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— Homeowners Insurance

Homeowners need to purchase insurance to protect their homes and personal property. Tenants need insurance to protect their furniture and other personal property. Both need protection against liability for accidents that injure other people or damage their property.

— How much

The better your coverage, the less you will have to pay out of your own pocket if disaster strikes. The amount of coverage you buy for your house, contents and personal property will affect your cost.

— Compare deductibles

The deductible is what you pay out-of-pocket on each claim and applies to coverage on your house and personal property. Make sure that you are comfortable paying the deductible amount.

Replacement cost vs. cash value

Replacement cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality, without deducting for depreciation. Actual cash value is the amount it would take to repair or replace damage to your home after depreciation.

— Shop around

You do not have to buy insurance from a company your lender recommends. Find out what different insurers charge for identical products and services.

— Research discounts

In some states, insurers offer lower prices for such things as insuring your home and car with the same company, installing deadbolt locks or alarm systems or replacing the roof.

— Basic coverage

There are different packages of insurance offered to protect your home and belongings. Each protects against a specified number of things such as fire, windstorm and theft. Each usually has four additional types of coverage: property damage, additional living expenses, personal liability and medical payments.

— Where to shop

Besides searching for local agents and companies online or in a local directory, ask your neighbors, relatives and friends for recommendations.

— Read your policy carefully

A home insurance policy is a legal contract. It is written so that your rights and responsibilities, as well as those of the insurance company, are clearly stated. Make sure you understand your policy’s contents. Keep it in a safe place and know the name of your insurer.

— Review your insurance needs annually

Check with your insurance agent at least once a year to make sure your policy provides adequate coverage. A room addition, new insulation or remodeling add value to your home and may increase replacement cost.

— How much coverage do you need?

— Self protection: You need enough liability coverage to protect yourself from lawsuits resulting from your negligence or things that happen on your property.

— Lender requirements: A mortgage will require you to cover the house for the replacement cost of the dwelling.

— Policy requirements: Insurers may impose some coverage requirements for replacement cost protection.

— Types of coverage

— Damage to house and other structures.

— Personal property: Personal property includes household contents and other personal belongings used, owned, or worn by you and your family.

— Additional living expenses: Covers additional living expenses when they are needed.

— Comprehensive personal liability: Protects you against claims arising from accidents to others on property that you own or rent.

— Medical expenses.

— What affects the cost of homeowners insurance?

The cost of homeowners coverage depends largely on where you live. Crime rates vary from community to community, as does access to your local fire department, police department, and water supply and all help to determine the cost. Also, things such as the type of construction, age of the house, deductible amount and potential discounts all influence the cost.

— Additional coverage?

— Extra contents: Remember that most of the coverages are a flat percentage of the amount of insurance on the home itself. For an extra fee, you can increase the coverage on your contents without increasing the amount of insurance on the home itself.

— Replacement cost: Most companies offer “Guaranteed Replacement Cost Coverage” for an additional premium. The most important coverage may be full replacement cost coverage with no depreciation deduction for your roof.

— Personal property: Your policy likely will have special limits on things such as furs, jewelry, firearms, computers and other items. You need to review the limits, and increase the coverage if needed.

— Additional liability: You can also purchase additional liability coverage and medical payments coverage.

— Flood insurance: If you live in a flood-prone community, ask your broker about flood coverage.

— Earthquake insurance: No standard insurance policy damage from an earthquake. In some places, such as South Carolina, this coverage is normally inexpensive and should be considered.

— 7 ways to lower the cost

  • Increase your deductible.
  • Be sure that the policy limits reflect the cost of rebuilding.
  • Such things as enhanced roofing systems, hurricane shutters and gable-end bracing can lower the cost.
  • Reduce your contents coverage on your wind & hail policy.
  • Apply for a Safe Home Grant.
  • Shop around.
  • Place your homeowners and other insurance coverages with one insurer.

Renters insurance

Renters insurance protects your personal property against damage or loss, and insures you in case someone is injured while on the your property. If you live in a rented apartment, house or condominium, your landlord’s insurance doesn’t cover your personal property if it is stolen or damaged by a fire or other circumstances or lost in a theft. Premiums average between$15 and $30 per month depending on the location, the size of the rental unit and the policyholder’s possessions.

— Basic options

–Personal property coverage pays to repair or replace personal belongings if they are damaged, destroyed or stolen.

–Liability insurance provides coverage against a claim or lawsuit from bodily injury or property damage to others while on the policyholder’s property.

–Unusually expensive items, such as fine jewelry or an art collection, may need additional coverage, called a “rider” or “floater”.

–Actual cash-value coverage will reimburse the renter for the cost of the personal property at the time of the claim, minus the deductible. For example, if a stereo system were stolen from an apartment five years after it was purchased, the reimbursement likely would be far less than what it cost new.

–Replacement cost coverage will reimburse for the cost of a new stereo system.

— Other things to know

–When a claim is reported, the insurance company will want proof of purchase for all items on the claim. You should have a list of possessions, including purchase prices, model numbers and serial numbers. Take photos or video footage of any personal possessions and make sure the information is stored in a secure, location.

–To know how much renters insurance you need, estimate the value of your personal possessions and buy enough to replace it.

Source: National Association of Insurance Commissioners

(c) 2013 The Sun News (Myrtle Beach, S.C.)