Homeowners insurance is an important purchase for many people. There are two major reasons to buy homeowners insurance:

To protect your assets

Homeowners insurance covers the structure of your home and your personal property, as well as your personal legal responsibility (or liability) for injuries to others or their property while they’re on your property.

To satisfy your mortgage lender

Most mortgage lenders require you to have insurance as long as you have a mortgage and to list them as the mortgagee on the policy. If you let your insurance lapse, your mortgage lender will likely have your home insured. Compared to a policy you would buy on your own, the premium might be much higher and the coverage will be limited to damage to the structure of your home. The lender can require you to pay this higher premium until you get your own homeowners insurance again.

Insurance companies rate your home based on factors such as replacement costs, the city and/or county where you live, your claims history, your credit history, construction materials and local fire protection.

Shop for the company and agent that offer the best service for the best price. Compare prices. Different companies charge different rates. Get quotes from several companies before you buy. Make sure you understand what coverages and perils are included and that you’re comparing equivalent policies.

• Am I in your lowest-priced company or tier? If not, why?
• How can I get a better rate?
• What perils or coverage is excluded or limited in the policy?
• May I add the peril or coverage back into the policy?

Some agents may represent several companies, while some agents represent only a single company or company group. Some companies market their policies directly to consumers without using agents. To check as many companies’ rates as possible, ask to see all the rates of all the companies the agent or company employee represents.

• In addition to costs, you should consider other important factors, such as the company’s financial strengths and customer service.
• Never cancel your old policy until your new policy is effective. A policy becomes effective only when the insurer or its local agent binds coverage.
• Make certain you answer all questions on the application truthfully. Wrong information could cause an incorrect price quote or a denial or cancellation of coverage.

You can save money on your premiums by increasing your policy deductibles. However, you’ll have to pay more out of pocket if you have a claim. If you are offered a policy with a large deductible, consider whether you can afford to pay the amount for each claim you file. You may qualify for discounts on your rate but remember not all companies offer the same discounts.

5 Ways to Lower Your Insurance Rates

• Impact-resistant (hail-resistant) roofs
• Dead-bolt locks or certain other security measures
• Approved electronic burglar alarms
• Smoke alarms, sprinkler systems or other fire prevention systems
• Age of your home
• Heating, electrical or plumbing updates
• Companion policies such as your auto policy with same company
• Senior citizens
• Personal property identification marking
• Credit score
• Continued policy renewals
• Claims free discount

If you are having problems finding homeowners insurance, you should contact the Oklahoma Market Assistance Program (OK-MAP). OK-MAP can connect you with insurance companies that may be willing to cover your home. For more information, call (405) 842-9883. Web address: www.mapsprogram.com.

Reading the Exclusionary Provisions is very important. Homeowners coverage does not include floods, earthquakes, back up of sewer and water, home businesses, home daycare, identity theft, nuclear accidents or war. Flood coverage can be purchased separately through the National Flood Insurance Program (NFIP). Ask your agent or carrier for more information, or you may contact the NFIP at:1-888-CALL-FLOOD or www.floodsmart.gov.

A policyholder can contact the insurance company and ask about filing a claim or how to file a claim. Companies cannot increase the premium, cancel a policy, or refuse to issue or renew a policy solely because a policyholder inquired about making a claim or requested information about making a claim. For policies in effect for more than 45 days, companies may not cancel, refuse to renew, or increase the premium solely because a first claim is filed against the policy.

An insurance policy is intended to protect you from certain claims; however, it is not intended to offset minor claims or routine maintenance issues. Insurers may impose a surcharge or additional premium if you file multiple claims, but companies are prohibited from surcharging for weather-related claims.

There is a big difference between an insurance company canceling a policy and choosing not to renew it. Insurance companies can cancel a policy for the following reasons:

• You fail to pay the premium.
• You have committed fraud or made serious misrepresentations on your application.
• You willfully act in a way that increases any hazard the policy insures against.
• You violate any local fire, health, safety, building, or construction regulation or ordinance that increases hazards.
• A change in the risk occurs which substantially increases any hazard insured against.
• The Commissioner determines that the continuation of the policy would place the insurer in violation of Oklahoma insurance laws.
• The insured party is convicted of a crime having as one of its necessary elements an act increasing any hazard the policy insures against.

Non-renewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Companies shall give policyholders at least ten days notice prior to the date of cancellation and 30 days notice prior to the date of non-renewal. If you think the reason is unfair or want a further explanation, call the insurance company’s consumer affairs division. If you don’t get a satisfactory explanation, call the Oklahoma Insurance Department at 800-522-0071.

Back Up of Sewer and Water Coverage:
This coverage is excluded from most homeowners policies but can be purchased as a rider. Coverage is provided for direct physical loss not caused by negligence of the insured caused by water or sewer that backs up through sewers or drains not caused by flood.
Cost: $5.98 to $111 for $5,000 coverage.

Child Care Liability Coverage:
This coverage provides personal liability for bodily injury and property damage arising out of a home day care service.
Cost: $42 to $323 for $100,000 coverage. $58 to $574 for $500,000 coverage.

Credit Card, Fund Transfer card, Forgery and Counterfeit Money (Increased Limits):
This coverage provides increased limits for the legal obligation of an insured to pay because of the theft or unauthorized use of credit cards or electronic funds transfer cards, loss to an insured caused by forgery or alternation of their check and loss through acceptance of counterfeit money.
Cost: $2 to $10 for $5,000 coverage.

Earthquake Coverage:
This coverage is excluded in the policy but can often be purchased as a rider by endorsement.
Cost: $0.08 to $0.18 per $1,000 of the dwelling limit.

Identity Fraud Expense Coverage:
This coverage is available to pay for expenses incurred as a result of identity fraud. Such expenses include the costs for notarizing fraud affidavits; certified mail sent to law enforcement, financial institutions and credit agencies; lost income resulting from time off work to meet with law enforcement or credit agencies; loan application fees for reapplying for a loan; and reasonable attorney fees incurred to defend lawsuits brought against the insured and to remove criminal or civil judgments.
Cost: $12 to $45 for $15,000 to $25,000 coverageز

Increased Medical Payments to Others:
This coverage, also known as first aide coverage, provides for increased limits for bodily injury to others. It does not cover the insured or person residing in the household.
Cost: $1 to $29 for $2,000 coverage. $2 to $83 for $5,000 coverage.

Increased Personal Liability Limits:
This coverage provides for increased liability limits for bodily injury or property damages caused by an insured.
Cost: $9 to $101 for $300,000 coverage. $13 to $163 for $500,000 coverage.

Personal Injury Coverage:
This coverage provides liability coverage for slander or libel, generally excluded in regular policy.
Cost: $4 to $50 for $100,000 to $300,000 coverage.

Personal Property Replacement Cost:
This coverage provides payment for losses to personal property at replacement cost rather than actual cash value.
Cost: 2% to 25% of base premium.

Refrigerated Property Coverage:
This coverage is available for property stored in freezers or refrigerators.
Cost: $3.06 to $12 for $500 coverage.

Special Personal Property Coverage:
This coverage provides personal property coverage against all risks with certain exceptions in lieu of named peril.
Cost: 2% to 40% of base premium.