Home Insurance Tips

On a recent episode of the Kansas City Real Estate Podcast, Joe and I had the pleasure of chatting with Paul Santos, an insurance expert, to help us better learn about the world of home insurance. We learn things like how the age of your roof and the elements it's exposed to are key factors that can lower or increase your home insurance premiums. We also made many many references to one of our favorite shows, The Simpsons. You'll learn some great tips, let me know what we missed.

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  How Your Roof Affects Your Home Insurance

Believe it or not, how your roof affects your home insurance more than you might think. Paul highlighted this at [6:14], noting that insurance companies really look at the likelihood of something terrible happening to your home.

• Newer roofs can seriously impact your home insurance premium, generally leading to better rates because they're less likely to fall apart [6:21].

• An old roof can be a major red flag, potentially leading insurance companies to hesitate to insure a home, which can significantly increase your premiums [6:40].

• Having two layers of shingles can make it really hard (and expensive!) to insure, as it's difficult to assess potential damage underneath [8:06]. Replacing your roof with quality materials can save you headaches down the road.

 

Learn about Mortgage Requirements for Home Insurance

Paul clarified a few key points about mortgage requirements for home insurance.

• If you have a mortgage, your lender will require you to have homeowners insurance [3:22].

• This is because the bank has a vested interest in making sure the property is protected.

• They won't close the loan if you don't have insurance [3:35].

 

What Underwriting Looks For

When it comes to underwriting, there are certain things insurance companies look for.

• Underwriters are looking to make sure your walls don’t have holes or your roof doesn’t have a leak [6:03].

• These are prime examples of issues that can lead to further damage and costly claims.

• To prepare your home for inspection, keep it in good repair to avoid these red flags, as regular maintenance is key.

 

The Impact of Inquiries on Your Home Insurance Premium Rates

This one really surprised me.

• Even just calling to ask how much your insurance would go up if something happened (like a broken bay window) could potentially increase your rates [13:17].

• While we didn't dive into specific examples, the takeaway is clear be careful what you ask!

• Make sure you understand your policy details before calling your insurance agent with random questions.

 

  Liability Coverage. Protecting Yourself.

Paul explained a key component of homeowners insurance, which is hedging your liability if someone gets hurt on your property [15:58].

• This covers you if someone slips and falls, or otherwise injures themselves on your property.

• You can also get umbrella insurance for additional coverage beyond the standard policy limits [16:16].

 

Insurance: It's a Shared Risk

Insurance is essentially a shared risk, as Paul explained.

• Everyone contributes [12:25].

• Those who experience a covered loss can draw from it.

• It's more expensive not to have insurance when something catastrophic happens, as you either break even or you're at a loss without it [11:51].

 

Owning a Home Outright. Do You Still Need Insurance?

Even if you own your home free and clear, he recommends having insurance.

• If the worst happens (fire, tornado, etc.), you're at a total loss without it [19:12].

• Plus, you still need liability coverage in case someone gets injured on your property [19:00].

 

Reading and Understanding Your Policy

This might sound obvious, but Paul emphasized the importance of actually reading your home insurance policy [57:05].

• You need to know what you're actually covered for!

• The last thing you want is to discover you're not covered when you thought you were.

 

Special Coverages: Earthquake and Flood Insurance

Paul pointed out that standard policies usually don't include earthquake or flood insurance [58:09].

• If you live in an area prone to these events, you'll nee