Homeowners Insurance in Washington
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UPDATED: Aug 6, 2020
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If you live more Inland or in a less populated city in Washington, you may be surprised to learn that average home values are over $300,000. The average cost may be skewed due to the fact that cities like Seattle are so popular to live in, which has been sending property values soaring in recent years. Despite this, it's actually relatively easy to find an affordable price on your homeowners insurance premium. This guide will show you how to navigate the tricky Waters of homeowners insurance in order to get the best possible deal for you and your family.
Most likely, if you're going to purchase homeowners insurance in Washington state, you're going to by what is known as an HO-3 policy. The special form policy offers very comprehensive coverage, including protection for your domicile, your personal property, liability insurance, and much more. Below, you can see an example of the amounts and types of coverages you will be expected to buy if you really want to protect your home for the best possible rate.
|Type of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
The average premium for the typical Washington State resident is a little bit lower than the national average. Obviously, in densely populated cities or cities that are closer to the Pacific Ocean, the rates are going to be a little higher. But the more Inland you are and the farther away you are from hazardous areas, such as densely populated forests or large bodies of water, the lower your premiums will be.
It may seem strange to many consumers that property values are high in the state, but insurance premiums on a home insurance policy are so low. Even though the state's western border is adjacent to the Pacific Ocean, for the most part there aren't very many natural disasters that threaten your property. This makes you less likely to file a claim, and a much safer investment according to your insurance provider.
But don't let that discourage you from shopping around. Even with the delightfully affordable annual premiums that most Washington home insurance companies offer, you can still benefit financially from getting several quotes from different Providers. Just make sure that you talk to three or more different companies before you settle on a policy. Also, be sure to compare the coverage you're getting against the rate they quote you. Not all home insurance policies are created equal.
Laws and Requirements
It's not technically a law that you have to buy homeowners insurance in the state of Washington - or any other state, really. But if you are like most homeowners, and you're paying for your home with a mortgage, your lender may make it a requirement of your contract. After you finish paying your mortgage, or if you paid for your house in cash, buying homeowners insurance is still a pretty good idea. After all, you're making a multi thousand-dollar investment in an important piece of property. If you want it to last, and you don't want potential disasters to put you in financial ruin, you're going to want to buy a homeowners insurance policy.
Taking a Home Inventory
For some, this may be the most difficult part of the homeowners insurance line process. Odds are you have a lot of stuff, and that stuff needs to be catalogued and Its value calculated accordingly. most people rush through or skip this step entirely. That's actually a pretty bad idea. Making a wrong guess on how much your property is worth could adversely affect your annual premium. If you purchase too much coverage, you're basically throwing money away. But if you purchase too little, it can have some disastrous effects on your bank account if you file a claim and your insurer doesn't pay out enough to fix or replace your damaged property.
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Choosing What (and How Much) Coverage
The most obvious perils that Washington residents have to worry about are hurricane-related. But those aren't the only disasters that can befall your home and/or property:
- Wildfires - Washington state is not referred to as the Evergreen State for no reason. There are thousands of Acres of woodlands throughout, and plenty of rural residents who live among and enjoy these scenic areas. Most homeowners insurance policies do cover damage caused by wildfires, but you can help yourself out and get potential discounts off your policy by protecting your home in other ways. Creating natural firebreaks, installing a nearby water pump, or using fire-resistant building materials will all help prevent damage from wildfire to your home.
- Flood Damage - Damage from flooding waters is one of the most expensive damages to fix or Replace. Sadly, it's also the exact type of coverage that most insurance companies refuse to sell you. But you have other options. The most popular one is the National Flood Insurance Program sponsored by FEMA. You may be eligible for up to $250,000 worth of coverage. And you cannot be turned down.
- Earthquakes - Did you know that there were approximately 470 earthquakes in Washington state last year? Most of them may be nothing more than a small tremor, but that doesn't change the fact that the state of Washington is located in a geologically active part of the country. Earthquake insurance is usually sold either as an endorsement that gets tagged onto your current policy, or you may have to buy a completely separate policy. You should also prepare yourself for the fact that earthquake insurance doesn't use your regular deductible when paying out claims; your insurance company will likely set a separate earthquake ductable at anywhere from 10% to 25% of your home's value.
- Winter Storms - Damage from winter storms, especially in the Northern and Eastern parts of the state, can be a big problem in the winter months. For the most part, your insurance policy will cover damages caused by winter weather. But there are some exceptions. Be sure to sit down with your agent and talk about what those exceptions are, so that you understand your responsibilities and whether or not you need to purchase additional coverage.
- Mold - Mold coverage does not come automatically with most homeowners insurance policies. You either have to buy separate coverage, or add an endorsement to your policy. This is because most homeowners insurance companies consider mold to be home maintenance issue, and not a peril that can randomly strike your property. Plus, mold damage is very expensive to fix, which makes insurance companies wary of selling covered against it.
- Landslide - Landslides are also one of those perils that are not commonly covered by your typical homeowner's insurance policy. This is especially true if the landslide was instigated by rain runoff, snowmelt, flooding, or earthquakes. Again, this is one of those issues that you need to sit down and talk about with your insurance agent. You may have the option to add endorsements, such as Content Coverage for your property and domicile, or separate Earth Movement Coverage.
- Covering Your Property - What's the use of a comprehensive homeowners insurance policy if it won't protect the property inside your domicile? This is what the part C coverage on your HO-3 policy is for. usually, insurance companies will sell you coverage for the personal property that equals 50% of your home's value. Some companies may go as high as 75 or 80%.
- Liability Coverage - What happens if an accident happens on your Property? What if someone you know or their personal property gets hurt or damaged in the process? Some homeowners are capable of settling things out of court. But if things get messy, you're going to need some financial protection. This is what liability coverage is for.
- Umbrella Coverage - If you don't feel your liability limit is high enough, umbrella coverage might be something you want to consider. This is because many insurance companies won't sell your average homeowner insurance coverage past a certain dollar amount. But if you have a lot of liability exposure, then you may require an umbrella insurance policy.
Replacement Cost vs. Actual Cash Value
Do you know the difference between replacement cost and actual cash value? Well, you're going to want to learn the difference before you sign the dotted line on a homeowner's insurance policy. Being unclear on these two terms can put you in a dire financial situation if you have to file a claim. Replacement cost will pay out more, but it will also raise your annual premium. This is because your insurance company is accepting more of the financial responsibility, which they don't like to do unless they are getting compensated for it. Actual Cash Value incorporates depreciation into how much your insurance company pays out when they honor your claim. This puts more of the financial responsibility on you, including your deductible. But it can help lower your annual premium.
How Your Credit Score May Influence Your Rate
In Washington State, like in many other states, insurance companies aren't allowed to make a heart check on your credit history in order to evaluate your creditworthiness. They use your insurance score, which is mostly based on a limited snapshot of your credit history pertinent to your insurance history. This reflects your history of making insurance payments on time and helps your insurance company evaluate how big of a risk you are. The less risky you are, the better your rates will be, as you can see in the chart below.
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 Insurance Commissioner - Washington State
PO Box 40256
Olympia, WA 98504-0256
Phone: 360-725-7080 | Fax: 360-586-2018