Caliber Home Loans Insurance Department – Your Guide to Understanding Home Insurance

Buying a home is one of the most exciting yet daunting experiences in life. After months of searching you finally found your dream home. The hard work is done right? Not so fast. Now you need to protect your investment by getting home insurance.

I know, I know Insurance can be confusing and boring But having proper coverage is absolutely critical for homeowners. At Caliber Home Loans, our insurance department is here to simplify the process for you.

In this comprehensive guide from Caliber Home Loans’ insurance pros, we will explain:

• What is home insurance?
• Why you need home insurance
• Different types of home insurance coverage
• Factors that impact your premiums
• Ways to save money on your policy
• How to file a claim

Let’s get started!

What Exactly is Home Insurance?

Simply put, home insurance (also known as homeowner’s insurance) is a policy that protects your home and belongings from damage and loss.

There are different types of home insurance coverage, which we’ll explain shortly. But in general, a home insurance policy covers things like:

• Damage to your home and property from disasters like fire, hurricane, lightning, and more
• Theft of your belongings and personal property
• Liability protection if someone gets injured on your property
• Additional living expenses if you can’t live in your home due to damage

Home insurance provides peace of mind and financial protection for homeowners. Without it, you could face massive out-of-pocket costs if something happens to your biggest investment – your home.

Why You Absolutely Need Home Insurance

As a homeowner, home insurance is not optional. Nearly all mortgage lenders require you to have a policy as a condition of approving your loan.

But even if you own your home outright, home insurance is still a necessity. Here are some key reasons why:

Protects your home & belongings – The cost to completely rebuild your home could easily be over $200,000. And replacing all your possessions could cost tens of thousands more. Do you have that kind of money sitting around? Probably not. Home insurance covers these unpredictable, costly losses.

Covers liability claims – Let’s say a guest trips and falls on your front stairs and breaks their ankle. Or your dog bites a neighbor. Or your homechildcare business gets sued. Without insurance, you could be paying massive amounts out of pocket. A good home insurance policy covers personal liability, taking this financial risk off your shoulders.

Allows you to rebuild – After a total loss from say, a fire, insurance provides the funds you need to demolish and reconstruct your home. No insurance? No rebuild.

Most mortgage lenders require it – Again, having home insurance is mandatory for almost all mortgage loans. No insurance = no loan approval.

Gives you peace of mind – Knowing you have comprehensive protection for your biggest asset – your home – lets you sleep better at night. Home insurance alleviates worry and provides security.

Understanding The Different Types of Home Insurance Coverage

Home insurance policies bundle different types of coverage together under one policy. The main types are:

Dwelling coverage – This covers damage to the physical structure of your home. It includes your house, garages, sheds, and more. Dwelling coverage caps are based on home value, with higher value homes needing more coverage.

Other structures coverage – This protects structures on your property that are not attached to your house like fences, stone walls, detached garages, guest houses, pools, and more. Generally, it covers 10-20% of your dwelling coverage limit.

Personal property coverage – Also called personal belongings coverage, this protects your stuff – furniture, TVs, clothing, appliances, dishes, decor items, and more. You choose a coverage limit. Make sure it’s high enough to replace everything.

Loss of use coverage – If damage forces you from your home, this covers hotel, restaurant, and other living expenses until repairs are done. It’s generally 20% of your dwelling coverage.

Personal liability coverage – As mentioned earlier, this covers injury claims from others that happen on your property. It also covers any legal defense costs. $100,000 is usually minimum.

Medical payments coverage – Covers medical bills for people hurt on your property, regardless of fault. This coverage is usually at least $1000.

Bundling these different coverages together under a single policy makes home insurance convenient and cost-effective. Your insurer can explain specific options.

What Factors Impact Your Home Insurance Premiums?

How much you pay for home insurance depends on a range of factors evaluated by insurance companies. Some key considerations include:

Home value – The rebuild cost of higher value homes is greater, so premiums are higher.

Location – Homes in higher risk areas for hurricanes, floods, wildfires, and crimes have higher premiums.

Age of home – Newer homes with modern electric and plumbing garner lower premiums.

Construction materials – Homes built with concrete and brick are lower risk than those with wood or vinyl siding.

Claims history – Frequent insurance claims on a home will increase its premiums.

Credit score – Statistics show homeowners with lower credit scores file more claims. Poor credit = higher premiums.

Deductible amount – Choosing a higher deductible (the amount you pay out-of-pocket on a claim) reduces your premiums.

Discounts – Bundling home and auto policies with one insurer, installing protective devices, and being claims-free all net discounts.

While you can’t control some factors, understanding how insurers calculate premiums helps you make smart coverage decisions.

Tips for Reducing Your Home Insurance Costs

No one wants to overpay for home insurance. Here are some tips from Caliber Home Loans’ insurance experts to lower your premiums:

Compare rates – Prices can vary dramatically between insurers. So shop around and compare quotes every few years to find the best value.

Review the limits – If your coverage limits are higher than you need, lowering them slightly can make a difference. But make sure they still adequately cover rebuild costs and possessions.

Raise your deductible – Opting for say, a $2500 deductible rather than $500 could reduce premiums 15% or more. Just be sure you have funds available to pay the deductible if needed.

Improve home security – Things like alarm systems, security cameras, motion sensor lights, deadbolts on doors, and fire extinguishers can qualify you for steep discounts.

Seek bundling discounts – Insure your home and auto(s) with the same provider and you can save up to 15%.

Maintain good credit – Fixing errors on your credit report and keeping up with payments will improve your score, often resulting in lower premiums.

Enroll in a loyalty program – Some insurers offer discounts as your tenure with them increases. Switching companies means starting back at zero.

What To Do If You Need To File an Insurance Claim

Even with the best precautions, sometimes bad things happen. Here’s a quick guide to navigating the claims process if you need to file one with your insurer:

Report it immediately – Notify your insurance company promptly after any incident causing damage. Delaying makes the claims process harder.

Document the damage – Take photos and videos showing the destruction to your home or possessions. List affected items and their value when possible.

Make temporary repairs if needed – Take reasonable actions like putting a tarp over a hole in the roof to protect your home from further damage. Save receipts for reimbursement.

Provide requested documents – Your insurer will need information to process the claim like police reports, repair estimates from contractors, purchase receipts for damaged items, etc. Gather and submit these promptly.

Work with adjusters – Adjusters sent by your insurer will inspect the damage, document details to submit, and estimate repair costs. Be available to meet with them.

Accept your settlement – Once the claim is approved, carefully review the settlement offer before accepting it. Get clarifications about anything you’re unsure about before agreeing to the amount.

Complete permanent repairs – Finally, work with contractors to complete repairs and renovations covered in your claim. The settlement funds will pay for these costs.

Caliber Home Loans has your back through every step of the home insurance process – from choosing the right policy to filing a claim. Our insurance pros are here to help!

Let Caliber Home Loans Handle the Insurance Details

As you can see, home insurance is complex. Multiple types of coverage, factors affecting premiums, discount opportunities, and the claims process all make it challenging for homeowners to navigate on their own.

But at Caliber Home Loans, our insurance department has the expertise to handle the insurance details for you.

We act as your personal insurance agent and advisor. Our team will:

• Review your specific needs and budget to recommend cost-effective policy options.

• Shop plans from multiple highly