What to look for in a Homeowners Insurance Policy
All Risk/Open Peril Policy – Also known as “comprehensive coverage” covers ALL perils unless they are specifically named and excluded by the policy.
Named Peril policy quotes look similar to All Risk Policy quotes but insure as few as 6 named perils.
Many Insurance Agents sell Named Peril policies because the price is less than All Risk policies and consumers have been conditioned by commercials to shop for insurance based on price.
The policy “Form” will reveal whether the policy is All Risk or Named Peril.
2. Replacement Cost Coverage – With Replacement Cost coverage, the insurance company will pay what it costs to repair or replace your damaged possessions (minus the deductible) at today's prices WITHOUT deducting for depreciation.
Actual Cash Value (ACV) coverage only pays you what your property is worth AFTER depreciation has been subtracted from its replacement cost (and after the deductible).
Important: Most policies include ACV standard and charge additional premium for Replacement Cost Coverage. This is an example where cheaper is not always better.
3. Coverage A Dwelling Limit > $100/SqFt – How much will it cost to rebuild your home in the event of a total loss? AT LEAST $100/SqFt. Be cautious of any policy with a Coverage A amount less than $100/SqFt.
4. A “Comfortable” Deductible – The deductible is what the customer must pay out of pocket for a covered loss (claim).
Homeowners policy deductibles are usually listed in terms of a % of Cov A (the dwelling). A $100,000 home with a 1% deductible = $1,000, whereas a $400,000 home with the same 1% deductible = $4,000. A 2% deductible on a $250,000 home = $5,000, Ouch!
A best practice is to set the deductible at an amount the insured can actually pay out of pocket should he/she experience a loss (commonly 1%). A higher deductible will lower the cost of policy, but it can also financially prevent the insured from being able to repair and restore their property.
Be cautious of deductibles higher than 1% unless a licensed insurance agent has detailed the consequences of high deductibles.
5. Comprehensive Water Coverage – The most common cause of loss for homeowners insurance claims is water damage including: 1) Sudden/Accidental Discharge or Water; 2) Backup of Sewers/Drains; 3) Water Foundation; and 4) Seepage.
HOWEVER, water coverage on most homeowners policies are “Optional Coverages” (Endorsements) that cost extra.
Many Insurance Agents do not add water coverage to keep the price down, because consumers have been conditioned by commercials to shop for insurance based on price.
We work with a number of Nationally and Locally recognized insurance companies that we have selected to assist your efforts to insure your home with the best comprehensive policy at an affordable price. As you go through the home buying process we will introduce you to the best fit "Independent Agent" to start this process with a Clue Insurance report on the property and receive a number of quotes. Please contact us and we will help you select the best fit for you and get the process started.
Authorized Real Estate + Credit Professionals:
PHIL DELGADO Agency Owner
210.899.3800 | OFFICE
Speaks: English and Spanish
STEFFANI HIDALGO Producer
210.763.8172 | direct
210.763.8172 | mobile
Speaks: English and Spanish
18503 SIGMA RD, SUITE 109
SAN ANTONIO, TEXAS 78258
7272 Wurbach Road
San Antonio, TX 478240