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Insurance 101 - Homeowners Insurance Coverage | The Ultimate Guide to Home Insurance

when I first bought my house I wish that

someone would have taught me the

different types of insurance that they

offer in what I was looking for because

when I purchased the home insurance I

just followed the natural flow someone

referred another person I bought

insurance from them and then I just kind

of crossed my fingers and hoped it

worked out today's video we're gonna go

through the top five things you need to

know about house insurance hey guys this

is Mark Flockhart if you're new here

this channel is all about home auto all

types of insurance and how you guys can

learn the tips and tricks of how to get

you the best rates on your insurance so

if that's interesting to you it might be

a good idea to subscribe I will also put

in the notes below a lot of the stuff

we're talking about today so that way

you can read it as well if you want to

read it just in write written form I'm

trying to start a blog I'm just kind of

created a website that I've started

using so it's kind of a tool for you

guys to use hopefully it's helpful if

you do get good value out of it

definitely let me know if you have other

things you want me to talk about please

leave that in the comments below as well

according to the National Association of

Insurance Commissioners the average cost

and house insurance is eleven hundred

and ninety two dollars per year keep in

mind the prices do vary from state to

state because if you're in Kansas or

Florida or Texas or Louisiana you guys

are the highest in the nation so your

averages are gonna be about three to

five hundred dollars per year more than

the national average so you're looking

at anywhere from fifteen hundred dollars

per year up to about to almost two

thousand dollars per year for house

insurance now those states even though

the high you will find some people there

that are only paying six or seven

hundred dollars a year it really just

depends on the location for example I am

living in Michigan and my average is

about twelve hundred dollars per year

we're pretty normal as far as the home

insurance goes not so much on the auto

but as far as that goes we're great but

I have people I ensure that our six

hundred dollars four hundred dollars

eight hundred dollars it's not uncommon

to be around that nine hundred dollar

range even though the typical home is

right around that eleven to twelve

hundred dollar range

location plays

huge factor being in the city versus

being in the country you would think

that the city is more expensive and

there are some factors if you're in a

high-risk area so the zip code has like

a lot of theft and stuff like that

you're gonna have some stuff there but

that's kind of a separate piece theft

and all those claims are more so not

really the amount of activity but it's

more whether you've cleaned that stuff

right if you're in the country you're

likely gonna pay a little bit higher of

a premium reason that is is because you

guys are gonna have less of a response

time for any fire claims and that's a

huge thing so if the fire station is

over here near the city you're off in

the country house starts on fire you

call them help me help me help me

by the time they get there half of your

house or all of your house has already

burnt down we're in the city they're

near everybody within ten minutes there

at your house they've put the fire out

and maybe the kitchen burnt up a little

bit you're talking about a ten thousand

dollar claim versus a hundred and fifty

thousand dollar claim there's a huge

difference so that is gonna play a very

large factor the age of the home makes a

big difference the older the house is

the riskier it is because the updates no

one's gonna dig up the plumbing and

change it

some people do there is a discount for

that but that's not common right if you

have a house that's built in 1968 that's

gonna naturally pull in a higher cost

than a house built in 1998 your

deductible plays a very very large piece

now I prefer to stay with the common

which the most common deductible that

you're gonna see is a thousand dollars

so if you have a house claim you

out-of-pocket a thousand your insurance

will pick up the rest if that's a

covered peril as they call it there's

two pieces of the deductible you have

they're all perils which covers pretty

much everything except for wind and hail

so it's like fire vandalism theft any of

those typical things that's gonna happen

you know your house burns down tomorrow

that's an all peril deductible and then

you have wind and hail deductible which

is usually wind and hail that's the roof

basically it covers the siding but it's

very rare that the siding is really the

part that got damaged so if there's a

huge thunderstorm that comes through

hail dropping everywhere you can

actually pick a large deductible on

either or most commonly you're not going

to be able to pick a larger deductible

all perils unless you're wind and hail

deductible matches that or is higher so

you're not gonna be able to do like a

five thousand all peril the duck table

and a 1000 wins and he'll it's not

common most companies will actually deny

that type of a deductible if you did one

thousand dollar deductible on your all

peril deductible then you can probably

put your wind and hail at twenty five

hundred five thousand even ten thousand

a lot of companies offer should you do

it probably not most of the time that

$1200 average range if you're

comfortable with that that's gonna be a

thousand dollar deductible on average

that's the most common thing that people

do but just know if you're trying to

close on a house and they're just saying

we need to get the insurance down

because we need to show that your your

mortgage needs to show that you have

more debt to income your mortgage person

is gonna come to me and say how do we

get this insurance down then that's our

first option I would rather not lower

your coverages because I don't want to

under insure you I'd rather just have a

larger deductible so I'm not gonna lower

the house from a $200,000 house down to

150 because if it burns it down tomorrow

I want it covered I'd rather have you

out-of-pocket ten thousand dollars

versus losing a hundred thousand dollars

there's a big difference

same thing with liability I know they're

not have eeeh add a three hundred

thousand liability when you were five

hundred because we needed to get the

price down rather raise that deductible

so that the price lowers and then if

it's for closing yeah sure if you need

to close it and you choose to put it

back up the next day the next month

whenever you can change those coverages

like you do on car insurance

so you could get that price close on the

house and then if you change your mind

and decide you know what I really am not

comfortable with that I'd rather have

that larger deductible you can raise

that typically your mortgage will pay

the difference but just keep in mind

they may ask you to pay the difference

your credit history pays a factor in

this so if you have good credit just

like your mortgage loan you're gonna get

a better or lower interest rate

same thing with insurance in most states

they allow credit to be a factor so if

you have really bad credit you're gonna

have a higher cost and your insurance

good credit lower cost now this it

doesn't really play as big of a factor

as people think

we're auto insurance it's different in

auto insurance because it's so risky

your credit you're more likely to walk

away from your car then you will walk

away from your house that brings us to

our second point which is understanding

the values or the coverages so to speak

there's really only a few different

coverages that our primary coverages in

your home policy you have coverage a b c

d e and f what are those you've got

coverage a that's your dwelling that's

the physical house the cost to rebuild

that house to rip it down take all the

stuff away that's that's removing

everything and then to build that same

exact house how much that gonna cost

keep in mind it's not the value of the

house the value of the house includes

the land the location all the features

that they put into it sure you're gonna

get those rebuilt but the cost to

rebuild them is sometimes more expensive

than the cost to buy them today so

that's one thing to be mindful of

coverage B is going to be other

structures so that's gonna be if you

have a shed in the backyard if you have

a fence around the house if there's a

pool not attached to the house anything

that's disconnected from the house

that's gonna be your coverage B coverage

C is going to be your actual property

damage so the actual stuff you won't my

shoes my couch my TV the one thing that

you always always always want to make

sure that you get with that is something

called replacement cost and what that is

is it basically means that no matter how

old the TV is how old the couch is how

old anything is you're gonna get full

value that doesn't mean you're gonna get

the full value that you paid for it it

means you're gonna get what today's

value is so you may bought a TV for a

thousand dollars five years ago that TVs

probably worth $200 today so if you

don't get full replacement cost you're

only gonna get $200 back if you have a

fire imagine that times your whole house

take 80% of what you own and you're only

getting 20 to 30% back that's crazy it's

not worth it and it's not expensive to

do full replacement cost full

replacement cost is gonna mean if that

TV was a thousand dollars five years ago

it's probably the prices have gone down

on TVs a little bit so you it's probably

only $800 or $600 in

store today but it's a lot better than

getting a $200 cash back you're gonna

have enough to buy that exact

replacement model of that TV same thing

with your couch if it's a ten-year-old

couch you paid $1,500 for it

if non replacement cost it's only going

to give you a fifty to a hundred dollars

back we're a full replacement cost is

probably going to give you anywhere from

800 up to the 1500 if it was three

thousand today then you're gonna get the

$3,000 back it's full replacement cost

coverage D is loss of use so it's what

it means loss of you if you let's say

you have a thirty thousand dollar claim

and it's in your kitchen right the

kitchen caught fire it's gonna take

three months to replace that so you have

to get moved out of the house or you

have to live in the house if you choose

to while they're remodeling that kitchen

what that's gonna do is that's gonna pay

any living expenses that you incur

because of that loss so if you have to

go rent another house similar size and

shape and it's $1,500 a month then

that's part of that living expense it's

gonna pay that bill if you have to pay

someone to come over mow the lawn

because you can't do it anymore because

you just can't get back to the house

between the distance of your rental and

work and all that if you can't cook up

the food like you used to for the next

week or a month and a half then you have

to they're gonna cover those living

expenses that you incur so that way

you're not gonna actually pay

out-of-pocket all of these extra pieces

it's covered with that policy normally

they're gonna give you quite a bit it's

usually 20 30 even $50,000 for that

coverage which doesn't seem like a lot

especially if your house is like a 200

or 300 thousand dollar house but think

about it if you had let's just say

thirty six thousand dollars and it took

your your rebuild of your house 12

months which it never should but let's

just say it did right took you 12 months

that's $3,000 a month to live off of of

24 36 thousand per year and so our total

if it took you 12 months to do that it's

usually enough in most cases that

coverage is gonna cover roughly about

5,000 on average per month

and you're never gonna use that so just

know that coverage it doesn't have to be

high it's really a mostly defaulted so

then coverage II is

going to be personal liability that's if

somebody's going to sue you for any

reason anything you're liable for the

easiest way to think of it is it's not

only inside your house it's actually

outside of your house as well so if

you're at the zoo and you drop the

alka-seltzer in the monkey cage right

and they eats it and it dies they're

gonna sue you because they're they're

gonna want that monkey to either have

all the medical bills paid for or

replace him to go purchase another one

that's three hundred thousand dollars to

ship them and all that stuff

so that's gonna go towards your home

liability if you have a friend over and

they trip down the stairs and they get

hurt and it's fifty thousand dollars

worth of medical in your medical

payments that's the next coverage coming

up doesn't pay enough of that which it

won't they're gonna have to sue you

they're gonna sue your insurance not you

that's the reason you have the insurance

is they're likely gonna go after that

liability now keep in mind if you have

more assets oh I own a Ferrari and I

have a really nice million dollar house

and that's paid for you should be

looking at a lot higher than a half a

million dollar liability

you will probably max it out at a

million and then you'll get something

called an umbrella which is 1 million

two million up to ten million even and

it can go higher but then you're getting

the more specialized companies nice

pieces coverage F which is your medical

payments or medical coverage it doesn't

cover you or direct family that live in

the house so it's more so if like

friends or family are over for a visit

and they get injured they fall down the

steps break an arm it's four thousand

dollars for their deductible through

their medical and that medical that

you've chosen let's say you chose five

thousand as your coverage is gonna cover

that bill so they don't have to sue you

they don't have to sue your insurance

it's basically paying for a reason for

them not to have to go after you what

coverage should you carry this is so so

simple for you to calculate the average

across the u.s. some states are a little

bit less and if yes if you have a really

nice home and you have special features

crown molding everywhere granite

countertops really upgraded stuff it's

gonna be more but typically the ease of

the easy way to calculate it is take the

square footage so we'll say a 2,000

square foot house multiply it by about a

hundred and fifty to 106

two dollars we'll use 150 in most

examples $300,000 to insure a 2,000

square foot house now if it's a brick

home that's a different type of material

so that's going to take longer to

rebuild and that's a lot more

labor-intensive so something like that

you're gonna want to do closer to like

160 to 180 per square foot as far as

calculating that and that's the major

things companies look at is how large of

a house is it square footage that's

above ground so if you walk in the front

door if you have a basement that walks

out that's not above ground so that

doesn't count for square footage it's

anything that's above ground and that's

the square footage that they're gonna

base it off of take note of everything

that you have so do you have specialized

stuff in your house like built-in

cabinets built-in bookcases you've got

Jacuzzi towels you've got speakers in

the ceiling those are all additional

pieces that aren't typically calculated

in it unless you are gonna speak up and

say something if your agents smart

they're gonna pull up your house on

Zillow or online and if there's photos

the kind of browse through them and make

sure that they're not missing pieces so

we've got our value so our 2000

square-foot house is $300,000 for

dwelling a ok the coverage separate

structures depending on the company is

either 2 or 10 percent more often it's

10 percent it's gonna be 30 thousand for

the shed and the fence and all that now

you can raise that if you want so that's

not going to make a big deal but if you

have like a pole barn in the back you're

gonna want to notate that and then raise

that coverage B up to a higher amount

that's sixty or seventy thousand that it

cost to rebuild that pole barn personal

property it's always ridiculously high

don't bother with this coverage it's

gonna be a hundred and fifty two hundred

thousand dollars it's crazy

but if you lower it nine times out of

ten it doesn't even change the price so

let it be as high as it wants just make

sure you have enough to cover your

personal belonging loss of use same

situation usually defaults a little bit

higher than average not a big price

changer so there's no point even playing

with this coverage just make sure you

have enough that you could live on for

at least three to six months if

something did happen and you had to move

out of the house medical payments more

often than not we're going to do five

thousand if you have some extra money

you don't mind having a little bit

your policy than shirt 10,000 maybe good

but usually it stops right around that

$10,000 range mainly because the next

part is going to be the liability

portion nine times out of 10 I quote

500,000 liability I just want you to be

protected as well as possible if you

have a lower income a little bit less of

a house then sure you can bump down to

300,000 liability as long as you have

enough less assets than what they're

gonna go after you for so that way

they'll go after the insurance and not

you if you have more like I mentioned

earlier then make sure you go higher up

to a million but more often than not

you're gonna keep that 500,000 liability

and then you're just gonna add an

umbrella on top of that because the

umbrella is gonna give you the million

two million three million dollar

coverage and it's not gonna stop at the

house it's gonna cover your auto

liability your car your home liability

anything that you're doing it's going to

umbrella that's why it's called umbrella

it's gonna over cover all of your assets

that way if something happens it's

cheaper to buy that than it is to up the

home and that something happens outside

of the home where it's not tied to that

and then the umbrella kicks in and

that's gonna give you a better benefit

the third piece I hope you're staying

with me if this is too much let me know

I can make this into multiple videos I

am going to go in-depth with some

computer screenshots of some Zillow

things and show you different types of

houses in one of the next videos

otherwise the third pieces don't accept

the referral and what that means is when

you go and purchase a house your Realtor

is gonna refer you to an insurance

person your mortgage person is going to

refer you to an insurance person and I

want to kind of preface this because I

told my wife this and she's like what

you get referrals from them all the time

I'm like yes I know but the reason I'm

saying that is and I'm really moreso

saying do some research on the back end

more often than not a person will get a

referral from the realtor because they

trust them and that realtor sometimes

works with a really good more a really

good insurance person but a lot of the

times they're all just trying to build a

network where I'll give you a lead and

you give me a lead and a lot of the

times or half of the time I would say

they don't really know that person

they're just given the referral because

they're really nice they had a really

good meeting with them maybe

maybe twice they might have just become

Facebook friends and that guy brings me

Donuts every month right that's really

the thing about referrals you got to do

some research that way you're not gonna

just jump in because I'll tell you

straight up seven out of ten people when

I get a referral purchase that's the

numbers the more referrals that you get

the higher converting they are is

because you're not gonna worry about

shopping everywhere you're just gonna go

to that one person if the price sounded

okay or if you're really close to the

time you had to close on the house then

you got stuck you bought that policy and

a couple years later you may think about

it like wait did I make the right move

so do a little bit of research maybe

Google the person or Google their

company and just see what kind of

reviews they have and that kind of leads

me into the fourth point which is do

your own research this doesn't have to

be a 30 40 50 hour long thing of you

doing research pull up a Zillow listing

or a redfin listing on your house look

at the square footage take the value you

can really lit you can literally do this

on a piece of paper take this here

footage times 150 and then 10% for

separate structures X percent for this X

percent for that and you can literally

just write down what it should be as far

as the coverages go and then you can

check a couple different places what I

typically do is because I work with an

agency that checks up to 17 different

places so when you call me that's one of

the reasons we have a lot higher of a

conversion is because when I'm checking

it I'm telling you a triple-a and

progressive and citizens and all those

guys Westfield and and all the major

carriers and I'm gonna be able to just

show you the differences and let you

kind of decide what's the best fit for

you okay well triple-a doesn't care

about the pit bull in this state but

progressive does so we know progressives

not the option for you you have a pool

triple-a doesn't care about the pool

westfield doesn't care about the pool

they rate for them they may have an

extra charge but then when you go to

those other companies some companies

don't want any pools so you join a

company they send an inspector out and

all of a sudden you're dealing with the

cancellation doing a little bit of

research in the background knowing your

coverages it's a really good thing to

have I'll try to create a cheat sheet

for you and I'll put a link below that

way you can go right to my website and

then you can download that

we that way you'll have an idea of what

you're looking for with that being said

the last part is gonna be the bundle

discussion mark don't no no no don't

leave don't leave yet don't leave please

I want to tell you it's so important aah

okay the first thing a lot of you

probably thought of just now was like no

you're trying to sell me on a bundle I'm

not doing bundles right I like my guy

who does my auto I like my God to do the

house I'm just gonna do whatever does

that okay I get that here's what I'm

saying if you love the guy that does

your Auto turn this video off now go

talk to him about your house bundle your

house in your auto no matter what is

best for you if you are shopping for

home insurance and you don't call the

guy that does your auto if you like him

or her then you're doing them a

disservice more than you would by saying

no to other people put your house with

them if it's a hundred bucks more and

you really think they're good fit for

you pay the extra hundred dollars it is

worth it to have the right agent that

will stand beside you when you have a

claim so having someone that can fight

for you in a battle like that especially

if you have a house fire one hundred

thousand two hundred thousand dollar

claim if your agent knows what they're

doing knows what coverages they gave you

and is willing to take the extra 20

minutes out of their day to fight for

you then you know you got a good one pay

the extra hundred dollars to be with

that person it is worth it I'm telling

you right now with that being said the

bundle saves you 20 to 30 percent off

home and auto so take whatever you're

paying on your auto and knock off to a

fifteen percent twenty percent or

whatever that company's discount is

that's huge

so you're gonna save money they're in

here it's worth it no matter which way

you go it's a bonus round all right we

made it just let's see in the fates I'm

sorry all right so I wanted to go over

the most important things that a lot of

you want to hear discounts I'm gonna

rattle through some discounts that I

think you guys should be mindful of and

don't worry about writing them down

right now I'm gonna put them in the

description below first-time home buyer

if you're a first-time home buyer you

usually will get a discount there are

some companies out there that I've

worked with that give hundred

of dollars off if you're a first-time

homebuyer updating the roof that's huge

if you have a new roof you're gonna have

to prove or get documentation showing

that the roof is new but it's gonna help

a lot if you've updated the electrical

the plumbing the heater all of that

stuff matters going paperless also

paying in full those are two discounts

that just have to do with the billing

you actually pay the bill yourself

sometimes they give it as count for that

versus going through the mortgage

because they're submitting all the

paperwork and dealing with the mortgage

company so that's more of a service and

you're paying for that extra service

being part of an affinity group so that

means you're part of a credit union

you're part of a triple-a membership or

you have RV membership club or

harley-davidson membership club any of

those things there's a whole bunch of

them we'll give you a discount for that

now keep in mind you don't have to

necessarily know what they are now so

when you get the price from your agent

ask them is there any additional

affinity groups that I can be part of

that will give me an additional discount

having high credit like we said before

credit matters so if you have really

good credit they're gonna give you a

little bit better of a deal doing in

your early shopper a little bit

sometimes they do sometimes they don't

being a nonsmoker not just you it's

anyone in the house so if there's four

people in the house if none of them

smoke they're gonna give you a discount

for that mainly because it's a lower

risk there's less chance of a fire

having a security system especially one

that notifies the police so if it's a

central security system and there's

gonna be an alarm going off when someone

tried to break in the house they smash

the window and there's sensors that go

off because of that if you have one that

notifies the police digit station that's

going to give you more of a discount

same thing with fire so if you have a

fire extinguisher you're gonna get a

discount for that but also if you have a

fire alarm system that either one

notifies sends an alarm out we move and

so that's going off right that's that's

a discount if it notifies the fire

station that's another discount quicker

response time they're gonna get to the

house quicker versus the half hour later

where half the house is gone tying in to

that is something called smart devices

so if you have a smart home where your

thermostat connects to your cell phone

or ring doorbell where it has a camera

on it you have the central fire alarm

system or notifies them you got the

central I mean having those things are

going to be a high safety feature

and that's gonna give you a lower price

on the cost and the last major one is

having a hail resistant roof if you have

a hill resistant roof that makes a huge

difference with insurance if you're in

states like Pennsylvania and anywhere

near the coast they also give one for

having hail resistant shutters so storm

shutters that way they're gonna close

off the glass if hail comes through or

wind comes through and it's gonna

protect the home essentially the more

stuff features that you have that are

gonna protect your house are going to be

beneficial anyways guys if you aren't

interested and don't have a specific

agent that you love if you love them

this is my agent and the video give me

the thumbs up have a great time if you

don't have that agent he's just not

pulling your heartstrings she's just not

doing you're not sure if they're doing

the right thing right I will put a link

in the description below that way if you

are interested in getting a quote

typically right now what it does is it

comes directly to me so it may take a

day for us to respond but what it does

is I'll take that information and I'll

look at it or pass it on to one of my

guys and they'll actually work up quotes

for you either way don't forget this

match the like button share the video

with anyone that you know is buying a

house if they are buying the house they

need to see this this could save them

several hundred dollars a year on their

insurance it's definitely worth it just

to give them the advice just so that

they know what they're walking into

alright guys I will see you in the next

one