Homeowners Insurance North Carolina: How to Find the Best Deal

Ownership has its privileges and responsibilities. Almost every aspect of buying a home is time consuming and tedious because of the attention you must pay to detail. Embrace this time and do the work. The reward of a successful endeavor is years of satisfaction with little to no burdensome surprises. Procuring sufficient homeowners insurance is a big part of these major decisions that go into the final processes of home ownership. Fortunately for North Carolina residents, even though the state does not require homeowners insurance, it manages to keep a fair and even playing field between home owners and the insurance industry.

You can’t know what a good deal is if you don’t understand what you need. Buying what you don’t need, even if it’s available for a good price, is wasted money, not a good deal. When investigating good insurance opportunities, you must first identify what you kind of coverage is sufficient to your needs. Several factors will come into play while you make these decisions such as your budget, where you live, and the value of your personal possessions among other things.

What Are the Best Ways to Shop Around?

• Connect with friends, co-workers, and even the business pages of the phone book to compile an initial list of potential providers. You can then compare this list by provider against the list on the National Association of Insurance Commissioners at naic.org. Providers are listed by state and have information, pros and cons that have been reported, that may help you to narrow down your list of options without having to make contact. You can also access these providers’ financial stability at ambest.com or standardandpoors.com/ratings.
• Check online quotes to get a general idea of the average price you can expect to pay, a frame of reference for comparison. Fair price is only one aspect that will qualify providers. Remember, you are looking for the best deal. This means that you also must consider the type, extent of coverage, and even quality of service.
• Once your list consists of three to four providers, start making contact and gathering in-depth information about the options, discounts, and promotions they offer.
• Set up a routine and take different companies through the paces of that routine.

What’s the Difference Between a Premium and a Deductible?

A choice that you cannot avoid making will be the cost of your premiums and your deductible. The amount you pay for your premiums (your periodic payments to your insurer for taking on the risk of insuring you) and the amount you pay for your deductible (what you are financially responsible for before your insurer steps in to cover any costs) are directly related. This relationship is a delicate balance between the two. Though it is true that you can raise your deductible to lower your premiums, you have to be careful not to delay your claim due to your inability to pay your deductible. Only you know how to gamble with your finances based on your past experiences. You know what you can afford to pay in premiums. On average in North Carolina doubling your deductible may cut 25% off your premiums. It’s really a matter of when you want to pay the bulk of your out-of-pocket expense, all along or in one lump sum when it’s time to file a claim.

TIP: Save some money every month until you have saved your deductible. Set it aside so that you can cover your end of your claim as quickly as possible.

What Else Affects the Premium?

If you haven’t purchased a house yet, it is never too soon to consider homeowners insurance. Where you live in a city and what is in close proximity to you may make a difference.

• Crime rate in your area – Sites in an urban area traditionally have higher crime rates.
• Likelihood of fire damage – The quality of your area fire department’s performance and your proximity to fire hydrants determine your home’s fire protection class. The fire protection class associated with your city is used to rate your policy. This classification takes into account the size, training, and equipment of the fire department, water supply and pressure, and the size of the local governing entity among other factors.
•  Type of construction – Your home’s ability to withstand damage may come into play. For instance, frame houses are a bigger risk than brick houses.
• Age of the house – The older the home, the more negative factors there may be against you, such as disqualification for discounts and limited forms of coverage.

What Questions Should I Ask Potential Providers?

1. What can you do to lower my costs?
2. How can I benefit from combining types of coverage?
3. Do you offer discounts for membership in particular groups like AARP, AAA, or specific professional organizations?

What About Additional Coverage?

Homeowners insurance doesn’t include acts of God such as floods, high winds, storms, rain and snow damage, or damage from ice or sleet. You can probably get additional coverage inexpensively. It will certainly cost less than covering such damages out-of-pocket. Depending upon the value of your personal possessions (antique furniture, art, electronics, and other big ticket items), you may want to investigate replacement cost as opposed to actual cost value. Make sure that you are purchasing sufficient coverage. Ideally you will need to cover at least 80% of the cost of repair or replacement of your property. This is almost certainly going to be higher than the actual cost of your home since the objective is to replace, repair, or restore using materials that will not decrease the value of the property.

2 Point Highlight

Fortunately for North Carolina residents, even though the state does not require homeowners insurance, it manages to keep a fair and even playing ground between home owners and the insurance industry.

If you haven’t purchased a house yet, it is never too soon to consider homeowners insurance.