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The Absurd Value of Homeowner’s Insurance

Homeowner’s insurance is one of the most common forms of insurance because similar to cars, many lenders won’t allow you to buy a home without first having insurance in place to protect it. Those lenders understand how important homeowners insurance is. When you break down everything it covers, the premiums you pay every month can seem like a steal.

The average homeowners insurance premium is somewhere around $1,000 a year. This can be higher or lower depending on where you live. For the math though, $1,000 is a nice round number that will make it easy to break it down. This $1,000 covers your dwelling, your possessions, your pool or fence, and your loss of use coverage.

Your premium each month is about $83. Every month you pay that money, your house is covered. Years go by and you keep paying your premium. One of these years the unthinkable happens and your house catches on fire and burns to the ground. Everything is gone. You’re devastated and have few options, but you do file a claim to get yourself back on your feet.

Now What?

Having paid your premiums faithfully for years the policy kicks in and will cover the replacement cost of your house, possessions, and the price you’ll pay while you get into a new home. So let’s say this happened after 20 years of paying a $1,000 premium. After paying your deductible (usually $500, $1,000, or $1,500) the policy will pay for everything else. That means you pay about $20,000 over the course of 20 years and now the insurance company will be covering your six-figure home, all of your possessions which can number into the tens or even hundreds of thousands,  and any costs you may incur while displaced from your home. In this case, it could be as much as $750,000 worth of value for your $1,000 you’ve paid every year.

Do you see how the value is downright absurd for the price you pay every year to keep your home protected? It is important to note that homeowners insurance has many parts and will only cover those things outlined in the policy. Has it been awhile since you last reviewed your policy? Schedule a time to come into the office and review what your policy covers. If you have something extra you’d like to add, the process is simple and your premium can be adjusted.

If you need to make an adjustment to your homeowners insurance policy, call Horan Insurance at (315) 635-2095 or come to our office at 6 Oswego Street in Baldwinsville, NY 13027.