Pros and Cons of Georgia Homeowners Insurance

15 Jan
Saint Simons Island, Georgia is a beautiful family friendly area amongst the barrier islands.

Paying for homeowners insurance is never fun but for most of us it is a necessity. If you have a mortgage on your property your lender will require that you carry a homeowners policy in order to protect their investment. However, once you have paid off your mortgage, it’s possible to drop you homeowners coverage but in most cases this is a huge financial risk.

According to data from the Insurance Information Institute (III), almost 98 percent of homeowners with a mortgage have homeowners insurance, which is good news because it only takes one severe storm, fire or lawsuit to destroy your home and financial well being.  

Statistics show that nationwide, almost 3 percent of homeowners are living in their homes without homeowners insurance. In most cases, people that have dropped their coverage fall into two categories, those who simply cannot afford the monthly payments and the very wealthy who can afford to self-insure their properties. 

Luckily, the cost of homeowners insurance in Georgia is pretty affordable. According to ValuePenguin, the median cost of a homeowners policy in Georgia is $1,089 which is only 1 percent above the nationwide average. Obviously, the cost of a policy will climb if you live in a coastal community such as Savannah, Brunswick or Saint Marys

If you have paid off your mortgage and are considering dumping your coverage, we strongly advise you to take a moment to consider the risks of this strategy. Unless you can easily cover the cost of repairing or rebuilding your home after a disaster, you should keep your homeowners coverage. 

Let’s have a quick look at the pros (hint: there is only one) and the cons (it’s a pretty big list) of dropping homeowners insurance. 

Only One Pro

There is really only one pro to dropping your coverage, saving money

Cost: The biggest and only advantage to dropping your coverage is the money you will save. While sticking $1,000 back in your back account sounds good, when you break it down to a monthly payment you are only saving $88 a month. Is putting your home and financial well-being at risk worth it for $88? 

Once you have dropped your home insurance coverage you will be on the hook for all costs related to repairing or rebuilding your home if it is hit by a storm or fire. If a guest falls and injures themself you may be on the hook for their medical costs.  Medical bills can quickly add up and if you end up being sued you will be responsible for all legal bills as well as any settlements that come out of a lawsuit. 

Unless you can easily afford to rebuild your home and cover the costs related to an injury or lawsuit, you should keep your home protected by an insurance policy. Georgia has certainly seen its share of hurricanes and Michael recently reminded Peach State residents of the damage they can cause. If you have dropped your homeowner coverage (and are not carrying a flood insurance policy) you will be responsible for cost of repairs or rebuilding. 

Reasons to Maintain Coverage are Plentiful

There are a quite a few reasons to keep homeowners insurance in place. 

Repair and Rebuilding Costs:The biggest reason to maintain your coverage is the cost to rebuild or repair your home if disaster strikes. While many of us can cover damages running up to a few thousand dollars, if your home is severely damaged or even destroyed, the cost of repairs or rebuilding can quickly drain a savings account. If you are uninsured, all of those bills will fall to you. 

While living on the coast certainly ups your risk factors, even residents of inland cities like Atlanta, Augusta, and Valdosta are at risk of severe weather damage as well as fires, lighting strikes and lawsuits. 

According to Zillow, the median home price in Georgia is currently $184,300 but that price can skyrocket on the coast or in certain Atlanta neighborhoods. If you are uninsured and something happens to your home you will be forking up $185K or more to rebuild your home and life. 

Homeowners insurance not only protects your home, it covers all of the outbuildings and detached structures on your property. Garages, outbuildings, sheds and barns are fully covered by your homeowners policy. There can be coverage limits to these types of structures so make sure that you check with your agent for details about your policy limits. 

Liability:Liability risks can end up costing more than repairing or even rebuilding your home. If a guest is injured in your home you can be responsible for their medical bills and if they end up suing the legal costs will fall to you as well as any judgments.  These types of costs can spiral out of control pretty quickly, easily run into the millions of dollars if the injury is serious.

Unprotected liability risks not only put your home at risk but all of your other assets as well. You could end up losing your retirement savings as well as any other major assets you have acquired. 

Living Expenses: The cost of living portion of your policy will help cover your day-to-day living expenses if your home is unlivable due to a covered peril such as fire or weather damage. This coverage will reimburse you for items such as hotel bills, restaurant meals and even laundry costs. This portion of your policy can be a lifesaver if you are out of your home for an extended period of time.

Your Possessions: If a fire or severe storm destroys your home, the majority of your possessions will probably be damaged as well. It can be difficult to imagine just how much it would cost to replace everything you have acquired over the years. Take a few minutes to look around your home and calculate what it would cost to buy everything you see.

Crime rates vary across the state but according to Neighborhood Scout, you have a 1 in 35 chance of being a victim of a property crime. This shakes out to about 55,000 burglaries a year and if you a victim of a crime you will have to cover the cost of repairing any damage criminals cause as well as replace whatever they manage to boost. 

One thing you should be aware of when it comes to homeowners insurance is that most policies have a coverage cap on high value items. This coverage cap will vary by insurer but $1,500 is fairly common. This limit applies to items like jewelry, collectibles, artwork, as well as wine and cigar collections. If you have high-value items that exceed this amount you may need a rider to fully protect your property. 

A Few Homeowner Insurance Tips

Here are a few final tips when it comes to homeowners insurance:

Flood and Earthquake Damage Not Covered: One common mistake that many homeowners make is assuming that homeowners insurance covers flood and earthquake damage. The majority of standard policies exclude flood and earthquake damage. If you live in a high-risk flood area you should be carrying a separate flood insurance policy. Flood insurance can be expensive but it can be a lifeline if your home is flooded. 

Boost Your Deductible: One way to lower your premium if your insurance is getting unaffordable is to raise your deductible. Insurers love it when homeowners put more skin in the game and are happy to give you a discount on your premium. If you can afford it, double your deductible but make sure you choose a deductible you can easily afford in the event you have to file a claim. 

Discounts Help: Insurers offer a wide variety of discounts and a great way to lower your insurance costs is making sure you are getting all of the discounts you are entitled to receive. Ask your agent to do a full discount review to ensure you are getting all available discounts. 

Shop Around: Possibly the best way to lower your premium is to shop your policy around. Insurers rate risk differently which leads to dramatic differences in policy quotes. Make sure you are comparing apples to apples when it comes to deductibles and coverage levels and always deal with a reputable nationwide company. Our online quoting process allows you to benefit from comparing rates to the best coverage options when reviewing the most competitive companies in Georgia. is happy to help you compare up to 12 rates and coverage options. If we can help you save money, while also improving your coverage, please click here to get online Georgia home insurance quotes now.

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