Homeowners Insurance in Wisconsin
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UPDATED: Mar 13, 2020
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Are you purchasing homeowners insurance for the first time? If so, it may seem a little daunting. But don't worry. Once you understand the ins-and-outs of homeowners insurance, it'll be much easier to find a comprehensive policy to protect your property. And you'll have an advantage in that it will be easier for you to find an affordable annual premium. Just take a look at this handy back, and keep our advice in mind once you start shopping for your home insurance policy.
There are many different forms of home insurance, but the most popular one that the vast majority of homeowners purchase as known as an HO-3 special form policy. This policy provides a very comprehensive list of coverages ranging from your external dwelling to your personal property to liability coverage and more. You also have the option to add riders or endorsements to your policy and the event that you feel you need more coverage.
|Type of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
In reality, the median price of a new home in Wisconsin is around $180,000. For the sake of simplicity, we have rounded up in the chart above. In order to get a better premium, however, you can adjust your dwelling coverage down to 80% of your home's total worth. And if you're worried about protecting your personal property, you may be able to ask your agent whether or not they will ensure your belongings for more than 50% of your home's value. Finally, if you want to lower your annual premium, consider raising your deductible. Although this will give you a larger financial responsibility in the event that you need to file a claim you might say money in the long run by paying less for your homeowners insurance policy each year.
Like many areas, large, densely populated cities in Wisconsin have higher homeowners insurance rates than rural cities with a lower population density. The more vulnerable your home is to potential perils - such as theft, flooding, wildfires, and more - the more likely you will end up paying for your annual premium.
In order to offset your potential financial burden, you should shop around and request quotes from a few different companies. We suggest getting quotes from at least three insurance providers. and if you can find agencies that will not run a hard check on your credit, then you should request as many quotes as you can get from such companies. Just take a look at the example below - shopping around can save you around $600 or more each year.
Laws and Requirements
Homeowners insurance is one of those types of insurance that most people buy regardless of whether there is a legal requirement. If you're paying for your home with a mortgage, you may not end up having a choice. It's likely that your bank, who is still a partial owner of that property until you finish paying off your mortgage, will insist that you protect that asset by purchasing homeowners insurance. And people who own their homes without telling any debt to a bank or mortgage lender would be smart to keep their homeowners insurance current anyway. After all, would you really want to be 100% responsible for any and all expenses associated with property damage to an asset that is valued at six figures? Most people don't.
Taking a Home Inventory
Taking a home Inventory is a definite pain in the - well, you know where. Unfortunately, it is a necessary evil if you want to make sure you get an affordable premium as well as a sufficient amount of coverage. If you underestimate the value of your belongings and you purchase too little coverage, you make get to pay less in annual premiums but at the same time, you may not get a sufficient payout if your insurance company honors a claim. Conversely, if you purchase too much coverage, you will get a bigger payout if your insurance company honors your claim but at the same time you will be wasting money in overpriced annual premiums.
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Choosing What (and How Much) Coverage
The most obvious perils that Wisconsin residents have to worry about are hurricane-related. But those aren't the only disasters that can befall your home and/or property:
- Fires - As recently as 2015, there were over 500 wildfires within the state of Wisconsin. The good news, however, is that your average HO-3 policy has many different protections for both your dwelling and your personal property. But it can still benefit you to take precautions, such as clearing a fire break around your property and making sure that you do not engage in any improper or illegal burning near your house.
- Flood Damage - A good portion of Wisconsin's coastline borders the Great Lakes. If you live in a coastal area, if you live near a large lake or river, or even an area that is prone to flash flooding and landslides, you're going to need to purchase some select coverage. Unfortunately, finding this coverage from a private insurance company is often difficult. That's why the national flood insurance program, sponsored by FEMA, exists. you can purchase up to $250,000 worth of coverage on your dwelling alone.
- Wind, Hail, and Tornadoes - Wisconsin may be far from the infamous Tornado Alley, but that doesn't mean that the state is invulnerable to severe weather. For the most part, HO-3 policies will honor claims filed for damages caused by hail, wind storms, and even tornadoes. But you should definitely go over these perils with your insurance agent and make sure that you don't need extra endorsements or other coverages to make sure your home and property are secure.
- Covering Your Property - Most homeowners don't just need to protect their home; they also need to protect their personal property within. Whether it's damage from theft or from environmental perils that sneak in through a leaky roof or broken window, damage can happen to your personal belongings just as often as it can to the exterior of your home. This is why HO-3 policies offer part C coverage.
- Liability Coverage - You may not think it's very likely, but the truth is accidents can happen on your property. And if you cannot settle it amicably between yourself and the injured party, you may end up going to court. Assuming in the court finds you liable, this is where the liability coverage on your homeowners insurance policy comes into play. Any liability claims filed with your insurance company should be honored up to the coverage limit you purchase on your policy. Any additional expenses will have to come out of your own pocket.
- Umbrella Coverage - If you think the liability coverage that your insurance company wants to sell you isn't enough, or if you have other valuable property that you need to purchase more coverage for, then you might want to consider umbrella insurance. This type of coverage can extend your coverage limit up into the millions of dollars. Of course the premiums will be much more expensive, because the more coverage you purchase, the more you will have to pay in premiums. But if you have a lot of expensive property protect, it can be worth it in the long run.
Replacement Cost vs. Actual Cash Value
Replacement cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality. In order to qualify for replacement cost coverage, the dwelling is required to be insured to at least 80% of the replacement cost. Although the cost for replacement cost is higher, the extra protection may be worth it.
Actual cash value is the value of your property when it is damaged or destroyed. This is usually calculated by taking the replacement cost and subtracting depreciation. Contents coverage (for such items as furniture, television sets, and appliances) is usually on an actual cash value basis. For example, a chair that costs $500 to replace may have a reasonable “life” of 20 years. If it is destroyed after 10 years, its actual cash value will be much less than $500, approximately $250. Most policies pay for losses to your contents on an actual cash value basis.
How Your Credit Score May Influence Your Rate
Insurance companies are allowed to take a look at your credit history when they evaluate you - either as a new customer, or to determine how much to charge you for your premium.You're going to want to ask any insurance company that you want a quote from how exactly they evaluate your credit history. Some companies may look at your entire credit report. But if you ask for too many quotes in a short amount of time, this can leave some suspicious marks on your credit history which may end up lowering your overall score. Other companies may only look at snapshots of your credit history, such as your CLUE report or your insurance score, which won't adversely affect your credit. Make sure you're aware of your current credit standing before you start shopping around. After all, the better your credit score, the more likely you are to get a more affordable 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:
Wisconsin Insurance Plan
Or contact them directly through the following resources:
Wisconsin Office of the Commissioner of Insurance
PO Box 7873
Madison, WI 53707-7873
Phone: (608) 266-3585