-29-2009 04:31 PM
Were going with State Farm. Due to cost and a decent rating on the JD Powers report. Farmers was the next best priced but lesser rating. Auto Club wouldn't insure because of the flat roof. Allstate was expensive.
Earthquake insurance is available from the California Earthquake Authority (CEA ) California Earthquake Authority
They have a built in calculator. The rates vary on what your covering and zip code. They have a 10% or 15% deductible and don't pay much for personal belongings. But compared to having no insurance, where you have a 100% deductible
Also this company offer earthquake insurance http://www.geovera.com/
05-29-2009 05:32 PM
05-29-2009 06:34 PM
IDK Pam... $1280 seems high to me. Did you use the expected cost of the structure only, or the entire purchase price for the property?
My home is $244K but for the structure only it's about $125K, so my home insurance will be under $600 per year. That's not including earthquake insurance, which I'm not going to purchase if it's not required.
05-29-2009 10:06 PM
05-30-2009 03:22 AM
I went and got a quote from that company (Amica) they rated highest and it didn't seem too bad (not including quake cover). It was 1280 for a year (on my imaginary house that I dont even own yet lol) or 10x128. Maybe I was wrongly expecting it to be a lot higher? I've never obtained home owner's insurance here (only apt. contents) so have no idea of what to expect really. Is it usual to obtain quake coverage separately?
I would shop around for better rates. My dwelling limit is 564k, other structures 10% of dwelling, personal property 70% of dwelling limit, 24 months loss of use coverage...Guaranteed replacement policy (not just up to the estimated replacement cost) and is only $1065/yr. This is my second policy company on this house with about the same premium. The only reason I switched is because of the guaranteed replacement on my new policy
Policy on 1300 sq ft should be no more than $700 and that is leaving a lot of wiggle room..
05-30-2009 07:49 AM
As others have posted, $1280 does seem a bit high.
Earthquake insurance is separate and optional. However, I have it and would recommend everyone to get it. It's a few hundred dollars more a year. But like all insurance, it will be more than worth it when (not if) the Big One hits. This is especially important if your home has higher earthquake risks, such as being an older home (pre-dates earthquake codes), on a raised foundation (vs. secured to a slab), two (or more) stories, heavy tiled roof, has a brick fireplace, etc.