Virginia Home Insurance: The Good & Bad!

27 May

If you recently sent in your final mortgage payment you may be considering dropping your homeowners coverage. While dumping this monthly bill would certainly be a good thing, it does put your home and other assets at risk. If you are not carrying a homeowners insurance policy you will end up being responsible for all cost to repair or rebuild your home and replace all of your possessions if it is damaged or destroyed.

Mortgage lenders require anyone that is carrying a mortgage to have a homeowners insurance policy in place to make sure that their investments in your house is protected in the event it is damaged or destroyed. The majority of homeowners stick to this requirement with 98% of homeowners with a mortgage carrying homeowners insurance according to data from the insurance information Institute (III).

While lenders require you to carry homeowners insurance, once you’ve paid off your mortgage you are free to drop your homeowners coverage. While this will certainly put a little money back in your pocket it can be a huge financial risk. Statistics from the III show that only 3% of homeowners across the country are living without homeowners insurance. This is mainly made up of two groups of people, those wealthy enough to self-insure their properties and homeowners who are no longer able to afford their policy premiums. 

Homeowners insurance is very affordable in Virginia. According to data from ValuePenguin, the average premium for a homeowners policy in Virginia is $946 a year which is an impressive 13% below the national average. Obviously, prices can be much higher if you live near the water or in certain neighborhoods in our major cities. If you call Virginia Beach, Hampton or Norfolk or other coastal cities home you may end up paying more for coverage.

If you own your home free and clear and are considering dropping your insurance we highly recommend that you take a few minutes to consider this decision along with the risk that it brings to you. Let’s have a quick look at both the pros and cons of dropping homeowners insurance.

Saving Money is Really The Only Pro

The main reason most people would even consider dropping homeowners insurance is to save a bit of money

Saving Money: Dumping the monthly premium that comes with a homeowners policy is absolutely an advantage but it also increases your risk dramatically and can put all of your assets in jeopardy.

If you decide to drop insurance coverage you must remember that if your home is seriously damaged or destroyed the entire cost to repair or rebuild will be your responsibility. In addition to those costs you could end up being responsible for medical and legal bills if someone is injured on your property. Finally, you will have to pay to replace all of your possessions if your home is completely destroyed. Unless you can easily cover these types of costs should not be thinking of dropping homeowners insurance.

Despite the fact that hurricanes rarely come ashore in Virginia the aftermath of these hurricanes definitely impacts Virginia homeowners. We are also no stranger to severe storms including tornadoes. If your home is severely damaged due to weather, fire or other peril, the cost to put it back to normal will fall to you and these types of expenses can quickly spiral out of control.

Keeping Coverage Makes Sense

There are plenty of good reasons for keeping homeowners insurance. 

Rebuilding and Repair Costs:The cost to repair or rebuild your home is probably the most important reason for keeping a homeowners insurance policy. Storms and fire can do a tremendous amount of damage and if you are not covered it will be up to you and whatever savings you have to put your home back in order or rebuild it completely. If these types of expenses would cause you financial stress you should absolutely have a homeowners insurance policy.

While coastal residents are more at risk for severe weather damage it doesn’t mean that inland homeowners are off the hook. Severe weather can happen anywhere as can lightning strikes and home fires. Even if you live in Richmond, Lynchburg, or Charlottesville you should be carrying insurance protection.

Zillow data shows that the median home price in Virginia is currently $255,400. Obviously prices can be lower, or much higher in certain areas. Regardless of where you live if you drop your insurance coverage you will be on the hook for the entire amount to rebuild your home if it is destroyed by fire or a weather disaster. In addition you will have to replace all of your possessions, which can add up very quickly.

It should be mentioned that homeowners insurance not only covers your home but all detached structures on your property. This means if you have a barn, shed, detached garage or other outbuildings they will all be protected by your homeowners insurance policy.

Liability Risks Can Be a Major Expense: Liability risks can end up being even more expensive then having to rebuild your home. The liability portion of your policy helps to cover medical and legal bills if a person is injured on your property up to your coverage limits. Without insurance these costs, which can be very expensive, will end up being your responsibility.

Medical costs are always expensive and can quickly put the average person into bankruptcy, especially if it is a serious injury. In addition to medical bills you may end up on the hook for legal costs as well as any settlements or judgments that come out of a lawsuit. Legal bills and judgments can easily end up in the million-dollar range if a person is seriously injured at your home. If you are unable to cover these types of costs easily you should definitely be carrying homeowners insurance.

If you are definitely going to drop your homeowners coverage we highly recommend carrying a standalone umbrella policy to help protect your liability risk.

Living Expenses Are Included:A standard homeowners policy comes with an additional living expenses portion. This section of the policy covers your day-to-day living expenses if your home is so damaged you cannot live in it. This coverage will reimburse you for hotel bills, restaurant meals and other day-to-day expenses such as laundry. If you are out of your home for an extended period of time this coverage can be a financial lifesaver.

Your Possessions Need to be Replaced: Take of quick wander around your home and calculate how much it would cost to replace all of your possessions if they were destroyed in a storm of fire. If this cost would cause you financial stress you should definitely be carrying a homeowners insurance policy.

It’s not only fire and weather you have to worry about, homeowners insurance covers theft as well. Crime rates vary across the state but according to Neighborhood Scout residents of Virginia have a 1 in 56 chance of being the victim of a property crime which translates into 18,468 burglaries a year.

The majority of standard homeowner insurance policies do have a coverage limit when it comes to high-value items. This coverage cap will vary by insurance company but $1,500 is a fairly common limit. This limit applies to items such as jewelry, collectibles and even cigar and wine collections. If you have high-value items that total more than $1,500 you may need a rider to fully protect your property.

Homeowner Insurance Tips

Here are a few tips about homeowners insurance and a couple of tips to lower your premium:

Flood and Earthquake Damage are Never Covered: Standard homeowners insurance policies do not cover flooding or earthquake damage. If you live in a high-risk area for either flood or earthquake damage you will need to carry a separate policy. While flood insurance can be expensive as well worth it if your home is damaged by floodwaters.

Boost Your Deductible: Upping your deductible is a great way to make your insurance policy more affordable. If you can afford to double your deductible expect to see a 10 to 20% discount on your policy. Always make sure you choose a deductible you can easily afford in the event you have to make a claim. 

Discounts Save Money: Insurers offer a wide variety of discounts, which can definitely make your policy more affordable. Ask your agent to do a discount review on your policy to make sure you’re getting all available discounts that you are eligible to receive.

Shop Your Policy: This is probably the best way to lower your insurance costs. Experts recommend shopping your policy on a yearly basis. Insurers rate risk differently which can result in dramatic differences in premium quotes. Always make sure you are comparing apples to apples when it comes to coverage levels and deductibles. 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 Virginia home insurance quotes now.

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