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Q. Are there things that I can do to lower the cost of my homeowners insurance?
A. There are several things you can do to lower the cost of your homeowners insurance, but you need to decide whether or not these actions make sense for you. The best thing to do is to share a copy of your current policy with us and we will review it together.

Sometimes quotes on homeowners insurance can vary by hundreds of dollars for the same coverage on the same home. At Ford Insurance Agency, we’ll shop and compare policies from our partnering companies, being careful to ensure that each insurer is offering the same coverage.

You may also qualify for discounts that may help lower the cost of your homeowners insurance. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Some insurers offer discounts if there are deadbolt exterior locks on all your doors, or if have an installed security system. At Ford Insurance Agency, we search for possible discounts for our clients.

One easy way to lower the cost of your homeowners insurance is to raise your deductible. For example, if you are comfortable raising your deductible from $250 to $500, in some cases you could lower your premium by as much as five or ten percent.

Q. What kinds of things are covered by homeowners insurance?
A. Homeowners Policies are usually composed of two main sections. The first section explains coverage for the property of the insured. The second section explains personal liability coverage for the insured. Anyone who owns or leases property should have this type of insurance. Usually, homeowners insurance is required by the lender to obtain a mortgage.

Q. How are "actual cash value" and "replacement cost" different?
A. Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. With coverage that uses “actual cash value”, the policy owner is entitled to the depreciated value of the damaged property. With coverage that uses “replacement cost”, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q. When purchasing homeowners insurance, what kind of things should I consider?
A. You should consider a number of things when purchasing any product or service, and insurance is no different. Some of these things to consider include:

1. Ascertain the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home—you’ll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs.

2. Calculate which, if any, additional endorsements you want to add to your policy. In your particular situation, you may want to add the personal property replacement cost endorsement, an earthquake endorsement or a jewelry endorsement.

3. Once we have determined the coverage you want in your homeowners insurance policy, Ford Insurance Agency can then help you determine if there are any gaps in coverage you might not have been aware of, explain the details of the policy’s exclusions and limitations as well as recommend an insurance company that will live up to your expectations.

Q. What are the policy limits (i.e., coverage limits) in the standard homeowners policy?
A. [Note: this answer is based on the Insurance Services Office’s HO-3 policy.]
The dwelling and other structures on the premises are protected on an “all risks” basis up to the policy limits. “All risks” means that unless the policy specifically excludes the manner in which your home is damaged or destroyed, there is coverage. The policy limit for the dwelling is set by the policy owner at the time the insurance is purchased. The policy limit for the other structure is usually equal to 10% of the policy limit for the dwelling.

Losses to your personal property are covered on a “named perils” basis. “Named perils” means that you have coverage only when your property is damaged or destroyed in the manner specifically described in the policy. The policy limit on the coverage is equal to 50% of the policy limit on the dwelling. Limits for the coverage for the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss is equal to 20% of the policy limit on the dwelling.

The coverage limit on personal liability is determined by the policy owner at the time the policy is issued. The coverage limit on medical payments to others is usually set at $1000 per injured person.

Q. Is my personal property covered when it is not in my home?
A. Your personal property (except property that is specifically excluded) is covered anywhere in the world. For example, suppose that while traveling, you purchase a dresser and you ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit—even though the dresser has never been in your home before.

Q. Should I consider purchasing earthquake coverage?
A. Standard homeowners insurance does not pay for direct damages caused by “earth movement.” “Earth movement” is a much broader term than earthquake. It includes earthquake, volcanic activity and other earth movement. This coverage may be available by endorsement for an additional charge. If you live in an area that is more likely to have an earthquake, you’ll pay more than if you live in an area that is unlikely to have an earthquake. Ford Insurance Agency can help you weigh the costs and benefits of this coverage before you decide to purchase.

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