10 Things homeowners should know about buying insurance in 2025

Slideshow December 17, 2024 at 11:30 AM

Despite ongoing climate risk and regulatory pressures, the housing insurance market is stabilizing, according to a report by Matic.

Why do homeowners insurance prices go up?

Answer: Inflation in costs for building materials and labor, natural disasters, increase in claims, fraud and litigation.

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How do I find a good homeowners insurer?

Answer: Buying and owning homeowners insurance should include policy review, customer service and claims. Handling of claims settlements is the best predictor of customer satisfaction.

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How much homeowners coverage do I need?

Answer: There are no state-mandated requirements for homeowners coverage, and a mortgage lender may require you to insure only 80% of the replacement value of your home. General rule: Buy enough insurance to cover the labor and materials to completely rebuild your home, called the replacement value or replacement cost.

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What extra homeowners insurance coverage should I consider?

Answer: Extended replacement cost for your dwelling, inflation protection, contents replacement cost, additional valuables, sewer backup, ordinance, earthquake, hail and windstorm.

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Should I get an umbrella insurance policy?

Answer: Your safest bet is to buy coverage worth at least as much as your assets. Umbrella or excess liability coverage can provide this added protection. It increases your liability protection beyond the limits of your home and auto policies in case you’re sued for accidental injury or property damage.

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Do I need flood insurance if I live in a low- or moderate-risk area?

Answer: The coverage can be a very worthwhile purchase, even if you don’t think your property is vulnerable. The National Flood Insurance Program, part of the Federal Emergency Management Agency, says that one in three of NFIP flood insurance claims originate in moderate- to low-risk flood areas.

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How can I pay less for homeowners insurance?

Answer: Bundle coverage, raise your deductible and make home improvements.

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When should I not submit a homeowners insurance claim?

Answer: Avoid making claims of just a few hundred dollars above the deductible. Doing so might erase discounts you’re getting for remaining claim-free. If you’re dealing with an independent agent, discuss the pros and cons with them before you report.

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What do I do if my homeowners insurance company drops me?

Answer: If you’ve been dropped and can’t find coverage from a private insurer, talk to an agent about your options. Many states also sponsor high-risk homeowners insurance pools to cover those who can’t find insurance elsewhere. They’re called Fair Access to Insurance Requirements (FAIR) Plans.

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