Statewide Insurance Agency offers Oklahoman’s that are looking for home insurance options so that the proper balance between cost and coverage is achieved.
The discussion that follows explains the difference between Replacement policies and Market Value/Actual Cash Value policies. We understand that no one size fits all Oklahoma consumers when you are getting quotes for your homeowners insurance.
It is quite common for insurance companies to offer quotes on homes in Oklahoma City for more than the market value. This often poses the question from Oklahoma homeowners, “Why is my house being insured for more than it is worth?” Before determining how much to insure a house for, it must be decided how the insurance company will value the house if there is a claim. One method offered is to value the property at Replacement Cost, which as the name implies, is intended to pay to replace the property, without regard to the original or current purchase price and without regard to depreciation.
In most situations, the Replacement Cost option is going to result in a higher claim payment then if the property was insured at its current value (sometimes called Actual Cash Value coverage – ACV). An insurance company is only obligated to pay up to the limit of insurance; therefore, the house may need to be insured for more than it is worth. In order to obtain Replacement Cost Coverage, the house will need to be insured for the amount it would cost to replace it.
Most property depreciates in value over time. A television set would not be sold today for the same amount it was purchased for ten years ago; it would be sold for less, most likely much less than the original purchase price. A policy containing a replacement cost provision would pay today’s cost of a new television set of like kind and quality which would be more than if the policy only paid for the value of the ten-year old television set (see ACV coverage above).
On a larger scale, the cost to rebuild or replace an entire home could be significantly more than the home was purchased for or could be currently sold for. Even for a home built this year, the cost to rebuild it very easily could differ from the original cost. There are several factors to consider when making an attempt to measure the cost of replacing a home, such as:
No economies of scale
Cost of preparing the home to be rebuilt
Access to the home site may be limited or obstructed
Increase in labor costs due to high demand, as in the event of a catastrophic event
Increase in material costs, possibly due to shortages or discontinued
There are several methods used to estimate the replacement cost of a home. Some of the factors insurance companies use are:
Type of foundation
Attached or detached garages
Location of the home
Number of rooms and baths
Replacement Cost Coverage is an option many homeowners should consider when looking for homeowners insurance. Obtaining this coverage will require the house be insured at the estimated Replacement Cost value, which typically is a higher amount than the market value. With the limit of insurance being higher, the premium will also be higher. Certainly no one wants to pay more for insurance, but the difference in a claim payment could be several thousands of dollars.
Saving Money on Auto Insurance – Auto insurance is a necessity, but it doesn’t have to cost a fortune. This video includes 5 simple steps to saving money on Auto Insurance. We’ve also included more tips for cutting insurance costs below.
Shop Around – The easiest way to save on high risk auto insurance is shopping around. Obtain as many auto insurance coverage quotes as possible. Since there are a myriad of alternatives accessible in the insurance marketplace today, you have the luxury of comparing different rates and opting for the most affordable option.
Take Control Of Your Rates – Being in control of your rates can also help lower the cost of car insurance. Tickets as well as accidents which are no longer paid for should be taken off the coverage at the right time. Each time changes are made to your status, obtain a few quotes and compare the different rates. Perhaps, you will be able to find a plan that allows you to save.
Buy A Cheap Car – The more expensive a car is, the more you will pay in insurance premiums.
Cover Less Miles In A Year – Try to keep your mileage to the minimum. Drivers who cover less than 10,000 miles in a year are more likely to qualify for reduced insurance rates. The more time you spend on the road, the more likely you are to be involved in an accident.
Park Your Car In A Safe Area – Burglary and accidental damages are just some of the factors that can increase your insurance premiums. Cars parked inside a garage or on a driveway are less likely to be broken into or damaged which results in a 4% to 6% decline in insurance costs.
Exercise Caution While Driving – Careless driving will result in additional points in your license. As a result, you will be expected to pay more in insurance premiums. Whereas points attributed to speeding tends to remain on a driver’s license for at least 4 years, insurance companies will confirm if there have been convictions in the past 5 years prior to deleting them from your record.
Install Security Systems In Your Car – Installing security systems, for example, car alarms and anti-lock brakes in your car can also help in lowering your risks.
Avoid Making Changes to Your Car – Do not make changes to your car before informing your insurance provider. Modifications refer to anything that will alter the original specifications, for example, fitting allow rims.
Call Statewide Insurance Agency today for more information on saving money on your Oklahoma car insurance quotes, or visit us online to receive a no-obligation quote.
Summer is officially over. A quick reminder to keep your home gutters clear from debris during the Fall!
Why do home insurance and car insurance consumers in Tulsa choose Statewide Insurance Agency in Edmond….100 miles away?
The answer is Tulsa Metro Area consumers are usually referred to us by family and friends that know and value what we have to offer….we respond quickly (phone and email), we only sell for dependable companies that pay claims without hassles, our experienced staff makes few mistakes and we are able to shop multiple companies to find the best home insurance and auto insurance package for you.
If you want to have a cup of coffee with your home insurance agent, we may not be the agency for you! However, if what you value is integrity, great service, stability, low prices and professional advice, please consider us as your need for home insurance quotes and car insurance quotes arise.
Even a small leak can become a major problem, so knowing what you’re covered for and how to prevent water damage are equally important. The below tips should help uncover any potential water problems down the road and keep your property dry this summer.
Shopping for your dream house? There are many considerations when looking at real estate, such as property taxes, school district, available recreational opportunities in the neighborhood, to name a few.
You will be paying insurance on your home for as long as you own it, which is why you need to do your homework before you decide to make an offer. Why? Thinking through all the costs associated with buying a home will make the process run more smoothly, and it may also save you money.
1. Check Your Credit Rating
A good credit history helps you in many ways. Good credit makes it easier to get a mortgage at a competitive rate, and it may also qualify you for a good credit discount on your insurance. Get a copy of one or all of your credit reports. Make sure they are accurate and report any mistakes immediately. If your credit is not as good as it could be, take steps now to improve it .
2. Protect Yourself with a Renters Insurance Policy
If you are currently renting a house or apartment, protect yourself financially with a renters insurance policy . In the event of a disaster, renters insurance  can help protect the down payment you’re building to buy your new home, as well as provide useful a insurance history to your prospective homeowners insurer when you go to buy your first home.
As you search for your new home, remember that the physical characteristics of the house—its size, location, construction and overall condition—can affect the cost, choice and availability of home insurance. Following are some factors to consider when shopping for a home:
3. Quality and Location of the Fire Department
Houses that are located near highly-rated, permanently staffed fire departments usually cost less to insure. This also holds true for homes that have a hydrant nearby.
4. Proximity to the Coastline
Houses located on or near the coast will generally cost more to insure than those further inland. There will also likely be a separate hurricane or windstorm deductible .
In some coastal communities, private homeowners insurance coverage may not be readily available. Instead, you may need to purchase insurance through a state-run insurance program, which can provide less coverage, and in some cases be more costly, than private insurance.
5. Age of the Home
A stately, older home can be quite beautiful—but they can also cost more to insure. Ornate features like plaster walls, ceiling molding and wooden floors may be costly to replace and can raise the cost of insurance. And, plumbing and electrical systems can become unsafe with age and lack of maintenance. If you are considering buying an older home find out how much it will cost to update these features and factor it into the cost of ownership.
6. Condition of the Roof
Always check the condition of the roof. A new roof matters to insurers and keeps you and your family safer. Depending on the type of roof and whether or not you use fire and/or hail resistant materials, you may even qualify for a discount.
7. Is the Home Well-Built and Up to Code?
Find out whether the house has been updated to comply with current building codes. Homes built by careful craftsmen and those built to meet modern engineering-based building codes are likely to better withstand natural disasters.
8. Risk of Flooding
Damage from flooding is NOT covered by standard home insurance policies. If you are buying a home in an area at risk from flooding, you will need to purchase separate insurance. Insurance for flooding is available from the federal government’s National Flood Insurance Program  (NFIP), and from a few specialty insurers.
9. History of Earthquakes
While earthquakes are most frequently associated with California, they occur in the majority of states and, like flooding, are not covered under standard home insurance policies. Earthquake insurance is available from private insurers as an endorsement to a homeowners policy, and in California from the California Earthquake Authority . Check rates with your insurance professional—the cost of earthquake insurance differs widely by location, insurer and the type of structure being covered.
10. Swimming Pool or Other Special Feature
If the house has a swimming pool , hot tub or other special feature, you will likely need more liability insurance. You may also want to consider purchasing an umbrella liability policy  to provide added protection in the event someone gets injured on your property and decides to sue you.
11. Check the Loss History Report
Ask the current homeowner to obtain a copy of the loss history report on the home. Homeowners can obtain either a Comprehensive Loss Underwriting Exchange  (C.L.U.E.) report, which is available from LexisNexis, or an A-PLUSTM  property report from ISO®. These reports provide a record of the type of loss on the home, the date of the loss and the amount and status of each claim—going back five years. If the report indicates there has been damage to the house, have it checked by a professional.
A home claim history can provide extremely valuable information and should prompt questions from the buyer. For instance, if there was a claim for water damage on the home, it is important to find out the source of the damage (such as a burst pipe) and whether it has been properly repaired. On the other hand, if there was a claim for wind or hail, which resulted in a new roof, this makes the home stronger and is very attractive from an insurance perspective.
12. Get the House Inspected
You’ll need to have the house properly inspected in order to get your mortgage approved. Accompany the inspector and make sure he/she does a thorough inspection of the home. The inspector should:
If the inspector raises questions, your insurance company will as well. And, be sure to find out if there is an underground oil storage tank, as many insurers will not provide policies for homes that have one.
13. Estimate How Much It Will Cost to Maintain the House
Routine maintenance is your responsibility as a homeowner. Losses caused by failing to properly care for your home are not covered by standard homeowners insurance policies. So make sure you factor these costs into the overall price of owning the home.
14. Call Your Insurance Professional
Don’t wait until the last minute to think about insurance. Ask your insurance professional if the house will qualify for insurance, and get an estimate of the premium. The sooner you act, the smoother the process will be. Don’t be shy about asking for estimates on more than one house. Insurance is an important consideration when purchasing a home. If you are uncomfortable with the cost of insuring a particular house, keep looking for one that better fits your financial situation.
For more about insuring your new home: Homeowners Insurance Coverage 
ALL SOURCES OF INFORMATION:
August 14, 2018: Norman, OK. Encompass Insurance, a wholly owned subsidiary of Allstate Insurance (ALL NYSE) has entered the Oklahoma home insurance market with a bang.
The Encompass homeowners product will target consumers in select communities such as Norman by offering below market home insurance quotes (in most situations) and a top quality product.
The product has all of the features and benefits that consumers have come to expect from Encompass and Allstate including up to $5,000 for emergency repairs that need to be made quickly following a loss in order to prevent further damage.
The Encompass home insurance product is being quoted and offered exclusively through Independent Insurance Agents, including Statewide Insurance Agency (Statewide) in Edmond, OK.
Statewide’s owner, Von Nix, commented on the opportunity to offer Norman residents lower homeowner insurance rates by saying, “we have agreements in place to offer home insurance from many different companies; however, there are only 4 that we have confidence in to provide great claim service and excellent long-term value….Encompass certainly falls in this category. We have seen several companies continue to take rate increases the last 4 years despite better than average weather in Oklahoma. Encompass will provide the competition that is needed in areas like Norman to help keep other carriers in line from a pricing point of view.”