Lisa Otero
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Phone: (405)200-3193    Fax: (405)604-2988
Homeowners Insurance

How to Buy Homeowners Insurance


Homeowners' insurance is a necessity, something every property should have. If you have a mortgage, your lender will require coverage -- and if your home is mortgage-free than you should have coverage anyway.
But not all insurance coverage is alike. Policies and protections differ, and so do costs. In essence, you want the most protection for the least number of dollars.
Homeowners' insurance generally comes in standardized packages. For instance, the most basic form, HO-1, offers protections against such perils as fire, theft, and certain types of liability.
HO-2 is more comprehensive and includes protection against damage from broken pipes, the weight of ice and snow, and broken hot water heaters.
HO-3 gives more protection still: It generally includes just about everything and excludes only earth-shaking events such as earthquakes, floods, nuclear accidents, and wars.
To determine which policy is best for you, and to find out about other policies, make a list of valued possessions and the types of coverage you'd generally like to have -- and then sit down with an insurance broker to review what's included (and excluded) from each policy form and the other forms of coverage which may be available. You may find all the coverage you want in a general form, or you may determine that you need special coverage at extra cost.
Real estate brokers, attorneys, fee-only financial planners, and CPAs can recommend local insurance brokers. Once you have some names what questions should you ask? Here are a few to get you started:
  • What form works best in your situation?
  • What is included under the form you select -- and what is excluded.
  • Do you have a personal office at home? If yes, what is covered?
  • Do you have a home-based business? If yes, you may require additional coverage specific to the type of business you operate. In this case, think in terms of clients dropping by, business equipment, inventory, etc.
  • Do you have antiques and jewelry? What coverage are you getting? What coverage do you need?
  • How much personal liability protection will the policy provide? What is the cost of additional coverage? What about an "umbrella" policy?
  • If you have a loss, will coverage be for actual cash value or replacement cost? Have the insurance broker explain the difference.
  • What is the policy deductible? (Generally lower deductibles mean higher premiums, higher deductibles result in lower premiums.) ·
  • How will the policy be paid? If your lender maintains an escrow account, the insurance policy will be paid by the lender -- remember, the house is security for the lender's mortgage. If you pay for property taxes and insurance directly, you will pay the bill. For details regarding escrow accounts and insurance requirements, speak with your lender.
  • Is your home an historic property? If yes, what special coverages are required?
  • When a policy says it covers "personal property" what does that term mean? What does it include and exclude?
  • How can you reduce policy costs? For instance, if you buy auto and home insurance from the same source will your combined expenses decline?
  • What home improvements can you make that would result in lower premiums?
  • How are claims handled if you have a loss? For your protection, it's a good idea to photograph or video your home and special possessions -- and then keep such photography in a safe deposit box.

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

How to Reduce Your Homeowners Insurance Costs


With the cost of insuring homes on the rise in recent years, now is a good time to examine your policy and look for ways to save money.
The Insurance Information Institute, a non-profit organization supported by the property and casualty insurance business, attributes the increases to the mounting number of catastrophes, the high cost of home repairs, and the emergence of mold claims.
So what can you do to help keep your rates reasonable? The III makes the following suggestions:
  • Shop for the best deal. Get at least three quotes. See if your state department of insurance has any price comparisons available. But don't just look at prices. Evaluate which companies provide the best customer service and are readily available to answer your questions.
  • Raise your deductible. The higher your deductible, the less premium you'll have to pay. The III says if you raise a $500 deductible to $1000, you may save as much as 25 percent.
  • Buy your home and automobile policies from the same insurer. Some companies will reduce your premium up to 15 percent if you have at least two policies from them.
  • Reduce the odds of being affected by a disaster. Make your home more resistant to disasters - you might be able to save by adding storm shutters and shatter-proof glass or reinforcing your roof. If you live in an older home, you should consider modernizing your heating, plumbing and electrical systems to reduce the risks of water and fire damage.
  • Understand the costs. The cost to rebuild your home is going to be different than what you paid for it. Don't include the cost of the land in deciding how much coverage to purchase.
  • Secure your home. Some companies offer a modest discount, usually at least 5 percent, for installing smoke detectors, burglar alarms and dead-bolt locks. Some insurers will also offer a discount if you install a sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. First you'll want to research the costs involved, and whether you'd be saving on your premiums.
  • Inquire about discounts. Ask your company about all potential discounts. For example, some offer discounts to those 55 and older.
  • Investigate group coverage. You may be able to get a group coverage plan through your employer or a professional or business group. See if it's a better deal than what you have.
  • Stay put. Many companies offer discounts for longer-term customers - sometimes up to 10 percent if you've had your policy through the company for more than six years. Be sure to compare prices against other companies once in awhile.
  • Review your policy and the value of your possessions. If you sold that pair of diamond earrings or other valuable for which you have a floater policy - additional coverage for items not covered by a standard homeowners policy - be sure you're not paying for the extra insurance.
Finally, when you're ready to buy a new home, be sure you factor in the cost of homeowners insurance. The cost of your premium will depend on how much it would cost to rebuild, and whether the house is likely to succumb to a disaster or fire.
Also, flood and earthquake damage are not covered by a standard policy. If you need flood insurance, which costs about $400 per year, you'll want to contact the Federal Emergency Management Agency. Most insurance companies offer a separate earthquake policy.

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

How Your Credit Affects Your Homeowners Insurance


If you've researched or gone through the process of getting a home loan, you know how important it is to have a good credit history. But did you know insurance companies also use your credit habits in determining whether they'll provide you with insurance and how much you'll pay?
Insurance companies have traditionally used many factors in determining how much of a risk you are to get into an accident or incur losses resulting in claims.
For example, insurers will look at your driving record and how long you've been driving when you seek auto insurance. Likewise, when you apply for homeowners insurance, they'll look at the age, size, and construction of your home.
Through the years insurers have found a person's credit information to be a highly accurate predictor of risk, according to the Insurance Information Institute, a non-profit organization supported by the property and casualty insurance business.
While insurers look at the same factors as lenders, they weigh each factor differently.
"The biggest difference is that insurance risk scores look for stability, but credit risk scores look for a reliable pattern," Craig Watts, a spokesperson for Fair, Isaac, and Co., whose insurance risk scores are used by about 300 insurers nationwide, told
Insurance companies typically weigh the factors as follows, according to FIC:
  • 30 percent: How much you owe. This typically evaluates how many accounts you have, how many have balances, and how much is owed on existing loans.
  • 15 percent: Length of credit history. Usually the longer your credit history, the better your score on this section.
  • 10 percent: New credit. If you've opened a lot of new accounts in a short period of time, your score will be lower. The system also takes into account how long it's been since you've opened an account. And if you had a bumpy period followed by a strong payment history, it will be considered favorably.
  • 35 percent: Payment history. You'll score high here if you make your payments on time and you don't have any bankruptcies, foreclosures, liens, or the like. If you have made late payments in the past, your score will reflect how frequently you were late and how late you were - in the eyes of insurance companies 90 days is viewed as much riskier than 60 days.
  • 10 percent: Types of credit. This will factor in your credit mix - retail accounts, installment loans, credit cards, finance companies, etc.
"Insurance scores are also more interested in how regularly you pay than in how much you already owe," Watts said.
Credit scoring is usually an advantage for those who have stellar credit histories because it can mean lower rates. It can also be advantageous to those who have a good history but may have filed claims in the past.
If you have a wobbly credit history, you can work on cleaning it up by:
  • Requesting a copy of your report and making sure it's accurate.
  • Keeping your balances low.
  • Paying off your debt.
  • Making payments on time.
  • Refraining from opening new accounts.
  • Re-establishing credit if you've had problems in the past - but do so responsibly.
  • Contacting a legitimate credit counselor, like Consumer Credit Counseling Services.
  • Knowing that closing an account doesn't wipe it from your credit history.
And if your credit score has bumped up your insurance rates or if you're looking for ways to reduce how much you pay for homeowners insurance, you can begin by shopping around and comparing rates. You can also lower your premiums by raising your deductible amounts.

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

Tips to get a Discount on Homeowner's Policy


If you're a first-time homebuyer overwhelmed at the prospect of closing costs, inspection and appraisal fees, "earnest money" and -- oh, yes -- mortgage payments -- undoubtedly you're a bit queasy about your homeowners' insurance, as well. It's the icing on an already very expensive cake.
Rumor has it that you, the newly cash-poor homeowner, have the power to receive discounts on your insurance policy if you take any one of a long list of measures to improve the relative safety of your home.
At this point, you're probably willing to stand on your head if that's what it takes to lower your monthly expenditures. None of these measures are that drastic. And sure, they're going to cost you some money up front.
But they're a wise investment in your safety; they'll save you money in the long run; and they'll even boost the resale value of your home come the day when you decide to sell.
The insurance companies' rationale is simple: The more safety measures you have in place throughout your home, the less likely they're going to have to come to your aid following a fire, flood, theft or other major disaster.
The following list outlines some of the protections you'd be wise to investigate and install prior to taking out your homeowners' insurance policy - or soon after you begin coverage.
There's no blanket guarantee, of course; some insurance companies offer discounts for these protections, and some don't. So it's clearly in your best interests to shop around and find out who will make you the best offer for your efforts.
  • Security system (offers an average of between 5 percent and 15 percent discount off your insurance policy, depending upon the provider)
  • Carbon monoxide detectors
  • Smoke detectors
  • Sprinkler system
  • Dead-bolt locks
  • Heat detectors
  • Fire extinguishers
  • Handrails installed alongside stairs
  • Fire escapes (if present) that are easily accessible
  • Wiring system which is both up-to-date and adequate for multiple appliances, which prevents overloading of sockets (a fire hazard)
  • Well-grounded outside antenna(e)
  • Backyard pool (if present) surrounded by fence with a securely locked and bolted gate
  • Heating system which is both updated and regularly inspected by a professional
  • Sidewalks outside the house are maintained and contain no large cracks, chips or holes
  • Flammable substances kept outside, preferably, at relatively cool temperatures to avoid overheating and risk of fire.
In many cases, new homeowners either have the above safety features, or they've performed various updates to their homes, and they fail to report them to the insurance company.
As a result, they end up paying more than they would had they spoken up. Before you meet with an insurance agent, make a list of all of your home's features, be they mere updates or safety features such as those listed above. List anything and everything you can think of; you have nothing to lose but money.
Some insurance carriers offer a discount to homeowners of properties built within the last decade. And if your home sits nearby a fire department or even a fire hydrant, you may apply for an additional discount; ask if the insurance provider offers such a benefit. You may also wish to investigate the option of combining your homeowners' insurance and automobile insurance under one policy, which typically results in a lower payment for you.
Another money-saving measure factor you may consider is raising your deductible, which can lower your premium significantly. Before you sign enthusiastically on the dotted line, however, make sure that in the event you need to use your insurance policy that your budget will accommodate a higher deductible.
In today's competitive market, it's particularly important to shop around, because it's quite possible you'll receive widely disparate quotes on policies that offer essentially the same coverage. This climate is to your advantage, however. If you don't like the quote you receive, you'll find plenty of other providers who will offer you a potentially better quote. But before you make judgments, be sure that the coverage you're being offered is comparable to other, more expensive policies.

© 1995- 2010 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved.  Equal Housing Opportunity® is the official site of the National Association of REALTORS® and is operated by Move, Inc.

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Coldwell Banker Mike Jones Company
4801 Gaillardia Pkwy 125 • Oklahoma City, OK 73142
Phone: (405)200-3193 • Fax: (405)604-2988

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