By Joe Szabo, Scottsdale Real Estate Team
You can and you should shop around for home insurance. Even if you have had the same policy for years. Homeowners insurance is a lot easier to shop for than a mortgage because premiums change only occasionally, so the price you are quoted is very likely the price you will pay.
Shoppers should be aware that carriers today have access to databases that combine claims data from many companies. If you have been making numerous small claims, all the carriers you shop will likely be aware of it. It is still worth shopping, however, because the carriers use different risk evaluation systems.
In shopping for the lowest premium, you must be very careful to compare apples with apples. The principal factors you must hold constant in soliciting quotes from different carriers are the deductible and the coverage. The deductible is the loss amount that is the homeowner’s responsibility: $500. Only losses above that amount are insured. Higher deductibles carry lower premiums. But lenders limit the amount of deductible they will allow — $1000 is a typical maximum.
The coverage dictates the maximum loss the policy will pay. There are four levels of coverage, called “actual cash value” (lowest coverage), “replacement cost”, “extended replacement cost”, and “guaranteed replacement cost” (highest coverage, but not necessarily available). Higher coverage carries higher premiums. Lenders typically require coverage of 125% of replacement cost, though this may be scaled down if the land accounts for an unusually large part of the house value.
Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.
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