When the Notre Dame Cathedral burnt down on April 15th with no insurance, France faced steep rebuilding costs. The revenue from merchandise and visiting costs funded its renovations. France always self-insured the Cathedral because taking private insurance on it would have been difficult and expensive.
Thankfully, French banks and billionaires have raised 790 million in a GoFundme to rebuild it. But you might not be so lucky if your house burns down. According to Mike Gulla, the senior director of underwriting at Hippo Insurance, 64 percent of homes are underinsured due to improper measuring and appreciation.
According to Hippo, 1 in 3 people haven’t updated their policy in 10+ years. Many people dread the process to get insurance; over half of people surveyed would rather go to the dentist than deal with their insurance agency. 5% of people responded they would rather give up their first born child if they wouldn’t have to deal with insurance agencies.
What Affects Insurance Costs?
The primary influencer of your premium is the cost to rebuild it if disaster strikes. The materials your house, the number and size of rooms, the number of stories, and location determines how much you pay.
Home insurance covers items in your home if you keep inventory updated. Only 48% of homeowners said they prepare an inventory list in the event their house was destroyed, meaning they wouldn’t be compensated for the full cost of their belongings. While many items are irreplaceable such as family heirlooms, you can replace computers, jewelry, and more.
Keeping a list of expensive items you keep may sound like a hassle, but it’s as simple as videoing a tour of your house.
Protection
You have to check your coverage for what exactly it covers. There are two types.
Actual Cash Value: This reimburses you for lost possessions after accounting for depreciation. The premiums are cheaper but cover a smaller total amount.
Replacement Cost Value: This replaces your items at current market value (not counting depreciation). Premiums for this kind are usually about 10% higher.
Dog bites accounted for more the 33% of homeowners claims in 2012. In 2015 only 15% of homeowners surveyed had flood insurance, which is a good investment depending on your location.
The American Insurance Agency reported $9.1 billion in water damage from 2007-09. The average cost to repair water damage is more than $20,000.
Many insurance doesn’t cover trampolines. The United State’s costs to cover trampoline injuries amounts to more than $270 million per year.
Maximum Coverage
Home and auto insurance are vital. But if you want more protection, you can buy umbrella insurance to cover extra liability such as costs of injury on your property or bad wrecks. Umbrella insurance was created to cover legal awards that exceed your primary insurance coverage.
How To Save $
- Raise your deductible
You can save money long-term by self-insuring if anything goes wrong. A policy with a $1,000 deductible has about a 25% lower premium than a plan with a $500 deductible. So pool that amount monthly as an emergency budget if anything breaks. - Bundle Most insurance agencies offer discounts if you bundle home, auto, and other insurance.
- Stay with one insurer (if it’s cost-effective) Many insurers reward loyalty with discounts
- Protect your credit score Good credit signals responsibility. A high credit score determines if you get insured and the premiums you pay.
- Buy safety devices Companies give discounts if you add deadbolts, motion sensor lights, and cameras. While these may have steep upfront costs, you could save in the long run.