Vermont Homeowners Insurance Guide

Everybody that owns a home should have some sort of home insurance. If you have a mortgage, your lender will probably require that you have an insurance policy. Home insurance covers your most valuable possession, your home, so you want to make sure that you have the right amount of coverage. What you don’t know about your home insurance policy could be costly. Although home insurance policies are similar wherever you go, Vermont has different environmental conditions than some other areas in the country. Experts recommend that you review your policy once a year in order to ensure that you are still covered under the amounts that you need.

What is Not Generally Covered in Your Home Insurance Policy

Most home insurance policies do not cover flooding. While you may think that you are not in a risky area because you don’t live in a low lying area or near a river, about 25% of people that make flood claims live in areas that are in a low-risk area. Flood coverage is usually purchased separately from the national flood insurance program. Earthquake insurance typically has a higher deductible than other types of insurance. You may not think that you need earthquake insurance in Vermont, but experts say that there is anywhere between a 1 in 20 and a 1 in 50 chance of seeing an earthquake above 5.0 on the Richter scale in any given year. If your home were to be damaged in an earthquake, the loss could be devastating. Fortunately, earthquake insurance costs less in Vermont than in many other areas of the country.

What Is Covered in a Home Insurance Policy?

There are typically six different areas that are covered in a standard homeowner’s insurance policy. These are:

• Structure - The structure of your home includes the walls, floors, ceilings, and other parts of your basic home. You should check annually to ensure that you still have enough coverage to rebuild the house in the event that your house is destroyed.
• Detached buildings - If you have a pool, storage shed, or detached garage, they would be covered by this portion of your insurance policy.
• Personal property - This is what you own, including appliances, clothes, toys, and furniture. If you have anything that is particularly expensive, such as jewelry, you may have to have that specially included in your policy.
• Loss of use - This covers any additional expenses that you would incur if your house were to be damaged and you could not live in it while it was being repaired. Could you afford to pay rent and a mortgage at the same time? Loss of use would help you pay to rent an apartment while your home was being repaired.
• Personal liability - If your horse damages your neighbor’s fence or someone falls and hurts themselves on your property, personal liability insurance would cover any damages that you were legally responsible for.
• Medical payments - This covers medical payments for visitors that are injured at your house. Grandpa slips on some ice and breaks his hip on your sidewalk? His medical expenses would be covered under this portion of your policy.

Your Credit Score Affects Your Insurance Rate

Like it or not, your credit score may affect how much you are paying on homeowner’s insurance. There is a statistical correlation between a low credit score and more claims made on a person’s homeowner’s insurance. To raise your credit score and perhaps lower your premiums, check your credit report for errors. Make your payments on time, and pay down your credit cards.