Wise Choices – Oregon Homeowner's Insurance

A home is usually the largest purchase you will make. Protecting this major investment can be important to your family's financial future. Whether your home is mortgaged or you own it free and clear, homeowner's insurance is an important safeguard for you and your family.

What is homeowner's insurance?

Homeowner's insurance is insurance that pays for damage to your home and other structures on your property. It also may pay for damage to or loss of the contents of your home, and for your liability for accidents that occur on your property or for damage to others' property.

Do I have to buy it?

Probably. Oregon law doesn't require homeowner's insurance, but if your house is mortgaged, most lenders require insurance for at least the outstanding balance of the loan. If your lender requires coverage, you may choose your own insurer; you aren't required to purchase coverage from the insurer your lender recommends.

How much insurance do I need?

The higher your coverage, the less you will have to pay out of your own pocket to replace property that is destroyed or stolen. You also need enough liability coverage to protect yourself from lawsuits if someone is injured while on your property.

To determine how much coverage you need, answer the following questions:

How much will it cost to rebuild my home?

Your insurance coverage should be based on the cost to rebuild to current building codes standards, not the selling price of your home — this is the "replacement cost." Your insurance agent can calculate rebuilding costs, or you can hire an appraiser.

Should I insure my personal possessions?

What would it cost to replace the contents of your home with new items if everything was destroyed? Start adding up the costs of everything from home electronics to housewares to handtools — you might be surprised at the total. Replacement coverage pays for the current cost of a comparable, new item. Without replacement coverage, you would only be reimbursed for the actual cash value of the used item.

Do I need umbrella liability coverage?

For a relatively low cost, a supplemental umbrella liability policy adds significant protection for your assets from a variety of possible liabilities and exposures to lawsuits. Up to $1 million in umbrella coverage can usually be added to a policy for as little as $10 to $15 a month.

Do I need earthquake or flood insurance?

Most homeowner's policies don't cover floods, volcanic eruptions, or earthquakes. Buying catastrophic coverage can protect your home and its contents. You can check out the estimated risks for various natural disasters in your area, and make an informed decision of whether you need this protection.

Money $aver

Choose the highest deductible you can comfortably afford. A deductible is the dollar amount you agree to pay yourself for each covered claim. The higher the deductible you choose, the lower your insurance premium.

Insurance Division Recommendations:

Be an informed consumer and shop around for the best price. Make sure you are comparing similar policies between companies, with the same deductibles and levels of coverage. When price shopping, you should have ready:

• a basic description of your house and property: square footage, type of construction, year built, etc.
  
  
• the distance from the nearest fire department and fire hydrant.
  
  
• a list of any security devices in your home.
  
  
• the insurance coverages, limits, and deductibles you want (remember to find out if the policies are for "replacement coverage").
  
  
• Make sure the value of your insurance policy is keeping up with increases in local building costs. You may be able to add an "inflation guard clause," or you may consider buying a guaranteed replacement policy that will pay whatever it costs to rebuild your house.
  
  
• Choose the highest deductible you can comfortably afford. A deductible is the dollar amount you will pay on each covered claim. Typically, the higher the deductible you choose, the lower your insurance premium.
  
  
• Keep an accurate list of your possessions, their purchase prices, model numbers, and serial numbers. You may also want to do a video or photo inventory of your home and possessions. This will be a helpful record in the event of a loss. Store this list and the video/photos of your possessions in a safe-deposit box or other secure site away from your home.
  
  
• Reduce your chances of having to file a claim. Some insurance policies offer discounts for security devices. Ask your local fire department, police, or your insurer about how to make your house as fire-proof and secure as possible.
  
  
• Remember that an insurance company's customer service track record can be as important as its price. The Oregon Insurance Division produces The Consumer Guide to Oregon Insurance Complaints. It ranks companies based on the number of complaints closed by the Insurance Division.
  
  
• Choose a qualified insurance agent. Here are some tips to help you choose an agent:
  
  
  • Make sure your agent is licensed in Oregon. If you aren't sure, call the Insurance Division's Agent Licensing Unit, (503) 947-7981 or visit our Insurance Agent Search Page.
    
    
  • Ask around. You may want to find out if your local Better Business Bureau has received complaints about a particular agent. Ask insurance agents for recommendations from clients.
    
    
  • Ask agents what kind of service you can expect from them. Will they regularly evaluate your insurance needs? Will they help when it's time to make a claim?
    
    
  • Finally, to obtain the best value, contact more than one agent for quotes.

For more information:

Consumer Guide to Homeowner and Tenant Insurance