The Hidden Price of Creating Your Own Insurance Policy

There are policy provisions that are pretty standard and what's commonly known as H03 and an H05, that's not very exciting. There are provisions that are going to be in all of your dwelling coverage and your personal liability coverage in your personal property coverage. But within those different policy provisions, things can be very different from one policy to the other. 

When we get our premium statement, and the premium has gone up, you can always go out and find a cheaper premium. Only pay for what you need. But there are hazards to that approach.

How to know what you’ll need in a home insurance policy?

For example, there was a man that came into our office, and he was drastically underinsured for dwelling coverage. If his building or if his home would have burned, he would not have had enough coverage to rebuild that house.  

Peril Policy vs Open Peril Policy

Another common issue is a named peril policy versus an open peril policy. For example, I have this insurance policy, but it only covers the accident. So that's a named peril policy. Whereas an open peril policy tells you what the policy won't pay for and it really gives the policy owner the benefit of the doubt. 

If it's not exclusively listed as something that's not covered, then it is covered and in going into purchasing a policy, that's a huge distinction. You can see that a named peril policy would be much less expensive because the risk is almost gone for the insurance company to ever have to pay a claim under such a policy. 

The dwelling coverage is another thing that you look for regarding liability coverage in today's world and you should not be less than $250,000. 

If you have something to protect, then you need to have as much coverage as you can afford. Umbrella coverage is a very good value.

You can't always name your own price. Because you don't necessarily know what you need. You can name your extra coverage. You can name your price, but chances are the price and your needs won't line up.

Are you thinking of buying or selling a home in the Nashville and Middle Tennessee area? Give me a call at (615) 930-0313, schedule a call with me, or send me a message! I love helping people and using my financial and legal background to guide you in finding your dream home!

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