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Picture the scene, you wake up early one morning with the sound of the wind blowing and rainfall bashing against you bedroom window. You ease yourself out of bed, walk down your stairs and are faced with your home under 6 feet of flood water. And so begins the long and distressing process of recovering from flood damage. And imagine your shock and horror when you call your insurance company only to be told you don't have the cover you thought and your claim is rejected!
This horrific scenario whilst uncommon could well be on the increase as home and business owners seek the cheapest possible insurance premiums without first looking into the cover they actually provide.
Mark Burdett, Marketing Manager of Gateshead based Northern Counties Insurance Brokers had this to say, “The recent flooding many parts of the UK has seen is likely to have an adverse affect on insurance premiums with insurance companies like Norwich Union already announcing price increases. One of the problems with increased insurance premiums is that people will naturally look to cut costs by shopping around for the best deal. The potential downside to this is that they then opt for the cheapest premium quoted without actually looking into the cover it provides. And unfortunately this could well result in cover not being in place which may only come to light when a loss occurs and they find out they aren't covered.”
So with flood claims seemingly on the increase for many home and business owners, Mark suggests people when looking to buy home or business insurance make sure they:
1. Get the cover actually required. For home owners this could mean accidental damage whilst for business owners' business interruption could be more beneficial. Many of these types of cover are often sold as optional extras so don't just be tempted with the lowest premium without understanding what it does (and perhaps more importantly) what it doesn't cover you for.
2. Know what excess they will have to pay in the event of a loss occurring. One of the ways insurance companies can quote lower premiums is by increasing policy excesses. Make sure your policy has an excess you can afford.
3. Ask for advice and help if in any doubt. Insurance Brokers are a great source for this as they can use their experience to find you the right cover, at the right price whilst making sure you, your home and your business are protected
As a victim of flood damage in the past himself, Mark summed up the risks involved in buying the cheapest insurance possible, “Many people see insurance as a grudge purchase and one which only produces a benefit when a claim needs to be made. I was lucky enough to have the right insurance cover in place when my home was flooded and I would urge anyone looking to cut costs on their insurance to make sure they know the potential consequences of buying the cheapest policy.”
It is possible to have cheap homeowners insurance (http://cheap-insurance-rates.com/home/newyork.cfm) and still have excellent coverage for all your needs. You do have to be very familiar with what is and isn't included in the policy, which is a lengthy contract that spells out every detail of then insurance. The contract names out the perils covered under the policy, which are usually fire, lightning, wind and hail.
Even if you need insurance to cover special circumstances, such as floods or earthquakes, you can get these clauses added to your home insurance policy by paying the extra costs involved. You can save money though by shopping around for an insurance provider that has cheap rates.
You may be able to have the coverage for extra perils added to the policy and still have cheap homeowners insurance in the money you save on the original policy. There are some perils that are not covered in any policy, such as acts of terrorism or war.
Since homeowner insurance (http://cheap-insurance-rates.com/home/statenisland.cfm) policies are for a one-year period only, you have to be on the alert for cheaper rates every year. You should start your comparison shopping for cheap homeowners insurance at least six weeks before your current policy is due to expire.
The location in which you live will have a lot to do with determining the price of the policy. If you live in an area, for example, in which homes are destroyed due to hurricanes every year, then the cost of your home insurance will not be as cheap as that of a person with an identical home in a different area where there are not as many insurance claims.
With the increasing number of insurance companies in the home insurance market, there is a lot of competition and this has brought down the rates on this insurance in recent years. Therefore it has become a lot easier to obtain cheap homeowners insurance. Once you start shopping around, you may be tempted to purchase a policy for the first quote you receive if it is cheaper than what you are already paying.
However, you really should request at least three free quotes to get a good idea of the insurance markets. Don't just look at the cost when you receive a home insurance quote because there may be differences in the policies with a cheaper one not being able to give you the coverage that you need.
If you have a mortgage on your home, you do need to have coverage for the amount of the outstanding balance. You can get a plan that suits your needs by deleting certain things and adding others, even with cheap homeowners insurance. You don't have to accept a policy designed by the insurance company because there is no one size fits all when it comes to insurance. Each case is unique with different factors that determine the premium costs.
You can get cheap homeowners insurance if you choose a higher deductible, which is the amount of money you have to pay before the insurance comes into play. Although it is more expensive, it is also essential that you have replacement cost of your home and personal belongings included in your policy so that you will get enough from the policy to replace what you have lost.