Are you a senior homeowner? Find out how you can benefit from home insurance and where to find the best deals from top companies
If you own a home, insurance is one of the most important investments you can make. Home insurance is something that people of all ages need to be aware of. However, as you age, recovering from a housing disaster can be even more financially and emotionally draining. That's why it's important that seniors have homeowners insurance.
This article outlines what senior homeowners need to know about home insurance, including costs, coverage, and policies.
Your rate depends primarily on these factors:
There's a lot to consider. How much coverage do you need? What companies offer policies for seniors? How can you save money on your policy? How do you know you're getting a good deal?
First, your home insurance is not set in stone. It can and will change. Here are some of the things that will change the price of your policy:
Home insurance is extremely complex. Finding someone to help answer your questions is a good step.
"Your agent can be a terrific resource," says William Hebert, director of regional sales for Mercury Insurance. "He or she is an expert and can help you determine what coverage you need."
Since insurance is complicated and your rates often change, it's important to stay educated about your home insurance. When it's time to renew, shop around and compare quotes from other insurance companies. Reassess your coverage levels. If you haven't already, consider bundling your home insurance with your car insurance.
We will cover the ins and outs of home insurance plans, where to get them, and how to save money.
You can tailor your home insurance policy to fit you and your home. Coverage options are diverse and dependent on your needs. But it's important that you have enough.
"Be careful not to shortchange yourself on coverage," warns Hebert. "Homes are most people’s biggest asset. Balance cost savings with necessary protection."
It's tempting to get cheap home insurance to save money. But that's not advisable.
"Don’t focus solely on the price, balance your decision on the value and coverage provided for the price you can afford," explains Hebert.
If you don't tailor your home insurance to your needs, you're at risk for unique problems.
For example, homeowners in disaster-prone areas should purchase flood coverage or earthquake insurance. People with jewelry collections or rare possessions can add a personal property policy. And you can purchase specific amounts for each coverage type. Here are some common coverage options:
When you file a claim, your insurance company must determine a monetary value for your loss. There are two main methods that insurance companies use to decide how much to pay you for a claim.
Replacement cost is the exact amount it'd cost to replace damaged or stolen property. Your item is valued by what it costs to purchase a replacement. Replacement cost doesn't take depreciation into account.
Let's pretend your couch was destroyed by a fire. You paid $1,000 for this couch last year. With replacement cost coverage, your insurance company will reimburse you the full $1,000. If that same couch now costs $1,200, they'll pay you the extra $200.
Actual cash value, on the other hand, is the cost of the item plus depreciation. Think of it as market value. Your insurance company might value your couch at $800 after a year of depreciation. That's how much you would receive in an actual cash value claim.
You can purchase either type of coverage for your property. Note that replacement cost coverage is more expensive since it doesn't account for depreciation. But for many people, it's more than worth it when it's time to file a claim.
"Make sure that the replacement cost coverage on your home is reasonable and adequate," says Hebert. You won't regret it when it's time to file a claim.
You can read more about actual cash value and replacement cost coverage here.
You can benefit from plenty of discounts during your golden years, including home insurance. Here are some common discounts specifically available to seniors:
Several insurers sell policies for homeowner's. According to J.D. Power, here are the 10 best homeowner's insurance companies based on overall satisfaction:
Use QuoteWizard to compare quotes and find the best policy.
It's an unfortunate reality that there are many scams that specifically target seniors. From fraudulent IRS calls to internet scams, there's a lot to be aware of. No matter how informed you are, it's still possible fall victim to scams.
According to the FTC, 36 percent of people ages 50 and older are victims of identity theft, and 49 percent of individuals 50 and older are victims of fraud. It's a serious problem.
Fortunately, many homeowner's insurance companies also offer identity theft and fraud protection. It's usually an optional endorsement, meaning it costs extra. According to the Insurance Information Institute, adding identity theft protection to your home insurance policy usually costs $25 to $50 per year.
To avoid identity theft, be extremely cautious about giving out your personal information. Many scammers will contact you pretending to be affiliated with an important organization to access your details.
"The Social Security Administration, the IRS, or your local police department are incredibly unlikely to ever ask you for this information over the phone, email, or via social media," says Amy Nofziger, AARP's fraud expert.
"Don’t display or give out personal details like your birthday, bank account number or Social Security number to almost anyone who asks over the phone," warns Nofziger. "If you have any doubt at all, hang up, or close your browser and verify who contacted you."
It's not just phone scammers and internet hackers that can compromise you. "One method we continue to see that targets older adults is the simplicity of a stolen wallet or purse," explains Nofziger. "Don’t carry your Social Security card around with you. If you need it, take a picture of it with your phone or carry a copy."
If you're a victim of identity theft or fraud, your home insurance company can help you out. Since identity theft and fraud protection is so affordable, it's a smart purchase.
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