The confusing realm of homeowners insurance: explained

Homeowners insurance is confusing. All those terms — homeowners insurance, dwelling fire, renters, townhouse… what do they all mean?

We’ll explain it for you here, plain and simple. Nice and easy.

Homeowners Insurance Homeowners insurance is for homes that are owned and occupied by you, and isn’t considered anything except a standard family house. (That means no condos, no townhouses, no apartments, even if you own them!) These policies will normally encompass your entire home, exterior structure and interior property. They will financially protect you should anything happen to your house.

Dwelling Fire Insurance Dwelling fire insurance is reserved for landlords of homes that are NOT owner occupied. These policies are for landlords to ensure that their property will be covered in case of damage to the exterior of the structure.

Renters Insurance Renters’ insurance is basically the opposite of dwelling fire insurance — for the tenant of a rented home. Although as a tenant, you may not be too concerned with the exterior of the house since you don’t own it, it still houses your property. Renters insurance is for you to financially protect your assets housed within a rented home.

Condo/Townhouse Insurance Condo/townhouse insurance is similar to renters’ insurance in the sense that it is protecting your belongings inside your house. Although you may be somewhat covered by your homeowner’s association (HOA), their coverage typically won’t help you if something happens to your stuff that is inside your house. Essentially, condo/townhouse insurance will cover you where your HOA coverage doesn’t.

More Coverage More coverage is available for different circumstances, for example, if you are a collector of antique arts, consider buying extra coverage to protect these rarities. If you are concerned about any of the items in your house being more valuable and thus needing more coverage, consider having a Scheduled Personal Property (SPP) endorsement to your policy to make sure they’re insured properly. If not, you may run the risk of losing your vintage items or collectibles in a natural disaster, theft, or other emergency and being financially unable to replace it.

We understand that homeowners’ insurance is extremely confusing. That’s why we have specially trained professionals to help you with any questions you might have. If you still have questions about home insurance following this blog post, please feel free to give us a call.

How to lower insurance premiums for your teen

It’s no wonder that teenage drivers are fated with the highest insurance premiums, ironically when they’re probably least financially able to pay for it. Here are some facts about young drivers that justify why teen insurance premiums are so high:

  • In 2010, 33% of deaths among 13-19 year olds were due to motor vehicle crashes. Not drugs, not suicide, but car accidents. That’s an insanely high percentage.
  • 16 year olds have a higher crash rate than any other age group.
  • 1 in 5 16 year old drivers, or 20%, are involved in an accident within their first year of driving.
  • 56% of teens said that they talk on the phone while driving.

Insurance premiums for kids have skyrocketed as a result, after statistics proved that teens were the most at-risk group of drivers of any other age. Parents, in turn, have been less willing to insure their kids. Insurance for any driver, but especially teens (look at those stats), is a must if they’ll be driving. Here are some ways you can cut insurance for your teen.

Encourage them to be good students. Many insurance providers have a “Good Student Discount,” which gives teens a considerable discount on their auto insurance premiums for maintaining above a B average (3.0 GPA.) Studies have shown a direct correlation between good students and responsible driving habits, which have encouraged insurance companies to have these types of discounts.

Also encourage them to practice safe driving. After three years with one minor ticket (no speeding over 100, racing, hit & run, etc) OR one minor at-fault incident (no claims filed), your child could qualify for a Good Driver Discount, which saves another good chunk of money. Although this won’t apply for the first three years of driving, discuss this with your teen to avoid ticket fines, car accident deductibles, and earn a discount afterwards. DUI’s and DWI’s stay on your record for ten years (and teens could face even worse charges for being underage drinkers,) so encourage them to follow the law.

Have them drive a safe car. Driving a safe car will not only give you a peace of mind that they’ll be physically protected if involved in a car accident, but also lessens their insurance premiums. If their car is equipped with safety devices such as airbags, anti-theft mechanisms, and anti-lock brakes, their premiums will be significantly lower than if they’re driving a car without these. Luxury cars and sports cars tend to have higher premiums, so think about another fortune you’ll be spending on insurance after already spending a fortune buying your teen a nice red Lamborghini convertible for his 16th birthday.

Raise your deductible to as much as you are financially able to sustain. Raising your deductible means that you’ll have to provide more cash upfront in case of an accident and exempts you from filing small claims, but if you’re able to, it would cut your premiums significantly. Furthermore, by paying these claims, your insurance company will never be notified of these minor claims that could later on disqualify you from a possible “claims free discount.”

Don’t get comprehensive/collision coverage for old cars. If your teen is going to be driving Grandpa’s old 1990 Toyota Camry that’s worth $500 and you’re not too worried about replacing it if it’s damaged in a car crash, forget comprehensive/collision coverage. You’d probably be paying more than it’s worth!

Shop around for different plans, policies, and coverages. All different auto insurance companies have different auto insurance policies, and it’s worth a shot looking around at different plans and seeing what they cover – your first priority should be safety! If you need help shopping around, be sure to give us a call and we’ll help you find the best coverage for your teen at the most reasonable price.