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Some people believe that purchasing homeowners insurance can be a very difficult process. Most of the time, they’re right. But it doesn’t have to be as difficult as most people make it out to be. If you prepare yourself accordingly – and reading our guide will do just that – you’ll be covered in no time!
Homeowners insurance is fairly well standardized across many states, and this includes Montana. Most homeowners end up purchasing what is known as an HO-3 policy in order to get adequate coverage for their property. It not only takes care of your outside structure, but also protects your interior property, liability, and medical payments.
|Types of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$100,000|
|Replacement Cost (Contents)||$75,000|
Property values in Montana, despite the beautiful countryside, are delightfully affordable. That’s why, in the example above, we only had to calculate average coverage amounts for a $100,000 home. As you can see in the estimated annual premiums below, however, the numbers seem a little bit high for such modest amounts of coverage. This has to do with the fact that Mother Nature, among other things, loves to run wild in Montana. Homeowners have to file claims more frequently for damage caused by severe weather, which raises premiums on average.
Keep in mind that this first chart is a fairly rough estimate based on many different insurance providers that are available in your area. But when you start shopping around, the quotes you receive will vary greatly. As you can see in this chart below, shopping around in Missoula or Butte can save you more than 50% off of your annual premium. But you have to know how to shop smart!
Did you know that homeowners insurance isn’t a legal requirement? That’s right; neither your state, federal, or local government entity can ever require a homeowner to purchase insurance on their property. In reality, though, very few people ever opt out of purchasing a policy. Having insurance on a property worth hundreds of thousands of dollars is a fairly sound investment that can pay dividends over the long haul. And if you haven’t paid off your home in full, and are still making mortgage payments, then your bank will make this form of insurance mandatory.
How much does your total home cost? How much would it cost to replace your roof? Your jewelry? Your refrigerator? Every single TV in your house? Your plumbing? Your water heater? Have we asked too many questions yet? The correct answer to that last one is “No, you haven’t asked enough”. This is because taking a home inventory is a very complex process. It can feel tedious and overwhelming, but in the end, it’s worth it in order to avoid overpaying or underpaying on your insurance premiums. And doing the major work now will make things much easier when you have to update it on a yearly basis.
The basic HO-3 policy that many Montana home insurance companies offer is really only the tip of the iceberg. On top of your basic policy, there are many other factors to consider. Such as:
Let’s define these two terms using the following example: a savage Montana hailstorm punches a few holes in your roof, and one particularly large piece shatters one of your windows and breaks an expensive piece of furniture. When you file a claim, which items will be replaced at cost, and which ones at actual cash value?
For most policies, the damage to your roof and your window will be replaced at their replacement cost. This means that your insurer will pay 100% of the replacement cost, minus your deductible. That expensive piece of furniture, however, is a different story. Depending on how old the furniture is, your insurance company will calculate its depreciation and subtract that amount from your claim payout. Therefore the older the furniture is, the less money your insurer will pay for that claim.
Montana is very different when it comes to checking your credit in order to evaluate your homeowners insurance premium. Most companies in other states can only look at a narrow snapshot of your credit. This snapshot is limited to your past seven years of credit history. Anything before that is your private business, and they can’t access that information.
In Montana, they can go farther back. Much farther back. They can look all the way back to the beginning of your credit history. And when you take into account that there’s a 29% difference in annual premiums between homeowners with normal credit and homeowners with excellent credit, you’re talking about a pretty hefty sum.
For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:
Or contact them directly through the following resources:
Office of the Montana State Auditor, Commissioner of Securities and Insurance
840 Helena Ave. Helena, Montana 59601
Phone: (406) 444-2040
Fax: (406) 444-3497 or (406) 444-3413
General Inquiry Contact Form