It is best to know what you are getting involved in before you purchase a Rhode Island homeowners insurance policy. While you can get plenty of quality, specific information from your insurance agent, it is always best to go into discussions with an understanding of the terms, policies, types of insurance and regulations involved.
Here is a quick overview of Rhode Island Homeowners Insurance
Insurance Terms to Know
- Appraised Value: The determined fair market value of the home as determined by a certified appraiser. Can be used to determine the amount of homeowners insurance is necessary for your home.
- Deductible: The amount from your own pocket you will have to pay before the homeowners insurance policy will begin paying for covered damage.
- Endorsement: An addition to the original policy that changes the terms of the policy.
- Exclusions: Specific items, conditions or causes that are not covered by your homeowners insurance policy
- Escrow Account: An account managed by your mortgage company in which taxes and sometimes homeowners insurance funds are collected and then dispersed.
- Hazard Insurance: Homeowners insurance that protects your home and property from specific damages. This is standard homeowners insurance that covers most causes of physical damage but not all.
Homeowners Insurance Perils
Perils are the things that can cause damage to you, your home and its contents. It is extremely important to know which causes of damage are covered by your policy and which are not.
Here is a list of commonly covered perils from standard hazard insurance.
- Falling objects
- Plumbing freezes
- Roof damage due to snow/ice weight
- Water leaks not due to negligence
Depending upon the area in which you live, wind and hail damage may also be covered. If you live in an area that is prone to hurricanes and heavy storms, you may have to purchase a separate policy to cover wind and hail damage.
You can also purchase Rhode Island homeowners insurance policies that will cover you home from additional perils, though your premiums will be higher.
Because the likelihood of flooding depends so greatly on the location of your home, and because of the incredible damage that flooding can do, flood protection is not part of a standard homeowners insurance policy. If you live in an area not prone to floods, (generally 100 year flood zone and up) you will not have to purchase a flood insurance policy. If you live in a flood prone area, then you will most likely be required by your lender to purchase a separate flood insurance policy.
Your Rhode Island homeowners insurance company can act as the intermediary for this purchase, but it will be from the National Flood Insurance Program (NFIP). You will need to talk with prospective homeowners insurance companies to know if your community qualifies for the NFIP. You may also want to inquire as to which insurance companies offer additional flood insurance protection above and beyond the national flood policy.
If there is damage to your home or personal property, there are different methods to determine compensation used by homeowners insurance companies.
- Actual cash value: You are paid according to the actual value of the item(s) destroyed. This means depreciation and other factors will be considered.
- Replacement cost: You are compensated based upon how much it will cost to purchase the item(s) as long as you do not exceed the monetary limits of the policy.
- Guaranteed replacement cost: The same as replacement cost method only the policy will continue to pay for replacement of items even past the limits of the policy.
These options are listed in order of cost with guaranteed replacement cost being the most expensive. Keep in mind that if you decide to go with actual cash value, you could end up having to pay for the replacement of your damaged items mostly out of your own pocket.
Rhode Island Homeowners Insurance Online Rate Quotes
When you feel comfortable and ready to purchase Rhode Island homeowners insurance, you should begin with rate quotes. It is possible to get multiple homeowners insurance quotes from one website. This completely streamlines the shopping process for you and can help save hundreds of dollars per year on Rhode Island homeowners insurance by letting you shop around quickly for the best rates.