Home Insurance?

Question

Hi, I am looking for home insurance. This is not for a huge house just a little cottage, would like to insure it for around $40.000. This is a vacation cottage so dont need a huge amount.

Answer 1

While mbrcatz has it essentially right, we need to know what state the home is in. In most instances you have homeowners coverage on your primary residence and you can extend liability coverage to cover the cottage from there, or even a renters (tenants) policy if you do not own another home.

There are very, very few insurers that will insure a home for less than 80% of the replacement cost of the building, which works in your favor if there is a loss. A home that is under-insured by more than 80% will have co-insurance penalties that equate to the amount of insurance you carry, divided by the amount of insurance you should have carried. That percentage will then be the percentage of the damage that the company will pay for, which is always going to be much less than your loss.

Any agent should advise their clients to insure for at least 80% of the rebuild cost of a house. If you carry 80%, there will be no co-insurance penalty when you have a claim.

Answer 2

OK, good luck on that. Here are a few odd facts, followed by some advice:

1. Insurance companies generally won't insure a secondary residence, unless they also insure the primary residence.
2. Most claims happen on houses insured for less than $80,000; which means, many insurance companies won't even give you a quote for a house insured that low.
3. Insurance companies, for the most part, issue policies on a "cost to rebuild" basis - if you think your cost to rebuild is $40,000, at $200 per square foot, your house is, what, 10 feet by 20 feet, on the outside, one story??

OK, so you're looking to seriously underinsure a house that will be unoccupied a majority of the time. You're going to have only a couple options:

1. get a policy through your state FAIR plan. It's relatively expensive for relatively not much coverage, but they'll go as low as you want them to. Oh, and they only pay out the percentage of the house that you insured - so if your house is actually 20 x 20, you're 50% underinsured - you'll get 50% of the damages, less your deductible.

2. get a policy through a low value homeowner company like Foremost Insurance or American Modern. $40,000 will likely cost you about $400 a year - IF the house is fully updated. They both surcharge heavily for older homes, lack of updates, etc, and NOTHING is built into the policy - if you want furniture covered, you pay extra. If you want liabiltiy, you pay extra. It will still be subject to coinsurance - but on a MARKET value, instead of cost to rebuild. That means, come claim time, they don't pay to FIX your house, they buy the damaged portion from you, and the amount YOU predetermined - half a house fire, half a policy payout.

Have you talked about this with your homeowners agent, the guy that writes your primary coverage? They should be explaining all this to you, in state specific terms.

Answer 3

I have to say that mbrcatz... nailed this one. Insure the property for what it is worth or you will lose out if you ever have a claim.

If you already have home or renters insurance, call your agent and ask about adding a secondary property to that policy. You will receive a break and get full coverage. If you co-own the property with several others (family) then, you should also discuss this with your agent. There may be some additional paperwork that is needed because of the joint ownership. Always tell your agent everything you can think about the property (even if they don't ask). Trampolines? Swimming Pools? Open lead mines (just kidding; I hope)? All of these will affect your rating, but if you don't disclose them, you could lose any coverage when it comes time to pay a claim. (Most people don't know that a trampoline will just about double their home-owners policy premium, but if you get hurt and didn't insure for it, you have no coverage).

Answer 4

There are many important features of a home insurance policy to consider when choosing what is the right coverage for you and your home. I always recommend discussing your situation and property with a local insurance broker to go over all the necessary information to determine what is the right coverage for the home and any additional coverages that may be necessary based on your situation and risks.

Here are a some of most important features that are included on most homeowners insurance policies:
Dwelling (covers the structure of the building plus any additional attached structures)
Other Structures (Any unattached structures)
Personal property (Flip your house upside down whatever would fall out would be covered here. Be aware there are some restrictions on the amount of coverage for certain items such as; currency, firearms, jewelry, fine arts, etc)
Loss of Use (pay for additional living expenses while home is being repaired or rebuilt due to a loss)
Personal liability (liability coverage to protect against potential lawsuits of negligence)
Medical Payments (Covers medical expenses to others who are accidentally injured on your property)
Deductible (Your portion of the loss that you have to cover then the insurance kicks in)
and many different other option to compare vs ins price -

Answer 5

hi thier plenty of insurance companies will insure second homes or seasonal homes the premuim will be higher than you thought because the home is moslty vacant. you can check out my site globalwideinsurance.com