How to know if you have good homeowners insurance
Insurance 101 - Homeowners Insurance Coverage | The Ultimate Guide to Home Insurance
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when I first bought my house I wish that
someone would have taught me the
different types of insurance that they
offer in what I was looking for because
when I purchased the home insurance I
just followed the natural flow someone
referred another person I bought
insurance from them and then I just kind
of crossed my fingers and hoped it
worked out today's video we're gonna go
through the top five things you need to
know about house insurance hey guys this
is Mark Flockhart if you're new here
this channel is all about home auto all
types of insurance and how you guys can
learn the tips and tricks of how to get
you the best rates on your insurance so
if that's interesting to you it might be
a good idea to subscribe I will also put
in the notes below a lot of the stuff
we're talking about today so that way
you can read it as well if you want to
read it just in write written form I'm
trying to start a blog I'm just kind of
created a website that I've started
using so it's kind of a tool for you
guys to use hopefully it's helpful if
you do get good value out of it
definitely let me know if you have other
things you want me to talk about please
leave that in the comments below as well
according to the National Association of
Insurance Commissioners the average cost
and house insurance is eleven hundred
and ninety two dollars per year keep in
mind the prices do vary from state to
state because if you're in Kansas or
Florida or Texas or Louisiana you guys
are the highest in the nation so your
averages are gonna be about three to
five hundred dollars per year more than
the national average so you're looking
at anywhere from fifteen hundred dollars
per year up to about to almost two
thousand dollars per year for house
insurance now those states even though
the high you will find some people there
that are only paying six or seven
hundred dollars a year it really just
depends on the location for example I am
living in Michigan and my average is
about twelve hundred dollars per year
we're pretty normal as far as the home
insurance goes not so much on the auto
but as far as that goes we're great but
I have people I ensure that our six
hundred dollars four hundred dollars
eight hundred dollars it's not uncommon
to be around that nine hundred dollar
range even though the typical home is
right around that eleven to twelve
hundred dollar range
location plays
huge factor being in the city versus
being in the country you would think
that the city is more expensive and
there are some factors if you're in a
high-risk area so the zip code has like
a lot of theft and stuff like that
you're gonna have some stuff there but
that's kind of a separate piece theft
and all those claims are more so not
really the amount of activity but it's
more whether you've cleaned that stuff
right if you're in the country you're
likely gonna pay a little bit higher of
a premium reason that is is because you
guys are gonna have less of a response
time for any fire claims and that's a
huge thing so if the fire station is
over here near the city you're off in
the country house starts on fire you
call them help me help me help me
by the time they get there half of your
house or all of your house has already
burnt down we're in the city they're
near everybody within ten minutes there
at your house they've put the fire out
and maybe the kitchen burnt up a little
bit you're talking about a ten thousand
dollar claim versus a hundred and fifty
thousand dollar claim there's a huge
difference so that is gonna play a very
large factor the age of the home makes a
big difference the older the house is
the riskier it is because the updates no
one's gonna dig up the plumbing and
change it
some people do there is a discount for
that but that's not common right if you
have a house that's built in 1968 that's
gonna naturally pull in a higher cost
than a house built in 1998 your
deductible plays a very very large piece
now I prefer to stay with the common
which the most common deductible that
you're gonna see is a thousand dollars
so if you have a house claim you
out-of-pocket a thousand your insurance
will pick up the rest if that's a
covered peril as they call it there's
two pieces of the deductible you have
they're all perils which covers pretty
much everything except for wind and hail
so it's like fire vandalism theft any of
those typical things that's gonna happen
you know your house burns down tomorrow
that's an all peril deductible and then
you have wind and hail deductible which
is usually wind and hail that's the roof
basically it covers the siding but it's
very rare that the siding is really the
part that got damaged so if there's a
huge thunderstorm that comes through
hail dropping everywhere you can
actually pick a large deductible on
either or most commonly you're not going
to be able to pick a larger deductible
all perils unless you're wind and hail
deductible matches that or is higher so
you're not gonna be able to do like a
five thousand all peril the duck table
and a 1000 wins and he'll it's not
common most companies will actually deny
that type of a deductible if you did one
thousand dollar deductible on your all
peril deductible then you can probably
put your wind and hail at twenty five
hundred five thousand even ten thousand
a lot of companies offer should you do
it probably not most of the time that
$1200 average range if you're
comfortable with that that's gonna be a
thousand dollar deductible on average
that's the most common thing that people
do but just know if you're trying to
close on a house and they're just saying
we need to get the insurance down
because we need to show that your your
mortgage needs to show that you have
more debt to income your mortgage person
is gonna come to me and say how do we
get this insurance down then that's our
first option I would rather not lower
your coverages because I don't want to
under insure you I'd rather just have a
larger deductible so I'm not gonna lower
the house from a $200,000 house down to
150 because if it burns it down tomorrow
I want it covered I'd rather have you
out-of-pocket ten thousand dollars
versus losing a hundred thousand dollars
there's a big difference
same thing with liability I know they're
not have eeeh add a three hundred
thousand liability when you were five
hundred because we needed to get the
price down rather raise that deductible
so that the price lowers and then if
it's for closing yeah sure if you need
to close it and you choose to put it
back up the next day the next month
whenever you can change those coverages
like you do on car insurance
so you could get that price close on the
house and then if you change your mind
and decide you know what I really am not
comfortable with that I'd rather have
that larger deductible you can raise
that typically your mortgage will pay
the difference but just keep in mind
they may ask you to pay the difference
your credit history pays a factor in
this so if you have good credit just
like your mortgage loan you're gonna get
a better or lower interest rate
same thing with insurance in most states
they allow credit to be a factor so if
you have really bad credit you're gonna
have a higher cost and your insurance
good credit lower cost now this it
doesn't really play as big of a factor
as people think
we're auto insurance it's different in
auto insurance because it's so risky
your credit you're more likely to walk
away from your car then you will walk
away from your house that brings us to
our second point which is understanding
the values or the coverages so to speak
there's really only a few different
coverages that our primary coverages in
your home policy you have coverage a b c
d e and f what are those you've got
coverage a that's your dwelling that's
the physical house the cost to rebuild
that house to rip it down take all the
stuff away that's that's removing
everything and then to build that same
exact house how much that gonna cost
keep in mind it's not the value of the
house the value of the house includes
the land the location all the features
that they put into it sure you're gonna
get those rebuilt but the cost to
rebuild them is sometimes more expensive
than the cost to buy them today so
that's one thing to be mindful of
coverage B is going to be other
structures so that's gonna be if you
have a shed in the backyard if you have
a fence around the house if there's a
pool not attached to the house anything
that's disconnected from the house
that's gonna be your coverage B coverage
C is going to be your actual property
damage so the actual stuff you won't my
shoes my couch my TV the one thing that
you always always always want to make
sure that you get with that is something
called replacement cost and what that is
is it basically means that no matter how
old the TV is how old the couch is how
old anything is you're gonna get full
value that doesn't mean you're gonna get
the full value that you paid for it it
means you're gonna get what today's
value is so you may bought a TV for a
thousand dollars five years ago that TVs
probably worth $200 today so if you
don't get full replacement cost you're
only gonna get $200 back if you have a
fire imagine that times your whole house
take 80% of what you own and you're only
getting 20 to 30% back that's crazy it's
not worth it and it's not expensive to
do full replacement cost full
replacement cost is gonna mean if that
TV was a thousand dollars five years ago
it's probably the prices have gone down
on TVs a little bit so you it's probably
only $800 or $600 in
store today but it's a lot better than
getting a $200 cash back you're gonna
have enough to buy that exact
replacement model of that TV same thing
with your couch if it's a ten-year-old
couch you paid $1,500 for it
if non replacement cost it's only going
to give you a fifty to a hundred dollars
back we're a full replacement cost is
probably going to give you anywhere from
800 up to the 1500 if it was three
thousand today then you're gonna get the
$3,000 back it's full replacement cost
coverage D is loss of use so it's what
it means loss of you if you let's say
you have a thirty thousand dollar claim
and it's in your kitchen right the
kitchen caught fire it's gonna take
three months to replace that so you have
to get moved out of the house or you
have to live in the house if you choose
to while they're remodeling that kitchen
what that's gonna do is that's gonna pay
any living expenses that you incur
because of that loss so if you have to
go rent another house similar size and
shape and it's $1,500 a month then
that's part of that living expense it's
gonna pay that bill if you have to pay
someone to come over mow the lawn
because you can't do it anymore because
you just can't get back to the house
between the distance of your rental and
work and all that if you can't cook up
the food like you used to for the next
week or a month and a half then you have
to they're gonna cover those living
expenses that you incur so that way
you're not gonna actually pay
out-of-pocket all of these extra pieces
it's covered with that policy normally
they're gonna give you quite a bit it's
usually 20 30 even $50,000 for that
coverage which doesn't seem like a lot
especially if your house is like a 200
or 300 thousand dollar house but think
about it if you had let's just say
thirty six thousand dollars and it took
your your rebuild of your house 12
months which it never should but let's
just say it did right took you 12 months
that's $3,000 a month to live off of of
24 36 thousand per year and so our total
if it took you 12 months to do that it's
usually enough in most cases that
coverage is gonna cover roughly about
5,000 on average per month
and you're never gonna use that so just
know that coverage it doesn't have to be
high it's really a mostly defaulted so
then coverage II is
going to be personal liability that's if
somebody's going to sue you for any
reason anything you're liable for the
easiest way to think of it is it's not
only inside your house it's actually
outside of your house as well so if
you're at the zoo and you drop the
alka-seltzer in the monkey cage right
and they eats it and it dies they're
gonna sue you because they're they're
gonna want that monkey to either have
all the medical bills paid for or
replace him to go purchase another one
that's three hundred thousand dollars to
ship them and all that stuff
so that's gonna go towards your home
liability if you have a friend over and
they trip down the stairs and they get
hurt and it's fifty thousand dollars
worth of medical in your medical
payments that's the next coverage coming
up doesn't pay enough of that which it
won't they're gonna have to sue you
they're gonna sue your insurance not you
that's the reason you have the insurance
is they're likely gonna go after that
liability now keep in mind if you have
more assets oh I own a Ferrari and I
have a really nice million dollar house
and that's paid for you should be
looking at a lot higher than a half a
million dollar liability
you will probably max it out at a
million and then you'll get something
called an umbrella which is 1 million
two million up to ten million even and
it can go higher but then you're getting
the more specialized companies nice
pieces coverage F which is your medical
payments or medical coverage it doesn't
cover you or direct family that live in
the house so it's more so if like
friends or family are over for a visit
and they get injured they fall down the
steps break an arm it's four thousand
dollars for their deductible through
their medical and that medical that
you've chosen let's say you chose five
thousand as your coverage is gonna cover
that bill so they don't have to sue you
they don't have to sue your insurance
it's basically paying for a reason for
them not to have to go after you what
coverage should you carry this is so so
simple for you to calculate the average
across the u.s. some states are a little
bit less and if yes if you have a really
nice home and you have special features
crown molding everywhere granite
countertops really upgraded stuff it's
gonna be more but typically the ease of
the easy way to calculate it is take the
square footage so we'll say a 2,000
square foot house multiply it by about a
hundred and fifty to 106
two dollars we'll use 150 in most
examples $300,000 to insure a 2,000
square foot house now if it's a brick
home that's a different type of material
so that's going to take longer to
rebuild and that's a lot more
labor-intensive so something like that
you're gonna want to do closer to like
160 to 180 per square foot as far as
calculating that and that's the major
things companies look at is how large of
a house is it square footage that's
above ground so if you walk in the front
door if you have a basement that walks
out that's not above ground so that
doesn't count for square footage it's
anything that's above ground and that's
the square footage that they're gonna
base it off of take note of everything
that you have so do you have specialized
stuff in your house like built-in
cabinets built-in bookcases you've got
Jacuzzi towels you've got speakers in
the ceiling those are all additional
pieces that aren't typically calculated
in it unless you are gonna speak up and
say something if your agents smart
they're gonna pull up your house on
Zillow or online and if there's photos
the kind of browse through them and make
sure that they're not missing pieces so
we've got our value so our 2000
square-foot house is $300,000 for
dwelling a ok the coverage separate
structures depending on the company is
either 2 or 10 percent more often it's
10 percent it's gonna be 30 thousand for
the shed and the fence and all that now
you can raise that if you want so that's
not going to make a big deal but if you
have like a pole barn in the back you're
gonna want to notate that and then raise
that coverage B up to a higher amount
that's sixty or seventy thousand that it
cost to rebuild that pole barn personal
property it's always ridiculously high
don't bother with this coverage it's
gonna be a hundred and fifty two hundred
thousand dollars it's crazy
but if you lower it nine times out of
ten it doesn't even change the price so
let it be as high as it wants just make
sure you have enough to cover your
personal belonging loss of use same
situation usually defaults a little bit
higher than average not a big price
changer so there's no point even playing
with this coverage just make sure you
have enough that you could live on for
at least three to six months if
something did happen and you had to move
out of the house medical payments more
often than not we're going to do five
thousand if you have some extra money
you don't mind having a little bit
your policy than shirt 10,000 maybe good
but usually it stops right around that
$10,000 range mainly because the next
part is going to be the liability
portion nine times out of 10 I quote
500,000 liability I just want you to be
protected as well as possible if you
have a lower income a little bit less of
a house then sure you can bump down to
300,000 liability as long as you have
enough less assets than what they're
gonna go after you for so that way
they'll go after the insurance and not
you if you have more like I mentioned
earlier then make sure you go higher up
to a million but more often than not
you're gonna keep that 500,000 liability
and then you're just gonna add an
umbrella on top of that because the
umbrella is gonna give you the million
two million three million dollar
coverage and it's not gonna stop at the
house it's gonna cover your auto
liability your car your home liability
anything that you're doing it's going to
umbrella that's why it's called umbrella
it's gonna over cover all of your assets
that way if something happens it's
cheaper to buy that than it is to up the
home and that something happens outside
of the home where it's not tied to that
and then the umbrella kicks in and
that's gonna give you a better benefit
the third piece I hope you're staying
with me if this is too much let me know
I can make this into multiple videos I
am going to go in-depth with some
computer screenshots of some Zillow
things and show you different types of
houses in one of the next videos
otherwise the third pieces don't accept
the referral and what that means is when
you go and purchase a house your Realtor
is gonna refer you to an insurance
person your mortgage person is going to
refer you to an insurance person and I
want to kind of preface this because I
told my wife this and she's like what
you get referrals from them all the time
I'm like yes I know but the reason I'm
saying that is and I'm really moreso
saying do some research on the back end
more often than not a person will get a
referral from the realtor because they
trust them and that realtor sometimes
works with a really good more a really
good insurance person but a lot of the
times they're all just trying to build a
network where I'll give you a lead and
you give me a lead and a lot of the
times or half of the time I would say
they don't really know that person
they're just given the referral because
they're really nice they had a really
good meeting with them maybe
maybe twice they might have just become
Facebook friends and that guy brings me
Donuts every month right that's really
the thing about referrals you got to do
some research that way you're not gonna
just jump in because I'll tell you
straight up seven out of ten people when
I get a referral purchase that's the
numbers the more referrals that you get
the higher converting they are is
because you're not gonna worry about
shopping everywhere you're just gonna go
to that one person if the price sounded
okay or if you're really close to the
time you had to close on the house then
you got stuck you bought that policy and
a couple years later you may think about
it like wait did I make the right move
so do a little bit of research maybe
Google the person or Google their
company and just see what kind of
reviews they have and that kind of leads
me into the fourth point which is do
your own research this doesn't have to
be a 30 40 50 hour long thing of you
doing research pull up a Zillow listing
or a redfin listing on your house look
at the square footage take the value you
can really lit you can literally do this
on a piece of paper take this here
footage times 150 and then 10% for
separate structures X percent for this X
percent for that and you can literally
just write down what it should be as far
as the coverages go and then you can
check a couple different places what I
typically do is because I work with an
agency that checks up to 17 different
places so when you call me that's one of
the reasons we have a lot higher of a
conversion is because when I'm checking
it I'm telling you a triple-a and
progressive and citizens and all those
guys Westfield and and all the major
carriers and I'm gonna be able to just
show you the differences and let you
kind of decide what's the best fit for
you okay well triple-a doesn't care
about the pit bull in this state but
progressive does so we know progressives
not the option for you you have a pool
triple-a doesn't care about the pool
westfield doesn't care about the pool
they rate for them they may have an
extra charge but then when you go to
those other companies some companies
don't want any pools so you join a
company they send an inspector out and
all of a sudden you're dealing with the
cancellation doing a little bit of
research in the background knowing your
coverages it's a really good thing to
have I'll try to create a cheat sheet
for you and I'll put a link below that
way you can go right to my website and
then you can download that
we that way you'll have an idea of what
you're looking for with that being said
the last part is gonna be the bundle
discussion mark don't no no no don't
leave don't leave yet don't leave please
I want to tell you it's so important aah
okay the first thing a lot of you
probably thought of just now was like no
you're trying to sell me on a bundle I'm
not doing bundles right I like my guy
who does my auto I like my God to do the
house I'm just gonna do whatever does
that okay I get that here's what I'm
saying if you love the guy that does
your Auto turn this video off now go
talk to him about your house bundle your
house in your auto no matter what is
best for you if you are shopping for
home insurance and you don't call the
guy that does your auto if you like him
or her then you're doing them a
disservice more than you would by saying
no to other people put your house with
them if it's a hundred bucks more and
you really think they're good fit for
you pay the extra hundred dollars it is
worth it to have the right agent that
will stand beside you when you have a
claim so having someone that can fight
for you in a battle like that especially
if you have a house fire one hundred
thousand two hundred thousand dollar
claim if your agent knows what they're
doing knows what coverages they gave you
and is willing to take the extra 20
minutes out of their day to fight for
you then you know you got a good one pay
the extra hundred dollars to be with
that person it is worth it I'm telling
you right now with that being said the
bundle saves you 20 to 30 percent off
home and auto so take whatever you're
paying on your auto and knock off to a
fifteen percent twenty percent or
whatever that company's discount is
that's huge
so you're gonna save money they're in
here it's worth it no matter which way
you go it's a bonus round all right we
made it just let's see in the fates I'm
sorry all right so I wanted to go over
the most important things that a lot of
you want to hear discounts I'm gonna
rattle through some discounts that I
think you guys should be mindful of and
don't worry about writing them down
right now I'm gonna put them in the
description below first-time home buyer
if you're a first-time home buyer you
usually will get a discount there are
some companies out there that I've
worked with that give hundred
of dollars off if you're a first-time
homebuyer updating the roof that's huge
if you have a new roof you're gonna have
to prove or get documentation showing
that the roof is new but it's gonna help
a lot if you've updated the electrical
the plumbing the heater all of that
stuff matters going paperless also
paying in full those are two discounts
that just have to do with the billing
you actually pay the bill yourself
sometimes they give it as count for that
versus going through the mortgage
because they're submitting all the
paperwork and dealing with the mortgage
company so that's more of a service and
you're paying for that extra service
being part of an affinity group so that
means you're part of a credit union
you're part of a triple-a membership or
you have RV membership club or
harley-davidson membership club any of
those things there's a whole bunch of
them we'll give you a discount for that
now keep in mind you don't have to
necessarily know what they are now so
when you get the price from your agent
ask them is there any additional
affinity groups that I can be part of
that will give me an additional discount
having high credit like we said before
credit matters so if you have really
good credit they're gonna give you a
little bit better of a deal doing in
your early shopper a little bit
sometimes they do sometimes they don't
being a nonsmoker not just you it's
anyone in the house so if there's four
people in the house if none of them
smoke they're gonna give you a discount
for that mainly because it's a lower
risk there's less chance of a fire
having a security system especially one
that notifies the police so if it's a
central security system and there's
gonna be an alarm going off when someone
tried to break in the house they smash
the window and there's sensors that go
off because of that if you have one that
notifies the police digit station that's
going to give you more of a discount
same thing with fire so if you have a
fire extinguisher you're gonna get a
discount for that but also if you have a
fire alarm system that either one
notifies sends an alarm out we move and
so that's going off right that's that's
a discount if it notifies the fire
station that's another discount quicker
response time they're gonna get to the
house quicker versus the half hour later
where half the house is gone tying in to
that is something called smart devices
so if you have a smart home where your
thermostat connects to your cell phone
or ring doorbell where it has a camera
on it you have the central fire alarm
system or notifies them you got the
central I mean having those things are
going to be a high safety feature
and that's gonna give you a lower price
on the cost and the last major one is
having a hail resistant roof if you have
a hill resistant roof that makes a huge
difference with insurance if you're in
states like Pennsylvania and anywhere
near the coast they also give one for
having hail resistant shutters so storm
shutters that way they're gonna close
off the glass if hail comes through or
wind comes through and it's gonna
protect the home essentially the more
stuff features that you have that are
gonna protect your house are going to be
beneficial anyways guys if you aren't
interested and don't have a specific
agent that you love if you love them
this is my agent and the video give me
the thumbs up have a great time if you
don't have that agent he's just not
pulling your heartstrings she's just not
doing you're not sure if they're doing
the right thing right I will put a link
in the description below that way if you
are interested in getting a quote
typically right now what it does is it
comes directly to me so it may take a
day for us to respond but what it does
is I'll take that information and I'll
look at it or pass it on to one of my
guys and they'll actually work up quotes
for you either way don't forget this
match the like button share the video
with anyone that you know is buying a
house if they are buying the house they
need to see this this could save them
several hundred dollars a year on their
insurance it's definitely worth it just
to give them the advice just so that
they know what they're walking into
alright guys I will see you in the next
one
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