Are you looking for home insurance in Rhode Island? Well, chances are it’ll be slightly easier than finding a home of your own in your densely populated state. But don’t relax just yet; if you’ve never shopped for homeowners insurance before, it can be a little intimidating at first. That’s why we’ve compiled this handy homeowners insurance shopping guide – so you can get the best deal.
In Rhode Island, home insurance policies are often referred to as “forms”. The special form policy – known more commonly as HO-3 in other states – is one of the most popular policies you can buy. It provides coverage for virtually anything on your land, including your dwelling, personal property, and additional structures. Below, you can see examples of coverage most commonly applied to a $200,000 home.
|Types of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
It may seem strange that such a tiny state has such expensive homeowners insurance premiums. But it’s more about geography than size. Many of the homes in Rhode Island were built around 60 years ago, which makes them more susceptible to damage. Additionally, Rhode Island has hundreds of miles of coastline bordering the tumultuous Atlantic Ocean, where hurricanes have been traveling farther and farther north each year. There are a lot of expensive perils that can force you to file damage claims, which is why local insurance companies raise their rates.
But that doesn’t mean that you can’t save money on your premiums. Shopping around and getting multiple quotes from different companies in your area is a great way to make sure you’re getting the best deal. As you can see from the chart below, you could save around $200-$300 per year over the life of your home.
Homeowners insurance isn’t legally mandated the way other policies, like car insurance, is. But that’s mostly because it doesn’t need to be. For starters, the vast majority of homeowners are paying for their house with a mortgage. And almost all banks will require you to carry insurance on your home while you are paying off that mortgage. But even if your home is fully paid for, you’re going to want to protect that asset (and the contents within). Otherwise, you could be facing financial ruin after the next hurricane or hail storm tears through your area.
Taking a home inventory may seem like it’s not that important, but it’s actually essential for getting the best deal on your insurance premiums. Some people underestimate their property’s worth so that they can buy less coverage and get a more affordable premium. But this can be dangerous since, if you do have to file a claim, you might not get a payout big enough to fix or replace your property. On the other hand, overestimating your property’s value may lead you to purchase too much coverage. And the more coverage you buy, the higher your premiums will be.
The basic HO-3 policy that many Rhode Island 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:
Choosing whether your provider insures your property by replacement cost or actual cash value will have a direct impact on your premiums. Replacement cost will pay out more on claims – 100% of the replacement cost, to be exact, after you pay your deductible – but your premiums will be higher. Conversely, actual cash value incorporates depreciation into your claim’s payout. This means you will be left with some of the financial responsibility associated with repairing/replacing your property, even after you pay your deductible. But on the bright side, your premiums will be lower.
Before you even request a quote from a company, ask them about how they evaluate your credit with regard to underwriting and rating new policies. Some homeowners insurance companies are limited by how much of your credit history they can take into consideration; others may have the freedom to evaluate your full FICO credit score. Depending on which method they use, you could have either a highly favorable or a less than exemplary credit history in the company’s eyes. And you want your credit to look as good as possible, if you want the best deal on your premium.
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:
Rhode Island Division of Insurance
1511 Pontiac Avenue
Cranston, RI 02920
Phone: (401) 462-9500
Fax: (401) 462-9532