Illinois Home Insurance: 5 Things You Should Know When Shopping for a Cheap Homeowners Policy
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Ron Trumbo
Insurance Editor
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If you own a home in Illinois, you need home insurance coverage. The National Association of Insurance Commissioners (NAIC) reports the average Illinois home insurance policy costs $628/year, that’s $52.33/month. When you consider that Illinois consumers use nearly 40%* of their household income to pay for home ownership, controlling home insurance costs is an effective and easy way to save money.
1. What Home Insurance Covers in Illinois
Not specific to just Illinois, home insurance generally covers 3 things: the cost of replacing your home’s physical structure, the cost of replacing your personal property, and liability for injuries for other people while they are visiting your house.
2. Most Mortgages in Illinois Require Home Insurance Coverage
You probably already know this, but nearly every mortgage lender require that borrowers have a home insurance policy. Many home insurance consumers have their home insurance policy attached to the actual mortgage bill in the impound account, where the mortgage company pays for other non-mortgage expenses such as property taxes.
Just because you home insurance is buried in your Illinois mortgage doesn’t mean that you can’t change which Illinois home insurance company you choose to use. Most Illinois insurance agents are experienced at working with mortgage companies to make sure you meet their minimum home insurance requirements. Depending on where you live in Illinois, if you are determined to live in one of Illinois’ flood area, your mortgage company may require that you purchase an additional flood insurance policy for your home.
3. The Amount of Home Insurance Coverage You Need Changes
Ideally, Illinois home owners should have enough home insurance coverage to fully replace the cost of rebuilding your home (dwelling coverage). Beware that this is not the same thing as the market value of your home, as you may see on a website like Zillow.com. The replacement cost of your home includes factors such as the cost of construction labor and building materials, among many other factors. If this seems complicated and confusing, it is. This is why an experienced local Illinois insurance agent can make sure you have enough home insurance coverage.
The amount of home insurance for replacement of personal property is generally 50% the value of your dwelling coverage. Coverage for structures separate from your dwelling such as fences and sheds are generally covered for up to 10% of your dwelling coverage. In the event that your Illinois home is damaged to the extent that you have to live in a hotel until it’s repaired, home insurance policies generally offer up to 20% “loss of use” coverage based on the policies dwelling coverage. Every home policy is different, so you have to review your policy closely to truly understand what level of protection you have.
4. Home Insurance Deductibles and Illinois Home Insurance Rates
The home insurance deductible you select for your Illinois policy will determine how much you pay out of pocket when you file a home insurance claim, as well as the actual price of your policy. Home insurance deductibles can be $500, $1,000, and $2,000. The difference between a $500 deductible and a much higher $1,000 can mean the difference of a 25% price difference.
Saving on home insurance in Illinois can be as easy and finding a cheaper car insurance policy. You need to compare at least five different home insurance quotes from five different Illinois insurance agents. In having a few discussions with qualified agents, you can secure all of your financial risks while finding the best home insurance policy at the best rate.
Source: U.S. Census Bureau, American Community Survey,
http://insurance.illinois.gov/HomeInsurance/shopping_for_homeowners.asp
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